Turning Down the Heat
Rising tensions in Ukraine along with a murky situation in Taiwan have provided the backdrop for a strange holiday week in the United States. It’s easy to feel whipsawed by alarm, and then 5 minutes later, news that would seem to deflect it. With everything going on, I’m going to say we should all be looking for ways to de-escalate and put things on a calmer, more steady course. Here’s some of what I’m tracking.
What’s Happening Now
Ukraine’s Zelensky claims he is the target of a coup plot. Today, Ukrainian President Volodymyr Zelensky claimed he is the target of a coup led by oligarch Rinat Akhmetov. He suggested the coup was planned for as soon as next week, and was linked to increasingly aggressive rhetoric coming from Moscow. The USS Arleigh Burke is now in the Black Sea, drawing concern from the Kremlin; the US 6th Fleet said it was on a “routine patrol” in support of NATO and its partners. Whatever’s going on here, it’s undeniable that Putin has his eyes firmly set on Ukraine. RAND Corporation’s Samuel Charap has attracted controversy over his recent study and articles suggesting that the US should more or less give Putin what he wants, by demanding that Ukraine formalize constitutional recognition of the rebel-held areas in Donbas. From my perspective, Russia should be contained using economic and other soft-power tools, and Ukrainian sovereignty respected. But it seems likely Putin will advance this conflict. The Russian public is being told “World War III is knocking at our door,” by one military expert. Given that, I think we need to look at this in a global context and what it’s likely to mean in terms of hybrid warfare and chaos; this will not be a standard war with conventional troop deployments, but rather an ongoing global hellscape where everything is disrupted and everyone is affected.
In the meantime, this piece by Monique Camarra (who joined us this week for a discussion on Fascism) is excellent for understanding what Putin may be doing.
China and Taiwan simmer while chaos erupts around them. We’re seeing a rise in activity that would appear to be Taiwan-China adjacent. The Solomon Islands erupted in arson attacks and rioting over an alleged bribe made by China to David Suidani, who switched alliances from Taiwan to China as a result. The destruction has been devastating, and Australian Federal Police have been deployed to quell the rioting. I will not pretend to understand all the nuances in play here, but it’s interesting we’re seeing this issue flare up now. Congresswoman Nancy Mace (R-SC) for some reason traveled to Taiwan and tweeted, “Just touched down in the Republic of Taiwan. 🇺🇸” Why that, now, Nancy?
It almost seems like Taiwan and China are content to play their long game while various provocations are popping off around them. Provocations that lead to more serious consequences are precisely what Graham Allison has been warning about, and anyone representing the US should be turning down the heat, not increasing it.
COVID besting crypto in contest to cause chaos... for now. The last few days have been mighty strange… last Saturday Mike Flynn suggested that Democrats were going to try to crash the economy, cancel the 2022 elections, and execute an authoritarian takeover of the country. That’s nonsense, but because it’s coming from Flynn, we can interpret it as a kind of projection. I’ve been getting intel that Thiel, Musk, Bannon, and others seem to be synchronized around trying to cause as much financial chaos as possible using cryptocurrencies as the tip of the spear. The debate over raising the debt ceiling will apparently be centered on the week of December 7th, when an allegedly “left” protest is scheduled to “shut down DC.” This isn’t helpful to anyone but our adversaries, and they should knock it off.
Rounding up crazy crypto developments:
- Eric Adams flew to Puerto Rico with Brock Pierce, on his private jet to talk… you know, crypto stuff. Former mayor Bill DiBlasio said this is all totally fine and normal and to stop asking so many questions.
- The IMF has warned El Salvador about using Bitcoin as official currency, suggesting it opens the door to instability, crime, etc., which, well, yeah is totally obvious and seems to be the plan.
- India has come out against cryptocurrencies and pretty much outlawed them, while giving people a chance to ramp down their holdings.
- Bad-faith inflation fears have been stoked again by Cameron Winklevoss, amplifying the Dollar Store changing its base price to $1.25. This feels like a publicity stunt and also a political move. This, of course, implies that there has been no inflation since 1986, right?
