The Deep State Paradigm: Keeping The Wheels Turning + Colonial Powers + Digital Disruption + Global Survival ????

In this piece, we’re distilling key insights from KVP’s fascinating exchange with I Am Deep State — a behind-the-scenes player whose career spans across elite institutions from Wall Street to 世界银行 . ????. With academic rigor (shout-out to 美国哈佛大学 ??) + street-level smarts from decades of geopolitical navigation ??, I Am Deep State brings a unique perspective on power’s evolution.

But First... Who Is I Am Deep State

I Am Deep State isn’t your average market pundit. He’s got miles under his belt from the world’s most elite circles all the way back when Goldman Sachs was a partnership. ?? He's wired into networks that span continents - from North America to Hong Kong, especially in the pulse of China’s dynamic rise. ??

Part old-school sage, part new-school disruptor, I Am Deep State embodies a rare mindset with perspectives challenging surface-level narratives, revealing the hidden systems shaping the future.

The Deep State Is Not What You Think ??

In our no-holds-barred convo, I Am Deep State lays it out:

“Deep State isn’t a monolith of shadowy figures pulling strings... It’s a state of mind. A coalition of institutions - government + quasi-government + private - that’s survived & thrived through wars, crises, & massive technological shifts.” ??

Let that sink in. 世界银行 alone, at the time when I Am Deep State worked there, was the second biggest employer in Washington, DC ?? (only Uncle Sam had more bodies). But more importantly, these institutions form the plumbing of global finance - allowing the free flow of capital + power + policy across borders. At least if you are on their side of the table - you get invited to the Goodie Room! ??(Shout out to Tom Cruise in #TropicThunder, there will never be another scene like this...)

As KVP notes, most people in finance think they’re independent players, if not masters of their respective asset class or strategic domains, or at the very least veteran capable players... yet in reality is they’re swimming in some of the deepest & darkest of waters, backed by systems most barely understand... & only a very few know the full capabilities of the colossal fabric ??

From Deep State 1.0 To 2.0... The Evolution Of Power ??

History buffs will dig this. ?? I Am Deep State frames the past like this:

“Colonialism? Yeah, that was Deep State 1.0. It was crude, violent, like an old DOS operating system (prior to windows). But what came after WWII - that was Deep State 2.0... Pax Americana.”

The analogy couldn’t be clearer. ???

Deep State 1.0 was all about hard power - extracting resources by force + enslaving entire populations + running empires like corporations. ?? Case in point: Take the British Empire’s $45T extraction from India . Imagine trying to build an economy after that level of wealth drain. ??

Post-WWII, the U.S. flipped the playbook: “You join our system, you get the perks: credit cards + global trade + access to capital. But play by our rules, or you’re isolated.” ???

You see, economic dominance wasn’t the goal here. This was about locking the world into a belief system powered by dollars (given the baton has switched to the US) & SWIFT codes. The difference?

It was mutually beneficial (on paper, anyway ??). Enter the likes of the Marshall Plan , Bretton Woods , NATO ... a new world order based on stability & interdependence. ??

The Power Paradox: Belief Trumps Money ??

A mic-drop moment ?? in the convo came when I Am Deep State said: “It’s not money that’s power... it’s belief. He who believes the strongest wins.”

This is the kind of deep truth that explains why governments don’t run like businesses, optimizing for their shareholders & stakeholders, governments optimize first & foremost for themselves. It’s all about survival, their number one priority - even (if not by default) if its at the expense of their own tax payers. Money flows & ebbs, but the game isn’t about profit margins - it’s about national security & making sure the system stays intact. ??

You can see the delta - if a venture or company stops being a going concern, the founders & employees can move onto the next company - if a government stops being a going concern, the repercussions are epically more significant.

The 2008 Financial Crisis proved this.

At first, it looked like a cash problem - banks failing, liquidity drying up.

