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Coffee Break: The Mask of Unreality Slipping?

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The mask of unreality worn by the powers that be is slipping as the narrative wars escalate and collide with inconvenient realities like 3 million pages from the Epstein files, 10 sigma events in the precious metals markets, the AI circular finance scheme breaking down, a shocking election result in Texas, and maybe the end of AI circular financing.

The Interregnum of Unreality

I postulated last year that America and the West have been trapped in an “interregnum of unreality” since the Obama era:

Until the pillars of American power (the dollar as reserve currency and the perception of American military primacy) fall, the Interegnum continues.

The Interregnum of Unreality kicked off when Obama’s administration and Bernanke’s Fed elected to keep the markets and economy going via massive Quantitative Easing rather than structural reform of the markets that failed under Bush and Obama.

It was paired with a change in geostrategic tactics. No new boots on the ground invasions, although the Iraq and Afghanistan occupancies were maintained as long as possible.

Instead, Obama preferred no-fingerprints regime changes (Egypt, Tunisia, Ukraine, etc) or proxy wars  (Syria, Ukraine). He also happily accepted the Nobel Peace Prize for essentially not being GW Bush, even while continuing and expanding on many of Bush’s worst policies (surveillance, drones, etc).

After Trump’s election win in 2016, Obama and the Democrats moved to set up a Silicon Valley censorship regime, sending RussiaGate ringleader Mark Warner to Twitter and other companies to let them know that if Adam Schiff wanted an account removed it would be removed.

The “Resistance” to Trump in his first term included much genuine grassroots opposition but was headed by resistance from the Deep State, the MSM, and the online monopolies.

Biden attempted to expand on the total information control, but since he was as charisma-challenged as Obama was blessed and the wheels came off of so many of his policies mid-term, the Democrats lost control of the machine along with their credibility.

It’s tempting to declare us in a new regime, given Trump’s re-election and seeming consolidation of power, which has seen him bring the Silicon Valley companies and much of the MSM onside.

But I think it’s more useful to think of Trump’s second term as merely a change in management for the pre-existing apparatus of control, which seeks total information dominance via traditional and social media.

This past weekend saw several barely controlled eruptions of fact that threaten to rip the mask of unreality off the Western narrative regime.

Let’s start with the undigested horrors vomited up by the Department of Justice’s most recent releases from the Epstein files.

Consensus Reality Smacked With Massive Epstein Revelations

CNBC summarizes the scope of the document dump:

Deputy Attorney General Todd Blanche said the department was releasing more than 3 million pages of documents in the latest Epstein disclosure, as well as more than 2,000 videos and 180,000 images. The files, posted to the department’s website, include some of the several million pages of records that officials said were withheld from an initial release of documents in December.

Media and alt-media flies are swarming on the pile, competing for cheap clicks and to control the interpretation of the revelations. Some seek to maintain the mask of unreality, others are trying to rip it off.

It’s too early to draw many conclusions other than to say that quick survey of headlines from The Financial Times show the files are full of bad news for such titans as Bill Gates, several pre-eminent Norwegians, UK’s ruling Labour Party, prominent figures from the UAE, private equity titans Apollo Global, ex-Barclays CEO Jes Staley, the former Prince Andrew, and many others.

For their part The New York Times has focused on the DOJ’s process, how Trump appears in the files, and only secondarily on business leaders outed in the files:

Trump’s DOJ seemingly did a good job of keeping anything too awful about the POTUS coming out in this batch, since the NYT characterized the new revelations re: Trump as “salacious and unverified claims, as well as documents that had already been made public.”

Despite this tranche of Epstein files doing bipartisan damage, the scope and nature of the revelations in the files leave the ruling class of America and Europe looking collectively monstrous and the mask of reality torn and tattered if not removed.

There are also some indications that Epstein’s fortune originated in the nexus of bad actors involved in 80’s scandals like BCCI and Iran Contra.

