Let's Know Things

• Tariff Leverage

  This week we talk about trade wars, TACO theory, and Chinese imports.We also discuss negotiation, protectionism, and threat spirals.Recommended Book: More Than Words by John WarnerTranscriptIn January of 2018, then first-term US President Trump announced a slew of tariffs and trade barriers against several countries, including Canada, Mexico, and those in the European Union.The most significant of these new barriers and tariffs were enacted against China, though, as Trump had long claimed that China, the US’s most important trade partner by many measures, was taking advantage of the US market; a claim that economists tepidly backed, as while some of the specifics, like those related to intellectual property theft on the part of China, were pretty overt, the Chinese government fairly brazenly gobbling up IP and technology from US companies that do business in the country before hobbling those US interests in China and handing that IP and technology off to their own, China-born copies, claims about a trade deficit were less clear-cut—most of those sorts of claims seemed to be the result of a misunderstanding about how international trade works.That said, Trump had made a protectionist stance part of his platform, so he kicked off his administration by imposing a package of targeted tariffs against specific product categories from China, including things like solar panels and washing machines. Those were followed by more tariffs on steel and aluminum—from a lot of countries, not just China—and this implementation of trade barriers between the US and long-time trade partners, which had mostly enjoyed barrier-free trade up till that point, kicked off a trade war, with the Trump administration announcing, out of nowhere, new tariffs or limitations, and the country on the pointy end of that new declaration announcing their own counter, usually something the US sells to their country, while in the background, both countries tried to negotiate new trade terms on the down-low.There was a lot of tit-for-tatting in those first couple years of the first Trump administration, and they led to a lot of negotiations between the US government and these foreign governments, which in turn led to the lifting of many such barriers, though the weaponization of barriers continued, with the administration, for instance, announcing a tariff on all imports from Mexico until the Mexican government was able to halt all illegal immigration coming into the US; negotiation ended that threat, too, but this early salvo upset a lot of the US’s long-time allies, while also making it clear that Trump intended to open negotiations with these sorts of threats, whenever possible—which had the knock-on effect of everyone taking the threats pretty seriously, as they were often incredibly dangerous to specific industries, while also taking them less seriously because it was obvious they were intended to be a negotiating tactic.When Trump left office, a bunch of international relationships had been scarred by this approach to trade deals, and when Biden replaced him, he dropped most of the new tariffs against long-time allies, but kept most of the China tariffs in place, especially those related to green technologies like electric vehicles and semiconductors, the local-made versions of which were becoming a big focus for the Biden administration. The administration then went on to expand upon those tariffs, against China, in some cases.What I’d like to talk about today is how this approach to trade protectionism and negotiation has ballooned under the second Trump administration, and what a new threat against China by Trump might mean for how the relationship between these two countries evolves, moving forward.—Trump’s second administration opened with an executive order that declared a national emergency, claiming that the Chinese were trafficking drugs, especially synthetic opioids like fentanyl, into the US, and that this allowed criminals to profit from destroying the lives of US citizens.This declaration allowed him to unleash a flurry of tariffs against China, first imposing 10% on all Chinese imports, then increasing that to 20% in March of 2025.China retaliated, imposing tariffs of 15% on mostly US energy products, like coal and natural gas, and on some types of agricultural machines, while also engaging in some legal pressure against US companies, like Google. They followed this up with tariffs against meat and dairy products, and suspended US lumber import rights, and disallowed three US firms from selling soybeans to China.The US reciprocated, and China reciprocated back. There was a period of spiraling broad tariffs and import bans in the mid-2025 between the US and China, which led to an aggregate baseline tariff on Chinese imports of 104%, which was followed with an aggregate Chinese baseline tariff against US goods of 84%. The US then upped theirs to 145%, and China raised theirs to 125%.Again, vital to understanding this spiral is that the Trump administration made pretty clear that they were doing this mostly as a negotiating tactic. There were claims that they could solve the US deficit by raising tariffs so high that the funds from those tariffs would pay off the country’s debt, but that’s generally not considered to be realistic. Instead, the consensus view is that Trump likes to play negotiating hardball, likes to step into negotiations with the upper-hand, being able to say, give me what I want and I’ll reduce the pain you’re experiencing, basically, and this play against China was another attempt to make that kind of advantage stick.China, for its part, seemed like it was done with the posturing at that point, though: it announced, after its retaliatory tariffs reached 125%, that it would simply ignore all further increases on the US government’s side, because the whole thing is just kind of a joke and it’s beneath them to keep playing this game.Not long after that, Trump announced that the tariffs against China would come down substantially, but not to zero; Trump said this was decided after discussions with China, and Chinese officials said they hadn’t been in contact with the Trump administration about any of this—which is something that seems to happen quite a bit with the Trump administration.During this period of spiraling trade barriers, China was able to establish better and more open trade agreements with other nations in Southeast Asia, including South Korea and Japan. China also reduced it US Treasury holdings, reducing its exposure to the US economy at a moment in which the US government was betting big on policy that many economists considered to be ham-handed at best, completely nonsensical, delusional, and harmful at worst.During that spiral, before things cooled off, China also began applying protections on locally sourced and refined rare earths, which are a category of mineral that are vital for modern electronics and things like solar panels, batteries, semiconductors, and electric vehicles.China makes and owns the rights to the vast majority of the current global supply of these materials, mining about 70% of them and controlling about 90% of global processing. And cutting them off, or even truncating their flow, is considered to be a huge strategic threat. The US has been slowly investing in alternative supplies for such things, but many of them are difficult or expensive to produce in the proper volume, and it’ll likely be a decade or more before those alternative sources can be properly exploited, replacing the volume currently imported from China.Back in June, China granted permits to US