This week's spike in US bond yields demonstrated the bond vigilantes' powerful return. Clinton advisor James Carville famously described this force, which can dictate terms to world leaders, after the 1994 Bond Massacre:

I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.

Facing a shifting global landscape marked by China's ascendance, President Trump, at the helm of a declining US superpower, initiated a global trade war, effectively dismantling the established post-war order. He shared the prevailing view that the US market's leverage, representing 13% of global imports, would continue to decline over the coming years. Therefore, he decided, that the time to force negotiations over terms for an updated global packing order is now. However, the market's response to his opening move, particularly the US bond market's reaction, pushed him to reassess his strategy of confronting the whole world simultaneously. Two theories attempt to explain the resulting bond sell-off that shook the US markets evolved over the last few days:

1. Margin calls triggered a need for cash among hedge funds, leading many to liquidate their US bond holdings, a common form of cash equivalent for them. (These funds frequently employ leverage, using borrowed money to amplify their trading positions beyond their own capital. When a trade moves unfavorably, they hit critical thresholds requiring them to deposit more cash or collateral to avoid a forced liquidation of their position.)

2. Allied nations have prepared an answer for Trump’s opening move: Canadian PM Carney floated the idea of selling US bonds during a meeting with EU representatives end of March. Given Canada's increased holdings, now over $0.35 trillion from roughly $0.1 trillion in 2021, and the EU's substantial $1.5 trillion position, those two hold significant leverage over the US. There are also claims that Japan, holding another $1.0 trillion, joined this coordinated sell-off, contributing to the surge in treasury yields. Together, these three hold approximately 30% of US bonds owned by foreign nations.

There is no hard proof for either of those options. Especially the latter appears constructed though: While Carney, with his history at the Bank of England and Bank of Canada, is absolutely knowledgeable regarding monetary policy, it is simply a fact that the Bank of Canada and the ECB, Europe's central bank, are independent institutions. In the same way Trump is not able to assert direct control over the FED's course of action, Canadian and European leaders can't either. Japan even publicly announced that they would not use their bond holdings as leverage.

Trump is acutely aware that the greatest threat in his initiated trade war is other countries forming new trade agreements that exclude the US, as I previously discussed in S1E3, Trump's Bank War. Subsequently, he threatened publicly after the Canada-EU meeting, which took place at the end of March:

If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!

Orchestrated or not, it is a matter of fact that Trump, understanding how severe and painful retribution to an escalating trade war would be, abruptly reversed course, announcing a 90-day pause on all tariffs except those imposed on China.

One might assume Trump's reversal would have calmed the markets, but the reality is the opposite. As Bloomberg reports, Wall Street and global investors remain deeply unsettled by his actions.

The chart above illustrates the exchange rate between the US dollar and the Euro. At the start of Trump's presidency, one dollar was worth approximately 0.97 euros, but currently (at the time of writing), it has fallen to around 0.88 euros. This represents a significant decline in the dollar's value.

It's crucial to note that this currency weakening is unusual in the context of a trade war. Typically, imposing tariffs tends to strengthen a country's currency, as was the case when Trump previously levied tariffs against China during his first term.

However, the current situation is different. Instead, investors are engaged in large-scale selling of US bonds and other US assets in general:

It is really crucial to understand that this combination of rising US bond yields and a falling dollar is a highly irregular and alarming scenario. Investor’s are not only getting out of US assets, they sell those and exchange the dollars they receive into assets abroad. We see for instance German bonds, the Euro, Yen or Gold spiking. Trump told the world, that the American-led order is over and appears as if the capital markets believe him and anticipate even more disruptive moves by him.

My interpretation, oriented by what the Heritage Foundation suggests in their Project 2025 paper regarding the FED, and the direction in which his close advisors Musk and Thiel appear to be influencing Trump's thinking, remains the same: He wants executive power over the FED, and it appears to be in his interest to inflate the dollar to devalue the outstanding bonds. After 54 years of the US shopping with an unlimited credit card, the bill is due, and Trump doesn't feel like paying. In a legal challenge before the Supreme Court, this week, Trump was seeking the authority to remove two Biden appointees from U.S. labor boards, arguing against existing federal laws that require cause for their removal. Bloomberg interpreted it as part of a legal strategy with which the administration attempts to overturn the Banking Act of 1935. Exactly that kind of move that would essentially bringing the FED back under full control of the executive branch.

The result we see is nothing short of capital flight - something we have not seen happening to the US in decades. The fact that he introduced numerous additional exceptions, even to the Chinese tariffs, on Friday only serves to highlight the irrational nature of his decisions. This erosion of trust has led to an irreversible decline in crucial soft power, resulting in consumers increasingly shunning US products and a significant drop in travel to the US, as illustrated in the following Financial Times graphs:

The Art of the Deal Echo Chamber

Given all those facts, it was especially astounding how quickly and in what way the narrative surrounding his actions changed: From arguing how right Trump is about the unfair treatment of the US and that it is time to bring back jobs by imposing tariffs to claiming that we have witnessed an Art of the Deal Masterclass, while all of this was about isolating China all along. Not only people who simply do not know better, but also economically well-versed individuals on Substack and beyond showed that pattern.

The current state of public discourse increasingly mirrors the patterns seen in societies dominated by authoritarian or totalitarian regimes, particularly the intense focus on Trump as central figure. There's a growing sense that the polarization within US society has reached a critical juncture, where the power of reinforcing group dynamics threatens to eclipse objective truth, making it possible to persuade large segments of the population to accept falsehoods as facts, enabling that administration to sell black for white and vice versa.

Following the Second World War, a key focus of the scientific community became understanding the ease with which groups can become self-reinforcing bubbles of thought and action. Researchers sought to dissect the mechanisms behind the personality cults that propelled leaders like Mussolini, Stalin or Hitler to power. They grappled with the unsettling paradox of how individuals, described by those who knew them as upstanding members of their communities, could participate in the barbarity carried out by SS death squads during the Final Solution or during Operation Barbarossa on the Eastern Front.

In 1950, Solomon Asch, a pioneer of social psychology, designed his now-famous conformity experiment, aiming to understand the extent to which individuals yield to peer pressure. In Asch's setup, participants were placed in a seemingly straightforward task: judging the length of lines. They were shown a ‘standard’ line and asked to identify which of three comparison lines matched its length. The catch? The participant was surrounded by several other individuals (actors, working with the experimenter) who, on certain ‘critical trials’, unanimously gave the wrong answer. The real participant, often the last to respond, was then faced with a stark choice: trust their own eyes or conform to the clearly incorrect majority. Over the 12 critical trials carried out, approximately 75% of participants conformed with the wrong answer at least once.

When participants were allowed to give their answers privately, conformity rates plummeted to 1%. This pointed towards normative social influence - the desire to be liked and accepted by the group - as a key driver of conformity. Participants often went along with the wrong answer not because they genuinely believed it, but because they didn't want to stand out or face potential social disapproval.

We humans are inherently social creatures. We crave connection, seek validation, and due to that many of us find comfort in the familiar embrace of a group. It is this very desire for belonging which can sometimes lead us down a path where shared beliefs are amplified, dissenting voices are silenced, and the collective mind becomes an echo chamber, resonating only with its own reflections.

Understanding our fundamental human nature is, I believe, key to grasping the roots of this developing personality cult. The inherent tendency towards group reinforcement, however, necessitates a clear us vs. them dynamic with those who don't conform though. Asch’s experiments also showed, that the mere presence of a single dissenting voice within a group drastically lowered the rate of conformity - simply by sharing the own perspective not by trying to convince any group member that they are wrong.

Trump’s trade war sends shockwaves through the global stock markets, I am way more concerned about the irreversible ripple effects that his action might have though. Many political and economic commentators have interpreted his actions as calculated political move. He would simply create short-term fear and insecurity in the markets, so that capital would move from stocks and comparable asset classes into bonds.

What advantages do they attribute to this strategy for the Trump administration?

Their argument centers on the US's significant refinancing needs this year – approximately $9.6 trillion. They argue that increased demand for bonds, would lower their yields, which would save the US hundreds of billions of dollars over the next decade.

As explanation: Governments borrow money via bonds, which normally have two components:

• Nominal Value: Typically $100, which the investor receives back when the bond matures.

• Fixed interest rate: Currently likely around 4%. This determines the coupon, the amount a bondholder is normally paid twice a year.

When demand for bonds increases, their Nominal Value goes up – let's say to $110. This means that the effective interest rate for a new holder of the bond decreases to around 3.6% (4% on $110 instead of $100 investment). Consequently, if the government issues new bonds, they can do so at a lower fixed interest rate.

That, at least, was the theory held by many commentators. As I already mentioned in S1E3: Trump's Bank War: Why his Tariffs Create a Historic Dilemma for the FED, it struck me as an odd tactic to evaporate trillions of dollars in wealth within days to potentially save around $500 billion over a 10-year period. Furthermore, what those commentators also failed to consider is that China holds approximately $760 billion in US bonds. This gives them the equivalent of a financial nuclear weapon. Not only could they absorb the increased demand for bonds from capital leaving equities, effectively thwarting the anticipated plan, but they could also create additional supply, sending yields soaring.

This morning, China instructed its state banks to reduce their purchases of US dollars. This action is just one consequence of Trump's tariffs. Critically, first signs of how they also erode trust and, consequently, US soft power globally, become visible. This damage is irreversible; the perception has been created that the US President has declared the end of the US-led post-war order. He appears to believe he can unilaterally coerce other nations into negotiations to determine how the order that will follow on his terms. Yesterday, he publicly boasted about his interactions with other world leaders, further exacerbating these concerns:

They call me… kissing my ass... dying to make a deal. Please, please, Sir! Let me make a deal, I'll do anything, I'll do anything, Sir!

Trump is not only damaging his own image globally, but also that of the United States as a whole. The US established the global, rule-based trade system, where participants adhered to the World Trade Organization's regulations. Trump has replaced this order with a poker game in which he consistently portrays himself as holding the strongest hand. It’s only a matter of time before others call his bluff.

As I argued in S1E3, I don't believe this is mere incompetence, but rather a calculated move within a broader strategy to reshape the US, both domestically and internationally. The escalation with China, coupled with the market's, the Federal Reserve's, and some of his billionaire allies' reactions in the past 48 hours, just underline his appetite for risk. He has already begun to target the FED, laying the groundwork for a populist argument: Monetary policy for China or for American workers? when he shared on his Twitter copy:

Economists understand all of this as a self-inflicted dilemma. He will blame the FED and its Chairman Powell for the ripple effects. Tonight, investors began to divest from US bonds, causing yields to surge to in a way not seen since 1982. All this is just the beginning, yet it can be interpreted as first signs of smoke that investors around the world really begin to believe, that the US President is indeed willing to destabilize the Federal Reserve and potentially even the US dollar to force the hand of his internal and external adversaries. A copy of Andrew Jackson’s Bank War.

