TRUMP IS NOT GOING SENILE. HE IS BECOMING MORE SCHIZOPHRENIC

I’m not hearing the word ‘schizophrenia’ in the media. The media are full of descriptions of Trump’s ‘cognitive decline’. I think this term misses the mark. He is not just slowing down in his mental processes; he is actually insane, psychotic. In fact, his schizophrenia is becoming more and more pronounced and serious. That’s quite different from senility.

The Mayo Clinic includes these identifying marks of schizophrenia.

People with schizophrenia can seem to lose touch with reality, 

  • Delusions. This is when people believe in things that aren’t real or true. For example, people with schizophrenia could think that they’re being harmed or harassed when they aren’t. They could think that they’re the target for certain gestures or comments when they aren’t. They may think they’re very famous or have great ability when that’s not the case. Or they could feel that a major disaster is about to occur when that’s not true. Most people with schizophrenia have delusions.
  • Disorganized speech and thinking. Disorganized speech causes disorganized thinking. It can be hard for people with schizophrenia to talk with other people. The answers people with schizophrenia give to questions may not be related to what’s being asked. Or questions may not be answered fully. Rarely, speech may include putting together unrelated words in a way that can’t be understood. Sometimes this is called word salad.
  • Negative symptoms. People with schizophrenia may not be able to function in the way they could before their illness started. For example, they may not bathe, make eye contact or show emotions. They may speak in a monotone voice and not be able to feel pleasure. 

Psychiatry.org has similar descriptors:

  • Delusions are fixed false beliefs held despite clear or reasonable evidence that they are not true. Persecutory (or paranoid) delusions, when a person believes they are being harmed or harassed by another person or group, are the most common.
  • Disorganized thinking and speech refer to thoughts and speech that are jumbled or do not make sense. For example, the person may switch from one topic to another or respond with an unrelated topic in conversation. The symptoms are severe enough to cause substantial problems with normal communication.

I don’t need to go into detail about how these symptoms apply perfectly to Trump’s behavior. Take his recent letter to the Prime Minister of Norway. That was not cognitive decline; it was delusional. He mixed up Norway with Denmark. He really believes he ended 8 wars and has brought inflation down.

I think that Europe has figured this out, as more and more I am seeing words from them like ‘mad’, ‘insane’, ‘crazy’, ’irrational’, etc. Even a senile person can still make rational decisions, but a schizophrenic person will say and do the most ridiculous things. Trump is living in a dream-world of his own making.

Therefore, in thinking about today’s politics, we should treat Trump as a madman, not as a doddering old man. A madman is probably more dangerous than a senile person, in that his actions are unpredictable and on a grand scale. Consider the following about Trump:

  • His speeches are becoming more and more rambling and incoherent. He threatens more and more violent actions.
  • His actions in Venezuela, Greenland, and Minnesota are becoming more and more unhinged.
  • His delusions about ending 8 wars, being under attack by everyone, or producing an A++++ economy are getting wilder and wilder. A senile person would not attack Greenland, but a madman might.

By the way, I have often compared Trump to the mad Roman emperor Caligula. Today I looked up what happened to Caligula. He was assassinated.

Caligula named his horse as a Roman Senator

WOULD TRUMP STAGE HIS ASSASSINATION?

I am not addressing the question of whether or not Trump DID stage a fake assassination.

I have read the conspiracy theories of how his ear healed miraculously fast, and how he stood up with his famous fist-shake even as the assassin was still possibly shooting. However, for me, the deciding factor of the authenticity of the act was that real bullets were fired and at least one real person was killed. Surely, I thought, Trump would never include real human death as a stage prop for a faked assassination.

Great composition, with the flag perfectly placed. Staged?

Since then, I have seen evidence that maybe even that human death could have been planned as part of the act.

I have seen mostly innocent Venezuelan fishermen blown out of the water just as a prop in Trump’s anti-Maduro theater. That includes the two unarmed survivors clinging to their wrecked boat, who were killed in cold blood as part of Trump’s theater.

More recently, I have seen ICE agents shooting and murdering innocent American citizens, all with Trump’s blessing. Thirty-odd people have died in ICE custody, and Trump only encourages more of the same. Human life means nothing to him. Innocent lives are expendable as part of the political game, aimed at instilling fear in the population.

