http://kunstler.com/blog/2009/11/dreams-die-hard.html
Dreams Die Hard
In The Long Emergency (2005, Atlantic Monthly Press), I said that we ought to expect the federal government to become increasingly impotent and ineffectual - that this would be a hallmark of the times. In fact, I said that any enterprise organized at the colossal scale would function poorly in years ahead, whether it was a government, a state university, a national chain retail company, or a giant midwestern farm. It is characteristic of the compressive contraction our society faces that giant hypercomplex systems will wobble and fail. We should expect this.
It's tragic that the avatar of hopefulness himself, Barack Obama, stepped into his role at exactly the moment when this set of conditions was getting traction. It is sure to get worse, and there are going to be a lot of disappointed people out there who will be suffering terrible losses and real pain in daily life. Societies don't do well when the public falls into the broad despair that is the opposite of hope. That's when the long knives and the tribal animosities come out and things get smashed.
Within the context of conventional party politics - the kind that has been baseline "normal" in the USA for a long time - we see this playing out in two factions that are increasingly out-of-touch with reality. The Obama government has made itself hostage to a toxic form of pretense and lying. In order to sustain the wish for "hope" - if not hope itself - the President and his White House advisors along with his cabinet appointments, are pretending that the historical forces of compressive contraction are not underway. They're flat-out lying about the employment figures issued in the government's name. They're willfully ignoring the comprehensive bankruptcy gripping government at all levels. They refuse to bring the law to bear against "the malefactors of great wealth." They appear to not understand the epochal energy scarcity problem the whole world faces, or its implications for industrial economies. Most of all, they persist in promoting the lie that this economy can return to the prior state of reckless debt accumulation (a.k.a "consumerism") that has made us so ridiculous and unhealthy.
The trouble with self-delusion, either in a person or a society, is that reality doesn't care what anybody believes, or what story they put out. Reality doesn't "spin." Reality does not have a self-image problem. Reality does not yield its workings to self-esteem management. These days, Americans don't like reality very much because it won't let them push it around. Reality is an implacable force and the only question for human beings in the face of it is: what will you do? In other words, it's not really possible to manage reality, but you can certainly choose to manage your affairs within reality. We won't do that because it's too difficult. This harsh situation leaves the public increasingly with little more than bad feelings of discouragement and persecution. It's astonishing that all the smart people around the president don't get this.
Reality unfolds emergently, and this ought to interest us. For instance, I have maintained for many years that we are approaching the twilight of the automobile age - and the implications of this for daily life in the USA are pretty large. For a long time, I had assumed that this change of circumstances would proceed from our problems with the oil supply. But reality is sly. It has thrown two new plot twists into the story lately. America's romance with cars may not founder just on the fuel supply question. It now appears that our problems with capital are so severe that far fewer people will be able to borrow money from banks to buy cars at the rate, and in the way, that the system has been organized to depend on. Our problems with capital are also depriving us of the ability to pay to fix the hypercomplex system of county roads, interstate highways, and even city streets that make motoring possible. What will we do?
For now, a cashless government gives out cash-for-clunkers, which is basically a self-esteem building program designed to make the government feel better about itself because it is ostensibly taking 11-miles-per-gallon cars off the road and replacing them with 27-miles-per-gallon cars, thus forestalling scary problems with climate change. It's dumb of course, but the failure of leadership is comprehensive. Even the elite environmentalists at the Aspen Institute are preoccupied with finding new "green" ways to keep all the cars running. They put zero effort into the idea of walkable communities, or restoring the railroad system, which will be the reality-based remedies for the car-dependency problem.
The Republican right wing is, if anything, even more childishly delusional. For Glen Beck and Sarah Palin it comes down to "drill, baby, drill." They know nothing about the geology of oil - they don't even believe that the earth is more than six-thousand years old, meaning they don't believe in geology, period - but they are inflamed with the faith of eight-year-old children that we must have a lot more oil in the ground because this is America and God loves us more than people in other parts of the planet so it must be there. As their disappointment mounts, their childish ideas will turn cruel and sadistic. They'll seek to punish anybody who believes that the earth is more than six thousand years old. The catch is, If they get into power in the election cycles ahead, they'll be impotent and ineffectual even at persecuting their enemies.
