Wake Me, Shake Me

Jim Kunstler is giving Saudi Arabia three weeks before it blows. Then $10 a gallon diesel fuel will end civilization as it is presently known. Peacenik says plant your garden now. And tune up your bicycle. Time for communities to get their acts together because working together is the only way to survive as we go forward into the...ah...future.

By James Howard Kunstler
on February 28, 2011 10:20 AM

A quickening of events pulses through lands where for so long time stood still, and the oil - what's left of it - lies locked for the moment beneath hot sands - woe upon all ye soccer moms! - while Colonel Gadhafi ponders the Mussolini option - that is, to be hoisted up a lamp-post on a high-C piano wire until his head bursts like a rotten pomegranate. Then the good folk of Libya can fight amongst themselves for the swag, loot, and ka-chingling oil revenues he left behind. Meanwhile, Hillary Clinton scowls on the sidelines knowing how bad it would look if US marines actually hit the shores of Tripoli (and perhaps how fruitless it might turn out to be). And Italian grandmothers across the Mediterranean wonder why there's no gas to fire up the orecchiette con cime di rapa.

The fluxes of springtime run cruelly across the sands of Araby, clear into Persia where the ayatollahs' vizeers toy with uranium centrifuges and thirty million young people wonder how long they will allow bearded ignoramuses to tell them how to pull their pants on in the morning. Along about now, I wouldn't feel secure standing next to somebody lighting a cigarette in that part of the world.

Pretty soon we're going to find out just how fragile things are in the Kingdom of Saudi Arabia, there at the heart of things oily. Last week, King Abdullah wobbled out of his intensive care unit to spread a little surplus cash around the surging population, but let's remember that their share of the oil "welfare" has been going down steadily in recent years - a simple matter of numbers really. Putting aside even the common folk, a thousand princes from dozens of different tribes pace restively in the background awaiting the struggle that must follow King Abdullah's overdue transmigration to the farther shore. All along the western coast of the Persian Gulf and down toward the Horn of Africa, dark forces stir. Fuses sputter in Kingdoms from Bahrain to the Yemen.

Read on...

Now What?

Jim Kunstler asks a very good question. And Peacenik is afraid that the answer is that there is no answer. Politicians in the U.S.A are not able to solve the problems that Kunstler lists in the article below. And the soon too be elected Tea Partiers only offer solutions that will make the problems worse. Peacenik thinks lots of Tea Partiers will get elected tomorrow. Is this the beginning of this sucker going down bigtime? Can the U.S.A and world economy be saved? Peacenik doesn't think so. Do you?

By James Howard Kunstler

On Tuesday, when the Republican Party and its Tea Party chump-proxies re-conquer the sin-drenched bizarro universe of the US congress, they'll have to re-assume ownership of the stickiest web of frauds and swindles ever run in human history - and chances are the victory will blow up in their supernaturally suntanned, Botox-smoothed faces.

But don't cry for John Boehner, Barack Obama.

The President and his Democrats may have inherited this clusterfuck from the feckless George Bush but they flubbed every chance to mitigate any part of it, ranging from their failure to restore the rule of law in banking (by prosecuting the executives of major banks who oversaw the systematic swindle), to mis-directing our dwindling resources toward ends (such as "shovel-ready" new super-highways) that won't promote a credible future for this society, to misleading the public in the fantasy that alt-energy will offset the disruptions of peak oil (and allow us to keep running suburbia, the US Military, and WalMart by other means).

Read on...

Puke Time

Peacenik says...Kunstler seems a little down this morning. Having witnessed the primary win by Christine O'Donnell can have that effect. Oh Yeah, Palin is the early leader for the Republican nomination for President too. Peacenik was kind of down on Peacenik's self this morning; then Peacenik saw neanderthal candidate Rob Ford—Toronto's quasi-Tea Party candidate for mayor—has a big lead in the polls. And our anti-science, anti-knowledge Prime minister continues to defend his census mayhem. And he continues to defend buying fighter jets the country doesn't need and can't afford, without taking competitive bids or doing any research. These days, it's the dumber the better. Yes, reading current events truly does bring on Peacenik puke time.



