"The Fourth Turning" by William Strauss and Neil Howe is a book that explores the cyclical nature of history and how societies go through recurring cycles every 80 to 100 years. Saeculums, a Latin term for a "long life", are divided into turnings that last 20-25 years. The authors argue that the United States is in the midst of its fourth turning, which is characterized by a crisis period that will reshape American society fundamentally. Silicon Valley Banks' quick demise and the recent bank runs, coupled with the financial crisis of 2009, can certainly make one ponder the future of banking and money and also wonder if the authors predictions are coming true.
The authors outline how these changes come about in course of a saeculum. They identify 4 cycles within this century-long saeculum.
The First Turning, or "The High": A time of optimism and social order, where institutions are strong and individualism is weak. Examples of a First Turning include the post-World War II era of the 1940s and 1950s.
The Second Turning, or "The Awakening": This is when there is spiritual and cultural upheaval, where institutions are attacked in the name of personal and spiritual autonomy. Examples of a Second Turning include the counterculture of the 1960s and 1970s.
The Third Turning, or "The Unraveling": Here we find social decay and declining trust in institutions, where individualism is strong and the sense of national purpose is weak. Examples cited f a Third Turning include the period of political polarization and cultural wars of the 1980s and 1990s.
The Fourth Turning, or "The Crisis": Brings resolution to a time of great turmoil and conflict, where institutions are destroyed and rebuilt in response to a major threat or challenge. Examples of a Fourth Turning include the American Revolution and Civil War. Are we heading into a 4th turning? or is this circumspect or coincidental evidence?
One significant impact of a fourth turning in the United States could be on it's currency. The U.S. dollar has been the global reserve currency for decades, and any changes in its value would have far-reaching global implications. The authors predict that the fourth turning will be a period of economic upheaval and inflation, which could result in the dollar's devaluation. This devaluation could significantly impact international trade, the global economy, and the United States' position in the world. Another potential impact of the fourth turning on the United States is on the banking industry. The authors argue that the fourth turning will be characterized by a period of distrust in institutions, including banks. This distrust could lead to a significant loss of confidence in the banking system, which could lead to a run on banks and a potential collapse of the industry.
Ironically, Silicon Valley Bank is an example of how innovative technologies are already disrupting the banking industry. oThe Silicon Valley Bank served the needs of high-growth companies as well as banking for crypto companies. Unfortunately, Silicon Valley Bank's demise mirrored traditional banking as mismanagement, crony capitalism, and poor regulatory oversight led to a bank run. In the music and words of the Talking Heads; "Same as it ever was". One possible solution to the currency and banking crises during a fourth turning could be Bitcoin. The book was written in 1997, well before there was available technology like cloud storage or a fast internet that could accommodate digital currencies, although the concept of digital currency has been discussed by the likes of Milton Friedman since the 70s. Bitcoin is a decentralized digital currency that operates outside the traditional banking system. It has the potential to provide a secure, stable, and programmed monetary system alternative to fiat currencies. Bitcoin's decentralized nature and encryption technology also make it more secure than traditional banking methods with improvements in self-custody. Could an alternative monetary network sit beside traditional finance and help restore public confidence in the banking industry.? If "The fourth turning" is playing out now, it's likely to have a significant impact on the United States currency, banking, and institutions. The potential devaluation of the dollar and loss of confidence in the banking and financial industry. Bitcoin and other decentralized digital currencies could provide a possible solution to these problems. The fourth turning could be a period of transformation for the United States, and innovative technologies like Bitcoin could be the key to navigating these challenging times.
The book is quite long and can be interpreted as being very dark at times. While it's uncertain whether the book predictions are playing out in real-time, it's worth noting the book makes logical arguments using pattern recognition. The conclusions of correlation might be coincidental or one could argue they fit their facts to align with the narrative.
Since 2000, we have experienced the internet bubble, the financial crisis resulting in bank bailouts in 2009, and a pandemic. On top of that, we have seen a highly accommodative Federal reserve policy with huge deficits from tax and government initiatives. All of this seemingly leads to an erosion of confidence in institutions as the authors opine. Whether there is a seismic shift or a gradual movement into the digital age of finance, time will tell.
It's important to note that the book is well-read by macro traders and money managers and the market is a collective of sentiment, so the book's premise deserves attention.
A hash rate is the measurement of a miner's computational power, usually measured in hashes per second (h/s). It is the speed at which a miner can perform the mathematical calculations needed to solve the complex algorithms that make up the blocks in a blockchain. The more computational power, the more powerful the miner is and the more likely it is to successfully mine new blocks and earn rewards in the form of cryptocurrency. The miner's hash rate is divided by the total hash rate of the network and gives the miner the probabilistic determination of BTC rewards. The hash rate is a key metric for determining the overall health and security of a blockchain network, as it is directly related to the amount of computational power being used to secure the network. In the case of Bitcoin, it's important to note that the hash rate is closely tied to the difficulty of the mining algorithm. The difficulty adjusts dynamically to maintain a steady block generation rate, with more computational power, more miners, and more difficulty. This means that as the network hash rate increases, the difficulty will also increase. This is also very important as an incentive mechanism when there are fewer miners and therefore a lower hash rate. The Bitcoin algorithm automatically adjusts lower, making mining easier and more profitable for the miners.
