I’m feeling a bit under the weather myself today, so let’s do this week’s Livestream Q&A Chat tomorrow at 2pm ET. I’ll be ready to rock.
In the meantime, here are two old articles I wrote about my vision of “Revolutionomics” long before Trading With Cody had even been launched. This first article is from October 2008, when the DJIA was at 8000, down 45% in a straight line, and my viewers on Fox Business were quite literally worried about whether the US financial system and stock market were going to survive the great Financial Crisis and the subsequent bank bailouts. I’d been very bearish from late 2007 and was finally turning bullish again as I wrote: “If you’ve got cash, I’d be a buyer of a great many stocks and/or the market for both a trade and/or if you’ve got a long-term time horizon of more than five years or so.”
More interesting perhaps is my prediction that:” “Revolutionomics dictates that the power of the center always dissipates to the edge over time. If Hank Paulson and his Illuminati cronies want to try to control us with the currency of their own central bank and collude with all the other central banks around the world to manipulate the currencies in tandem, then we’ll just end up creating our own private currencies to get the power back from them.”
Just three months later, bitcoin launched! And just about couple years after that, I started buying and accepting bitcoin when it was trading at about $100 each. But my point is that you can see that I literally use the concept of Revolutionomics to make that competing currencies prediction.
by Cody Willard 10/09/2008
I actually trademarked the term, “They Can’t Stop the Revolution” a few years ago. And their inability to stop the revolution is the good news. Ultimately, there’s no stopping the will of the people in this country and the innovation and prosperity built thereupon.
Right now, there’s just no easy answer, no easy solution, no easy way out of this. So many of the virtuous cycles of the recent years and decades have turned vicious and the negative feedback loops are indeed feeding back upon themselves.
If you’ve got cash, I’d be a buyer of a great many stocks and/or the market for both a trade and/or if you’ve got a long-term time horizon of more than five years or so.
If you’re long and worried about your life savings, I’d sit tight and wait for the next rally to sell, with the DJIA at 8344 in the futures market as I type.
Other than that, I think we all need to calm down a little bit. This hasn’t been easy and the repercussions of this melt down will be painful. But we’re going to be okay. This country’s going to be okay. Our system’s going to be okay.
Think of this way — Revolutionomics dictates that the power of the center always dissipates to the edge over time. If Treasury Secretary Hank Paulson and his Illuminati cronies want to try to control us with the currency of their own central bank and collude with all the other central banks around the world to manipulate the currencies in tandem, then we’ll just end up creating our own private currencies to get the power back from them.
Heck, when you think about it, Microsoft’s already got its own currency called the Zune. You can buy one 79 Zunes for 99 cents, which means the conversion ratio of the Zuneland currency to the US currency is pegged about 80 Zunes per dollar or 1.25 cents per Zune.
Warren Buffett could issue Buffetts and back them with his huge balance sheet and pristine credibility. If PIMCO really wants to help the US public the outta offer PIMCOs at a floating exchange rate against the dollar. I’ve long planned to eventually create Reversons (Revolutioncombined with Jefferson) in the RevolutioNetwork, akin sorta to Zunes.
I dunno, I got on this topic last night with my students in Revolutionomics as we talked about how on the surface it seems that we’re moving against the theory in this country right now. The fact is that Revolutions and the economics around them are volatile even in the relatively peaceful and prosperous times we live in here in this country today. The revolution is dead; long live the revolution.
We are still the leaders of this world.
We’re gonna be fine.
And see, I’m gonna take Lobo on one more bike ride around the block and then have a peanut butter and 4 fruit preserve sandwich on whole wheat with a big glass of milk and go to bed. We’ll get ’em again tomorrow.
Okay, Cody back in real-time February 2018 now. Here’s the other article that explains in depth what exactly I mean by “Revolutionomics” and why I believe it’s not just creating trillion dollar investment opportunities, but can actually “end atrocities, civil wars and genocide”
by Cody Willard 11:24pm 10/09/2008
It’s not a coincidence that so much of the wealth and innovation in the 21st century is focused around information and communications. With the advent of the networks that connect us all, it is what you know that matters and no longer just who you know. And as everybody makes connections with everybody else we all get to know each other anyway and as we spread our knowledge, we’re seeing entire peaceful revolutions topple decades-old dictatorships.
Today, anybody in the developed world can tap into the necessary elements for sustainable success. The 1.5 billion people on this planet who have tapped in can be seen as a dynamic life form that’s constantly moving to the places on the Internet that empower and free them the most. That life form will constantly (and at an accelerated pace) move away from centers of control and into centers of empowerment. Lock in, switching costs, data mining and every other strategy that the world’s leading companies have forever built their business models on have no place in this end-user-powered networked world. And just as the tendency towards disorder in the universe can’t be controlled, nobody can stop the virtuous entropy of the Internet Revolution.
