Category Archives: Economics

Silicon Valley Bank collapses, crypto under intense price pressure

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Two days ago Silvergate Bank was the largest US bank failure since 2008. That has now been surpassed by the shutdown of what was earlier-in-the-week the 16th-largest US bank, Silicon Valley Bank.

Sam Bankman-Fried on Silvergate’s website: “Life as a crypto firm can be divided up into before Silvergate and after Silvergate. It’s hard to overstate how much it revolutionized banking for blockchain companies.”

Satoshi Nakamoto’s bitcoin was put online in 2009, and still today no one knows who this guy is, or where all that Mt Gox bitcoin went. But today there are now two distinct eras in the history of post-Mt Gox crypto– FTX and post-FTX. Silvergate was the key crypto bank for the entire US industry and it just died Wednesday evening, March 8, 2023. It died from a malignant case of FTX.

Now Silicon Valley Bank has been shuttered by California state regulators due to mass discrepancies between what they can prove they have, and what they claim they have, etc. Stablecoin issuer Circle said late Friday that $3.3 billion in cash deposits remained at Silicon Valley Bank. According to Circle, this sum represents ~8% of the total reserves ($40 billion) backing Circle’s stablecoin USDC.

Stablecoins attempt to peg their market value to fiat currency 1:1. This means one US dollar (Euro, etc) ALWAYS equals one stablecoin. Tether is the top stablecoin, while Circle’s USDC is the second-largest stablecoin on the market. Stablecoins are now considered to be fundamental elements of the crypto ecosystem.

But the validity of stablecoins has been seriously called into question, especially since the Terra/Luna collapse in May 2022. Binance is also a big stablecoin issuer, and they have been forced to admit that their BUSD token hasn’t always maintained its 1:1 peg, like it’s supposed to be for people to trust. Where does the money go?

The Federal Reserve has sought to stifle worker wage increase demands by inducing a recession through its policy of raising interest rates. Note that this only increases inflation, which the ruling class is purportedly fighting. The Fed’s fight against “inflation” is actually a corporate-mandated attack on workers’ wages. It’s another example of Orwellian doublespeak in the fake media.

Unfortunately for the Federal Reserve Bank, this raising of interest rates has collapsed the crypto industry which relies on free money. Venture capitalists, hedge funds, blank check companies, and FDIC-banks have thrown trillions dollars into crypto which is now going bankrupt everywhere because it is expensive, wasteful & useless.

Binance CEO Changpeng Zhao, a Canadian citizen living somewhere in the far East, has been avoiding & deflecting accusations contained in investigative reports from Forbes and The Wall Street Journal recently, claiming that Binance’s math is fuzzy and their books don’t balance. CZ’s Twitter responses were more rhetoric about FUD, fake media attacks, etc, providing no evidence to contradict investigator claims.

It’s comparable to when Seymour Hersh published his Nord Stream bombshell, and no one in the US political establishment (or fake media) could mount a serious response to refute his claims. Eventually, most thinking people took that to mean that Seymour Hersh was correct and that the terrorist US government is lying again.

Somehow, all these realities, facts & nuances get lost in translation through the filters of fake news. Big crypto is secretly negotiating their next bailout with US officials. That is how the White House has been “monitoring the situation” in crypto since the Silvergate Bank collapse.

Crypto is one big hustle & dodge that is running out of time & money. Bitcoin is now under intense pressure, as the latest CoinDesk headlines reads, “Bitcoin Regains $20K After $200M in Crypto Liquidations; Some Traders signaling strength for [Circle’s] USD Coin, citing its treasury backing in U.S.-issued bonds.”

These are clear signals to elite Traders to bet that US taxpayers will pay for any crypto-connected bank bailouts, etc. As far as market manipulators go, crypto whale Elon Musk is having to burn through a lot of bitcoin these days to keep its price inflated at $20K. Musk is running out of Tesla stock to sell and companies to destroy. If Elon Musk doesn’t get a big bailout soon, the richest person in the world will go bankrupt.

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Silvergate Bank now defunct only weeks after getting $4.3B bailout

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Silvergate Bank announced Wednesday evening (Mar 8) that it has collapsed, voluntarily entering bankruptcy liquidation after market concerns over its inability to file required tax documents last week. It will not survive. This is the biggest US bank failure since 2008-09. This is not even two months after it was reported that Silvergate Bank’s Q4 tax filings revealed a $4.3 billion bailout loan from the Federal Home Loans Bank (FHLB), a quasi-private consortium of banks & bondholders that are backed by US Congress– meaning the US taxpayers.