By James Howard Kunstler
on September 20, 2010 9:05 AM

Our county fair put me in mind of that American classic, Moby Dick, this year. So many white whales among the try-pots bubbling with rendered blubber, where crews of savages from all corners of the world toiled to bring forth batter-dipped Mars bars, Pop Tarts, corn dogs, funnel cakes, and other rarities of the deep fryer... and then the whales ventured a little further down the midway where they mounted the engines of swirling cosmic death, and were flung about in the centrifugal pods of fate on the ingenious mechanical arms of innovation, until their sickened souls gave forth with a mighty spewage of corn byproducts that rained down upon the moiling innocents below....

Like most metaphors, this one limps a bit, as did Captain Ahab himself, with his whale-bone peg-leg. But when everyday life gets detached from reality, metaphor is all you've got left. And in this ridiculous, sickening culture, with its toxic stream of electronic simulacrum politics sucking all the oxygen out of the collective brain-space, the mind is left wandering numbly across a kind of wilderness where twisted sign-posts point to mutant evangelists, freakish ideologies, false prophets, deadly miracle cures, phantoms on horseback, angels with bat-wings, and the ghost of Spotted Elk lying dead in the snow with his stiffened arm beckoning the way to extinction like Melville's Ahab corded to the hump of his sounding white whale. Oh, America, pull your head out of your electronic ass while you still can! And look out below!

Read on...

Scary People, Scary Times

Yes the scary people are coming out of the woodwork in the U.S.A., aided and abetted by right wing media. The most wild accusations about Obama, whether he was born in the U.S., whether he is a socialist, whether he is a muslim, whether he is a christian, etc., etc., all get major play. Is Obama afraid of the scary people? Peacenik thinks so. Obama is afraid to put solar panels on the roof of the White House for fear of offending the nutjobs. Obama is afraid to fight for extended unemployment benefits. Obama is afraid to fight for social security. Obama is afraid to fight for fair taxation. Obama is afraid to close Guantanamo. Obama is afraid to end the wars and bring the troops home. Yes the scary people are in charge. It is laughable that someone who has offered so little to the public discourse, such as John Boehner, can rise to be the Speaker of the House. But when the president is a scardy cat, when the supposed leader of the progressive movement is a scardy cat, this is what happens. Sarah Palin as president, becomes imaginable.

By James Howard Kunstler
on September 13, 2010 7:24 AM

In that order. The scary people have already started coming out of the woodwork. The times lately have been mostly uncertain, but soon they'll turn scary, too, as it becomes clearer that the people running things in the USA have no idea what's going on or what they're going to do about it -- and what's going on is an involuntary permanent re-set of the terms of everyday life, from a wet-dream robotic "consumer" techtopia to something more like the first chapter of Tobacco Road, with a family of half-wits reduced by hard times to fighting over a sack of turnips in a roadside ditch. That's the story-arc anyway, and lots of people won't like it. But the theme of dwindling resources is not a pretty one.
The most striking feature of the current scene is the absence of a coherent vision of our multiple related predicaments and how they add up to a valid picture of reality. To be precise, I mean our predicaments of 1.) energy resources, 2.) vanishing capital, and 3.) ecocide. This inability to decode the clear and present dangers to civilized life is a failure of leadership and authority without precedent in the American story.

Read on...

World War Three Anybody?

Unfortunately, Kunstler lays out a very plausible future. Can the tensions in the Middle East just keep festering without something different happening? Peacenik doesn't think so.

And something different won't be peace and friendship and brotherhood. The outcome of an attack on Iran is probably just as Kunstler imagines it or worse. Yet U.S. senators and media types and some generals openly cheer and campaign for an attack. Does U.S. society have a deathwish? Or is the future already so distopian that this future, World War, is a preferable outcome? Maybe swine flu should mutate and depopulate huge chunks of the earth. Maybe that is a preferable outcome.

By James Howard Kunstler

When Alan Greenspan predicted three percent economic growth showing up in the reported figures for the third quarter of 2009, did he mean executive compensation packages? Maybe the lesson here is: don't ask a crackhead to predict the future supply of crack. Greenspan's greatest success may be to drive economics into such disrepute that it will be cut loose from the universities and only be taught by mail order or internet subscription from the same outfits that offer PhD's in astrology. That is, before the universities themselves go broke.
The predicament that the USA finds itself will not be "solved" at the scale of operation that we're accustomed to, and we should just stop wasting precious time and dwindling resources in the idle hope that it will be. The failure to recognize this dynamic is the most impressive part of the meltdown. The only thing that the federal government is likely to prove in the process is the ineffectiveness of its actions as applied to any of the raging current problems from the killing burden of hyper-debt to the brushfires of geopolitics. Congress will only make the health care system more complex. Both congress and President Obama will do everything possible to keep housing prices unaffordable -- in a quixotic effort to protect the collateral of the big banks. Capital will continue to vanish in the black hole of default.