We will see what news regarding the United States Digital Asset Stockpile, that is already under development, the coming days and weeks will bring.

While historical events rarely repeat themselves, a closer examination reveals very often that they in fact do rhyme. It appears fair to characterize Trump as an ego-driven individual, his constant comparison to the greatest American Presidents, can be interpreted as an indicator that leaving a legacy is his primary concern. In his second term his appetite for risk seems to be higher than ever. Based on that I have illustrated the historical parallels to the two high tariffs phases in US history, identified contradictions within the Trump administration's approach, and laid out an interpretation of the actual underlying objectives of his Liberation Day Speech.

Subscribe now

Chapter 1: Jackson's Bank War and the Seeds of Civil War Division

On January 8, 1835, Washington's political leadership celebrated Andrew Jackson's elimination of the national debt, a feat announced by a senator with: Gentlemen...the national debt...is PAID. It was the first time a debt-free status was archived in US history. It lasted merely one year. The subsequent economic collapse, culminating in the 1837 depression, which cultivated the American divide leading to the Civil War.

Prior to his presidency, Jackson engaged in land speculation in Tennessee. A personal experience involving a failed land transaction which resulted in substantial personal debt and worthless paper notes, instilling in him a strong aversion to the debt-based banking system. Consequently, during his presidential campaign, Jackson targeted banks and the national debt as primary adversaries, labeling the latter as a national curse, a sentiment that garnered significant public support during his campaign.

Following his 1828 election, he signed a bill into law that significantly increased tariffs, reaching as high as 50%. Similar to arguments currently used by Trump, the rationale was that this protectionist measure would stimulate domestic job growth and simultaneously reduce the national debt. However, this policy led to a substantial contraction in international commerce, with both imports and US exports experiencing notable declines of 50% and 20%, respectively.

To still deliver on his set goal of debt elimination, Jackson pursued a policy of aggressively curtailing federal spending, vetoing infrastructure projects, and implementing the Trail of Tears – a brutal forced displacement and dispossession of Native American tribes that resulted in numerous deaths. The subsequent sale of vast tracts of these newly acquired lands to private speculators provided a significant portion of the funds needed to reach his financial objective.

He crushed opposition to his radical policies that were perceived by many as executive overreach. When the Supreme Court declared in a landmark decision that the state of Georgia did not have the authority to regulate the Cherokee Nation’s territory, Jackson, who was known for his strong belief in states’ rights and his disdain for Native American tribes, disregarded the Court’s decision and famously stated:

The Supreme Court has made its decision, now let them enforce it.

His sweeping financial policies exacerbated existing regional tensions within the United States. The industrialized Northern states generally perceived his trade policies as beneficial, while the agrarian Southern states, reliant on international markets, experienced significant economic hardship. When his Vice President John Calhoun sided with Southern States, specifically South Carolina, which argued that the states had the right to nullify the federal trade tariffs, he purportedly said:

John Calhoun, if you secede from my nation I will secede your head from the rest of your body.

By many historians Jackson’s presidency is considered to have set the stage for the Civil War that followed two and a half decades later. Especially because he understood to use the anger, fear and the divide his policies caused to his advantage: Jackson ran in the 1832 presidential race on a platform representing the planters, the farmers, the mechanic and the laborer against the monied interest. He argued that those hit the hardest by his policies were actually victims of the unconstitutional public–private organization of the Second Bank of the United State (BUS) which would violate state sovereignty and was called by him repeatedly a Hydra of Corruption. After assuming office, he promptly initiated the removal of federal deposits from the BUS, redistributing these funds to various state banks. Those banks were chosen by Jackson and run by loyal political allies which were part of his Jacksonian Democracy Movement. One might say he raised around his administration a moneyed aristocracy - exactly what he blamed his opposition to do in the opening quote of this essay. BUS’ president Nicholas Biddle retaliated to that by imposing tight money policies by calling back loans and restricting the issue of new ones. While Jackson’s actions were widely perceived as another abuse of executive power, he successfully managed to blamed Biddle’s repercussions for the economic downswing and pressured the BUS to reverse their tight monetary policies which ultimately resulted in Jackson decisively winning the Bank War.

There are notable perceived similarities between Jackson’s actions against the Central Bank and Trump’s approach: Even though almost 200 years apart, the arguments to impose tariffs, that are essentially a tax on his own constituency, are almost identical creating the same dilemma for the Central Bank: To fight inflation, a tight monetary policy such as increasing interest rates and generally making it harder to obtain credit would be needed, on the other hand low rates and uncomplicated access to credit is what is needed to grow and establish domestic industries, lessening the hardship for US citizens. The argument down the line feels predictable: Monetary policy for China or American workers?

Jackson caused and then used to not only force the Central Bank’s hand, but essentially abolish and replace it by a system where figures loyal to him were allowed to establish charter banks that issued their own currencies. I have described the infiltration of leading figures of the neoractionary movement, such as Thiel or Musk, that founded what became PayPal with the vision to substitute the US dollar, or Armstrong’s Coinbase as well as it’s former CTO Srinivasan who publicly advocate for the end of the dollar as world reserve currency as well as call to audit and End the FED in my essays S1E1 as well as S1E2, which focuses specifically on the sale of federal land to private tech elites to establish Chapter Cities with the goal to merge them into an UN recognized nation.

Jackson’s state banks, which he called Pet Banks, operated under looser lending procedures than the national bank, using the federal deposits handed to them as basis to print large amounts of money to grant risky loans, fueling investments in land and all kind of other asset classes. The resulting inflation and unsustainable lending practices led to a surge in speculation, which was followed by a sharp contraction in the economy and the Panic of 1837. Many state banks, unable to meet the demands of depositors and creditors, closed their doors, triggering a period of economic instability that fueled the divide within the US that led to the Civil War. The financial and economic instability lasted until the Federal Reserve System was created in 1913. While this era fostered significant hardship for millions, it enabled the rise of powerful monopolists like Vanderbilt, Morgan, Rockefeller or Carnegie. Circumstances that Thiel describes in his book Zero to One as desirable.

Chapter 2: Federal Reserve Act, Great Depression and the Post-War Era

The tension between private and public interests in shaping monetary policy is a debate with a long and rich history, likely as old as the concept of money itself. This fundamental question of influence has persisted for centuries. Wilson’s above quote from his 1913 book The New Freedom, is no exception. So Trump can arguably understand himself in respectable society when he stated in November 2024:

I feel the president should have at least a say in there. I feel that strongly. I made a lot of money. I was very successful. And I think I have a better instinct than, in many cases, people that would be on the Federal Reserve — or the chairman. [adding about Powell] He’s tending to be a little bit late on things. He gets a little bit too early and a little bit too late. I believe it’s really a gut feeling.

Wilson assumed office following a period of frequent bank runs that persisted since the end of the Civil War, he managed to balance the competing interests by capitalizing on the widespread consensus that reform was necessary. On December 23rd of the same year, he signed the Federal Reserve Act into law, establishing the 3rd US Central Bank.

The balance he was able to justify limited private influence initially significantly, which inadvertently contributed to monetary policy becoming a tool for short-term electoral gains. The post-World War I economic landscape saw American business’ boom, fueled in part by the exclusion of Germany and other in the war involved nations from the US market – a situation American business sought to maintain. Rising American wages also generated fears among businessmen that lower European labor costs would lead to undercutting. Consequently, figures like Joseph Fordney advocated for tariffs as a means to safeguard American jobs. This America First sentiment, advocating self-sufficiency and isolationism from the old world with a focus solely on North America, permeated the US and ultimately contributed to the economic collapse of the Great Depression in 1929.

By 1933, the crisis had brought the US economy to its knees, with a staggering 25% unemployment rate, a 90% decline of the Dow Jones, and the failure of 35% of the nation's banks. Facing an inability to meet its debt obligations – which has officially never happened in US history - with the exception of the four times it actually has – the Roosevelt administration took decisive action. FDR - the only US President who served more than two terms - issued an executive order changing the official gold exchange rate from $20.675 to $35.00 per ounce, prohibited private ownership of gold, and effectively ended the redemption of deposited gold for currency. This effectively devalued the US dollar and the government's outstanding debt by approximately 40%.

Amendments to the Federal Reserve Act in 1935, which excluded the Treasury Secretary and the Comptroller of the Currency from the Board, were a reaction to the obvious influence the FED’s structure had on the creation of the Great Depression. While the direct control of the had lessened, Congress and the executive branch maintained significant influence over the Federal Reserve through now more indirect channels. The economic hardships of the interwar period fueled a rise in international tensions, as nationalist movements gained prominence and became the dominant global ideology. How the arguments of the neoreactionary movement resemble those of the reactionaries of the 1920s and 1930s, I have outlined in S1E1. The parallels to the America First sentiment are probably obvious.

During World War 2 the FED committed itself to maintaining an interest rate of ⅜ percent on Treasury Bills to finance the American war effort. After hostilities ended, the Treasury Department was committed to keep the interest rates low, while inflation increased in the post-war years tensions between the executive branch and the monetary experts at the FED escalated. As consequence the Truman administration singed the Treasury-Federal Reserve Accord in 1951 into law which again marked a significant step towards greater FED autonomy and private influence over the monetary policy. Only months later a public altercation between Truman and FED chairman McCabe regarding interest rates at the wake of the Korean War ironically ended with the following announcement by the President:

McCabe was informed that his services were no longer satisfactory, and he quit.

The Bretton Woods Agreement of July 1944 had turned the US dollar into the world reserve currency. This agreement, negotiated by delegates from 44 Allied nations at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire, established a new international monetary system in the aftermath of World War II. The core of the system was a regime of fixed exchange rates. Each member country pledged to maintain the value of its currency within a narrow margin (initially 1%) of a declared parity, which was pegged to the US dollar. The dollar on the other hand was based on the Gold Standard meaning that gold could be converted at a fixed rate of $35 per ounce.

The United States, possessing the only major economy largely unscathed by World War II, presented a simple proposition to the devastated nations of Europe and Asia: Abolishment of imperial ambitions to establishment peaceful intra-regional trade frameworks in exchange for access to the expansive US market and credit system, while the US Navy's dominance in the Atlantic and Pacific would guarantee safe trade routes globally. Given the historical context of disrupted commerce due to centuries of piracy and imperial rivalry, this offer presented was almost too good to be true.

The Bretton-Woods era concluded in 1971 with the Nixon Shock, an event triggered, in part, by the growing sentiment among European allies that the Bretton Woods structure no longer represented a fair global economic order. Germany was among the first to decouple its currency from the US dollar, sensing that the US was about to default on their Gold Standard promise once again, setting off a chain reaction. The Nixon administration responded with a series of economic measures, most notably the suspension of the dollar's convertibility to gold, effectively transforming the US dollar into a fiat currency – one whose value is not based on any intrinsic commodity.

