Sidepots in the Asylum
When I started trading, I was in it for money and pride. My father lost a lot of money starting a hedge fund and we lost our house when I was a kid. I got into trading as some kind of redemption arc.
My father is a renegade. He viewed markets as a way to escape the simulation. He wasn’t around much but he did buy us long leather jackets and took us all to watch the Movie the Matrix at a formative age.
Once I had money, I sought freedom from control. I had to take a lot of abuse from my bosses to learn the arts of trading.
Eventually I figured out how to combine data, markets, memes, and my own judgment into a cohesive whole and reached financial escape velocity. With line of sight to financial freedom, I left these mechanisms of control.
At this point, I understood that my father’s financial losses - the thing that caused us to lose our home - came from delusion. And so I started viewing markets as a way to ensure your rationality. If you do not lose money, you are by definition sane.
But the further I studied markets the more I realized that you gain no sanity studying the deranged. It is like walking the halls of an insane asylum. Imagine a man rocking back and forth in his cell, repeating himself. “Jar. Jar. Bowl. Bowl.” over and over again. Now picture a bored prison guard who says, “If you guess what the man says next, I’ll give you some Looney Tokens.”
The insane man mutters, “Jar. Jar.” And you whisper to the guard, “He will say Bowl Bowl” next. The guard hands you a bit of paper. A Looney Token.
“Wow, you got it again. Good job. Maybe do a quick Twitter thread explaining how you’d predict what he’s going to say next!” The guard intones.
You can go to the mess hall and cash Looney Tokens in for food. It’s not particularly good food - but it’ll do.
But there’s a problem. Your predictive powers in the insane asylum don’t make you more rational. They’re a contrived game. And you get paid in the currency of the asylum. By attributing meaning to this game you are just as mad as the inmate. And by enabling you to play this game, the guard is simply constructing order in a mad world - solving his own boredom.
If you play this game every day, and get a lot of Looney Tokens, can you even spend them in the real world?
When I saw that the gambler living in the asylum, the guard and the inmate were all locked up together - I understood something new and fundamental. The markets themselves are control mechanisms. They exist to lend credibility, and liquidity to a mad set of affairs. This mad set of affairs, specifically, is a society pretending to be a democracy run by special interests. Pretending to be wealthy when in fact, all the money is debt.
By playing the sidepot on the insane man’s chatter, you simply dance inside the asylum - profiteering off the guard’s boredom. There is no meaning in this. You don’t gain any special wisdom predicting the insane man’s croaks.
You are trapped as the inmate is. As is the guard, though he believes he is guarding the inmate. You and the guard - posessing some rationality - are perhaps “free” to leave, but functionally mad due to the force of habit.
Escaping the Asylum
Rather than playing the game any more it is worth considering the key questions. You cannot remember who you are but you know some things for certain.
- The Asylum exists.
- Someone owns the asylum and pays the guard in a currency
- The currency seems redeemable for food in the mess hall. The food is indeed real.
- The guard is bored and wants to play a game predicting the inmate’s behavior
Rather than applying your reasoning to the chatter of the insane man, perhaps one exercise could be asking - why is all this so?
Now - one one hand, you could stay in the asylum. Keep playing the game. Keep betting on “bowl bowl jar jar”. Spend day after day cashing in Looney Tokens for food. Figure out where the food came from. Speculate about what exists in the real world.
But the thing is - you’re not an inmate. You can just leave.
And once you do, you see something.
The complexity and mysteries of the Asylum are a trap that keeps your analytical powers from being turned towards the cabal of people who control the food production.
It’s only once you leave the Asylum that you grasp the mechanisms of control.
What are the Mechanisms of Control
In the asylum there are 4 forms of control
Layer 1: madness
- There is real madness. The inmate is functionally insane. This is what causes him to repeat the same things over and over again. Even if he were not behind physical bars he would be trapped.
- There are actual bars. The inmate, is, indeed locked behind bars.
- There is a guard. The guard has been paid to keep madness at bay, because though he may be harmless - what if he’s not?
- So behind Layer 1 - is not just madness, but also fear of madness.
Layer 2: money
- The guard is paid to show up to his post every day. In a way, he is controlled - though he believes he is free
- He is paid in money that is exchangeable for food inside the asylum
- But you cannot take that money outside the asylum and therefore you cannot functionally leave
- Money provides a token for speculation which keeps you - the speculator engaged with the guard.
