As the year 2017 comes to a close, it is worth looking back at what we have seen and what we have learned:

• United States is a country with an unserious population.

Despite Trump’s  un-presidential antics, the apocalypse that many feared has not arrived. Despite supposedly serious people screaming that Trump and his supporters are Nazi’s, that “our democracy is at risk”, and that those who aid Trump are “complicit”, concentration camps a have not been set up (some were already in place a year after Hitler took power). In addition, anti-Trump journalists are not being beaten up, jailed, or made to mysteriously disappear. What we have is that the type of fear and hysteria that was promoted in obscure places on the right during the Obama years (especially at the beginning), is now playing out from a left-wing perspective on the pages and airwaves of mainstream news organizations. If you strip away the Trump Twitter-account, the Trump agenda is largely a mainstream Republican agenda; most of which would likely be pursued by a Republican President of any stripe. The fact that the Republican Party controls, in full or in part, more than 40 states means that a Republican Party that was “threat to democracy” would have reshaped large swaths of the country in ways that would make the country physically unsafe for certain groups of people in same way that the West Bank and Gaza are not safe for Jews or Americans. And this fact would be well-known and out in the open (no so-called “dog-whistles”). The fact that one side of the political spectrum has an image such as this about the other sides means that the U.S. is not guided by seriousness.

• At least part (if not most) of the permanent U.S. government has been politicized.

From massive government leaks to apparent hiding (or outright destruction) of evidence, parts of the U.S. government appear to be above the law and above congressional oversight. And unfortunately, as of right now, it appears that the politics all runs in the same direction. It seems that the permanent bureaucracy has decided that Trump cannot be allowed to govern, and is doing everything it can to undermine and/or destroy him. While one can certainly argue with wisdom of various policies, the fact that he won an election in prescribed manner means that he should be allowed to govern within the bounds set by the Constitution. The fact that unelected bureaucrats are taking it upon themselves to frustrate that means that a large part of the country has no hope of ever seeing policies that they want enacted, even if they win elections. Fortunately, it does not yet appear that this has been widely realized yet. When it eventually is, the permanent U.S. government can expect to find that it has lost legitimacy and the support of a large part (perhaps half) of the U.S. population.

• Brexit, that thing that couldn’t be allowed to happen, appears to be going ahead.

In the immediate aftermath of the Brexit vote in 2016, there were dreams that the referendum results could be overturned. Some ideas floated were to just ignore the results and declare that the referendum was an advisory one and not legally binding after the fact, to overturn it in parliament, overturn it in the courts, or to have another referendum to overturn the first one. None of these things have been successful and the divorce negotiations with the E.U. seem to be moving forward (albeit with stumbles). The catastrophic economic collapse that was predicted would happen if Brexit was approved has not happened.

The Lesson?

That things that are unthinkable can actually happen.

• That a chaotic Washington is not necessarily an impediment to stock market growth.

As it became clear on election night that Donald Trump was going to be the next President of the United States, stock market future completely tanked. New York Times columnist (and Nobel Prize-winning economist) Paul Krugman predicted that the stock market would not recover for the duration of the Trump Presidency. While the Trump tenure has been chaotic as many feared it would be, the stock market is up more than 20% during that period. While there are legitimate concerns that the market is currently overvalued and overdue for a substantial correction, the fact remains that the market has done what it has done with seeming chaos swirling around it. Furthermore, the Trump Administration does in fact seem to be more business-friendly in that bad news for the Trump economic agenda seems to result in a down day for the market, while good news for the agenda seems to translate to a good day for the market. While the President isn’t the guider of the market and a recession or a market correction (both likely to occur within the next 3 years no matter who was/is in the Oval Office) will be pinned on Trump, the fact is that either Washington doesn’t matter as much to the market as it thinks it does, or Trump’s agenda is perceived to be good for business both by those economic desperate people who voted for Trump and those Wall Street titans who may or may not have done so.

Overall, what we have learned in 2017 is that the world is changing and that things are not likely to turn out well for the United States as it currently exists. A country with an unserious population and a politicized civil service is not a politically or socially stable combination over the long-run. In addition, a country that discovers that it can thrive without Washington is one that will not long cease to question why we should bother paying taxes to it or be governed by it. Furthermore, in both the U.S. and Britain, there are those in high places that don’t really believe in respecting a democratic result unless it is a result that they personally approve of. While the system in the U.K. seems to be respecting (at least grudgingly) the will of the voters and moving towards the result approved, the jury is still out on the United States. One thing is for sure. Disrespecting half of your population (largely the tax paying half) and making it difficult/to impossible for them to govern when they win elections is not going to result in a happy society that rolls on being the most powerful country in the world, generation after generation.

