Max Notes
Max Notes has become a laboratory of sorts to pull together thoughts that appear in our longer episodes. There has been a convergence of certain themes surrounding Venezuela that I’m building on to release a MeidasTouch explainer video on why we’ve pivoted more aggressively toward regime change in this Latin American country. Some of these thoughts appeared in the member newsletter this week but are expanded.
The Ghosts of Hugo and Fidel
This week I interviewed a young creator named Keith D. about the future of cryptocurrency as we continue investigating the impending crypto legislation before the Senate and what it portends for the future of the dollar and certain powers of the Treasury and Federal Reserve. I was struck by the reaction to it as some people were very dismissive of the conversation because it had crypto in the title. But this is important stuff to understand.
The thrust of our conversation was about the stability of crypto blockchain networks and whether the currencies themselves, from Bitcoin as chief among its peers and stablecoins will be adopted in a manner that excludes the public. Whether you believe crypto will impact your daily life or not it’s important to recognize that it’s a freight train. This is happening whether we like it or not so better to understand what the future holds than let it pass us by.
To understand how important crypto has become in global affairs, look no further than the subject at hand today: Venezuela.
The New York Times published an exhaustive piece this weekend about how the Maduro regime has been able to outmaneuver U.S. sanctions to prop up its trading activities. Even though the Venezuelan economy is once again in freefall with rampant inflation gripping the domestic economy, the political class has managed to keep money flowing into the country by accepting payments in crypto and converting it. But that’s not all.
“The government’s crypto injections have quickly trickled down. P.D.V.S.A. [Venezuela’s state oil company] now pays some contractors in stablecoins, private firms pay bonuses in stablecoins and citizens, from motorbike taxi drivers to executives, trade bolívares for stablecoins on Binance, the world’s largest crypto exchange.”
This puts the Trump administration in murky territory. On the one hand it’s sanctioning Venezuela to the hilt and trying to choke out its economy to promote regime change. On the other hand, it’s working quickly to facilitate global adoption of crypto exchanges such as Binance and the stablecoins on these exchanges because they have become backchannel purchase mechanisms for U.S. treasuries. In turn, countries like El Salvador, Argentina and Venezuela are moving quickly to adopt crypto for everything from international settlements to localized payments for goods and services.
This is the backdrop to the bizarre escalation of what the War Department now considers a drug war despite the fact that remarkably few drug routes into the United States originate in Venezuela. Pete Hegseth, the man in charge of the generals he called fat and lazy, just sent an aircraft carrier into the region (and into a fucking hurricane because of course he did) to position the U.S. for a potential invasion. This is all bonkers. And corrupt. And illegal. In other words, totally on brand for this administration.
But what’s really behind this obsession with a country that we’ve had on the economic ropes for decades? What did they do that is so deserving of this attention?
The ever increasing war fever toward Venezuela is still about one person. Not Juan Guaidó, the illegitimate neoliberal self-proclaimed president. Not Nobel Peace Prize recipient María Machado. Not even Nicolás Maduro. It’s still about Hugo Chávez.
When Chávez was in power he did the unthinkable. He ushered in a true socialist revolution and committed the cardinal sin of developing a fully self determined economy. The nerve! His closest political friend and ally was Fidel Castro. As if these offenses weren’t bad enough, Chávez nationalized the oil producing operations in Venezuela and kicked out any American companies that didn’t negotiate minority stakes.
It didn’t help relations when he hosted his own nationally televised armchair conversations and routinely made fun of American leadership. His pet name for George W. Bush? “Burro.” (Donkey.)
If Trump’s motives were truly narco terrorism related, we’d be invading countries all over the world. Including our own. Everyone knows a tiny fraction of drugs that enter the United States originate in Venezuela. That’s not to say there isn’t state sanctioned drug trafficking. We can be grown ups here. It’s just not an issue that warrants talk of war between our nations.
This is about regime change, yes. But if I had to provide an order of priorities it would be:
- Oil
- Money
- Cuba
Yes, Cuba.
Venezuela is a petrostate. Therefore it’s a victim of the resource curse. It’s what ultimately derailed Chávez’s agenda and plunged Venezuela into a deep and persistent recession. Our oil companies invested a ton of money into the country and they have a long memory. So reason number one is that we’d like our shit back.
We have also sanctioned the ever living shit out of Venezuela so they can’t sell the oil they have in U.S. dollars. Petrodollars are important to us because it helps fill demand for our treasuries. To restart this demand we would have to eat a healthy amount of shit and allow them to sell on the open market. Not only would this be embarrassing but it would also be lucrative for Venezuela and detract from our efforts to crush their economy and force a domestic revolution.
But the sneaky reason that we detest this regime so much is because of their close and unrelenting friendship with Cuba. Most Americans don’t appreciate the depth of our disdain for this island nation. In the eyes of our foreign policy apparatus these nations are one in the same now. And my guess is that if you were able to have an off-the-record conversation with our Secretary of State, he would tell you that it’s his sworn duty to force a regime change in both countries.
This potential escapade into Venezuela also checks the distraction box in a major way. Pretty Pete Hennessey gets to send a big gunboat to threaten a country with a population less than California that hasn’t been a problem for the United States since the Roosevelt administration. Teddy Roosevelt. In fact, it was a little standoff between Venezuela and the British that led to what became known as the Roosevelt Corollary of the Monroe Doctrine. Essentially, don’t fuck with our hemisphere. That’s our job.
It’s also curious timing that we started a campaign against a crypto nation that uses Binance as a primary exchange in the same week that Trump pardoned Changpeng Zhao (known as “CZ”), the founder of Binance. How long before that exchange suddenly experiences some outages or payments just stop processing? Considering the extremely close relationship between the Trump family and the engineers at Binance who helped build their World Liberty Financial stablecoin infrastructure, it’s hardly a stretch to predict what comes next.
It’s all connected and all roads lead back to Trump. And Fidel. But mostly Trump.
