Cole's paradox is a simple term for the paradox involving the brain's perception of the physical universe. It is the most important piece of evidence revealing the illusory nature of physical reality.
The paradox is that the physical world you perceive is an expression of empirical states of your brain,
yet your brain is a component of the physical world your brain is creating its experience of.
You experience an outer physical reality as an inner experience of your brain, and yet, your brain is an aspect of that outer reality. Everything you perceive within the world around you is the result of an empirical brain state; however, your brain is apparently reacting to what is happening in the world around it.
The physical world is a world of interactive, observable symbols; i.e., physical objects. For a nonphysical focus of consciousness to experience itself as "physical," it requires a physical representation of itself, within itself, which translates into physical symbology as "your body in a universe." Your brain exists as a physical symbol for your experience of consciousness, so the only way you can experience a brain state is through the paradox that the brain is and simultaneously isn't generating your reality experience. The main concept to bring to bear here is that as consciousness, you literally are the things you experience—you are the experience itself.
The observer is the observed.
The reason why it seems like the observer is not the observed is because the observation is incomprehensibly complex, and is also multidimensional. There is such an extravagant amount of information being observed, it's easy to think that in all that unfathomable complexity the little old observer can't be one with it. If you have a small projector, capable of projecting an incredibly huge, vivid, magnificent movie on a screen, and if you were only taught to focus on the gigantic, amazingly amazing movie, it would be easy to think the projector is somehow inferior and or separate from that projection. If you were raised in a culture where for thousands of years, even the smartest of the smart—the planet's intelligentsia—ALL were extremely focused on validating the realness of the projection, you might not even recognize it as a projection! To put it into perspective, physical reality is way, way, WAY more complex than any movie projection. Physical reality is complex, multidimensional, and paradoxical in structure.
And with all that said, the bottom line is YOU ONLY OBSERVE YOU.
Though, this doesn't negate the fact that there are others.
Just as your experience of others doesn't negate the fact that it is your experience.
You are experiencing an observation of yourself; by definition, you cannot experience that which is separate from your consciousness. Nothing you experience is truly outside of you. All experiences you perceive happen within your consciousness. This is physiologically translated as the experience of your body within the physical universe. Any physical experience you have is, by definition, an experience of your body. Even the visual concept of "the outside" is actually taking place within you. The light of the object is being reflected into your body, via the eyes, and being interpreted as an experience of self. Any experience you have—no matter how crazy, spiritual, or multidimensional—must by definition relate to your body on some level and to some degree. Even "out-of-body" experiences are representative of a unique brain state, just like all forms of sleep, lucid dreams, and even the waking state.
You are seeing what your brain creates you to see.
You only ever see YOU.
You are hearing what your brain creates you to hear.
You only ever hear YOU.
You are feeling what your brain creates you to feel.
You only ever feel YOU.
All that you perceive only exists as a perception of self. It is a reflection projected out of yourself, because nothing else exists but you. You are everything, because what you perceive as "everything in the physical universe" is YOUR experience of YOU! Again, these observations are all predicated upon YOUR brain state.
Your very breath is testimony to this axiom.
The fact that you must intake your environment to sustain your body shows the two are inextricably intertwined, and are not separate at all. The observer is the observed, because it is merely observing aspects of itself. This is a physical axiom, self-evident by the very nature of human observation involving a brain state coupled with a corresponding mental state.