In the meantime, American life will just wind down, no matter what we believe. It won't wind down to a complete stop. Its near-term destination is to lower levels of complexity and scale than what we've been used to for a long time. People will be able to drive fewer cars fewer miles. The roads will get worse. They'll be worse in some places than others. There will be fewer jobs to go to and fewer things sold. People who live in communities scaled to the energy and capital realities of the years ahead are liable to be more comfortable. We're surely going to have trouble with money. Households will drown in debt and lose all their savings. Money could be scarce or worthless. Credit will be scarcer.
Both factions of American political life indulge in the fiction of control. History is reality's big brother. It is taking us someplace that we don't want to go, so it will probably have to drag us there kicking and screaming. For starters, both reality and history will probably take us out to some woodshed of the national soul and beat the crap out of us. That could be a salutary thing, since the crap consists of all the lies we tell ourselves. Once we're rid of all that, we may rediscover a few things left inside our collective identity that are worth regarding with real self-respect.
And one comment to this article:
walt November 9, 2009 10:00 AM Reply
This morning, elite opinion (Paul Krugman, NYT) has officially joined Kunstler and other pessimists/doomers. We are fast careening down a steep slope and there are apparently no brakes on this vehicle of state............
Monday, November 9, 2009
Friday, November 6, 2009
SC98-5
http://www.informationclearinghouse.info/article23908.htm
The Evil Empire
The US government is now so totally under the thumbs of organized interest groups that “our” government can no longer respond to the concerns of the American people who elect the president and the members of the House and Senate. Voters will vent their frustrations over their impotence on the president, which implies a future of one-term presidents. Soon our presidents will be as ineffective as Roman emperors in the final days of that empire.
Obama is already set on the course to a one-term presidency. He promised change, but has delivered none. His health care bill is held hostage by the private insurance companies seeking greater profits. The most likely outcome will be cuts in Medicare and Medicaid in order to help fund wars that enrich the military/security complex and the many companies created by privatizing services that the military once provided for itself at far lower costs.
It would be interesting to know the percentage of the $700+ billion “defense” spending that goes to private companies. In American “capitalism,” an amazing amount of taxpayers’ earnings go to private firms via the government. Yet, Republicans scream about “socializing” health care. Republicans and Democrats saw opportunities to create new sources of campaign contributions by privatizing as many military functions as possible. There are now a large number of private companies that have never made a dollar in the market, feeding instead at the public trough that drains taxpayers of dollars while loading Americans with debt service obligations.
Obama inherited an excellent opportunity to bring US soldiers home from the Bush regime’s illegal wars of aggression. In its final days, the Bush regime realized that it could “win” in Iraq by putting the Sunni insurgents on the US military payroll.
Once Bush had 80,000 insurgents collecting US military pay, violence, although still high, dropped in half. All Obama had to do was to declare victory and bring our boys home,thanking Bush for winning the war. It would have shut up the Republicans. But this sensible course would have impaired the profits and share prices of those firms that comprise the military/security complex. So instead of doing what Obama said he would do and what the voters elected him to do, Obama restarted the war in Afghanistan and launched a new one in Pakistan. Soon Obama was echoing Bush and Cheney’s threats to attack Iran.
In place of health care for Americans, there will be more profits for private insurance companies. In place of peace there will be more war. Voters are already recognizing the writing on the wall and are falling away from Obama and the Democrats. Independents who gave Obama his comfortable victory have now swung against him, recently electing Republican governors in New Jersey and Virginia to succeed Democrats. This is a protest vote, not a confidence vote in Republicans. Obama’s credibility is shot. And so is Congress’s, assuming it ever had any. The US House of Representatives has just voted to show the entire world that the US House of Representatives is nothing but the servile, venal, puppet of the Israel Lobby. The House of Representatives of the American “superpower” did the bidding of its master, AIPAC, and voted 344 to 36 to condemn the Goldstone Report.