I’ll close this section with some very interesting revelations about Epstein and Ghislane Maxwell’s information control activities involving platforms like Reddit and 4Chan, the mask of unreality didn’t build itself you know:

There’s also some revelations that seem to expose Epstein as a big behind the scenes player in Bitcoin.

Just goes to show that our hypernormalized world is the most manipulated thing ever, behind the mask of unreality.

But maybe that narrative control is beginning to break down. It’s definitely showing signs of wear and tear in the commodities markets.

Weird Scenes in the Precious Metals Markets

The weekend was also bookended by some extremely dramatic movements in the gold and silver markets that revealed a serious discrepancy between New York’s Comex and Shanghai’s Shanghai Futures Exchange (SHFE) and threatened to rip off the mask of unreality.

Friday, after the Asian markets had closed Comex saw an incredibly dramatic price drop in silver:

Holy backwardation, Marketman!

Commodities analyst David Jensen had questions:

Nothing changed on Friday in the terms of silver metal supply to market reducing the global silver shortage that has driven silver’s price higher.

The open interest (total contracts) on the CME COMEX ended down just 5% on the day indicating that the trading on that day was just a churn with little covering or new positions despite the massive ~ 2x average daily volume traded on Friday.

The CME COMEX has ‘circuit breakers’ in the silver market that halt trading for a period if extreme price movements occur to allow for a more orderly market. What the CME COMEX calls dynamic circuit breakers automatically kick-in when the price of silver drops or rises by 10% on a rolling 1 hour basis. We can see in Figure 1. below that from ~ 12:30 to ~ 13:30 Eastern Time, the price of silver – both cash/spot and futures – ranged between $91 /oz. and $75 /oz., representing an 18% range, and yet the CME COMEX automatic circuit breakers were not activated nor announced by the CME. Yesterday, I wrote a letter to the CME asking why this exception to CME COMEX rules occurred and will report their response when received.

Here’s how CNBC tried to explain it to the squares:

Silver and gold fell on Monday, extending losses after a major selloff at the end of last week.

Silver futures ticked down 0.3% to $78.70. Silver, which had surged alongside gold on safe haven demand and speculative inflows, dove 28% on Friday for its worst day since March 1980.

Gold futures slid more than 3% to around $4,707. The yellow metal dropped nearly 10% on Friday, sending prices below the $5,000 an ounce mark.

The metals swung between gains and losses in Monday’s choppy trading day.

The CME Group increased margin requirements following the steep sell-off last week, effective Monday after market close. Margins on COMEX gold futures have been raised to 8% from 6%, while those on the COMEX 5,000-ounce silver futures were lifted to 15% from 11%.

Metals saw a violent reversal on Friday as optimism around U.S. interest-rate cuts collided with a sudden reassessment of Federal Reserve leadership after President Donald Trump nominated former Fed Governor Kevin Warsh to succeed Chair Jerome Powell after his term ends in May.

Others ascribed the action to blatant market manipulation:

Key points:

When margins are raised across the entire precious metals complex like this, it’s not a single metal story. It’s the exchange saying the volatility regime has shifted enough that the system needs more collateral per unit of exposure.

The part most people miss is that this is a margin regime change

The key shift is how margins are being calculated. CME has moved more explicitly toward percentage of notional margining rather than static dollar amounts. That matters because fixed dollar margins quietly increase leverage as prices rise. Percentage based margins do the opposite because they automatically tighten leverage as prices go vertical. This is CME preventing leverage from expanding precisely when it’s most dangerous.

That’s the real story. This is a clearinghouse firewall, not a headline grabbing intervention.

Just Dario had more:

Key points:

It is an open secret now how many banks and brokers were under water on their silver positions, gold and other precious metals especially after the rally in January. Beware this flow chart roughly applies to all these metals that all crashed on Friday (not silver alone).