Read on...

The Labor Day Blues

Here is Jim Kunstler's take on the state of the media world: "Whatever the politics of the moment may be, national attitudes are surely changing. A psychology of hardship is overtaking even the bread-and-circus blandishments of the Cheez Doodle / infotainment / professional sports matrix of idiocy that the sociopathic corporate axis-of-evil operates to take advantage of ordinary human weakness."

Read his whole article. As usual it is entertaining. And kind of frightening. Meanwhile Obama gives a speech to school kids today. The media is painting it as wildly controversial. When George Bush went into classrooms to read his favorite book to the children, "The Hungry Caterpillar" it wasn't controversial. Peacenik says some things never change.

by Jim Kunstler

One national moment-of-nausea this Labor Day weekend struck Sunday morning, when CNN's John King led off his 10 a.m. State of the Union show with a valentine to ABC's Diane Sawyer, on her becoming anchor of that network's evening news. (This was the most important news of the week???) The old legacy networks have taken on the role of dishing out reassurance to an anxious and insecure public as job number one, and the subtext of the Sawyer lede was that a Mommy figure would soon be in place to soothe the multitudes even as the nation free-falls into bankruptcy and disorder. This is supposed to be a counterpoint to the chorus of smug, braying rabble-rousers who inflame the crowds on Fox News and MSNBC, and CNBC -- the Glen Becks and Keith Olbermans and Dennis Kneales -- who work the anger regions of the brain.

The inherent conflicts arise from a nation that simply cannot bring itself to try getting its house in order. Instead of adult leadership, we prefer good parent / bad parent therapy -- a psychodrama of alternating messages of reassurance and punishment that provides distraction from problems and conundrums too horrible to face. One unfortunate result is the evaporating legitimacy of anyone or anything in authority, and that is extremely dangerous at a time like this because it creates the perfect opportunity for the rise of a corn-pone Hitler who will beat a path straight into a national ordeal-by-fire, and make everybody feel better by telling them clearly what to do.

Read on...

Evil Syndicated

Peacenik just got back from a wilderness survival course. Some interesting stuff on mushrooms and the biomass of salamaders. Peacenik was out of the information loop, but did notice a newspaper box headline declaring the recession in Canada over. And Peacenik got some text news flashes from a Punditman correspondent, that in fact the recession was over. Peacenik goes away for one week and all the problems of society are cured. Is it time for Peacenik to admit that Doom and Gloom is dead? By the way Peacenik has CNBC on tv in the background right now. The pundits sound hysterical. Maria Bartolomo is hyperventilating. Apparently there is no limit to the upside. Was Peacenik wrong? Should Peacenik put his meagre savings into mutual funds?

Then Peacenik scanned the blogosphere. The bubble economy is back. Or is it? Was Peacenik wrong? Peacenik thinks the economy is close to absolute collapse. Read Kunstler's take on the stock market. Is Kunstler right? Peacenik thinks so. And ask yourself this. Why would you believe anything that any central banker, or corporate spokesmen or politician says about the economy?



by Jim Kunstler

By now, everyone in that fraction of the world that pays attention to something other than American Idol and their platter of TGI Friday's loaded potato skins knows that Goldman Sachs has been caught at another racket in the stock market: front-running trades. What a clever gambit, done with the help of the markets themselves - the Nasdaq in particular - in which information on trades is held back a fraction of a second from public view, while the data is shoveled to the computers of privileged subscribers who can execute zillions of programmed micro-trades before the rest of the herd makes a move. This allows them to vacuum up hundreds of millions of dollars by doing absolutely nothing of value. The old-fashioned method used by brokers was called "churning," in which stocks were bought and sold incessantly (by phone) from the portfolios of inattentive clients merely to generate commissions. In any sensible society - i.e. a society with an instinct for self-preservation - it would be against the law and the people doing it would be sent to prison.