In case you don’t know, the Goldstone Report is the Report of the United Nations Fact Finding Mission on the Gaza Conflict. The “Gaza Conflict” is the Israeli military attack on the Gaza ghetto, where 1.5 million dispossessed Palestinians, whose lands, villages, and homes were stolen by Israel, are housed. The attack was on civilians and civilian infrastructure. It was without any doubt a war crime under the Nuremberg standard that the US established in order to execute Nazis. Goldstone is not only a very distinguished Jewish jurist who has given his life to bringing people to accountability for their crimes against humanity, but also a Zionist. However, the Israelis have demonized him as a “self-hating Jew” because he wrote the truth instead of Israeli propaganda. US Representative Dennis Kucinich, who is now without a doubt a marked man on AIPAC’s political extermination list, asked the House if the members had any realization of the shame that the vote condemning Goldstone would bring on the House and the US government.
The entire rest of the world accepts the Goldstone report. The House answered with its lopsided vote that the rest of the world doesn’t count as it doesn’t give campaign contributions to members of Congress. This shameful, servile act of “the world’s greatest democracy” occurred the very week that a court in Italy convicted 23 US CIA officers for kidnapping a person in Italy. The CIA agents are now considered “fugitives from justice” in Italy, and indeed they are. The kidnapped person was renditioned to the American puppet state of Egypt, where the victim was held for years and repeatedly tortured. The case against him was so absurd that even an Egyptian judge order his release.
One of the convicted CIA operatives, Sabrina deSousa, an attractive young woman, says that the US broke the law by kidnapping a person and sending him to another country to be tortured in order to manufacture another “terrorist” in order to keep the terrorist hoax going at home. Without the terrorist hoax, America’s wars for special interest reasons would become transparent even to Fox “News” junkies. Ms. deSousa says that “everything I did was approved back in Washington,” yet the government, which continually berates us to “support the troops,” did nothing to protect her when she carried out the Bush regime’s illegal orders.
Clearly, this means that the crime that Bush, Cheney, the Pentagon, and the CIA ordered is too heinous and beyond the pale to be justified, even by memos from the despicable John Yoo and the Republican Federalist Society. Ms. deSousa is clearly worried about herself. But where is her concern for the innocent person that she sent into an Egyptian hell to be tortured until death or admission of being a terrorist? The remorse deSousa expresses is only for herself. She did her evil government’s bidding and her evil government that she so faithfully served turned its back on her.
She has no remorse for the evil she committed against an innocent person. Perhaps deSousa and her 22 colleagues grew up on video games. It was great fun to plot to kidnap a real person and fly him on a CIA plane to Egypt. Was it like a fisherman catching a fish or a deer hunter killing a beautiful 8-point buck? Clearly, they got their jollies at the expense of their renditioned victim. The finding of the Italian court, and keep in mind that Italy is a bought-and-paid-for US puppet state, indicates that even our bought puppets are finding the US too much to stomach.
Moving from the tip of the iceberg down, we have Ambassador Craig Murray, rector of the University of Dundee and until 2004 the UK Ambassador to Uzbekistan, which he describes as a Stalinist totalitarian state courted and supported by the Americans. As ambassador, Murray saw the MI5 intelligence reports from the CIA that described the most horrible torture procedures. “People were raped with broken bottles, children were tortured in front of their parents until they [the parents] signed a confession, people were boiled alive.”
“Intelligence” from these torture sessions was passed on by the CIA to MI5 and to Washington as proof of the vast al Qaeda conspiracy. Amb. Murray reports that the people delivered by CIA flights to Uzbekistan’s torture prisons “were told to confess to membership in Al Qaeda. They were told to confess they’d been in training camps in Afghanistan. They were told to confess they had met Osama bin Laden in person. And the CIA intelligence constantly echoed these themes.”
“I was absolutely stunned,” says the British ambassador, who thought that he served a moral country that, along with its American ally, had moral integrity. The great Anglo-American bastion of democracy and human rights, the homes of the Magna Carta and the Bill of Rights, the great moral democracies that defeated Nazism and stood up to Stalin’s gulags, were prepared to commit any crime in order to maximize profits.
