Blain’s Morning Porridge 12th Feb 2025: The Billionaire Technocracy’s Goals, Middle Earth and What Follows Trump?
“In a hole in the ground there lived a hobbit.”
Trump has hit the global economy with extreme force and a blizzard of confusion that’s working well for him as his domestic popularity rockets. JD Vance delivered a clear message to Europe yesterday – our way or no way. But ultimately, what is the real power dynamic in the USA? Clue: it’s not Musk. The answer may be Peter Thiel and his fascination with JRR Tolkien.
If you wanted to know who much the world has changed since January 20th 2025, then the look on Ursula von der Layen’s face said it all yesterday – shock and horror. The young barbarian warlord from the New World, US Vice President JD Vance, delivered a clear and brutal message to the Paris AI conference, upon which Macron of France and others had set such high hopes upon. The UK looked the other way, and backed the Americans.
Vance swept aside any illusions European leaders may hold about becoming challengers in the AI universe. He told Europe to back off on Digital Services regulation, forget dealing with China in tech, and to do exactly what US tech firms tell them to do – or else. “Our Way, or No Way.” The speech is being portrayed in the media as Vance echoing his master’s America First message.
The attack on Europe’s AI pretentions came even as Ken Griffin, CEO of Citadel, and prominent Republican donor, (remind me; who were the Republicans?), warned that Trump’s aggressive trade sniping is going to cause enormous damage to the USA’s reputation around the globe. A No Sh*t Sherlock award is in the post to Ken – but no one is really listening. Griffin made some serious business points about how CEO’s can’t make long-term investment plans when the world is in turmoil from short-term tariff and trade spats.
Macro-economic convention would suggest trade disruption, and the cost consequences of tariffs, government job layoffs, spending cuts, and open economic hostility towards former close allies, bodes extremely ill for growth and will inevitably lead to recession. As established alliances are overturned, then what will the encouragement of US companies to bribe their way into foreign contracts mean for new power relationships?
We should not be surprised – we should have known what was coming. Trump’s blizzard of Executive Orders and off-the-cuff MAGA aggression has left the world reeling. Many market observers believe it’s deliberate; Trump’s tactic of destabilising any and all opposition, allowing him to push policy concept that would previously have gone nowhere. He’s mastered a new form of Blitzkrieg politics and its working. Middle East leaders are so shocked by Trump’s plans for Gaza, they are queuing up to “negotiate” with him. He will get a deal.
The fact Trump’s domestic approval ratings are rising as he creates mayhem is an extraordinary illustration of how he’s successfully read the mood of his electorate. The voters believe Musk has “uncovered” massive fraud and corruption through DOGE. They hear Vance delivering a message of US economic exceptionalism – they don’t hear the threat, they hear strength and applaud him. What next? A deal with Putin on Ukraine, (and yesterday Trump hinted Ukraine might yet be Russian again), may horrify Nato allies… but if Zelensky isn’t prepared to pay for Ukraine’s defence – why should American voters care?
There is no point being shocked at what Trump is doing. Bleeding heart liberals will be left to bleed out. Trump’s policies of disruption and aggression towards the World – reminding them who the biggest swinging Mickey in the room is – may make Americans Feel Great Again, but it will inevitably spawn economic consequences which will hit Trump’s MAGA voters the hardest when they inevitably hit.
Trump’s backers want to avoid that inevitable pain when it comes. The challenge for markets and investors is to understand what might really be going on the USA. I think there is something much deeper than the emergence of an Trumpist authoritarian MAGA autocracy/dynasty underway.
It’s no secret that Tech money – over $270 mm from Musk alone – and support in terms of opening up Crypto supporters, the power of social media, X and the use of podcasts to capture a far larger share of young voters than the Democrats expected, helped propel Trump to victory. What we’ve seen since the election hints at how it happened – how the great Tech-lords of the American Economy flanked Trump at his coronation, and have queued up to kiss his imperial ring.
At this point, we have to understand the Court of Trump is reliant not only on the power MAGA supports give him over the former Republican Party, but also on the wealth of the Techlords. They are the real power in the USA – a factor the now dismissed Steve Bannon saw only too clearly. The wealth and power of the Billionaire Technocracy will be exercised to steer markets and the economy in their favour.
Vance is key part of the new US power equation. He proved yesterday that he is more than competent to play the role of the Mouthpiece of Trump bossing around vassal states (which is how Trump apparently views NATO). Vance would no doubt would seek the MAGA mantle as Trump’s successor, but is aware that is unlikely to happen without external pressure. Many believe Trump’s vision is to establish MAGA as the base of his own political dynasty.
Vance was never chosen by Trump as his running mate. Vance was put in place by the Billionaire Technocracy as the price of their support. Peter Thiel, David Sacks, Chamath Palihapitiya, Bill Ackman, Founders Group, and the rest… they funded Vance’s campaign and the price of their support for Trump was Vance at his side.
Oh, conspiracy theory upon conspiracy theory…
Now the rest of Silicon Valley has fallen into line, creating a loose confederation of brilliant upcoming and established US tech entrepreneurs united under the banner of ensuring US Tech industries dominate the global markets. To do so, they are willing for Trump and Vance to represent them on the World Stage – as Vance so effectively did in Paris yesterday. They are collectively – the Billionaire Technocracy. They have wealth, they have power, and want to preserve and grow it.
The very public spat between Elon Musk and Sam Altman highlights there is much jostling within the Court of Trump. Altman scored a significant success when Trump supported the launch of Stargate, a $500 bln investment programme from OpenAI, Oracle and Softbank. Musk immediately responded by trying to rubbish the initiative – where is the money? He’s now trying to buy Altman’s company with a $97.4 bln bid, which Altman has brushed aside, offering a counter bid for X.
However, the real power in US Tech is not Musk – however much he tries to dominate the flow in terms of DOGE, through X/Twitter and leveraging up his supposed technological brilliance at Telsa and SpaceX. The fact is neither Trump nor Altman are inventors or technologists – they are very savvy investors and entrepreneurs.
It would be useful to map out the connections and allegiance lines of the US Billionaire Technocracy – something I might try to do in coming days. The real power lies with others – the Middle Earth fraternity for want of a better term. At its core lies Peter Theil.
I suspect JRR Tolkien would be spinning in his grave if he knew the US defence industry’s two new paladins, Palantir (The Seeing Stones) and Andruil (the sword, The Flame of the West) were named from his fantasy novels.
Peter Theil, co-founder of market darling Palantir, also gave JD Vance his start in Hedge Fundery – at Mithril (yet another Middle Earth reference, the impervious metal from which Bilbo Baggin’s coat of mail is made from), before forming his own fund, yet again with a Tolkein connection – Narnya (one of the three Elven rings of power!), which was also backed by Thiel.
Anduril, run by Palmer Luckey (who sold Occulus Rift to Meta a decade ago), is the new defence industry star – taking over Microsoft’s augmented reality headset for the US army – a $22 bln contract! Anduril was funded by Thiel and Founders Fund, and is now valued at $28bln.
There may be more parallels with Tolkien than Thiel and his fellow hobbits realise. A core tale of Middle Earth is how the Kingdom of Numenor, the new world granted to Men as a reward for their steadfastness against the evil of Morgoth, falls into evil ways and is wiped from the face of the planet in a Cataclysm of Atlantean proportions.
Just saying…
Out of time, and off to catch train to London…
Bill Blain
Author Morning Porridge