Silvergate was the biggest crypto-friendly bank in the US. Founded in 1988, Silvergate Bank got into crypto in 2014, and out of it in 2023. For as much as libertarian crypto fanatics scream about ‘de-fi’ & ‘independence from tradition finance’, these zealots are learning (the hard way) that even bitcoin can’t survive without access to banking services.

Lots of people, from venture capitalists to young kids, have put their money into crypto, but it’s much harder to get their money out. That’s the most valuable service Silvergate Bank provided to it’s crypto customers & clients, until it couldn’t anymore. Silvergate even ran their own crypto exchange (SEN) which has now been turned-off forever.

It’s been known since mid-January that Signature Bank received an $11.3 billion loan from the FHLB. Signature is now facing US regulator scrutiny as it inherits the mantle of crypto industry leader in banking. Signature’s stock is down 10% or so with the news of Silvergate’s collapse. Anyone who has been following developments in crypto knows, there’s trouble in the entire crypto banking sector, with banks facing massive liquidity issues as customers rush to cash out & put their money somewhere safer.

How is US Congress or the SEC going to help with all this? The Fed is raising interest rates, and crypto simply can’t afford that. Crypto needs free money from the Fed & venture capitalists for ‘innovative’ start-ups, and then taxpayer bailouts for when they crash.

Ally Financial bank (founded 1919, HQ Detroit) received $7.2 billion from the FHLB in Q4 2022, so they can been seen as the next disaster after Signature Bank. Provident Bancorp received $80 million from the FHLB in Q4 2022. These were massive (& secret) bailouts to crypto-friendly banks that didn’t help for more than a few months. Now the entire crypto industry needs another bailout to prevent bitcoin from free-falling.

Bitcoin & tether (‘stable coin’) are the top name brands in crypto. Their price must be maintained with massive injections of liquidity to re-inflate the bubble, or else it risks total collapse. This is the existential crisis the crypto industry (& capitalism) is facing now. Since the traditional financial sector is deeply implicated in the crypto mess, none of these pertinent facts are being reported in the corporate media.

Instead we get misinformation on the subjective price of bitcoin, as there is much stupidity posing as intellectualism. For example, Coindesk, the self-proclaimed industry leader in crypto reporting, just published a piece titled, “Price, Not Intrinsic Value, Is the True Measure of Bitcoin’s Success”, a fairly typical example of their muddle-headed libertarian thinking. It pontificates:

“My question is, what is intrinsic value? There is no such thing – value has and will always be subjective based on an individual’s need at the time. Demand drives everything and always has. The idea of intrinsic value is a fool’s errand. The question of whether a Rolls Royce is worth more than a bottle of water is subjective based on where you are and what you need. The demand for water in the desert is certainly going to be higher than that of a Rolls Royce. I exaggerate to make my point, but demand drives value. That’s unchanging over time.”

To clarify & correct the nonsense you just read in the paragraph above, the question of which is worth more, a Rolls Royce or a bottle of water, is NOT subjective. The Rolls is ALWAYS worth MUCH more than the bottle of water, no matter the conditions, because MUCH MORE human labor goes into making a luxury car. In a desert the Rolls can provide shade & shelter, If the RR is gassed-up, it can drive you out of the desert. That has much more value than a bottle of water, Only fools & liars would argue otherwise. There is nothing subjective about this, and there hasn’t been since Karl Marx explained it in Capital (1867).

Of course, libertarians don’t read Marx, they are only concerned with making money for themselves. So they make up stupid stuff, anything to justify their ends. Crypto needs another massive US taxpayer bailout, and it’s getting harder to hide them. That’s the panic in the crypto markets right now, the elephant in the room that no one is mentioning in the fake media.

