I don’t wanna get too ahead of myself but we may be about to see a major public reckoning on what on earth banks even are and what they are supposed to do.

SVB didn’t go down due to “the tech bubble” or really anything to do with “banking Silicon Valley” being a bad idea. if anything, it’s a great idea! Their deposits went up ~2.5x in 2 years because there was a shit load of cash that needed to be banked! (debate separately to what extent that was a ZIRP phenomenon. I’m not saying this was good in the grand scheme of things. just that, in context, it was good business).

the problem is what to put the money in. most nocoiners seem to think that their deposits just sit there “as money,” and although I’m sure they don’t imagine notes in a vault, exactly, to a large extent that was true for SVB: they held treasuries - the “risk free” asset lmfao - which is as close to cash as you can get in a liquid security.

the conundrum here is that there literally is no such thing as “liquid dollars” - there is only credit. all dollar assets are somebody else’s debt. for all intents and purposes, treasuries *are dollars*. the idea of “keeping it in cash” at the relevant magnitudes is literally nonsensical. what would it even mean? deposit it at *another bank*? that hardly solves the problem!

the further you tug at this thread, the more you realise that dollars can only really be defined as vacuous promises by the US government to … one day give you slightly more dollars?!? that realisation is now getting aired in public.

I think the first consequence as this starts to sink in will be a massive preference for shorter term debt that can just be rolled over and over and over because the lesson of SVB is the duration sensitivity is absolutely not worth it. you can literally evaporate hundreds of billions of dollars by getting that just a little wrong even though you didn’t have much of a choice (“RISK FREE ASSET” LOLOLOLOLOLOL) this is yet another example of fiat driving up time preference and corrupting the information signals necessary to coordinate long-term capital investment. but oh well, the currency is collapsing so we have bigger fish to fry than the yield of long-dated bonds 😂

but the juicy bit is that we may be on the cusp of this reasoning, and the insanity of fractional reserve and central banking, finally being aired in public as people try to make sense of all this.

or maybe not, I dunno. maybe I’m naive. but I’m also bullish 🤙

DING DING DING 🔔

the market is open! happy bank run day everybody 🍿

Operation chokepoint and the deliberate targeting of Silvergate and Signature is a gross abuse by Treasury, but it wouldn’t have worked if those banks didn’t shitcoin. There are consequences to doing business with shitcoiners like FTX, Celsius, BlockFi etc… Sad week.

I'm feel really bad for breaking marchoftwitter for the 1st time. But it was worth it! You aced it! 🔥🔥🔥

Looks like this week will determine whether or not Silicon Valley Bank was a terrible manager of risk and is a one-off failure, or if everyone who has been saying "the banks are more well capitalized than ever post-2008" have been living a lie.

Isn’t it great going to Twitter and throwing a hand grenade to watch everyone flip out and then coming back to nostr and everyone being like

I’m not sure I can be bothered tweeting this coz I don’t want to deal with the negative pushback, but equally I do want to vent so I can sleep soundly:

if you deposit in a fiat bank, you are an unsecured creditor. you are not a victim. the real victims are those furthest from the fiat spigot, who are persistently priced out of ever accumulating capital, and whose time will be stolen *yet again* to plug the gap of fake value destroyed by this latest round of insane leverage collapsing.

the idea that it is crass to be rooting for bank failures or opposing clear-cut short-term fixes has a certain sentimental appeal but is ultimately asinine.

THE BANKS ARE ALL GOING TO FAIL.

the longer it takes, the worse it is going to be for exactly the people who are harmed by it happening now. if you really care about them, you want this out of the way as quickly as possible. but the idea you can just close your eyes and procrastinate this all away is juvenile. it is arguably even *the cause* of the problem. this could have been dealt with at any point in the past 50 years, but no. we just kept borrowing more than it is possible to repay and consuming more than it is possible to produce.

at some point people need to learn to take responsibility. ignorance is not an excuse unless you are also willing to pay the entire price yourself, which, note, nobody whining about this is. you can tell because, if they were, they wouldn’t be whining.

“but I thought I was a depositor!” <> “I don’t give a fuck what you *thought* - you were lazy and you were wrong. and you are asking the already poor and already fucked over by your ignorance to pick up the tab for it *again*. learn what is actually happening and have the balls to fix it.”

feel free to quote me to anybody you think needs to hear that.

Ha, have you thought about in roads via ESG?

Allen when we spoke at the btc conference in Amsterdam, you said you had a few things you were working on - have those projects materialised? You dropped off a bit on twitter.

Long Bitcoin is short fiat 🙃

"Ill take cream and a little bit of violence in my coffee today"