Amb. Murray learned too much and was fired when he vomited it all up. He saw the documents that proved that the motivation for US and UK military aggression in Afghanistan had to do with the natural gas deposits in Uzbekistan and Turkmenistan. The Americans wanted a pipeline that bypassed Russia and Iran and went through Afghanistan. To insure this, an invasion was necessary. The idiot American public could be told that the invasion was necessary because of 9/11 and to save them from “terrorism,” and the utter fools would believe the lie.
“If you look at the deployment of US forces in Afghanistan, as against other NATO country forces in Afghanistan, you’ll see that undoubtedly the US forces are positioned to guard the pipeline route. It’s what it’s about. It’s about money, its about energy, it’s not about democracy.” http://www.informationclearinghouse.info/article23906.htm
Guess who the consultant was who arranged with then Texas governor George W. Bush the agreements that would give to Enron the rights to Uzbekistan’s and Turkmenistan’s natural gas deposits and to Unocal to develop the trans-Afghanistan pipeline. It was Karzai, the US-imposed “president” of Afghanistan, who has no support in the country except for American bayonets. Amb. Murray was dismissed from the UK Foreign Service for his revelations. No doubt on orders from Washington to our British puppet.
The Evil Empire
The US government is now so totally under the thumbs of organized interest groups that “our” government can no longer respond to the concerns of the American people who elect the president and the members of the House and Senate. Voters will vent their frustrations over their impotence on the president, which implies a future of one-term presidents. Soon our presidents will be as ineffective as Roman emperors in the final days of that empire.
Obama is already set on the course to a one-term presidency. He promised change, but has delivered none. His health care bill is held hostage by the private insurance companies seeking greater profits. The most likely outcome will be cuts in Medicare and Medicaid in order to help fund wars that enrich the military/security complex and the many companies created by privatizing services that the military once provided for itself at far lower costs.
It would be interesting to know the percentage of the $700+ billion “defense” spending that goes to private companies. In American “capitalism,” an amazing amount of taxpayers’ earnings go to private firms via the government. Yet, Republicans scream about “socializing” health care. Republicans and Democrats saw opportunities to create new sources of campaign contributions by privatizing as many military functions as possible. There are now a large number of private companies that have never made a dollar in the market, feeding instead at the public trough that drains taxpayers of dollars while loading Americans with debt service obligations.
Obama inherited an excellent opportunity to bring US soldiers home from the Bush regime’s illegal wars of aggression. In its final days, the Bush regime realized that it could “win” in Iraq by putting the Sunni insurgents on the US military payroll.
Once Bush had 80,000 insurgents collecting US military pay, violence, although still high, dropped in half. All Obama had to do was to declare victory and bring our boys home,thanking Bush for winning the war. It would have shut up the Republicans. But this sensible course would have impaired the profits and share prices of those firms that comprise the military/security complex. So instead of doing what Obama said he would do and what the voters elected him to do, Obama restarted the war in Afghanistan and launched a new one in Pakistan. Soon Obama was echoing Bush and Cheney’s threats to attack Iran.
In place of health care for Americans, there will be more profits for private insurance companies. In place of peace there will be more war. Voters are already recognizing the writing on the wall and are falling away from Obama and the Democrats. Independents who gave Obama his comfortable victory have now swung against him, recently electing Republican governors in New Jersey and Virginia to succeed Democrats. This is a protest vote, not a confidence vote in Republicans. Obama’s credibility is shot. And so is Congress’s, assuming it ever had any. The US House of Representatives has just voted to show the entire world that the US House of Representatives is nothing but the servile, venal, puppet of the Israel Lobby. The House of Representatives of the American “superpower” did the bidding of its master, AIPAC, and voted 344 to 36 to condemn the Goldstone Report.
In case you don’t know, the Goldstone Report is the Report of the United Nations Fact Finding Mission on the Gaza Conflict. The “Gaza Conflict” is the Israeli military attack on the Gaza ghetto, where 1.5 million dispossessed Palestinians, whose lands, villages, and homes were stolen by Israel, are housed. The attack was on civilians and civilian infrastructure. It was without any doubt a war crime under the Nuremberg standard that the US established in order to execute Nazis. Goldstone is not only a very distinguished Jewish jurist who has given his life to bringing people to accountability for their crimes against humanity, but also a Zionist. However, the Israelis have demonized him as a “self-hating Jew” because he wrote the truth instead of Israeli propaganda. US Representative Dennis Kucinich, who is now without a doubt a marked man on AIPAC’s political extermination list, asked the House if the members had any realization of the shame that the vote condemning Goldstone would bring on the House and the US government.