What’s even more remarkable is how precocious metals crashed on Friday in isolation, stocks, bonds and other commodities were totally unaffected. Anyone that understands any basic of macro and markets knows how this is logically wrong.
…
All in all, it’s fair to estimate how banks and brokers made up to 5bn$ of profits (or lowered their pre existing losses depending on how you look at it) orchestrating one of the biggest price manipulation in the history to abnormally crash the price of silver in a single day. Surely they made more if you consider the same dynamics happened on gold platinum and palladium.

However this left the precious metals market in a massive price dislocation not only between physical and paper, but also across financial products and exchanges.

Trading resumes in less than 24 hours and there is a chance that what’s about to happen is going to be even more historic than Friday’s events because China and India won’t stop buying silver because of the severe industrial shortage they are dealing with.

This video by the Boring Currency is highly recommended for those with a few minutes and hankering to understand WTF?!?

Shanaka Anslem Perera distilled the contending narratives battling for control over silver pricing:

On January 30, 2026, silver futures crashed thirty-one point four percent in a single session, the largest one-day decline since the Hunt Brothers’ collapse in 1980. The institutional interpretation crystallized within hours: speculative excess had been purged, the bubble had burst, and the metal would return to equilibrium somewhere below fifty dollars where sober analysts had always said it belonged. Bloomberg ran the headline “Silver Bubble Bursts.” The Financial Times called it “a long-overdue correction.” Goldman Sachs reiterated their conviction sell recommendation. The smart money, according to this narrative, had seen it coming.

The smart money missed the only data point that mattered.

While paper silver was crashing in New York and London, physical silver in Shanghai was trading at premiums exceeding fifty percent over the COMEX price at the crash low. In Dubai, wholesale premiums reached eighteen percent. In Mumbai, dealers were quoting twenty-five percent above the screen price. At the exact moment when paper silver printed seventy-eight dollars and twelve cents, the lowest tick of the crash, physical silver in Asia was changing hands at prices equivalent to one hundred twenty to one hundred thirty dollars per ounce in wholesale markets where actual metal was delivered. The financial press reported the paper crash. They did not report that physical premiums widened by thirteen to fifty-four percent during the very session that was supposed to prove silver was overvalued.

This is the opposite of what should happen when an asset is genuinely overvalued. When a bubble bursts, holders rush to exit, and physical markets trade at discounts to paper as metal floods the market seeking bids. The widening of physical premiums during a paper crash is the signature of something else entirely. It is the signature of a market that has fractured into two separate pricing regimes that no longer communicate with each other. The paper market and the physical market have divorced, and the implications of that divorce will define precious metals investing for the next decade.

It’s not just markets where the mask of unreality is slipping and threatening the Trump 2.0 regime.

Trump has been doing his best to put an end to the American experiment, but maybe it won’t work.

Trump’s Rapid Clampdown

John Burn-Murdoch at The Financial Times documents the atrocities:

The speed, scale, flagrance and persistence of the Trump administration’s deviations from established legal and constitutional norms during his second term have been so dramatic that it bears stepping back and taking stock.

Within hours of his January 2025 inauguration, Donald Trump had pardoned hundreds of people convicted of political violence — a hallmark of aspiring autocratic regimes — and shown tacit support for violent resistance to electoral setbacks. Days later he removed legal protections from civil servants and fired 17 oversight officials charged with tackling fraud and corruption. By March the administration was in open conflict with the courts, summer saw police firing rubber bullets at protesters and the removal of the labour statistics agency chief in the wake of weak jobs numbers, and this month brought the criminal investigation into Fed chair Jay Powell and the shootings of Renée Nicole Good and Alex Pretti by Immigration and Customs Enforcement agents.

While US history is hardly free from political violence or maltreatment of disfavoured groups, this blitz on America’s citizens, institutions and — by many estimations — the constitution itself ranks as arguably the most rapid episode of democratic and civil erosion in the recent history of the developed world.

While I certainly think there is plenty of room for skepticism about this kind of quantitative analysis of qualitative phenomena, my lived experience of Trump 2.0 jibes with the FT’s account.

But maybe there’s reason for hope in the narrative wars.

