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Peter Thiel’s $5 Billion Bombshell: Hubris and Hypocrisy Beyond all Imagining

June 26, 2021 Danny Leeds

ProPublica drops a second monumental article based on treasure trove of IRS, SEC & court data

Excellent reporting of tax injustices among the obscenely rich continues with a huge and revelatory piece on Peter Thiel and his “little” Roth IRA scheme. Going well beyond the previous article that detailed how Bezos, Musk, Buffet and others all use loans secured with share holdings to avoid income, and thus avoid paying tax the “Lord of the Roths” is even more explosive.

While the emphasis of the article on Thiel’s Roth IRA takes on the task of trying to somehow compare an “average” investor’s potential gains with the unimaginable magnitude of Thiel’s windfall, this is something that makes sense as a valid perspective, but the obscenity is nearly lost in the opaque fog of numbers beyond comprehension.

For example: your Peter is basically gifted 1.7 million shares by the company he was one of the founders of (along with Elon Musk and the rest of the so called “PayPal Mafia). That “purchase” costing less than $2000 based on the ridiculous price of $0.001 per share was used to found a Roth IRA.

The engineered numbers were no accident: at the time, in 1999, a Roth IRA account had a maximum allowable contribution amount of $2,000. Since the shares were “below fair value”, the fact of which was admitted by PayPal in an SEC filing from the time just before the company went public, the value increased massively, by 227,490% in the first year. Which increased the value of the paltry $2k up to $3.8 million.

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Though obviously not enforced, regulations at the time forbade this kind of “stuffing”. Meaning, the initial trade that launched this scheme was possibly illegitimate, if not unlawful. Or, as ProPublica more kindly phrased it: “Investors aren’t allowed to buy assets for less than their true value through an IRA. “

As a matter of fact, according to the article, the “stuffing” was so successful that no further contributions were ever made into the account after that initial 1999 sum.

Since a Roth IRA allows a person to trade stocks within the account tax free, as long as no withdrawals are made, this large but still comprehensible sum was the start of a 20 year use of the tax statutes to build a fortune of over $5 billion without paying a single penny in tax.

Hitting $870 million in value by 2008, by 2019 the tax free enterprise, built on the less than $2000 initial contribution (stock “purchase”), ultimately ballooned to 96 sub-accounts with holdings of $5 billion.

Ok, so that’s the short summary of the mind blowing numbers. For a more detailed account, by all means visit the original article.

The numbers are outrageous, but the entitlement and arrogance is on a whole other level

The part of the story that should spark outrage is not in the numbers but begins where the almost inhuman greed, hubris and hypocrisy at this good fortune grows apace with the size of the tax free bonanza. Because Peter Tiel is not just any run-of-the-mill untaxed billionaire.

The endlessly expanding windfall he received, tax free, did not engender a mindset of charity or gratefulness at his miraculous providence.

Instead Thiel, once the wealth lent him a position of power, preached and pushed the idea that the US government, the same one that he was able to avoid paying taxes to, was guilty of over-taxing people like him (and poor people too).

He spent millions of dollars in an effort to influence Republican politicians and groups that have anti-tax agendas, to change the laws in ways that would add even more advantages to his already preposterously privileged position. Then this: as per ProPublica: “In 2016, he became the rare Silicon Valley titan to endorse Donald Trump.”

And, in an arrogance that is as incomprehensible as the size his effortlessly expanding fortune, he espouses the belief that people like him are entitled to these kind of spoils because, after all, without him we might have to live without PayPal and….wait for it…. Facebook.

Yes, you heard that right. In 2004, Thiel used his IRA to buy $500,000 worth of shares in a, then private, company called Facebook, which was the first big outside investment in Zuckerberg’s soon to be massive monstrosity.

By using his IRA funds to buy shares of the start-up he was able to avoid tax on all the future gains of those shares. (ProPublica, in excellent investigative reporting, uncovered this tidbit by combing though Facebook court documents).

