Welcome back to the 1st Law Newsletter - Friday Edition.

In this email:

• Infinite game theory

• Currency Debasement

• Quotes to go

Infinite Game Theory

I am trying to develop a mindset where my happiness does not depend on winning. Like the aging athlete who is happy to simply play and compete without injury, regardless of winning or losing. Like the aging worker who doesn’t need the money but goes to work to stay busy and contribute to society. Adopting this mindset mean I cannot be beaten because by playing, I win. The most important thing is to never quit. The only objective is to continue to play.

Cynics are right 99% of the time and wrong 100% of the time in the end. If someone is telling you the person you are dating is the wrong one, they are gonna be right every time… until they are wrong when being right matters most and you find the one you are going to marry. It doesn’t matter if you lose 9 bets in a row, as long as you can still make a 10th. You never know which one will work out. That 10th bet may have outsized rewards that offset your previous 9 losses. It doesn’t matter how many businesses you start. Every business will fail until the one that doesn’t. All that matters is that you keep playing. Do not get wiped out. Stay in the game.

Debasement of our currency

Supposed inflation metrics in Canada for the past 10 years, as found on Statistics Canada CPI Annual Review.

2014: 1.91%, 2015: 1.13%, 2016: 1.43%, 2017: 1.60%, 2018: 2.27%, 2019: 1.95%, 2020: 0.72%, 2021: 3.4%, 2022: 6.8% 2023: 3.9%.

That means that something that cost $10 in 2014 costs $12.80 today. Doesn’t seem too bad. If this were actually true, I probably wouldn’t be writing about inflation in this newsletter. But everybody I know is talking about how expensive things have gotten. It does not feel like a 28% difference over 10 years (which is still significant). And as I’ve brought up before, this inflation metric is based on the CPI, which is different for everybody, so while this metric is a good idea in theory, it feels pretty irrelevant. Asset inflation is different than commodity inflation. The stock market has increased much more than 30% over the last 10 years. And the average home sale price in Toronto (source) in January 2014 was $472,437. In January 2024 it was $945,113… that’s a 100% increase.

The only point I am trying to make here is to open your eyes to the fact that our currency is being debased, just like when people chipped small bits off of gold coins. When the government prints Canadian dollars it has the same effect. And its not just Canadian dollars, its pretty much every currency in the world. More money is being put into circulation without the backing of actual energy expenditure, without some form of productivity. For example; pandemic stimulus checks. We cannot give money out for nothing. All it does is make things more expensive for everybody. Nixon 1971.

I feel as though I lost my train of thought in this article. I will think about this more and bring it up again in a future edition with a more cohesive point to convey.

Quotes to go

Thanks for reading!

Lucas