Within minutes of Reneé Good’s murder, Trump coldly came out with some lies about her running over the ICE agent, and falsely branding her a ‘domestic terrorist’. He showed no compassion for the murder of the mother who had just spoken calmly to the ICE agent. When video after video showed that her car had not touched the agent and that he shot her from the SIDE, fake AI videos started appearing on the internet, showing a speeding car ramming into someone. That didn’t convince many people, so the latest ploy is to claim that the agent suffered ‘internal bleeding’.  Trump has been flooding the internet with that one. It appears on my Facebook every few minutes. No one believes that one, either, especially as it now emerges that he was taken — a week after the shooting — to an administration building, not a hospital. All these machinations show just how far Trump will go to cover up a murder, with no compassion for the victim.

The kidnapping of Maduro in Caracas was labeled just a police action to arrest a criminal. Buildings were bombed and over 100 people – civilians, soldiers, and even Cubans – were killed. But according to Trump, that’s not an act of war. Those deaths were just collateral damage in going after Maduro.

Most gruesome is the Snopes fact check as ‘true’ of the following:

In December 2025, the U.S. Department of Justice released an FBI tip in which a complainant alleged President Donald Trump witnessed her uncle kill her newborn child and dispose of the body in Lake Michigan when she was 13 and being trafficked for sex by Jeffrey Epstein.

That may not actually have happened, but it corroborates his pattern of horrible acts done with no apparent feeling.

So now, having observed Trump’s callous willingness to kill people as part of his theater games, I think that he could easily have arranged his own fake assassination to include the killing of an innocent bystander, to make the plot more believable. Again, I’m not saying that actually happened that way, but I now think that Trump has the psychopathic coldness to murder as many people as he wants in cold blood, in order to further his political games.

TRUMP’S INCREMENTAL CREEP

Everyone is talking about the murder in Minneapolis, so I guess I’d better weigh in. My point here will be Trump’s incremental creep of outrage. He engages in some outrageous behavior, faces no consequences, and so is emboldened to creep to the next stage. When he faces no consequences for one action, that action becomes the new norm and sets the stage for the next outrage, raising the new norm a notch further.

Take Venezuela. First, he murdered the fishermen in international waters. No consequences. New normal. Then he murdered the survivors of his bombing. Outrage, but no consequences. Next, he pirated two oil tankers and stole the oil. New normal. Then he went into Venezuela, bombed the city, killed over 100 people, and kidnapped their president. No consequences. New normal. You can see that he will be emboldened to some new outrage:  invade Greenland? Fully invade and occupy Venezuela? Attack Cuba or Columbia? And when he gets away with that, he will proceed to the next stage of normality.

Bombing Caracas. A police action to arrest a suspect?

Now for ICE: he started with the deportation, with no due process, of mostly undocumented immigrants to that Salvadoran torture gulag, and got away with that; Next, he set up his own horrible concentration camp at Alligator Auschwitz. (A lot of people thought that was shut down, but it wasn’t. It’s still operating, run by the state of Florida rather than the federal government.) Next, he started detaining and deporting US citizens, and children with cancer, at the same time that SCOTUS was declaring that he could detain and deport anyone who LOOKED like an illegal.

Next, ICE started beating up and manhandling its detainees. At least 31 died in detention in 2025, according to Reuters.

Numerous reports from detainees, human rights advocates and lawmakers have denounced the horrible conditions people face inside immigration detention centers.

New normal. Finally, ICE has murdered an innocent US citizen in cold blood. Outrage across America, but no consequences, as Congress and MAGA sink to this new normal. The ICE murderer will probably go Scot free. That will lead to the next incremental creep.

The next step may be the murder of multiple protesters. It almost happened in Portland, where two protesters were shot but not killed. Of course, ICE and Trump will claim ‘self-defense’ and that the protesters were radical leftist Antifa terrorists. Mike Johnson, JD Vance, and Congress will defend that view, and Trump will proceed to the next level of outrage. Eventually, I see something like the following:

Some critic of Trump, say, Zohran Mamdani, will be detained by ICE agents, who will provoke some sort of confrontation as an excuse to murder Mamdani (in ‘self-defense’, of course). Or it might be Gavin Newsom, or James Comey, or Letitia James. And Mike Johnson and MAGA will applaud all of this, waiting for the next escalation.

