Avoiding Catastrophe
A central goal of this newsletter is to identify worst-case scenarios and “black swan” events, and by exposing them, help to avoid them. Even if our ability to do that is quite limited, we do reach some influential readers, and it is not unreasonable to think that improved situational awareness might help nudge important policy decisions in the right direction.
This week we have a bumper crop of such scenarios to consider. Overall, despite many red flags, my level of alarm is about 7 (of 10), which has been roughly steady the last few months. If any of the situations we’re monitoring slip into increased uncertainty, then things could quickly spiral into uncharted terrain. Here’s a look at what we’re monitoring.
What’s Happening Now
Jack Dorsey surprised many this week by resigning as the CEO of Twitter, handing the reins to Parag Agrawal. Many observers think this was the result of a plan set into motion months ago by activist investor Paul Singer who made a $1 billion investment in Twitter in 2020, with the intention of replacing Dorsey with someone ostensibly more sympathetic with “conservative” voices. The truth is likely more nuanced; Dorsey was already splitting his time with his other company, Square, and he’s also been spending time tweeting nonsense about hyperinflation. This likely riled the board and other C-level colleagues, who have not been making any decisions aligned with perceptions of imminent “hyperinflation.” Dorsey gives the appearance of someone increasingly isolated from both critique and the real world— doubling down on his passion, blockchain. More on that in a minute.
The day after Dorsey resigned, Twitter launched a new policy around sharing photos and videos of “private individuals” without their consent. While this would seem to promote privacy, many of us immediately noticed that this would seem to also protect people engaged in potentially criminal activity in public. Neo-Nazis began scouring Twitter, mass reporting tweets from OSINT (open source intelligence) researchers and activists who had identified individuals from events such as the deadly rioting in Charlottesville and at the Capitol on January 6th. It isn’t really clear whether this new policy is a result of Dorsey’s resignation; indeed that seems unlikely, and the narrative that Dorsey is or was a “liberal” and that new management will be cracking down on left-leaning voices is, I believe, unsupported by evidence. Still, activists will be keenly watching what Twitter does, and some are going so far as to download their archives and moving to other platforms pre-emptively.
On Wednesday, Dorsey’s other company, Square, announced a rather confusing rebrand. The company changed its corporate name to Block (to reflect its laser-focus on blockchain tech); its subsidiaries now include Square (now just the brand for the payment processor), CashApp, Spiral (formerly Square Crypto), and a goofy open-source side-project blockchain thing called, seriously, TBD54566975. Not to be left out of the pantheon of internet titans, this move places Block into the same tier as Alphabet and Meta who have adopted vague holding company names to reflect just how big their vision is, and convey why their sky-high stock prices are still a bargain. We get it Jack, you’re a big deal.
GOP (still) using threat of government shutdown and debt default in attempt to gain leverage. Conspiracy and disinfo channels have been lighting up for a few months over the possibility of an imminent financial shock sometime in November or December. I have noted that this could be tied to the idea of a “strategic default” on the US debt, with the intention of bankrupting the CCP and throwing the world into deep financial instability. J. Michael Waller, a right-wing analyst, has been chattering about this idea for a while, and if you look, you also see similar noises coming from Michael Flynn and Steve Bannon. There are also other weirdo voices such as a “Mr. Trumptastic” who has been pushed on Telegram channels talking about a similar set of moves under the name of “debt forgiveness.” All are pushing people towards purchasing gold and crypto, through sites such as the so-subtly-named “Birch Gold.”
The good news is that all of the smart people I know think that McConnell wouldn’t dare risk a default — “he would be shot,” said one analyst. And I think that’s correct. However, it does seem likely that a US government shutdown may occur as soon as tonight, as Republicans seem to be in no rush to concede to proposed vaccine mandates.
And here’s the worst-case concern: a government shutdown that lasts into next week may create new circumstances and conditions that, whoops, result in a failure to raise the debt ceiling and leads to a default, and McConnell can claim it wasn’t his fault because… reasons… shutdown, or whatever.
