March 11, 2023
Yesterday, imagine the surprise when I saw Silicon Valley Bank (SVB) trending on Twitter.
I have a corporate account with them.
So I clicked on it to find out what’s going on.
Rumors were circulating that SVB sold some securities at a huge loss.
My face turned pale.
I quickly logged into my account to try wire out my money.
A few hours later, I checked and my account homepage was loading non-stop, not showing any balance details.
My wire transfer had failed to go through.
And within the hour news broke that SVB had been shut down. Remaining deposits were transferred to the FDIC.
Only 2.7% of Silicon Valley Bank deposits are less than $250,000. Meaning, 97.3% aren't FDIC insured.
FDIC insurance means nothing for businesses.
So its money gone down the drain literally overnight.
Thousands of companies including my own rely on SVB to run our business and startups.
Now, tens of thousands of employees will not get their salary.
SVB had a Moody’s credit rating of A just 3 days ago.
And what do you know, SVB’s top C-suite executives sold millions of dollars of stock a few weeks ago. I did not get the memo. (Sounds vaguely familiar from stories I heard in 2010.)
Rumors were also circulating that even Peter Thiel told his Founders Fund to take out ALL their money from SVB. They managed to do so.
They had inside information.
We didn’t. The rest of us can kiss our businesses goodbye.
A lot of startups will go down with Silicon Valley Bank. This will set us back for years, maybe a decade. You’d think that this kind of thing only happens in Greece, Lebanon, or maybe Argentina.
But no. It happened in the State of California. Silicon fucking Valley.
And it boils down to one entity. The Federal Reserve (Fed).
First the Fed printed trillions.
Then denied inflation was happening.
Then said it was transitory.
Then they decided to sent rates to the moon.
The arrogant Fed’s naïve intervention Fucked the economy Big Time.
Last June, during the European Central Bank forum, a host asked the chairman of the Federal Reserve about inflation.
The Fed Chairman responded, “I think we now understand better how little we understand about inflation.”
“Uh, that’s not very reassuring,” the host chuckled.
Talk about an understatement. It’s downright terrifying.
This is the Fed Chairman— the High Priest of finance— who has the power to control virtually everything in the economy.
He can conjure trillions of dollars out of thin air practically at will, raise and lower interest rates, push businesses and banks into bankruptcy, and cause people to lose their jobs.
And here he is acknowledging that they didn’t have a clue about inflation.
The Fed just engineered a bank run. Genius!!
Exhibit A: Silvergate bank
Exhibit B: Silicon Valley Bank (16th largest bank in the US)
Exhibit C: ???
The Fed essentially engineered the economic conditions that led to this bank run.
Remember that part of the Fed's mission is to maintain financial stability, especially in the banking system... so they managed to screw that part up royally.
Think about it— the government did this in the 2008 recession, doling out luxurious unemployment benefits that lasted for YEARS.
And during COVID they paid people to NOT work and stay home.
So it’s practically a given that the government will dish out fresh new benefits to newly unemployed workers.
And where will the government get all that money from to pay unemployment benefits? From the FED! Duh. How do these Fed officials not understand this?!?!?
America is about to go supernova
This is going on in front of their own faces, but the Fed can’t see it.
If you look at the official minutes and records from the Fed’s policy meetings, you can see what they actually discuss... and it becomes even more obvious they still don't understand inflation.
They STILL blame inflation on Putin and the evil virus.
There is ZERO discussion about how the government destroyed the economy and labor market with lockdowns, or how oil companies are being chased out of town (leading to higher energy prices), or all the idiotic new rules penned by the woke capitalism mob.
And of course there’s zero discussion about the Fed’s own role in slashing interest rates to zero (and keeping them there for the better part of a decade), or printing more than $8 trillion since the 2008 recession.
There’s no discussion of the $31+ trillion government debt, or last year’s $4 trillion deficit, or the impact of idiotic legislation like the poorly named “Inflation Reduction Act”.
Ultimately they consistently prove that the people in charge of managing the US dollar have still learned absolutely nothing.