Special Election in Texas Results Are Truly Special

I’ve worked on a LOT of political campaigns in Texas in this century and I have never seen a swing in voter sentiment like we saw last week.

From the Texas Tribune:

Democrat and machinist union leader Taylor Rehmet won the special election Saturday to represent a solidly red Texas Senate district that President Donald Trump carried by 17 points in 2024, a stunning upset that injected a fresh and urgent sense of a panic into the GOP from the Texas Capitol to the White House heading into November’s midterm elections.

With ballots tallied from all but a handful of voting centers, Rehmet had 57% of the vote, besting the 43% for his GOP opponent, conservative activist Leigh Wambsganss, who vastly outspent Rehmet as Republicans including Lt. Gov. Dan Patrick mounted a furious funding push in a bid to tilt the election in their favor in the final days. …
Rehmet was far outspent in the leadup to the November election, spending $68,000 compared to millions spent by the two GOP candidates. He remained financially outgunned heading into Saturday, with Wambsganss reporting a whopping $736,000 in expenditures compared to Rehmet’s roughly $70,000, according to campaign finance filings with the state.

Outsiders have also been spending on the race. VoteVets, a progressive national veterans PAC, poured in roughly $500,000 to boost Rehmet. Patrick, the upper chamber’s presiding officer, contributed $300,000 to Wambsganss’ campaign through his PAC, Texas Senate Leadership Fund.

One just doesn’t see outcomes like this:

It’s important to note where the votes came from:

The Wall Street Journal has more:

The 31-point-swing leftward is a bad sign for Republicans hoping to maintain a Senate majority and an already-slim majority in the House, said Jason Villalba, a former GOP state lawmaker who now leads the Texas Hispanic Policy Foundation, a research group.
“Whatever inroads the GOP was making recently among Latinos in Texas has begun to really revert back to what it was originally,” he said, pointing to Saturday’s shifts in Texas precincts with large Hispanic populations. “That will have implications around Texas and around the country.”

And the implications are bad news for more than just the GOP. Establishment Democrats have reason to fear:

The Democratic candidate’s ability to overcome a massive spending disparity is encouraging because the big money wants to keep the mask of unreality on and they’re marshalling their forces.

Huge Money Wants to Keep the Mask of Unreality Locked On

The New York Times has a pretty scary summary of what the forces of reaction are up to:

If money talks, don’t mess with the A.I. industry, the crypto industry, the pro-Israel lobby or President Trump’s super PAC.

Those four interests are set to be the wild cards of the 2026 midterm elections: They have shown a desire to get involved in primary elections. They are unpredictable in general elections. And they each have tens — if not hundreds — of millions of dollars, according to new federal filings. Mr. Trump’s super PAC, by far the richest, has amassed a staggering sum of more than $300 million.
…
Leading the Future, the main super PAC funded by the A.I. industry, raised $50.3 million in the second half of 2025, almost all from the family of an OpenAI founder and from the venture capital firm Andreessen Horowitz, which has invested heavily in A.I.
…
Fairshake, the main super PAC backed by crypto heavy hitters, took in $73.8 million in the second half of 2025, mainly from its typical backers: Andreessen Horowitz, a major investor in crypto, as well as the crypto companies Coinbase and Ripple. Fairshake and its two affiliate groups entered 2026 with $193 million on hand.
…
moved $30 million to its allied super PAC, the United Democracy Project, last year. That super PAC raised $61.6 million in the second half of 2025 and entered this year with almost $96 million on hand, putting it among the best-funded outside groups in the country.

The super PAC, which started in 2022, spent about $35 million in House primaries in the 2024 cycle. That amount appears to be chump change compared with the group’s potential 2026 budget.

But all the fiat currency in the world can’t recreate reality and we’re seeing the limits of financial power being reached in the biggest bubble of them all.

AI’s Mask of Unreality Looking Ragged

AI skeptics have to feel vindicated by the latest development in the world of circular financing, per the WSJ:

Nvidia’s plan to invest up to $100 billion in OpenAI to help it train and run its latest artificial-intelligence models has stalled after some inside the chip giant expressed doubts about the deal, people familiar with the matter said.