Those events were another famous test of the FED’s independence: President Richard Nixon, pressured then-FED Chairman Arthur Burns to ease up on monetary policy to boost the economy ahead of the 1972 election. On the infamous Nixon tapes that later forced him to resign he stated:

I respect his independence. However, I hope that, independently, he will conclude that my views are the ones that should be followed.

An Fortune article concludes:

In part because of Nixon’s pressure, inflation skyrocketed during the 1970’s while economic growth slowed to create stagflation that lasted well after Nixon resigned in 1974. The oil shock in 1973 also sent gas prices soaring and stoked more inflation. These economic headwinds were only halted by the drastic interest rate hikes of Burns’ successor Paul Volcker.

Essentially Nixon’s policies handed the US a truly unlimited credit card though. The American economist Barry Eichengreen concluded:

It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries had to pony up $100 of actual goods in order to obtain one.

The following chart shows what he meant:

The U.S. transitioned from a net importing country into one with unlimited global purchasing power, with a fiat US dollar underpinned by the nation's significant economic and military strength, which discouraged challenges to its value.

The Nixon shock enabled the ultimate rise of the US Empire establishing itself as the successor of its British predecessor, which used to amass extensive deficit and debt trading with its colonies over centuries itself. I guess it is fair to say that not even Trump would be bold enough to argue that it was the colonies that ripped the Brits off, yet that is his stance on the US trade deficit today;

Chapter 3: The Challenge of De-dollarization and Shaping the Next American Century

Trump's recurring assertion that countries with a trade surplus with the US are ripping us off is inaccurate on multiple fronts as Noah Smith argues in this latest Substack correctly:

1. Trump's advisors apparently focused on the GDP equation and observed that imports are subtracted. However, they seemingly failed to grasp that this subtraction is an accounting mechanism to offset the fact that the value of imports is already included within the consumption and investment figures. Consequently, imports do not inherently reduce GDP.

2. The assumption that eliminating imports will automatically lead to a one-to-one increase in domestic production – the idea that stopping the import of a drill from Europe, for example, will simply result in an American company making one more drill – is a significant oversimplification of economic reality.

In fact, those two inaccuracies actually even mutually reinforce each other. It is in general a weird way to argue: If you go to Walmart and pay with your credit card, does that mean that Walmart is ripping you off? No. Does paying with your credit card make you poorer though? Also no - you have indeed less money, you have simply exchanged it for stuff though. And if you are the leading empire of your time possessing the global reserve currency grants to the luxury that you can simply print more money when you run out of it.

Trump has incredibly capable advisors, including Thiel and Musk, in his administration, which not only understand the economic implications of tariffs, but are more than just qualified to play 3D Chess. So the question is, what strategic objectives motivates them?

To me their timing is driven by three major factors:

1. Foreseeable population collapse in Europe and developed Asia

   1. People aged 25-40 are the biggest consumers in the developed world. Germany is 45 on average, Italy 47, Japan 50, while the US is 39. The economic rationale for maintaining a costly global (military) infrastructure primarily to secure trade is increasingly being questioned, particularly given the enhanced economic opportunities within North America compared to a century ago.

2. De-dollarization

   1. The global order is transitioning towards a multipolar structure, leading to a discernible and accelerating decline in the US' capacity to unilaterally enforce dollar-denominated trade. This trend is evidenced across various sectors, including energy transactions, the emergence of alternative payment systems, and the diversification of currency reserves in emerging markets. Even JP Morgan began to argue like that recently.

3. Refinancing

   1. Due to the $9.2 trillion debt refinancing requirement in 2025, a strategy of creating economic uncertainty might push investors out of equities and into the relative safety of bonds. This increased demand for bonds could lower interest rates, with a 0.5% decrease potentially saving the government approximately $500 billion in interest over a 10 year period.

The theory that Trump instigated a trade war to lower future debt costs has been floated around for a while. Yet, using this as stand-alone explanation is unconvincing to me. The trade-off of causing trillions in immediate market losses for the possibility of saving billions over years appears to be an extremely unfavorable proposition.

A more plausible scenario, in my view, involves an orchestrated attack on the Federal Reserve as part of a plan to reshape the US. Several advisors and advocates associated with the neoreactionary movement, including Srinivasan and Musk, whose involvement in the Chapter City legislation I detailed in S1E2, have been advocating for the dismantling of the Federal Reserve in recent months. The following Tweet is just one of several examples of what appears to be a purposefully orchestrated debate:

Musk e.g. also retweeted a post targeting the FED stating The FED is insanely overstaffed or commenting on a post suggesting that Ron Paul should be used to audit the FED as Great idea.

Trump tariffs effectively place the Federal Reserve in a position analogous to that faced by Jackson nearly two centuries ago. The Federal Reserve's response to inflation – tightening monetary policy – would, paradoxically, benefit China, Europe, and other trade partners targeted by the tariffs, while simultaneously exacerbating the economic challenges faced by US farmers, small businesses, and other domestic sectors. Trump can easily turn the public debate into one that is basically boiled down to Is the FED pro Americans or pro China? Directing the fear and anger of his constituency towards the FED creating the grounds to increase the influence of the executive branch onto the FED to a pre-WW2 level putting him in a position to devalue the dollar comparable to FDR in 1933, which would solve the foreign debt problem, while it creates room for new, asset-backed cryptocurrencies to be used as legal tender, while the USD is inflated out of relevance.

Historically potential shifts in the global order, as we are currently seeing them play out, bear a great risk of internal or external conflict. In his announcement abolishing the Gold Standard, Nixon repeatedly emphasized that another war was not a viable option, stating, for example:

Prosperity without war requires action on three fronts: We must create more and better jobs; we must stop the rise in the cost of living; we must protect the dollar from the attacks of international money speculators. We are going to take that action – not timidly, not half-heartedly, and not in piecemeal fashion. We are going to move forward to the new prosperity without war as befits a great people – all together, and along a broad front.

He said that understanding the historical precedence over the past five centuries wherein a declining dominant power more often than not engaged in war with a rising power. (12 out of 16 times) If the collapse of a reserve currency, which has always been coupled with significant wealth disparities within that nation holding it, meant historically a significant risk for internal conflict or even civil war. Elon Musk has described the latter at least 8 times over the last 12 months as inevitable - debating events in the US and Europe.

I do not believe that anybody wants to see an armed conflict unleashed. But as Thomas Schelling said in Arms and Influence:

The purely ‘military’ or undiplomatic’ recourse to forcible action is concerned with enemy strength, not enemy interests; the coercive use of the power to hurt, though, is the very exploitation of enemy wants and fears.

Use of force is a bargaining chip in diplomacy, as such we see the biggest US military buildup in over a decade happening in the Middle East right now, while Israeli sources share intel that claims Iran would have nuclear capabilities within three weeks, which was followed with a clear war threat by Trump last week:

If they don't make a deal, there will be bombing. It will be bombing the likes of which they have never seen before.

Similar to the approach Truman took towards the Federal Reserve during the buildup to the Korean War, Trump's current troop movements and rhetoric regarding Iran, and the broader global implications, create a scenario where the Federal Reserve's actions are potentially additionally constrained. The threat of conflict in the Middle East, even if not realized, carries the risk of significant oil price volatility, which would disproportionately harm the EU, China, and other trading partners with whom the US seeks trade agreements. All this is especially made possible by the recently archived energy independency of the US.

While Jackson’s policies and the Civil War had horrible consequences for the majority of American’s, they were the basis of the Gilded Age and the creation of the most powerful monopolist in American history.

The US accelerated GDP growth, fueled by the US dollar dominated fiat currency system established in 1971, has been characterized by uneven distribution, contributing significantly to the current economic disparities observed both within the United States and globally. In the last 500 years the rich and powerful at the end of a reserve currency cycle have all done the same: Tried to prevent major redistribution of their wealth to the have-nots. It is a natural instinct and main personal objective that is this time around not different.

With the context above the underlying objectives of Trump’s Liberation Day Speech are the following to me:

1. Creating dilemma for the FED to win influence over her like Jackson, FDR or at least Truman.

2. Prevent trade agreements of e.g. EU with Canada and Mexico or China with Panama or Mexico. The US’ zero-sum approach contrasts with the potential for other countries to create non-zero-sum outcomes through cooperative trade arrangements, effectively isolating the US This isolation represents a significant strategic vulnerability.

3. Force trading partners into trade agreements that guarantee investments on US soil.

4. Create a cryptocurrency reserve and buy tokens and coins via the FED or another government institution. Using the inflating dollar as long as people mutually agree that it holds value to exchange it into cryptocurrencies like Bitcoin, is a no brainer trade.

5. Establish sovereign Chapter Cities, granting them the right to use own cryptocurrencies as legal tender.

6. Grant Chapter Cities the right to set own regulations comparable to the Próspera case study.

7. Finance and push the AI Manhattan Project - the geopolitical landscape of the 20th century was dominated by nuclear devices, the 21st will be dominated by AI weapons, robotic and drone swarm capabilities.

I deny believing that it was not a calculated risk for Elon Musk that his role as Head of DOGE - or RAGE as Curtis Yarvin has initially called it - would turn Tesla’s public listing into an obvious attack angle. While views on his character are rightfully so subject of debates, his track record and abilities are undeniable. He possesses the ability to raise capital like maybe nobody else in our time. When facing significant short seller opposition (traders that make money, when a stock price falls), his market actions are viewed by some as approaching the threshold of market manipulation, a criminal offense. It appears to be for Musk simply a gray area, in which a successful entrepreneur needs to be able to navigate confidently, to others it is proof that he believes certain rules would simply not apply to him. The historical interpretation of yesterday's events, marked by a 15% Tesla stock rally and a $120 billion market capitalization of Tesla increase following a devastating Q1 report, will be determined over time, particularly concerning the role of viral Fake News, that triggered the surge.

But one thing at a time:

Tesla’s market capitalization was at $910 billion at the end of trading yesterday. Up from $790 billion when the markets opened. As benchmark: The nine automotive companies joining Tesla in the Top 10 of the most valuable car manufacturers globally represent a valuation of $868 billion - combined.

Tesla’s stock price and valuation are hardly driven by fundamentals - meaning bound to revenue or profitability numbers - but rather by his personal following that resembles that of a crypto-bro cult. The reported global decrease in Tesla sales during the first quarter of this year has been triggered by global opposition to his political statements and his association with the Trump administration. Compared to the same time frame last year the numbers of cars sold decreased by 41.1% in France, 55.3% in Sweden, 12.5% in Norway, 55.3% in Denmark and 49.7% in the Netherlands - it looks comparable in markets all over the world. While EV sales are booming globally, Tesla’s market share decreased from 14% to 11% only avoiding an even harsher collapse with severe discounts at zero percent financing. Given the monthly reporting of new vehicle registrations and related data by numerous countries, a decrease in sales was anticipated, leading Wall Street analysts to revise their forecasts: From well over 400,000 delivered cars to 378,000 on average. Tesla's reported figure of 336,681 units was lower than the most conservative analyst projections though. Following the release, the stock price experienced a 10% decline in after-hours trading. Anticipating an additional post-market-open decrease, short sellers took positions that may drive Tesla's stock below critical support thresholds (price levels determined by chart analysis). It appeared to be obvious that the damage to Tesla’s brand had caused an even harsher decline of the company’s fundamentals, darkened its outlook and opening the door to a real crash.