When you think about it, that goes for nearly every major institution.
The White House appears to have learned nothing, the media has learned nothing, the high priests of climate change have learned nothing.
The good news though, is that everyone else— who feel the impact of these destructive policies— is learning very quickly.
And people are finally starting to declare independence from the expert class.
I actually saw this coming as far back as 2017.
The writing was on the wall.
I stumbled upon Bitcoin in October 2017.
I got curious and started learning and experimenting with it.
After spending tens of thousands of hours on any information I can find on Bitcoin; I was incredibly convinced that I could solve the very problematic counterparty risk of fiat money by buying and self-custodying bitcoin in my own hardware wallet.
Bitcoin essentially solves a $100 Trillion dollar trilemma.
First, it solves the problem of unchecked monetary debasement. Bitcoin’s max. supply is 21 million BTC.
Second, with my mobile phone I could transact bitcoin instantly worldwide 24/7/365 without needing permission from my bank or needing to wait for them.
Satoshi Nakamoto knew the U.S. government would be able to print money with impunity because of one simple reason: The U.S. Dollar is the de facto world currency. Not the British Pound, not the Yen, not the Yuan, not the Euro, not the German Mark. The Dollar.
And that soon they won’t be able to kick the can down the road anymore, because the can will hit a brick wall.
The world is going to have to switch to some other form of currency, and the day that happens is the day the music stops in America.
I understood that bank failures were only going to be more prevalent and that the Government will have to bail out the big banks by stealing from everyone’s savings (print trillions) like in 2009.
The whole underlying financial system is decaying in real-time because of the nature of fiat money. It cannot be reversed. Like Pandora’s box. And that is why problems keep resurfacing unless the Fed keeps the money printer going.
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” R. Buckminster Fuller
What is Counterparty Risk when you have money in your bank?
Counterparty risk is the likelihood of a party defaulting on its obligation in a transaction.
The risk-free illusion of thinking that banks always have your money. And that you can always access it in its full entirety.
Counterparty risk must be taken especially seriously because, even if you believe the likelihood of default to be low, the possibility of severe and permanent loss is introduced into the equation.
Everything in life involves risk. Everything. Don’t let the Gov tell you otherwise.
Even if you think the USD is Stable or always strong (only relative to other currencies). Or the money you have in a bank is always safe.
What you choose to store your value in is equally important.
Karl Denninger said it best:
“The Dollar is a hooker with crabs.
All the other currencies have AIDS.”
Because not all forms of money are created equal.
Bitcoin is digital bearer money that can be transacted peer-to-peer without a third party to mediate the exchange. This also means that it can be self-custodied, eliminating counterparty risk entirely.
Yes, risk of permanent loss still exists (remember: everything involves risk!), but it’s a factor that is within your control. The option exists to employ a personalized self-custody scheme that fits your needs, objectives, and value being secured.
And unlike other bearer instruments (i.e., cash or gold), the costs of storing and securing it do not scale with the amount held. Billions of dollars of value can be stored in a sequence of 12 words on a single piece of paper (although inadvisable).
The important thing here is that self-custodied your bitcoin holds the entire system to a higher standard: wiping out the fractional-reserved and over-leveraged players in bear markets and cementing the on-ramps and service providers that do not require rehypothecation as part of their business model.
“If you have Bitcoin on an exchange or custodian, you don’t have bitcoin.” —Stephan Livera
“The riskiest way to use financial systems is to assume counterparty risk doesn’t exist just because you haven’t been burned… yet.” —Jameson Lopp
How Great Empires Crumble from Within
The events leading up to the collapse of the Roman Empire seem eerily similar to what is happening in the United States right now.
Panic individuals end Pandemics; Panic governments destroy individuals.
One robs a nation, the other steals hundreds of dollars worth of cheap plastic goods.
But get this, only one of these things is a crime.
How do you destroy a nation?
By systematically destroying the value of money. Drain the wealth of the people with hidden taxation and expand debt perpetually.
Create overly complex financial instruments for borrowing and saving,
… which discourages basic financial literacy.
