Our Silicon Valley Bank Run Moment: Give Peter Thiel A Parade And A Medal of Freedom
Our Silicon Valley Bank Run Moment: Give Peter Thiel A Parade And A Medal of Freedom
We aren't coming to save you, Silicon Valley and neither are the Chinese
“The fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom that makes the world safe for capitalism.” — Peter Thiel
I wanted to share a few thoughts on the bank run on Silicon Valley Bank.
The bottom line is most important. Here it is: This is the beginning of the end for Chinese-Israeli malarkey.
Regulators are removing Chinese influence from America starting with the things which are most abstract and ridiculous — crypto, start up valuations, vineyards — and move to the things which are most practical — housing.
Quite a number of Chinese saw what happened to dear Jack Ma and they wanted the money out, out, out. Many of them moved that money into Silicon Valley bank — and that’s when the troubles began. Sure some of it was “investment” but how much? We’re not really allowed to ask just yet.
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Some time ago I was exposed to Silicon Valley Bank and met with them on occasion over the years.
“They’ll bank anyone,” a Silicon Valley friend told me after brokering an introduction. “Anyone?” says I. Do they know I’m a thought criminal?
In raising capital for Traitwell — I personally put in $600K+ — I had a few would be investors tell me that I had to appear as Silicon Valley-esque as possible. I informed them that would be a problem as, in my view, Silicon Valley operated a blacklist. Indeed I had investors tell me that they would put still more money into Traitwell were I to bank with Silicon Valley Bank. This struck me as odd.
But they didn’t vibe as bankers. Over the years I’ve grown suspicious of these types who crossdress between finance and tech and do neither. Banks, just as people and venture capitalist, get compromised when they don’t stick to their true mission.
My colleague ultimately did a cost benefit analysis and we dodged the SVB bullet. We picked a local Texas bank — Woodforest! — and I have never looked back.
Silicon Valley Bank is the Silicult’s bank. It’s why you are commanded to bank there if you are a founder. The cult has to keep all its money in the cycle for it to work.
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They called it Chimerica — and you were never under any illusions about which came first. China then America.
Banks are always a creation of the state. The question is of which state. Chimera complicated that by design — was the money in China? America? neither? —and so the Chinese slowly but surely took over the major banks and the major venture funds.
A 2015 New York Times piece suggests that Silicon Valley Bank serves “65 percent of all existing start-ups and many of the most prominent venture capital firms.”
The truth is that most short sellers have a strong relationship with the intelligence community, as evidenced by the masterly book, Money Men, on Wirecard written by Dan McCrum. So, too, do I think behind every bank run is an intelligence community triggering it.
Which brings me to Peter Thiel.
I’m often perhaps a little too critical of the German-American-Maltese-New Zealander billionaire who once upon a time counted me if not as a friend than an intellectual mistress. If we were to have a Facebook status, it would say, “It’s Complicated.” Lest you think I’m embittered I’m not. I actually went well out of my way to help Peter on multiple occasions. This is what friends do for one another.
Having worked with him on besting the very Russian-Chinese front Gawker, I was more than a little bit depressed that he seemingly descended into mediocrity and pontification, the low point of which was his speech about bitcoin.
Boy, was I wrong! He’s back, Theodin-style. Or so we hope.
It’s often said that Peter Thiel is the don of the PayPal mafia. There’s one interpretation that he confirmed he was the don by executing his old lieutenant — David Sacks — with a run on the bank.
I’m into this cinematically. I like the idea of Thiel and derring do.
Thiel’s fans are protecting him online while his detractors are claiming that he’s the worst but I think he should really lean into it.
Here’s what I would say were I he.
“You’re damn right I caused the bank run on an insolvent bank to protect my founders. It’s called Founders Fund for a reason. I aim to protect my founders.
What the press should be asking is why so many VCs pressured their portfolio companies to bank everything with Silicon Valley Bank, how insidery the game was,
In the last few years a number of VCs have put their own needs ahead of the founders or the American public. This is a great country and I’m proud to be an American. The English-speaking peoples have uniquely delivered technology to the world.
That ends with the fall of Silicon Valley Bank, which is really about laundering foreign money into the United States.
The Scapegoating of Peter Thiel?
One way to understand the collapse of SVB is as a bank run triggered by Peter Thiel. He told his founders, as he should, that their fundamentals are unsound and that they should withdraw their deposits—it’s called Founders Fund, after all, duh.