businesses that would be allowed to import rare earths, but that supply remained tenuous—a bit of a counter to Trump’s ongoing tariff threats that could seemingly arise out of nowhere, messing up everyone’s plans. The Chinese seemed to want to leverage this supply in the same way, and keeping things limited while issuing a few permits meant the flow could kind of continue, but could also be slowed or cut off, again, at a moment’s notice.In early October, the Chinese government announced new curbs on the export of rare earths and related technologies, just three weeks before a scheduled meeting between Trump and Chinese leader Xi Jinping. These new curbs further limited what could be imported to the US, even if there were intermediary nations involved, and also tightened their grip on anything related to mining, smelting, recycling, and producing products, like powerful magnets, from such materials.It’s worth mentioning here, too, that these sorts of materials are increasingly vital for the production of high-tech military goods. If the US were to lose access to sufficient volumes of them, the US military would have a very hard time making missiles, replacing satellite components, building tanks and drones—it would give China a significant advantage, probably for years, in terms of upgrading and maintaining their military hardware.Despite that, and despite the US government’s claims that it intended to replace Chinese sources of these materials, theoretically limiting Chinese leverage in these upcoming talks, progress in that department has been minimal, so far; about a billion dollars worth of investment in rare earths supply chains were announced over the past year or so, but further investment is considered to be unlikely in the near-future, and it’ll be a while before these investments will pay off, if they ever do.Shortly after that announcement by the Chinese, President Trump threatened to enforce a new 100% tariff on Chinese imports, beginning on November 1, or potentially even sooner, raising tariff levels to just shy of what they were back in April of 2025, at the peak of the US-China trade protectionism threat-spiral.He also said he didn’t see any reason to meet with Xi if they were going to limit rare earths in this way, but later clarified that the meeting hadn’t been cancelled, and said that he set the implementation date for that new threatened tariff rate to Nov 1 because that would give the Chinese the opportunity to back down on their new trade barriers before they chatted.Global markets, which are sometimes a good barometer for how informed folks think these sorts of negotiations will play out, have been relatively calm about all this, though there have been some significant tumbles in the US market, including a recent drop of about 2.7% for the S&P 500, marking the worst day for the US market since April, back when the tariff threats last reached this kind of peak.One stance that’s become popular in trading circles over the past year is the so-called TACO theory, which stands for Trump Always Chickens Out; the idea being that Trump is never really serious about any of these threats, he just likes to talk a big game and then hopes the other side will feel threatened enough to give him what he wants during negotiations—but if they don’t, he steps back from all his big talk and quietly gives in to the other side, especially if they have leverage.Some analysts are assuming that’s what’s happening now, as evidenced by Trump’s own statements about giving China the chance to deescalate—giving them specific instructions for how to let things calm down, rather than making these threats and suggesting they’re permanent, or not giving the other side any rationale for why it’s happening.There’s a chance, though, that there’s some truth to the opposing theory that this is part of a larger plan by the Trump administration to create a new trade war that’s meant to dominate headlines and concerns for a while, maybe as far into the future as next year’s elections, all of which is meant to conceal other efforts by the administration, like the military occupancy of American cities and the administration’s vehement objection to releasing the so-called Epstein files, which allegedly contain many references to Trump and other powerful people within his administration, which in turn would further connect him to a renowned pedophile.The Republican-controlled congress has made a massive effort to keep those files from being released, and Trump has become well-known for saying and doing headline-grabbing things whenever something inconvenient for him starts bubbling up in the news.So while there’s a chance this back-and-forth will end just before those upcoming trade talks, both sides taking their fingers off the trigger, as it were, in order to make a deal, there’s also a chance elements of this will be spun into a larger narrative, a war of sorts meant to dominate headlines and conceal other things that the administration would prefer to keep off the front page.Show Noteshttps://apnews.com/article/rare-earths-china-united-states-trade-supply-chain-de92222cda02dc85064c697911c6dea7https://apnews.com/article/tariffs-timeline-trade-war-trump-canada-mexico-china-a9d714eea677488ef9397547d838dbd0https://www.scmp.com/economy/china-economy/article/3318694/china-cuts-us-treasury-holdings-third-month-amid-trade-war-debt-ceiling-fearshttps://apnews.com/article/china-us-trump-tariff-threat-trade-talks-cc4bd30c3b1bcf2eb2676bc0e66efba0https://apnews.com/article/trump-inflation-federal-reserve-powell-88358f4955fd86ef3c86f5e8e089e775https://apnews.com/article/trump-xi-tariffs-china-ai-642b042b1ebe1d1930eb93bf51943e3fhttps://apnews.com/article/trump-xi-china-cc47e258cfc6336dfddcc20fa67a3642https://apnews.com/article/china-earths-exports-trump-dad99d532f858f04d750d0b8c50e5ed6https://time.com/7292207/us-china-trade-war-trump-tariffs-timeline/https://en.wikipedia.org/wiki/China%E2%80%93United_States_trade_warhttps://en.wikipedia.org/wiki/Tariffs_in_the_first_Trump_administrationhttps://www.piie.com/research/piie-charts/2019/us-china-trade-war-tariffs-date-charthttps://www.wsj.com/economy/trade/trumps-fresh-tariff-assault-threatens-chinas-fragile-economy-d0b3a00dhttps://www.bbc.com/news/articles/cn828kg8rmzo This is a public episode. 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• Gamewashing

  This week we talk about Electronic Arts, 3DO, and the Saudi Arabian Public Investment Fund.We also discuss Jared Kushner, leveraged buyouts, and loot boxes.Recommended Book: Bandwidth by Dan CarusoTranscriptElectronic Arts, often shorthanded as EA, was founded in 1982 in California by a former Apple employee named Trip Hawkins, who also went on to found the ill-fated 3DO company, which made video game hardware, and the somewhat more prolific, but also ultimately ill-fated casual game developer Digital Chocolate.EA, though, has been an absolutely astounding success. It’s business model was predicated on the premise of selling video games directly to retailers, rather than going through intermediaries. This allowed them to gain more market share than their competitors right off the bat, and it helped them glean higher margins than their competitors from each direct sale, too.EA also established an early reputation for treating its developers really well. They were the first gaming company to feature their developers in advertising and to give them platforms, promoting them as video game artists, basically, and it shared the profits netted from those direct sales with these develops—which in turn meant all the best developers really wanted to work for EA, which