The entire rest of the world accepts the Goldstone report. The House answered with its lopsided vote that the rest of the world doesn’t count as it doesn’t give campaign contributions to members of Congress. This shameful, servile act of “the world’s greatest democracy” occurred the very week that a court in Italy convicted 23 US CIA officers for kidnapping a person in Italy. The CIA agents are now considered “fugitives from justice” in Italy, and indeed they are. The kidnapped person was renditioned to the American puppet state of Egypt, where the victim was held for years and repeatedly tortured. The case against him was so absurd that even an Egyptian judge order his release.
One of the convicted CIA operatives, Sabrina deSousa, an attractive young woman, says that the US broke the law by kidnapping a person and sending him to another country to be tortured in order to manufacture another “terrorist” in order to keep the terrorist hoax going at home. Without the terrorist hoax, America’s wars for special interest reasons would become transparent even to Fox “News” junkies. Ms. deSousa says that “everything I did was approved back in Washington,” yet the government, which continually berates us to “support the troops,” did nothing to protect her when she carried out the Bush regime’s illegal orders.
Clearly, this means that the crime that Bush, Cheney, the Pentagon, and the CIA ordered is too heinous and beyond the pale to be justified, even by memos from the despicable John Yoo and the Republican Federalist Society. Ms. deSousa is clearly worried about herself. But where is her concern for the innocent person that she sent into an Egyptian hell to be tortured until death or admission of being a terrorist? The remorse deSousa expresses is only for herself. She did her evil government’s bidding and her evil government that she so faithfully served turned its back on her.
She has no remorse for the evil she committed against an innocent person. Perhaps deSousa and her 22 colleagues grew up on video games. It was great fun to plot to kidnap a real person and fly him on a CIA plane to Egypt. Was it like a fisherman catching a fish or a deer hunter killing a beautiful 8-point buck? Clearly, they got their jollies at the expense of their renditioned victim. The finding of the Italian court, and keep in mind that Italy is a bought-and-paid-for US puppet state, indicates that even our bought puppets are finding the US too much to stomach.
Moving from the tip of the iceberg down, we have Ambassador Craig Murray, rector of the University of Dundee and until 2004 the UK Ambassador to Uzbekistan, which he describes as a Stalinist totalitarian state courted and supported by the Americans. As ambassador, Murray saw the MI5 intelligence reports from the CIA that described the most horrible torture procedures. “People were raped with broken bottles, children were tortured in front of their parents until they [the parents] signed a confession, people were boiled alive.”
“Intelligence” from these torture sessions was passed on by the CIA to MI5 and to Washington as proof of the vast al Qaeda conspiracy. Amb. Murray reports that the people delivered by CIA flights to Uzbekistan’s torture prisons “were told to confess to membership in Al Qaeda. They were told to confess they’d been in training camps in Afghanistan. They were told to confess they had met Osama bin Laden in person. And the CIA intelligence constantly echoed these themes.”
“I was absolutely stunned,” says the British ambassador, who thought that he served a moral country that, along with its American ally, had moral integrity. The great Anglo-American bastion of democracy and human rights, the homes of the Magna Carta and the Bill of Rights, the great moral democracies that defeated Nazism and stood up to Stalin’s gulags, were prepared to commit any crime in order to maximize profits.
Amb. Murray learned too much and was fired when he vomited it all up. He saw the documents that proved that the motivation for US and UK military aggression in Afghanistan had to do with the natural gas deposits in Uzbekistan and Turkmenistan. The Americans wanted a pipeline that bypassed Russia and Iran and went through Afghanistan. To insure this, an invasion was necessary. The idiot American public could be told that the invasion was necessary because of 9/11 and to save them from “terrorism,” and the utter fools would believe the lie.