I’ve coined the phrase Revolutionomics to describe this dynamic. Revolutionomics is the unstoppable shift of power from centrally controlled organizations, including governments, religions, and corporations to the individual that results as society itself endlessly increasing access to information and capital through new technologies.
This shift has resulted in the constant and instantaneous dissemination of news, information, ideas, and capital, which leads to ever more efficient, free and fair markets. Taken to its extreme, Revolutionomics leads to a constantly shifting chaotic order that, by definition is not anarchical. The constant in Revolutionomics is indeed the change itself, which is always a shift of power and increased access to information and capital that has hitherto been reserved for those in control. More individual power, freedom, upward mobility, access to information and capital is the only end game of the Internet and the effects of putting billions of people into real-time contact with each other, as those billions move to the paths of most empowerment and least control.
Every revolution that’s ever succeeded in the long term shifted power away from central control. As Edward Bulwer-Lytton once told us, the pen is mightier than the sword, and indeed, that this revolution will be fought using words, software and open networks and on such a massive scale is precisely why its impact will be much bigger than any revolution this world has gone through already. A clear understanding of the development of Revolutionomics and the virtuous entropy and the disruptions it causes is crucial to stay on top of the market, and ahead of the curve.
We’ve reached a point where we have built ourselves on top of so many virtuous, and productivity enhancing platforms. To get there we had to first start on a physical world platform and completely conquer that world, which took mankind millions of years. Two or three thousand years ago, we were integrated and free enough such that we were really able to start accelerating and building on the physical world platforms. This includes everything from the development of concrete, steel, and other modern building materials that help us move and control the physical world to the generation and harnessing of electric, gas, and nuclear power.
Once we were able to manipulate the physical world we started building platforms of communications. Though communications platforms were already in place, such as the alphabet, numbers, and language, there were only so many communication channels available to use. For example, I have two business cards framed on the wall of my office. One is my great grandfather’s from the 1890s; he sold real estate in the Midwest and the other is mine in which I copied his design. On his business card it says, “L.L. Lindsay, Madison, Kansas, Real Estate.” In 1891, how did you communicate with someone who had given you his business card? You sent a piece of mail to Madison, Kansas with just his name on the front. Contrast that with today, where a typical business card could have a name, title, physical address with street and zip code, business number, cell phone number, fax number, home number, email address, AOL instant messenger screename, and so on. The point is that we have been exponentially increasingly the amount of channels that we can communicate with each other on. Further developments in the physical world such as the learning that we could use copper wires, coax cable, satellite, fiber optics, radio, fixed wireless, and wireless to communicate has enabled this growth of communication channels.
At a point, we then started layering different methods of communication on top of these platforms. For example, we are all used to broadcast, such as newspapers, yellow pages, radio, TV, movies, which is a one-way communication that is controlled from central organizations and pushed out. Communications advances have since brought us the ability to transceive, or both send and receive. Instead of just one-way communication, it is now two-way. The transceiving technologies we are most familiar with are the phone, mail, ham radio, etc.
What the Internet did that all of these other communication channels could not was move from a limited one-way and two-way system to a system in which an individual is able to broadcast to many people. Before it was one (TV, Radio, Newspaper) broadcasting to the many or one transceiving with one (phone, mail), and today it is the many broadcasting to the many (the 10 million blogs). Because of the Internet, for the first time in the history of the planet, there is no barrier to entry for broadcasting to the many, we can all do it online.
We have crossed a point at which the intelligent end user has gained enough power to take advantage of the new platforms and channels of communication. Where physical world platforms, such as a car engine, are limited by only being able to be used in one place at a time, communications platforms, such as a website, are not limited and can be used in millions of different places by millions of different people all at the same time. There is no incremental cost for reproduction, and there is no barrier to entry.
At some point there has to be point of diminishing returns, but I would hate to guess that we are anywhere near that.
Let me note that power is not zero sum; it’s not as if there is a finite amount of power in the world and government has a certain percentage of power and individuals have a certain percentage of power. Rather, as we empower users, power exponentially grows. So it is not as if government ever loses its “power” in concept, but rather it loses its share of power. There is no single person or entity controlling whether individuals can send email, go to war, allow certain technologies, or classify content as pornography. Rather the end users act as an entity choosing what to do and where to go. From these choices, the vast majority of people will choose not to visit or view those things that they do not support.
And while the concept of government and the power of the government thereof will never cease, the same cannot be said of the mainstream political parties.
The two major fraternity parties, er, political parties in this country have long had a symbiotic relationship with the mainstream media, as the mainstream media, always a lover of the status quo as all those in power always are, focuses on the Republican and Democrat parties to the exclusion of independent and smaller political movements. That symbiosis has lasted for more than two hundred years, but is now collapsing under accelerating Revolutionomics that the Internet drives. As we all are now empowered to shine a light on corruption and compromised ethics of any sort in the government – and just as importantly, on the mainstream media itself – the system becomes more virtuous and information itself becomes ever more accurate.