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The people aren’t fooled

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Yesterday, The New York Times published its account on who bombed the Nord Stream pipelines last September. Recall that at first they blamed Putin.  A summary on Yahoo! titled, “US intelligence sees ‘pro-Ukraine group’ behind Nord Stream sabotage: report” received many comments from readers. Here is my Top 10 list from that piece:

1) I’ll take “Things the CIA says to cover their tracks” for $100, Alex.
2) I don’t know who did it, but they found Joe Biden’s passport a few meters from the blast site.
3) It was the Palestinian Navy.
4) It was Chinese attack balloons.
5) Per the CIA, it wasn’t Joe Biden. Of course, if he did it, he wouldn’t remember ordering it.
6) Gaslight much? It’s already been exposed by a real journalist that the US did it.
7) The fake news is strong with this one.
8) I stopped reading after, “US officials…”
9) America has a propaganda epidemic.
10) US intelligence must have the best magic mushrooms.

Bonus comment:

11) I’m running out of conspiracy theories to mock– they’re all coming true!!

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Marilyn Manson vs. the abusive MeToo campaign

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Who anointed the MeToo campaign as the morality police, judge, jury & executioner? Whether you like Marilyn Manson or not isn’t the issue. The guy worked hard to make millions of fans, and his relationships with those people has been poisoned by cynical politics & a dirty-tricks campaign. I know fans of Marilyn Manson (men & women) who say his music helped them get through a tough period in their lives, etc. Who is MeToo to judge all this with absolute authority?

In the case of Marilyn Mansion & Ashley Morgan Smithline, it’s Evan Rachel Wood who is the abuser. Evan Rachel Wood is a perjurer who (among other criminal activities) submitted a fraudulent letter from the FBI as evidence under oath in court. Commenters online are now calling Evan Rachel Wood “Amber Heard 2.0”, which is accurate. Evan Rachel Wood has the full backing of the CIA Democrats as Marilyn Manson has been the victim of a coordinated MeToo-style hit job because he’s an easy target.

The MeToo campaign and its fanatic adherents have no compassion & understanding for a man’s career ruined with lies. Just as they have no compassion for women who are teaching in classrooms with COVID, or female healthcare workers, retail employees, etc.

The MeToo campaign supports the criminal US/NATO-led proxy war in the Ukraine against Russia, nevermind all the women & children who have become casualties. The MeToo campaign still supports sanctions on Syria, even after a series of devastating earthquakes hit the region. Women & children buried under rubble doesn’t register on the MeToo campaign’s radar.

MeToo doesn’t care one whit about women autoworkers who have been unfairly fired for reporting sexual harassment & wage theft to the UAW bureaucracy. When a woman working on the line in an Ohio auto plant had a miscarriage last year, because she was doing work she shouldn’t have been doing, the UAW helped deny her insurance claim. And so on, etc…

MeToo doesn’t care about working class women, it is only concerned with gaining privileges for a thin layer of women in the upper-middle class. That’s the focus of all the identity politics campaigns (Black Lives Matter, LGBTQ+, etc) which come directly from the CIA Democrats. This cynical attempt to divide workers & the poor only strengthens the hand of the far right.

Ashley Morgan Smithline has declared that Evan Rachel Wood manipulated & abused her. So why wouldn’t you believe her? MeToo (who claims women should ALWAYS be believed) is silent on this question.

The MeToo campaign, like capitalism, is exploitative & abusive to its core. The only way to end this nefarious, dirty-tricks MeToo campaign is by organized mass resistance to the capitalist system itself.

Music is such an important form of communication, perhaps the most influential as its primality touches & stirs our deepest emotions. The question of questions becomes: Who controls the music? Consider all music of the past in its historical materialist context, with a philosophical understanding of dialectics in revolution. These days, if the music doesn’t also stimulate the intellect, it’s crap.

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Seymour Hersh reports Joe Biden took out Nord Stream pipelines

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Seymour Hersh is an investigative journalist of the highest caliber. He is one of my inspirations along with the writers of the WSWS. When you read “discredited journalist” next to his name in the fake media, that refers to the right-wing attack campaign from the CIA Democrats to silence all leftists.

(Photo by Bettmann Archive/Getty Images)

In short, Hersh reports that Joe Biden blew up the Nord Stream pipelines last September, with help from US Navy/CIA deep sea divers who planted C4 charges on the pipelines which were remotely activated by a sound buoy dropped later by US military/CIA aircraft. This allowed Joe Biden to pick his time to execute this act of international terrorism.

This is now a January 6th moment for the Democrats, as there is a noticeable silence here in the US corporate media– on all sides. This is an international war crime by US President Joe Biden and it hardly gets a mention next to “spy balloons” and the Super Bowl.