“If you look at the deployment of US forces in Afghanistan, as against other NATO country forces in Afghanistan, you’ll see that undoubtedly the US forces are positioned to guard the pipeline route. It’s what it’s about. It’s about money, its about energy, it’s not about democracy.” http://www.informationclearinghouse.info/article23906.htm
Guess who the consultant was who arranged with then Texas governor George W. Bush the agreements that would give to Enron the rights to Uzbekistan’s and Turkmenistan’s natural gas deposits and to Unocal to develop the trans-Afghanistan pipeline. It was Karzai, the US-imposed “president” of Afghanistan, who has no support in the country except for American bayonets. Amb. Murray was dismissed from the UK Foreign Service for his revelations. No doubt on orders from Washington to our British puppet.
Thursday, November 5, 2009
SC98-4
Some recent entries at Rice Farmers Blog
http://www.ricefarmer.blogspot.com/
Public Debt, Default and Prosperity
In a previous post, Defaults by Developed Nations?, I said of Japan’s public debt-to-GDP ratio, “It’s a prime example that a lot of our ‘prosperity’ is actually financed with debt.” I don’t mean to say that I told you so, but in this article The Telegraph’s economic commentator Ambrose Evans-Pritchard outlines Japan’s — let’s be honest — absolutely hopeless financial situation.
Japan’s skyrocketing debt-to-GDP ratio is projected to keep shooting for the stars:
The IMF expects Japan’s gross public debt to reach 218pc of gross domestic product (GDP) this year, 227pc next year, and 246pc by 2014.With the industrial system in decline and no more hope for economic growth as in the good old days, this is tantamount to digging one’s own grave. You’ll find more sobering (terrifying?) facts in the article, so I encourage everyone to read it themselves.
Of course, Japan isn’t the only country headed for a train wreck. The world is full of toxic and unsustainable debt, with a raft of matter-of-time defaults and bankruptcies just waiting to happen. China looks hot, but upon closer inspection appears to be growing a big bubble. What’s more, the world as a whole is sitting on a huge derivatives time bomb. The amount is so big that just one glitch could prove catastrophic. So, name your poison.
But to return to the matter of prosperity, it’s abundantly clear that modern industrial prosperity has come from cheap fossil fuel energy and from debt. Further, all this debt accumulated because the world has always counted on cheap energy to fuel still more growth, which would, in theory at least, make it possible to pay off the debt. At least that was Plan A, and now we have come to the point where Plan A has failed and, mired in denial, we still have no Plan B. Even at this date, all governments in the world preach more economic expansion and assure their citizens that the good old days will return and that we’ll achieve sustainable growth.
So again, name your poison. And strap yourself in — it’s going to be a rough ride.
.........On America Going Broke
Quite germane to our current topic of sovereign default is a column titled Could America go broke? in that venerable medium of news and opinion, The Washington Post. The columnist — who likewise uses the US and Japan as examples — makes it sound as though a default by either country is highly unlikely. But of course he omits mention of the primary reason why both countries are almost certain to go bust and default: Peak oil. For example:
Governments of rich countries are borrowing so much that it’s conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse.Certainly these are two of the assumptions, but they are most definitely not the only ones. Everyone also assumes that cheap energy will make more economic growth possible. Naturally, the columnist can’t bring up the expensive energy factor because that would make it immediately evident that the US, Japan, and a number of other countries are already on their way to fiscal doomsday. And by the way, America is already broke.
............More on “Collapse”
Time for an update on the documentary “Collapse,” which is about to start its theater run.
First, the November 4 Wall Street Journal has an article on the film, including a short interview with the film’s star, Michael Ruppert. Despite the shortness of the interview, a few important points are brought out. One very important fact that Ruppert states is that “money is useless without energy.” Some readers of this blog will perhaps recall this post from June of this year in which I made this same point and illustrated it with an example. We tend to put all costs in terms of money, and lose sight of the fact that actually energy is doing the work, with money merely being the means of accessing and mobilizing energy. If you are concerned about this and much more, definitely take any opportunity you have to see the movie. Since I am in Japan, I’ll have to wait until a DVD is available, but having followed Ruppert’s work for some years, I can well imagine the barrage of uncomfortable facts that assault the viewer...........
http://www.ricefarmer.blogspot.com/
Public Debt, Default and Prosperity
In a previous post, Defaults by Developed Nations?, I said of Japan’s public debt-to-GDP ratio, “It’s a prime example that a lot of our ‘prosperity’ is actually financed with debt.” I don’t mean to say that I told you so, but in this article The Telegraph’s economic commentator Ambrose Evans-Pritchard outlines Japan’s — let’s be honest — absolutely hopeless financial situation.