led to a beneficial cycle where they created better and better, and more and more financially successful games.In the late-80s, they started deviating from this model somewhat, scooping up a collection of successful independent game development studios and deviating, at times, from the creative lead’s vision when releasing their games. They also refocused a fair bit of their resources on franchises, like the immensely successful, as it turned out, Madden NFL series, and they branched out into producing games for the console market, including the still-new Nintendo Entertainment System, in 1990.That same year, EA went public on the NASDAQ, the company got new leadership when Hawkins decided to refocus on his far less successful 3DO hardware startup, and in an interesting twist, the arrival of the Sony Playstation in North America caused EA to drop support for 3DO hardware in the mid-90s so it could refocus on Playstation games, which were a lot more lucrative.By the mid-90s, EA had an astonishingly large and successful software library, including franchises like the aforementioned Madden games and the FIFA soccer games, but also celebrity-tied games like Shaq Fu, and military shooters like Jungle and Urban Strike.By the early-2000s, EA was making exclusive licensing deals with the NFL and ESPN, in order to stave off newfound sports game competitors, and it was the only video game company to consistently make a profit, most others experiencing feast and famine cycles, with periodic wins, but a whole lot of losses they had to cover with the profits from those wins. EA, in contrast, had a reliable stable of profit-sources, and it thus had a whole lot of leverage in terms of attracting and retaining talent, but also getting big names and brands on board, for collaborative projects.What I’d like to talk about today is what happened to EA during and following the 2008 economic crisis, and how and why it recently became an acquisition target for Saudi Arabia.—In 2008, when the global economy was collapsing, EA suffered a bad holiday sales season and fired 1,100 employees and closed 12 of their facilities early the following year. Later in 2009, the company announced the firing of another 1,500 employees, which was about 17% of their total workforce at the time, and in 2010 they acquired a gaming company that focused on mobile games, which were becoming increasingly popular, now that many people had touch-capable smartphones, which brought hot new franchises like Angry Birds under their brand umbrella.On the strength of that acquisition and all those downsizings, in early 2011, EA announced that it hit $3.8 billion in revenue in the financial year for the first time, and in early 2012, it announced it surpassed $1 billion in digital revenue during the previous year, which was a huge figure that early in the digital media landscape. It used some of those profits to scoop up another mobile-first gaming company, adding properties like Plants vs Zombies and Peggle to their library.EA completed another mass-firing in 2013, dismissing 10% of their employees under what they called a reorganization, around the same time they announced an exclusive license with Disney that would allow them to develop Star Wars games.Their stock value boomed in the following years, as a result of those cost-savings measures, and those new relationships, and emboldened by record-high stock valuations, in the mid-20-teens, the company started releasing big-name games, like Star Wars Battlefront 2, with random-content loot boxes and other sorts of microtransactions.This did not go over well with players, who decried these in-game purchasing options as ‘pay to win’ mechanics, as players could pay more money to get better characters and equipment, and a lot of the content, even after paying for the expensive games, was still locked behind paywalls, requiring more payments to unlock that content. A bunch of gaming journalists cried foul on this shift as the game careened toward its full release, as did a whole lot of early players, and Disney complained, too, so by the time it hit shelves, the game’s loot system was substantially changed, but that whole controversy spooked investors, and led to an 8.5% stock value drop in just a single month, knocking $3.1 billion from the company’s valuation. As a result of that controversy, EA also became the face for a larger legal and legislative debate about in-game purchases and how it’s kinda sorta like gambling, from that point forward.Soon after, EA experienced a series of bad quarters, including a huge drop of 13.3% to its valuation when a major entry in one of their larger franchises, Battlefield V, was released late, and received very mixed reviews when it was released, which led to a million fewer sold copies than anticipated. The game was also lagging in terms of gameplay behind smaller, nimbler competitors, including then-burgeoning Fortnite.The company saw an overall boost with the surprise success of Apex Legends, and the COVID-19 pandemic boosted sales dramatically for a while, since everyone was staying home, which allowed EA to gobble up a few more competing companies with successful franchises, and they knocked out a few more successful Star Wars games, as well.In early 2021, Saudi Arabia’s public investment funds bought 7.4 million shares of EA for about $1.1 billion, which flew under the radar for most gamers, but that’ll be important in a moment.Later that year, the company experienced a massive hack, a lot of its data, including the source code for games, stolen and sold on the dark web. EA bought some more competitors, but word on the street in 2022 was the the higher ups at EA were quietly shopping the company around, themselves looking to be acquired by a larger entity, on the scale of Apple or Disney.In early 2023, the company announced more mass-layoffs and launched another internal reorganization. It gutted several of its most popular gaming sub-brands, including BioWare, it cancelled an upcoming Star Wars game, and it announced that it would be shifting away from licensing agreements and refocusing on EA-owned IP.The pattern of layoffs leading to better financial fortunes didn’t pay off this time, though. In early 2025, EA divulged that it expected to underperform in the coming year, several of its big-name titles not doing as well as expected; the company cast blame on the market, but players and journalists pointed at the company’s gutting of its big-name studios, and the firing of many of its veteran developers to explain the reduced sales.EA had another mass-firing in April of this year, and followed by another in May, which paralleled an announcement that they would no longer be moving forward with a big, planned Black Panther game.In late September of 2025, EA announced that it had reached a deal, worth $55 billion, to go private, no longer selling shares on the stock market, with the financial assistance of a group of investors, which included Affinity Partners, which is led by Jared Kushner, US President Trump’s son-in-law, Silver Lake, which is a US-based private equity firm that helps make these sorts of big sales happen, and the aforementioned Saudi Arabian Public Investment Fund.This deal isn’t done yet, it still needs to get regulatory approval and a successful vote by stockholders, but it seems likely to go through, since the US regulatory environment is pretty lax at the moment, and because Kushner is involved, it’s unlikely President Trump will take a personal disliking to it.But the big story here seems to be that Saudi Arabia is buying up not just a video game company, but one of the