“You just wait until the next bear market…”

Last month, I talked about how many of the legendary investors I’ve long followed as well as many of my contemporary financial commentators (speaking specifically of the contrarian ilk), are almost unanimous in the opinion that the AI trade is well into bubble territory and stocks in general are overvalued. Hell, even I think that and I’m personally “all in” on AI and have a fair bit of equities exposure to it (not a tonne, but it’s there, and the biggest winners in the TSC portfolio lately have all been AI stocks and HPC stocks).

Angela sent me this Diary of a CEO interview with Jeremy Grantham – another legend – and she said it was scary. At his peak he managed something like $165B AUM, but he’s down to $80B or $90B now (he also says the only reason he’s still counted as a billionaire today, personally, is because they include the money he’s given away. Grantham has donated over 90% of his net worth to the Grantham Foundation, which invests and incubates primarily green-tech innovation to combat climate change.

Although Thomas Braziel, whose name you might recognize as a notable distressed asset investor who specializes in crypto i.e. Mt Gox claims, FTX, put out an interesting analysis of Grantham’s green tech foundation’s filings – and surmised that what he’s saying on the talk-show circuit isn’t lining up with where he’s actually allocating the foundation’s …money )

Grantham occupies an exalted perch in the pantheon of institutional investors, so when he opines on something, it tends to get picked up on, which one may find somewhat quizzical, given his lifetime batting average isn’t really in the same league as the likes of Buffet, Munger, Klarman, et al.

His lifetime average returns? The closest analog could be the lifetime average of the GMO Global Asset Allocation Composite, which he co-founded.

Their number? 8.43%. And 0.8% of that was because of a one-time litigation settlement received in 2024

Warren Buffet’s lifetime batting average is pushing 20% (19.8%).

The S&P itself, 10%.

In case you’re wondering how somebody became a billionaire by lagging the major index by 200bp over their entire career, it’s because Grantham is proficient at one thing in particular: not losing money.

The TL;DR from the DOAC interview? A lot of people are about to lose a lot of money.

When Stephen Bartlett told him he was invested in SpaceX, Grantham dead-panned, “Good luck with that”.

Bitcoin? “It’s a zero”.

The interview went a bit viral and I saw a lot of “Billionaire says Bitcoin is worthless” headlines in the mainstream financial press. Grantham has since been on a punditry tour (perhaps in promotion of his latest book, “The Making of a Permabear” – yes, really); and the soundbites that are being repeatedly teased out from them are his “Bitcoin is a zero” sermons, in one case getting into a somewhat heated exchange with Joe Kernen on CNBC – where Kernen, incredibly, makes some of my points far less diplomatically than I have here.

At least it’s not just Bitcoiners getting into scraps! pic.twitter.com/pfJyXM3ZFc

— JOEY (@JoeyTweeets) June 26, 2026

After Grantham trotted out the usual “no use case”, “there’s no there there”, “it’s a bubble”, Kernen straight-armed Grantham in the face with his underperformance over the past two decades,

“You’ve done a great disservice to anybody who’s listened to you over the last twenty years”.

Grantham’s response and attempt at a defence, combined with something else he said in the DOAC interview, are all leading up to my point here, while being 100% oblivious to it:

To Joe Kernen: he said “We’ve been in a bull market since 2009, let’s see how all this stuff holds up when the next bear market hits”

To Steven Bartlett: he cautioned how Amazon sold off a staggering 92% during the Dotcom bust.

During the drive to Hamilton for a board meeting, I listened to this short Alex Hormozi clip and his analogy (which he cribbed from Brian Johnson) hit me full force and I finally had a working metaphor that explained what I’ve been trying to articulate about these living legends of finance.

That they’re underestimating the significance of fiat debasement is true, but it doesn’t really explode in your brain as much as make your eyes glaze over.

The analogy is fish are swimming around in water. Some of them become experts at swimming. They train their entire lives, they practice every day, they study the expert swimmers of yore, and they analyze nearly every aspect of the water they inhabit: it’s PH levels, alkaline, currents, flow – everything.

They know how a slight variance in one factor impacts the others – they know “which way the current is going”.

But over time, the water heats up; they may pick up on this, but they’re never quite prepared for what it means beyond a certain point.

When that point arrives, the water evaporates – and now it’s gas. Steam.

Setting aside for our purposes how this would fry the fish, imagine they’re still alive, but now they’re trying to apply everything they know about swimming in water to this new environment, which is gaseous, not liquid.

They would be flailing and flapping around like the proverbial “fish out of water”.

What happened?

They were never wrong about their fluid dynamics.

The physics changed and they had no model for the new reality.

Hormozi’s short clip was applying this metaphor to AI – which is certainly among the key drivers of the “monetary physics change” that we are now undergoing.

But the point of no return, when the phase shift started, was – I believe, and as Raoul Pal has always said – the Global Financial Crisis of 2007-2009.

That was when the water started turning to gas.

Grantham’s own yardstick measures the current bull market from then – when the central banks stepped in, when The Big Print started and when interest rate suppression and credit expansion became permanent features of the global monetary system (I would argue that the process started in 1980-82, and the GFC was a major tipping point).

Yes, Amazon came off 92% when the dotCom bubble burst. But anybody who had bought, even at the high right before that, is now up about 4,642.7 %

On the new Sovereign Capitalist site, we can model all this out interactively (see below).

On its surface, Grantham’s fixation on loss avoidance serves a purpose (recall Buffet’s top rules of investing: number one is “Don’t lose money”, number two is “See Rule number one”).

If I ever experienced a staggeringly huge life-changing windfall in one moment, I would carve out a “retire your bloodline”-type allocation and hand it to a guy like Grantham (more likely it would be Vito Maida  over at Patient Capital, here in Canada).

But being good at preserving capital has its own opportunity cost, which is far more pronounced now that we’ve traversed the inflection point into the Exponential Age.

The world has transitioned from flat to hyper-cubed – the architecture is completely different now, and the linear measuring stick known as fiat money is ill equipped for the task of describing it.

To Grantham’s point “you just wait until the next bear market”, there won’t be a next bear market, not until we change that measuring stick.

Until the monetary regime change happens – that “change in physics” – any drawdown, no matter how deep, will be papered over with incessant Big Prints until the system itself completes its metamorphosis.

Today’s post was an excerpt from The Sovereign Capitalist my recently relaunched premium service. This goes beyond a dashboard, it’s more of an operating system for high agency net-producers.  All members get access to the full pre-release version of my new book: The Blueprint – Survive & Thrive in an Overclocked Timeline.

Try it out for a month for $7, when you use the promo code TSC_PREVIEW26 here.

There was a version of this country that worked.

This was a country that used to punch above its weight across all key metrics and in a large part, did so espousing classical liberal values.

Multiculturalism here was both uncontroversial and functional. People came from everywhere, integrated, and got on with building lives, businesses and contributing to that overall ethos Canadian culture.

Minority rights and gender equality stopped being fights and became defaults.

Ontario, the most populous province, ran one of the cleanest grids on the continent for half a century on the back of CANDU, a reactor we designed ourselves. Peaceful, homegrown, zero-carbon, clean energy, and nobody lost any sleep over it. In fact, most people probably weren’t even aware of that.

By every classical liberal measure that actually mattered, Canada was a success story that inspired the rest of the world.

I want to be precise about the word “liberal”. The small-l, “classic” version meant open markets, open minds, equal treatment, and a state clueful enough to stay out of the way. That Canada earned its stature honestly.

Then, in 2015, the big-L Liberals took over the small-l idea. They have spent a decade undertaking what looks like something between a “controlled demolition” and act of subversion.

Start with energy, our single largest missed opportunity

We can’t build pipelines. A country sitting on one of the largest energy endowments on earth cannot get its own product to its own coast or even to its own citizens. In 2017 the Trudeau government changed the rules and moved the goalposts on the Energy East pipeline which resulted in its cancellation.

Canada is sitting on the fourth largest oil reserves on earth, after other political temperate zones: Venezuela, Saudi Arabia and Iran, and we import between 500K – 600K barrels per day, nearly all of it, from the United States (“Elbows Up!”)

When Germany came knocking in 2022, Chancellor Scholz flew here and asked, practically begged, for us to sell them natural gas. Russia has just invaded Ukraine, and that put the Germans (which had wisely demolished their own nuclear power grid) into an awkward spot of having to buy energy from Putin.

Our answer?  There has “never been a strong business case.” Maybe we could interest the Germans in some solar panels and windmills. They went and signed a fifteen-year deal with Qatar instead. Qatar. Not exactly a human-rights exemplar, especially during Pride Month.

We did eventually sign an LNG deal with Germany, off the West Coast, in May of this year. Four years late, for volumes that would have looked modest in 2022. Better than nothing. Slower than everything.

None of this was an accident of incompetence. It was ideology. A decade of WEF-flavoured talking points, degrowth dressed up as climate virtue, and a governing instinct that treated Canadian resource wealth as something to apologize for.

Ottawa’s own reports spelled out the anti-capitalist drift in black and white (Bombthrower covered one here). When the environment file is handed to a former Greenpeace activist pinned to the far left of the spectrum, the pipeline math and the LNG math and the nuclear math all start to make a grim kind of sense.

Speaking of nuclear. The recent strategy was supposed to prove we still build things. “10 New Nuclear Reactors!” Oh boy.

Read past the headline. The plan is:

• two reactors under construction …by 2035, and
• five more “planned” (or “under development”) by… (checks notes)… 2040.

Planned. Under development. Unserious.

Meanwhile…. over in China,  they’re projecting roughly 200 gigawatts of total capacity, which means about 100 new reactors, finished and powered-on by 2040. They finish a reactor in about five years, and they a couple dozen under construction simultaneously. We are going to have started two.

We invented the CANDU. We are now a rounding error in the industry we helped create.

On Indigenous affairs, honesty requires two things at once

Most people can only manage one.

The first is that the historical record is genuinely damning. Broken treaties. Mishandled reserves. The residential schools. Generational neglect. Like slavery in the United States and elsewhere across the world, our treatment of First Nations casts a long shadow, and pretending otherwise isn’t helpful.

The second is that none of us alive today built that system. Nobody alive today bears any culpability for it. How could we?

The dichotomy between responsibility and duty was always so cogently captured in a lecture I remember in college, given by the late Jack Richardson: the great Canadian producer. I remember it well, but I’ll paraphrase:

“When you’re the producer on a record, your job is to deliver the master to the label – full stop.

Anything that gets in the way of that: the bass player dies of a heroin overdose, somebody burned the studio down, the lead singer’s wife left him and now he’s out on a ledge…

…all kinds of things can go wrong and none of them may actually your fault, but every single one of them is your problem.

You have to deliver the fucking record. That’s on you“.

That is exactly where reconciliation should sit. Something we did not cause and still have to remedy… somehow.

But nothing that we do are actual remedies.

Instead of the hard, unglamorous business of clean water, functioning services and honoured agreements, we got theatre: Never-ending land acknowledgements read off laminated cards. Streets renamed, it seems deliberately, to incomprehensible text strings. Empty gestures that move no needle on any stated goal and instead breed the exact resentment they claim to be healing.

A growing share of the public has stopped seeing any of this as a lingering injustice to be addressed but now views it as a permanent guilt-management industry to tune out.

The elephant in the room: Immigration

Immigration was our masterpiece.

For decades we skimmed the cream of the planet. Skilled, educated, motivated people from every culture and country, selected through a points system that drilled down on simple KPI: can you come here, integrate, and build something? Successful applicants kept their heritage, celebrated it, added it to the mix, …and got to work.

We took people on humanitarian grounds too, generously so, but never more than we could economically and culturally absorb.

That gave us extraordinary dynamism. Entrepreneurs and investors who arrived with nothing and hit it out of the park. Chamath Palihapitiya came as a refugee from Sri Lanka and became one of the most influential venture investors of his generation.

Prem Watsa came from India and built Fairfax into a company that earned him the “Canadian Warren Buffett” tag honestly.

Legends, both. We could use as many of those as the world will send us.

Then we changed the filter.

The points system asked whether you could succeed here. The volume model, switched on after (guess when?) 2015, asked almost nothing. The targets stopped being calibrated to housing, services, and absorption capacity, and got calibrated to two different things instead: cheap imported labour for the mega-employers who lobbied for it, and a river of tuition to turn colleges into degree farms selling permanent residency with a diploma stapled to it.

The numbers got loud. Population grew faster in 2023 than in any year since the 1950s, almost entirely through immigration, into a housing market that was already broken. We’ve all seen the graph, I don’t need to repost it. By 2024 Ottawa was admitting north of 480,000 permanent residents a year, with temporary-resident inflows stacked on top that pushed the real figure far higher.

Then, even the Capital-L Liberals blinked. In late 2024 they slashed the targets and Justin Trudeau conceded, in his own words, that they “didn’t get the balance quite right.” Permanent-resident targets came down to 395,000 for 2025 and 380,000 for 2026, with brutal cuts to international students. Mark Carney, having replaced him, kept the lower numbers. Governments do not reverse that hard, that fast, on policies that are working.

Here is the part that gets people shouted down for raising, so let me be clear here:

This is a screening argument, and nothing else.

When you select immigrants, you screen. At least you’re supposed to.

Skills, language, education, and yes, background. When you stop selecting and simply move volume, you stop screening, and you get the entire Bell-curve of humanity – and quite possibly the wrong tail of it. That includes people from low-trust societies who carry their grievances and factional conflicts across the border with them, and it includes the criminal minority that any large, unvetted inflow will contain.

Ethnicity is beside the point here. The removed filter is the entire point.