But there's another layer to this event, Peter was a student of Rene Girard who formulated the theory of mimesis and scapegoating. What can be seen in this framing of SVB collapse as a bank run is that it was fundamentally a result of a mimetic crisis, again, triggered by Thiel.
Once the Founders Fund companies requested their deposits back, rumors began to spread beyond the firm to other founders. "If one of the top VC funds is getting out of SVB, then shouldn't we do it as well?" This is where the mimetic desire kicks in.
People started to realize that the reason they're doing this is because they think SVB's fundamentals are not sound, something which until now wasn't a problem for them, but not they're having second thoughts because of Founders Fund. The more people come to this conclusion and take their deposits out in imitation of FF the more difficult it is to take out the deposits and at the same time the higher the mimetic desire is to do it. And so, you get the biggest bank collapse since 2008.
Now, we're in the scapegoating phase. Lots of people are left holding the bag, including probably some of your favorite start-ups. Even the Israeli ones, such as the shady crypto exchange eToro. So sad, so sad.
And who is to blame for this? At least for those that see and get the bank-run narrative, it's Peter Thiel. And with the crypto-focused firms like eToro, he is surely especially disliked because of the pump and dump FF did with Bitcoin recently.
You had Elizabeth Spiers who formerly worked for Jared Kushner of all people and for Gawker, backed as it was by a Russian oligarch.
And here’s Chinese compromised Dave Troy.
But Peter understands the scapegoating mechanism better than theses guys and so knew that this would happen unless he has plausible deniability and does things covertly. There might be an alternate timeline where he comes out and says it:
But that would be dangerous, so for now the scapegoat for most people, like David Sacks and Elon Musk, are still Janet Yellen, the FED, or even Ukraine, ridiculously.
The Sacks/Elon network is now in the business of scaremongering about "financial contagion" and "systemic risk" and the need to bailout this loser bank lest the whole economy collapses. Nope. No more. You can try, though. It's funny. Just like the scaremongering about nukes and war with Russia (the nukes don't actually work, guys). These psywars just don't hit the same as they use to, do they?
But who is actually to blame, and what does the collapse of SVB actually mean? Everyone at the SVB bank, the investors, the owners, the clients, are to blame for their own fate. All the fraudsters, the crypto bros, the NFT merchants, etc. are to blame, from the Israeli eToro to the, uh, Israeli-affiliated FTX. The whole thing was always built on sand, and if you looked closely you would realize even the sand is bullshit.
Everyone involved with SVB is now a loser because they didn't see the writing on the wall and realized that the world is changing, that USG is now actually anti-mob.
They're also to blame for not seeing the significance of Peter Thiel realizing this himself, and joining the anti-malarkey alliance. Long may he live (perhaps, forever?). If you weren't convinced by the previous post that there are no brakes on this train, that this didn't start with Biden nor will it end with him, then maybe you should reconsider and maybe retire from being a fraudster, mobster, or foreign asset right about now? Just a suggestion. Though frankly, if you didn't get it by now...On the bright side, you're in the same company as Bibi, who is focusing on helping shady companies like eToro while ignoring apparently the largest Israeli protests in history—it's a bad look, to put it mildly.
The end of SV does not mean the end of VC, though we need a new term for this stuff. The spirit of the new world.
It means an evolution of venture capitalism, with far higher barriers to entry and standards, and a truly post-libertarian mentality. Is it actually possible to *gasp* work for the deep state? The goal of FF now is, or at least should be, to go beyond the world of bits and make the US unrecognizably better by finally investing in the world of atoms. Maybe they could rededicate themselves to their mission. That might involve letting some people go.
Perhaps that's what Peter realized, that indeed there are things in the world of atoms, like genomic sequencing, satellites, facial recognition, and drones, that are actually getting growing, getting cheaper and better, perhaps even at Moore's Law pace or faster. Who better to define what post-SV investing, and furthermore, what the post-SV world will look like. Whatever it is, it will follow a rule: no malarkey.
Is this the beginning of the Peter Thiel-Joe Biden's "No Malarkey" Alliance?
The smart move for him would be to crew up with AUKUS and turn from Likud but we shall see. Maybe then he will earn his parade and even a presidential Medal of Freedom.
I get you’re excited but a lot of people have suffered bc of Peter Thiel and the federalist society. That asshole helped bury us in this shit heap we’re trying to get out of. Lando got to help blow up the Death Star but he gets no parade.