So, again, ostensibly, based on his well known statements, we are not only to congratulate him on his clever method of avoiding any taxation whatsoever on the first gambit with the PayPal shares, but we ought to effusively thank him for helping Facebook to become the dangerous purveyor of surveillance and phantom tollbooth Ponzi empire that is it today?

In perhaps one of the greatest illustrations of how power corrupts, this idea that because he was able to amass a fortune on such a massive scale without the burden of any tax whatsoever, he is somehow a hero to be emulated, is the real reason for us to be outraged.

That an average person might be lucky to turn $2000 into $250,000 over two decades, as was illustrated in detail in the article, while Thiel easily turned it into $5 billion, is outrageous, yes.

But the real “crime” is that it was done with zero benefit to anyone except him and other Silicon Valley insiders at companies like PayPal and Facebook.

Could it be argued that Facebook is a gift to humanity? Well, in 2021 that would be a tough argument to put forth without being laughed out of the room. And PayPal? It’s doubtful that Satoshi Nakamoto has to fear competition from any of the PayPal Mafia (including Mr. Musk) when the crown for greatest financial innovator of the century is awarded.

In a revelation that could have received more page inches, the article also exposes a second, possibly more plausible reason, regarding why Thiel went to great lengths to bankrupt Gawker Media, which he blamed for outing him as Gay. That politically convenient motivation could very well have covered up the real reason:

Again, as per ProPublica:

“In a story headlined, “Give Me Liberty or Give Me Taxpayer Money,” Gawker Media, citing anonymous sources, revealed that Thiel held his Facebook investment in a tax-free Roth.”

Companies built on greed and hubris create nothing and, in the end, die

Thiel believes he will live to be 120 years old. Based on his comments and writings he appears to believe that the world would benefit from that eventuality.

But when looking at the companies he helped to build, and the obscene fortune he was rewarded with for binging them into being, it seems like most of us, after accessing his life’s works and “accomplishments”, would be more thankful for the improbability of that dream coming true.

2087? That will be the year that either Utopia or Oblivion will have arrived for humanity and the planet earth. If by a miracle an earthly Utopia comes to be, it is highly unlikely that PayPal, Facebook or Mr. Thiel will have had any hand in bringing it about.

Books in the Top 100 for Decades: Power, The Alchemist, Rich Dad Poor Dad, The Four Agreements

June 6, 2021 Eric Cho

Above: Photo Credit / Publishers / Various

In music the famous example is Pink Floyds “Dark Side of the Moon” which, incredibly, remained in the top 100 charts for more than 18 years. When it comes to popularity and longevity, there are certain works of art and literature that exist on a whole other level.

When it comes to books, classics remain on must-read lists for centuries. During more recent times we have these examples of books that remain the most popular around for decades. The Alchemist by Paulo Coelho was first printed in 1988, 33 years ago. Rich Dad Poor Dad, meanwhile, was published by Robert Kiyosaki and resonated immediately with readers, and has never lost its appeal, still hovering near the top of best seller lists. The Four Agreements, similarly, has remained immensely popular for 24 years. And, finally, The 48 Laws of Power has fascinated and attracted readers, with a nearly unmatched power for 21 years.

Below we are happy to feature these incredible, evergreen wonders, along with some information on the titles.

The Four Agreements

In The Four Agreements, bestselling author don Miguel Ruiz reveals the source of self-limiting beliefs that rob us of joy and create needless suffering.

Based on ancient Toltec wisdom, The Four Agreements offer a powerful code of conduct that can rapidly transform our lives to a new experience of freedom, true happiness, and love.

– A New York Times bestseller for over a decade
– Translated into 46 languages worldwide

First published in November 07, 1997.

Rich Dad Poor Dad

In the 20th Anniversary Edition of this classic, Robert Kiyosaki offers an update on what we’ve seen over the past 20 years related to money, investing, and the global economy.