Then followed the unexpected breaking news when Politico published an article stating:

President Donald Trump has told his inner circle, including members of his Cabinet, that Elon Musk will be stepping back in the coming weeks from his current role as governing partner, ubiquitous cheerleader and Washington hatchet man.

The president remains pleased with Musk and his Department of Government Efficiency initiative but both men have decided in recent days that it will soon be time for Musk to return to his businesses and take on a supporting role, according to three Trump insiders who were granted anonymity to describe the evolving relationship.

The X algorithm, elevated this news to the platform's top story, resulting in its widespread dissemination before the markets opened. The stock experienced a significant surge throughout the day, not only recovering its pre-market losses but closing with a 5.3% gain. As described Tesla gained $120 billion in market capitalization due to that. While that triggered substantial losses for short sellers, Musk netted $15 billion.

Even though he tweeted numerous times throughout the day, he waited to clarify that the perfectly timed Politico article was false until the markets closed by simply retweeting the WH Press Secretary denouncing his departure from DOGE as garbage.

All that occurring just before Trump's Liberation Day speech, which will if not burry, certainly limit its coverage in major publications, makes that whole stunt smell fishy.

Politico, a subsidiary of the German media conglomerate Axel Springer, was acquired in 2023 as part of CEO Mathias Döpfner's strategic plan to expand Springer's US presence and influence. While Döpfner is actively extending his US network personally, he controversially provided Musk with a platform on Die Welt to advocate for Germany's far-right AfD during the election race. His son Moritz on the other hand became Chief of Staff at Peter Thiel’s Family Office Thiel Capital. (I have described Thiel’s role within the neoreactionary movement and the Trump administration at length in my essay S1E1: The Butterfly Revolution: A Silent Coup?)

Although there is no evidence of direct consultation between Musk, Thiel, and Döpfner regarding this PR stunt, the established connections surely did not hinder its release. It is most definitely also not to Musk’s disadvantage, that his DOGE is dismantling regulatory bodies, including the SEC, which fined him for a 2018 tweet containing false claims about securing funding to privatize Tesla at $420, resulting in a 23% stock increase.

The circumstances of this $120 billion surge are very questionable. It appears to be fair to say that an individual who envisions to crown himself as king of his own empire by establishing a sovereign Chapter City, as described in my essay S1E2, needs to have the vocation to operate outside of conventional regulatory norms. Especially if such individual possesses the ability to involve the Oval Office into a PR heist that appears to be for the history books.

No judge, no jury, no executioner.

On August 4th 1789 - three weeks after the Storming of the Bastille initiated the French Revolution - members of the nobility and clergy relinquished their long-held privileges in a historic, late-night session at France’s Constituent National Assembly. It meant the abolition of the feudal system, the end of serfdom and peasant obligations like forced labor and tithes (a mandatory contribution of a tenth of one's income or produce, for the sustenance of the clergy), marking it the Night of Sacrifice of the Privileged. Inspired by the principles of the Declaration of Independence, the very National Assembly, passed 17 articles guaranteeing citizen and human rights to every inhabitant across the French Empire from birth on.

Many historians consider these events to be the definitive transition from the medieval to the modern era, yet the neoreactionary movement driven by Silicon Valley billionaires like Peter Thiel, Mark Andreessen, Mark Armstrong or Bajai Srivivasan appear to see in a ‘modernized’ form of feudalism the future of governance.

This essay explores the concept of Charter Cities and Network States, detailing their ideological underpinnings and analyzing how they are being leveraged by a self-proclaimed elite to establish autonomous territories, ultimately aiming to dismantle any traditional, democratic governmental oversight to crown themselves Lords, Dukes and Kings of the Information Age.

Sounds absurd? I know. The passing of historic legislation that would undoubtably mean irreversible damage to the U.S. democracy as it is drafted to legalize the groundbreaking ceremony to begin constructing what is ought to become an independent, diplomatically recognized country on U.S. soil appears to be just months away.

Subscribe now

Charter One: From a TED Talk to a Charter City Blueprint

Paul Romer, a Nobel Prize-winning economist, proposed in 2009 the concept of Charter Cities as semi-autonomous zones within nations. These cities would be empowered to create their own legal codes, immigration policies, and governance structures, with the goal to foster economic growth and innovation, drawing parallels to examples like Hong Kong or Singapore. This approach would offer a departure from traditional reform, advocating for a clean slate approach to development. To avoid corruption and guarantee investment safety, Romer’s concept involved governmental oversight of such Charter Cities by nations like Canada offering an alternative to traditional Development Aid. Countries open to the idea contacted Romer. After years of debate Honduras passed under president Porfirio Lobo Sosa, a charter city law, from which Romer withdrew his support, saying corporate special interests had corrupted his vision.

While Romer stopped walking through the door he had created by just glimpsing through it’s keyhole, a well-funded Delaware-based company took concrete action and did not only flung the door wide open but walked right through it. Erick A. Brimen, CEO and founder of Próspera, a venture fueled by investments of Tech-Titans such as Brian Armstrong's Coinbase, Peter Thiel, Sam Altman, Marc Andreessen or former Andreessen Horowitz Partner and Coinbase CTO Balaji S. Srinivasan (via Pronomos Capital) recognized this as the moment to realize the blueprint of their most ambitious startup utopia: Establishing what is supposed to grow into an own, by the United Nations recognized nation with everything that comes with it - from courts to taxation. A billion dollar real-world learning experience, necessity to refine their vision to potentially scale such Charter Cities across the US and beyond. This Silicon Valley utopia comes with one big difference to Romer’s initial idea: Their setup has no governmental oversight at all.

If you have S1E1: The Butterfly Revolution: A Silent Coup? many of those names involved, their connections to the neoreactionary movement and Trump administration are familiar to you. This makes the abundance of governmental oversight less surprising, it spurred me to delve deeper though. The revelations that followed were truly mind-blowing:

Próspera finalized a deal with Honduras’ President Juan Orlando Hernández, starting constructing the by far most advanced project within the globally growing Charter City movement on the island of Roatán in 2021. Honduras - or the circles governing it during that time - granted Próspera extensive autonomy, typically reserved for counties, including its own jurisdiction (excluding Honduran criminal law), the right to define their own industry-specific regulations, as well as taxation of which Honduras receives a 12-15% ‘revenue’ share. As a result entry requires signing a Contract of Coexistence exceeding 4,000 pages, while you can become citizen via an app.

Próspera cut this deal even though they could have known what Romer meant with corporate special interest: In 2009 military forces forcibly removed Honduras' left-wing president, Manuel Zelaya, from his residence to install in a military-sanctioned election Porfirio Lobo Sosa, Zelaya's former rival, as president. During his presidency Honduras’ Supreme Court ruled against his Charter City (ZEDE) legislation, citing the risks that it would carry to Honduras as a nation. Hernández, then President of the National Congress, effectively neutralized that opposition by removing four dissenting judges in what was widely condemned as a purge and technical coup. Those coups, drew criticism regarding their legitimacy from various international observers, including the U.S. but have not resulted in any severe consequences, until in 2019 U.S. federal prosecutors accused Hernández (who succeeded his mentor Lobo as president) and Lobo of accepting campaign contributions from the Cartel determining that they had turned Honduras into a narco-state. Lobo's son got already convicted of trafficking tons of cocaine to the U.S. in 2016, while Hernández's brother received a similar conviction and was also implicated in the murder of two rival drug traffickers three years later. President Hernández himself ended up being sentenced to 45 years in a U.S. prison in 2024, Lobo's wife received a 17-year sentence for corruption in the same year.

Skepticism surrounding Próspera understandably steadily intensified from the moment it secured its 50-year concession to manage their part of Roatán in 2013. This simmering tension reached a boiling point when the project released images depicting its advanced stages of development, which encroached upon the neighboring fishing village of Crawfish Rock. The ZEDE laws, designed to facilitate Charter Cities in Honduras, include provisions for expropriation, which allows for the forced sale of land. A New York Times article summarized that circumstance as follows:

[…] the narrative changed from ZEDEs are bad because they are violating constitutional rights, […] to the more forceful ZEDEs are bad because they’re going to take your land. A national protest movement was born […]

This movement was fueled by historic resentment: Facing substantial debt to Britain in the late 19th century, Honduras sought to stimulate its economy by enticing foreign investment through land grants and financial incentives. This led to investments by U.S. banana companies, such as Cuyamel and United Fruit (corporate ancestors of Chiquita), who agreed to constructing vital infrastructure like railroads and ports in exchange for vast tracts of land. In 1911 Cuyamel formed an army of American mercenaries that carried out a coup to install a puppet government turning Honduras into the original Banana Republic.

In 2021, Xiomara Castro, Zelaya's wife, made history by winning the Honduran general election, becoming the country's first female president. That same year, the UN projected that ZEDEs could potentially control approximately 35% of Honduras' territory due to the described provisions for expropriation. Although Próspera publicly stated that using such laws would contradict their ideological understanding of property rights, they stopped short of proposing amendments to the legal framework. One year later in 2022, Honduras’ Congress unanimously repealed the law and passed a constitutional reform that would abolish the until then three existing ZEDEs.

Próspera - technically not a city or country but a Delaware company - decided to make as such use of the powerful investment provisions of the CAFTA-DR free trade agreement and sue Honduras for $10.8bn in a investor-state dispute settlement court located at the World Bank. These dispute settlement systems are structured to grant corporations the right to sue states, a right not reciprocated. This creates an enormous imbalance of power, especially because corporations can claim potential future profits as damages, while the process would be held in a country that controls assets of the country being sued. Refusal to pay is generally not an option, as assets can be seized to enforce judgments. These arbitration outcomes can also add to a state's foreign debt. Studies reveal states win only 36% of arbitration cases.

The geopolitical magazine Foreign Policy concluded as follows:

Próspera’s $10.8 billion claim is equivalent to roughly two-thirds of Honduras’s annual state budget. Such an arbitration decision would simply render the country bankrupt. It is time for the growing number of ISDS critics, including the current U.S. administration [Biden at that time], to go beyond the do as I say, not as I do mantra and support Honduras’s democratic sovereignty in the face of an egregious case of corporate abuse.