I'm not a lawyer, but I've got to think that the actions at the Nasdaq end - shoveling the data to the privileged subscribers a fraction of a second early - is patently illegal in the first place, since the whole purpose of an exchange is to create a fair trading space. Where both parties are concerned, it should amount to a plain vanilla criminal conspiracy to commit stock trading fraud. Maybe the larger question is: since when did we become a society lacking the instinct for self-preservation - that is, a society bent on suicide? Or maybe the question is better put to Goldman Sachs's CEO Lloyd Blankfein.

Read on...

The Free and the Dead

Peacenik thinks this little essay by Jim Kunstler is appropriate as summer holidays arrive. Images of the lake and boats and kids having fun on tubes. Peacenik has read all the economic doomsday predictions. Kunstler says American's are in a dreamworld...partying on...while their society collapses. But Peacenik admits Peacenik is thinking about summer frivolity as well.

It may not be very realistic, but summer is short in Canada. And Peacenik acknowledges that everyone, including Peacenik, needs a little R & R. As George Bush used to say it is tough work worrying about everything. So Peacenik looks forward to some holidays, and doesn't begrudge people their last chance at a bit of a golden summer. Harsh reality will come soon enough. Have fun, why fight it?

By James Howard Kunstler
on July 6, 2009 6:34 AM

I was out on a big Adirondack lake in a canoe this weekend while the American economy was dying -- but you wouldn't have known it for the fleets of giant power boats dragging children back and forth across the water on rubber tubes, and the giant camping vehicles crammed into every bare spot. How do people pay for these things, I wondered. For not a few, installment loans, no doubt -- though that still begs the question. The sheer programming of American life runs wide and deep. We are, apparently, a people born to drag children behind hundred-and-fifty horsepower two-stroke engines, so that's what we do, no matter what is really going on in the world. Alas, mindless programming is the sort of thing that kills societies.

Watching the summer panorama on an Adirondack lake is like reading a history of the post World War Two decades, because almost nothing on view there now existed before 1945 and we'll be stunned to see how swiftly it all terminates. The fantastic prosperity of these postwar decades killed the wildness of these once-remote lakes. Fortunes were made -- like everywhere else in the USA -- carving up the landscape and deploying graceless houses made of cheap, fabricated materials. All the diabolical genius brought to engineering the New Jersey and Long Island suburbs was eventually turned loose on the Adirondack wilderness, with predictable results. The lakes themselves, stuffed with all those sleek plastic power boats, are like the Long Island Expressway minus the painted lanes.

Read on...

The Bottom

by Jim Kunstler

Euphoria managed to out-run swine flu last week as the epidemic-du-jour, with "consumer" confidence jumping and the big bank stocks nudging up. The H1N1 virus fizzled for now, at least in terms of kill ratio, though we're warned it might boomerang in the fall with a vengeance. No one was surprised to see Chrysler roll over like a possum on a county highway, but the memory of their muscle cars will linger on like a California surfing song. Here in the northeast, where Sundays are not spent at the Nascar oval, the spring foliage reached the tenderly explosive stage and it was hard to feel bad about anything.

For now, the "bottom" is in -- that is, the bottom of this society's ability to process reality. It may continue for a month of so, even after the "stress test" for banks is finally let out of the massage parlor with a "happy ending." But events are underway that are beyond the command of personalities. We're done "doing business" in all the ways that we've been used to, but we just can't get with the new program. Let's count the ways:

Read on...

Is the bottom really in? The swine flu didn't even make the front page of Tuesday's Globe and Mail. Instead the headline reads: Investors flock to stocks as market sees some good news. The leaves are coming out on the trees. Peacenik walked by a beautiful Magnolia tree in full bloom on Peacenik's way to work this morning. Its spring.

But is the bottom in? The auto industry is still in its death throes, with GM likely to soon follow Chrysler into bankruptcy. Many of the biggest banks are still bankrupt. Almost every sector of the economy is still lining up for bailouts. The commercial real estate sector is tanking. The world is past peak oil. Unemployment is soaring. The black hole of debt, containing more debt that the whole world's GDP, is still hungry. None of the structural issues that caused the financial collapse have been resolved. They are being ignored.

Is the bottom in? Jim Kunstler doesn't think so. Peacenik will stick with Peacenik's lottery tickets for future security, cash in Peacenik's pockets, Kraft dinner in Peacenik's cupboard, and a pitchfork by Peacenik's bed. Peacenik wishes all the best to anyone trying to time the top of what is a classic bear market rally.