Japan’s skyrocketing debt-to-GDP ratio is projected to keep shooting for the stars:
The IMF expects Japan’s gross public debt to reach 218pc of gross domestic product (GDP) this year, 227pc next year, and 246pc by 2014.With the industrial system in decline and no more hope for economic growth as in the good old days, this is tantamount to digging one’s own grave. You’ll find more sobering (terrifying?) facts in the article, so I encourage everyone to read it themselves.
Of course, Japan isn’t the only country headed for a train wreck. The world is full of toxic and unsustainable debt, with a raft of matter-of-time defaults and bankruptcies just waiting to happen. China looks hot, but upon closer inspection appears to be growing a big bubble. What’s more, the world as a whole is sitting on a huge derivatives time bomb. The amount is so big that just one glitch could prove catastrophic. So, name your poison.
But to return to the matter of prosperity, it’s abundantly clear that modern industrial prosperity has come from cheap fossil fuel energy and from debt. Further, all this debt accumulated because the world has always counted on cheap energy to fuel still more growth, which would, in theory at least, make it possible to pay off the debt. At least that was Plan A, and now we have come to the point where Plan A has failed and, mired in denial, we still have no Plan B. Even at this date, all governments in the world preach more economic expansion and assure their citizens that the good old days will return and that we’ll achieve sustainable growth.
So again, name your poison. And strap yourself in — it’s going to be a rough ride.
.........On America Going Broke
Quite germane to our current topic of sovereign default is a column titled Could America go broke? in that venerable medium of news and opinion, The Washington Post. The columnist — who likewise uses the US and Japan as examples — makes it sound as though a default by either country is highly unlikely. But of course he omits mention of the primary reason why both countries are almost certain to go bust and default: Peak oil. For example:
Governments of rich countries are borrowing so much that it’s conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse.Certainly these are two of the assumptions, but they are most definitely not the only ones. Everyone also assumes that cheap energy will make more economic growth possible. Naturally, the columnist can’t bring up the expensive energy factor because that would make it immediately evident that the US, Japan, and a number of other countries are already on their way to fiscal doomsday. And by the way, America is already broke.
............More on “Collapse”
Time for an update on the documentary “Collapse,” which is about to start its theater run.
First, the November 4 Wall Street Journal has an article on the film, including a short interview with the film’s star, Michael Ruppert. Despite the shortness of the interview, a few important points are brought out. One very important fact that Ruppert states is that “money is useless without energy.” Some readers of this blog will perhaps recall this post from June of this year in which I made this same point and illustrated it with an example. We tend to put all costs in terms of money, and lose sight of the fact that actually energy is doing the work, with money merely being the means of accessing and mobilizing energy. If you are concerned about this and much more, definitely take any opportunity you have to see the movie. Since I am in Japan, I’ll have to wait until a DVD is available, but having followed Ruppert’s work for some years, I can well imagine the barrage of uncomfortable facts that assault the viewer...........
Wednesday, November 4, 2009
SC98-3
http://www.informationclearinghouse.info/article23867.htm
Be Prepared for the Worst
Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession.
A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble.
Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan's excessively low interest rates: the housing bubble, the explosion of subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions. Rather than allow the market to correct itself and clear away the worst excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.
This is nothing less than the creation of another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble's collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been. Even with the massive interventions, unemployment is near 10% and likely to increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve's balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?
What is more likely happening is a repeat of the Great Depression. We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years. As the housing market fails to return to any sense of normalcy, commercial real estate begins to collapse and manufacturers produce goods that cannot be purchased by debt-strapped consumers, the economy will falter. That will go on until we come to our senses and end this wasteful government spending.