The companies unveiled the giant agreement last September at Nvidia’s Santa Clara, Calif., headquarters. They announced a memorandum of understanding for Nvidia to build at least 10 gigawatts of computing power for OpenAI, and the chip maker also agreed to invest up to $100 billion to help OpenAI pay for it. As part of the deal, OpenAI agreed to lease the chips from Nvidia.
…
Now, the two sides are rethinking the future of their partnership, some of the people said. The latest discussions, they said, include an equity investment of tens of billions of dollars as part of OpenAI’s current funding round.

Nvidia Chief Executive Jensen Huang has privately emphasized to industry associates in recent months that the original $100 billion agreement was nonbinding and not finalized, people familiar with the matter said. He has also privately criticized what he has described as a lack of discipline in OpenAI’s business approach and expressed concern about the competition it faces from the likes of Google and Anthropic, some of the people said.

We are in a time of dramatic conflict between contending forces and the powers that be have immense resources at their command, and no moral scruples or limits holding them back.

Narrative control is possibly the most powerful weapon in the arsenal of the status quo.

But maybe, just maybe, the rips in the mask of unreality will help those attempting to resist the lords of ruin and misrule see a path to a better future.

Stay tuned.

Previous attempts to penetrate the mask of unreality:

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7 comments

  2. Geo

    Talk you for this thorough outline of the rips in the unreality narrative. It’s been interesting to see it happening in my own little anecdotal world. From family that lives in their safe MSM bubble experiencing deportation horrors in their own home (literally), to apolitical friends giving up their lives here to move abroad, to crypto/AI evangelists seemingly starting to doubt their deities.

    It’s funny/frustrating to hear from the MSM listeners about how Epstein was a Russian operative but I guess old habits die hard but even they have stopped cheerleading for Israel and feel we shouldn’t be supporting them anymore. The only people in my circles who are still fully clinging to unreality are the MAGA acolytes. From them I still get the “he’s selflessly given up so much to be president” and “he’s only going after the worst of the worst” etc, etc, etc. Identity is a heck of a drug.

    As for the resistance: Was funny/frustrating to see Chuck Schumer, in the span of just about an hour, go viral for saying “I have many jobs as leader … and one is to fight for aid to Israel, all the aid that Israel needs.” then posting a photo of himself with María Corina Machado writing, “It was an honor to meet with the leader of the Venezuelan democratic movement and Nobel Peace Prize laureate, María Corina Machado, to discuss our support for a free and democratic Venezuela. Her bravery and resilience are an inspiration for all who stand for freedom.”

    Seems to me the best ally Trump has right now is Democratic leadership and their subservience to unreality.

    Reply ↓
  3. Ben Panga

    Nina Illingworth (who I remember once exploding at you on twitter about the word “liberal” for no obvious reason 😂) used to claim QAnon felt like a test for something and was clearly managed by spooks.

    No suprise to see our Mossad-connected ex-trafficker involved so heavily.

    The insane new-right internet wave has always felt manufactured. Would love to know who’s really behind Zeroh*dge. It does fit well with both Israeli (drum up the war of civilizations) and Thielite (as a successor to his early 2000s failed NASCAR and right-wing politics magazine) rhetoric.

    Reply ↓
  4. Giovanni Barca

    I really appreciate the oblique Doors allusion. “Of our elabroate plans, the end, of everything that stands, the end.” Weird scenes indeed.

    Reply ↓
  5. marku52

    Thanks Nat. Always enjoy your stuff.

    That TX election. No one has ever abandoned his campaign promises faster than DJT. Not even the photogenic slimy weasel St Obama.

    “Peace President” my flaming ass.

    The Hispanic turn away from DJT has be a result of ICE attacks on communities.
    And the terrible economy. The inflation. The tariff taxes. The unceasing whiplash of chaos and noise.
    Make it stop, one might wish.

    Well looks like they voted that way.

    Reply ↓

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