The Premise We’ve Always Trusted
For decades, investors and policymakers have relied on a comforting belief: that markets and economies, no matter how chaotic, eventually find their way back to balance.
This idea—mean reversion—suggests that prices, valuations, and ratios oscillate around some long-term average or “true” value. When markets overshoot, they correct. When they panic, they recover.
It’s an elegant principle. It implies that the world behaves predictably, that deviations are temporary, and that equilibrium always returns. Its a generalised efficient market hypothesis meets mirco-economics view of the world.
When the Mean Starts to Move
But what happens when the “mean” itself is no longer stable?
In recent decades, patterns that once defined equilibrium have begun to fracture. Global debt has ballooned. Interest rates, after forty years of decline, reversed course. Asset valuations detached from economic reality.
Meanwhile, the stabilising forces that made mean reversion possible—cheap energy, young populations, and the dominance of the U.S. dollar—are fading.
When the foundation moves, the cycles built on top of it lose meaning. The “normal” we expect to return to may not exist anymore.
The Question?
If mean reversion assumes stability, what explains instability?
How do we understand a system that no longer reverts to its past, but reorganizes itself entirely?
Fundamental Reversion
Fundamental reversion offers a way to think about this new reality.
Where mean reversion describes fluctuations around a fixed trend, fundamental reversion describes the long-term rebalancing of that baseline itself.
It’s the process through which economies and markets revert—not to old averages—but to new equilibria defined by the reassertion of their true constraints: debt, energy, demographics, productivity, and trust.
In this sense, today’s “anomalies” are not temporary. They are a complex system’s attempt to rebuild coherence after decades of distortion.
The Structural Forces Driving It
Five converging dynamics illustrate this deeper reversion:
Debt Saturation – Each new dollar of debt produces less real output. The growth engine has exhausted itself.
Interest Rate Regime Change – The 40-year tailwind of declining yields has ended. The cost of capital is rising, exposing every dependency built on cheap money.
Energy Transition & Petrodollar Erosion – The global energy system is fragmenting, and the dollar’s supremacy is being quietly re-negotiated.
Demographic Decline & Deglobalisation – Aging populations and shrinking labor pools are reversing the deflationary forces that globalisation once delivered.
The rise of Remote - The loneliness epidemic, the growing psychological fraying, and the need for comforting community.
Together, these shifts signal that the world is not “returning to normal.” It’s reverting to a different reality—one grounded in physical, demographic, and energetic limits.
Defining the Term
This publication is our attempt to wrestle with the hypothesis that a breakdown is underway and that under conditions of destruction, reorganisation and chaos that a reversion to first principles will be a priority reaction.
This financial and societal deleveraging will be the course that will be followed.
Is this just a global-scale iteration of Schumpeter’s Creative Destruction? Perhaps, but the magnitude of the impact is going to be greater than at any time before. The level of connectivity, the virality of “The Socials”, and the starting conditions dictate that the Destruction will be severe and that the Creative might have fewer residual artefacts with which to start building.
This is not a forecast of collapse. It’s a recognition that the old equilibrium has ended—and that the next one will be built on new terms.
Understanding fundamental reversion changes how we interpret everything:
Why asset prices can stay inflated amid fiscal decay.
Why gold and energy are quietly reclaiming their roles as stores of value.
Why the next “normal” may emerge from structural repricing, not cyclical recovery.
Why community could reassert itself in the trust restoration process.
It reframes volatility as signal, not noise—and forces us to confront the limits of the old order.
As the world’s financial, demographic, and energetic systems reset, the question is no longer when things will “return to normal.”
It’s what the new normal will be—and who will be ready for it.
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