51: This guy will do whatever it takes



One thing that everyone is still talking about is all the Russia stuff, and for one reason or another the controversy seems to grow and grow.

There is probably not too much we can add to what you are already hearing about elsewhere when it comes to Russia, but maybe one thing we can start to address is what makes Russia… Russia. 

Today, we’ll address two quick points.

First, Russia will always see itself as one of the great powers and in Putin they have a strong leader who fights for them on the international stage. As such, Russia is rewriting the rules of modern warfare, which, in a post nuclear world is a much more nuanced kind of battle. Forget about the old school style fighting currently happening in the Middle East. The real skirmishes are happening, more often than not, on the battleground that is the Internet.

As Buzzfeed reports, Russia is more or less singlehandedly writing the cyberwar handbook:

“The Russians use cyberweapons like they butter bread in the morning. It’s a critical, fundamental component of their global hybrid warfare strategy. They are pushing the envelope on how they use it every day,” said Malcolm Nance, a former counterterrorism and intelligence officer for the US military, intelligence agencies, and the Department of Homeland Security. “Ukraine is just one of many test beds.”

And one avenue of attack they have been honing recently is against a host nation’s power grid. In December of 2015, one attack took out Western Ukraine’s electricity for about six hours:

“The US is terrified of it,” said Robert M. Lee, a former cyberwarfare operations officer for the US Air Force and co-founder of Dragos Security, a security company that specializes in critical infrastructure. Lee was part of a team that investigated and produced a report on the 2015 attack on Ukraine’s power grid. “Although a lot of people don’t actually understand what an attack on a power grid means, or what can actually be achieved. There is a huge disconnect between what DC thinks can be done with a power grid and what can actually be done. The effects are more psychological than anything else.”

Then there’s the election tampering, which, again, isn’t necessarily all that surprising. What’s surprising perhaps is how brazen Russia has become and how far ahead of everyone else they are in terms of aggression and effectiveness:

“What happened in the US was a reality check for Europeans. We didn’t observe what was happening earlier, and then it was too late,” said Stefan Meister, a Russia-watcher at the German Council on Foreign Relations. While Eastern European states like Ukraine and Georgia long complained of Russian tampering, Western Europe assumed it was largely immune from the hacks, cyber espionage, and disinformation campaigns that have been attributed to Russia. “Germany and France, they were really latecomers to taking it seriously. It was only after what happened in the US that they realized their systems were vulnerable as well.”

Maybe that’s what makes Russia so scary of an adversary. There is the sense that they just DGAF anymore, whether it’s through modern cyberwarfare or, you know, the more traditional kind of achieving your goals through whatever means necessary.

Like this Russian lawyer who recently plunged to his death from his bedroom window. Mysteriously, of course.

As good as gold

A few years ago, I wrote about how Bitcoin is just like gold in the sense that both Bitcoin and gold sort of act as an anti-establishment hedge.

But Bitcoin has a bunch of other special features that also make it resemble a currency and a payment system. Yet as Bitcoin has grown in scale, those features have come under strain as transactions take longer to confirm and fees rise.

And so this has sparked passionate discussion about Bitcoin’s true purpose:

These purists cite the likes of Hal Finney, one of bitcoin’s earliest developers, who noted in 2010 that: “Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain”. They also quote Amir Taaki, a bitcoin activist, who said in 2014 that: “This vision of Bitcoin as a faster, cheaper and better payments-network is simply not tied to any technological grounding of what Bitcoin is really about.”

The counter-narrative goes on to claim bitcoin was intended from day one to be a neutral, transferable and less corruptible international reserve asset akin to the SDR or Keynes’ bancor – a.k.a a reserve unit against which local banking systems could square self issued units against. The elimination of middle-men, consequently, was never a direct objective.

In other words, as Bitcoin grows in size, it starts to look a lot more like gold again as its built-in payment system starts to make less economic sense.

Anyway, I always liked this Warren Buffet quote about gold despite its logical holes:

Gold gets dug out of the ground in Africa, or some place. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

A bitter pill to swallow

One guy who is really scared of populism is Ray Dalio, a point he emphasized at Davos.

Well Dalio is re-emphasizing that point with a recent blog post:

In the period between the two great wars (i.e., the 1920s-30s), most major countries were swept away by populism, and it drove world history more than any other force. The previously mentioned sentiments by the common man put into power populist leaders in all major countries except the United States and the UK (though we’d consider Franklin D. Roosevelt to be a quasi-populist, for reasons described below). Disorder and conflict between the left and the right (e.g., strikes that shut down operations, policies meant to undermine the opposition and the press, etc.) prompted democracies in Italy, Germany, Spain, and Japan to choose dictatorships because collective/inclusive decision making was perceived as tolerance for behaviors that undermined order, so autocratic leaders were given dictatorial powers to gain control. In some cases (like Spain), strife between those of conflicting ideologies led to civil war. In the US and UK, prominent populist leaders emerged as national figures (Oswald Mosley, Father Charles Coughlin, Huey Long), though they didn’t take control from mainstream parties.


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Delightfully indulgent.

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