Given Próspera's governance structure, its backers as well as Committee and board members it is little surprising that several high ranking U.S. officials joined its cause immediately. House Republicans, including Paul Gosar, Mario Díaz-Balart, Michael Waltz, and Maria Elvira Salazar called publicly for individual sanctions in response to attempts to shut down the ZEDEs while the Senators Bill Hagerty and Ben Cardin sent a letter to U.S. Secretary of State Antony Blinken stating:

Any direct or indirect expropriation of U.S. investments in Honduran Economic Development and Employment Zones would be regarded as a direct assault on the guarantees of CAFTA-DR and surely trigger a devastating loss of private sector confidence. In turn, this would dramatically undermine the strong U.S. interest in encouraging significant new private sector investment in Honduras and the region. We therefore urge your Department to encourage Honduras to respect this 50-year legal stability guarantee that protects U.S. investments in Honduran Economic Development and Employment Zones under CAFTA-DR.

Próspera's Committee of Best Practice - one of two chambers of its governmental structure - consisted initially according to a New York Times article of members from both European aristocracy and prominent U.S. Republican circles, incl. Archduchess of Austria Gabriela von Habsburg, granddaughter of the final Austrian emperor alongside figures like former Reagan speechwriter Mark Klugmann, anti-tax activist Grover Norquist, and Ronald Reagan’s son, Michael Reagan, among several other former Reagan administration members. Klugmann is known to be a driving force of the Network State movement and has been an advocate and advisor to governments around the world regarding Charter Cities, while he considered an expert on their legislation.

While the Best Practice Committee, was officially appointed by former Narcopresident Hernández, Próspera's second chamber is a nine-member council, of which five are elected, while four are appointed by Honduras Próspera Inc. The requirement for a two-thirds majority in decision-making effectively grants Honduras Próspera Inc. veto power. An app-based voting system, where each square foot of land grants one vote, creates a real neofeudal power dynamic, which mirrors historical empires, such as that of Gabriela von Habsburg's ancestors, who held vast landholdings, including the Spanish Empire that stretched across Europe, Asia, South and North America, during an era when land ownership was the foundation of political power.

In light of the overall vision, it's clear that the consequences for Honduras are not perceived as a setback, but can be interpreted as deliberate outcome and a blueprint ready to be scaled across the globe. Even though alarming, it appears to be little surprising that Próspera's Chief of Staff, Trey Goff, revealed to WIRED that he and representatives from the Freedom Cities Coalition have been in recent discussions with the Trump administration, who have reportedly responded positively to their proposal to establish ten Charter Cities on U.S. soil, multiplying Honduras’ Trojan Horse turning it into an existential threat to liberal democracies around the globe.

Notably: the Freedom Cities Coalition is an initiative of NeWay Capital LLC, Próspera's trademark holder.

Charter Two: From Charter City Blueprint to Irreversible Expansion

What I’m really calling for is something like Tech Zionism, he said, after comparing his movement to those started by the biblical Abraham, Jesus Christ, Joseph Smith (founder of Mormonism), Theodor Herzl (spiritual father of the state of Israel), and Lee Kuan Yew (former authoritarian ruler of Singapore). Balaji then revealed his shocking ideas for a tech-governed city where citizens loyal to tech companies would form a new political tribe […]

This report from New Republic is just one of many about a controversial speech of Srinivasan at Y-Combinator - maybe the most prestigious startup hub in the world -where he went on as follows:

A huge win would be a Gray Pride parade with 50,000 Grays. That would start to say: ‘Whose streets? Our streets! Reds should be welcomed there, and people should wear their tribal colors. No Blues should be welcomed there. In addition to celebrating Gray and celebrating Red, you should have movies shown about Blue abuses.… There should be lots of stories about what Blues are doing that is bad. Take total control of your neighborhood. Push out all Blues. Tell them they’re unwelcome. Just as Blues ethnically cleanse me out of San Francisco, like, push out all Blues.

Srinivasan's Blue vs. Grays terminology refers to the uniform colors of the American Civil War, with Grays representing his Network State movement. He argues that there are only three geopolitical strategies left to guide the world, which he sees in somewhat of a death spiral, towards a positive future:

1. Reform the Chinese Communist Party.

2. Turn around the US which is in inexorable decline.

3. Disrupt governments and nations and start something new.

Srinivasan, a crypto billionaire who Tech-Titan and Senior Trump Advisor Marc Andreessen attest to have the highest rate of output per minute of good new ideas of anybody he has ever met, denies the possibility of a fourth alternative, considering only option number three as feasible to venture out to safe the world. His antipathy with the current state of society echoes that of Musk, Thiel and other Tech-Titans who have publicly abandoned hope in the current democratic system and joined the neoreactionary school of thought which supports neofascist ideals. So it is little surprising that Marc Andreessen, undoubtably one of the most influential Venture Capitalists in the world, names Filippo Tommaso Marinetti, co-author of the 1919 Fascist Manifesto and vivid supporter of Italians dictator Benito Mussolini as one of his patron saints - his guiding spirit.

In their attempt to create an alternative to the liberal democracy as we know it, Thiel and Srinivasan have both extensively discussed late Harvard economist Albert Hirschman’s book Exit, Voice, and Loyalty and underlined their believe and the importance of Exit as a concept that goes beyond the authors interpretation. The book presents two contrasting paths for individuals facing organizational decline: One can either exercise their Exit option by leaving, or can use their Voice to attempt to change and shape the organization's future.

Contrary to Hirschman's framework, which limited Exit and Voice to e.g. business, while to politics only Voice could apply, the neoreactionary movement argues that government is in fact a corporate entity and thus Exit has to be an elementary part of political systems as well. They argue that without the ability to leave, no one really needs to listen to you - in business and politics. Elon Musk, for instance, stated in a CNN interview in 2020:

Government is simply the largest corporation. I think it is a false dichotomy to look as government and industry as separate. Government is simply a corporation in the limit. It is the ultimate corporation - it is a Monopoly.

This argument is echoed in Srinivasan's 2022 book, The Network State, which details how a global network of Charter Cities, modeled on Honduras' best practices, are supposed to form a globally decentralized Network State. Voting, ownership and payment is all handled utilizing Blockchain protocols. He also describes what he calls parallel establishment which in turn creates a parallel society that ultimately, when a threshold is reached, would settle Charter Cities. With parallel establishment he means like-minded - Gray - startups and institutions, while its loyal employees, users and other stakeholders represent the parallel society. When the tipping point - and legislation - to establish Charter Cities is reached, qualifying individuals are offered the choice to relocate to them, which are governed by their preferred Tech-Titan. This Tech-Titan wields veto power over elected officials and establishes laws and regulations with absolute authority, reminiscent of pre-French Revolution monarchies. Exiting existing governance structures for complete subordination in exchange for a tax rate close to zero and the promise to live free from regulation, the local Tech-Titan sees as limiting for innovation and/or personal freedom. All Charter Cities together function as a Network State that aims to be eventually diplomatically recognized.

He outlines a 7-step process for realizing his vision of establishing this global Network State based on a decentralized cluster of Charter Cities tailored to the needs of the Information Age:

1. Found a startup society.

2. Organize it into a group capable of collective action.

3. Build trust offline and a cryptoeconomy online.

4. Crowdfund physical nodes.

5. Digitally connect physical communities.

6. Conduct an on-chain census.

7. Gain diplomatic recognition.

Srinivasan suggested on March 5th on X to create The Special Elon Zone (SEZ):

There's a simple way to rebuild manufacturing in the US: just give @elonmusk control of a huge swath of land surrounding Starbase, Texas and allow him to set whatever regulations he wants.

1) First, sunset the regulations. America has talent. What it doesn't have is friendly regulations, particularly in terms of labor and environmental laws. But President Trump and Governor Abbott of Texas can use executive orders to remove obsolete laws at state and federal level. And for anything they can't remove, they can direct state and federal police to exercise discretion in terms of non-enforcement. Think of Starbase as a "sanctuary city", but for innovation — using leftist tactics in reverse.

2) Then, allocate capital. With regulatory barriers down capital will likely flow freely. However, in the unlikely event it doesn't, then you can do government VC. Basically: Democrats gave $370B+ to John Podesta to waste on climate graft, so the precedent is already established. But Elon is a proven capital allocator. So have Treasury back up the truck to make Elon —or his designates — the #1 VC in America. […]

3) Ensure border security. Given the security risks Elon faces, he'll need border control. So you might designate the land surrounding Starbase to be a military base or something similar, so that he can fence it off and determine at his sole discretion who can enter. Similarly, ideally every single person in the zone has opted in to be there, so no one can complain about the pro-builder regulations.

4) Proceed at the speed of physics. Finally, with all man-made barriers removed in the form of regulation and capitalization, Elon and his designates can move at the speed of physics — not permits. […]

5) Nail it, then scale it. Once there's traction, replicate the idea in other states, giving other proven founders their own special economic zones. I'm sure Florida and Ohio would want theirs after Texas proves it out. […]

So the suggestion is really, that Elon Musk moves companies and their jobs, that have been made possible with more than $38bn of tax payer money while utilizing vital U.S. infrastructure, into his own Charter City that he controls without any oversight. While these might seem like mere concepts, the NRx movement's agenda has advanced to the point where these Trojan Horses are poised to be established on U.S. soil within a matter of months, as the following details will demonstrate:

Our favorite possibility is Presidio National Park. Though much smaller than Guantanamo Bay or Lowry Range, its location is ideal. San Francisco is the world’s tech capital, despite its many problems. The federal government can help San Francisco unleash its full potential by developing Presidio. With Paris-level density and six-story apartment buildings, a developed Presidio would add 120,000 residents, increasing San Francisco’s population by 15%. Further, given the city’s existing talent density, a Presidio featuring a liberalized biotechnology regime would quickly become a world innovation leader in this sector. America deserves a Bay Area that can compete; turning Presidio into a Freedom City could be an important step in that direction.

To that result come Mark Lutter, founder and executive director of the Charter Cities Institute, and Nick Allen, president of the Frontier Foundation in an article published on the portal City Journal. They are in corporation with other lobby groups such as the before mentioned Freedom City Coalition involved into drafting the legislation with the Trump administration. A WIRED article reports:

Frontier Foundation, a 501c4 organization, is working in partnership with the nonprofit Charter Cities Institute to bring freedom cities to the US.

Jeffrey Mason, the head of policy at the Charter Cities Institute, tells WIRED that several other groups have recently joined their effort, including the Housing Center at the American Enterprise Institute and the Foundation for American Innovation. They’re drafting legislation that Mason says should be ready “hopefully sometime in the next several months.”

He adds that members of these groups are having “casual conversations with people in the White House,” in addition to Republican and Democratic members of Congress.

In a 2025 memo shared with WIRED, the Frontier Foundation argues that “domestic innovation and production has been significantly impeded for decades by outdated and unnecessarily restrictive federal regulation.”

In parallel to drafting new legislation, Trump moves forward preparing for instance Lutter’s and Allen’s most favorite Charter City target Presidio National Park. The New York Times reports:

President Trump moved to drastically shrink the Presidio Trust, the federal agency that oversees the Presidio of San Francisco, a national park at the base of the Golden Gate Bridge and one of the city’s most cherished public spaces, in an executive order issued Wednesday evening.