The CIA Democrats have no plausible alternative to offer on who done it, only attacks on Seymour Hersh. This CIA playbook is run on all leftists through political & economic channels. This big lie technique activates all Nazis to join in the savagery, as they will take delight in trying to discredit this heroic work of investigative journalism.

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Wanted: bassists

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If you are a bass player and you don’t sing or help with songwriting, then you need to shut up & play bass. If you want to handle management, booking duties, etc, that’s fine– but since you don’t write songs, you are NOT qualified to be the bandleader and therefore you are NOT allowed to dictate every creative decision by leveraging your position of advantage. That fucks up a band every time. There are a million guitar players out there & a zillion singers too, with a more limited pool of good drummers, but quality bass players are very hard to find. Many of the best bassists let this instrumental scarcity go to their heads, by taking the attitude that if they don’t get their way, they’ll simply take their bass & go home– leaving the band stranded. One of the biggest problems in rock music today is there aren’t enough bassists who are team players.

I’ve learned over the years that many of the top bassists do corporate gigs for a living, including tribute acts & such that play six nights a week and twice on Sundays. Any left-handed bassist is wanted for Beatles tribute bands, etc. That’s where the steady money is, as compared to forming a band and trying to be something new. My biggest criticism of professional bass players is that they are too rigid as a rule, which limits them. You can’t be a great band without a solid bass player, and you can’t be a serious bassist if you don’t work well with others.

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Bankrupt crypto bank Silvergate gets $4.3B US taxpayer bailout

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It was reported last week that Silvergate Bank, the bankrupt crypto lender with FDIC affiliation (a rarity in the industry), received a $4.3B bailout from the San Francisco-based Federal Home Loan Bank, following the collapse of crypto exchange FTX, according to the firm’s Q4, 2022 filings.

US taxpayers, without their consent, have just bailed out this bankrupt crypto bank– and it barely made the news. Silvergate was the first, of what is to be many bailouts for crypto. As much as the crypto community howls about “de-fi, privacy & freedom”; it needs a bailout even more. Industry players have been angling for this since the FTX collapse.

To review, Silvergate provided banking services to crypto exchanges & investors, with ~90% of its deposits from crypto. Silvergate’s 10 biggest depositors, include bankrupt firms such as: Coinbase, Paxos, Crypto.com, Gemini, Kraken, Bitstamp & Circle. As a result of the FTX collapse in November, Silvergate was bankrupt, as it held worthless deposits for both FTX & Alameda Research.

Market manipulation is what is driving the current bitcoin bounce. This, along with venture capital, is what is sustaining the crypto industry on life support. Market manipulation through wash trading, and other pump & dump tactics are the rule in crypto. Wash trading is when a firm trades with itself to artificially boost prices, to give the illusion of liquidity & generate interest from investors. A recent paper from the National Bureau of Economic Research found that wash trades accounted for 50-70% of all crypto transactions, suggesting most trades on these platforms are fraudulent.

For example: bitcoin’s price had been languishing at ~$17K for weeks, but as of last week it has slowly been going up. Bitcoin currently sits at over $21K, and no one can explain why, as investors are leaving the industry in droves, lay-offs are everywhere, and hardly a day goes by without some news of another crypto firm, exchange, bank, etc, having liquidity issues. So where is all this money coming from? As it turns out, it’s now coming from the taxpayers.

Update: Sat 21 Jan 2023 5:50 AM CST

Silvergate Bank ($4.3B), Signature Bank ($11.3B), Provident Bancorp ($80M), and Ally Financial ($7.2B) have been bailed out by the Federal Home Loan Banks program, which is ostensibly meant to fund home loans. This is surely the tip of the iceberg as there are many others we don’t know about– yet. US taxpayers support FHLB financing, as their bonds are implicitly backed by Congress, which would not allow a default, hence their AAA rating from Moody. Should one of these crypto-friendly banks fail, FDIC accounts would be second in line, after the FHLB, in claims resolution. Banks always get bailed out first. Bloggers are the only ones reporting this story, as the corporate media is maintaining silence on this massive & secret crypto bailout scheme.

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Is Sam Bankman-Fried now an agent of US Intelligence?