Here’s a final thought: I notice that ICE agents wear uniforms that say “Police – ICE”. They are not police and do not have the authority of the police. Is this not an illegal ploy to intimidate people into believing they must take orders from ICE agents? An ICE agent ordered Good to get out of her car. She did not have to follow his illegal order, but the ‘Police’ tag was designed to intimidate her into doing so.

ARE CAMBODIANS REALLY BUDDHISTS?

Here’s an interesting hypothesis: the behavior of followers of any religion is diametrically opposed to the main principles of their religion. For example, the main message of Christianity is “Love thy neighbor.” But today’s Evangelicals harbor an intense hatred for blacks, Hispanics, Moslems, LGBTQs, and anyone not exactly not like themselves. Not to mention the Inquisition, the Crusades, witch-burning, the rack, etc.

One simplistic explanation is that religious people go through all the pious, symbolic motions, and therefore believe they are ‘saved’ and excused from all sorts of heinous crimes.

So what about Cambodian Buddhism? The main message of Buddhism is renunciation, detachment, aloofness, and not needing too much or becoming too attached – the ‘Middle Way’. When I look around and see Cambodians making $500 a month driving $40,000 cars, I see conspicuous consumption, not Buddhist moderation. I see debt up to their eyeballs, leading to all kinds of stress, all in the pursuit of image. Thousands of Cambodians are spending $500 for vanity license plates. Buddhist Cambodia is one of the most highly indebted countries in the world.

Cambodians are greatly attached to their families – not just to their immediate families, but to their extended families, who form the social safety net that the government cannot provide. They have one of the lowest divorce rates in the world. And yet, one of the pivotal incidents in the Buddha’s life is the ‘Great Escape’, in which he abandons his wife and baby in the middle of the night. He wanders around, unattached, for the rest of his life. Cambodians today clearly do not condone such behavior.

Prince Siddhartha (later to become the Buddha) abandons his wife and baby.

I attended a Cambodian wedding last week, in which a father wanted an impressive wedding for his son, and spent more than he could afford. He was hoping the wedding guests would defray the costs, as is the custom in Cambodia. He came up short by some $3000, and it nearly drove him crazy that he could not pay it. While the wedding followed all sorts of Buddhist rituals and traditions, it was not, in spirit, a Buddhist wedding.

There is, however, at least one tenet of Buddhism in which Cambodians believe and act accordingly: Karma. During the Thai border war last month, there were constant referrals to the horrible karma coming to the Thais. After the Khmer Rouge debacle, Cambodians kept asking themselves what they had done wrong, perhaps in previous lives, to merit such horrible karma at the hands of Pol Pot.

Cambodians spend a lot of time and effort at ‘gaining merit’, i.e. good karma. The daily tradition of monks begging for alms is not considered begging at all, but the monks offering people the opportunity to gain merit through their donations.

Rich men and politicians build elaborate stupas or other monuments to the Buddha (and also to themselves), in hopes of gaining merit.

Angkor Wat copy mausoleum of Oknha  & Mrs. Net Yang, Wat Kandal, Battambang

If you go into any pagoda, you will probably see paintings or sculptures or doors or windows with an inscription stating who paid for it and how much they contributed. This is a sort of conspicuous consumption and gaining merit all wrapped up in one.

Typical donor plaque, Wat Kandal, Battambang (note Thai baht)

Cambodians, therefore, do not really adhere to the Buddhist principle of renunciation. However, they can be partially excused because the Buddhist ‘religion’ is far greater than just the original Buddhist philosophy. Some people will argue, “But Buddhism is only a philosophy, not a religion” Just go to any pagoda and you will see that Buddhism is indeed a full-blown religion, which often has little to do with the Buddha’s philosophy.

MY 2026 PREDICTIONS FOR THE U.S. ECONOMY

The trends so far for 2025 have been:

  • Job losses and higher unemployment, now up to 4.6%.
  • Rising, but still manageable inflation, although still higher than the target 2%.

It would be reasonable to predict that these trends will continue into 2026. However, I don’t think they will.

Let’s start with job losses. AI will cost the jobs of millions of Americans. I predict the 2025 employment trends will continue, BUT…

As more and more immigrants and asylum seekers are deported, more and more low-paying jobs will be left unfilled – fruit pickers, hotel cleaners, and jobs that most Americans would not dream of touching. As Americans lose their jobs, they may stoop to accept the immigrants’ jobs, at much lower pay, but hey, a job is a job.