- Turkey’s Lira is in freefall after Erdogan’s push against rising interest rates. Perhaps Erdogan is trying to demonstrate to the world what a good use for cryptocurrencies in the context of a failed state might be? If so, he’s doing a fine job. It will be interesting to see how Turkey attempts to recover from this debacle.
- The US Senate Banking Committee has requested documentation from Tether and all other issuers of so-called “stable coins”— cryptocurrency products pegged to the US Dollar and other fiat currencies. They have drawn special scrutiny because of their potential to destabilize other currencies if not properly regulated. (Narrator: they’re not properly regulated.)
- This article by Jack Raines correctly notes that “SPACs, crypto, penny stocks, NFTs, overpriced growth stocks, they’re all the same thing.” They drive a cycle of pump and dump designed to pull people in and separate them from their money.
- Elon Musk made the disgusting comment, “Bitcoin cures cancer.” Yeah, he’s a joker alright… but besides being in bad taste, it literally doesn’t, as it’s fueled in large part by coal and carbon fuel extraction and consumption, which, well, causes cancer. This is just par for the course these days, I guess.
- More pod people: Candace Owens and Glenn Greenwald both debuted their crypto-love yesterday. Owens with a lunatic, misspelled ‘cryto’ coin called “Let’s Go Brandon,” and Greenwald shilling its utility to avoid control by regulators. Owens was an early driver of Parler adoption in 2018; she is one of the front line soldiers. (Her husband, George Farmer is now CEO of Parler.)
Meanwhile the new COVID B.1.1.529 “Omicron” variant is scaring markets today with claims of being 500% (5X) more virulent. Not a whole lot more is known about it yet, but if it’s as bad as it sounds, we can probably expect a very ugly winter. Markets responded accordingly, retreating to safer assets. BTC is down about 8% for the day, gold is about flat, oil is down $10 per barrel in largest drop since April 2020, and the Dow is down about 2.5%. Good news, though: lower gas prices are on the way!
Two verdicts, opposite impacts. The world watched the verdicts in the Rittenhouse and Arbery cases this week. Plenty of better commentary exists on the specifics of those cases, but I’ll say that the Rittenhouse narrative is likely to lead to damaging disinformation and radicalization that makes America more violent. By contrast, the Arbery case would seem to have delivered justice and sends the opposite message. America, with all its messiness and contradictions, will need to hobble forward, damaged and unfinished as it is, as we sort out who we are and what we want to become. May the better angels of our nature prevail.
NEW! The Fascist Playbook with Ruth Ben-Ghiat, and the Roots and Legacy of Fascism with Monique Camarra. This week we discussed the roots of fascism in Italy as a reaction to socialism — a “third way” to organize economic activity in the time of the Great Depression. You won’t want to miss these two new episodes—with more coming soon! This is designed to provide a base understanding of the forces driving what’s happening in the world today, perfect for your holiday road trips!
What May Happen Next
December 2021 seems to have been designated as world chaos month. The crypto-shilling is continuing apace, only it doesn’t seem to be taking hold as well as they’d like, with BTC down about 20% from its highs a month ago.
Lin Wood, whom Kyle Rittenhouse fired for being too crazy, seems to be turning on Mike Flynn. In recent posts on Telegram, Wood has questioned Flynn and whether he might have architected QAnon as a psychological operation, or might even be “Q”. This may seem like side-drama, but if this accelerates the demise of Flynn’s networked insurgency cult, that could dramatically improve the information landscape in the US. With Bannon at least partly curtailed, we may see things tip in a better direction very soon.
So in December it seems we’ll be dealing with a reboot of COVID, debt ceiling drama, crypto-craziness, Ukraine, Taiwan, and Bannon-o-Flynn-a-palooza (remnant edition). All of these things could fizzle. Of them, I’m betting on COVID, Putin, and debt ceiling follies. The rest, well… we’ll see what happens.
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. If you enjoy my work, please consider making a donation to World Central Kitchen, to support their work feeding people in times of need.
For an even deeper dive, check out my series, The Big History Behind January 6th.
