Hello again and welcome back to Situation Report. We’re back once again a week later with more updates, and will be going with a Friday publication schedule for now! Let’s dive right in.
What’s Happening Now
Crypto is creeping along, undermining democracies. Longtime Russia shill Aaron Maté joined Vladimir Putin and Edward Snowden in coming out in support of digital currencies. Bitcoin surpassed $60,000 USD on enthusiasm over prospects of SEC approval of Bitcoin Futures ETFs (exchange traded funds), allowing an easier flow of funds into the scarce crypto bathtub. Meanwhile, the US Treasury Department warned that its current sanctions regime is not effective at curbing current activity using digital currencies.
The New York Times notes:
“The agency currently has a leadership vacuum, as Senate Republicans have blocked the confirmations of two of President Biden’s nominees — Brian E. Nelson and Elizabeth Rosenberg — to be its top sanctions officials. The Treasury Department has not had an under secretary for terrorism and financial intelligence since Sigal Mandelker resigned from the job in late 2019.”
Meanwhile Twitter CEO Jack Dorsey has announced a new initiative to “build a Bitcoin mining system.” And the SEC released a report this week on the internet-fueled trading activity of GameStop (GME) and other so-called “meme stocks” earlier this year, concluding essentially that it was complicated. Considering the picture as a whole (crypto vs. fiat, crypto vs. sanctions, “real” stocks vs. “meme” stocks, looming debt ceiling), there are many clear systemic risks to the financial system that regulators and lawmakers need to quickly address. This does not appear to be happening.
Lastly, the investment firm Hindenberg Research has offered a $1 million bounty for information about the illegitimacy of the so-called “stablecoin” Tether, which is supposed to be pegged to equivalent holdings of “real” money. Many believe that Tether is effectively unbacked, and if it collapses could lead to a rout of the crypto pyramid scheme. We’ll see what happens, and how any of this may interact with the looming December 3rd deadline to raise the debt ceiling. If we fail to do so, expect catastrophic outcomes.
Oleg Deripaska is at the center of, well, all the things. Speaking of sanctions… this week we saw several of his properties raided by the FBI. With Deripaska, it’s hard to know where to start… with his involvement in US disinfo campaigns, or with Cambridge Analytica, or his collaboration with Mitch McConnell to lift sanctions on Rusal. Or perhaps his investments to turn hydroelectric power into cryptocurrency in Siberia. Deripaska is a central figure in spreading the influence of state-backed organized crime around the world and into centers of power in the United States. Whether US law enforcement can effectively deter him or whether this week’s raids are material is unknown, but it’s good to see something finally happen in the realm of the DOJ with respect to this longtime bad actor.
Trump’s TRUTH network recalls Pravda — and Jonestown. I’ve always been struck by one particular maneuver that Jim Jones employed in the final days of Jonestown, his so-called “White Nights,” where he would gather his disciples, sometimes all night, ranting about the attacks the group was under, and conducting loyalty tests, often while humiliating his supporters. Trump is utilizing many elements of the cult playbook here, herding people into ever tightening and hardened social in-groups, all the while pushing narratives about persecution and coming conflict. I decline to amplify the details of his new social network; the name obviously echoes Pravda (truth), the old official mouthpiece of the Soviet Union.
The Trump camp has also adopted the use of the phrase “Let’s Go Brandon” as a stand-in for “fuck Joe Biden.” Loading and coding language is another cult tactic to establish enhanced social capital within the in-group. When Trump is ready for his final messianic confrontation, expect all of these tactics to come into play.
Academia is Koched up—and it’s a looming problem. Most of you probably didn’t spend the last week re-reading Dark Money (Jane Mayer, 2017) and Democracy in Chains (Nancy MacLean, 2017), but I did, and the effect is powerful. The two deeply overlapping stories outline just how pernicious, widespread, long-term, and ruthless the Koch influence is in dismantling our institutions. I’m concerned about Koch funding in two places in particular: the Stanford Internet Observatory and at the Harvard Kennedy School.
At some point we’re going to need to have a conversation about “decentralization” of social media, and how exactly that will work, and if we will pursue it. These conversations are already well underway, of course, but not in the mainstream. As conversations about disinformation morph from “platform regulation” to “platform disintegration” and “decentralization,” it’s worth paying attention to the parallels between social media, crypto, and central banks, and seeing who comes out on what sides and when.
As the Koch strategy is rooted in long-term “interrelated plays,” it is not difficult to see how a deeply fractured, unregulated social landscape serves the extremist libertarian agenda. (The status quo is also deeply problematic and in need of controls and regulation.) However, given that the “decentralization” is an ideologically driven position and has had virtually no grounding in sociology or human behavior, we can also expect such designs to lead to social atomization and cultish behaviors, possibly far worse than anything we see now. This is a conversation we need to have.
It is worth pressing leading academic institutions to take a stand on these issues, sooner than later. The longer we wait, the more time the “interrelated plays” can be executed—many irreversibly.
Notable mentions...
- Vladimir Putin said this week that Russia would be “carbon neutral” by 2060. Uh, sure, okay.
- The horrific death-by-stabbing this week of UK Member of Parliament David Amess was another example of radicalization of the political realm by social media, and some are calling for a law banning online abuse. We need to have this conversation, even if solutions are hard to agree on. I’m cheering for Edward Lucas who is a candidate for MP in London, and a longtime advocate for reasoned debate on complex topics.
- I was saddened to learn of the death of Gen. Colin Powell. The internet of course had to loudly note his role in the misguided Iraq War, something he owned. However, by all accounts of reasonable people he was a decent man who ultimately put country over party as one of his final acts. He spoke at an event I organized in 2012. It’s of course worth mentioning that he had multiple myeloma and would likely be alive had the pandemic been handled more competently. RIP, General.
- My friend Zeynep Tufekci wrote a solid piece about the reality of vaccine hesitancy. Instead of relying on facile political stereotypes, sociological evidence provided by David Lazer at Northeastern University suggests that people’s motivations are different from what we sometimes imagine—and crucially, that vaccine mandates work—with very few holdouts.
- Pope Francis dropped a hot list of demands this week, all of which are hard to argue with from a moral standpoint. This of course caused many to speculate about his ‘-isms’ (besides for the obvious one), but this isn’t about capitalism or socialism… this is about the moral duty of humans to care for each other—and we absolutely can choose the right thing regardless of any other considerations.
What May Happen Next
We’re obviously continuing to keep an eye on the crypto vs. fiat and debt ceiling situation. We’re also tracking a growing number of cults in multiple countries, some of which are pushing apocalyptic, messianic messages that would seem to be preparing people towards conflict and confrontation.
We should expect those currents to continue to grow and evolve, and for Trump’s language to become increasingly bombastic and confrontational. The vote by Congress for the criminal referral of Steve Bannon is a welcome development, but the key thing is limiting his ability to continue to drive operations. If he is seen as martyred and not curtailed, he will continue to pose a grave threat.
And that’s all for now! We’ll be back next week with more of what matters most.
We’re interested in the major historical trends that shape current events. Tips? Ideas? Drop us a line via email or Twitter DM. Please note: this analysis is historical and political in nature; it is not intended as financial advice and should not be taken as such.
For an even deeper dive, check out my series, The Big History Behind January 6th.