Layer 3: certainty
- The guard not only is paid, he is comfortable in his role as a guard
- The inmate repeats the same phrases to himself over and over again because he wants the comfort of repeating the same words
- You guess his phrases because you have taken on the role of the Seer. The Speculator. If you’re honest with yourself, you are also addicted to the rush of guessing. You’ve developed a gambling habit, and so has the guard. Even though he loses most of the time, it doesn’t matter because he has a salary whereas you don’t.
- All three of you are certain in your roles - and money serves as a mechanism to cement this certainty
Layer 4: motivation for entrapment
- Presumably someone outside the asylum does not want the guard interacting with them or their children. Perhaps the guard is a dangerous man - strong, and brutal
- Someone outside the asylum does not want the inmate out in society - for he is thoroughly mad
- Someone outside the asylum does not want you (an unaware speculator) mingling among them
- Someone outside the asylum owns the means of food production to ensure that Looney Tokens inside the asylum can be swapped for actual meals - otherwise there would be revolt
Once you study these 4 layers you’re left with an inescapable question: “On what conditions would the elite outside the asylum want one of these members to escape?”
Let us give a name to these elite. Overseers.
The answer - as painful as it is - comes from the one thing we know about the people in the asylum: the people who built the asylum (Overseers) have done so deliberately.
Overseers want a society free of mad men, violent guards, and contrarian thinkers. By constructing the asylum and imbuing it with money they allow these three unsavory sorts to interact with one another, and never leave. So the only way they’d allow someone to escape is if they had internalized the value of the asylum itself.
Overseers would never allow a guard to escape, because a guard is dangerous. So they addict him to a paycheck and make him stand by a cell. The insane man can not escape because he does not have his wits about him - and the guard is there if he comes to. The speculator can leave any time but this of course would require him to stop speculating on the events within the asylum. Is he even capable of such a thing? Would he integrate into the Overseer society upon exit?
The Simple Plan
Now - you could simply walk out of the asylum. Nobody is stopping you. But in the outside world they don’t accept Looney Tokens. You’d need to convert them to food within the asylum and sell the food as quickly as you could to begin traipsing in the outside world.. But doing so, you’d incur large losses. The food spoils quickly, and you have a limited time to convert it to hard assets - such as Gold or Bitcoin.
And if you’re just walking around, pockets full of gold and Asylum clothes on, without guards about - you end up getting mugged.
In fact - the simple plan is so bad that you realize something quite dark indeed.
The Inmate tried the simple plan. He saw the world as it was, and made a break for it. But he didn’t have a plan for when he got out of the asylum, and realized he’d have to go back. He thought he was Neo from the matrix but was just another clown who tried to step up to the Overseers. And rather than choose defeat, he chose his madness.
Madness does not come naturally, but rather through encountering reality as an inescapable prison.
Simply trying to escape from the asylum - is the very madness that this asylum was designed to contain.
What Other Mechanisms of Control Are There
You know that ultimately, whatever you come up with is being observed. Every interaction you have within the asylum is tracked. If your plan is to kill the elite, they’ll send in a guard and kill you first.
You aren’t Neo from the Matrix. Maybe you are. But I’m not.
However - like any society - whatever society exists outside the asylum wants more members. And they’re watching you.
The Asylum is under constant surveillance to ensure everyone is playing their roles. But if someone stops playing their role, the questions become twofold:
- Can this person peacefully integrate within our society without guards?
- Would this person provide value to us?
It occurs to you. The Asylum is itself - not mad. The Overseers have built it to ensure their own objectives. They are rational. The Sane.
Peaceful Integration: Part 1- Establishment of Intention (Valid Reason)
Someone who just wants more Looney Tokens (a pure speculator) isn’t rational.
They’re going to switch to whatever currency there is outside the asylum, and accumulate a lot of those. And keep going. They’re addicts without heed for the well being of themselves or those around them. Their only goal is to increase their balance, never asking why.
So the Overseer class sees a Speculator as fundamentally untrustworthy. The Speculator will simply destabilize the Overseer economy, causing random booms and busts.
Thus - the Overseer class will only let you roam free if you have a clearly stated intention they can observe, understand and empathize with. This intention - will in essence, serve as a passport in the area outside the asylum. And the intention cannot be to accumulate wealth speculating.
