AuthorTopic: Shake me, wake me!  (Read 3300 times)

Offline Guest Blogger

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Shake me, wake me!
« on: February 04, 2014, 04:09:50 AM »

Off the keyboard of James Howard Kunstler

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where_are_the_peasants_with_pitchforks
Originally Published on Clusterfuck Nation  January 20, 2014
Discuss this article here at the Diner Forum.
  

     The rot moves from the margins to the center, but the disease moves from the center to the margins. That is what has happened in the realm of money in recent weeks due to the sustained mispricing of the cost of credit by central banks, led by the US Federal Reserve. Along the way, that outfit has managed to misprice just about everything else  — stocks, houses, exotic securities, food commodities, precious metals, fine art. Oil is mispriced as well, on the low side, since oil production only gets more expensive and complex these days while it depends more on mispriced borrowed money. That situation will be corrected by scarcity, as oil companies discover that real capital is unavailable. And then the oil will become scarce. The “capital” circulating around the globe now is a squishy, gelatinous substance called “liquidity.” All it does is gum up markets. But eventually things do get unstuck.

     Meanwhile, the rot of epic mispricing expresses itself in collapsing currencies and the economies they are supposed to represent: India, Turkey, Argentina, Hungary so far. Italy, Spain, and Greece would be in that club if they had currencies of their own. For now, they just do without driving their cars and burn furniture to stay warm this winter. Automobile use in Italy is back to 1970s levels of annual miles-driven. That’s quite a drop.

     Before too long, the people will be out in the streets engaging with the riot police, as in Ukraine. This is long overdue, of course, and probably cannot be explained rationally since extreme changes in public sentiment are subject to murmurations, the same unseen forces that direct flocks of birds and schools of fish that all at once suddenly turn in a new direction without any detectable communication.

     Who can otherwise explain the amazing placidity of the sore beset American public, beyond the standard trope about bread, circuses, and superbowls? Last night they were insulted with TV commercials hawking Maserati cars. Behold, you miserable nation of overfed SNAP card swipers, the fruits of wealth and celebrity! Savor your unworthiness while you await the imminent spectacles of the Sochi Olympics and Oscar Night! Things at the margins may yet interrupt the trance at the center. My guess is that true wickedness brews unseen in the hidden, unregulated markets of currency and interest rate swaps.

     The big banks are so deep in this derivative ca-ca that eyeballs are turning brown in the upper level executive suites. Notable bankers are even jumping out of windows, hanging themselves in back rooms, and blowing their brains out in roadside ditches. Is it not strange that there are no reports on the contents of their suicide notes, if they troubled to leave one? (And is it not unlikely that they would all exit the scene without a word of explanation?) One of these, William Broeksmit, a risk manager for Deutsche Bank, was reportedly engaged in “unwinding positions” for that that outfit, which holds over $70 trillion in swap paper. For scale, compare that number with Germany’s gross domestic product of about $3.4 trillion and you could get a glimmer of the mischief in motion out there. Did poor Mr. Broeksmit despair of his task? 

     Physicist Stephen Hawking declared last week that black holes are not exactly what people thought they were. Stuff does leak back out of them. This will soon be proven in the unwinding derivatives trades when most of the putative wealth associated with swaps and such disappears across the event horizon of bad faith, and little dribbles of their prior existence leak back out in bankruptcy proceedings and political upheaval.

     The event horizon of bad faith is the exact point where the credulous folk of this modern age, from high to low, discover that their central banks only pretend to be regulating agencies, that they ride a juggernaut of which nobody is really in control. The illusion of control has been the governing myth since the Lehman moment in 2008. We needed desperately to believe that the authorities had our backs. They don’t even have their own fronts.

     Is the money world at that threshold right now? One thing seems clear: nobody is able to turn back the plummeting currencies. They go where they will and their failures must be infectious as the greater engine of world trade seizes up. Who will write the letters of credit that make international commerce possible? Who will trust whom? When do people seriously start to starve and reach for the pitchforks? When does the action move from Kiev to London, New York, Frankfurt, and Paris?