The failure compounds when institutions respond to the predictable problems by looking away or dismissing credible criticisms as racism. When a serious crime involving a recent arrival gets softened in the media coverage, or when the judge sentencing a convicted violent criminal dials back the penalties in order to avoid deportation, ordinary people notice. They are not stupid.

People start rumbling about “two-tier” justice systems and “immigration discounts” for criminals, and they are correct.

True story: Racism in Canada had been all but eradicated.

This is reason I bothered writing any of this. Because it’s Canada Day. And I see too many reactions to what has happened in this country get boiled down to the lowest-IQ filter that exists: racism.

For what now seems like a bygone Golden Age, racism in this country was basically over.

Structural racism had been excised from the systems and institutions while garden variety cultural racism was confined to relatively few fringe dwellers. Every few families had one of those Archie Bunker type uncles and nobody really took them seriously.

The overwhelming majority of Canadians, born here and immigrants alike, simply did not organize their lives around skin colour. That was the win. That was paradise. We had it.

Some may say we always sorted ourselves, that Little Italy and Little India prove it (“Checkmate, multiculturists!”). They actually prove the opposite. Ethnic neighbourhoods are on-ramps: the first generation clusters for the food and the familiarity, the second scatters to the suburbs and marries out (including inter-marriage with other groups); and the whole thing runs on choice and empties itself by design. A multi-generational bakery on a corner is culture. A Tim Horton’s staffed with TFWs is policy. The paradise ran on the former and its destruction happens on the latter.

Look at where a decade of dismantling this has left us.

For starters, racism is back from both sides, with a twist:

Structural racism came back, only this time wearing progressive branding. Job postings openly signal racial and other identity preferences. Criminal sentencing now weighs a defendant’s race, background and immigration status.  A system that largely made race irrelevant has spent the last decade making it central again, then acts astonished at the reaction.

And because of that reaction cultural racism is now, also back with a vengeance. Resentment festers among perfectly normal people, including fully integrated immigrants from the earlier waves who did everything right and now watch the standard collapse behind them. That Archie-Bunker racism, the crude ambient kind we had mostly shamed out of public life, is back and being said out loud. Grassroots organizations that used to sit at the crank-fringe are growing past it. Social media runs on lowest-common-denominator rage bait, and a lot of it is now straight-up racist.

We spent forty years turning down the temperature on race in this country and it worked. Then, in the name of turning it down further, we cranked it al the way back up.

The title isn’t a joke, it’s the truth.

A classically liberal paradise is precisely what we built. Open, tolerant, prosperous, boringly functional, (“peace, order, good government”) the envy of people who had to flee places that were none of those things. The small-l achievement was real, and it was ours.

The big-L party inherited it, mistook the inheritance for a mandate to undertake a mass civilizational social engineering project, and spent a decade trading competence for platitudes, energy for symbolism, selection for volume, and hard-won racial peace for a fresh cycle of division marketed as inclusivity.

We had this one in the bag.

Now, not so much.

Happy Canada Day.

If you’re a net-producer, high agency Canadian interested in joining a like-minded group for the politically homeless in Canada, check out Ready.ca

If you are new to the Equibit story, please read The Assassination of Equibit, originally released in 2023.

When the Berlin Wall fell in November 1989, the world celebrated the end of one of history’s most oppressive regimes. East Germans stormed the headquarters of the Ministry for State Security — the infamous Stasi — desperate to seize and protect the mountains of files that documented decades of tyranny. What they uncovered was more horrifying than most could have imagined.

Among the archives was Directive 1/76, issued in 1976 by Stasi chief Erich Mielke. This document formalized Zersetzung — “decomposition” or “corrosion” — a systematic program of psychological warfare designed to destroy “hostile-negative” individuals and groups without the messiness of arrests, trials, or overt violence. The goal was simple and demonic: fragment, paralyze, disorganize, and isolate the target so completely that they could no longer function as a threat — all while maintaining the appearance of normal life.

The Sheer Evil of Zersetzung

Historian Hubertus Knabe, one of the foremost experts on the Stasi, described it chillingly: “The Stasi didn’t try to arrest every dissident. It preferred to paralyze them… by damaging their reputation, by organizing failures in their work, and by destroying their personal relationships.”

Tactics included:

• Covert home invasions to move furniture, change alarm clocks, or swap everyday items (classic gaslighting)
• Systematic smear campaigns using true, false, and twisted information
• Engineered professional and social failures
• Provocation, anonymous threats, and orchestrated “coincidences”
• Destruction of marriages, friendships, and family ties through rumors and planted evidence
• Sabotage of careers, vehicles, and medical care

Victims often had no idea the Stasi was responsible. Many believed they were losing their minds. Mental breakdowns and suicides were common outcomes.

One victim, Jürgen Fuchs, a writer and dissident, called it “psychosocial crime” and “an assault on the human soul.” Many survivors suffered lifelong trauma, paranoia, depression, and shattered trust. Some received modest compensation decades later, but for most, the damage was irreparable. Families were torn apart. Careers evaporated. Lives were slowly, methodically erased from within.

The Stasi built an enormous network of civilian informants — the Inoffizielle Mitarbeiter (IMs). By 1989, there were roughly 91,000 full-time Stasi employees and between 173,000 and 189,000 unofficial informants. This meant roughly one in every 50 to 60 East German citizens was actively collaborating with the secret police — an astonishing level of societal penetration. Some estimates, including occasional informants, run as high as one in six or seven adults.

These informants came from every walk of life: neighbors, colleagues, friends, even family members. Recruitment methods ranged from ideological appeal and bribes to blackmail and threats against loved ones. Once enlisted, they were used to spread rumors, provoke conflicts, sabotage opportunities, and report intimate details for the creation of detailed “psychograms” — psychological profiles used to exploit every weakness.

From East Germany to Canada: The Equibit Case

What happened to Chris Horlacher and Equibit Group bears unmistakable hallmarks of this same strategy — updated with 21st-century digital tools and operating within a Five Eyes democracy.

As documented across the Equibit Factum, technical forensic reports, live videos, court filings, and interviews on equibitlawsuit.com, the campaign against Horlacher and his company included:

• Prolonged surveillance and contact by prime-suspect Marc Godard beginning as early as 2010 — when Chris was engaged in online liberty activism.
• What appears to be the recruitment and corruption of Sergei Sachkov, lead Core developer at Equibit Group, by CSIS.
• Intense and malicious harassment by the Ontario Securities Commission, and demonstrable entrapment efforts.
• Marc’s attempts to involve Chris with questionable individuals post-Equibit, more entrapment schemes via financial crimes.
• Router compromises via the TR-069 protocol, with logs showing impossible 1981 timestamps and persistent remote access.
• DNS man-in-the-middle attacks rerouting traffic through U.S. servers.
• Microsoft ecosystem intrusions where private memos were observed copying themselves in real time.
• De-banking, institutional pressure, and coordinated defamation campaigns.
• Insider betrayal, code forking, rebranding (OCEAN → Tesseract), a coordinated effort to dismantle Equibit Group from within.

Marc Godard’s background in Cognitive Science would have been particularly useful in constructing the kind of detailed psychograms the Stasi relied upon — mapping personality weaknesses, relationships, and pressure points for maximum psychological effect.

This was not random crime or bad luck. It was a sustained, multi-vector operation designed to isolate, financially ruin, discredit, and psychologically break a founder who dared to become a fierce advocate for limited, constitutional government.

Zersetzung Has Gone Global

The Stasi needed a vast human network because they lacked today’s digital omnipresence. In the Five Eyes countries (Canada, USA, UK, Australia, New Zealand), agencies no longer need millions of informants on the ground. They have tools that allow remote, deniable, scalable decomposition: compromised routers, operating system-level access, financial system cooperation, and institutional capture.

What Horlacher has experienced — and meticulously documented — strongly suggests that modern Zersetzung is not only possible in Canada and its allies, but is likely already being deployed against innovators, dissidents, and threats to the established order throughout the country.

A Call to Global Conscience

This is cruel, inhuman, and degrading treatment. It is extrajudicial psychological torture dressed up in the language of national security. It violates every principle of human dignity and the rule of law.

We call on readers to take immediate action:

1. Visit https://equibitlawsuit.com — read the evidence, watch the videos, review the technical reports.
2. Submit a detailed complaint to the UN Special Rapporteur on Torture (sr-torture@ohchr.org), including all available documentation and requesting an urgent inquiry into the use of modern Zersetzung-style tactics by intelligence agencies in democratic nations.
3. Contact appropriate NGOs and oversight bodies:  Amnesty International, Human Rights Watch, the Canadian Civil Liberties Association, Privacy International, and the National Security and Intelligence Review Agency.
4. Share this story relentlessly. Public awareness is the greatest threat to these shadow operations.

What was done to Equibit and Chris Horlacher must not be allowed to become the new normal. If governments in the West can wage silent war on their own citizens — innovators, thinkers, builders — using the refined cruelty of the Stasi, then none of us are safe.

The Berlin Wall fell. The files were opened. The world saw the evil and recoiled in horror.

Today, new walls are being built in the digital realm — invisible, pervasive, and far more sophisticated. We must tear them down with the same courage and determination.

The time for silence is over. The time for exposure, outrage, and accountability is now.

Demand an international inquiry. Demand justice for the victims of digital Zersetzung. Demand that this hideous violation of human rights ends.

Because if we do not act, the decomposition will spread — until freedom itself is nothing but a memory.

Stay tuned to equibitlawsuit.com for more updates on the Equibit lawsuits against CSIS and related actors

Two inexorable realities have come into sharpened focus over the last month or so. Both are themes we have been exploring and monitoring – one, since practically the very beginning of this service, the other, over the last year or so.

The first is the unsustainable nature of the global monetary system: we are not unique in calling that out – it’s practically a trope and has been for a long time.

The other is the existential necessity to win the new arms race – which is less about kinetic weapons now and more about computation, information and 5GW.

In the past, when the Soviet Union put as astronaut into space before NASA, it was a humiliation and a psychological defeat – but the USA arguably still held strategic advantage where it counted at the time, which was here on earth, with more nuclear missiles, tanks and military bases than the USSR.

The US space program kicked into overdrive, and NASA was able to slingshot past the Russians, and over time and across more dimensions, the Soviets never caught back up or retook the lead – in anything.

To this day, Russia’s resurgence onto the world stage – articulated through concepts such as Neo-Eurasionism or “Third Rome” (basically their version of “Manifest Destiny”) – is more than anything, an aspirational framework for “getting up to speed”, while rationalizing their inability to do so in traditionalist, volk-ish trappings.

Their high priest of this quixotic mix, is “Fourth Political Theory” author, university professor and philosopher, Alexander Dugin – whose other titles include “Last War of the World-Island” and – perhaps most tellingly, although least known of his works here in the West – “Katechon and Revolution”.

The word “Katechon” (from the Greek: ὁ κατέχων / τὸ κατέχον which translates loosely as “the Restrainer”) is important in the Russian collective psyche because it contains a massive “tell”.On its surface, it’s supposed to encompass Russia’s “state messianism” and symbolize its opposition to The West – their “Antikeimenos”.

The day of the Russian invasion of Ukraine, Dugin posted on Facebook “Now we are in a war of the spirits. Katechon vs. Antekeimenos”.

Antikeimenos (from the Greek: ὁ ἀντικείμενος) is the term St. Paul uses in Thessalonians 2:4 for the figure of the Antichrist. It appears exactly once in the Greek New Testament, in that single verse. The literal sense is “the one who opposes” or “the one set against”.

And therein lays “the tell” – what the Russian collective psyche is admitting to, and trying to come to grips with, and it is this:

If we reframe the Cold War as the first technological contest between Great Powers, Russia has to confront the fact that they lost – and they’ve never been able to recover from it.

In the contemporary pantheon of international relations and political economy, absolutely nobody today thinks of Russia as a “great power”. When you peel back the ideations of “The Fifth Empire” or “The Soviet Union 2.0”, you get to that underlying underdog mentality – trying to recapture super-power status.

They lost the space race. Then the Cold War, and now they can’t even beat the Ukraine.

That was supposed to be an overwhelming military victory, but the Ukrainians, mainly through wholesale adoption of drone warfare, have managed to give the invaders a rough time of it, even penetrating deep into Russian territory using high-altitude balloons to deliver suicide drones.

Make no mistake, all that financial support from the West aside, the Ukrainians have been able to stave off complete defeat through technological means and because cheap, sophisticated weaponry (drones) completely upended the conventional battlefield.Such are the travails of an erstwhile great power that has lost a technological competition. You can bet today’s incumbents – namely the USA and China – understand these stakes, and neither of them has any intention of losing:

• AI
• Energy
• High Performance Computing (which leads us into)
• The Space Race 2.0
• Quantum Computing

This is why the “catastrophic climate change” narrative has been rather suddenly sunsetted in The West (at least, the non-Euro west): we need more energy, including nuclear – lots, and lots of nuclear.

It’s why White House Asset Management (WHAM) is pumping money into quantum computing companies (including, from our wish list: D-Wave, which we hadn’t yet pulled the trigger on).

It’s also why China has moved further out on the interventionist side of the state capitalism spectrum, with mandated “Capital Reallocation” programs where the government has issued structural directives forcing state-owned pensions, insurance funds, and enterprise pools to funnel trillions of yuan directly into equities, while the state-backed “National Team” continues steady, strategic purchases of domestic ETFs to put a floor under major indices.