The result may even be that the unemployment rate will decline below 4%, even as workers’ standard of living will decline in those low-paying jobs. We may see a recession, even a depression, even as the unemployment rate looks like it’s doing fine.

I think that a key event was when the Korean Hyundai company brought its own trained workers to its Atlanta factory to help train American workers. ICE detained 475 of them and deported 300 of them in a cruel manner, creating a diplomatic dispute between South Korea and the US. That kind of incident is likely to be the norm in 2026, as Trump makes foreigners less and less welcome, through visa policies and deportations.    On September 12, 2025, The Wall Street Journal‘s editorial board issued an opinion criticizing the Trump administration, writing that “raids like the one in Georgia are a deterrent to the foreign investment Donald Trump says he wants.”

Trump claims that his policies will bring more companies to America, but so far, it looks as though the reverse will be the case for 2026. As companies leave the US, there will be fewer jobs for Americans, thereby exacerbating the problems described above.

Now what happens during a depression? Demand for goods and services falls. Prices fall. Recall that during the Great Depression of the 1930s, people lost their jobs, had no money to buy goods, and forced prices dramatically downward. 2026 may see a decline in prices for some of the same reasons. Add to this the phenomenon that tariffs, while raising prices at their outset, do not continue to raise prices as long as the tariffs do not increase. Throughout 2025, companies have reduced existing inventories, so that prices due to tariffs have only risen slowly. When the inventories have been depleted, prices may hit their peak and then stabilize.

A word about interest rates. Trump is flooding the Fed with sycophants who will reduce rates. Such policies usually boost employment but raise inflation. In this way, Trump may partially offset the trends I have described above. I don’t see the lower leg of the K-shaped economy as benefiting much from lower rates. His goal, I suspect, is to make his rich business cronies (including, of course, himself) richer. Their bonds will decrease in interest rates while appreciating in value, and they will find it easier to invest in their huge AI data centers and other high-tech ventures.

The construction of these data centers will require huge amounts of energy and water, so that energy prices will rise. Add to this Trump’s betrothal to the fossil fuel industry, where he is cutting down the use of alternative energy sources like wind. The total amount of energy will be reduced, thereby further raising energy costs for the working people. The lower leg of the K will have to pay more for health care and for energy, and so they will have to cut back drastically on other everyday living expenses.

In all, I see an acceleration of the current K-shaped economy, where the rich (upper arm of the K) prosper while the poor (lower leg of the K) find their standard of living going down the tubes. The US could become a third-world economy, even while the statistics look good: inflation under control, unemployment steady. Trump and MAGA may even win the midterm elections.

WHY WOULD THAILAND WANT TO DESTROY A VISHNU STATUE?

Thai crane topples Cambodian sacred statue on Cambodian ground

This destruction was no accident, and was not done by F-16 fighters. It’s a simple crane toppling the statue – clearly on purpose. Thailand claims the statue was removed “solely for the purpose of area management and security”. Suuure!

I have been claiming that the Thai generals and politicians have been waging this war to stir up patriotic sentiment ahead of the elections in February.

However, this useless destruction of sacred objects must not sit well with the very religious Thai people. There must be some other reason for such sacrilege. There is no strategic goal in toppling a statue. Destroying a holy icon does not conquer more Cambodian territory. The only answer must be that this act sends a message. But what is the message, and to whom is it addressed? That’s what really puzzles me.

For one thing, it is clear that this action is designed to humiliate the Cambodian people. Khmer culture places great pride in its religion. The Vishnu statue is a familiar icon found all over Cambodia. Indeed, of the Brahma-Vishnu-Siva trio, Vishnu is the preserver and protector. Many homes and businesses across Cambodia have images of Vishnu to protect them. The destruction of the statue, along with the incursions deep into Siem Reap Province, may be a signal that Thailand could, if it wanted, destroy any place in Cambodia, even Angkor Wat. It is also highly symbolic that Thailand can destroy Cambodia’s preserver and protector.

Why, then, would Thailand, at this moment in time, choose to humiliate Cambodia?