biggest and most successful video gaming companies in the world, which, although it’s lost a lot of fan-credibility over the years, still owns some massively influential intellectual property and has just a stunning number of relationships and connections throughout the media world, alongside its huge valuation.If the sale does go through, and we should know for sure by sometime around June 2026, it would be the largest-ever leveraged buyout, which means the purchase was completed by using borrowed money that was borrowed against the asset being purchased; so those investors have taken out debt against EA itself, which is an increasingly common means of buying a large asset on the cheap, but it also typically burdens that asset with a simply astounding amount of debt which must then be recouped, often by selling off undervalued assets.When this happens to a newspaper, for instance, the buyer will often sell off the paper’s real estate and fire all their employees, to make money and pay off that debt, and in this case, there’s a chance that debt will be paid by throwing up a bunch of new paywalls and really leaning into those in-game transactions that nobody really liked, including politicians, back in the day, but which in this current regulatory environment would probably be allowed, and they would probably make some serious bank off of it initially, before players started getting wise and moving on to other games released by less predatory companies.The really interesting facet of this story, though, is the question of why Saudi Arabia wants a video game company.And to understand that, it’s important to understand that, first, the country’s Public Investment Fund is meant to help its economy shift away from purely extractive resources, like oil, and it has thus invested in all sorts of things, including luxury beach resorts, minority stakes in financial service companies like Citigroup, stakes in companies like Disney and Boeing and Meta, and increasingly, investments in companies run by allies of President Trump, like the aforementioned Affinity Partners, which was formed by Jared Kushner.So this is an economic play, but also a political play, almost certainly, by the Saudis, to get in good with the people who are in good with the US government.It’s also been alleged that this might be an attempt by the Saudis to engage in what’s being called game-washing, which is similar to greenwashing, but instead of trying to make a company seem green and sustainable by doing kinda sorta green things, but only as a veneer to cover up the opposite, in this case it means using sports and video games and the like to increase a nation’s reputation with humanistic seeming things, despite, well, the truth being much more complicated.Just as when the Fund participated in buying a Premier League football, a soccer team, back in 2021, then, alongside their concomitant establishment of LIV Gold, a golf league meant to compete with the PGA, this investment in EA, and other investments it’s made in video game companies like Capcom and Nexon, might be part of a larger effort to diversify the nation’s brand, not just its economics. It’s human rights record is abysmal, and it’s possible they’re trying to cover that up, make people forget about it, by creating more connections between Saudi Arabia and more positive things, like sports and games and the like.There are additional concerns about this purchase of EA, too, by the way, because Saudi Arabia’s cultural values are very anti-woman, anti-LGBTQ, and anti-liberal, democratic values. So there are fears that we might see less representation and fewer what we might call western values portrayed in the games released by these studios, as a result of this ownership.The folks running EA have said their core values will remain unchanged by the buyout, but it’s expected, bare-minimum, that this will lead to another several restructurings and mass-layoffs throughout the company in the coming years, to help recoup all that debt, at the end of which even the people making those promises might be long gone.Show Noteshttps://en.wikipedia.org/wiki/Public_Investment_Fundhttps://www.nytimes.com/2025/09/29/business/dealbook/electronic-arts-buyout-jared-kushner.htmlhttps://www.wsj.com/business/deals/ea-private-deal-buyout-video-game-maker-808aefechttps://www.ft.com/content/61cef75e-ceba-43ee-80e3-040756c6154f?accessToken=zwAGQAMTiJKIkc9hzvdezrpD7tOA4wQHVsYVTw.MEUCIHND3WOT4rS4frIMIOoeXHQeil_Ma1yGrwOqUD2m306DAiEAtA_QLvpyObai9zoo_9GZSljJuJyTKxJgFHpQDcCcVsE&sharetype=gift&token=03dd6ca5-c34f-4925-8a3d-a89f4058ee80https://www.wsj.com/business/deals/ea-silver-lake-deal-jared-kushner-c145cd55?st=eZghQHhttps://en.wikipedia.org/wiki/Electronic_Arts This is a public episode. 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• NATO and Russia

  This week we talk about Article 4, big sticks, and spheres of influence.We also discuss Moldova, super powers, and new fronts.Recommended Book: More Everything Forever by Adam BeckerTranscriptThe North Atlantic Treaty Organization, or NATO, was originally formed in 1949 in the wake of World War 2 and at the beginning of the Cold War.At that moment, the world was beginning to orient toward what we might think of as the modern global order, which at the time was predicated on having two superpowers—the US and the Soviet Union—and the world being carved up into their respective spheres of influence.NATO was formed as the military component of that protection effort, as the Soviets (and other powers who had occupied that land in the past) had a history of turning their neighbors into client states, because their territory provides little in the way of natural borders. Their inclination, then, was to either invade or overthrow neighboring governments so they could function as buffers between the Soviet Union and its potential enemies.The theory behind NATO is collective security: if anyone attacks one of the member nations, the others will come to their aid. Article 5 of the NATO treaty says that an attack against one member is considered an attack against all members, and while this theoretically would be applied against any would-be attacker, it was 100% created so that the Soviets and their Warsaw Pact allies knew that if they attacked, for instance, Norway, the other NATO nations—including, importantly, the United States, which again, was one of just two superpowers in the world at that point, all the other powers, like the UK and France having been devastated by WWII—would join in their defense.NATO, today, is quite a bit bigger than it was originally: it started out with just 12 countries in Europe and North America, and as of 2025, there are 32, alongside a handful of nations that are hoping to join, and are at various points along the way to possibly someday becoming member states.What I’d like to talk about today are recent provocations by the Soviet Union’s successor state, Russia, against NATO, and what these provocations might portend for the future of the region.