Afghanistan, China, Inflation and Breath

August 16, 2021

How’s your Summer going? I got on a packed plane this weekend! It’s been good to leave the island.

“I have just three things to teach: Patience, simplicity, and compassion. These three are your greatest treasures.”

- Lao Tzu

“Fanaticism consists of redoubling your effort when you have forgotten your aim.”

- George Santayana

“Life is a series of natural and spontaneous changes. Don't resist them; that only creates sorrow. Let reality be reality. Let things flow naturally forward in whatever way they like.”

― Lao Tzu

A. A Few Things Worth Checking Out

1. If you’re looking to read and understand more about how and why Afghanistan has turned out the way it has, Dexter Filkins’ work seems to be a great place to start.

He has written about Crown Prince Mohammed bin Salman of Saudi Arabia, the uprisings in Yemen, the crises in Syria and Lebanon, the Prime Minister of Turkey, and a troubled Iraq War veteran who tracked down the surviving members of a family that his unit had opened fire on. In 2009, he won a Pulitzer Prize as part of a team of Times journalists covering Pakistan and Afghanistan. In 2006, he was a Nieman Fellow at Harvard University, and, from 2007 to 2008, he was a fellow at the Carr Center for Human Rights Policy, at Harvard’s Kennedy School of Government.

He has received numerous prizes, including two George Polk Awards and three Overseas Press Club Awards. His book, “The Forever War,” won the 2008 National Book Critics Circle Award for nonfiction and was named a best book of the year by the Times, the Washington PostTime, and the Boston Globe.

He gave a Google Talk about the book.

Filkins wrote an article in March of this year, “Last Exit from Afghanistan,” and also appeared on NPR’s Fresh Air Podcast around that time. He was also a frequent guest on Charlie Rose over the years, including a 2008 show introducing his book.

2. I don’t have anything original to say on Afghanistan. The humanitarian tragedy is enormous, but having been born in Pakistan (Afghan neighbour) I have seen this suffering for 4 decades. These problems are not new.

There is in the longer term, a bigger debate to be had on how to fix the core problems in Afghanistan (if they can be fixed) and who should be responsible for them, in the near term many people are coming to the wrong conclusions about US and Afghanistan, this article provides good context on why we went to war and when we should have withdrawn and why the US occupation of Japan isn’t a good comparison.

I supported the Afghanistan War in 2001. I’m not a military interventionist in general — I strongly opposed the Iraq War just two years later, and protested against it. But in 2001, the case for war in Afghanistan seemed strong. America had suffered a huge, devastating attack on our territory; the terrorist group who perpetrated the attack was still at large; the Taliban government of Afghanistan was sheltering those terrorists. The case for war, as I saw it, had nothing to do with the odious nature of the Taliban regime — there are lots of odious regimes in the world, and we don’t go invading them just because they’re nasty and bad, nor should we. Instead, it was about eliminating a clear and present threat to the United States, and about punishing those who had been responsible for it.

Ten years later, that case for war still seemed strong. Bin Laden slept with the fishes. The leadership of al Qaeda had all been killed or captured, except for Ayman al-Zawahiri, a cranky old man who we seemed to leave in place in order to alienate as many people as possible before al Qaeda finally slipped into the history books. Though no one will ever say al Qaeda is dead, the centralized, competent organization that attacked us on 9/11 is certainly gone, and the name is now basically just a franchise used by a ragtag bunch of scattered local Islamist gangs who usually lose the wars they’re fighting in. Mullah Omar, the Taliban leader who chose to shelter and support al Qaeda, bought the farm in 2013 (though we didn’t know it til 2015).

In other words, America did what I saw us as having come to do. The threat (al Qaeda) was eliminated, and the punitive expedition seemed to have inflicted sufficient punishment on the people who sheltered them. Accordingly, the U.S. began to draw down troops, and by 2015 our military presence in the country was relatively minor.

It seemed incredibly unlikely that this was due to a radical diminution of Taliban military capacity; instead, the Taliban were simply waiting for us to go away. Indeed, they were negotiating with us for us to go away, and even fighting alongside us against ISIS. It seemed inevitable that soon we would withdraw troops, the Taliban would take the reins of power again, and that they had learned their lesson not to harbor anti-U.S. terrorist cabals. The punitive expedition was complete, and now the country would go back to its natural rulers. Staying in the country past 2013, it seemed to me, was a mistake — an example of sunk cost fallacy, and a political problem where neither Obama nor Trump was willing to endure the public image fallout of seeing the U.S.-backed puppet government fall on his watch. Better to get it over with.

Biden saw things the same way I did, and here we are.

Of course, lots of people are saying that the U.S. was “defeated” in Afghanistan — as if permanent occupation would have represented some sort of “victory”. Of course, various people have their own political B.S. reasons for saying that the Afghanistan war represents a failure or defeat. But I also think there’s a popular idea that U.S. military occupations ought to be able to transform countries into prosperous stable liberal democracies. That idea is nuts, and it represents us learning exactly the wrong lessons from the resolution of World War 2.