CREW reported this week that a “McConnell-aligned nonprofit raised $172 million in 2020” — and no one has any idea from whom. One anonymous donor gave $33 million. If you read Jane Mayer’s previous descriptions of debt ceiling negotiations, it’s not at all clear that this is the slam dunk pundits think it is.
A default would, however, likely be a terminal, world-ending move for McConnell, and indeed the rest of us. It’s unclear whether the insurrection crew is ready to blow up the world yet. If they are, this is one way they can do it. If not, they may kick the can down the road into January, which is one possible outcome of the reported secret negotiations between McConnell and Schumer.
Overall I don’t consider a shutdown-then-default scenario to be especially likely, but if we’re honestly analyzing risks and looking to mitigate them, we must consider the possibility that this could occur and try to prevent it.
Conflict mounts in Ukraine, China, and… Florida? Putin is continuing to, you know, talk about “unstoppable missiles,” and red lines, while moving things around Ukraine’s border. He’s also agitating in Belarus and Bosnia (pledging support for Serbs) in an effort to show how totally serious he is about restoring Russia’s former glory on his watch. He seems to also be seriously considering a Suwalki gap play against the NATO-member Baltic states of Estonia, Lithuania, and Latvia. Anything is possible here and the timing appears to be sooner vs. later.
Meanwhile, Steve Bannon is talking about a “kinetic war” with China popping off at any time, either “before the olympics” or by that time, advising people to buy gold and crypto. This is obviously a win-win strategy for him, as keeping his base on edge is generally useful.
And lastly, Florida Governor Ron DeSantis has been issuing a series of executive orders, including some that are “confidential” (?), and also has announced the formation of a Florida state militia that is not under the control of the US federal government. Secession much? What’s all this for, Ron?
Dr. Mehmet Oz is running for Senate in Pennsylvania… and don’t call him a ‘grifter’ — he’s worse than that. This week television personality Dr. Mehmet Oz announced he will seek office in Pennsylvania as Senator. Many rightly see him as a popular culture figure intent on manipulating audiences with pseudo-scientific babble but may not be aware he is part of the network associated with Cambridge Analytica and other information operations. He promoted the company in a video back in 2016. He is one of the many ‘fruiting bodies’ of this mycelial Mercer-Koch network which keeps turning up again and again with their plot to overthrow the US government, and even if he doesn’t win, he can still gather a lot of data which can be marshaled for that cause. He’s a dangerous person and anyone writing him off as merely a scammer is underestimating his intentions and the gravity of the situation.
What May Happen Next
This month, we have several major variables in play, any one of which could affect the others:
- Government Shutdown this week (likelihood 9/10)
- US Debt Default by December 15th (likelihood 2/10)
- Full-scale assault on Ukraine by Russia (likelihood 8/10)
- Attack on NATO/Baltic states by Russia (likelihood 3/10)
- Eruption of kinetic conflict in China (likelihood 3/10)
- US civil unrest/hot conflict/secession (likelihood 1/10)
Depending on how these events play out, each one of them could unlock the other. The goal should be to keep the doors welded on as we pass through this treacherous period. Because of the complexity of the situation, no one can predict exactly what might happen, but ideally with open eyes and a clear-headed view of what could happen, we can steer away from the worst-case-scenario ditch with which we are, seemingly, insistent on flirting.
NEW audio episodes: The Cult Roots of American Fascism with Joe Szimhart, and Oil, Data, and Psychological Warfare with Brent Allpress. This week we recorded two new audio episodes for my series Oil, Gold, Crypto, and Fascism: How We Got Here and How to Fix It. These fascinating conversations help lay the groundwork for understanding just what’s happening now and why, and are the quickest way to get up to speed on this peculiar moment in time.
Afterword
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
— The Second Coming, William Butler Yeats, November 1920
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 and my audio series Oil, Gold, Crypto, and Fascism: How We Got Here and How to Fix It.