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The conspiracy theory that SBF is now an agent of US intelligence is supported by the facts and his actions since pleading “not guilty” in a Manhattan courtroom. The DOJ normally takes no prisoners in its prosecutions, unless a secret deal has been reached.

From a historical perspective, the DOJ investigations of Donald Trump have been as restrained a legal action as you will ever see, because he’s so connected to right-wing militias (which intelligence agencies view as an asset), but the DOJ still went after him to some extent for his malfeasance. SBF has the same criminal credentials, but with even more value to US intelligence, so he’s been treated with kid gloves by the DOJ & the corporate media because they’re all tied-in to the CIA Democrats.

The dictatorship of finance capital can be clearly observed in crypto. SBF & Co. have surely made secret deals, as they are being integrated into US intelligence to help move dark money to Ukraine, etc. Thus, none of the defrauded customers will see a penny of the $5B in assets the US government has claimed to have recovered (so far) in the FTX fallout.

Republicans have now setup a new committee to bail out this distressed “asset class” known as crypto, and as a result of this activity, bitcoin has moved up by ~$2K in the past few days.

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Roger Goodell cancels Bill-Bengals MNF game: A true Hollywood story

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After Roger Goodell conferred with the top Vegas bookies & ESPN fantasy leagues for three difficult days, it was decided by the owners of football to be in their best interest to cancel the Bills-Bengals game. According to NFL records & the Black Hand, it never happened.

The NFL had cancel this game, but they REALLY didn’t want to. League officials & executives needed to confer behind-the-scenes with bookmakers & the biggest fantasy leagues for council on what to do, which is why it took three long days for the NFL to make it’s final decision, when it really had no choice from the start.

The fantasy leagues are a particularly sticky situation, because those are hardcore football fans who invested 4+ months in drafting, building & cheering their teams. The Bills-Bengals game was to be the final MNF contest of the season, and it’s the Super Bowl in most fantasy leagues. If this event had happened during a typical Sunday afternoon game, it wouldn’t have been as harmful to NFL interests. But it happened on Monday night, when the entire sports world is tuned-in, and not just any Monday night, but the biggest MNF game of the season.

Instead of being a nationwide football festival, the plug was pulled & the excitement killed. Most sports fans understand the situation and don’t blame the players, or cry foul, but there are interests that want to make sure this NEVER happens again. Docking wages for leaving the field would probably be bad optics for the NFL, so look for the owners to get together after the post-season and establish a “protocol” to prevent players from mutually leaving the field before a game is finished. Owners consider what happened as an unauthorized work stoppage, and that is strictly prohibited by the powers-that-be. This could become a CBA grievance if the owners take too much of a hard-line stance.

So how did Roger Goodell arrive at his judgement, three days after an on-field medical event stopped the Bills-Bengals MNF game, with the players refusing to resume the contest? First, the NFL Commissioner had to take heavy flak from all the East coast dweebs screaming in his ear about sponsors, ratings, fantasy leagues, etc– imagine a scene from Network (1976) and apply it here. After absorbing all this abuse, Goodell then had to fly to Las Vegas and stay at the Flamingo to take a meeting with Ace Rothstein & Nicky Santoro. After that, he had to hustle over to the Tropicana to see Moe Greene, and you know what that means— Don Barzini. Roger Goodell had to earn his paycheck this week.

Nicky Santoro: Hey commish, what happened?! I got all these betting slips and I don’t know what to do with them. I’m thinkin’ I’ll keep all the money. What do you think, Sam?

Ace Rothstein: You’re the muscle end Nicky, I just tell you the point spread.

Nicky Santoro: So commish, a player feints on the field, he’s taken-off, and the game just ENDS?!! Since when do we do THAT?!! Are we gonna put pink dresses on them next? [Lots of expletives…] I’m feeling like a chump for holding all these markers. The game was two nights ago!! [Lots of expletives…] I’m just trying to run a respectable bookmaking business here, I gotta pay the winners & collect from the losers to get my vig, you understand? How can I pay when there’s no game?!! [More expletives…] Since I’ve been holding this money for so long, I’d almost feel like a chump to return it. I’m thinking I’ll keep the money. What do you think, Sam?

