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October 14th, 2015 
Awake Goy As many readers know, I spent 15 years working in Silicon Valley before partnering up with Chris to start Peak Prosperity.
I got my MBA at Stanford in 1999 when the dot-com bubble was at its zenith, and worked for both a VC-funded start-up as well as one of the biggest Internet juggernauts (Yahoo!). I lived in Palo Alto, the central core of the tech scene.
As a result, I have a pretty good read on how Silicon Valley works. Many of the folks I worked and went to school with are now in leadership positions at the big operating companies, VC firms and hedge funds in that ecosystem — so I have personal knowledge of who’s making the decisions.
And it’s no secret that I think it’s degenerated into a steaming pile of hucksterism.
The “engine of our economy”, the “cradle of innovation”, the “land of tomorrow” — whatever breathless hyperbole the fawning media is using this week — is a sham. Silicon Valley has become a factory of hype, funneling gobs of early-stage capital into whatever half-credible concepts it can think of, and then pimping the artificially-inflated initial results of those tarted-up ventures to whichever “greater fool” is willing to acquire it or buy its IPO. Let that idiot figure out if it will ever turn a profit…
Like the too-cozy relationship between DC and Wall Street, I see a similar one between Wall Street and the Tech sector. They collude to pump out as many opportunities as they can — private placements, acquisitions, IPOs, secondary offerings — to cash out the insiders and foist the long-term financial risk onto the “dumb money” (pension funds, foreign capital, retail investors, corporations desperate to enter the “digital age”). The dreams of ‘changing the world’ or revolutionizing lives by making great products have taken a distant back seat to the drive to have as lucrative an “exit” as possible. If that exit requires selling junk to unassuming buyers, so be it.
As with Wall Street in general, the Tech story has been driven by ferocious and cheap liquidity. The Fed and the other major world central banks pumped trillions and trillions of freshly-printed money into the system starting in 2008, and it largely went into the hands of the major financial institutions and the top 1%. All that money has to go somewhere, and the high-potential rewards offered by tech ventures is a really attractive magnet for it. Couple that with the administration’s “Don’t worry, technology will save us!” meme to calm market jitters, and the media’s amplification of that message in desperate hopes it will come true, and money has been lining up to enter Silicon Valley over the past 6 years. There literally have not been enough ventures to invest in to soak up the supply of capital sloshing around Silicon Valley.
Source Article from https://www.freedomsphoenix.com/News/184855-2015-10-14-the-death-of-hopium.htm?EdNo=001&From=RSS
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