The legislative framework remains undefined, yet enthusiastic lobbyist groups, such as Free City Organization, are already presenting their arguments which sound aligned with Srinivasan vision and the Próspera blueprint:

[…]no city can be a Free City unless it has the long-term guarantees and arrangements to be able to then operate independently, without the reliance on continuous federal political support. To be a Free City, the nascent Freedom City should also have as much of a blank-slate regulatory system as possible – likewise with a long-term stability guarantee. To maximize its independence, this city should be privately owned, and if it is established on federal land, this land should be promptly privatized. Their focus will be on flexibility, economic freedom, and voluntary participation.

Such Free Cities allow for organic growth without the need for constant government intervention. By focusing on voluntary association, residents and businesses choose to participate in an environment that prioritizes innovation, efficiency, and accountability. Instead of relying on the mercy of Congress with regard to their freedom and status, such cities would simply operate under a different legal and administrative framework from the start.

Even with the ongoing erosion of Honduran democracy as a stark warning, this situation strongly resembles the precedent established by the Committee of Best Practices.

Subscribe now

Charter 3: Dismantling Democracy to Establish a Neofeudal Order

S1E1 has outlined that the way MAGA has been infiltrated appears to be modeled after Curtis Yarvin’s ideas surrounding his essay The Butterfly Revolution this Network State approach sounds suspiciously like his 2008 essay PATCHWORK: A POLITICAL SYSTEM FOR THE 21ST CENTURY where he envisioned:

The basic idea of Patchwork is that, as the crappy governments we inherited from history are smashed, they should be replaced by a global spiderweb of tens, even hundreds, of thousands of sovereign and independent mini-countries, each governed by its own joint-stock corporation without regard to the residents’ opinions. If residents don’t like their government, they can and should move. The design is all “exit,” no “voice.”

He goes on to construct Friscorp, his brainchild of the Patchwork - or Charter City - San Francisco will be turned into. Yarvin wouldn’t be Yarvin if he wouldn't address the clear difficulties associated with such a city reincorporation by providing concrete - and pragmatic - solutions:

The first and touchiest problem, though, is just deciding who gets to live in San Francisco. Friscorp’s answer is simple: anyone who isn’t dangerous to others, and can afford to live in San Francisco. It is probably also nice if they speak English, but considering the exigencies of the second constraint, they almost certainly will. Friscorp may also import menial laborers, as Dubai does today, but they are not to be confused with the actual residents.

This concept, mirroring Srinivasan's Y Combinator speech, is already put in motion e.g. by Trump's actions regarding Presidio National Park. Regarding the legislation of Yarvin’s Charter Cities he had already back in 2008 the following ideas:

To be a reactionary is not to say we must reinstall the exact political structure of the fourteenth century tomorrow, although that would surely be an improvement on what we have now. To be a reactionary is to borrow freely across time as well as space, incorporating political designs and experience from wherever and whenever. As Nick Szabo has observed, the most interesting, detailed and elegant European forms are found in the period we call feudal, and thus it is only natural that a reactionary design for future government will have a somewhat feudal feel.

But Patchwork is something new. It will not feel like the past. It will feel like the future. The past—that is, the democratic past—will feel increasingly gray, weird, and scary.

When you think that he seems to have predicted 2025 with remarkable precision, it won’t surprise you that his ideas have inspired the actions of authoritarian leaders outside the U.S. as well. He for instance continued with:

There are quite a few people presently in San Francisco who do not meet the second constraint, are pretty iffy on the first as well, and have no labor skills to speak of. What do we do with them? Sell their slums out from under them, obviously; demo everything, spray for roaches, rodents and pit bulls, smooth the rubble out with a bulldozer or two, and possibly a little aerial bombing; erect new residential districts suitable for Russian oligarchs. Next question?

But where do they go? Since their customer-service contract gives them the right of exit, these people—call them bezonians—can of course emigrate to any other realm in the Patchwork. This presumes, however, that said realm is willing to accept them. And why would it be? If our design does not provide for the existence of a large number of human beings whose existence anywhere is not only unprofitable, but in fact a straight-up loss, to that realm, it is simply inconsistent with reality.

He constipated a couple weeks ago in his post Gaza Inc.:

I’m worried that the resemblance between President Trump’s Gaza plan and mine will contribute to the weird delusion that I am secretly running the world. […]

Gaza, without its residents (even more important, without their complex maze of Ottoman-era land titles), is worth much more than Gaza with its residents, even to its residents.

This is 140 square miles of Mediterranean real estate, clear of titles, demolished and demined at a cost of perhaps ten billion dollars. This land becomes the first charter city backed by US legitimacy: Gaza, Inc. Stock symbol: GAZA.

The exit strategy of GAZA is to be the first sovereign corporation to join the UN. While there are many trillion-dollar companies, none of them has true sovereignty, much less some of the best land in the world. Is a trillion-dollar IPO a possibility? I think it’s a possibility. What if Adam Neumann runs the roadshow? Why not?

Suddenly, each former Gaza resident has $500,000 in GAZA tokens. Does that come with the right to live in Gaza? No—you don’t get any special treatment in Starbucks stores for being an SBUX holder. Does it come with shareholder voting rights over Gaza, Inc? No, because that would defeat the whole purpose of corporate governance—there would be a conflict of interest between the shareholders and the company.

I could show further evidence, which would include the Thiel-backed Praxis project's plans for a Greenland Charter City, and founder Dryen Brown's statement upon Thiel associate Ken Howery's appointment as U.S. Ambassador to Denmark, indicating that everything is developing according to plan. But this feels beyond the point.

Tech-Titans are in a driving seat of an economy, where success is measured to which level shareholder value creation - or return on capital (r) - outperforms the rate of economic growth (g). Their libertarian ideals, e.g. considering taxation as theft, are part of the problem that created those circumstances. A world in which per Thomas Piketty's famous formula, r > g, wealth inequality can only increase over time. It is true that economic and social inequalities have regressed to levels of pre-industrial feudalism. r > g is a big part of the reason.

Were the neoreactionary movement to adopt a less selective view of history, they'd repeatedly find instances where the very shortsightedness they exhibit led to the downfall of stable systems. While suppressing the populace may have been effective in the Dark Ages, we, as a population, are not illiterate peasants, serfs, or slaves anymore. Regardless of our origins, we have benefited from the seeds of enlightenment, cultivating complex social experiences and diverse opinions. We are billions, liberated by history from predetermined destinies assigned to us by birth.

The predicament of freedom for all at birth is a genie that they can't put back in the bottle. They know this. That is why they will appeal to greed. Lure residents into their Charter Cities by promising near-zero tax rates. - if you don’t like it? Just Exit.

As of today the legislation is unknown but we should not be focused on what entering a Charter City would bring with it, but how sure is it, that you can Exit it, without enormous strings attached? Assets will be held in crypto which can easily be structured to posses way less buying power outside this then established Network State. Will health insurances pay for treatments needed based on coming in touch with normally regulated or even untested substances? Even today U.S. federal law applies globally - smoking a joint in Amsterdam makes you inadmissible to enter the United States.

There are many potential pitfalls - some can simply be created when thresholds are reached. History has shown that even Jewish people were allowed to leave the Third Reich until 1940 - way into the war. They had to leave everything behind though while the obstacles to find a welcoming country were immense.

I no longer believe that freedom and democracy are compatible.
-Peter Thiel

Sixteen years have passed since tech-billionaire Thiel published the essay The Education of a Libertarian. Back in 2009, the markets had just crashed to unimaginable lows - the Great Recession, triggered by the burst of the U.S. housing bubble, pushed the Dow Jones even lower than the dot-com crash a decade prior. As an entrepreneur, investor, and vivid financial jongleur, Thiel stood amidst the rubble of capitalism as the world had known it. Change was needed.

Thiel, a talented chess player already as a child, concluded that the broader education of the body politic had become a fool’s errand - a task with no hope of success. Specifically, he believed welfare beneficiaries and […] women - two constituencies that are notoriously tough for libertarians - would refuse to conform to his worldview, effectively blocking his attempts to implement change. His spontaneous dystopian solution involved sacrificing not just the queen, but the entire democratic castle, to pave the way for self-governed, libertarian outposts, initially on the world’s oceans and eventually in outer space. The libertarian New Frontier.

By 2011, however, Thiel concluded that seasteading - the creation of permanent dwellings in international waters meant to grow into ocean nations - was not feasible. While his former business partner and fellow PayPal Mafia member, Elon Musk, ventured out to create his libertarian vision on Mars, Thiel turned his attention to rethinking society within the United States. The answers he arrived at, and the (underground) movement that formed around them, are startup-typical disruptive at best. Yet, they have the potential not just to abandon the above mentioned castle but to tear it down entirely to rebuild a structure out of it ashes meant to serve the interest and ideals of a chosen few.

The neo-reactionary movement (NRx)

The Enlightenment, the 18th-century intellectual movement that emphasized reason, individualism, and skepticism of traditional authority, laid the groundwork for modern democracy, science, and human rights. When monarchies toppled in the late 19th and early 20th century all over Europe, the democratic movements met fierce opposition by the reactionary thinkers like Oswald Spengler, a German historian and philosopher. Among others his ideas deeply influenced reactionary and conservative thought during the Weimar Republic - Germany’s first democracy, which followed over 1,100 years of monarchy. In The Decline of the West, Spengler argued in 1922 that Western civilization was in an inevitable state of decay, critiquing modernity, democracy, and liberalism. The reactionary movement called for a return to authoritarianism and traditional values, which resonated with many disillusioned by the Weimar Republic's perceived instability and cultural decline. This contributed to the failure of Germany's 15-year democratic experiment, allowing Hitler's NSDAP to seize power and establish the Third Reich.

Since the late 2000s a controversial, intellectual movement that has been bubbling under the surface of online discourse. Intellectuals like Nick Land and Curtis Yarvin (who used to write under the pseudonym Mencius Moldbug) along with a scattered community of bloggers and forum dwellers, argue once again that the modern world is built on shaky foundations. They claim that democracy is inherently flawed, leading to corruption, short-term thinking, and a bloated bureaucracy. Instead of celebrating progress, they see it as a slow-motion collapse of tradition, hierarchy, and order. Sounds familiar?

While this neo-reactionary movement (or NRx for short) attempts the philosophical equivalent of throwing a wrench into the gears of the Enlightenment, it’s ideas are more forward-thinking and future-oriented than those of their intellectual predecessors a century and more ago. They believe that power should be concentrated in the hands of a capable elite, that is chosen by accomplishments, IQ and merit. Equality? They see it as a myth. Freedom? They argue it’s been distorted by liberal ideals and that there can only be true individual freedom once political choice has been eliminated. For them, stability and efficiency matters most, since a government is nothing more than a company that owns the land it rules over. The solution? A government structured and run like a cooperation abstractly build on the following 5 principles:

1. A CEO, Not a President
   NRx proposes a shift from electoral democracy to a meritocratic system, where a CEO-like leader or executive board, selected for managerial expertise, governs. This model prioritizes efficiency over popular sovereignty, concentrating authority among a select few and excluding broader participation. It reflects an elitist philosophy that posits a small cadre as the optimal decision-makers.