***

James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

 

« Last Edit: February 04, 2014, 04:15:32 AM by Surly1 »

Offline g

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Re: Shake me, wake me!
« Reply #1 on: February 04, 2014, 04:52:27 AM »
What an article. Nobody can say it like JHK.  :emthup: :emthup: :emthup:

Offline RE

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Re: Shake me, wake me!
« Reply #2 on: February 04, 2014, 04:55:26 PM »
When do people seriously start to starve and reach for the pitchforks? When does the action move from Kiev to London, New York, Frankfurt, and Paris?

Jimmy can sure write the flowery stuff, I agree. He has also really been improving in terms of how he phrases his prognostications, back in the old days he would have assigned a date to the pitchforks and starvation, that has never worked so well for him.

Actually Jimmy got this quite right, said Pitchforks, Riots & Hunger already ongoing over in Greece, Spain & Ukraine.  If it wasn't for the SNAP Card program here, there would be 47M people here in quite the same mood.  You can mask a lot of problems for a while with more debt.  Not forever though.

<a href="http://www.youtube.com/v/H7jHWw_XRc4?feature=player_detailpage" target="_blank" class="new_win">http://www.youtube.com/v/H7jHWw_XRc4?feature=player_detailpage</a>

Coming Soon to a Theatre Near You.

RE
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Offline Petty Tyrant

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Re: Shake me, wake me!
« Reply #3 on: February 04, 2014, 05:05:50 PM »
I havent noticed JHK pitching out any timelines or dates as long as Ive been reading him for at least a year.
ELEVATE YOUR GAME

Offline g

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Re: Shake me, wake me!
« Reply #4 on: February 04, 2014, 06:24:33 PM »
I havent noticed JHK pitching out any timelines or dates as long as Ive been reading him for at least a year.

Nor do I Unc. When I  read a work by Mr Kunstler it appears as a work of literature, not a fortune teller or stock market tout giving opinions.

He is more of a poet to me. A man with a broken heart who hates what has happened to his country and the apathy of it's citizens. His warnings and views of the future are very real and possible in my view. Whether some of them prove true next month, or next decade, or never are of no consequence to me. I think you have to be a senior citizen and have lived in the US that JHK and myself grew up in around the same time to fully understand where he is coming from. Just saying. :-\


Offline Ka

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Re: Shake me, wake me!
« Reply #5 on: February 04, 2014, 10:50:29 PM »
I havent noticed JHK pitching out any timelines or dates as long as Ive been reading him for at least a year.

He stopped doing it, after predicting "Dow at 4000 this year" and "Eurozone breakup" two or three years in a row. Like many (including me) he didn't realize the ability and willingness of the CB's to continue blowing asset bubbles.

Offline Petty Tyrant

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Re: Shake me, wake me!
« Reply #6 on: February 06, 2014, 04:45:13 PM »
When do people seriously start to starve and reach for the pitchforks? When does the action move from Kiev to London, New York, Frankfurt, and Paris?

Jimmy can sure write the flowery stuff, I agree. He has also really been improving in terms of how he phrases his prognostications, back in the old days he would have assigned a date to the pitchforks and starvation, that has never worked so well for him.

Actually Jimmy got this quite right, said Pitchforks, Riots & Hunger already ongoing over in Greece, Spain & Ukraine. 


There have been hunger and riots for as long as there has been food and cities to consume surplus from the countryside.

Classic Jimmy essay.

http://web.archive.org/web/20010211165926/kunstler.com/mags_y2k.html

How did everyone do during the oil market upheavals that accompanied Y2K? Anyone remember the good ol' days of WalMarts and Kmarts? Apparently they weren't going to be able to survive Y2K, and a $0.30/gallon increase in fuel prices might kill them! (talk about nearly an order of magnitude boo-boo on that one, eh Jimmy?).

Jimmy said that Y2K was going to force us all to live more locally…whatever that means. Less junk food apparently. Anybody know what the difference in junk food sales between 1999 and today might be?

Quote from: RE
If it wasn't for the SNAP Card program here, there would be 47M people here in quite the same mood.  You can mask a lot of problems for a while with more debt.  Not forever though.

Tens of millions of people have been collecting food stamps and aid for far longer than Jimmy has been selling fear. GovCo loves the idea of citizen dependency, I am amazed that clever bloggers who otherwise would use food subsidies as proof of a failing system don't understand that they aren't a FAILURE, they are a raging success.