Sidebars throughout the book will take readers “fast forward” — from 1997 to today — as Robert assesses how the principles taught by his rich dad have stood the test of time.

In many ways, the messages of Rich Dad Poor Dad, messages that were criticized and challenged two decades ago, are more meaningful, relevant and important today than they were 21 years ago.

First published April 1, 1997

The Alchemist

Combining magic, mysticism, wisdom and wonder into an inspiring tale of self-discovery, The Alchemist has become a modern classic, selling millions of copies around the world and transforming the lives of countless readers across generations.

Paulo Coelho’s masterpiece tells the mystical story of Santiago, an Andalusian shepherd boy who yearns to travel in search of a worldly treasure.

His quest will lead him to riches far different–and far more satisfying–than he ever imagined. Santiago’s journey teaches us about the essential wisdom of listening to our hearts, of recognizing opportunity and learning to read the omens strewn along life’s path, and, most importantly, to follow our dreams.

First published in Spanish in 1988 and in english on April 15, 1993

The 48 Laws of Power

In the book that People magazine proclaimed “beguiling” and “fascinating,” Robert Greene and Joost Elffers have distilled three thousand years of the history of power into 48 essential laws by drawing from the philosophies of Machiavelli, Sun Tzu, and Carl Von Clausewitz and also from the lives of figures ranging from Henry Kissinger to P.T. Barnum.

Some laws teach the need for prudence (“Law 1: Never Outshine the Master”), others teach the value of confidence (“Law 28: Enter Action with Boldness”), and many recommend absolute self-preservation (“Law 15: Crush Your Enemy Totally”). Every law, though, has one thing in common: an interest in total domination. In a bold and arresting two-color package, The 48 Laws of Power is ideal whether your aim is conquest, self-defense, or simply to understand the rules of the game.

First Published in September 01, 2000

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Breaking News, Entertainment, Movies, Stock Market, Videos

Wolf of Wall Street has Pump & Dump and more to Inform during the Game Stop Craze

Video January 29, 2021 Wiley Simms

Want know more about shorting? About the shady and complicated scams? And also see an incredible film?

The Wolf of wall street is simply a great movie. It’s even better though if you watch it in the context of stock market mania. Just like the one that’s happening now.

Beyond the fact that the story is incredibly entertaining it does also get into the heart of the “pump & dump” boiler room mentality. While the so called ‘retail investors” who are riding the Robinhood stock purchasing app to what they see as well deserved revenge on Wall Street, and Belfort who was the real life “Wolf of Wall Street” was more of a wannabe that couldn’t get into the establishment. He then set forth, with chutzpa and insanity and some drugs, built his own criminal empire, there are some very clear correlations between his tricks that made him rich and what the short-squeezing Reddit & Wall Street Bets chat room vigilantes are doing right now.

Can we all be like the guys, Jordan Belfort or Michael Burry, who was played by Christian Bale in the movie, and even though it was about going short, it’s sill ok, cause, Christian Bale?

History does exist, even if it happened before your uncle was born

Up until 1934 many things were legal and rampant that today, technically, are not allowed. Insider Trading is the most obvious and best defined, look up Martha Stewart and jail time if you want to know more about that.

Collusion in the market is another less well known practice, also known as “pump & dump” that has as many variations as Ponzi schemes and, though illegal, will never be stamped out. The technical terms for Colluding in relation to stock trading are “securities fraud” or “market manipulation.”

Not to get technical but here’s an partial excerpt of the legal specifics:

15 U.S. Code § 78i – Manipulation of security prices

(a) – (2 To effect, alone or with 1 or more other persons, a series of transactions in any security registered on a national securities exchange, any security not so registered, or in connection with any security-based swap or security-based swap agreement with respect to such security creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.

https://movietrailers.apple.com/movies/paramount/wolfofwallstreet/thewolfofwallstreet-tlr2_h1080p.mov

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