Dick repeatedly dreams of the phrase “the only living reality we have now is Philip the first” and tries to figure out what that means.
He thinks our savior will arrive unnoticed just as the little boy in Nicholas Roeg’s 1976 movie The Man Who Fell to Earth starring David Bowie (a movie that inspired the film in VALIS). This fills him with dread since the time of judgment is so close, but he reassures himself that his faith will protect him.
He dreams about a story called “beyond lies the Wug” (published in Planet Stories in his dream). This is a combination of the Wub from his story “Beyond Lies the Wub” and the Vug from his novel The Game-Players of Titan, both of which are aliens who can take on the form of humans. From this Dick decides Earth will be invaded by aliens disguised as us.
Perhaps Paracelsus’s inner firmament means we are on the outside of the universe, like on the surface of a balloon, looking in.
Anamnesis is more than just remembering a past life. It is coming to terms with and understanding the phony world and time we are a part of. He recalls a passage from Virgil about the return of Apollo and reiterates that Christ will soon be victorious.
Dick lists everything he has studied thus far (Buddhism, Brahmanism, Paracelsus, etc.) and decides he is all of those things but has come up with his own system as well.
We entered into a pact with the BIP to remain blind to it in a comfortable fugue state, as depicted in Time Out of Joint, Eye in the Sky, etc. We need to have the courage to stand up to the BIP and regain the freedom we lost.