—In early 2014, Russia invaded—in a somewhat deniable way, initially funding local rabble-rousers and using unmarked soldiers and weapons—the eastern portion of Ukraine, and then annexed an important Black Sea region called Crimea. Then in early 2022, Russia launched a full-scale invasion of Ukraine, massing hundreds of thousands of military assets on their shared border before plunging toward Ukraine’s capitol and other vital strategic areas.Against the odds, as Ukraine is small and poor compared to Russia, and has a far smaller military, as well, Ukrainians managed to hold off the Russian assault, and today, about 3.5 years later, Ukraine continues to hold Russia off, though Russian forces have been making incremental gains in the eastern portion of the country over the past year, and Russian President Putin seems convinced he can hold the Donbas region, in particular, even if peace is eventually declared.At the moment, though, peace seems unlikely, as Russian forces continue to grind against increasingly sophisticated and automated Ukrainian defenses, the invading force, in turn, bolstered by North Korean ammunition and troops. Ukraine’s exhausted soldiery is periodically and irregularly bulwarked by resources from regional and far-flung allies, helping them stay in the game, and they’re fleshing out their locally grown defense industry, which has specialized in asymmetric weaponry like drones and rockets, but Russia still has the advantage by pretty much any metric we might use to gauge such things.Over the past three weeks, concerns that this conflict might spill over into the rest of Europe have been heightened by Russian provocations along the eastern edge of the NATO alliance.Russia flew drones into Poland and Romania, fighter jets into Estonia, and aggressively flew fighters over a Germany Navy frigate in the Baltic Sea. Article 4 of the NATO treaty was invoked, which is the lead-up invocation to an eventual invocation of Article 5, which would be a full-fledged defense, by the bloc, against someone who attacked a NATO member.And that’s on top of Russia’s persistent and ongoing efforts to influence politics in Moldova, which held an election over the weekend that could serve as a foot in the door for Russian influence campaigns and Russia-stoked coups within the EU, or could become one more hardened border against such aggressions, depending on how the election pans out. The final results aren’t in as of the day I’m recording this episode, but there are fears that if the pro-Russian parties win, they’ll turn the country—which is located on Ukraine’s borders, opposite Russia—into another Russian puppet state, similar to Belarus, but if the pro-Russian parties don’t do well, they’ll try to launch a coup, because Russian disinformation in the country has been so thorough, and has indicated, in essence, if they lose, the process was rigged.All of which is occurring at a moment in which NATO’s most powerful and spendy member, by far, the US, is near-universally pulling out of international activities, the second Trump administration proving even more antagonistic toward allies than the first one, and even more overt in its disdain for alliances like NATO, as well. It’s probably worth noting here, too, that part of why things are so hectic in Moldova is that the US government has stopped pressuring social networks to tamp down on overt misinformation and propaganda from Russia-aligned groups, and that’s led to significant fog of war for this most recent election.Considering the US’s recent unreliability, and in some cases complete absence regarding NATO and similar alliances and pacts, it’s perhaps prudent that NATO member states have recently agreed to up their individual spending on defense, all of these states meeting or exceeding their pre-2025-summit goal of 2% of GDP, that target increasing to 5% by 2035.This is notable in part because it’s something Trump demanded, and that demand seems to have worked and probably been a good idea, but this is also notable because of what it represents: a cessation of leadership by the US in this alliance.The US has long been the big stick wielded by its European allies, and this administration basically said, hey, you need to make your own big sticks, you may not have access to our weapons and support anymore. And while it will still take a while to both get their funding up to snuff and to spend those funds appropriately, outfitting their defenses and shoring up their numbers, this would seem to be a step in that direction—though there’s simmering concern that it might be too little, too late.That concern is mostly held by Russia-watchers who have noted a big pivot by Russia’s leadership, and in the Russian economy.Over the past 3.5 years since it invaded Ukraine, that invasion taking a lot longer than they thought it would, Russia has shifted into a total war stance, its entire economy becoming reliant on its continued invasion of Ukraine.Should that invasion end or ebb, or should it continue to fail to give the Russian government enough successes, so it can brag about how well it’s doing to its citizenry and oligarchs, it would probably need another target—another front in the war that it can open to justify the continued churning-out of weapons and soldiers, and the continued spending of a huge chunk of its GDP toward the military. Lacking that churn, it’s economy would be in even worse straits than it’s in, today, and lacking that cause, it’s possible support for the government could collapse.It’s also been posited that it could be a disaster Putin’s regime if too many Russian veterans, wounded and traumatized from their time on the front lines in Ukraine, were to arrive back in Russia all at once. That’s the sort of situation that could lead to an uprising against the government, or bare minimum a lot of turmoil that they don’t want to deal with. Having another front, another battle to send them to, would solve that problem; it would be an excuse to keep them fighting external enemies, rather than looking for internal ones.Russia’s Foreign Minister, Sergey Lavrov, recently said that NATO and the EU have declared a “real war” against Russia by participating in the conflict; by providing arms and financial support for Ukraine.This is, of course, a silly thing to say, though it is the kind of statement an aggressor makes when they want to make themselves sound like the victim, and want to justify moving on to victimize someone else. You attacked us for no reason! We are thus completely within our rights to defend ourselves by attacking you; we are in the right here, you’re the bad guys.This could be just saber-rattling, and it usually is. Lavrov says things like this all the time, and it’s almost always state-sanctioned bluster. The drone and jet flyovers, likewise, could be meant to send a signal to the EU and NATO: back off, this is not your fight, but if you continue supporting Ukraine, we’ll make it your fight, and we think we can beat you.It’s also possible, though, that these actions are meant to test NATO defenses at a moment in which the US is largely absent from the region, China and Russia have never been tighter, including in supporting each other’s regional goals and militaries, and in which Russia seemingly has many reasons, mostly internal, to expand the scope of the conflict.Show Noteshttps://www.yahoo.com/news/articles/pistorius-russian-jet-flew-over-142629311.html?guccounter=1https://www.nytimes.com/2025/09/19/world/europe/russian-fighter-jets-estonia-nato.htmlhttps://www.nytimes.com/2025/09/07/business/russia-disinformation-trump.htmlhttps://www.nytimes.com/2025/09/20/world/europe/poland-drones-russia-nato.htmlhttps://en.wikipedia.org/wiki/Prelude_to_the_Russian_invasion_of_Ukrainehttps://www.bbc.com/news/articles/c5ygjv0r2myohttps://thehill.com/policy/international/5522862-lavrov-nato-eu-russia/https://www.cnn.com/2025/09/27/europe/putin-hybrid-war-europe-risks-intlhttps://www.nytimes.com/2025/09/27/world/europe/russia-europe-poland-drones-moldova-election.htmlhttps://apnews.com/article/russia-ukraine-poland-drones-sanctions-rafale-429ff46431a916feff629f26a5d0c0dahttps://www.reuters.com/world/europe/denmark-has-no-plans-invoke-natos-article-4-foreign-minister-says-2025-09-26/https://www.upi.com/Top_News/World-News/2025/09/27/More-drones-spotted-Denmark/4031758983759/https://apnews.com/article/russia-ukraine-war-poland-drones-defense-kyiv-ec284922b946737b98a28f179ac0c5a0https://apnews.com/article/poland-airspace-drones-russia-airport-closed-cf7236040d8c7858104a29122aa1bd57https://apnews.com/article/russia-ukraine-war-poland-drones-fa2d5d8981454499fa611a1468a5de8bhttps://apnews.com/article/russia-ukraine-war-poland-drones-1232774279039f9e5c5b78bd58686cb9https://apnews.com/article/british-intelligence-mi6-russia-war-443df0c37ff2254fcc33d5425e3beaa6https://apnews.com/article/nato-article-4-explainer-russia-poland-estonia-26415920dfb8458725bda517337adb12https://www.worldpoliticsreview.com/nato-article-4-russia/https://www.nytimes.com/2025/09/28/world/europe/moldova-election-russia-eu.htmlhttps://www.nato.int/cps/en/natohq/topics_49187.htmhttps://en.wikipedia.org/wiki/NATOhttps://www.nato.int/cps/en/natohq/topics_52044.htm This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit letsknowthings.substack.com/subscribe