Well, here’s a hypothesis: China. With China’s recent aggressive foreign policy, it is the elephant in every room these days. In recent years, Chinese influence in Cambodia has grown immensely. Maybe Thailand’s message to Cambodia is “Don’t get too buddy-buddy with China”. The invasion often appears sporadic and random, but it is performative to the extent that China and Cambodia will both understand clearly that Thailand could conquer all of Cambodia if they wanted to.

Thai support of jet fighters and bombers from the US, Korea, and Sweden mocks Cambodia, “Nyah, nyah, nyah! Where is China now? Why don’t you have Chinese fighter jets?” Cambodia is powerless to defend against these planes. Thus, the message to China and Cambodia comes not only from Thailand, but from the three Western nations.

China has remained remarkably silent throughout this invasion, making only the perfunctory ‘maximum restraint’ comments. However, if Thailand really invaded all of Cambodia, China might just step in. Therefore, Thailand is limiting its operations so as to poke the Chinese bear without any real consequences.

The Cambodian people are praying to their savior Donald Trump, but it’s clear Trump will do nothing. All he wants is to attach his name to a peace treaty or news headline, to make him more eligible for the Nobel Peace Prize. In fact, why isn’t he reminding Thailand that American F-16s are not allowed to attack civilians? He is quietly allowing American bombers to (illegally) kill innocent Cambodian civilians, so you might infer that he is taking Thailand’s side in the dispute.

The fact that the US, South Korea, and Sweden are allowing their planes to kill civilians supports the hypothesis that all three are sending Cambodia and China the message not to increase their ties.

The above interpretation leads me to believe that Thailand may eventually decide that the message has been properly sent, and that no more performative hostilities are needed. For this to happen, Cambodia and China could indicate to Thailand that they have received the message. Some symbolic stepdown of Cambodian-Chinese relations might be the solution to the crisis.

THAILAND’S PERFORMATIVE ATTACKS ON CAMBODIA

‘Performative’ has become the word of year. Events around the world are seen more and more as motivated by the desire to present an image, a meme, a narrative, regardless of the truth or the facts.

This is precisely what is happening along the Thai-Cambodian border. Thailand is attacking Cambodia, not for any strategic reason, but to present one party’s tough-guy image of patriotism to the Thai electorate, just as elections are coming up. The world, however, can easily see through the lies of this propaganda.

Let’s examine some of the Thai propaganda blaming Cambodia for attacking first.

First, Cambodia has no reason to attack Thailand. The border issue is bogus, because that border has been officially established and recognized by international organizations for decades, if not centuries. Thailand has no legitimate claim to these lands. The areas disputed by Thailand are part of Cambodia, where ethnic Khmers have lived for years. Why should they want to expand their territory into Thailand? 

Thailand destroyed this bridge in Cambodia. Why?

Second, Thailand has attacked areas all along the 200-km border, far from the disputed zones. These attacks appear to be random and sporadic, with no visible motive. They now involve six provinces, from Koh Kong in the south to Preah Vihear in the north. There is no concerted strategy of invading and occupying any particular piece of land. Rather, the objective appears to be the creation of dramatic images of planes bombing villages, the destruction of bridges, the ruin of thousand-year-old temples, none of which are near or related to the disputed territories. These images are meant to be spread by internet to target audiences in Thailand, to demonstrate the military might of the party.

Destroyed Ta Krabei temple, before and after – to what strategic advantage?

Are Thai Buddhists happy about destroying sacred Buddhist temples?

Third, both stages of the fighting have been precipitated by Thai soldiers stepping on landmines. However, the Thai propaganda never quite states where these mines were located. Is there a hint that Cambodians are sneaking across the border and planting mines in Thailand? That makes no sense. On the other hand, if the Cambodians are planting mines on their own land, what are Thai soldiers doing in Cambodia stepping on mines? And why isn’t anyone investigating whether these were freshly-planted mines, or leftovers from the Khmer Rouge era some 40-50 years ago?

The infuriating thing about these theatric machinations is that pompous Thai politicians in back rooms are thinking only about how to gain a political advantage in the upcoming elections. They figure that ruining the lives of a million people will help them with their patriotic, bad-ass image. They have no compassion for all those displaced people whose homes they have destroyed, including those on the Thai side.

