Coffee Shop Thoughts 7/19/24: Teams, Triffins Paradox, Consciousness
If it’s not apparent already, I typically spend a portion of my Friday at a coffee shop so I can get isolated, heads down, zero distraction time to do more individual contributor level of work. I typically carve out an hour to get my thoughts down from the week so I figure I might as well post it here for the world to see. What could go wrong?
This week was a great reminder of what it feels like to work in a great engineering team. We have a loaded sprint with lots of complex work. My team has been absolutely cruising through it with extremely high levels of communication and coordination between many departments. It’s always a great day when you’re trying to do a release and an engineer, who has already shipped a ton of work in the sprint already, goes “Hold up, don’t release, got another ticket in the pipe that’s just about done”.
When stupid religious wars or politics are involved, it destroys the team. When your team is laser-focused, is truly tech-agnostic, and loves to build, there’s harmony and excitement.
From a product management angle, this is when it gets really fun. It becomes much more like playing a fast-paced game of Tetris or Guitar Hero. There are a lot of tactical shifts, priority changes, triaging, roadmap shifting, etc. which is exciting because it means the product organization is healthy.
In that same vein, I’ve started to work on some really interesting work involving LLMs and a data source that I cannot name because it would give away the secret of what we’re doing. It’s not something that has been done before in the market and is truly novel. This is where it gets really exciting. It’s also where it gets frustrating because there is a constant need for more resources. That’s the PM dilemma: you see your roadmap getting executed and say “If I had 2 more engineers, we could take on this whole other high-value stream of work”.
Soon.
While on the topic of dilemmas, there’s a specific theory called the Triffin Paradox. The simplest way to describe this paradox is this:
Any currency that is used globally in a significant way will eventually get to the point where the domestic needs and the international needs of that currency are at odds.
This is compounds on top of the Dollar Milkshake Theory. That theory, in essence, is that you should be much much less concerned about the dollar weakening and more concerned with the dollar strengthening.
As the fed funds rate increases, it means we are reducing liquidity in the system. Since we are the global currency for the vast majority of transaction settlements (>70% of transactions are done in the dollar), every country needs the dollar to do basic things like buy oil to power their economy. When rates go up, liquidity goes down, and thus the demand for the dollar actually increases. This makes it very hard for other countries because their currency is weakened against ours. The way they combat this is typically by printing which has the negative byproduct of devaluing the competing currency.
Why should you care about this?
Well, in a globalized economy with tightly interwoven supply chains from many countries around the world, if one of those countries cannot get their hands on the dollars they need to transact, they’re toast. If we do that too much then we start knocking out our trade partners which are required to keep the flow of goods going.
In our current example though, if we don’t reduce the liquidity of the dollar then we run the risk of inflation. Excess cash in the system with high consumer demand creates inflationary pressures.
And that, my friends, is where the paradox comes in. We need interest rates to increase to curb inflation but if we raise them too much then our global trading partners have an increased risk of defaulting, thus posing a system threat to the global economy.
I’m a pretty hard capitalist at heart and believe we should prioritize our native country (USA) first. However, you cannot ignore the globe. I know folks say things like “who cares what happens in India” or “nobody cares about China anymore”. The reality is that we must care about them - all of them - in some form or fashion because we rely on them for producing goods. It honestly is an uncomfortable situation to be in.
What’s sort of funny when thinking about this line of thought is that our global economy operates like one giant entropic-like system. Over time, disorder continues to increase as we spread out further on the planet (and eventually solar system). However, within that chaos are certain conditions that create the emergence of consistent patterns.
It’s the ultimate interplay between order and chaos as they more than just coexist but rather generate each other. This is found in biology or chemistry, such as the Belousov-Zhabotinsky reaction. I’ve written about this in my post on “Volatility and Resonance: Black Swan Events and Contrarian Thinking in Coherent Markets”.
Anyway, switching gears.
I tweeted something out recently that was a sort of joke but not really.
“Callin' it now: When we start to colonize the Moon and Mars, @Matthews_REIS will be the first to do the transaction.”
I was actually thinking about this quite a bit more after I tweeted it because I think it’s where we are going and faster than we think.
One of my favorite sci-fi series of all time was The Expanse. It was unlike any series I had ever read and a large part of that was due to how realistic it felt. For example, there were interplanetary politics that were driven by concepts like mutual assured destruction, colonization, energy/commodity independence, etc.
This sent me down a slight rabbit hole. Where did our existing land governance system come from in the USA? Turns out, it was the Land Ordinance of 1785 that kicked off the Public Land Survey System (PLSS). This is how land was divided up with terms like townships, acres, etc. The foundations of all commercial real estate go back 239 years… This provokes the question: is this the best system?
This is really interesting when you think about going multi-planetary. Or even if we just get the moon going. Will the moon be purely government-owned, operating like a federal airport? (mainly because its most likely initial use case is a transportation depot).
Will they allow for it to be private? If private, will they care about equal opportunity to access/own the land or will it only be for the rich because they can afford to build out the infrastructure?
How do we get infrastructure up there? Will there be zoning or building codes? Once there are buildings, how will we handle things like inspections for a transaction?
It might seem ridiculous to think about but I think there is a much higher chance than 50% that we start to have to answer these questions in the next 30 years. I’m confident that Matthews will be involved somewhere ;)
I’ve got a few minutes left to write before the hour mark so I’ll end it briefly with a topic I continue to think about a lot: Consciousness.
I continue to wonder what, exactly, is this thing called consciousness. The human body is just a platform with DNA as the programming language. We can modify it, repair it, and even print it synthetically. It’s totally separate from the mind.
We know there is this thing called the ego from Sigmund Freud. The ego is separate from the body and has 3 layers (Id, Ego, and Superego) which make up the model of the psyche that we know today. But, the ego is separate from the body.
As a thought experiment, try answering this question:
When you are talking to yourself… who, exactly, is listening?
I’m sure you’ve had conversations with yourself. Ran through scenarios, ideas, arguments, whatever. Who is listening? Have you ever tried further separating yourself from the thoughts that you hear and rather passively listen to them? Who is listening to the random stream of conversation from the ego fly by?
Freud and Yung have similar opinions on this but they still feel shallow. Why?
When you do these observations in “base reality” (aka. sober), your mind is in a settled chemical state with the majority of the brain activity happening in the frontal lobe.
When you are on psychedelics, the entire brain lights up, and people describe it as a “complete separation of the mind from the body” as well as “a oneness with everything”. Your brain looks like the below:
A paper I recently read takes the study further by studying the neural connectivity of the connectome pre- and post-psychedelic trip.
The results were super interesting: post-psychedelic trip has significant persistent small changes that alter the brain. This is why there is so much research at the Veterans Affairs on the use of psychedelics in PTSD treatment.
But, again, I go back to the line of questioning I’ve been thinking about. Where is the “conscious” thing in this? Is consciousness something like quantum fluctuations that harmonize in a quantum pattern that we just can’t see? We know our brain and other species have quantum-like effects that alter how we operate. Is our brain just a place where quantum effects can emerge from?
So many questions. Anyways, I’m out of time. Hopefully, the rambling is interesting.