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• Nepal Gen Z Protests

  This week we talk about corruption, influencers, and pro-monarchy protests.We also discuss Nepalese modern history, Gen Z, and kings.Recommended Book: Superagency by Reid Hoffman and Greg BeatoTranscriptThe Federal Democratic Republic of Nepal, usually referred to as just Nepal, is a country located in the Himalayas that’s bordered to the northeast by China, and is otherwise surrounded by India, including in the east, where there’s a narrow sliver of India separating Nepal from Bhutan and Bangladesh.So Nepal is mostly mountainous, it’s landlocked, and it’s right in between two burgeoning regional powers who are also increasingly, in many ways, global powers. Its capital is Kathmandu, and there are a little over 31 million people in the country, as of 2024—more than 80% of them Hindu, and the country’s landmass spans about 57,000 square miles or 147.5 square kilometers, which is little smaller than the US state of Illinois, and almost exactly the same size as Bangladesh.Modern Nepal came about beginning in the mid-20th century, when the then-ruling Rana autocracy was overthrown in the wake of neighboring India’s independence movement, and a parliamentary democracy replaced it. But there was still a king, and he didn’t like sharing power with the rest of the government, so he did away with the democracy component of the government in 1960, making himself the absolute monarch and banning all political activities, which also necessitated jailing politicians.The country was modernized during this period, in the sense of building out infrastructure and such, but it was pulled backwards in many ways, as there wasn’t much in the way of individual liberties for civilians, and everything was heavily censored by the king and his people. In 1990, a multiparty movement called the People’s Movement forced the king, this one ascended to the throne in 1972, to adopt a constitution and allow a multiparty democracy in Nepal.One of the parties that decided to enter the local political fray, the Maoist Party, started violently trying to shift the country in another direction, replacing its parliamentary system with a people’s republic, similar to what was happening in China and the Soviet Union. This sparked a civil war that led to a whole lot of deaths, including those of the King and Crown Prince. The now-dead king’s brother stepped in, gave himself a bunch of new powers, and then tried to stomp the Maoist Party into submission.But there was a peaceful democratic revolution in the country in 2006, at which point the Maoists put down their arms and became a normal, nonviolent political party. Nepal then became a secular state, after being a Hindu kingdom for most of their modern history, and a few years later became a federal republic. It took a little while, and there was quite a bit of tumult in the meantime, but eventually, in 2015, the Nepalese government got a new constitution that divided the country into seven provinces and made Nepal a federal democratic republic.What I’d like to talk about today is what has happened in the past decade in Nepal, and how those happenings led to a recent, seemingly pretty successful, series of protests.—In early 2025, from March through early June, a series of protests were held across Nepal by pro-monarchy citizens and the local pro-monarchy party, initially in response to the former King’s visit, but later to basically just show discontentment with the current government.These protests were at least partly politically motivated, in the sense of being planned and fanned into larger conflagrations by that pro-monarchy party—not truly grassroots sort of thing—but they grew and grew, partly on the strength of opposition to the police response to earlier protests.That same distaste carried through the year, into September of 2025, when the Nepalese government announced a ban on 26 social media platforms, including Facebook, Instagram, Reddit, and Youtube, because the companies behind these platforms ostensibly failed to register under the Ministry of Communication and Information Technology’s new rules that required, among other things, they have local liaisons that the government could meet with in person, and complain to if a given network failed to remove something they didn’t like quickly enough.The general sense about that ban is that while this failure to properly register was used as justification for shutting down these networks, which are incredibly popular in the country, the real reason the government wanted to shut them down at that moment was that a trend had emerged online in which the rich and powerful in the country, and especially their children, many of whom have become online influencers, were being criticized for their immense opulence and for bragging about their families’ vast wealth, while everyone else was comparably suffering.This became known as the Nepobaby or Nepo Kid trend, hashtag Nepobaby, which was a tag borrowed from Indonesia, and the general idea is that taxpayer money is being used to enriched a few powerful families at the expense of everyone else, and the kids of those powerful families were bragging about it in public spaces, not even bothering to hide their families’ misdeeds and corruption.This, perhaps understandably, led to a lot more discontent, and all that simmering anger led to online outcries, the government tried to stifle these outcries by shutting down these networks in the country, but that shut down, as is often the case in such situations, led to in-person protests, which started out as peaceful demonstrations in Kathmandu and surrounding areas, but which eventually became violent when the police started firing tear gas and rubber bullets at the crowds, causing 19 deaths and hundreds of injuries.The ban was implemented on September 4 and then lifted, after the initial protests, on September 8, but the government’s response seems to have made this a much bigger thing than it initially was, and maybe bigger than it would have become, sans that response.It’s worth mentioning here, too, that a lot of young people in Nepal rely on social media and messaging apps like Signal, which was also banned, for their livelihood. Both for social media related work, and for various sorts of remittances. And that, combined with an existing 20% youth unemployment rate, meant that young people were very riled up and unhappy with the state of things, already, and this ban just poured fuel on that flame.On that same note, the median age in Nepal is 25, it’s a relatively