2. Accountability Through Competition
   NRx views electoral processes as inefficient and prone to partisan gridlock. Instead, it advocates for personnel decisions made by experts, aiming to establish accountability through competitive governance. Citizens dissatisfied with the system can exercise their 'exit' option, or rival states can challenge the existing government.

3. Government as a Service Provider
   NRx envisions the state as a service-oriented entity, akin to a corporation. Rather than focusing on abstract ideals, its primary function is to provide concrete services: security, infrastructure, and stability. Taxes are viewed as subscription fees for these services, with the expectation of a well-managed society.

4. Technocracy Rules
   This technocratic model posits that governance should be grounded in data, expertise, and rational analysis, seeking to eliminate ideological and public opinion influences. The goal is to achieve objective, evidence-based policy outcomes. The public would be controlled by tech enabling a system comparable to China’s Social Credit System.

5. Profit Motive Meets Public Good
   Efficiency is pursued through the reduction of bureaucratic obstacles and the elimination of corruption, with the aim of maximizing tangible outcomes.

Sounds like something out of a dystopian novel, doesn’t it? But it’s not fiction, NRx, also called The Dark Enlightenment after a 2013 book by Nick Land, is very real.

MAGA, NRx and the PayPal Mafia

On September 5th 2016, the pseudonym Publius Decius Mus published an essay beginning with the following paragraph:

2016 is the Flight 93 election: charge the cockpit or you die. You may die anyway. You—or the leader of your party—may make it into the cockpit and not know how to fly or land the plane. There are no guarantees.

Except one: if you don’t try, death is certain. To compound the metaphor: a Hillary Clinton presidency is Russian Roulette with a semi-auto. With Trump, at least you can spin the cylinder and take your chances.

The Flight 93 Election, as later revealed, was published by Michael Anton, who had a background in conservative thought and government service. He previously worked in the George W. Bush administration as a speechwriter and communications director for the National Security Council. He was also known for his writings on political philosophy and his critiques of the Republican establishment. This essay catapulted Anton into the spotlight of the conservative movement, positioning him as an intellectual voice for its populist, nationalist wing. He argued that Trump represented a necessary break from the failures of traditional conservatism.

Framing the 2016 presidential race as a life-or-death moment for America, the essay compared it to the 9/11 hijacking of Flight 93. It argued that libertarianism and neoconservatism were exhausted, leaving conservatives with only one option: to rally behind Donald Trump to stop Hillary Clinton, whom the author portrayed as an existential threat. This sense of urgency resonated with conservatives disillusioned by the Republican establishment, signaling a shift toward a nationalist, populist vision. Anton emphasized issues like immigration, trade, and national identity - key talking points of Trump - urging conservatives to prioritize the nation’s interests over abstract principles and globalist agendas.

In recognition of his support, Anton joined the administration after Trump’s election, serving as a senior national security official. Thiel, one of Trump’s most prominent and influential supporters from the tech industry, was appointed to the President’s Transition Team, where he advised on technology and innovation policy. He also served on the Executive Committee of the President’s Strategic and Policy Forum, a group of business leaders who provided economic and policy advice.

Trump leveraged Thiel’s network, appointing Ken Howery, a Stanford Review and PayPal alum, as the U.S. ambassador to Sweden, and Michael Kratsios, former chief of staff at Thiel Capital, as the White House’s deputy chief technology officer (later becoming CTO in Trump’s second administration). Additionally, Mark Woolway, an early PayPal employee now at Sacks’ Craft Ventures, served on Trump’s 2016 Treasury Department transition team.

In 2021, Peter Thiel introduced JD Vance to Trump at Mar-a-Lago. Fast forward four years, and Vance has entered the White House as Vice President, while the administration is complemented by close Thiel associates: David Sacks, a former PayPal colleague and fellow Stanford Review alum (the student newspaper Thiel founded at Stanford in 1987), was named the White House’s new AI and crypto czar. Meanwhile, Jim O’Neill, former CEO of Thiel’s personal foundation, has been tapped as deputy secretary of the Department of Health and Human Services. And then there’s Elon Musk, whose financial and vocal backing helped propel Trump to victory. Musk, who worked closely with Thiel at PayPal, now leads the newly created Department of Government Efficiency (DOGE). Thiel’s influence extends further through his venture fund, Founders Fund, which was an early investor in several of Musk’s ventures, including SpaceX, the Boring Company, and Neuralink.

Already in 2013, Peter Thiel invested in Curtis Yarvin’s company, Tlön Corp. Thiel, who has called Yarvin a powerful historian, with whom he has build a close bond over the years. In 2016, Yarvin shared with far-right political commentator Milo Yiannopoulos - who later introduced Elon Musk to Ashley St. Clair, the mother of his child born in 2024 - that he coached Thiel and watched the 2016 election at his house. Thiel’s friend, Marc Andreessen, an influential venture capitalist turned informal adviser to Donald Trump, has approvingly cited Yarvin’s (anti-democratic) thinking on many occasions. Steve Bannon, former chief strategist in the Trump White House, has acknowledged his familiarity with and appreciation for Yarvin's work, aligning himself with those who have expressed skepticism about democracy claiming that he has stopped believing in it. And then there is JD Vance, who has cited Yarvin as an influence multiple times, he stated most prominently said in 2021:

So there's this guy Curtis Yarvin who has written about these things, which included ‘Retire All Government Employees’ (or RAGE, written in 2012). I think what Trump should do, if I was giving him one piece of advice: Fire every single midlevel bureaucrat, every civil servant in the administrative state, and replace them with our people. And when the courts stop you, stand before the country and say, 'The chief justice has made his ruling. Now let him enforce it.’

In 2022, Thiel supported Vance’s Ohio Senate campaign with $15 million, helping him - as his by far biggest donor - to win a closely fought GOP primary before going on to capture the seat in the general election. It was just an other stepping stone on his way up. On election night 2024, after Trump and Vance, his running mate, had won, Thiel and other Silicon Valley giants began positioning Vance as the heir to the MAGA crown, aiming for him to run in 2028.

Yarvin attended the Coronation Ball on Inauguration Day in D.C. as informal guest of honor. An event hosted by the ultraconservative publishing house Passage Press gathering the new conservative counter-elite that has risen to power on the tide of Trump’s reelection. The movement that considers Yarvin’s work as dominant ingredient of that soup they swim in - which is how he refers to White House staffers who circulate his work within influential circles.

Over nearly twenty years, he's produced a collection of essays, not a unified argument. These often contain extreme, morally nihilistic (claiming there is no good and bad in anything) views, and appear calculated to elicit strong reactions. In a New York Times interview he claims:

“Difficult to argue that the Civil War made anyone’s life more pleasant, including freed slaves”

At a later point he clarified that he meant with anyone not individuals but groups of people just to double down on his argument:

If you look at the living conditions for an African American in the South, they are absolutely at their nadir between 1865 and 1875. They are very bad because basically this economic system has been disrupted.

His perspective necessitates a critical examination of the ethical implications of prioritizing economic stability over human liberation. He exhibits a general pattern of selective historical interpretation, seemingly cherry-picking events to bolster his immediate argument. In A Gentle Introduction, he offers a semi-ironic nod to this practice, acknowledging:

Frankly, Hitler reads a lot like me, if I lost 25 IQ points from drinking lead soda, and also had a nasty case of tertiary syphilis. I may have some of Hitler’s talents - I will be the first to admit it. But I have no intention of applying for his job.

He stated in Moldbug on Carlyle, known as the Founding Father of Fascism and Prophet of the Fascist Regimes post WWI:

I am a Carlylean. I’m a Carlylean more or less the way a Marxist is a Marxist. My worship of Thomas Carlyle, the Victorian Jesus, is no adolescent passion—but the conscious choice of a mature adult. I will always be a Carlylean, just the way a Marxist will always be a Marxist.

The consistent ideological thread, revealed in Yarvin's numerous writings, is similarly found in Land's body of work. They echo Thiel's eureka moment, with which this text begins, underlining the incompatibility and inherent tension between democratic principles and individual liberties.

The Butterfly Revolution

In 2022 Yarvin called for a full reboot of the USG [United States Government], he said, we can only do this by giving absolute sovereignty to a single organization, of which Trump would be the Board Chair and an experienced executive would be CEO.

The CEO Trump picks will run the executive branch without any interference from the Congress or courts, probably also taking over state and local governments. […] America needs a unitary executive […] so much more powerful than the present office, [such] that the President considers both the judicial and legislative branches purely ceremonial and advisory.

he added in his work The Trials of Trump:

In a world where voters elect Trump with a mandate to just take over the government - as completely as the Allies took over the government of Germany in 1945 - he will probably screw it up, anyway. Yet he doesn’t have to screw it up. The only way to not screw it up, for Donald Trump, is to be the chairman of the board, and delegate to a single executive ready to be the plenary CEO of America.

In 2022’s essay The Butterfly Revolution, Yarvin characterized the Trump campaign as a regime in internal exile, charting its course back to power.:

While in exile, this regime will be a larva - a harmless caterpillar. Once duly elected, in office it will not just caper in front of the cameras (in fact, it will not talk at all to the legacy press) - it will spread its wings, and become a beautiful governing butterfly.

Trump himself will not be the brain of this butterfly. He will not be the CEO. He will be the chairman of the board—he will select the CEO (an experienced executive). This process, which obviously has to be televised, will be complete by his inauguration—at which the transition to the next regime will start immediately.

Accompanying the Project 2025 outcry, a list with seven goals, derived from NRx ideals, began circulating on the internet:

1. Trump runs on a platform pledging to apply his business acumen to streamline government, cutting bureaucratic red tape and eliminating inefficiencies that hinder economic growth and national progress.

2. Purge the bureaucracy

3. Ignore the courts, if necessary by declaring states of emergency

4. Co-opt Congress

5. Centralize the police (federalize the national guard, create a national police force that absorbs local ones)

6. Shut down the elites most influential to the nation’s sovereignty of interpretation specifically the media and universities

7. Encourage widespread public mobilization to express dissent against perceived government overreach and demand accountability when ever the movement faces obstruction by a government agency

It's crucial to acknowledge the robust and interconnected system of checks and balances inherent in U.S. democracy. Furthermore, this list should not be interpreted as a linear plan, but as seven concurrent strategic objectives essential for the creation of a potential transformative scenario. Yet, Yarvin’s brainchild - a tentative outline of the process and organization of a larval new regime - takes that into account and states:

You need a CEO. And a national CEO is what's called a dictator. There's no difference between a CEO and a dictator. If Americans want to change their government, they are going to have to get over their dictator phobia.