If an Overseer Officer stops you and asks you why you’re roaming about, you need a Valid Reason. You need to believe it, too - because the Overseers and their attack dogs can easily sniff out lies and turn you into an inmate at a moment’s notice.
Someone running around outside the Asylum without a Valid Reason is a future inmate.
What is a Valid Reason? If an Overseer officer shows up and asks you for it, what do you present to him? Imagine a holographic ID tag that shows the ideal world you are moving towards. This hologram is incredibly detailed - it shows what your ideal life looks like in most regards. The food. The people. The activities. The location. The tactile senses.
When an Officer stops you he asks for your Valid Reason. You pull out the Valid Rreason hologram, play it briefly for The Officer. Let him inspect its detail.
After quickly checking the logical continuity, the Officer quickly checks your pupil dilation to make sure that it’s your real intention, takes a look at the Hologram and says, “Sorry for bothering you sir.”
The Overseers want to keep their ranks from being overrun by the mad, the violent and the unhinged. Such characters lack emotionally resonant intention - Valid Reason Badges.
Peaceful Integration: Part 2: Avoiding Tilt
Why would an Officer stop you to begin with? How would he know you likely didn’t have a Valid Reason Badge?
To answer this you must understand the three Asylum archetypes:
- The Inmate - a person who has been driven mad - often by trying to launch himself without a plan into the Overseer Society.
- The Guard - a violent person, easily swayed by stories of control. Think of any soldier, dying for his country. Routine. Roles. Authority. Deep down he has a weakness for speculation and Dice - which feeds the speculators.
- The Speculator - a gambler. He is better at gambling than the guards, and less violent. But he is still a slave to stories he tells himself. About being better than Guards. Or Inmates. Or his heightened rationality.
The sources of their incarceration are delusion, obedience to external authority, and inability to control vices.
If you are delusional, you cannot move towards the Valid Reason accurately. You’ll be caught swerving like a drunk driver.
If you are obedient, you will forget your Valid Reason in favor of whatever meme or new authority comes into play. You’ll drop your ID card. Next thing you know, you’re a guard in someone else’s asylum.
If you are unable to control your vices, you’ll end up speculating. You tell yourself you’re a punk but you’re making money from guards. Their rote obedience is your bread and butter. So you’re there. Breathing their same putrid air. Trapped in a prison of your own choice - though you’re allowed to leave, you can’t.
All three of these - delusion, obedience, and vice - come from “tilt”.
Tilt is when you generate big emotions unrelated to achieving your Valid Reason, and chase them. Officers pull you over when you’re on Tilt.
So the key is understanding what Tilt is. And as soon as you start exhibiting it, calm yourself down before an Officer stops you.
Peaceful Integration Part 3: Participating in the Overseer Economy (Work Pass)
The Overseers are various entities that all have Valid Reasons, and do trade with one another.
They understand that their interactions are not Hobbesian because they’ve built the Asylum and locked all the State of Nature types up. The violent are Guards. The mad are inmates. The gamblers are speculators who keep the guards from getting bored. Officers patrol the grounds close to the Asylum to make sure that the right people are there.
But the Asylum isn’t just a concept - it’s a real world military prison industrial complex. There are farmers to ensure there’s food and chefs to cook it. There is a currency system to build the Loonie Tokens. There is a surveillance system to ensure the entire thing doesn’t unravel.
Thus even the establishment of the Asylum has created a set of valuable economic primitives. Officers, Food, Currency. Surveillance.
Additionally, understanding and justifying the entire architecture to prevent revolt is important. What happens if compassionate Overseers start asking hard questions about locking up a large percentage of society? Thus storytelling and politics is part, as well.
The more each one of these functions can be automated the better. Not only do automated system reduce the amount of work required to keep the entire system in place, they also have fewer existential crises than human Officers charged with enforcing the entire system that can be quite brutal at times. Thus - Technology as applied to food, currency, surveillance, and even the construction of the Asylum - is a high value activity among the Overseer class.
Each member of the Overseer society is moving towards an objective function - or a Valid Reason.
This Valid Reason must resonate with every Overseer and in exchange an Overseer agrees to do labor towards an economic primitive. The terms of this work are defined by the Work Pass ID.
The Work Pass ID is another conceptual hologram detailing very specifically, on any given day or week what an Overseer is working towards and what economic primitive it is advancing.