My fear is that those same Thai politicians are going to opine that the repetitious theatrics they have produced over the past week may be wearing thin on the bored Thai electorate. They have already escalated their memes to include the destroyed bridge and the ruined temple shown above. They may want to make even more outrageous attacks, in order to keep the public interested. Maybe a population center like Poipet or Pailin is next.

BEHAVIOR INFLUENCED IN THE WOMB: LGBTQ?

We almost always boil the questions of human behavior down to “Is it in the genes, or is it conditioned by society?” This is the common ‘nature-nurture’ debate. We seldom pause to think that there is a third way that human behavior can be explained: what happens in the womb between conception and birth.

Here’s a simple example: cocaine babies. Wikipedia describes the effects as

Babies exposed to cocaine may experience withdrawal symptoms at birth, including irritability, tremors, and feeding difficulties. They are also at risk for smaller head sizes, low      birth weight, and premature birth. 

Even more striking was the notorious ‘Thalidomide scandal’ back in the 1950s, in which some 10,000 babies were born with severe deformities due to the administration of the drug thalidomide to pregnant mothers. That was neither ‘nature’ nor ‘nurture’.

Thalidomide baby – neither nature (genes) nor nurture (environment)

I don’t think the effects of fetal brain chemistry during pregnancy have been adequately studied. This is undoubtedly because of our bias towards ‘nature-nurture’ thinking. ‘Nature-womb-nurture’ might be a better way of looking at it.

I believe that a lot of LGBTQ behavior can be linked to such changes in brain chemistry during pregnancy. While the body has been physically determined by the genes at conception, to be, say, male, the developing brain could conceivably turn out to have female characteristics, especially sexual orientation.

Almost all LGBTQ people will aver that they have felt that way as far back as they can remember. They do not ‘choose’ to be gay or transgender; that’s just the way they are.

For years, scientists have been searching for a ‘gay gene’, or at least some combination of genes that lead to LGBTQ behavior, but they have always come up empty handed. That is why so many binary-biased people claim, “See, if it isn’t genetic, it must be chosen or at least alterable behavior.”

There has been some research on the effect of brain chemistry on sexual orientation, and it supports pretty much what I have been saying. Here is an excerpt from an article from scitechdaily.com called Homosexuality Might Develop in the Womb Due to Epigenetic Changes

According to a newly released hypothesis, homosexuality might not lie in DNA itself. Instead, as an embryo develops, sex-related genes are turned on and off in response to fluctuating levels of hormones in the womb, produced by both mother and child. This benefits the unborn child, however if these epigenetic changes persist once the child is born, and has children of its own, some of these offspring may be homosexual.

The Wikipedia take on this is:

 The hormonal theory of sexuality holds that, just as exposure to certain hormones plays a role in fetal sex differentiation, such exposure also influences the sexual orientation that emerges later in the individual. Prenatal hormones may be seen as the primary determinant of adult sexual orientation, or a co-factor.

An endocrinology study by Garcia-Falgueras and Swaab postulated that “In humans, the main mechanism responsible of [sic] sexual identity and orientation involves a direct effect of testosterone on the developing brain.”

This theory explains how many individuals experience gender dysphoria: their biological sex (determined by their genes at conception) does not match their gender (determined within their brain during pregnancy).

It follows that it may even be possible to determine the gender (not sex) of a fetus by looking at its brain chemistry, and by considering what chemical changes in the mother might have led to their gender.

Blood test to determine the gender of the baby? Why not? (from shrewdmommy.com)

I truly wish that people and countries around the world would start to appreciate that LGBTQ is not a choice – that’s the way people are born. When a country like Uganda executes homosexuals as common criminals, I weep. That’s like executing cocaine babies. Many past cultures have executed left-handed babies (origin of the word ‘sinister’).

The more we turn towards ‘nature-womb-nurture’ thinking, the more we will appreciate that there may be many, many more influences on human behavior that occur during that nine-month stay inside the mother, whose chemistry is constantly changing.

DATs and SUBPRIME LOANS

DATs are companies whose business is hoarding cryptocurrencies

The more I delve into the intricacies of cryptocurrency, the more I am struck by its complexity. Like any other asset, there are all sorts of derivatives: funds of crypto, ETFs, futures contracts and on and on. As I pointed out last week, this complexity is far over the heads of ignorant, Dunning-Kruger congressmen, and Trump is hell-bent on removing any restrictions or regulations. The smart boys on Wall Street are licking their chops over ways to game the system.