The Coming Siege of Austerity

by Jim Kunstler

It's a curious symptom of the consensus trance zombifying the American public and its auditors in the media that something like a "recovery" is now deemed to be underway. And, as events compel me to repeat in this space, it begs the question: recovery to what? To Wall Street booking stupendous profits by laundering "risk" out of bad loans with new issues of tranche-o-matic securitized paper? This I doubt, since there isn't a pension fund left from San Jose to Bratislava that would touch this stuff with a stick, even if it could be turned out in collector's editions of boxed sets. Does it mean that American "consumers" (so-called) are awaited momentarily in the flat-screen TV sales parlors with their credit cards fanned-out like poker hands, ready for "action?" Not too likely with massive non-performance out in cardholder-land, and half the nation's electronics inventory wending its way onto Craig's List. Are we expecting more asteroid belts of new suburbs carved in the loamy outlands of Dallas and Minneapolis, complete with new highway strips of Big Box shopping and Chuck E. Cheeses? Go to banking's intensive care unit and inquire (if you can) among the flat-lining production home-builders and the real estate investment trusts on life support when they expect to rev up the heavy equipment.

Read on...

Yesterday Peacenik read that the Stratford Festival was putting 30 performance dates on hold. This morning, former Mike Harris acolyte and now Canada's Industry Minister, Tony Clement, is warning the CAW to make more concessions. Also this morning, General Growth Properties, the largest mall owner in the U.S., declared bankruptcy. Conquest Vacations went out of business yesterday. Intrawest is being forced to sell Mont Tremblant. Housing starts in the U.S. are near a record low. The Habs are for sale. A closer examination of Goldman Sachs stated first quarter profit shows that maybe the profit was just some accounting trickery.

Peacenik doesn't think things are getting better. Jim Kunstler doesn't think things are getting better. Do you?

Strange Days

by Jim Kunstler

Even while a wave of reflex nausea washed over America last week, and the unemployment rolls swelled by much more than another half million, the greatest stock market suckers' rally in seventy years pulled in the last of the credulous. These are strange days. The earth is heaving and the buds swelling again -- at least north of the equator, where most of the action is -- and the global economy, which was supposed to be a permanent new add-on to the human condition, is sloughing away in big horrid gobs. But no one in charge of anything can believe it. The banking fiasco has introduced so much noise into the system that world leadership can't think straight.

What they're missing is real simple: peak oil means no more ability to service debt at all levels, personal, corporate, and government. End of story. All the other exertions being performed in opposition to this basic fact-of-life amount to a spastic soft-shoe performed before a smokescreen concealing a world of hurt. If the "quantitative easing" (money creation) and fiscal legerdemain (TARPs, TARFs, et cetera) happen to jack up the "velocity" of the new funny-money, and the world resumes its previous level of oil use, the price of oil would rise again -- this time astronomically because the previous crash of oil prices crushed the development of new oil projects to offset depletion -- and the global economy will crash again. Only the next phase of the disease is liable to move beyond the financial and into the social and political realms. Disorder of various kinds will rule -- toppled governments, civil unrest, international tension and conflict.

Read on...

Peacenik survived the wilderness, torrential rains, a Spring snowstorm, flooded roads and the lack of news. Peacenik melted snow, and burned wood, and ate leftovers and Peacenike survived. Now Peacenik discovers that over the weekend nothing changed....for the better. Peacenik has a sense that things may be even worse. The suckers rally on Wall St. looks like it could run out of gas this week. And there isn't much left for investors to pin their hopes on. After reading Kunstler's post, Peacenik is glad that Peacenik is not a Wall St. banker. Their future looks scary. Very scary.

The Abyss Stares Back

Jim Kunstler

The public perception of the ongoing fiasco in governance has moved from sheer, mute incomprehension to goggle-eyed panic as the scrims of unreality peel away revealing something like a national death-watch scene in history's intensive care unit. Is the USA in recession, depression, or collapse? People are at least beginning to ask. Nature's way of hinting that something truly creepy may be up is when both Paul Volcker and George Soros both declare on the same day that the economic landscape is looking darker than the Great Depression.