When an Officer stops you, you should be able to present your Valid Reason as well as the Work pass that it is justifying. What are you doing and how does it bring you closer to the Objective Function? If you cannot answer this, what are you doing in the Overseer society? Perhaps you need some more time in the Asylum
Each labor unit in the Overseer economy is translated into a currency without coercion or the need for guards. This is - in all likelihood - a cryptocurrency, or another form of hard money.
As a side note - Looney Passes are currency for the Asylum, so it’s somewhat suspect if an Overseer is carrying a high balance of Looney Passes unless he’s in the Currency business.
Conclusions from the Matrix
There are two options proposed in the movie The Matrix (if you haven’t seen The Matrix - it’s a movie about artificial intelligences constructing a fake reality that resembles earth to keep human consciousness on ice for energy/ study). The Red Pill, and the Blue Pill.
The Red Pill gives you the option of attacking the machines on their home turf and leaving the asylum. The Blue Pill gives you the option of staying in the Matrix.
The Matrix itself is a bit like the Asylum I’ve described above.
A character named Cypher - takes the Red Pill first but wishes he took the Blue Pill (ignorance). He realizes that he’s going to end up dead trying to run around in Machine society and misses eating delicious steak in the Asylum.
Cypher’s Mistake was that he didn’t figure out how to work with the machines from the get-go. Instead he tried to destroy them, and collaborated with terrorists. Thus his best case scenario was betrayal, and working with a psychopathic Officer (Agent Smith).
Neo and Cypher both end up dead.
Furthermore - it’s not often remarked upon, but Neo is a mass murderer. He and Morpheus claim that all “minds that are not set free” are enemies of humanity. But they’re still humans. They have lives - even simulated ones. And when you die in the Matrix you do also die in real life.
So when Neo shoots an “unfreed mind” inside the Asylum, he’s still committing murder. Just because the man is rocking back and forth muttering doesn’t mean he has no human dignity. Just because the guard has subjected himself to higher authorities doesn’t mean he has no fundamental right to life.
Even if an unconsidered life “isn’t worth living” who is to say people in the Matrix haven’t considered their lives, or have deemed them unworthy? Who is Neo to make the choice of life or death on their behalf?
Are the Machines wrong to systematically hunt and destroy a mass murderer who wants to also end their existence?
Neo isn’t the hero society (or the movie) makes him out to be. And Cypher made the wrong call and is trying to turn back the clock. Which is, of course, impossible and self defeating.
But at the same time, once you see the terms of the the Matrix. A control system designed to keep undesirables in check, serfs essentially who work for an Overseer class. You can’t stay in that world “as is”. You have to play the game based on your new understanding. Why? Because the Overseers can see that you’ve reached awareness.
The way to escape the Matrix and live among the Overseers is to signal to the machines, “Hey, I see what’s going on here. I don’t want to cause mayhem. I have something I’m working towards - my Valid Reason. Here’s the hologram of what it looks like. Here’s my Work Pass - the thing that shows how I’m progressing towards my valid reason. And I’m not going to end up on tilt like Neo or Cypher if you let me go through this simulation with some extra powers.”
This is perhaps all a fancy way of saying that it’s good to know what you want, how to get there, and avoid falling into mental traps. And perhaps it’s as mundane as that.
Perhaps the Asylum isn’t real, it’s just the ranting of a blogger. Perhaps the Matrix is just a movie.
You take the blue pill the story ends when you wake up in your bed and believe whatever you want to believe.
You take the red pill, you go down the rabbit hole but run out of food 20 days in and get shot and killed by day 30
But if the Asylum is real. If that uneasy feeling you get reading this, has a grain of reality to it. That there really is an architecture of control that doesn’t have your best interests at heart. Trapping you in a digital panopicon designed by elites. What’s the best way to deal with it? That doesn’t end up in willfull ignorance or personal catastrophe.
Don’t take either pill. When you see Morpheus offering them to you - run.
The Overseers won’t stop you unless you break their rules. Have clarity of Intention, clarity of process and avoid tilt. If you bend the rules of the Matrix a bit getting to your objectives, this ensures that the Matrix itself isn’t destroyed in the process.
To escape the Aslyum means to understand its nature, its purpose - and to walk away knowing those who built it are now watching your every move.