I have already compared Stablecoin to the catastrophic Savings and Loan crisis. Today I want to look at DATs, or Digital Asset Treasury companies. The idea was made famous in 2020 by Michael Saylor with his company Strategy. His idea was to bundle together (called ‘hoarding’ in the media) several cryptocurrencies. The company’s share value is based on its holdings of crypto.

Some companies or countries are not allowed to trade in crypto, but they can buy shares in Strategy as an alternative to buying crypto directly. That is why Strategy (and its many look-alikes) are so appealing.

Strategy made billions on its model, so many other companies followed suit. They realized that simply by advertising that they are investing in crypto, their share value will increase. Once investors sink their capital into the company, the company can leverage even a small crypto holding into more investment capital. However, I flinch whenever I hear the word ‘leverage’. It is a dangerous word, because a small profit or loss in the underlying crypto can translate to a bigger profit or loss in the share value. As an article in MSN stated:

A flood of penny stocks and obscure microcap firms began using bitcoin as a headline tool, not an investment thesis. These companies had no real exposure to digital assets as a business — no mining rigs, no blockchain products. But they saw what happened to Strategy’s stock and tried to replicate it. The formula became familiar: issue a press release touting a pivot to crypto, announce a small Bitcoin or Solana purchase, and watch the stock briefly spike. In many cases, it worked — for a day or two.

Small companies have also started to dip into more thinly traded volatile tokens ⁠in a bid to boost their profits, creating more potential volatility risk for their share price

ALT5 Sigma, for example, is a company ‌that started a DAT strategy hoarding the Trump family’s cryptocurrency venture, World Liberty Financial.

If the Stablecoin phenomenon reminded me of the Savings and Loan scam, the complexities of DATs remind me of the Subprime Loan scam, in which highly risky loans and mortgages were bundled into Collateralized Debt Obligations, and somehow given super-safe AAA ratings. Of course, when the underlying mortgages went bust, so did the CDOs.

Today, we have highly risky cryptocurrencies hoarded by DATs, who then sell their shares at a premium. If the underlying cryptocurrencies go south, the leveraged DATs can lose their shirts, that is, the investors in the shares of the DATs lose their shirts.

So now we have Stablecoin looking like the S&L disaster, and DATs looking like the subprime disaster. I have only scratched the surface of the arcane world of cryptocurrencies. Who knows what other schemes are being hatched to siphon off billions of dollars, while ignorant politicians and Trump’s deregulators sit back and let it all happen. In fact, they are probably complicit in the scams.

STABLECOIN TETHER INVESTING IN RISKY ASSETS

Last week I wrote about the danger of Stablecoin, a variety of cryptocurrency that guarantees a base return of $1 for every dollar invested. I pointed out that they re-invest your dollars in high-risk assets which can make enormous profits for the issuer, but are protected by the Genius Act’s guarantee of a bailout in case they fail.

This scenario is taking place with the largest Stablecoin issuer: Tether (based in El Salvador, if that doesn’t already tell you something).

An article by Kim Jun-Hoong in Korea’s Chosunilbo put the details on Stablecoin’s gamble by stating that

S&P Global Ratings downgraded Tether’s stability rating from “constrained” to “weak,” the lowest of the agency’s five-tier scale for crypto assets.

Chosunilbo’s graphic describing the Stablecoin’s promised peg to the US dollar.

In fact, 5.5% of Tether’s collateral is invested in Bitcoin, which is quite volatile and has dropped a lot in recent weeks. If you think you are investing in Stablecoin for safety, you are partially investing in Bitcoin or other unstable cryptocurrencies. Chosunilbo warned that if Bitcoin’s value drops alongside other high-risk assets, Tether’s collateral capacity could rapidly deteriorate.

In general, 24% of Tether’s collateral consists of high-risk assets such as corporate bonds, other cryptocurrencies, and gold. That could be a recipe for disaster — your Tether coin would no longer be worth one dollar.

Are other Stablecoin issuers following the same risky investments of their collateral? I think we can surmise that they are, and that a drop in those risky assets could doom the issuers, forcing the US Government to bail them out, to the tune of exorbitant sums that the government cannot provide.

That’s exactly what happened in the Savings and Loan crisis in the 1980s, costing taxpayers some 132 billion dollars.