Those tuned into the media-waves were enchanted, in a related instance, by Rick Santelli's grand moment of theater in the Chicago trader's pit last week when he seemed to ignite the first spark of revolution by demonstrating that bail-out fatigue had morphed into high emotion -- and that the emotion could be marshaled against public policy. The traders in the pit on-screen seemed to color up and buzz loudly, like ordinary grasshoppers turning into angry locusts preparing to ravage a waiting valley. "Are you listening, President Obama?" Mr. Santelli asked portentously.

Read on...

In August Peacenik thought some of Peacenik's doom and gloom posts were satiric and over-the-top. Today Peacenik is unable to imagine how bad things will be by the end of the day. The future has arrived in a hurry. AIG needs $60 billion to get through the week. Auto makers are putting a gun to the heads of world leaders and demanding a bigger bailout. The banking system stress tests which are supposed to determine which banks will survive the week are exposed as little more than kindergarten colouring tests. George Soros and Paul Volker have declared the financial system defunct. The DOW and TSX approach levels that only the fringe doomers dared predict. Today the DOW will probably crash the 7000 level, to the downside. Pensions, 401k's, RRSP's, REIT's, and mutual funds are evaporating. Unemployment is soaring. And the Leafs are only 12 points out of eighth place and are starting their annual push to almost make the play-offs. And it is sunny out. It is time for everyone to slowly, carefully, and quietly, step back from the abyss.

State of Cringe

January 26, 2009
State of Cringe

Just as Mr. Obama has danced into the oval office, we've arrived at a moment when a lot of people have a hard time imagining the future. This includes especially the mainstream media, which has reached a state of zombification parallel to that of the banks. But even in the mighty blogosphere, with its thousands of voices unconstrained by craven advertisers or pandering managing editors, the view forward dims as a dark and ominous fog rolls over the landscape of possibilities.

For at least a year several story-lines have been slugging it out inconclusively for supremacy of the Web-waves. The main event has been the Deflationists versus the Inflationists. The first group basically says that so much "money" is being welshed out of existence that it dwarfs the new "money" being shoveled into existence in the form of bail-outs, tarps, and office re-decoration stipends. The Deflationists see the tattered remnants of the consumer credit economy auguring ever deeper into a hole until it is buried so far down that all the back-hoes ever sold will not be able to dig it out. The competing Inflationists say that the massive truckloads of shoveled-in "money" will soon.

Read on...

The Harper government is bringing forth a budget that promises to pretty well make all the mistakes that every other government has and is making all over the world. Kunstler lays out the situation in clear terms. Peacenik has been wondering about the health of the Canadian banking sector. Peacenik has been wondering about the health of the Canadian economy. Harper will be talking about hope and the future. Kunstler doesn't see a way out or a way forward. Peacenik is cringing.

Change You Won't Believe

by Jim Kunstler

The peak oil story has not been nullified by the scramble to unload every asset for cash -- including whomping gobs of oil contracts -- during this desperate season of bank liquidation. The main implication of the peak oil story is that we won't be able to generate the kind of economic growth that defined our way of life for decades because the primary energy resources needed for it will be contracting.

Just as global oil production peaked, our economy evolved into a morbid hypertrophy, and the chief manifestation of it was the suburban sprawl-building fiesta that has now climaxed in the real estate bust. By the early 21st century, when so much American manufacturing had been swapped out to Asia, there was no business left except sprawl-building -- a manifold tragedy which wrecked the banks that financed it, and left the ordinary people mortgaged to it with ruinous liabilities.

Read on...

Peacenik has mentioned in the past that Peacenik is concerned about shortages at the grocery stores and beer stores. This raises the question about how one should try to prepare for sudden shortages. Will there be warning signs? Will there be alarms? Should Peacenik start preparing for shortages now? When is it too late? Quite independent of Peacenik's concern, are weekend reports of shortages, unrelated to bankruptcy, in a food store in Florida. Major food suppliers in the U.K. are about to go bankrupt. Kunstler and Ilargi both mention the probability of food shortages in the near future.

Peacenik will share his strategy. Peacenik set up a Google Alert for +"grocery shelves" +empty. Decide what your comfort level is. If this search returns a couple of alerts a week, all is probably well. If the search starts returning 10 or 20 alerts a week, it is time to head for the grocery store. Peacenik will see you there in the bulk food department.