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Crypto mining report

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Mining bitcoin became less profitable in 2022 as hashrate (the electrical cost of mining bitcoin) increased, while bitcoin tumbled from an all-time high of $69K in November 2021 to under $17K at present. Crypto is being propped-up with everything the US financial system has left. There are a lot of billionaires & multi-millionaires who are VERY upset at the prospect of losing a massive chunk of the portfolio invested in crypto.

In 2022, the stock prices of the five biggest public crypto miners by hashrate: Core Scientific ($CORZ), Riot Blockchain ($RIOT), Bitfarms ($BITF), Iris Energy ($IREN), and CleanSpark ($CLSK) traded down 99%, 85%, 91%, 92% and 79%, according to CoinDesk. What’s going on in the crypto industry is a massive restructuring, with a few big fish eating all the little fish. New rationalizations are needed to reassure venture capitalists in their support for the flagging crypto industry. If investors stop giving crypto money, then it’s lights out– literally.

Miners are hardcore crypto fanatics, so they tried to hold onto the bitcoin they mined, often electing to finance operations with low-interest debt, venture capital, blank check companies, etc. Perhaps pitch the idea on Shark Tank, which coincidentally appeared around the same time as bitcoin. The point is that bitcoin mining companies, who are in the business of mining bitcoin, weren’t making the BIG money in crypto.

Miners were contracted to make money for whales, who financed the mining of bitcoin. For instance, if Elon Musk contracted a massive amount of bitcoin to be mined from various bitcoin mining companies, the bitcoin would be delivered to him while he paid the consortium of miners for the service, presumably in bitcoin. This would support the industry as long as the price of crypto went up and money was cheap from the Federal Reserve.

Elon Musk’s financial Waterloo was his commitment to buy Twitter for $44B last spring. When his bitcoin empire crashed, soon after his takeover announcement, he began to back-off on buying Twitter. By summer, when Twitter shareholders threatened to sue & win in court, Musk was beaten. Elon Musk was heralded as the wealthiest man in the world by Forbes, with a value of $264B as of 2021. So here’s a modern economic question: Why couldn’t Elon Musk just buy Twitter for $44B, and be secure w/ $200+B remaining in personal wealth? Answer: Because his wealth was never real. It was mostly inflated crypto, and you can’t buy a publicly-traded company with bitcoin. Forbes is a central player in this fictitious accounting.

Elon Musk’s choices to finance his Twitter acquisition were to A) liquidate bitcoin; or B) liquidate Tesla. Tesla is WAY overvalued, and Musk knows this better than anyone, so him selling huge shares of his flagship electric car company tells the story there. If bitcoin recovers, Elon Musk is king again. If crypto goes to zero (which it must), then Musk is dust. When the stock value of Tesla collapses, as it must, Elon Musk won’t have any real money left. The more Tesla stock Musk sells, the sooner this will happen.

As poorly as Musk has run Tesla, his short reign as Twitter CEO has been qualitatively worse. Maybe Twitter was worth only a quarter of what Musk paid for it, say $10B. But that’s still an asset, and the second-largest social media platform on the internet. At least manage it decently for awhile, then take it public again, or sell it & eat the loss. That would be a rational business strategy after making a big mistake. But instead, Musk destroyed Twitter through a series of tirades, boneheaded ideas & tantrums. Now, Twitter isn’t worth $2B. These new-age millennial entrepreneurs have trouble producing value in the real world. They always need more money.

Turning to the unending crypto saga of Sam Bankman-Fried, the Securities Commission of the Bahamas has taken custody of FTX deposits valued at more than $3.5B as of November 12, according to a media release published last week. The November 12 date is significant, because the murky, murky $383M FTX hack, live-streamed in this video, happened during the evening of November 11, while SBF was in Bahamian custody. So where is the money?

The government of the Bahamas is in complete control of $3.5B in crypto, which the US government wants for itself. Bankruptcy trials take a long time, and this is largely a jurisdictional battle for the spoils which is to be hashed-out by lawyers, financial officials, opportunists, etc, on both sides until all the money is divvied-up to the right people. This is how governments steal for themselves in the name of their people & democracy.

The crypto community is facing an existential crisis. The vast majority, who have worked to build this industry, in mining, computer programming, sales & promotion, etc, have been shucked & jived by modern-day shysters. Calls in the fake media for regulation are a smokescreen, as crypto will never be regulated by US Congress. A few years back, during the Trump administration, Facebook CEO Mark Zuckerberg was compelled to testify before the US Senate for a regulatory hearing. The most memorable moment was when a crusty septuagenarian senator asked Zuckerberg how Facebook made money? The Facebook CEO smiled to himself & replied, removing as much condescension from his voice as possible, “We sell ads, sir.”