The Chinese debt overhang on bad real estate loans is even larger than what we had here in the run up to the GFC, so regulators there are pulling out all the stops to keep the balloon duct-taped together:In early 2026, Beijing quietly abolished enforcement of its strict “three red lines” policy. Developers are no longer required to report monthly data regarding debt-to-equity, cash, and asset metrics, freeing up fresh credit channels.

They’ve backstopped an additional 7 trillion yuan under a new “property project whitelist” mechanism, which extends developer loan maturities by up to five additional years to stave off defaults.

Commercial and state banks are aggressively financed to help local governments buy up unsold, completed housing inventory directly from developers to convert them into subsidized public housing (this is a nominally communist country, so why not).

To top it all off, we’re seeing capital flight restrictions – going so far as to prevent technology transfers to the West via acquisition (we covered last month how Meta’s acquisition of Manus was blocked and reversed by state authorities).

Any rational observer of finance and economics knows that all world economies, including The World Economy, is levitating in mid-air buoyed by stimulus, signal suppression and pure white-knuckled will.

In prior years, when all the financial commentators and contrarians were waiting for this to hit a wall, we all marvelled (at least I did) how the system was kept on the rails at all costs – because too much was riding on it to let rational economics and market restructuring take their course.

That was before AI. Before it became apparent that not being number one in this technological arms race had civilizational consequences, like joining Russia as another “also-ran”.

Once again, the contradictions and distortions that this imperative amplifies are bubbling to the surface.

On one hand – all rational analysis of the market is screaming “overbought”. Practically every financial commentator I came up following is looking at this and making comparisons with the dot-com bubble; the AI high flyers now look a lot like Global Crossing, Nortel, L3, VA Linux before they all imploded.

My X feed is absolutely jam-packed with people posting screenshots of 7-figure trading accounts that were ostensibly amassed in under a year trading HPC, AI, chip makers, memory, and now quantum (again).

Zerohedge has remarked on the circular nature of the AI economy more than once:

Note that the above-linked article (from which the screenshot came) is a Tyler Durden original, it is not a repost of somebody else’s article.

Tyler has this annoying trait: he’s always early and he’s often right.

Yet it’s possible the man himself buried the lede (from that screen cap):

“The Infinite Money Glitch”

By all rational and financially coherent measures, the equities markets are overvalued, beyond bubble levels and primed for a catastrophic drop on the order of, pick one, 50%, 75%, 90%. Yes. 90%. We’ve been pumping since 2008 folks. Even further if you go back to the beginning of the equities supercycle in 1982.

After the dot-com bust, we were in a bear market for two years. When the GFC finally hit, it was straight down for a good 18 months. When COVID was coming, the banking system was starting to crack up under the hood (the reverse repo situation in late 2019) but when it came unglued in March, it was about two weeks before the monetary bazookas were unleashed and everything reversed hard of the March low.

What happens after that is instructive:

The Regional Banking crisis erupted, and was even larger in nominal terms than the GFC when it came to the amount of assets tied to bank failures. The Fed threw the taper overboard, did a massive liquidity injection and after a failed attempt to pick and choose winners in terms of which banks to save, caved in to public uproar and backstopped everything.

Liberation Day, Japan-ageddon, Israel/Iran/Gaza barely perturb the trajectory.

If you switch out of linear mode for that long-term chart, and go to logarithmic – you should recognize the pattern:

It’s the same as Bitcoin, which is the same as gold during the Weimar Republic and it’s the same signal being broadcast from every one of those charts.

We should acknowledge that the Nasdaq took 15 years to recover from the Dotcom shakeout, which is a long time to be underwater if you bought in at the tippy-top.

But I believe two things have changed since the GFC:

The first is that tech, despite taking the biggest hit, almost by definition when the Dotcom bubble blew, also became the apex asset class from here on out.

If you look at the long-term chart for the Nasdaq, it basically went parabolic for the first half of the equities supercycle, and formed a double-bottom from the Dotcom crash to the GFC

After that it blasted off and has left everything else in its dust:

This makes perfect sense, because tech is the asset class of choice in a world driven by acceleration and tachyosis.

We can’t put Bitcoin in that chart because it’s basically a divide by zero error. But if we take the commonly held, first market price ever for Bitcoin, which was $0.10, it pencils out to an absurd value. Call it 77,719,900% and leave it there.

It’s not uncommon to hear criticisms of Bitcoin that are simply “all it does is follow tech”.

Yeah, no shit. That’s because it is tech.

The other thing I believe about all this, is Raoul Pal’s theory that after the GFC, the world’s central banks got together and made a deal to never let anything like that happen, ever again.

Which means that central bank balance sheets will grow in perpetuity, and stock market will never have a meaningful bear market – for the remainder of the duration of the current monetary system:

That’s from Raoul Pal’s “Everything Code”, it goes on:

• They don’t understand valuations are a function of debasement.
• They don’t understand why technology rises and valuations can keep rising.
• They don’t understand why crypto is being adopted and is the fastest horse in the race.
• They don’t understand why the dollar keeps rising.
• They don’t understand that energy transition is real and is crucial for the world economy.
• They don’t understand why rates won’t remain high.
• They don’t understand why GPT4/AI is the biggest humanity-scale event since the splitting of the atom.
• They don’t understand why this is all so fucking deflationary. They want their sticky inflation. They will not get it.
• They don’t understand why nothing in their world makes sense.

We understand it. Because we know the cheat code, which is:

Put the chart into logarithmic view.

Look at the X axis.

Then own the assets that are outpacing everything else on that scale.

That’s it.

Get on the Bombthrower mailing list here. Premium members of The Sovereign Capitalist have already received advance copies of my new book: The Blueprint: Survive and Thrive in an Overclocked Timeline – we launch in two weeks, get on the invite list here. 

Follow me on X here.

If you are new to the Equibit story, please read The Assassination of Equibit, originally released in 2023.

Chris Horlacher has documented multiple sophisticated intrusions through his Microsoft ecosystem. These incidents go well beyond ordinary malware and align with key moments in his legal activities. They indicate a close collaboration between Microsoft and the Five Eyes to deliver undetectable spyware onto targeted devices in order to steal information and interfere with the normal functions of the computer.

Key Incidents of Unauthorized Access

• July 19, 2025 – Unauthorized Sharing of Sensitive Memo
  A confidential memo was suddenly made publicly shareable via OneDrive using Chris’s own Microsoft account. He did not perform this action. During the event, his computer’s built-in screen recorder was disabled. Luckily Chris was able to capture the event with his cell phone’s camera.

Watch the incident:

• August 27, 2025 – Spontaneous File Movement
  A critical security report analyzing router compromises was mysteriously moved to the desktop.
• October 27, 2025 – Camera Roll Breach
  OneDrive logs showed someone browsing the Camera Roll folder containing images taken directly by the device, as well as two files related to psychology that provide insight as to the hacker’s identity (more on that in later posts!)

Watch the Camera Roll intrusion:

Mass Windows & BIOS Updates – Highly Suspicious Timing

On August 18, 2025, immediately before a strategy call with his lawyers about upcoming discovery sessions, Chris’s computer began installing an unusually large wave of updates — including Windows, BIOS, and more than a dozen other components. He described it as one of the largest simultaneous update pushes he had ever experienced. Call quality then rapidly deteriorated and the connection was terminated exactly when the discussion turned to sensitive topics.

This event is especially concerning in the context of Bill C-22, Canada’s proposed Lawful Access Act. Part 2 of the bill would require electronic service providers (including software and operating system vendors) to build and maintain technical capabilities to facilitate authorized access to information by law enforcement and CSIS. Critics argue this could effectively compel companies like Microsoft to enable mechanisms for delivering signed updates or payloads that Windows would trust by default. Because Microsoft-signed updates are automatically trusted by the operating system, they represent a powerful and nearly undetectable vector for delivering targeted tools to specific users.

For more on Bill C-22:

• Department of Justice Backgrounder
• Michael Geist Analysis

Nightmare Eclipse Zero-Days and Browsergate

These incidents occurred against the backdrop of major Microsoft security controversies. In 2026, researcher Nightmare-Eclipse (also known as Chaotic Eclipse) publicly released several high-impact Windows zero-days, including exploits targeting Windows Defender and privilege escalation mechanisms. Some researchers have speculated that certain vulnerabilities may have been known internally for extended periods before public disclosure.

Additionally, Browsergate exposed serious allegations against LinkedIn (owned by Microsoft). According to a detailed report by Fairlinked e.V.:

• LinkedIn allegedly injected JavaScript that scanned users’ browsers for over 6,000 Chrome extensions.
• The script reportedly collected detailed device telemetry and extension data without clear user consent or prominent disclosure in the privacy policy.
• This allowed LinkedIn to build extensive user profiles, potentially identifying competitors, corporate tools, and other sensitive software.

The revelations led to privacy lawsuits and widespread criticism. You can read the original report here: BrowserGate.eu

Broader Implications

These events demonstrate deep access into Chris’s systems, precise timing aligned with legal activities, and the ability to manipulate core operating system functions. When combined with other documented technical attacks, they highlight growing risks around proprietary platforms and the potential for state-level exploitation.

Further Reading & Updates:

• Additional technical evidence and interviews in the Media section
• Ongoing lawsuit developments at equibitlawsuit.com

This case raises important questions about digital privacy, corporate responsibilities, and the balance between security and individual rights. Share this post if you believe these issues deserve greater public scrutiny.

Stay tuned to equibitlawsuit.com for more updates on the Equibit lawsuits against CSIS and related actors.

And what you can do about it
(besides complaining).

Palantir dropped a manifesto last weekend. 22 bullet points distilled from Alex Karp’s book The Technological Republic, posted to X with the casual framing of “because we get asked a lot.” I haven’t seen a reaction so widespread, unanimously opposed and viscerally aghast since James Damore’s infamous “Google’s Ideological Echo Chamber”.

The usual suspects lost their shit. Engadget called it “the ramblings of a comic book villain.”

TechCrunch clutched its pearls at the bits about “regressive” cultures and “vacant and hollow pluralism.”

Bellingcat’s Eliot Higgins observed, (via Bluesky, of course), that these aren’t philosophical musings floating in the ether: they’re the public ideology of a company whose revenue depends on the politics it’s advocating.

He’s not wrong, Palantir sells to ICE, DoD, NYPD, and the intelligence community. It may be a manifesto, but it’s also product literature.

Even Alexander Dugin, the Russian “Fourth Political Theory” philosopher, not exactly known for having a libertarian bent, seemed triggered by it, calling it “the plan of the Western techno-fascism” on X, “Pure Satanism” on his Substack.

Palantir manifesto is the plan of the Western techno-fascism. The superiority of the white race based on the technology. No antisemitism, no sacredness, no socialism of old historic fascism. This time pure capitalist, Jews friendly, profane, materialist. Anglo. Posthumanist.

— Alexander Dugin (@AGDugin) April 19, 2026

Former Greek FM Yanis Varoufakis called it “evil” and put out his own point-for-point on it – he calls it a refutation, it’s actually more of a rant.

So everybody across the horseshoe is big mad. Fine.

The thing is, none of this should surprise anyone. Let’s now look at why the policy this “manifesto” outlines was always going to arrive, with or without Karp’s prosaic stylings.

Karp Didn’t Invent “The Technate”

The merger of corporate power and state apparatus, the “technate” that people are suddenly discovering with horror on a Sunday afternoon, is not a new idea. It’s not even a recent one.

Back in 2013, Eric Schmidt (then Google’s executive chairman) and Jared Cohen (Google Ideas, ex-State Department advisor to Condoleezza Rice and Hillary Clinton) published The New Digital Age. The book was blurbed by Henry Kissinger, Madeleine Albright, Tony Blair, and General Michael Hayden, the former director of the CIA. That’s an elite-class blurb list for a book that explicitly argued for the intersection of Silicon Valley and state power, the fusion of corporate infrastructure with national security logic, and the reshaping of diplomacy through private platforms.

In 2013 it was called “transformational.” Kissinger gushing that it was, “a searching meditation on technology and world order” (he would go on to co-author The Age of AI with Eric Schmidt that should be every bit as concerning as Karp’s Technological Republic).

Not too long after that, Google’s Sergey Brin and Klaus Schwab held a fireside in Davos where Herr Schwab pontificated that with the advent of AI, since the algos would be able to predict election outcomes with 100% certainty, they may as well pick the winners anyway and we could do away with elections altogether.

Nobody batted an eye. My timeline certainly wasn’t overflowing with rage over it and the people who were calling attention to it were using facing all kinds of headwinds.

In a conversation with Google founder Sergey Brin, founder of the WEF, Klaus Schwab, delights at the thought of a future without elections:

“Digital technologies mainly have an analytical power. Now [we’re going] into a predictive power, and your company is very much involved in… pic.twitter.com/9shJlXw3DG

— Wide Awake Media (@wideawake_media) August 13, 2023

My personal favourite goto clip about all-pervasive corporate surveillance that absolutely nobody gave a shit about, was this one, also via the darlings of Davos:

This is important to understand:#CBDCs will not be “money”: in the sense we understand it. They will be social credit scores, capped by your personal carbon footprint quota pic.twitter.com/e6ibVwXM65

— Mark E. Jeftovic (@jeftovic) October 4, 2024

Here we have an ex-Goldman Sachs guy running a Chinese multi-national sermonizing about mass surveillance and personal carbon footprint quotas and my timeline was not filled with angry tweets from elite A-listers calling for the dismantling of Ali Baba.

Here in 2026 it’s the exact same structural narrative, now with Karp’s sharper edges and fewer Davos euphemisms, only this one is being called a fascist manifesto instead of drooled over by media elites.