This in turn produces a dependent population ever reliant on welfare and handouts,
… which maintains a state of working subservience.
Keep the body, Take the Mind.
That’s how you disempower the majority to be able to both think for themselves and defend their ideals.
That’s how you encourage “Parasites” to feed on its own people.
George Santayana said, “Those who do not know history's mistakes are doomed to repeat them.”
Historically, governments that steal from the people end up eating it’s own tail.
This happened in Rome at its highest pitch of greatness.
It was ridiculous to speak of Rome failing in the 5th century, but it did gradually sank into the Dark Ages..
During the following 5 centuries, the economy withered (check), long distance trade halted (check), cities depopulated (check), money vanished from circulation (check) and art and literacy almost disappeared.
Rome was so degenerate by the later stages of the 5th century that its “fall” generally eluded the notice of most people who lived in it.
Saying Rome had fallen was news that were bad for business.
It’s unlikely anyone would have dared to even hint at that possibility, saying “Rome fell this evening.”
That is why history’s great transitions are seldom spotted as they happen.
If you know nothing about the future, you can be sure that dramatic changes will be neither welcomed nor advertised by conventional thinkers.
Then as it is now, the Roman Empire faced constant coin shortages as precious metals flowed east. The emperors took to repeatedly debasing the coinage until the finances of the empire collapsed.
Debasement increased the money supply and thus the government’s spending power.
Stretching the money supply helped pay for their debt obligations, fund expeditions of war and more importantly keep their large body of troops fed (& ready to die).
Paper money or Fiat made it even easier to accomplish this…
Only this time, the whole world shares the same global standard of currency:
The US dollar standard:
The global reserve currency is always under the control of whoever the global superpower is at any given time.
And the U.S. became a superpower in less than 100 years because it developed the capacity to quickly convert its civilian population and economy into a vast war machine.
…thanks in part to the removal of the gold standard in 1971. (Benjamin Franklin shaking his head above)
Today, the real U.S. defense budget exceeds $1 trillion.
The only way you can finance such a large military force, larger than the next 10 countries’ military combined is by removing any remaining gold obligations.
This meant that the currency was no longer fixed to anything.
The dollar became a floating currency subjected to manipulation.
It can now be expended ad infinitum while keeping the face value of the dollar constant.
And that’s how you lose your buying power…
This is how governments steal from you to feed itself.
Once again, the massive increases in wealth that resulted from past economic freedoms fed the size and power of the State.
Economic freedoms create wealth…
…and wealth attracts more thieves and political parasites, whose greed then destroys the economic freedoms.
In other words, freedom metastasizes the cancer of the State.
The Government that starts off the smallest always end up the largest.
This is why there can be no viable and sustainable alternative to a truly free and peaceful society as long as money is left in the hands of a central power.
It’s the main reason why wealth today is widely considered to be tied to power.
Essentially, money is not wealth. Money only measures wealth.
How can wealth be measured then if it can be expanded forever?
Politicians, in particular, want to persuade you that if you give them enough power — for a long enough period — they will create wealth for all, equally distributed.
This is the great socialist lie — that wealth is a power blend.
Politicians are funded by the very people who have custody over our money. Banks.
But this trend is about to change though.
Remember, these things ebb and flow. They rise and fall.
Money evolves. The natural evolution of money is always as a store of value that’s easier to move, more secure and more private.
And the world naturally gravitates to the next best thing.
Something that is neutral, censorship-resistant, open, borderless and decentralized.
Something that cannot be killed. Cannot be hacked. Cannot be banned.
Now imagine a base metal as scarce as gold but can be transported securely over the internet.
It may sound ridiculous at first, but it makes perfect sense.
Bitcoin empowers the individual.
It is the Great Equalizer.
It provides basic financial service to the underbanked.
It gives us the option of opting out of a corrupt and unfair system.
It gives hard working people the freedom to save value in the hardest asset known to man. And not let anyone, even the government to fuck with my money.
You can too!
You have all the power to protect your assets, secure your family’s future, and much more.
To your freedom,
Winson
ThinkMaverick.com