Public opinion no longer is filtered (and skewed) by the media and the partisan political leaders. Whereas the printing press allowed the written word of the few to be read by the many, blogging enables the written word of the many to be read by the many.
The distribution mechanisms for information for the last few hundred years have enabled a wondrous growth of literacy and communication. But as the saying goes, the freedom of the press has always belonged to those who own one. Well, guess what, in the 21st century, ink is free. For the first time in the history of the world, freedom of the press is a reality.
Control has fully shifted from the few to the many, and each of us now has more control than anyone’s ever had before. Our forefathers knew that a system of checks and balances would help curb corruption. They put in a system in which three disparate branches of government keep an eye on each other, and the framers knew that it was important enough to keep the government and the press apart that they made freedom of the press the First Amendment to the Constitution in the Bill of Rights.
As brilliant as he was, I’m not sure Thomas Jefferson ever would have imagined what a system of a billion checks and balances would look like — or the prosperity that such a system would spark. The one thing that evil always hates is attention. We always fight evil by calling attention to it — we’re taught to scream if we’re attacked, we install loud alarms to protect our cars and homes, we put up lights and security cameras to safeguard citizens.
This power shift from the media and the politicians to the public is not really a sum-zero game. More entities — especially individuals — will be empowered. But old-school media outlets will never lose all of their power either. Granted, the old school media outlets themselves will be subject to the empowered watchdog bloggers and other checks and balances as never before. But like a growth-oriented, capitalistic economy that creates wealth and prosperity (rather than simply redistributing it) for most of its participants, so too does the empowering of the people result in a net creation of simply more power, prosperity and better checks and balances.
The revolution is not just about broadband and multimedia applications. Its scope will end atrocities, civil wars and genocide. No, I’m not mincing words. As the world becomes increasingly connected and means of communication are completely transformed in both developed and developing world, everyone will become exponentially more secure. And, yes, there are ways that investors can, and should, profit from this virtuous cycle.
Checking out of a hotel in Los Angeles a few years ago, I turned to find the actor Don Cheadle checking in next to me. I chose not to “communicate” with him, sparing him an “I love your movies” gush. But seeing him in that up-market hotel got me thinking more about one of his recent films, Hotel Rwanda, and how it underscored the impact on the world of the explosive rise in the number of communication outlets.
In the film, Cheadle’s character, Paul Rusesabagina, uses the threat of communication with the outside world to counter the threat of violence. Simply put, the most effective tool against organized crime and menace is light – shining a light on it to show the world. It is a powerful and recurring theme throughout the film.
Early on, Rusesabagina responds to one threat by saying that US satellites are watching. Later, he repeatedly uses the phone to call for help, and his reporting is one of the few ways the outside world becomes aware of the escalating atrocity. He even explicitly tells all his guests to make calls to anyone in the outside world and “shame” them into helping.
This is powerful stuff. And, as the world continues to shrink – thanks to the Internet, cell phones, camera phones, fixed mobile phones, blogging, vlogging, reporting, and more – and as we all become ever more connected, people such as Rusesabagina now have the ability to reach out to millions of people. And they can do it repeatedly, in real time.
Today, a person in Rusesabagina’s position can interact directly with columnists at the Financial Times or reporters from any other mainstream outlet, from TV to radio to the most popular blogs on the Internet. Not to mention every politician in the US.
As these networks expand, those in need and in trouble will be sending footage directly, calling reporters on the phone. Pinging our Blackberry. Continuously.
But we are not quite there yet. Africa’s communication infrastructure is slowly growing. And while there is plenty of demand for optical networking and routing capacity and other familiar technologies that make the developed world’s networks run, the expansion of these networks is going to center on new, cheaper, less robust technologies.
Revolutions and the disruptions they cause in society create tremendous opportunities and empowerment as the status quo falls. The biggest worries about the Revolutions going on in the Arab world is that they’ll end up as new dictatorships, perhaps, fully militarily-run dictatorships. But I would counter that this new empowerment that the people feel is just the tip of the ice berg and that autocracies are doomed forever by the communications revolutions that now fully undermine them.
There’s no question that as billions of us come online and interact, trading information and capital and services that we are currently experiencing the greatest Revolution of all time. All great societies, from Ancient Egypt to colonial Singapore were simply hubs that connected people and provided them a platform to trade. The Internet is the hub of connection that is exponentially more powerful than any before it. The value of a network is equal to the square of the number of users on it, as each person on the network can reach out to all of the others and vice versa. 1.5 billion of us are already on this giant trading hub called the Internet. 6 billion of us will be on it by the end of the next decade, virtuously policing ourselves and our governments and trading information and capital unfettered. Viva la Revolucion! Or put in more modern terms, get Revolucious, baby!