RAGE is what it takes to make way for this CEO/dictator. It's as simple as that.

Yarvin first publicly explained his acronym RAGE - Retire All Government Employees - at a 2012 conference, and subsequently elaborated upon it in The Butterfly Revolution, saying:

The new regime must seize all points of power, without respect for paper protections. Anything can be nationalized—so long as the new regime has the staff, the prize crew as it were, to nationalize it.

The regime must have the capacity to govern every institution it does not dismantle. […] the new regime must perform the real functions of the old, and ideally perform them much better.

Many institutions which are necessary organs of society will have to be destroyed. These organs will have to be replaced. If they have not already been replaced in the larval stage, or even if they have, to scale—these replacements will need staff. Etc. […]

What is there, in this executive branch? What does it do? One thing is certain—the Trump regime will not be thinking about what parts of the executive branch must be systematically dismantled. It will be thinking about what parts can be safely preserved.

The parallels between this blueprint and the actions of Elon Musk's DOGE project are undeniable... coincidently so?

Provided this remains just be one element within a broader seven-goal strategy, I would agree, particularly given the inherent difficulty in opposing bureaucratic streamlining. But there is more, way more, that has unfolded in parallel suggesting that all principles are enacted in parallel. Yarvin said for instance about the role of the judiciary branch:

The CEO he picks will run the executive branch without any interference from the Congress or courts, probably also taking over state and local governments. […] Congress may pass any bill it likes. The courts may have any opinion they like. It is the job of the executive branch, as a coequal branch of government, to respect these bills and opinions. But respecting the legislative and judicial branches is not the executive’s only job; nor does the Constitution say it is. If the voters feel that the President they elected has done a poor job, let them vote him out. He is accountable to them, and no one else. We call this “representative democracy.”

On March 6th 2025 the White House published a fact sheet in which Trump labeled judges activists attacking the judiciary branch as follows:

STOPPING JUDICIAL OVERREACH AND FRIVOLOUS LAWSUITS: By issuing this memorandum, President Trump is ensuring the democratic process remains intact by curbing activist judges and holding litigants accountable.

• Unelected district judges have issued sweeping injunctions beyond their authority, inserting themselves into executive policymaking and stalling policies voters supported.

• Activist groups file meritless suits for fundraising and political gain, facing no consequences when they lose, while taxpayers bear the costs and delays.

• The Justice Department is forced to divert resources from public safety to fight these frivolous cases, weakening effective governance.

• Enforcing Rule 65(c) deters such litigation by holding plaintiffs accountable for costs and damages if their injunctions are baseless, protecting taxpayer funds and judicial integrity.

Vance articulated his perspective on the separation of powers via a post on X, stating:

If a judge tried to tell a general how to conduct a military operation, that would be illegal. If a judge tried to command the attorney general in how to use her discretion as a prosecutor, that’s also illegal. Judges aren’t allowed to control the executive’s legitimate power.

On Feb 27th 2025 the former Secretary of Defense William J. Perry (1994-1997), Leon E. Panetta (2011-2013), Chuck Hagel (2013-2015), James N. Mattis (2017-2019) and Lloyd J. Austin III (2021-2025) shared a bipartisan appeal to Congress in response to what was framed as the beginning of a purge by many media outlets, stating:

We are deeply alarmed by President Trump’s recent dismissals of several senior U.S. military leaders. […]

Mr. Trump’s dismissals raise troubling questions about the administration’s desire to politicize the military and to remove legal constraints on the President’s power. We, like many Americans -- including many troops -- are therefore left to conclude that these leaders are being fired for purely partisan reasons. As former Secretaries of Defense, we call on both the House and the Senate to hold immediate hearings to
assess the national security implications of Mr. Trump’s dismissals. The House and Senate should demand that the administration justify each firing and fully explain why it violated Congress’ legislative intent that the Chairman of the Joint Chiefs of Staff complete a four-year term in office.

Among other controversial personell decisions by Defense Secretary Hegseth this letter was triggered by firing the three judge advocates general - known as JAGs - Lt. Gen. Joseph B. Berger III, Air Force Lt. Gen. Charles Plummer and Rear Adm. Lia M. Reynolds in February which sent shockwaves through the Pentagon and legal community. In The War on Warriors released in 2024, Pete Hegseth asserts that military lawyers’ imposition of restrictive rules of engagement repeatedly allowed adversaries to gain tactical advantages against frontline forces. In his book, he also expresses repeated frustration with the international laws put in place after World War II to govern armed conflict stating

What do you do if your enemy does not honor the Geneva Conventions?

Rosa Brooks, a professor at Georgetown Law, wrote on X regarding what seems to his answer:

It’s what you do when you’re planning to break the law: you get rid of any lawyers who might try to slow you down.

It is Congress"‘ constitutional duty as coequal branch of government to control the actions of the executive. Historically, lawmakers from both parties have vigorously defended their institutional authority, resisting presidential attempts to infringe upon congressional prerogatives. Members of Congress viewed their position in Article I of the Constitution as indicative of their branch's paramount importance within the system of checks and balances, perceiving the executive branch as primarily responsible for implementing their legislative directives. They often emphasized the enduring nature of Congress compared to the transient nature of the presidency.

Describing their partnership with Trump as the Super Bowl, Speaker Mike Johnson conveyed to Fox News that Congress is poised to reshape government functions. He expressed:

This is the moment we’ve all been waiting for our entire careers, and finally, the stars have aligned so we can do that better.

A New York Times article summarized the way Congress subordinates itself to the executive branch as follows:

But Mr. Trump, Mr. Musk and other top administration officials have already made it clear that they have little regard for Congress’s authority, […] Conservative House G.O.P. lawmakers who typically oppose appropriations bills backed this week’s short-term spending bill precisely because it would hand Mr. Trump much of the authority for funding decisions that Congress would usually reserve for itself. […] Congressional Republicans have also relinquished some of their power on economic issues. On Tuesday they gave up any possibility of holding a House vote this year to overturn tariffs enacted by the president. The power to impose such levies was originally vested with the legislative branch, but lawmakers over time have increasingly delegated it to the executive. Still, under current law, Congress can vote to undo tariffs imposed by the president.

Under language that G.O.P. leaders tucked into a procedural measure this week, that law would effectively be nullified.

They said they were reversing themselves in part because the Trump administration had already demonstrated it would disregard congressional instructions to allocate money for programs lawmakers voted to fund.

The executive's assault on its coequal branches of government is clear. As to why Congress is yielding and the judiciary is being outmaneuvered, The Butterfly Revolution provides this explanation:

Once elected President, he should present the legislative, judicial and administrative states with a choice: either they acknowledge his manifest democratic mandate to Constitutional executive authority and allow him to serve as a Constitutional chief executive; or, he leaves the White House, and calls his people into the street. He will return only on their backs—to serve as a revolutionary chief executive. […]

Naturally, if there is a bloc of Trump ninjas in the legislature, it is much easier to make the revolution as legal as possible.

In parallel the Trump administration has also cracked down on universities limiting their Free Speech, not just regarding DEI but their curriculums in a broader way. Attorney General Mr. Martin, in an initial letter sent on February 17th and again on March 3rd, threatened for instance to block Georgetown Law alumni from fellowships, internships, and employment at the U.S. Attorney's Office for Washington unless the school responded satisfactorily to two inquiries about its DEI programs. He claimed, without evidentiary support, that Georgetown Law 'continues to teach and promote DEI.

The Trump administration also significantly impacted Columbia University by rescinding $400 million in federal grants and contracts, citing the institution's alleged insufficient response to antisemitism. This action, described by Columbia's interim president as affecting nearly every corner of the university, was considered highly unusual.

Trump personally insisted that universities curtail students' First Amendment rights, specifically their right to gather and express opinions through protest. Mahmoud Khalil, a legal U.S. resident and former Columbia graduate student, was detained by federal immigration agents in New York on Saturday and subsequently transferred to an immigration detention facility in Louisiana. Trump stated publicly that he would be the first of many.

Jelani Cobb, the journalism school’s dean advised his students at a gathering in Pulitzer Hall:

If you have a social media page, make sure it is not filled with commentary on the Middle East

In response to a Palestinian student's pointed criticism, he got more direct:

Nobody can protect you. These are dangerous times.

Given Trump's well-documented disdain for the mainstream media, or Fake News, I feel like I don’t have to take up any additional time of yours to make that point. Within the NRx Movement those opinion elites are framed as The Cathedral, a topic worth an own essay, which has to be dismantled for a new system to take shape.

Considering the evidence above, it increasingly appears that Yarvin's ideas have transitioned from online forums to White House policies.

Are they proof for facilitating a shift towards a post-democratic order though?

United States of America Inc.

A video from March 2023 resurfaced in which Trump openly spoke about using protected federal lands to build Freedom Cities. Trump said in the video:

Past generations of Americans pursued big dreams and daring projects that once seemed absolutely impossible. They pushed across an unsettled continent and built new cities in the wild frontier. […] we will build new cities in this country again, these Freedom Cities will re-open the frontier, reignite American imagination, and give hundreds of thousands of young people and other people a new shot at home ownership and, in fact, the American dream.

Trey Goff, chief of staff for Próspera, reports to WIRED that he and representatives from the Freedom Cities Coalition have been engaging with the Trump administration recently regarding their proposals. He states that the administration has responded favorably. These new zones are supposed to allow for the testing of new technologies, including new nuclear reactors, free from government oversight.

The Freedom Cities Coalition was established by NeWay Capital LLC, the entity holding numerous trademarks for Próspera. Próspera, located on the Honduran island of Roatán since 2020, attracts tech professionals and startups with promises of low taxes, minimal regulations, and a customer-centric governance model. Its financial backers include Pronomos Capital, supported by Peter Thiel and Marc Andreessen, and Coinbase.

Coinbase, under it’s CEOs Armstrong's leadership, is the primary corporate funder of Fairshake, contributing nearly a quarter of its total funds. Fairshake, the largest corporate-backed super PAC in this election cycle (and second-largest overall), has expended $120 million on U.S. House and Senate races this year, as reported by Sludge.

At the annual Network State Conference in Singapore, Armstrong explicitly stated his belief in exit, referring to the process by which individuals leave existing nations to join Network States. He advocated for developing those backup options. He shares a clear vision how to establish MVPs - tech-speech for Minimal Viable Product for Thiel's utopian vision. Not on the oceans or in outer space, but soon already in your neighborhood?

The text invites you to apply your own critical analysis and evaluate the extent to which the seven-goal strategy are already underway, or if the presented connections are purely coincidental.

Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself.
There never was a democracy, yet, that did not commit suicide.
-John Adams

Get more from Borderline Interesting in the Substack app

Available for iOS and Android

Get the app