For EXACTLY the reason you mention. During the slow American political conversion to some new form of fascism/socialism GovCo needs to build as thorough a dependence on THEM as possible. Only allow the employment of those deemed "acceptable" through government required insurance regulations, hand out food by the bucket loads because certainly people would get cranky without that, outsource the jobs, encourage Hollywood to teach romantic illusions to as many as possible, anything and everything designed to make sure that past characteristics of what it meant to be an American are  submerged in the flood of reality TV show educated millennials.

I think you confuse gen Y with millenials born this century. Junior may be a moron more or less but he could ride round you on the outside on any track you please Mr motoGP.
ELEVATE YOUR GAME

Offline g

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Re: Shake me, wake me!
« Reply #7 on: February 07, 2014, 06:08:43 AM »
When do people seriously start to starve and reach for the pitchforks? When does the action move from Kiev to London, New York, Frankfurt, and Paris?

Jimmy can sure write the flowery stuff, I agree. He has also really been improving in terms of how he phrases his prognostications, back in the old days he would have assigned a date to the pitchforks and starvation, that has never worked so well for him.

Actually Jimmy got this quite right, said Pitchforks, Riots & Hunger already ongoing over in Greece, Spain & Ukraine. 


There have been hunger and riots for as long as there has been food and cities to consume surplus from the countryside.

Classic Jimmy essay.

http://web.archive.org/web/20010211165926/kunstler.com/mags_y2k.html

How did everyone do during the oil market upheavals that accompanied Y2K? Anyone remember the good ol' days of WalMarts and Kmarts? Apparently they weren't going to be able to survive Y2K, and a $0.30/gallon increase in fuel prices might kill them! (talk about nearly an order of magnitude boo-boo on that one, eh Jimmy?).

Jimmy said that Y2K was going to force us all to live more locally…whatever that means. Less junk food apparently. Anybody know what the difference in junk food sales between 1999 and today might be?

Quote from: RE
If it wasn't for the SNAP Card program here, there would be 47M people here in quite the same mood.  You can mask a lot of problems for a while with more debt.  Not forever though.

Tens of millions of people have been collecting food stamps and aid for far longer than Jimmy has been selling fear. GovCo loves the idea of citizen dependency, I am amazed that clever bloggers who otherwise would use food subsidies as proof of a failing system don't understand that they aren't a FAILURE, they are a raging success.

For EXACTLY the reason you mention. During the slow American political conversion to some new form of fascism/socialism GovCo needs to build as thorough a dependence on THEM as possible. Only allow the employment of those deemed "acceptable" through government required insurance regulations, hand out food by the bucket loads because certainly people would get cranky without that, outsource the jobs, encourage Hollywood to teach romantic illusions to as many as possible, anything and everything designed to make sure that past characteristics of what it meant to be an American are  submerged in the flood of reality TV show educated millennials.

The business of forecasting and predicting is a tough one. People make mistakes, some of them glaring and obviously embarrassing. JHK screwed up big time with this one and many others. So What?

Should we ignore what he has to say now because of errors in the past? Stephen Hawkings lost a bet about Higgs Bosun. Freely admitted to being totally wrong, congratulated the person who proved him wrong and said he should be nominated for the Noble Prize. Should we ignore Mr Hawkins and what he has to say now about black holes because of this embarrassing episode?

Aren't people entitled to honest heart felt opinions?  Should we laugh at seemingly concerned intelligent people who see grave problems and disaster ahead because of past errors, because it hasn't happened yet? Should I have the luxury of thinking "It ain't Gonna Rain No More" because of a predicted terrible Flood that never happens?

This posting brings to mind the story of Noah and his Ark. They say passerbys used to stop and jeer and laugh at the fool and his ark and warnings; call him names and deride him with much merriment and belly laughter.

Noah never complained, or lost confidence in the message given him to prepare. They say he only thanked God for giving him more time.

Offline Petty Tyrant

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Re: Shake me, wake me!
« Reply #8 on: February 07, 2014, 02:11:53 PM »
What a blessing is the 20-20 vision of hindsight.
ELEVATE YOUR GAME

Offline agelbert

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Re: Shake me, wake me!
« Reply #9 on: February 07, 2014, 04:50:26 PM »
Quote
What a blessing is the 20-20 vision of hindsight.

BINGO!  :icon_mrgreen:
Leges         Sine    Moribus      Vanae   
Faith,
if it has not works, is dead, being alone.

 

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