People Get Ready

In the twilight of the Bush days, in the twilight of the twilight season, a consensus has formed that we are headed into a long, dark passage leading we know not where. Even CNBC's Lawrence Kudlow has been reduced to searching for stray "mustard seeds" of hope on hands and knees in a bleak and tortured financial landscape. Half the enterprises in the land are lined up for some kind of relief bailout and a blizzard of pink slips has cut economic visibility to zero.

The broad American public voted for "change" but they thought that meant a "changing of the guard." Out with the feckless Bush; in with the charismatic Obama... and may this American life now continue just as it ever was. The change actually coming will be much more than they bargained for, namely our transition from a wealthy society to a hardship society. The sharp break is a product of our years-long failure to reckon with the energy realities of our time. We're still confused about that, but it's hard, otherwise, to ignore the massive disappearance of capital, asset values, livelihoods, domiciles, comforts, and necessities.

Read on...

Its Monday morning. Do you know where your money is? Is your bank still in business? Do you still have a job. Is your government on vacation? Peacenik thinks Kunstler is almost optimistic in this post. At least he acknowleges the possibilty that people may react to the current depression with kindness rather than cruelness. Small mercies.

Zombie Economics

by Jim Kunstler

Though Citicorp is deemed too big to fail, it's hardly reassuring to know that it's been allowed to sink its fangs into the Mother Zombie that the US Treasury has become and sucked out a multi-billion dollar dose of embalming fluid so it can go on pretending to be a bank for a while longer. I employ this somewhat clunky metaphor to point out that the US Government is no more solvent than the financial zombies it is keeping on walking-dead support. And so this serial mummery of weekend bailout schemes is as much of a fraud and a swindle as the algorithm-derived-securities shenanigans that induced the disease of bank zombification in the first place. The main question it raises is whether, eventually, the creation of evermore zombified US dollars will exceed the amount of previously-created US dollars now vanishing into oblivion through compressive debt deflation.

My guess, given the usual time-lag factor, is that the super-inflation snap-back will occur six to eighteen months from now. And the main result of all this will be our inability to buy the imported oil that comprises two-thirds of the oil we require to keep WalMart and Walt Disney World running. At some point, then, in the early months of the Obama administration, we'll learn that "change" is not a set of mere lifestyle choices but a wrenching transition away from all our familiar and comfortable habits into a stark and rigorous new economic landscape.

Read on...

Peacenik was feeling kind of discombobulated this morning when Peacenik realized Peacenik hadn't read Kunstler's Monday morning eye opener. Yes, all is well, everything is still going to hell in a handcart. But Kunstler at least prescribes a few remedies.

In the Reality Lounge

by Jim Kunstler

The G-20 came to Washington for the weekend and sucked all the air out of the city before announcing that they were really serious about patching all the leaks in the foundering ship of globalism. Well, they have to at least pretend that they are doing something. Meanwhile, the former bit player known as reality has taken center stage in the ship's main lounge. It is putting on an act even gnarlier than the Kit Kat Klub show in Cabaret.

This reality show is sending some clear signals to the denizens of the real and really crowded world. The main signal is that the trade and financing rackets of recent decades are over. The extravaganza of economic hypergrowth based on cheap resources is over. The promiscuous swapping around of risk and rewards is over. There is no global institutional framework for managing the impairment left in the wake of this binge. It will be up to the individual nations now to figure out their national lives and livings.

Read on...

Peacenik can't not post Kunstler on a Monday morning. Enjoy.

A Nervous Nation

by Jim Kunstler

This is a nervous nation. Though I'm usually allergic to paranoia, something makes me think that there's a back office in the US Treasury that is buying the entire Dow Jones Industrial Index at opportune moments -- like fifteen minutes before the closing bell -- at the direction of Mr. Paulson. He seems to easily spend $50 billion a day on other dubious hand-outs. At that scale, buying the whole Dow would just take his walking-around money. The idea behind it, my paranoid fugue goes, is to jack up the stock market enough around election day to give the dimmer members of the voting public the idea that the financial fiasco is over and happy days are here again. You can't put this past the Republican party, despite John McCain's friendly turn on Saturday Night Live, consorting with "the enemy" for laughs.

Apart from that, McCain has run the flat-out most scurrilous campaign I've ever seen, despite his reputation as a war hero and a sterling fellow among the senators. He's run a campaign of malicious innuendo and slander, seemingly aimed at voters who would have trouble qualifying for the Special Olympics. And you have to wonder whether he actually requested Vice-president Dick Cheney to lay that "kiss-of-death" endorsement on him at the last moment. It could only have been better if Mr. Cheney borrowed some trick-or-treater's Darth Vadar costume for the grand occasion.

