The jacks and the queens, they forsake the courtyard
Fifty-two gypsies now file past the guard
In the space where the deuce and the ace once ran wild
Farewell Angelina, the sky is folding, I'll see you after a while
This 3rd verse uses playing card images in quite a symbolic way, it is not referring to playing cards in the literal sense.
It is referring to the demise and downfall of the past authority figures and the chosen, privileged few that previously reigned in the “courtyard”.
Now gypsies (usually the homeless, the searchers and wonderers, the people who have been left out from society) march through the empty courtyards where the previous royalty once held dominance. Things are changing. Great metaphor for the way things change over time.
“The sky is folding”, in a game of Poker, you can “fold”, which means to give up and that you are out. So, Dylan is saying that his perspective has changed and he is moving on.
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