A good thing to do if you want learn more about the Taliban is just read the Wikipedia entry for Mujahideen. This is after all where the story began.

3. Peter Zeihan had a good piece titled: The Return of American Narcissism on Afghanistan.

Some key quotes:

Many have criticized the Biden administration for “losing” Afghanistan. To them I have four responses:

  1. If after twenty years of effort and literally trillions of dollars of assistance the Afghan military cannot hold its country together for two weeks, then another year, another decade, another 10,000 American combat deaths, will achieve nothing.

  2. The goal of the American presence was to prevent the return of hostile militant groups like al Qaeda, the radical Sunni terror group that carried out the September 11, 2001 attacks. Good. Fine. But al Qaeda has inspired more capable copy-cats in Pakistan, India, Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Iraq, Syria, Palestine, Egypt, Algeria, Morocco, Yemen, Sudan, Libya, Niger, Nigeria, Mauritania, Mali, Somalia, the Philippines, Indonesia, France, Belgium, Russia, and I probably missed a few. So we are going to, what, occupy them all??

  3. Our greatest allies in the Afghan operations fell into two camps. The first are the Hazaras, an Afghan tribe in the central highlands. They’re badass. Love those guys. Wish we could bring them all to the United States for settlement. Unfortunately, they stayed in their central highlands and only fought the Taliban defensively. The other camp -the Northern Alliance, the ones willing to take the fight to the Taliban in the lowlands which wrap around Hazara territory like a giant U - is comprised of a dark web of opium smugglers and serial child abusers. If that’s the best ally we could find, you’ve gotta wonder if it’s all worth it.

  4. It isn’t worth it. It was never worth it. When I look at Afghanistan, I think similar thoughts to when I think of Syria or China’s Belt-and-Road program: at the end of the day, what does the winner get? Afghanistan is landlocked and oil-free. It is among the poorest countries on the planet and has been for most of recorded history. It is on a path to nowhere. Getting in and out requires deals with either Pakistan (wildly untrustworthy), Iran (problematic to say the least), China (heh, no), or Russia (stupid stupid stupidSTUPID).

This was never going to last. I even have a hard time criticizing the Biden administration for its bungling of the withdrawal. I’ve been saying for the better part of three years than whenever U.S. left Afghanistan the Afghan government would fall, but I was thinking in terms of seven to twelve months. Not fifteen days. The evacuation authorities think they can have everyone associated with Western governments out of the capital of Kabul within another fifteen days. They will need to work faster. As of the time of this writing August 15, the Taliban already has entered Kabul from all points of the compass. The only thing preventing a bloodbath is the Taliban’s desire to capture Kabul, not raze it. With the Afghan president’s decision to send all government workers home, the rump Afghan government has already been functionally dissolved. The flag wasn’t so much lowered as the flagpole fell over.


People are worrying about the wrong thing.

First of all, Afghanistan was not an ally. It was an occupation. Anyone who is anyone in the field of international relations saw Afghanistan as a drain on American attention and resources - not a springboard to greater things. The Americans being out frees up the possibility of more action, not less. For rivals of America, that’s a problem. For allies of America, that’s an opportunity.

Second and far more importantly, fixating on Afghanistan and its aftereffects is focusing on absolutely the wrong thing. It isn’t so much that the United States is pulling completely out of the United States, but instead it is pulling completely out of the world.

America’s rivals want the Americans to make the world safe for Iranian and Russian oil shipments and for Chinese merchandise trade, but for the Americans to not muck about in their neighborhoods. Sorry, but that’s not what full withdrawal looks like. The Americans are leaving everywhere which will free up the entire American military to do whatever the hell the Americans decide to do, whenever they decide to do it. In the meantime, say goodbye to the primary economic pillars which support all the countries that dislike America. So, yeah, America is leaving, and America’s rivals are about to get what the wanted. Good and hard. The idea that Iran and Russia and China can survive without American-guaranteed international trade is statistically hilarious.

As for the Americans, bereft of significant international threats and presences, they will do the same thing they did in the 1990s and turn back to their internecine arguments.

4. George Soros had a well-articulated WSJ op-ed on Xi's plans to stay past his term limit and become a dictator in 2022:

Xi "faces an important domestic hurdle in 2022, when he intends to break the established system of succession to remain president for life...He knows that his plan has many enemies, and he wants to make sure they won’t have the ability to resist him. It is against this background that the current turmoil in the financial markets is unfolding, catching many people unaware and leaving them confused...He doesn’t know how the financial markets operate, but he has a clear idea of what he has to do in 2022 to stay in power...Thus, his first task is to bring to heel anyone who is rich enough to exercise independent power. That process has been unfolding in the past year and reached a crescendo in recent weeks."

