who is the observer who is observing myself?

Let's try to replace "who" with "computer". Who is the computer that observes itself? all of them. A computer is not passive, a brain is not passive. It can observe itself. In other words, the parts communicate.

The whole point is, that's not an obviously valid replacement in the context of consciousness. What's your definition of "passive"?

A city is not passive. The parts communicate. Is there consciousness there?

Maybe it is. It's a self replicator, a culture and technology preserver, a competitor in the race for resources.

I think much of what we think is human intelligence is actually crystalized intelligence in the form of language and tools. We got them by default, as citizens of our city.