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Peacenik remembers watching hour-after-hour of the voting fiasco in Florida in 2000. And after all the talk and 8 years of George Bush, the voting problems remain; Diebold machines, no paper voting trail, voter suppression etc. etc. None of the problems have been solved. Many states have recently passed laws allowing citizen challenges of your right-to-vote. This is sure to encourage turn out in the redneck states. Will it stop Obama. Peacenik doesn't think so. Will Obama be able to solve the problems of society. Kunstler isn't sure.

Easthampton Burning?

by Jim Kunstler

In the typhoon of commentary that's blown around the world a step behind the financial tsunami that's wrecking everything, two little words have been curiously absent: "fraud" and "swindle." But aren't they really at the core of what has happened? Wall Street took the whole world "for a ride" and now a handful of Wall Street's erstwhile princelings have shifted ceremoniously into US Government service to "fix" the problem with a "toolbox" containing a notional two trillion dollars. This strange exercise in financial kabuki theater will shut down sometime between the election and inauguration day, when the inaugurate finds himself president of the Economic Smoking Wreckage of the United States. What will happen?

I have thought for some time that things could get dangerously out of hand in America, despite our exceptionalist notion that we are immune to the common plot-lines of history. For starters, inauguration night will seem more like Halloween, as those two little words fly in to haunt the new president. So, a large and looming question is: who will be appointed the next attorney general of the US (to replace the human sash-weight currently occupying the office), and how soon will the federal marshals be scouring the wainscoted hallways of Goldman Sachs, JP Morgan Chase, not to mention a thousand Greenwich, Connecticut, hedge fund boiler rooms, with man-sized nets?

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Kunstler seems to think that unemployed, hungry, homeless, hopeless sheeple may not react well to the new economic order. Peacenik hopes that Kunstler is wrong. Meanwhile financial planners are working overtime trying to reassure their clients to sit tight and trust the markets. Trust?

What Now?

by Jim Kunstler

It's fascinating to read the commentators in mainstream journals like The Financial Times and The Wall Street Journal all strenuously pretending that "the worst is over" (maybe... we hope... fingers crossed... hail Mary full of grace... et cetera). The cluelessness would be funny if it didn't involve a world-changing catastrophe. All nations that have reached the fork-and-spoon level of civilization are now engineering a vast network of cyber-cables that lead directly from their central bank computers to the Death Star that is hovering above world financial affairs like a giant cosmic vacuum cleaner, sucking up dollars, euros, zlotys, forints, krona, what-have-you. As fast as the keystrokes create currency-pixels, the little electron-denominated units of exchange are sucked out of the terrestrial economies into the black hole of money death. That's what the $700-billion bail-out (excuse me, "rescue plan") and all its associated ventures are about.

To switch metaphors, let's say that we are witnessing the two stages of a tsunami. The current disappearance of wealth in the form of debts repudiated, bets welshed on, contracts canceled, and Lehman Brothers-style sob stories played out is like the withdrawal of the sea. The poor curious little monkey-humans stand on the beach transfixed by the strangeness of the event as the water recedes and the sea floor is exposed and all kinds of exotic creatures are seen thrashing in the mud, while the skeletons of historic wrecks are exposed to view, and a great stench of organic decay wafts toward the strand. Then comes the second stage, the tidal wave itself -- which in this case will be horrific monetary inflation -- roaring back over the mud flats toward the land mass, crashing over the beach, and ripping apart all the hotels and houses and infrastructure there while it drowns the poor curious monkey-humans who were too enthralled by the weird spectacle to make for higher ground. The killer tidal wave washes away all the things they have labored to build for decades, all their poignant little effects and chattels, and the survivors are left keening amidst the wreckage as the sea once again returns to normal in its eternal cradle.

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Peacenik reads Kunstler and wonders what Peacenik should do. Can Peacenik save himself from hyperinflation? Can he save himself from deflation? Can anyone? Will the near future be peaceful? Peacenik watched War of The Worlds last night and was surprised at how orderly people were in the face of an alien attack. But Peacenik also read Cormac's The Road. The future may be scary and it may be soon.