young country. So there are a lot of Gen Zers in Nepal, they’re the generation that uses social media the most, and because they rely so heavily on these networks to stay in touch with each other and the world, the ban triggered a mass outpouring of anger, and that led to huge protests in a very short time.These protests grew in scope, eventually leading to the burning of government buildings, the military was called in to help bring order, and ultimately the Home Minister, and then the Prime Minister, on September 8 and 9, respectively, resigned. A lot of the burning of government buildings happened after those resignations; protestors eventually burned the homes of government ministers, and the residences of the prime minister and president, as well.The protestors didn’t have any formal leadership, though there were attempts during the protests by local pro-monarchy parties and representatives to position the protests as pro-King—something most protestors have said is not the case, but you can see why that might have worked for them, considering those pro-monarchy protests earlier this year.That said, by September 10, the military was patrolling most major cities, and on the 11th, the president, head general, and Gen Z representatives for the protestors met to select an interim leader. They ended up using Discord, a chat app often used by gamers, to select a former Supreme Court Justice, Sushila Karki, as the interim prime minister, and the first woman to be prime minister in Nepalese history. Parliament was then dissolved, and March 5 was set as the date for the next election. Karki has said she will remain in office for no more than six months.As of September 13, all curfews had been lifted across Nepal, the prime minister was visiting injured protestors in hospitals, and relative calm had returned—though at least 72 people are said to have been killed during the protests, and more than 2,000 were injured.There are currently calls for unity across the political spectrum in Nepal, with everyone seeming to see the writing on the wall, that the youths have shown their strength, and there’s a fresh need to toe the new line that’s been established, lest the existing parties and power structures be completely toppled.There’s a chance that this newfound unity against government overreach and censorship will hold, though it’s important to note that the folks who were allegedly siphoning resources for their families were all able to escape the country, most without harm, due to assistance from police and the military, and that means they could influence things, from exile or after returning to Nepal, in the lead-up to that March election.It’s also possible that the major parties will do more to favor the huge Gen Z population in Nepal from this point forward, which could result in less unemployment and freer speech—though if the King and the pro-monarchy party is able to continue insinuating themselves into these sorts of conversations, positioning themselves as an alternative to the nepotism and corruption many people in the area have reasonably come to associated with this type of democracy, there could be a resurgent effort to bring the monarchy back by those who have already seen some success in this regard, quite recently.Show Noteshttps://restofworld.org/2025/nepal-gen-z-protest/https://apnews.com/article/nepal-ban-social-media-platform-3b42bbbd07bc9b97acb4df09d42029d5https://apnews.com/article/nepal-new-prime-minister-protests-karki-0f552615029eb12574c9587d8d76ec46https://www.bbc.com/news/articles/crkj0lzlr3rohttps://kathmandupost.com/visual-stories/2025/09/08/gen-z-protest-in-kathmandu-against-corruption-and-social-media-banhttps://en.wikipedia.org/wiki/2025_Nepalese_Gen_Z_protestshttps://en.wikipedia.org/wiki/2025_Nepalese_pro-monarchy_protestshttps://en.wikipedia.org/wiki/Nepal This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit letsknowthings.substack.com/subscribe

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• GENIUS Act

  This week we talk about stablecoins, crypto assets, and conflicts of interest.We also discuss the crypto industry, political contributions, and regulatory guardrails.Recommended Book: Throne of Glass by Sarah J. MaasTranscriptA cryptocoin is a unit of cryptocurrency. A cryptocurrency is a type of digital currency that uses some kind of non-central means of managing its ledger—keeping track of who has how much of it, basically.There have been other types of digital currency over the years, but cryptocurrencies often rely on the blockchain or a similarly distributed means of keeping tabs on who has what. A blockchain is a database, often public, of users and a list of those users’ assets that’s distributed between users, and it makes use of some kind of consensus mechanism to determine who actually owns what.Some cryptocurrencies ebb and flow in value, and are thus traded more like a stock or other type of non-fixed, finite asset. Bitcoin, for instance, is often treated like gold or high-growth stocks. NFTs, similarly, create a sort of artificial scarcity, producing unique digital goods by putting their ownership on a blockchain or other proof-of-ownership system.Stablecoins are also cryptocurrencies, but instead of floating, their value growing and dropping based on the interest of would-be buyers, they are meant to maintain a steady value—to be stable, like a national currency.In order to achieve this, the folks who maintain stablecoins often use reserve assets to prop up their value. So if you produce a new stablecoin and want to issue a million of them, each worth one US dollar, you might accumulate a million actual US dollars, put those in a bank account, show everybody the number of dollars in that bank account, and then it’s pretty easy to argue that those stablecoins are each worth a dollar—each coin is a stand-in for one of the dollars in the bank.In a lot of cases, the people issuing these coins aim for this approach, but instead of doing a direct one-for-one, dollar for coin system, they’ll issue a million coins that are meant to be worth a dollar apiece, and they’ll put one-hundred-thousand dollars in a bank account, and the other 900,000 will be made up of bitcoin and stocks and other sorts of things that they can argue are worth at least that much.As of mid-2025, about $255 billion worth of stablecoins have been issued, and about 99% of them have been pegged to the US dollar; Tether’s USDT, Binance’s BUSD, and Circle’s USDC are all tethered to the USD, for instance, though other currencies are also used as peg values, including offerings by Tether and Circle that are pegged to the Euro.Stablecoins that are completely or mostly fiat-backed, which means they have a dollar for each coin issued in the bank somewhere, or close to that, tend to be on average more stable than commodity or crypto-backed stablecoins, which rely mostly or entirely on things like bitcoin or gold tucked away somewhere to justify their value. Which makes sense, as while you can argue, hey look, I have a million dollars worth of gold, and I’m issuing a million coins, each worth a dollar, that asset’s value can change day-to-day, and that can make the value of those coins precarious, at least compared to fiat-backed alternatives.Because stablecoins are not meant to change in value, they’re not useful as sub-ins for stocks or other sorts of interest-generating bets, like bitcoin. Instead, they’re primarily used by folks who want to trade cryptoassets for other sorts of cryptoassets, for those who want to avoid paying taxes, or want to otherwise hide their wealth, and for those who want to transfer money in such a way that they can avoid government sanctions and/or tariffs on those sorts of transfers.What I’d like to talk about today is a new US federal law, the GENIUS Act, which was heavily pushed by the crypto industry, and which looks likely to make stablecoins a lot more popular, for better and for worse.