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SVB, contagion, and preserving Ethiopian culture with NFTs

This is an excerpt of “SVB, Contagion & Preserving Ethiopian Culture with NFTs” thought piece that is first published on The Digital Wayfinder, the newsletter by George Siosi Samuels tackling topics from Web3 to Notion AI and ancient history.

Last week, we dove into Digital Wayfinders, ChatGPT’s A.I. Arms Race & Nouka Puriël. This week, we look at the failure of Silicon Valley Bank (SVB), lessons from history, and preserving Ethiopian culture with NFTs.

Let’s dive in…

If you tuned into Twitter this weekend, you might’ve heard the news about SVB being one of the largest bank failures in U.S. history. Before the crash, it managed $212 billion. The news caused shockwaves across the U.S., especially for founders and businesses who had their funds tied up with SVB.

But if you really want to see what this means, study echoes from the past:

As investor Ray Dalio has mentioned before, these events are quite predictable if you look at the macrocycles that plague civilizations time and time again. In the early 1400s, Banco Medici (of the infamous Italian Medici family) collapsed after 100 years. Why? Because of poor management, fraudexcessive lendinginsufficient reserves and capital (what most of today’s banks continue to do), and lack of corporate governance. The same signs are present in 2023.

So although there was panic about what would happen today (Monday) when markets opened, the U.S. dodged a bullet by having the government step in. Ironically, many of the entrepreneurs and V.C.s crying for this bailout were criticized for touting “libertarian” notions of the need to have no government and providing no bailouts in the past.

The “contagion” has been contained for now, but fears over the weekend did rear its ugly head in the U.K. and Chinese markets (HSBC [NASDAQ: HSBC] quietly purchased SVB’s U.K. arm for £1 or $1.22), interestingly enough.

What do you think this will mean elsewhere, though? Increased inflation.

And although things seem ‘fine,’ it’s just kicking the can down the road a bit further. In other words, SVB should’ve been allowed to fail (if we’re looking longer term). This was essentially a bailout for the venture capital community and their portfolio companies. It happened in 2008, albeit with a different group, yet the U.S. seems to be repeating the same mistakes of the past.

What would the ancestors (i.e. Founding Fathers) of the “great United States” think about all this?

Read the full piece and subscribe to The Digital Wayfinder newsletter by George Siosi Samuels here.

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