5. James Clear is one of my favourite thinkers, this tweet storm is a good summary of his writings:

6. Bloomberg Wealth with David Rubenstein speaking to Marc Andreessen.

7. Carl Icahn is worth $17bn, what’s his secret to success:

8. Jeremy Grantham: we are in one of the greatest bubbles in financial history.

9. There are so many discussions on Inflation, but the most nuanced and thoughtful one I’ve found is this one with Viktor Shvets on Macro Voices.

For me the highlights were:

a) The March to zero. Technology and abundance of capital are huge deflators. Eventually the cost of all things will edge towards zero since technology takes marginal costs to zero.

b) In the near term, we will be spending more manipulating atoms rather than bits, this will be inflationary.

c) In the 80s we decided to financialize our economy. We wanted a better life and in a democracy you can always change the rules. Good framework for long term: mean reversion isn’t inevitable in a democracy. The rules of the game can be changed.

d) What are assets worth in a world of zero rates and zero risk premia?

10. A Nuanced Guide to Delta by Ed Yong of the Atlantic.

11. Brian Koppelman interviews Quentin Tarantino. Koppelman wrote the script for one of my favourite movies, Rounders, and co-created the brilliant series, Billions. And Tarantino doesn’t need an introduction.

This conversation was sheer joy. They chat about each others’ creations. Tarantino chats about his school years, where he says he was the dumbest kid in class. At age 8 he says he couldn’t ride a bike or tell the time. He asked himself “Is there something wrong with me?” And he concluded “I was just f*cking lazy”. He chats about the early years where he cobbled things together with no money. He chats about how his mother shouted at him when his schoolwork was a disaster and banned him from writing scripts.

The highlight for me was the detail he goes into about the Austrian actor, Christoph Waltz.


Breathing right is one of the most important things you can do for your lifespan and health (apart from sleep).

Your breath is a key pillar in your health and wellness.

James Nestor’s great book - Breath: The New Science of a Lost Art, is worth a read, here are the key ideas if you want to improve your breathing:

  1. Nose breathing helps you stay in aerobic rather than anaerobic, which is 16x more effective. The body craves more carbon dioxide, not oxygen. It is the chief hormone if the entire body.

  2. Slow breathing, particularly exhalation, has tremendous positive benefits. People breathe too much, breathe less and as lightly as possible

  3. Lung capacity is most tightly correlated to longevity. Not blood pressure or HRV or anything else – lung capacity. There are many breathing and stretching videos you can check out at Nestor’s site.

  4. Buteyko breathing and other practices that help you slow down your breathing and breathe less have shown remarkably effective in helping all sorts of diseases. Counterintuitively, You want to increase the carbon dioxide in your blood. Increase the time for exhalation, rest, inhalation – it is no wonder or surprise that slowing down your breathing and heart rate can help you live longer. The ideal is 5.5 inhales and exhales per minute

  5. The modern diet has shrunken our mouths, faces, and airways, making us terrible breathers. Our ancestors chewed for hours per day which gave us a wide and strong mouth and jaw

This Modern Wisdom podcast James did is great.

C. The Tech and Crypto Section

1. In what might be the most complete piece to date on China’s technology policy, The Economist has gone into incredible detail arguing that the country will continue to evolve its own technology ecosystem with a strong focus on everything from artificial intelligence to self-driving cars.

The consumer technology sector will exist but won’t feature as prominently as it does in the West. What is clear from the piece is that China is a country moving with intent and following a coherent tech strategy designed to firm up the country's power and prowess above all else.

Now the government wants to use such carrots, as well as its anti-tech sticks, to create a less unruly and more hardware-focused technology sector to help it surpass America and the rest of the West in economic might, writes Rush Doshi, an adviser to President Joe Biden, in “The Long Game: China’s Grand Strategy to Displace American Order”. Mr Xi has referred to “great changes unseen in a century” in areas such as ai and quantum computing (which would harness the weirdness of subatomic physics to drastically speed up certain types of calculations). These, he has suggested, will usher in a new global economic order that revolves around China. Senior officials believe that if China can get a first-mover advantage on the cutting edge of technology, it will become not just an economic superpower but a geopolitical and military one, too, writes Mr Roberts of the Atlantic Council.

2. Kai-Fu Lee (VC and author of AI Super Powers) had a great piece on how China is using AI to fuel its next industrial revolution.

3. VCs are getting more comfortable with disclosing their limited partners and the real money behind their funds.

4. Chris Dixon of a16z had a great tweetstorm on what it means to go from Web 2.0 to Web 3.0.

5. Great part-3 of The Generalist piece on FTX and Sam Bankman-Fried.

6. And SBF did a great summary of Coinbase earnings last week:

7. Scott Galloway spoke with Josh Wolfe about all things technology and Josh’s recent tweet reminded me our post last week on Atoms vs Bits.