—The Guiding and Establishing National Innovation for US Stablecoins Act, or GENIUS Act, was introduced in the Senate by a Republican senator from Tennessee in May of 2025, was passed in June with a bipartisan vote of 68-30—the majority of Republicans and about half of Democratic senators voting in favor of it—and after the House passed it a month later, President Trump signed it into law on July 18.Again, this legislation was heavily pushed by the crypto industry, which generously funded a lot of politicians, mostly Republican, but on both sides of the aisle, in recent years, as it serves folks who want a broader reach for existing stablecoins, and who want to see more stablecoins emerge and flourish, as part of a larger and richer overall crypto industries.Folks who are against this Act, and other laws like it that have been proposed in recent years, contend that while it’s a good idea to have some kind of regulation in place for the crypto industry, this approach isn’t the right one, as it basically gives the tech world free rein to run their own pseudo-banks, without being subject to the same regulations as actual banks.Which isn’t great, according to this argument, as actual banks have to live up to all sorts of standards, most of them oriented around protecting people from the folks running the banks who might otherwise take advantage of them. Those regulations are especially cumbersome in the wake of the 2008 Great Recession, because that severe global economic downturn was in large part caused by exactly these sorts of abuses: bankers going wild with lending mis-labeled assets, those in charge of these banks pocketing a whole lot of money, lots of people losing everything, and lots of institutions going under, leaving those people and the government with the bill, while the folks who did bad things mostly got off scott free.The goal of these bank regulations is to keep that kind of thing from happening again, while also keeping banks from overtly taking advantage of their customers, who often don’t know much about the banking options and assets they’re being sold on.Allowing tech companies to do very similar things, but without those regulations, seems imprudent, then, because, first, tech companies have shown themselves to be not just willing, but often thrilled to grab whatever they can and get slapped on the wrist for it, later, moving fast and breaking things, basically, and then paying the fines after they’ve made a fortune, and if they’re allowed to step into this space without the same regulations as banks, that gives them a huge competitive advantage over actual financial institutions.It’s a bit like if there were a food company that was allowed to dodge food industry regulations, as was thus able to cut their flour with sawdust and sell it to people at the same price as the real thing. People would suffer, their competition, which sells actual flour would suffer, because they wouldn’t be able to compete with a company that doesn’t play by the same rules, and the companies that sell the inferior products without anyone being able to stop them would probably get away with it for a while, before then closing up shop, pocketing all that money, and starting over again with a different name.This is how things work in a lot of countries with weak regulatory systems, and it creates so much distrust in the economic sphere that things cost more, the quality of everything is very low, and it’s nearly impossible to ever punish those who cause and perpetuate harm.That’s at the root of many arguments against the GENIUS Act: concerns that a lack of consumer protections will lead to a situation in which we have growing systemic risk, caused by tech entities taking bigger and bigger risks with other people’s money, like in the buildup to the 2008 recession, while simultaneously more legit institutions are elbowed out, unable to compete because they have to spend more and work harder to adhere to the regulations that the new players can ignore.It’s worth mentioning here, too, that the Trump family has issued their own cryptocoins, and reportedly already profited to the tune of several billion dollars as a result of that issuance, that the Trumps have their own stablecoin, which they’re promoting as an upgrade to the US dollar, that the early backers of these coins include foreign governments and their interconnected companies, like the Emirati-backed MGX, that the Trump children have their own crypto-asset companies, including one that’s listed on the Nasdaq, and which is profiting from the increasing popularity and legalization of the industry in the US, and that Trump’s media company, which owns Truth Social, also has a multi-billion-dollar bitcoin portfolio, alongside a whole lot of other crypto-coins, which the president has been pushing, and his family has been promoting overseas, using his name and office.All of which points at another conflict of interest issue here, that the president and his family seem to be self-enriching at an incredibly rapid pace and at a very high level, in part by pushing this and similar legislation.People in the crypto industry lavishly spent on his campaign, and they are entwined with his family’s business interests, which makes it difficult to separate what might be good for the country, in an objective way, from what’s good for Trump and his family, in the sense of using the office to grow wealthier and wealthier—and that’s true both in the sense that crypto-assets allegedly allow his family to take bribes in a fairly anonymous and deniable way, but also in the sense that people who buy his memecoins and buy into his stablecoin ventures and buy more bitcoin and similar assets that he already holds, also increase the value of his existing assets, and using the office of the presidency to enrich oneself in that way is the sort of thing they never really made illegal because they didn’t think anyone would be brazen or shameless enough to do it.There’s a lot going on here, then, and while there are some arguments that this sort of legislation is a good starting point to get some eventual, actual guardrails on the crypto industry in the US, the concerns related to those tech world incentives, and the possibility and reality of the president and his family profiting from this legislation, would seem to make this effort a lot more questionable than prudent, and loaded with a lot more downsides than upsides, even if, again, the majority of lawmakers voted for it, and a lot of people are excited about it for all sorts of reasons.Show Noteshttps://www.wired.com/story/genius-act-loophole-stablecoins-banks/https://www.weforum.org/stories/2025/07/stablecoin-regulation-genius-act/https://en.wikipedia.org/wiki/GENIUS_Acthttps://apnews.com/article/donald-trump-stablecoins-congress-cryptocurrency-94fa3c85e32ec6fd5a55576cf46e58eahttps://advocacy.consumerreports.org/press_release/senate-oks-genius-act-without-safeguards-needed-to-protect-consumers-and-the-financial-system-from-stablecoin-risks/https://www.cnn.com/2025/09/03/politics/crypto-trump-bitcoin-wlfi-stablecoin-analysishttps://en.wikipedia.org/wiki/Cryptocurrencyhttps://en.wikipedia.org/wiki/Stablecoin This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit letsknowthings.substack.com/subscribe

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