Cost of Doing Business
Hash rate is also closely tied to the mining cost, as more powerful mining equipment is required to maintain the same hash rate as difficulty increases. Therefore, the hash rate is a key metric for determining the overall profitability of mining for a certain cryptocurrency.
Hash Rate Derivatives Solve a Problem? Bitcoin hash rate derivatives can help miners in many predictable ways:
Price stability: Hash rate derivatives can provide miners with a way to hedge against fluctuations in the price of bitcoin. This can help them to better manage the risk of mining by allowing them to lock in a certain price for their mining efforts, regardless of what happens to the price of bitcoin.
Revenue predictability: Hash rate derivatives can provide miners with a more predictable revenue stream, as they can lock in a certain price for their mining efforts. This can help them to better plan for future investments, and expenses and make more informed decisions.
Increased liquidity: Hash rate derivatives can increase liquidity in the mining market, as they provide miners with a new way to monetize their mining efforts. This can help to attract more miners to the market, which can increase competition and drive down the cost of mining.
Increased transparency: The use of hash rate derivatives can increase transparency in the mining market, as it provides a way for miners to demonstrate the value of their mining efforts. This can help to increase trust in the market and make it more accessible to new investors.
Better risk management: Hash rate derivatives can help miners to manage their risk more effectively, as they provide a way to hedge against fluctuations in the price of bitcoin. This can help them to better manage the risk of mining and increase their chances of profitability.
These derivative contracts most certainly can be a helpful financial tool as well as a way to gain exposure to the BTC network. As with any financial derivative, I am reminded of the old financial adage that the "Only perfect hedge is in a Japanese Garden" meaning no hedge solves every problem.
Sometimes simple can be elegant, and measuring your company's numbers can be simple but immensely valuable. Key performance indicators (KPIs) are important because they help organizations measure and track their progress toward specific goals and objectives. By regularly monitoring and analyzing KPIs, organizations can make informed decisions about how to allocate resources, identify areas for improvement, and make adjustments to their operations and strategies. Depending on what data is being tracked, this can be done over several time series.
KPIs are typically chosen to align with an organization's objectives, and they can vary depending on the industry, the size of the organization, and other factors. For example, a retail business might use KPIs such as sales revenue, customer satisfaction, and inventory turnover to measure its performance, while a manufacturing company might focus on metrics such as production efficiency, quality control, and on-time delivery.
In addition to helping organizations track their progress and make informed decisions, KPIs can also help to motivate employees and encourage them to work towards specific goals. By setting clear targets and regularly reviewing progress, organizations can create a sense of accountability and encourage employees to work towards improving their performance.
TYPES
There are many different types of KPIs that organizations can use, and they can be specific to a particular industry or business. Some common KPIs include:
Financial KPIs: These measure the financial performance of an organization and can include metrics like revenue, profit margin, and return on investment.
Customer KPIs: These measure the satisfaction and loyalty of customers and can include metrics like customer retention rate and customer satisfaction score.
Internal process KPIs: These measure the efficiency and effectiveness of internal processes and can include metrics like on-time delivery rate and error rate.
Learning and growth KPIs: These measure the development and progress of employees and can include metrics like training completion rate and employee retention rate.
Some specific examples of key performance indicators would include:
Revenue growth
Net profit margin
Customer retention rate
Employee turnover rate
On-time delivery rate
Average order value
KPIs are often used in a variety of settings, including businesses, government agencies, and non-profit organizations. They can be used to track progress in areas such as financial performance, operational efficiency, customer satisfaction, and employee engagement.
HOW TO USE THEM
Having clear KPIs in place can help organizations:
Identify areas of strength and weakness: By regularly tracking and measuring key performance indicators, organizations can identify areas where they are doing well and areas where they need to improve.
Set clear goals and objectives: By establishing KPIs, organizations can set specific, measurable targets that help them focus their efforts and work towards achieving their goals.
Improve decision-making: By tracking and analyzing key performance indicators, organizations can make more informed decisions based on data and evidence rather than relying on gut feeling or assumptions.
Improve communication: By establishing and sharing clear KPIs, organizations can improve communication and alignment among team members and stakeholders, helping everyone stay focused on the same goals.
Overall, key performance indicators are an essential tool for organizations to track and measure progress, identify areas for improvement, and make informed decisions to help them achieve their goals.
Using KPIs allows organizations to make data-driven decisions, rather than relying on gut instincts or subjective opinions. By regularly monitoring and analyzing KPIs, organizations can identify trends, patterns, and areas for improvement, and make informed decisions about allocating resources and optimizing performance.
In summary, KPIs are important because they provide a clear, quantifiable way for organizations to measure their progress and make data-driven decisions to improve their performance. Or in the most simple form, KPIs allow an organization to measure and manage.