The only major difference I can see is where Davos/WEF inspired technocracy was globalist, Palantir, Karp, Thiel et al are nationalist. Perhaps, a North American nationalist.

(This fits with what I wrote in my last edition of The Bitcoin Capitalist, about the factional rivalry between the intellectual descendants of Samuel Huntington (“The Clash of Civilizations”) vs his former pupil, Francis Fukuyama (“The End of History”) I posted an excerpt here.

Fukuyama thought the entire world would become one big Neo-Liberal circle-jerk.

Huntington said future conflict wouldn’t be between countries, but between cultures. And some cultures were less compatible with how we live here in the West, than others (Palantir’s point #21).

Overall, the project didn’t change. The faction driving it did.

Driving what? The inexorable drive toward post-Democratic technocracy.

Here’s what nobody wants to hear.

If you’re reading Karp’s 22 points and feeling a cold prickle of recognition, if you’re realizing that what Palantir is describing is the operational blueprint for the next 40 years, there’s something you have to sit with first:

You put your hand up for this.

In case you wondering what makes a company like Palantir even possible…. (find out why, here ) https://t.co/1mOEQ9JkLR pic.twitter.com/aLIjg1Sqw5

— Mark E. Jeftovic (@jeftovic) April 20, 2026

Perhaps not you personally. But collectively, “we”, the Western mass public already ran a dress rehearsal. And we all passed (or flunked) with flying colours.

During the pandemic and in the years immediately after, the political and managerial class was wrong about effectively everything.

The origin of the virus. The (non)-efficacy of lockdowns. The vaccines didn’t work and were in fact, kill-shots for many. The money printing.

The correct response to being that wrong, that publicly, and that unwaveringly, about that much, should have been pitchforks and torches in the streets, if not guillotines.

At the very least, in our enlightened civilization: recall elections, mass firings, inquests and class actions. There should have been a generational reckoning with expertise that got captured by politics, a media cartel that went full agitprop and Chapter-7 bankruptcy for institutional credibility.

That is not what happened.

What happened instead was that people stood on the dots. We wore the masks on the walk from the restaurant door to the table, then took them off to eat, sitting in saran wrap bubbles on the street in the middle of winter.

People snitched on their neighbours. They watched elites throw lavish maskless parties while they got tased by cops at their kids’ soccer games.

In other words: we “followed the science”, even as the science was revised quarterly to match policy because the facts on the ground refused to conform to the narrative.

And now, most people will fight tooth and nail to defend the very system that did this to them.

The pandemic was the trial balloon. The political class, Wall Street, and Silicon Valley watched carefully.

What they learned was this: the population will comply. The population will inform on itself. The population will absorb humiliating, contradictory, demonstrably false directives from authorities, and the dominant social behaviour will be enforcement of those directives on anyone who objects.

The Technate has been an ideation of post-Democratic elites since at least the 1930’s.

It has been moving forward inexorably ever since, but it was probably that event, the pandemic and the populace cucking out at a mass level when the technate became inevitable.

Not because of any single manifesto, book, or CEO. Because a civilization that behaves that way under stress has already told its elites what it will accept.

The Technocracy Is Already Here

The manifesto isn’t about Palantir specifically. It’s the blueprint for what I’ve already been noticing, not just in the US but everywhere, that I’ve been calling State Capitalism.

It’s the fused-lattice model of corporate-state power where the company doesn’t lobby the government, it is part of the governing apparatus, and the government in turn provides the regulatory moat that keeps the company’s competitors out, and to whom they can outsource things that national governments aren’t supposed to be doing.

This is where we’re headed for the next few decades. And it’s where we’re headed precisely because the population demonstrated that it would tolerate it, even while they decried “fascism”.

Ever notice how some people who want to lock you down, censor your speech, cancel you for wrongthink, force an experimental vaccine on you and take away your gas stove think of themselves as “anti-fascists” ?

— Mark E. Jeftovic (@jeftovic) January 15, 2023

Welcome to the Era of Mass Compliance.

Karp’s 22 points are the tidy, sanitized version of what we’ve already said in our “Repricing Sovereignty” piece. The early iterations are already in production. Every ICE deployment, every DoD contract, every integration between federal databases and private analytics, every AI-for-defense procurement cycle, every surveillance-as-a-service rollout is a beam in the Cathedral.

And here’s the part that separates the individuals from the crowd:

If you can’t beat ’em. Own ’em.

Long PLTR. This is straight out of the playbook my premium readers will recognize as “The Post Singularity Stack.” It’s a barbell trade that allocates to State Capitalism on one side, while personally building out sovereign technology on the other.

This isn’t an endorsement of the politics, because frankly, I’m done with politics (“vote harder, mofos”). Politics is a racket to keep the rabble in line.

Stand on the dots. Flap your arms. Good boy.

This will go down in history as the most assinine, ill-conceived campaigns ever produced
Most of these people don’t even know what Elbows Up means
Honestly, it’s like a Monty Python skit pic.twitter.com/9MKFCGOHA8

— Canada has gone mad (@HaveWeAllGoneM1) August 25, 2025

True self-sovereignty can only be acquired individually.

It’s an acknowledgement of the structural reality. We’ve been talking about this for a long time (we call it The Great Bifurcation, and as we always suspected, the branch you wind up in is largely an exercise in self-selection). For the next few decades, The Technate will be the vehicle through which capital will compound, and the only rational response is to own a piece of it. Capital is optionality. Wealth is exit velocity. And by wealth I mean not being economically dependent on The State, not living paycheque to paycheque, and not being one frozen bank account away from being forced into compliance.

There is an ancient Chinese aphorism,

“It is unlucky to remain obstinate in the face of overwhelming odds”.

Being morally aghast while your purchasing power erodes in losing sectors leaves you with neither the moral high ground nor the means to act on it.

The most important points of the manifesto are #5…

And #12:

The people who are panicking at the manifesto are the same people who voted, complied, and shamed their neighbours into the conditions that made it possible. They don’t get to be outraged now.

Some people saw this coming years ago. Some of us even wrote it down.

What happened to many of those people was they got deplatformed, canceled, debanked and generally villainized by the same people who are now screaming about Palantir.

I’m mostly done trying to warn the wider public on where things are going.

Now we’re just buying the ticker.

Get on the mailing list for the follow-up to this (The Pareto Paradox In The Age of Mass Compliance), follow me on X here, or if you want to get a look at The Post Singularity Stack, take the premium trial here ».

The Comfortable Collapse: Canada’s Decade of Managed Decline

Originally via @JoeyTweeets on X

There is a concept in ecology called a “shifting baseline.” It describes what happens when each generation accepts the degraded state of its environment as normal, because no one can remember what things looked like before the decline began. The fisherman’s son thinks a small catch is a good catch because he never saw the ocean his grandfather fished.

Canada is living through a shifting baseline. Not a dramatic collapse. Not a sovereign debt crisis or a currency peg breaking in the night. Something quieter, and in many ways worse: a country getting slowly, structurally poorer, and rearranging its national mythology fast enough that most people haven’t noticed.

The numbers tell a story that the political class, across every party, has spent a decade trying not to say out loud. So let me say it plainly: Canada has been in structural economic and social decline since approximately 2015, and nearly every major indicator of national health has moved in the wrong direction. The question is no longer whether the decline is happening. It’s whether the decline is reversible.

The Productivity Death Spiral

Start with the most damning chart in Canadian economics, the one that should be taped to the wall of every MP’s office in Ottawa: GDP per capita.

A representative Canadian today produces roughly what they produced in mid-2014. That’s not a typo. Over the same period, the average American saw cumulative output growth of more than 16%. Germany, the next-weakest G7 economy, managed over 5%. Canada sits dead last. Flat. A lost decade, measured and documented by the Bank of Canada, the OECD, TD Economics, National Bank, and the C.D. Howe Institute, among others. This is not a fringe narrative. It’s the institutional consensus.

The mechanism behind the stagnation is brutal in its simplicity. Business investment in machinery, equipment, and intellectual property has been in retreat since 2015. Adjusted per-worker investment in the third quarter of 2025 was roughly $15,000 in 2024 dollars, down nearly a quarter from its 2014 peak of $19,400. Real spending on machinery and equipment currently sits below levels recorded in 2008. Canada’s stock of M&E, the actual physical tools and assembly lines and robots that drive output, declined 4.6% over the past decade, from roughly $370 billion to $353 billion in constant dollars. While the machines aged and the factory floors emptied, the US saw investment per worker rise by more than 26% over the same period.

The comparisons with the United States are particularly savage. Canadian workers now receive just 41 cents of new M&E investment for every dollar their American counterparts receive, down from 47 cents in 2015. In intellectual property products, the software, patents, and R&D that define competitiveness in any modern economy, the figure is 32 cents on the dollar. Canada invests just 3.4% of its gross value added in IP products, roughly half the American rate of 6.6%. These are not numbers that describe a peer economy. They describe a country that has quietly opted out of the technological competition.

Canada’s R&D spending has been in perpetual decline for over twenty years, while every other G7 country has seen increases. The OECD projects Canada’s average annual growth rate for GDP per capita through 2060 to be the lowest among 30 advanced economies. Not the lowest growth rate this year, or this decade. The lowest projected growth rate among developed nations through 2060. The institutional bet is that Canada’s relative decline is not a blip but a trajectory.

Where did the investment go? Into real estate. In 2022, 38% of Canada’s gross fixed capital formation was directed toward housing, the highest fraction in the OECD. Germany was second at 33%. Every other country was below 30%. Canada chose houses over factories, speculation over production, and the bill is now arriving in the form of a productivity gap with the United States that has widened from 88% to 71%. By 2024, Canada generated about $143,000 of output per available worker, compared with almost $200,000 in the United States.

The Bank of Canada’s own deputy governor called it a “productivity emergency” in 2024. By late 2025, the Bank devoted a full speech to the problem, warning that Canada was caught in a “vicious circle” where weak investment begat weak productivity which begat weak wages which begat weak investment. When your central banker is using the word emergency and talking about vicious circles, you are well past the point of polite concern. And when their proposed solution is essentially to hope that adversity catalyzes action, you know the institution has run out of ideas.

Meanwhile, foreign direct investment tells its own story. By the end of 2024, Canadian direct investment abroad outpaced foreign direct investment in Canada by nearly $1 trillion. In a single month in 2024, investors poured a record $14.2 billion into US equities while foreign investors sold $11.4 billion in Canadian shares. Capital doesn’t have a nationality. It goes where returns are highest and risk is lowest. And it has been leaving Canada for a decade.

The Population Experiment

To understand what happened to the denominator in Canada’s per-capita math, you have to understand the scale of what was attempted.

In 2023, Canada’s population grew by 3.2%, an increase of 1,271,872 people. That is roughly the size of Calgary, added in a single year. It was the highest growth rate since 1957, and 97.6% of it came from immigration. The following year added another 744,000. By January 2025, the population stood at 41.5 million, with approximately 2.7 million non-permanent residents living in the country.

These growth rates have, as one demographer noted, “never been seen in a developed country” since the 1950s. What makes the Canadian experiment distinct is not just the velocity but the composition. Two-thirds of the non-permanent arrivals came on temporary work or student visas. The international student pipeline, in particular, became a shadow immigration program: institutions facing declining domestic enrollment and reduced public funding began relying on international students whose tuitions were more than five times higher than domestic rates. The 20-hour weekly work limit was lifted entirely in 2022 and only reinstated (at 24 hours) in 2024, after public pressure made the arrangement untenable.

The result was a labor market flooded at the low end. Thousands of international graduates found themselves in a country with no clear pathway to permanence, working multiple part-time jobs in food service and retail, paying rents that consumed most of their income, and in many cases ending up at food banks. The system promised them a future in Canada and delivered precarity. It promised Canadian workers a growing economy and delivered wage suppression.

The apologists will tell you that headline GDP kept growing, and that’s true. Canada posted the second-fastest aggregate GDP growth among G7 economies over the past decade. But GDP is not GDP per capita, and the gap between the two is where the lived reality of Canadians hides. You can grow your economy 2% by adding 3% more people. The math just means every individual got poorer. And that’s precisely what happened.

Budget 2025 proposes cutting temporary immigration from 673,650 in 2025 to 385,000 in 2026, with permanent immigration stabilizing around 380,000. This is an acknowledgment that the experiment failed. But the damage has been done: the housing deficit accumulated, the healthcare system was overwhelmed, and per-capita GDP fell for three consecutive years. You can’t un-break these systems by moderately reducing the rate at which you add people to them.

Housing as a Wealth Destruction Machine

The housing numbers in Canada are so far removed from any rational economic relationship to incomes that they almost resist analysis. In Toronto, a median household would need to devote 77% of its income to cover ownership costs at the benchmark price. In Vancouver, affordability recently touched 30-year worsts. Development charges alone add over $180,000 to the cost of a single-family home in Toronto and Markham, over $135,000 in Mississauga, and more than $113,000 in Coquitlam. These are not prices. They are barriers to entry, designed by incumbents to protect asset values.

Canada has the lowest number of dwellings per capita in the OECD. This is not a new development. But the gap between demand and supply exploded after 2022 when the population began growing by a million or more per year while housing starts flatlined. In 2025, Canada started 259,028 homes, the fifth-highest total on record, which sounds encouraging until you realize that CMHC estimates roughly 430,000 to 480,000 new homes need to be built annually through 2035 to restore affordability. Canada has never come close to this number. Not once. Not in any year since Confederation. And even the 259,000 figure masks a deteriorating picture: Toronto starts fell 31% year-over-year, and CMHC’s own chief economist warned that construction momentum has been fading since September, with the trend entering 2026 from a weaker position.

