Written by our Director of Equity Advisory, Jeremy McKeown, the HyperNormalTimes provides in-depth and considered long-term commentary on major macroeconomic and market-shaping themes.

<< Back to HyperNormalTimes archive

January 14, 2024

Our Crumbling Cathedral – Bitcoin & Mr Bates


Mother, should I trust the government? Roger Waters. 

If I had understood the situation a bit better, I should probably have joined the Anarchists. George Orwell.


The Post Office Horizon scandal has played out in plain sight for the past two decades with indifference from the people and organisations we (citizens, taxpayers) entrust to ensure the organs of state function properly and fairly. The tireless work of Alan Bates, Computer Weekly and a few other brave and resilient people went unnoticed until ITV shone a light to expose the scale of human tragedy and institutional indifference to the victims’ plight. As recently as 2019, the Post Office’s CEO, who oversaw this tragedy, was awarded the honour of Commander of the British Empire (CBE), praised for her commitment to diversity, inclusion, and social purpose at the heart of the organisation she ran.

Russian-speaking, American-Ukrainian, self-styled anarchist and political critic Michael Malice refers to The West’s Cathedral as a catch-all term for the established, mutually supportive alliance of prestige universities, government agencies, media organisations and political parties. As such, the Post Office is a longstanding pillar of the British Cathedral, and its now demolished reputation, which happened slowly at first and then very quickly, is further evidence of the erosion of trust in our government and its machinery. So, let’s take a pew, say a Hail Mary and marvel at how the pillars of high democratic liberalism are crumbling before our eyes and how this theme might develop over the coming year of national elections.

The year’s most consequential campaign for financial markets will likely be the US presidential election in November, and while it is still early days, it looks set to be a re-run of the 2020 shoot-out between Biden and Trump. As with many democratic processes, voters have more strongly held views about who they do not want to lead them than positive views about who they might regard as the best party or candidate. However, American Cathedral goers must realise that the more they show unified judicial, political, and ideological objections to Donald Trump’s right to be on the ballot paper, the greater sympathy he gains among the disaffected American electorate. As singer-songwriter Oliver Anthony said, the rich men North of Richmond think you don’t know, but I know that you do.

Further North of Richmond, the Presidents of Ivy League schools, Harvard, MIT and U Penn, were questioned by US Senators in December amidst growing evidence of antisemitism on their campuses. In response to the question of whether calling for the destruction of Israel and the annihilation of Jews was contrary to their university codes of conduct, these leaders prevaricated and replied that it depended on the context. Two of the three leaders have since resigned under pressure, with the Jewish investor, alumnus, and donor Bill Ackman pressurising Harvard President Claudine Gay out of her role in early January. On her departure, Gay blamed subversive anti-feminist and racist ideology for the unwarranted attacks on her integrity.

Meanwhile, in Europe, which holds EU parliamentary elections in June, German farmers are in the French style, with several thousand tractors blocking Frankfurt protesting against higher taxes on what we in the UK call red diesel. Olaf Schultz, who is less popular with his electorate than Rishi Sunak is in the UK, struggles to maintain his coalition with the Alternative for Deutschland (AfD) breathing down his neck. Next door, French President Macron has boldly appointed a 34-year-old Prime Minister in an attempt to avoid wipeout in the June elections, the first since Brexit.

But if there is a significant country where trust in government is a prerequisite of citizenship, it is Xi Jinping’s China. Xi’s political power base has increased since the last CCP National Party Congress in October 2022. However, coinciding with the stage-managed event was the final act of the controversial zero-COVID policy, an episode that shook the people’s confidence, as far as can be told.

Chinese citizens have only been allowed to own private residential property since 1998, and given their chance, its people have gone all in over the last quarter of a century. In the process, they made China’s housing market one of the world’s largest asset classes worth approximately $117tn. The CCP implicitly backed this act of all eggs in one basket savings, and Chinese homeowners were rewarded with 20 years of upward-only property prices.

However, today, this market and its financing have multiple problems, including a rapidly declining working-age population due to the disastrous one-child policy since the 1980s. Unlike Europeans and North Americans, Chinese workers did not end the lockdown with excess savings. They needed to rebuild their balance sheets to protect themselves against the rising costs of healthcare and old age. However, they now have also to repair the damage done by falling property prices. (It would be ironic if the major credit event of 2024 were an Asian financial crisis brought about by an economy some 18 months ahead of the West in providing monetary stimulus).

The most crucial foundation stone to the West’s Cathedral is the state’s monopoly supply of money, which from 1971 has been wholly fiat-based, with the US dollar the undisputed global reserve asset. (See www.wtfhappenedin1971 for more details). Despite being backed by the world’s largest economy and most lethal military strike force, this cornerstone is fragmenting.

Last week, the SEC (the Cathedral’s financial Swiss Gaurd) finally conceded, through gritted teeth, the approval of Bitcoin ETFs. This overnight has expanded the ownership potential of an asset, like gold, that is no one else’s liability. It is what Zoltan Povzar describes as outside money. As any Bitcoiner worth their salt would tell you, if they’re not your keys, they are not your coins. Like owning a gold ETF, with a Bitcoin ETF, you still have counterparty and confiscation risk, which kind of misses the point. But significantly, the enablement acknowledges that Bitcoin, a fifteen-year-old network, has been accepted into the established financial order.

Another area where fiat currency and the Central Bank orthodoxy it depends on is coming under pressure is Russia’s foreign reserve assets and the upcoming decision by the G7 next month regarding its sequester. At stake are $300bn of Russia’s bank deposits, bonds and other financial liabilities of Western countries that Putin didn’t manage to protect before he invaded Ukraine. The FT reported that as the second anniversary of that invasion approaches, the G7 should do the right thing and seize these assets to help finance arms for Ukraine and ensure justice is done. A round of applause from the Cathedral, but concern all round from the libertarians.

What is a justifiable and necessary action for people on an editorial board of one of the Cathedral’s media assets is unlikely to be the agreed line by the likes of Roger Waters, George Orwell or Michael Malice. For committed Bitcoiners with their own keys, the issue is soluble by totally decentralised, trustless digital assets; for Alan Bates, Computer Weekly and the 100s of violated sub-postmasters of Britain, we can only guess, but one suspects they just want closure and compensation, and fiat currency would do nicely, thank you.


This communication is provided for information purposes only, and is not a solicitation or inducement to buy, sell, subscribe, or underwrite securities or units. Investors should seek advice from an Independent Financial Adviser or regulated stockbroker before making any investment decisions. Progressive Equity Research Ltd (“PERL”) does not make investment recommendations.

Opinions contained in this communication represent those of PERL and/or our affiliates at the time of publication and PERL does not undertake to provide updates to any opinions or views expressed. PERL does not hold any positions in the securities mentioned in this communication, however, PERL’s directors, officers, employees, contractors and affiliates may hold a position,  and/or may perform services or solicit business from, any of the companies or related securities mentioned.

Any prices quoted in our research are as at the previous day’s close.