But TARP’s $700B injection wasn’t just a quick money fix - it restored belief in the system, when the system was pushed into what seems like an abyss by Wallstreet (Mainstreet did not get a vote). Without that belief, the whole thing collapses, & suddenly we’re trading food for water in a modern-day Mad Max scenario. ?? Spoiler: that didn’t happen. Instead, TARP turned a $15.3B profit. Not bad for government work... yet the devastating monetary policy & printing experiment that it unleashed... we are still calibrating to this day... over 16yrs later.

If we had to break it down ??, here’s part of the belief system global governance operates from:

• Real power lies in the threat, not the execution. Its a carrot & mother of all big sticks game.
• Direct force signals weakness, not strength. It can & often leads to unintended consequences.
• Control flows through systems, not a series of actions. Just like in life Consistency > Intensity.
• Two Rules: One - Optimize for survival, regardless of the costs & consequences. Two - see rule One.

Whether you’re talking about communism, capitalism, democracy, socialism or any system in between... belief is the glue that holds it all in place. ??If enough people believe... then it is birthed into reality... if enough people switch beliefs, then its loses its network effect & dies. This is why its so hard to kill an idea in something like Hamas or Hezbullah .

This echoes what KVP wrote in The Macro Dragon: "Money is no longer money ??" - as fiat loses value in a sea of inflation & surveillance, those holding the reins of belief, not currency, hold the true power.

China’s Paradigm Shift: The New Deep State Player ??

When I Am Deep State talks about China, it’s like seeing through the Matrix. ?? China’s leaders looked at the U.S. having a debt-fueled party in 2008 & said, ‘Why are we paying for this?’. I.e. Why are we footing the bill, that was caused by the actions of others. This moment of realization set the stage for China’s pushback through its own initiatives. ??

China’s $586B stimulus was 14% of GDP - a massive injection that saved their economy (& the overall global market at the time) but overexposed their property market (now 30% of GDP) & set off a $1T tech crackdown. ?? ?I Am Deep State calls this moment a “magnificent misunderstanding,” like a bad marriage where both parties are so far apart the only path forward is separation. We’re seeing the fallout today: youth unemployment at over 20%%, developers defaulting, & local governments buried under $9T of debt. ??? Bear in mind, these are the known unknowns... we can only imagine the real numbers, once the unknown unknowns are added to the tab.

Deep State 3.0: AI & De-Globalization ??

This is where things get spicy. ??? Looking ahead, I Am Deep State identified two bombshells: Deep State 3.0 will tackle AI & de-globalization.

Governments will regulate AI as they did the internet ??. No state will allow a parallel intelligence to take control of its destiny (at least thats what Government Sapiens think, The Hive would beg to differ ).

The second force? De-globalization - think friend-shoring, CBDCs & SWIFT alternatives. The world is fragmenting - fast. ? For governments, the real game is keeping control while looking like they’re not. As KVP & I Am Deep State discussed, the U.S. learned this long ago: you don’t need to physically occupy a country to control it. You just need to control the META rules & frameworks of the system. ??

Diplomacy isn’t about kindness or honesty - it’s survival. War signals system failure, so the real game is in backroom negotiations, where diplomacy creates controlled chaos without triggering full-blown collapse. ??

Channeling Machiavelli’s playbook: “A wise Prince should never use his power because it’s dangerous. It may threaten to topple him.” ??

In the end, the ultimate currency isn’t money. It’s stability. As long as the system holds, even inefficient governments can last for decades. Change only happens when stability’s gone - & when it breaks, it breaks fast. ????? Stability is a lack of serious structural (systematic) volatility, at the very least for long periods of time.

Stay Tuned... The Best Is Yet To Come ???

KVP is barely scratching the surface here. The full conversation with I Am Deep State is dropping next week ?? & trust KVP - you won’t want to miss it. We go deeper into the evolution of power, AI’s disruptive potential, & how the global chessboard is shifting right before our eyes. ??

Stay sharp??, stay curious.

Keep a mind that is open to everything yet attached to nothing.

-KVP

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