That’s typical of the level of fundamental cluelessness in elite politics. Crypto with its blockchains, decentralized finance, off-shore shell companies, etc, is much more complex than the nuts & bolts of social media. Not only is regulation unwanted by the industry (and Republicans), it’s unthinkable because no one in bourgeois politics has a clue how to deal with this mess. No politician wants to be seen as “impeding the free market,” and no politician wants to get dragged into these crypto scandals any further. You know it’s really bad when you see corrupt politicians insisting there are returning FTX money.

Calls for “regulation” in articles discussing crypto should be always interpreted as “bailout.” Eventually this crypto bubble will burst, and unlike the sub-prime crisis of 2007-08, there are no assets to recoup here. Millions of homes with defaulted mortgages were transferred into bank ownership in the wake of the 2008 financial meltdown. This was done to make bankers & hedge fund investors (who caused the meltdown) whole again. They were too big to fail. But the soon-to-come crypto crash will leave nothing to be recouped, because it’s been a fake asset from the start. US & Bahamian regulators are fighting over custody of $3.5B in fake money, and who winds up with it is beside the point because it’s worthless.

Meanwhile, Sam Bankman-Fried is out on bond, living with his parents who are co-conspirators in the $32B FTX/Alameda swindle. The effectively altruistic boy genius came up with a better way to mine crypto. Instead of having a series of supercomputers mining the crypto by solving complex mathematical equations, SBF just made up his proprietary FTT tokens out of thin air. This saved energy costs, and the expense of contracting crypto miners. This way, SBF made super-profits! Crypto skeptics point to Binance’s native BNB token, and ask if Changpeng Zhao created them by the same process.

Sam Bankman-Fried has surely violated the terms of his bail by moving large amounts of crypto from hidden Alameda wallets after his release on bond last week. SBF denies this, of course, as his parents are there to punish him if he does anything wrong again. The problem with crypto isn’t SBF, per se, it’s capitalism & the flawed idea that you can create value from nothing.

Update: Wed Jan 4, ~8:45AM CST

SBF was allowed to be free on bond, and violate those terms by moving large amounts of crypto out of Alameda wallets to unknown accounts. Unknown to the public that is. The US government knows where the crypto is, because undoubtedly they have been monitoring his computer, but they aren’t revealing anything they know to the public which is normal. SBF is acting as a personal tutor for US intelligence agencies, etc, in how to move crypto. Notice how names are always redacted when his legal team requests it, etc. Since when has such a swindler been allowed such clout in a DOJ prosecution case? Normally, targets of the DOJ receive no mercy, unless they plead guilty– or cut a secret deal. SBF pled not guilty, yesterday, as expected. SBF should now be considered as an agent of the US state. It’s the only way he can save himself.

Final thoughts: Thu 05 Jan 2023 6:43 AM CST

The crypto community is learning the hard way, that BIGGER interests (such as the US-provoked war in Ukraine) override any claims of crypto theft. The most logical explanation for SBF’s ‘not guilty’ plea is that he made a secret deal with US intelligence to save himself. These demoralized libertarians are in WAY over their heads here.

Crypto believers have hyped bitcoin with an impressive amount of enthusiasm & bravado, but never answered any fundamental questions posed to them over the years. They display a staggering level of naivety & ignorance in the fields of economics & politics. And yet, in their collective moment of stunned disbelief over the reality of how quickly dreams can evaporate, they maintain they are correct. The Federal Reserve & US Intelligence are the primary forces keeping crypto alive. Crypto is a money-laundering tool, that’s it’s only use value.

Any talk of SBF being an asset of US intelligence will now be branded as “conspiracy theory” in the fake media.That’s the Big Lie playbook they run on the public. This conspiracy theory is backed by the facts and the events as they are unfolding, which strongly implies that it is correct. US Intelligence always lies & evades to minimize exposure of an asset, especially a big fish like SBF, who is teaching them new & better ways to move crypto. This helps Joe Biden work with Republicans in funneling funds to the neo-Nazis in Kiev in the name of fighting Russian aggression which keeps us safe from terrorism.

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