2017 was an eye-opener. 2018 is likely to bring even more surprises.

With the price of Bitcoin sky-rocketing over the last few months (making millionaires out of some very young people), the world’s attention is suddenly focused on Bitcoin (and other crypto-currencies). Economists and financial ‘experts’ are talking about how Bitcoin really isn’t a currency and is a bubble, and boosters are talking about how Bitcoin will change everything and drain power away from governments allowing transactions to take place beyond the regulatory reach of the state.

So, what is the truth? It would be tough to claim that anyone currently really understands what Bitcoin is. Saying that Bitcoin isn’t really a currency is ludicrous. Anything that anyone will take in exchange for something else is a currency, whether that be dollars, Swiss francs, or a stack of baseball cards. The criticism that Bitcoin isn’t backed by anything really runs into a similar problem that afflicts other conventional currencies; namely that they aren’t really backed by anything either beyond faith that someone else will take them (dollars, euros, etc.) in exchange for something else. True, the faith in these currencies is underpinned by fact that certain governments will accept their own currencies to satisfy tax obligations, as well as the widely shared experience that many establishments will accept the local currency as payment for goods or services rendered. However, if the government issuing the currency is overthrown, the faith in the currency (and its value as a medium of exchange) tends to disappear too (see German Reichsmarks, East German Marks, etc.). So, what is really meant by the assertion that Bitcoin is not a real currency is that its ability to be exchanged for tangible goods and services has not yet been adequately established. Admittedly, at this time Bitcoin does seem to be the Esparanto of currencies: some people use it, but the use of it has not been adopted widely enough to make it a truly useful currency.

One of the more apparent criticisms of Bitcoin is that it is currently in a bubble phase. Any item that increases its price in dollars by 5 or 10 times over during a few months is a legitimate target for a bubble accusation. This is especially true when there is no obvious reason for such a move. The rapid increase in the value of Bitcoin bears a lot of the hallmarks of a bubble move. Specifically, you have a new, potentially transformative, technology that nobody really understands. It moves from the fringes into the popular consciousness. People get excited and the price skyrockets beyond all rational expectations. We have seen this historically in the legendary tulip craze a few centuries ago, and more recently in the “tronics boom” of the 1960’s and the tech bubble of the late 90’s. The rise in price was due largely to sentiment and expectations. If (when) these fail to be met and people lose faith in the idea that they will ever be met, the price of the asset crashes hard, leaving financial (and possibly economic) wreckage in its wake. Having said this, if Bitcoin suddenly entered popular use (and with the internet, something can enter popular use rather suddenly from out of nowhere), see the price of the coins increase rapidly would not be something unexpected. For now, as I haven’t seen signs sprouting up touting that my local grocery store now accepts Bitcoin in payment, count me in the bubble category (although as Bitcoin is a global currency, its possible that the price increase could be justified just from online use).

Finally, the question about the use of Bitcoin also must include questions regarding how one can obtain Bitcoin (it’s essentially inaccessible for most people) as well as the alleged limit on its supply. While this limit is viewed as a limit against Bitcoin losing its value through inflation (a VERY important concern when one is dealing with a medium of exchange that has no governing structure), its limited supply could result in it limiting economic growth and prosperity if it were ever widely adopted in the way that gold (another faith-based medium of exchange) does. As for being inaccessible for most people, this is going to make it less likely that your average person will have experience with it, less likely that he/she will be comfortable with it, and this will hinder its overall adoption by the general public.

What we could end up seeing, however, is the emergence of a global economic segment (a sort of sub-economy, if you will) where people/firms who do business with each other but are also weakly linked with the greater global economy use Bitcoin in transactions. There are many potential ways this could come about, but illustrating them would be an exercise in pure speculation. Perhaps over time, Bitcoin will be gradually adopted as more and more people begin to have experience with it and the faith in the currency grows and allows it to achieve critical mass. However, at this time, it is too new, and the value too unstable, for this to be considered a candidate for mass adoption any time soon.