The result is a generational wealth transfer from young to old that has rewritten the social contract. 70% of Canadians now say homeownership is impossible. Among millennials, almost half have considered delaying starting a family because they can’t afford a suitable home, and nearly a third would consider leaving the country entirely to find affordable housing. When your housing market is driving emigration, you’ve moved beyond a policy failure into something closer to an institutional betrayal.

Meanwhile, 56% of Toronto condos and 48% of Vancouver condos are investor-owned. Canada’s pension funds, including CPP and OTMH, own residential rentals across the country. The system doesn’t just fail to house its citizens. It actively profits from their inability to be housed. For every home built under government-funded programs, Canada loses 11 affordable rental units to rent increases, demolitions, and conversions. The country is running to stand still and losing ground.

The Healthcare Collapse in Slow Motion

The healthcare system that Canadians have historically cited as the core justification for higher taxes and slower growth compared to the United States is disintegrating in real time.

The Fraser Institute’s 2025 report recorded a median wait time of 28.6 weeks from GP referral to treatment across 12 medical specialties. That’s the second-longest wait ever measured. Wait times have increased 198% since 1993, three decades of consistent deterioration. This is not a system under stress. It is a system in secular decline, its trajectory as consistent and predictable as a demographic curve.

Half a million Canadians left emergency departments without being seen by a doctor in 2024. In Ontario, average ER wait times hit 20 hours, with some hospitals reporting 25 hours or more. 16.1 million unscheduled ER visits were recorded nationally in 2024-2025, up from 15.5 million the prior year. Among universal healthcare countries, Canada has some of the lowest numbers of physicians, hospital beds, and MRI machines per capita. Rural communities are watching their emergency departments close outright due to staffing shortages.

The system was built for 25 million people. It now serves 41.5 million and has not been meaningfully restructured. The population grew by 30% since 2000. Hospital capacity did not. And the wait-time data captures only the people still in the system. It doesn’t count the Canadians who gave up waiting for a referral, who drove across the border for an MRI, who paid out of pocket for a procedure their taxes were supposed to cover, or who simply learned to live with a condition that in any other developed country would have been treated months ago.

The Food Bank Indicator

If you want a single data point that captures the lived reality of Canada’s decline, here it is: food bank usage has doubled nationally since 2019.

2.2 million Canadians visited food banks in March 2025, the highest number ever recorded. Food Banks Canada titled its 2025 report “Food Banks as a Lifeline: Canada’s New Normal.” That word, normal, is doing a lot of heavy lifting.

One-third of food bank clients are children, representing nearly 712,000 monthly visits. One in five food bank clients is employed. In 2019, it was one in eight. Employment is no longer a reliable buffer against poverty in Canada. The cumulative CPI increase since 2021 is over 18%, with shelter up 26% and food up 25%, while wages have not kept pace, especially at the bottom.

34% of food bank clients are newcomers who have been in the country for 10 years or less. This is not a condemnation of newcomers. It’s a condemnation of a system that brings people in at a rate it cannot absorb, fails to provide affordable housing or adequate social services, and then acts surprised when those people end up at a food bank. The cruelty is the system, not the people caught in it.

In Ontario alone, food bank visits hit 8.7 million between April 2024 and March 2025. That’s a 165% increase from 2019-2020. The ninth consecutive year of growth. Half the province’s food banks worry they won’t have enough food to meet demand, and two-thirds are concerned about sustaining operations over the next six months.

The Pension Gap and The Senior Poverty Trap

The maximum monthly CPP payment for someone starting their pension at age 65 is $1,433. The average new beneficiary receives $808 per month. Roughly 6% of recipients get the maximum.

Let that sit for a moment. The average Canadian retiree collects about $9,700 per year from the pension system they paid into for their entire working life. In a country where the average one-bedroom rental in Toronto or Vancouver exceeds $2,000 per month.

CPP payments are indexed to CPI, which sounds reasonable until you realize that CPI systematically underweights the things seniors actually spend money on: healthcare, food, housing, and transportation. Grocery prices are still 25% higher than prepandemic levels. The 2% CPP adjustment for 2026 doesn’t even cover the cost of the food inflation seniors experienced in the previous year, let alone the cumulative damage.

Senior poverty had been declining for years, reaching a low of 3.1% in 2020. It’s now climbing again, hitting 5.0% in 2023. Seniors advocacy groups report that retirees are turning down the heat in their homes, buying expired food at discount, and cutting back on social activities because they can’t afford transportation. Less than 40% of Canadian workers have access to a workplace pension plan. In the private sector, it’s under 25%. For young workers, 13%.

The system is structurally incapable of providing a dignified retirement for the majority of Canadians. This was a known problem a decade ago. Nothing was done.

The Brain Drain and the Talent Exodus

A record 29,186 Canadians permanently emigrated in the first quarter of 2025 alone. Over 70% of graduates from the University of Waterloo’s elite software engineering program leave for the United States. A 2018 study found that one in four STEM graduates from Canada’s top three universities left the country, with 81% going to the US.

The reason isn’t complicated. The same software engineer can earn roughly double the compensation in the US, pay lower taxes, and live in a city where housing costs are often more reasonable relative to income than Toronto or Vancouver. Canada creates AI researchers at a world-class level and then watches them walk across the border to build companies that compete against Canadian firms.

The Globe and Mail diagnosed it precisely: Canada is becoming a “sophisticated rentier nation.” It’s a polite way of saying the country is transforming from a workshop into a counting house, living off the returns of capital deployed elsewhere because the domestic environment is too regulated, too expensive, and too uncompetitive to justify investing at home. The country exports talent and imports labor. It exports capital and imports consumption. These are the trade patterns of decline, not growth.

The Demographic Cliff

And then there’s the birth rate, which at this point reads like a biological verdict on the country’s economic management.

Canada’s total fertility rate hit 1.25 in 2024. That’s well below the replacement threshold of 2.1 and deep in “ultra-low fertility” territory, alongside Japan, Italy, and South Korea. British Columbia recorded 1.02, which is to say that the average woman in Canada’s third-largest province is having roughly one child. Nine of ten provinces and three territories recorded their lowest fertility rates ever in 2024.

Half of Canadians under 50 who want children say they’ve delayed having them longer than they intended. Among those aged 35 to 44, the figure is 74%. The primary reason is cost. Housing, childcare, general economic insecurity. When a society makes it economically irrational to have children, people stop having children. This is not a mystery. It’s an incentive structure producing its predictable result.

The country’s response has been to replace domestic births with immigration. In 2021, for the first time, the number of immigrants arriving annually exceeded the number of domestic births. By 2024, more than two in five newborns had a foreign-born mother. The dependency on immigration to maintain population has become so total that any disruption to inflows would cause an immediate fiscal crisis in pension and healthcare funding.

This is not a sustainable model. It is a Ponzi demographic structure that requires ever-increasing inputs to avoid collapse, while doing nothing to address the underlying conditions that made domestic family formation unaffordable in the first place.

The Homelessness Explosion

The final indicator, and perhaps the most visible: nearly 60,000 Canadians were experiencing homelessness on a single night in late 2024. That number has almost doubled since 2018. The proportion sleeping in unsheltered locations, including encampments, grew from 14% to 28% over the same period. Among those who have experienced homelessness, 28% had also experienced an eviction, with disproportionate impacts on Indigenous, Black, and other racialized communities.

Walk through downtown Toronto, Vancouver, Ottawa, Edmonton, or Halifax today and you’ll see a street-level reality that would have been unrecognizable a decade ago. Tent encampments in public parks. People injecting drugs in broad daylight on transit platforms. The normalization has been so gradual that residents have adjusted their routes and lowered their expectations without ever being asked.

The government’s own 2025 poverty report acknowledged that “policy makers built the social safety net for a different era” and that “the current system isn’t flexible enough to adapt to meet current realities.” This is a remarkable admission from the institution responsible for the system. It is also, characteristically, paired with no meaningful plan to fix it.

The Policy Mirage: Why the Carney Government’s Proposals Won’t Fix This

Mark Carney came to office with a rare credential for a politician: actual experience in the economic domain. Governor of the Bank of Canada during the financial crisis, then head of the Bank of England during Brexit. The theory was that his technocratic seriousness would translate into the kind of structural reforms Canada needed. Instead, Budget 2025 delivered a grab bag of spending commitments, transfer payments, and sloganeering that leaves every root cause of decline untouched.

Start with the centerpiece: Build Canada Homes, the new federal agency tasked with “doubling the pace of construction” to 500,000 homes per year. The initial commitment is $13 billion and 4,000 modular homes across six sites. The Parliamentary Budget Officer has estimated the agency will deliver roughly 5,000 homes per year, or about 26,000 by 2030. Canada needs 430,000 to 480,000 annually. Build Canada Homes, at the PBO’s own estimate, covers about 1% of the target. One percent. For $3.5 billion a year. With no clear performance metrics, no mechanism to override municipal zoning fragmentation (there are over 800 residential zones in Gatineau alone), and a mandate weighed down by competing requirements to use Canadian-made and climate-friendly materials, which means by definition not the cheapest option.

B.C. developers have already expressed skepticism. The Fraser Institute points out that Ottawa can’t efficiently downsize its own office footprint despite years of effort and ample funding. The government took from 2017 to 2023 to reduce its office portfolio from 6.0 million to 5.9 million square meters. This is the institution that is going to build housing at scale. Meanwhile, the budget quietly retreated from the Liberal platform’s commitment to work with municipalities to reduce development charges by 50%. The Canadian Homebuilders Association noted this omission immediately. In Toronto, those charges exceed $130,000 per apartment and $180,000 per single-family home. Until those come down, no amount of federal prefab housing changes the math.

Then there’s the affordability strategy, which is really a transfer strategy. The renamed “Canada Groceries and Essentials Benefit” (formerly the GST Credit) gets a 25% boost for five years, providing a family of four up to $1,890 in the first year and about $1,400 thereafter. This is a cash transfer to help people afford food whose price was driven up by the same monetary and immigration policies the government pursued. It’s the economic equivalent of breaking someone’s leg and handing them a crutch. The $20 million allocated to the Local Food Infrastructure Fund to ease “immediate pressures with food banks” works out to roughly $9 per food bank user per year. The government is also developing a “National Food Security Strategy” which, true to form, promises to “strengthen domestic food production” without specifying how, when, or at what cost.

The broader fiscal framework is similarly hollow. Budget 2025 promises to “catalyze $500 billion in new investment” and to “enable $1 trillion in investments over the next five years.” These are projection numbers, not commitments. They assume that a combination of trade diversification, Buy Canadian mandates, $925 million for AI, $334 million for quantum computing, and defense spending reaching 2% of GDP will somehow attract a volume of private capital that a decade of declining competitiveness has repelled. The budget cuts 40,000 civil service positions and claims spending will grow at less than 2% annually, compared to nearly 9% over the previous decade. But it also layers on $150 billion in new measures while promising to close a $15 billion annual gap between revenue and operating spending “by Budget 2028.” These numbers don’t reconcile. They’re aspirational, and everyone in Ottawa knows it.

The most revealing initiative might be the smallest: the “Canada Strong Pass,” which gives families free or discounted access to museums, historic sites, and parks, plus a 25% VIA Rail discount for young adults. This is what the government offers a generation that can’t afford homes or children: a subsidized train ticket to look at the country they’re being priced out of. It would be satire if it weren’t real policy.

What’s missing from the agenda is everything that would actually reverse the structural decline. There is no corporate tax reform to close the competitiveness gap with the United States, where 2017 reforms sharply reduced the US rate and undid Canada’s business tax advantage. The capital gains inclusion rate hike was cancelled, which is welcome, but a defensive measure rather than a growth catalyst. There is no regulatory rollback proportionate to the problem. The interprovincial trade barriers, estimated by the IMF to be equivalent to a 21% tariff and by the Canadian Federation of Independent Business to cost up to $200 billion annually, were supposed to be eliminated by July 1, 2025. The legislation was tabled, but the barriers remain largely intact because the federal government doesn’t actually control most of them. Provinces do.

There is no plan to address the fundamental structural distortion that channels Canadian capital into real estate rather than productive assets. The financial system’s bias toward residential construction is well documented and completely unaddressed. There is no immigration reform that ties intake to housing capacity, healthcare capacity, or per-capita GDP targets. The reduced numbers in Budget 2025 are a concession to political pressure, not a structural redesign. When political winds shift, the numbers will shift back.

And there is no answer to the brain drain. The budget allocates nearly a billion dollars for AI and quantum computing, which is fine, but the people trained by those programs will walk into a labor market where their American counterparts earn double the salary, pay lower taxes, and face lower housing costs. Until the total compensation equation changes, the talent will keep leaving and no amount of “attract foreign researchers” policy language will change that. You don’t solve an outflow problem with inflow rhetoric.

The Carney government’s theory of change appears to be that confidence and stability, combined with trade diversification and defense spending, will catalyze a wave of private investment. It’s a theory well suited to a central banker’s worldview: set the conditions, signal credibility, and let private capital do the work. The problem is that Canada has been setting conditions for a decade while watching capital flow in the opposite direction. At some point, you have to ask whether the conditions themselves are the problem, not just the signaling.

The Comfortable Collapse

None of this happened overnight. None of it happened by accident. And none of it is irreversible in theory, though the window for reversal narrows with each year of inaction.

Canada’s decline is the product of specific policy choices: a deliberate preference for real estate over productive investment. An immigration system calibrated to suppress wages rather than build capacity. A healthcare system left unreformed for decades. A housing market treated as a wealth vehicle for incumbents rather than shelter for citizens. A tax and regulatory environment that repels capital and talent in favor of managed stagnation. And now, a government that has correctly diagnosed the disease and prescribed an aspirin.

The country still has extraordinary advantages. Natural resources that most nations would kill for. Proximity to the world’s largest consumer market. World-class universities and research institutions. A relatively stable political system. These assets are real. But they are being squandered at a rate that should alarm anyone paying attention.

The danger of the shifting baseline is that by the time people notice the fish are gone, the ocean has changed beyond recognition. Canada is not there yet. But it’s closer than the national conversation suggests, and the comforting myth that everything is basically fine, that Canada is still somehow doing better than it looks, is the most dangerous narrative of all.

The numbers are in. The institutions agree. The decline is structural, it is accelerating, and the only people who deny it are the ones whose incentives depend on the denial. The current government offers ambitious slogans and modest programs. It promises to “build Canada strong” while presiding over every trend that makes Canada weaker. And if history is any guide, it will continue to do so until the shifting baseline has shifted so far that the country Mark Carney inherited is unrecognizable to the country he leaves behind.

Bank of Canada. “Toward a Virtuous Circle for Productivity.” Speech, November 2025.
https://www.bankofcanada.ca/2025/11/toward-a-virtuous-circle-for-productivity/

Canadian Centre for Housing Rights. “Everything You Need to Know About Build Canada Homes.” September 22, 2025.
https://housingrightscanada.com/everything-you-need-to-know-about-build-canada-homes/

Canadian Mortgage and Housing Corporation. “Housing Starts Up 5.6% in 2025 from 2024.” January 16, 2026.
https://www.cmhc-schl.gc.ca/media-newsroom/news-releases/2026/housing-starts-december-2025

Canadian Centre for Policy Alternatives. “2025 Was Canada’s Year of Mark Carney: What Have We Learned About His Economic Policy Agenda?” January 5, 2026.
https://www.policyalternatives.ca/news-research/2025-was-canadas-year-of-mark-carney-what-have-we-learned-about-his-economic-policy-agenda/

Conservative Party of Canada. “Just the Facts: Not Building Canada Homes.” January 16, 2026.
https://www.conservative.ca/just-the-facts-not-building-canada-homes/

Department of Finance Canada. “Budget 2025: Canada Strong.” November 4, 2025.

Food Banks Canada. “HungerCount 2025: Food Banks as a Lifeline: Canada’s New Normal.” 2025.

Fraser Institute. “Waiting Your Turn: Wait Times for Health Care in Canada, 2025 Report.” 2025.

Fraser Institute. “Federal Government Wants to Build 4,000 Homes Despite Years of Real Estate Mismanagement.” 2025.
https://www.fraserinstitute.org/commentary/federal-government-wants-build-4000-homes-despite-years-real-estate-mismanagement

Information Technology and Innovation Foundation. “Underinvestment in Capital Equipment Hinders Canadian Productivity Growth.” May 27, 2025.
https://itif.org/publications/2025/05/27/underinvestment-in-capital-equipment-hinders-canadian-productivity-growth/

Liberal Party of Canada. “Our Plan.” 2025.
https://liberal.ca/plan/

Liberal Party of Canada. “Fiscal and Costing Plan.” 2025.
https://liberal.ca/cstrong/costing/

Macdonald-Laurier Institute. “Canada at a Crossroads, Volume 4: Capital Ideas.” May 20, 2025.
https://macdonaldlaurier.ca/canada-at-a-crossroads-volume-4-capital-ideas-attracting-investment-boosting-productivity/

Marion, Stéfane, and Alexandra Ducharme. “GDP per Capita: A Lost Decade.” National Bank of Canada, 2024.

OECD. “OECD Economic Surveys: Canada 2025.” 2025.
https://www.oecd.org/en/publications/2025/05/oecd-economic-surveys-canada-2025_ee18a269/full-report/raising-business-sector-productivity_443bcd88.html

Office of the Prime Minister of Canada. “Prime Minister Carney Announces New Measures to Make Groceries and Other Essentials More Affordable for Canadians.” January 26, 2026.
https://www.pm.gc.ca/en/news/news-releases/2026/01/26/prime-minister-carney-announces-new-measures-make-groceries-and-other

Office of the Prime Minister of Canada. “Prime Minister Carney Outlines Budget 2025 Measures to Buy Canadian.” November 10, 2025.
https://www.pm.gc.ca/en/news/news-releases/2025/11/10/prime-minister-carney-outlines-budget-2025-measures-buy

Policy Options (IRPP). “Build Canada Homes: The Shift to Prefabricated Housing.” February 2026.
https://policyoptions.irpp.org/2026/02/prefabricated-housing-canada/

Robson, William B.P., and Mawakina Bafale. “Canada’s Investment Crisis: Shrinking Capital Undermines Competitiveness and Wages.” C.D. Howe Institute, December 24, 2025.
https://cdhowe.org/publication/canadas-investment-crisis-shrinking-capital-undermines-competitiveness-and-wages/

Robson, William B.P., and Mawakina Bafale. “Underequipped: How Weak Capital Investment Hurts Canadian Prosperity and What to Do About It.” C.D. Howe Institute, September 12, 2024.
https://cdhowe.org/publication/canadas-capital-crisis-growing-threat-falling-business-investment-productivity/

Statistics Canada. “Canada’s Population Estimates, Fourth Quarter 2024.” 2025.

Statistics Canada. “Fertility: Fewer Babies.” The Daily, 2025.

Statistics Canada. “Labour Productivity, Quarterly Estimates.” Table 36-10-0208-01.

TD Economics. “From Bad to Worse: Canada’s Productivity Slowdown Is Everyone’s Problem.” 2024.
https://economics.td.com/ca-productivity-bad-to-worse

The Hub. “A Trillion-Dollar Gap: 12 Charts Highlighting Canada’s Capital Flight Crisis.” January 26, 2026.
https://thehub.ca/2026/01/26/a-trillion-dollar-gap-12-charts-highlighting-canadas-capital-flight-crisis/

Follow Joey Tweeets on X here, sign up for the Bombthrower mailing list here.

The Walls Are Going Up: Capital Controls Have Already Arrived in the First World

Originally via @JoeyTweeets on X

They’re Coming For Cash, Too

Cash is the last truly private way to transact in the traditional system. So naturally, it’s being systematically restricted.

The EU passed Regulation 2024/1624 (the Anti-Money Laundering Package) with a vote of 482 to 47 in April 2024. Starting July 10, 2027, businesses across all 27 EU member states are prohibited from accepting or making cash payments above €10,000. This applies to single transactions or multiple payments over time that “appear to be linked.” The language is deliberately broad.

But the €10,000 cap is just the ceiling. Cash transactions above €3,000 now trigger mandatory identity verification: government-issued ID, KYC procedures, records retained for five years. Businesses must monitor payment patterns to detect structured transactions designed to circumvent the limits.

And now the net is expanding to crypto. The OECD’s Crypto-Asset Reporting Framework (CARF) is being adopted by jurisdictions globally. The UK enacted CARF regulations effective January 1, 2026. This closes what was the last significant gap in the automated reporting regime.

The Politics Of Institutionalized Predation.

“I become stronger as you become weaker, I absorb strength as yours flows into me. I become capable of this because I do not experience your pain, I don’t care about your loss, and I feel no regret about using, abusing, and devouring you.”
— Page 63, An Age For Lucifer

Consider the following:

“This book explores a strange new spirituality about to enter into competition with other established religions. My purpose here is to convince you that its emergence is probable, if not inevitable. I begin this exploration with an unproven assumption based on Darwinian evolutionary principles: a new predator will appear on our planet, an evolutionary prototype designed to prey on humans. Another assumption then follows: this predator will evolve gradually and incrementally from humanity, just as we apparently evolved from lower forms to prey on them. A further assumption suggests that these predators have already appeared as evolutionary prototypes, as new humans with advanced methods of survival and new forms of spiritual expression and religious organization designed to support and advance their predation.“
— Robert C Tucker, An Age For Lucifer: Predatory Spirituality & The Quest for Godhood

The book in question was Robert C Tucker’s “An Age For Lucifer: Predatory Spirituality and the Quest For Godhood“. I first wrote about it in a Bombthrower piece: The WEF Isn’t a Cabal, It’s A Cult, and I can’t remember how I came into possession of it in the first place. I remember owning it for years and never reading it, because frankly, it scared me.

At first I thought it was some kind of manual for psychopathy – how to rise above your self-limiting human emotions to attain power and fame (even Godhood?) through the energetic predation of those around you.

But once I found out that its author wasn’t some High Priest of the Left Hand Path, but rather, a former counsellor and director of COMA, the Council On Mind Abuse, based in Canada – it started to take on a different light.

COMA worked with “adult survivors and child victims of ritual abuse“, and Tucker spent much of his adult life interviewing Satanists and Luciferians (yes, there is a distinction, as Tucker would elucidate in this book).

It was an anthropological study, born out of a thought experiment:

What if all the ritualistic abuse we are seeing isn’t random criminality but an expression of an overarching, organizing principle that viewed mere humans as psychic fodder, to be devoured for the benefit of those in the know?

In his talks with Satanists and sociopaths Tucker repeatedly detected a whiff of something, he never put a name to it, but referred to it as “the thing that points beyond itself”.

COMA eventually went bankrupt, being on the receiving end of relentless lawfare from the Church of Scientology. Tucker died of a heart attack in Mexico in 2003.

In my original Bombthrower piece, I picked up the thread on “The Thing That Points Beyond Itself”, positing the very real, not metaphorical, existence of larger, transpersonal entities such as egregores, morphogenic fields, Vadim Zeland’s “Pendulums”, memetics and mass thought forms in general.

As the world tries to wrap its head around the millions of new and partially unredacted Epstein documents, it becomes very difficult to unsee the dynamics of what has been revealed to be playing out at the highest echelons of institutional power, for decades at least.

The Thing That Points Beyond Itself

An egregore isn’t an analogy or mythical. It’s what a shared belief system becomes when it fuses with incentives and institutions and starts behaving like an organism. It recruits, it feeds, it protects itself. The Epstein network isn’t the egregore. It’s one of its organs.

As the names keep dropping, it’s hard not to get a sense that absolutely anybody who had achieved fame, influence, power or renown was mixed up in an organized cabal of depravity and moral turpitude.

It feels like every TED Talk you ever nodded in agreement to, every Grammy award-winning singer you vibed to, every politician you voted for, and every business leader whose companies you bought shares in, they were all laughing behind your back, because it was a Big Club and you ain’t in it.

The Club is in the global domination game, and its accoutrements include fraud, racketeering, blackmail, and ritualized abuse of women and children.

But what is weird about The Club is the seeming preponderance of pedophiles and sexual predators. Doesn’t anybody nice ever rise into positions of authority?

The Club has to be impelled by something, be it an incentive structure or dynamic that attracts both sociopaths and easily manipulable bunglers.

But it goes beyond that.

The Falsification of Hanlon’s Razor

Hanlon’s Razor used to be the bedrock of my thinking. It’s a derivation of Occam’s Razor. Loosely stated, it advises us:

“Never ascribe to conspiracy what can be explained by stupidity.”

When you look at the types of people ensconced in government, bureaucracy, and academia, this fits. Nowhere in the private sector could you find such a monotonous array of one-dimensional apparatchiks. Any enterprise run by such institutionalized mediocrity would have zero competitive edge and go bankrupt.

However, what I should also have taken to heart, more than I did, was something James Dale Davidson and Lord Rees-Mogg observed over twenty years ago in their seminal work The Sovereign Individual:

“Too little attention has been paid to the fact that electoral politics lures disordered, Messianic personalities into positions of power.”

My base case used to be that the political class were, by definition, failures and rejects. They washed out of the private sector, then drifted into statecraft out of necessity.

I thought that belief in a vast, overarching conspiracy of powerful elites who controlled everything was Loserthink. It ingrained a sense of helplessness in the believer, which made them ambivalent and docile.

Now I realize that I’m the loser – at least in the eyes of everyone in The Club, because there is now no doubt, except to the willfully ignorant – that The Club exists, and the entire political ruling class, the corporate oligarchs, the TED-class influencers and CNN talking heads and panelist experts, are all in it.

Seeing now that The Club exists, and whatever is behind it pulls the levers of power, narrative, and money itself, doesn’t make me feel helpless after all.

It makes me angry. As it likely does for a lot of people.

But The Club is driven by something, that sits behind it.

What’s Behind the Three-M’s?

In numerous writings I have said that the main affliction facing humanity today was what I privately term the “3M’s of Elite Insularism”, those in the The Club are Malthusian, misanthropic, and Marxists.

But I now suspect those are mere symptoms of how The Thing That Points Beyond Itself presents, and that thing is…

A Luciferian Death Cult

Throughout his book, the term Tucker uses to refer to his posited predatory spirituality is Luciferianism, and he said that it

“reinforces and encourages four basic energies — devouring, possession, violence and disguise — which in turn, assist the Luciferian to transform consciousness, animate hidden potential, and ultimately attain godhood.”

Devouring is the core process – it is the act of ingesting various types of energy for oneself, whether it be wealth, property or life energy itself – it’s all fair game to the elites in The Club, because they view it all as theirs by divine right.

“Luciferians believe that core identity can be devoured only when it is broken like an egg or nutshell. Once broken, the victim’s identity yields powerful energies. “

Page 71.

(Serious adrenechrome vibes…)

The elites, The Club, view themselves as a kind of breakaway civilization – but not in the sense that I have been calling The Great Bifurcation for years. My sense of that was a split into separate streams of humanity, a la the Eloi and Morlocks posited in The Time Machine, by that irascible communist H.G. Wells.

But The Club isn’t splitting off from the mass of humanity, they’re using the masses as fuel for stage separation like a booster rocket. Ready to jettison our spent husks as our psychic energy is consumed to propel them into the stars and Godhood itself.

For the rest of us to go along with this, we have to submit to this and want to provide ourselves as energetic fuel to be consumed by our betters.

This involves the promotion of what Tucker calls “Self-Annihilating Traditions” and we see it in various forms of psychic driving and mass influence operations that induce an intellectual and instinctive lethargy at both the individual and mass levels:

“The actual experience of being devoured emotionally, cognitively, or spiritually usually occurs gradually over time. The devouring itself is never obvious to the victim; if it was, then defenses would be mobilized.”

Any suffering the victims do experience is attributed to other causes – I think of them as “institutional scapegoats”.

“Suicidal Empathy” is phrase that has arisen from those skeptical of the value prop of allowing oneself to be psychically, economically and even physically devoured to the benefit of The Club, ostensibly in service to the higher calling of the collective.

We have to be conditioned to desire an end to our own existence as a moral imperative unto itself – hence the relentless climate crisis, mankind-as-a-cancer narrative, the institutionalization of euthanasia, abortion and the incentivizing of medical pseudo-science that induces violent psychosis on a mass scale.

Like the Anti-Life Equation posited in DC Comics New Gods series, most humans have to be conditioned to want to die.

…so that the “capstone class”, as I’ve called them in the past, can use us as booster fuel into godhood.

Tucker’s book was tabled as a thought experiment, and that’s where it sat for me, until now.

When you map the model onto the world we actually inhabit the point ceases to be that some new predator-class spirituality might emerge.
It is here now, and the point is that we inhabit a system that is optimized for it.

Somewhere along the line, a prototype evolved inside the species, and learned to prey on its own kind. As I outlined in
another (very long) piece, this has likely been going on for a long, long time.

(That piece happened to mention Clinton Foundation insider Ira Magaziner, his role shaping the governance regime of the Internet, and his presence in the Epstein black book; the latest Epstein file dump shows, despite protestations that no relationship existed, that Magaziner and Epstein were indeed in contact beyond the stated claims. Ira is still CEO of the Clinton Health Access Initiative. His son is congressman Seth Magaziner, D-RI).

Back to The Club: over the centuries, they’ve built a social and spiritual architecture that normalizes the predation, and advances it – taking special efforts to co-opt anything that appears that could challenge it. Tucker called it “predatory spirituality.” We have other names. The behaviour is the same.

And where would such a class (The Club) take up residence, if they were real?

They would not live at the margins, nor burrow into the powerless underclass.

The Club would move inexorably toward the apex. They would infiltrate the institutions that confer immunity, walk the corridors of power where favours become law.
They would acquire control of the media organs where spin defines reality, and they would reside above the law, where consequences are for other people, the little people.

Predatory spirituality takes up residence where power emanates, because that is where it can feed without being seen, or at the very least with immunity.

Civil War, SplinterNet and Guillotines
(a.k.a. where we are headed…)

Epstein is not important because he was uniquely depraved. He is important because he is the icon, the symbol that points beyond itself.

The machinations of his network give us a glimpse of the operating system. It’s a case study in how leverage, ritual, and institutional protection intertwine. Once you accept that, the question is no longer “How could this happen?” The question becomes “How long has this been going on?” and “Who or what hasn’t been corrupted by it?”

In the follow-up piece, I’m going to widen the lens. Because when institutional legitimacy breaks down, alternative structures step into the vacuum.

Despite what The Club would want for the rabble, when it comes right down to it, people actually don’t want to be psychically, economically and spiritually devoured for the benefit of an insular, overlord class.

For years I have written the age of centralization and the linear geometry of the Industrial Age was heading toward collapse. It was, and still is, too early to tell what comes next – but whatever it is, owing the emerging architecture of the Network Age, it won’t be a top-down hierarchy, lorded over by (Luciferian) priests of the temple.

Whenever people ask me for a succinct descriptor of what I see coming, my answer was and remains: Snow Crash.

We’ve already gone full Snow Crash. pic.twitter.com/KJjgRI6snQ

— Mark E. Jeftovic (@jeftovic) February 11, 2026

As the collapse in institutional legitimacy accelerates, non-state groupings will step into the vacuum and provide the functional scaffolding that civil governments are no longer willing, or able to provide.

Sometimes they look like protection rackets. Sometimes they look like special economic zones, franchise sovereignties or city-states.

Sometimes they look like cartels with drones. Sometimes they look like transnational corporations with private intelligence services.

The end result is the same. Fragmentation. Competing authorities. SplinterNets (and consensus reality shattered).

That’s where this leads.

Epilogue

My next piece explores a strange new social construct about to enter into competition with other established sovereignties. My purpose here is to convince you that its emergence is probable, if not inevitable. I begin this exploration with an unproven assumption based on game theory and simple incentives: a new class of irregular sovereigns will appear on our planet, an evolutionary prototype designed to oppose Luciferian predation. Another assumption then follows: these factions will evolve gradually and incrementally from largely compromised nation states, just as we apparently evolved from previous obsolete governance structures. A further assumption suggests that these groups have already appeared as evolutionary prototypes, as guerrillas with advanced methods of resiliency and new forms of communications and asymmetric tactics designed to support and advance their insurgency.

Watch this space.

Get on the Bombthrower mailing list to get the next instalment, follow me on X, we’re also getting ready to relaunch Ready.ca – a boot camp for politically homeless Canadians (and others). 

Personal Freedom In The Age of Mass Compliance

What follows are a couple of excerpts from the last Bitcoin Capitalist Letter, which was a long-form piece that was a refinement of my overall long term investment thesis. It corrects for my biggest mistake in the previous model: the belief that nation states were in secular decline, and centralized government power was waning.

This may be true for the long haul, but for the next five, ten, twenty years – we’re heading into an era that numerous commentators have been identifying, and I’m looping under umbrella “State Capitalism”. 

More specific to our “Great Bifurcation” thesis, what this really means is State Capitalism for the “haves” and  mass compliance and (the warmth of?) collectivism for the  permanent underclass. UBI is coming out of necessity, and anyone who thinks that isn’t going to be some permutation of social credit (most likely based on personal carbon footprint quotas) is ngmi.

Late Stage Globalism

A paper I came across recently was Nicolas Colin’s Late-Cyle Investment Theory, which came out in June ’25 but Colin was recently a guest on Hidden Forces.

Colin’s paper posits that we are entering the maturity phase of the computer/networking information age.

What got my attention, both from the podcast interview with Demetri Kofinas and then as I read through the paper itself, is how it explains the mechanisms by which late-cycle dynamics force governments toward what we’ve described last edition, a global march toward a kind of “state capitalism” and that “uncomfortable reality I have been grappling with for a few months, that The State and The Economy are in the process of merging”.

We’re seeing a kind of  inexorable slide into state-directed capital allocation; it’s taking forms peculiar to its cultural backdrop but it’s happening all over the world.

Russell Napier calls it “National Capitalism”; he also appeared on Hidden Forces a year ago and we covered it in the December ‘24 edition.

WEF luminaries like Marianna Mazzacuto – wholly in favour of the trend – calls it “The Entrepreneurial State”; Tyler Durden over at Zerohedge calls the American expression of it “WHAM” – White House Asset Management.

My favourite version of it is George Gilder’s  “Emergency Socialism”, because it captures the exigencies that are making this a priority among governments worldwide.

Colin is somewhat unique in that he argues high public debt isn’t a policy mistake but a structural feature of technological maturity (not sure I agree, tbh).

As he puts it, governments continue borrowing as if the previous growth regime still applies, even as productivity gains plateau and returns diminish.

The numbers are stark:

• US public debt at 122% of GDP (255% including private sector)
• France at 112% (300% total)
• Japan exceeding 260% public (400% total).

Not mentioned in his paper, but I’ll add that Canada’s total government debt (all levels) is 120%, and our private debt on its own is north of 200%.

These levels dwarf anything seen during the 1970s inflation.

The options, as Colin lays them out, are brutally limited, and this shouldn’t come as a surprise to any of us here.

Governments cannot meaningfully raise taxes, any increases can only be performative and symbolic. Those who pay the lion’s share of them have already demonstrated a willingness to relocate if the “tax the rich” slogans translate into excessive action (we’re already seeing anticipatory exoduses from New York City as Mamdami comes in threatening full-on socialism).

Nor can governments cut spending, because various entitlement programs dominate budgets.

Colin thinks that they can’t outgrow the debt because technological maturity means slower productivity growth, which is the core of his thesis.

He may be right, but I don’t think governments believe that – they are looking at AI to ignite a productivity boom that can outpace the debt bubble.

Whether Colin is correct, or governments believe their own mantra about a productivity miracle in the offing, both roads lead to the same place:

There is only one politically viable path, and that is inflation.

“Run it hot”, basically.

But here’s where Colin’s analysis dovetails with our thesis: inflation has consequences.

As prices rise and real rates fall, voluntary demand for government bonds evaporates (this is why we’ve been seeing yields on sovereign debt spiking higher for over a year).

The one common denominator from those we’ve mentioned above (Colin, Napier, Gilder) is that the most likely outcome is financial repression: policies that force domestic savings into public debt through capital controls, regulatory mandates, and banking rules.

This is the merger of the state and capital that I’ve been warning about. It is a type of financial repression, but the quiet bureaucratic kind where your pension fund must hold treasuries, where capital controls prevent you from moving wealth offshore, where the rules of the game are systematically rigged to channel private savings toward public obligations.

Colin frames this as part of a broader institutional fragmentation. Trade wars, he notes (citing David Skilling), are precursors to capital wars.

States that once relied on global capital markets increasingly treat capital as a strategic resource (hence the advent of things like “Strategic Bitcoin Reserves” – my comment, not his).

The open, rules-based order many still assume to be in place is actively unravelling.

Napier talked about all this a year ago and never once uttered the word “Bitcoin”, let alone crypto.

Colin, for his part, sees crypto and stablecoins as part of the emerging new financial system (sound familiar?), and what’s fascinating is how this all maps onto The Stablecoin Standard thesis we’ve been developing.

He sees dollar-backed stablecoins as America’s attempt to extend monetary hegemony into the digital age, essentially creating a new channel for petrodollar-style recycling where foreign demand for USDT and USDC indirectly finances US government debt.

No surprise here, but it contains an inherent tension: stablecoins work precisely because they route around traditional banking, yet that same feature makes them harder to control when geopolitical pressures mount.

The implication for us is clear and it emerges in a kind of “Barbell trade” portfolio that both recognizes the reality of State Capitalism while also hedging for it via the simultaneous emergence of a parallel system (more on this below).

The big wake-up call for me, is that The State Is “The House”. I’ve spent most of my adult life thinking that it was on its last legs, that at some point a Geopolitical Minsky Moment would demolish the entire scaffolding, and then sound money and free markets would assert themselves.

I was wrong. I’ve now realized that.

The general public will never not believe in the legitimacy of “The State” (even though they may dispute who currently occupies the machinery). It’s baked in since childhood – and it won’t matter that their leaders debase the currency, leach away their wealth, send their children to die in turf wars or even load their neighbours into boxcars. The masses will always believe that The House is legitimate, inevitable and necessary.

With all that said, I still do think that there will be a geopolitical Minsky moment, a kind of global, macro “force majeure” that resets the table, simply because the fiat currency system is well past its “use by” date – but make no mistake, the only thing that happens to The House in the aftermath is that some other faction takes over the lease. And the masses will then dutifully follow the new boss.

The only antidote to this is on the individual level. Independent thinking and independent wealth. That’s it.

If you have a compassionate streak and you want to help the masses or uplift the poor, you have one way to do it: give them the means, motive and opportunities to lift themselves at an individual level – education, mentorship, motivation, angel investing, scholarships, introductions.

One may ask what the exact change in thesis is; if we’re still long Bitcoin, we’re still invested in what we think is the emerging new financial system, we’re still long picks and shovels.

Before we get to it, we have to put a couple more pieces on the table.

The picture we see emerging is this:

• Increasing numbers of plebs are “checking out” of the system, trying to degen their way to wealth, and not even bothering to vote for a system that has essentially abandoned them (referring to our write up on The Prison of Financial Mediocrity  in the full edition)
• AI is killing not only jobs, but entire career paths. UBI is moving past being part of the conversation – I expect 2026 to be a  pivotal year in turning it into reality in multiple jurisdictions.
• Whoever still believes there’s a functioning system in place, does so for the simple reason that they are banking on it to save their asses: hence the growing populist surge on both sides of the political spectrum – but “democratic socialism” and collectivism seem to hold characteristically peculiar attraction for vast swaths of the public.

The final piece in all this is the unrelenting crack-up of the global financial system itself and the geopolitical scaffolding that, until recently, seemed immutable.

I reiterate my old prediction that Donald Trump will be the penultimate president of the United States as they are understood today. Whoever comes after will be the last. And then the US will morph into something else, similar to the breakdown of the USSR in the early 90s.

The same is happening in Canada – where there are now three separatist movements: Quebec, Alberta and now Saskatchewan.

it’ll be more like this pic.twitter.com/Sx4ixGUlOt

— Mark E. Jeftovic (@jeftovic) January 19, 2026

The Eurozone will likely crack up under its own internal tensions and secessionist movements are poised to gain momentum the world over.

How do we reconcile that with an era of Big Government and State Capitalism?

There will simply be more states: a multi-polar world, and different jurisdictions will govern with varying levels of heavy-handedness and interventionism.

Singapore, for example, is for all intents and purposes an authoritarian enclave – under the singular rule of the People’s Action Party since independence, and everybody who lives there seems fine with that. The trains run on time, there are very low levels of corruption and street crime is practically unheard of.

They’ll cane you for chewing gum in the subway (harsh? Try riding the TTC in Toronto without getting stabbed by a mental patient), and they’ll execute you for serious crimes, but there are no “immigration discounts” on sentencing (in November, two men were hanged for trafficking heroin, one a Singaporean, the other, Malaysian).

Singapore is no libertarian paradise, but there is also pretty well zero possibility that any purple-haired Trantifa berserkers are going to shoot up your kid’s school, or that some liberal arts soy-boy in a keffiyeh will smash your face in with a brick on New Year’s Eve.

So there’s that.

Parag Khanna, in his elite-class best-seller “Technocracy In America: Rise of the Info State”, said the governance model of the future should be some manner of Swiss-Singapore hybrid. I remember being both bemused and mortified when I first read that (it came out in 2016) …in the intervening years, I find myself thinking we may do OK with a touch of both:

“What model should post-authoritarian or newly democratic societies pursue: Swiss-style organic economic diversification or Singapore-style managed innovation?

The answer is both. Having lived for stretches in both these small countries, I’ve come to see that despite their enormous differences, what matters most is that Switzerland and Singapore are both verifiably democratic and rigorously technocratic at the same time.”

Khanna cites Harvard’s Michael Porter and Richard Rosecrance, who forecasted an emergence of a “market state” era.

Also,

“business strategist Keniche Ohmae, in his book The Next Global Stage (2005), argued that urban agglomerations of city-states resembling the medieval Hanseatic League would become the world’s power centers.”

When you take a step back, it’s not that different from the mosaic of competitive (not combative) sovereignties posited back in The Sovereign Individual (or, Snow Crash).

It just turns out that Khanna arrived as a similar conclusion from a different angle. If I’m honest, my initial reaction to it probably owed much to Khanna’s involvement with the WEF.

As a recent guest on the Canadian Bitcoiners Podcast once quipped, almost off-handedly, “the wealthy never suffer in any society”.

In places like Singapore – and the innumerable micro-sovereignties that will spring up over the coming years – there will be due process and basic rights (Singapore has a constitutional guarantee on free speech, with a lot of escape hatches for the government in cases of public order, hate, etc. – the same thing is happening here in Canada, and around the world).

But realistically, it will probably take deep pockets to be able to exercise those rights. In Canada we have an expression to describe what happens to property owners who use deadly force against violent home invaders, “The process is the punishment”.

It means if your door gets kicked in by some low-IQ imports who are already out on bail for doing this previously, and you blow their heads off with a legally owned shotgun, you will be charged and forced to stand trial. After a few years, and several hundred thousand dollars in legal fees, you’ll likely prevail in court. If you don’t have the resources to fight that battle, you’ll take a plea deal and spend some time behind bars with exactly the same types of people you just defended yourself against.

Remember our maxim: “In the future, it’ll be a lot more expensive to be free”.

Meanwhile, the bottom tiers of the wealth pyramid across most jurisdictions (the permanent underclass) are going to embrace collectivism, populism and wind up with varying degrees of authoritarianism.

The Post-Singularity Stack and the SoS Portfolio

This is the tightest wrapper I could come up with for everything I’ve been trying to set out in this issue.

Due credit goes to Addison Wiggin, from the Grey Swan Fraternity, who recently put out a piece entitled “Repricing Legitimacy”. It touches on many of the same themes we’re monitoring here: the widespread disaffection of the younger generations, and the loss of faith in legacy institutions – albeit, as we’ve noted above, somewhat ironically juxtaposed with a renewed enthusiasm for Big Government and even collectivism.

“Our job isn’t to pick a slogan or a side. It’s to recognize where legitimacy is being rebuilt, where it’s being faked, and where it’s quietly draining away.

Revolutions without plans tend to end in terror and sorrow. Systems without trust eventually seize up.

Cycles don’t care what we believe. They respond to balance. And balance, right now, is being renegotiated almost everywhere at once.“

Drawing on source material mentioned earlier, plus a few others:

• • Viktor Shvets’ “Twilight Before The Storm”
  • Jeffrey Towson’s “What Would Ben Graham Do Now?”
  • Daniel Bell’s “The China Model”

The common theme seems to be that they are books which filled me with revulsion and dread the first time I read them.

Shvets’ thesis is point blank: the old neoliberal capitalist consensus has collapsed and no new model has yet emerged, but all indications are that it’ll include some kind of socialism (my extension on this is that we’re headed for a two-tier system of techno-socialism for the masses, and state capitalism for the asset holders).

If you hear Shvets on any interviews, he usually blames the markets for breaking down – saying, in effect, that “the market model has been discredited”. I would beg to differ, saying that the market functioning has been completely coopted by government interventionism and fiat debasement, but at the end of the day it doesn’t matter. The dysfunction is real.

He makes frequent references to something called the “Fujiwara Effect”, a meteorological term for when multiple hurricanes converge into a single, humongous, cataclysmic storm. The analogy here is the compounding of multiple negative cycles: financial, with the debt bubble; technological, with the existential disruptions coming from AI – and he also puts “climate change” in there, which I actually view as the one thing we don’t have to worry about, at least not now.

It’s still a fitting term for what we’re headed into: some kind of transition that won’t be incremental, but “rupture”-like.

Towson, whose book is over a decade old, reframed value investing as not only a game of mental chess with “Mr. Market”, but as one where “Mr. Government” had entered the chat. Investors and entrepreneurs would henceforth have to take the ever-increasing regulatory and ideological biases of The State into account when making their allocation decisions.

Daniel Bell himself defended criticisms that he was extolling a China-style command economy, which he maintains he was not, but that the point of his book was that nobody can dispute China’s results in operating that way. It works. Or at least it did (they too, have an enormous, untenable debt bubble, just like everybody else).

If there is a common aspect to these models it’s that policy starts to crowd out price discovery.

We’ve been dancing around this realization for a long time; this is what I’ve been intuiting every time I said that shorting anything was a fool’s errand because markets are now structurally hardwired to go up – more so than at any other time in history.

That’s fiat debasement at work, and it puts the entire universe of assets on an escalator, and from there it’s a matter of picking what will outperform the rate of decay in our denominators.

Tyler Durden’s phrase “White House Asset Management” (WHAM) is telling us that intrinsic value is now a political function, at least partially so. Imagine being short MSTR only to wake up some morning and find out that Trump put out a tweet during his morning dump announcing that the US government just took a 10% stake in MSTR, MARA and HUT/ABTC.

Nobody should be surprised if that happens. Not anymore

For many years I’ve taken pains to chart a largely libertarian, if not anarcho-capitalist path, the crux of which was trying to conduct myself with no regard to who was in power or which party formed the government.

I basically tried to tune out The State. I’ve conceded that it’s become much harder to do that since COVID, but I was still making my investment and capital allocation decisions from a market forces perspective.

And that is what is changing now. Our overall thesis may be unperturbed: The Great Bifurcation, Monetary Regime Change, etc. – but I am now grudgingly acknowledging that The State is going to impact our economic calculus more than I’d care to admit.

Those above-mentioned books which filled me denial and dread when I first read them, I’m now re-reading to adjust my investment theses around them.

I’m not exactly happy about it, but here we are…

Let’s talk SOS (Sovereign vs Serfdom):

If we’re going to stipulate that The State, “Mr. Government” (or “Mr. Regime” as I began to frame it mentally) is now part of the calculus, one of the places to start is to look at the largest economy in the world – The United States – and look at what its stated, national strategic objectives are.

The “economic security” objectives include: critical supply chains (logistics) and materials, energy dominance, reviving the defence industry, and growing financial sector dominance.

We know that energy dominance doesn’t mean windmills and solar, it means nuclear, oil, and natgas.

We also know that financial sector dominance will have Bitcoin, blockchain, crypto and stablecoins baked in.

And, big surprise, more military spending.

When I looked at all this and realized that all major powers are jockeying around these same themes, what came to mind for me was a kind of barbell positioning between “Mr. Regime” and a Parallel System (including “freedom tech”) across two axes:

Axis A: Serfdom vs Sovereign

Regime-aligned: are companies and assets that directly benefit from various national security strategy priorities (energy dominance, reindustrialization, defense industrial base, financial/AI leadership).

Sovereign / Parallel: Bitcoin, gold, privacy, decentralized rails and jurisdictions that hedge State Capitalism and what I sometimes call the “monetizing serfdom” trade.

These are positions that get us through whatever this is happening right now and over the next five to ten years.

Axis B: The “Post-Singularity” stack

Sound Money: Bitcoin, precious metals, future fintech

Smart Machines: AI / HPC / Big Data

Scarce Resources: energy, metals, base commodities

These are the companies and resources ushering in or underpinning “what comes next”.

Putting it all together

I touted this edition as a “major revision to the thesis”, however as I worked my way through it, what became apparent to me was that not a lot had changed within the thesis itself, except perhaps in timing:

• The Great Bifurcation was coming => TGB is here
• Governments and institutions are out of their depth
• Bitcoin will make a place in the next financial system => Bitcoin has taken its place within the emerging financial system

If the overall components and mechanics of the thesis haven’t changed – then what exactly did? Because something sure feels different to me.

I guess the big shift is from an overall optimism that humanity was going to level up en masse through the separation of the State and money (“fix the money, fix the world”), and admitting that was extremely naive.

It comes down to two things:

#1) Big Government is waxing, not waning:

Despite our governments and institutions being legacies of the industrial age, trying to linearly extrapolate their approaches into a non-linear world, their influence is not waning – as I have been positing since the aftermath of the pandemic.

The State is asserting itself ever more into the private sphere, everywhere.

I’ve made passing references to “a last gasp of Big Government” and the Nanny State in the past, but I think I under-emphasized it. This so-called “last gasp” will persist for a long time in the context of our lives. It could be a couple of decades, or more, before this plays itself out.

#2) I’ve completely misread the public mind

Again, thinking the demise of institutional credibility and loss of faith in an unaccountable and insular ruling class coming to a head during COVID was a secular wave.

That also appears to be wrong. It was an aberration and the general public has settled back into lethargy and compliance.

The combination of these realities pushes us toward the “Mr. Regime” side of the investment thesis, which is basically monetizing servitude, and on a certain level, that just feels wrong.

Aren’t we supposed to try to educate the masses? Make them understand how screwed they are if they don’t take massive action right away?

Our better nature may say so, but let me tell you a story about that impulse… (a true one):

In 1984, an unknown social psychology professor put out a book that was intended to be a consumer awareness tool designed to “pull back the curtain” on how people are manipulated.

The author described himself as a lifelong “patsy” and “easy mark” who wanted to educate the general public on the tactics of “compliance professionals” (like salespeople, marketers, nudge units and propagandists) so that they could defend themselves.

The book flopped, his publisher going so far as to withdraw promotion and publicity funds, citing that it would be like “throwing money down a pit”.

Nobody cared.

That book was eventually discovered by the very people who it was intended to expose: the marketing industry.

Robert Cialdini’s “Influence” is now an evergreen staple of the business world, having been re-released in an expanded edition, and has sold over 7 million copies worldwide.

This anecdote is both depressing and indicative of the world we live in – a microcosm for everything.

You thought Bitcoin was going to emancipate the masses from the tyranny of central banking?

The masses don’t care. They’re busy piling onto Polymarket and betting on which Stranger Things character is going to die in the finale:

You know who does care about Bitcoin, now? JP Morgan. Wells Fargo. Citigroup.

As TFTC notes, “14 of the top 25 US banks are now building Bitcoin products”:

14 of the top 25 US banks are now building Bitcoin products pic.twitter.com/U7pMPmcRVr

— TFTC (@TFTC21) December 27, 2025

Note also how a couple are building their Bitcoin products for “HNW Clients Only.

And that’s why if we want to stay on the right side of The Great Bifurcation and have the means to chart our own paths through this period of State Capitalism, we’re going to have to do it individually – and recognize that in the future, it’ll be a lot more expensive to be free.

That’s why the revised thesis carries a cynicism that’s uncomfortable. Any remaining altruism I felt toward a public that would rather ignore, or even punish the messenger than act on the message has to be quelled, and any civic-mindedness I had left has to be channeled accordingly (mentorship, curation, lead by example, etc).

What bothers me the most about this, was that in the past there was no existential impetus to break oneself out from the crowd. Everybody had the perfectly reasonable option of simply fitting in: you could get an education or a trade, work for a living, buy a house, raise a family, put your kids through college and just live a quiet, middle class life.

My dad worked on the shop floor in a General Electric plant for over thirty years, after which they gave him a pen for his retirement and a pension that my mom collected for another 17 years after he died. My parents were probably among the last generation of truly working/middle class people to live, work, save and retire.

All that is over. A bygone era.

Serfdom or Sovereignty (“SoS”) – that’s the choice now and most people aren’t even aware of it, and when they see somebody choosing sovereignty it looks downright heretical to them.

We can’t help these people, and that makes me sad, even if the majority of them would gleefully stone me to death in the street if the TV set ever tells them that the reason their livelihood is gone and their savings have been vaporized was because of “Bitcoin speculators” and goldbugs.

Most people are stupid. Especially when they act in numbers. If you’re reading this letter, you aren’t one of them.

The next edition of The Bitcoin Capitalist Letter, with more on the Post-Singularity Stack, should be out next weekend. Bombthrower readers can get a special trial offer here

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