Government intervention cannot lead to economic growth. Where does the money come from for Tarp (Treasury's program to buy bad bank paper), the stimulus handouts and the cash for clunkers? It can come only from taxpayers, from sales of Treasury debt or through the printing of new money. Paying for these programs out of tax revenues is pure redistribution; it takes money out of one person's pocket and gives it to someone else without creating any new wealth. Besides, tax revenues have fallen drastically as unemployment has risen, yet government spending continues to increase. As for Treasury debt, the Chinese and other foreign investors are more and more reluctant to buy it, denominated as it is in depreciating dollars.
The only remaining option is to have the Fed create new money out of thin air. This is inflation. Higher prices lead to a devalued dollar and a lower standard of living for Americans. The Fed has already overseen a 95% loss in the dollar's purchasing power since 1913. If we do not stop this profligate spending soon, we risk hyperinflation and seeing a 95% devaluation every year.
Be Prepared for the Worst
Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession.
A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble.
Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan's excessively low interest rates: the housing bubble, the explosion of subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions. Rather than allow the market to correct itself and clear away the worst excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.
This is nothing less than the creation of another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble's collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been. Even with the massive interventions, unemployment is near 10% and likely to increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve's balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?
What is more likely happening is a repeat of the Great Depression. We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years. As the housing market fails to return to any sense of normalcy, commercial real estate begins to collapse and manufacturers produce goods that cannot be purchased by debt-strapped consumers, the economy will falter. That will go on until we come to our senses and end this wasteful government spending.
Government intervention cannot lead to economic growth. Where does the money come from for Tarp (Treasury's program to buy bad bank paper), the stimulus handouts and the cash for clunkers? It can come only from taxpayers, from sales of Treasury debt or through the printing of new money. Paying for these programs out of tax revenues is pure redistribution; it takes money out of one person's pocket and gives it to someone else without creating any new wealth. Besides, tax revenues have fallen drastically as unemployment has risen, yet government spending continues to increase. As for Treasury debt, the Chinese and other foreign investors are more and more reluctant to buy it, denominated as it is in depreciating dollars.
The only remaining option is to have the Fed create new money out of thin air. This is inflation. Higher prices lead to a devalued dollar and a lower standard of living for Americans. The Fed has already overseen a 95% loss in the dollar's purchasing power since 1913. If we do not stop this profligate spending soon, we risk hyperinflation and seeing a 95% devaluation every year.
Monday, November 2, 2009
SC98-2
http://troutclancampfire.blogspot.com/
Grievance or Gratitude
freeacre
Monday, and I feel compelled to get a quick post up because we have well over sixty comments going on the previous post. All excellent, by the way. A much brainier post is in the works by Belgium. I stole the phrase “grievance or gratitude” from James Howard Kunstler’s latest Clusterfuck Nation essay this morning. He is referring to the upcoming Thanksgiving season, which seems to be buried in the malls by Halloween hoopla and the Christmas marketing blitz. He doesn’t think that folks are feeling particularly grateful this season, since unemployment is still on the upswing, many unemployment checks are expiring, the federal government is on the verge of bankruptcy, commercial real estate is about to go bust, and so forth. In fact, he intuits that when people get wind of the outlandish bonuses that will be paid on Wall St. around Christmas, a fair-sized segment of the population just might go postal. He even envisions a possible coup or some sort of disintegration of the federal government itself! That seems a tad over the top, even to me.
The consensus of opinion, at least from our little slice of consciousness at the Campfire, seems to be that President Obama is impotent to protect us from the banking and corporate globalists at best, and, at worst, a willing shill for the Reptilian puppet masters. I think of the sociopathic Big Boys pulling the strings as reptilian, due to their seeming inhumanity. They seem to be incredibly unconnected to the vast majority of regular people as to be another species dressed up in a suit. Cold-blooded, ruthless, greed-driven, malicious, and monstrous, they have proven capable of entrapping their victims whole, wrapping them up in a web of deceit, and eating them alive, like spiders. Okay, I know that spiders are arachnids, not reptiles, but they are not human, that’s for sure. The latest report this weekend on Huffington Post, and quoted by Kunstler (or was it George Ure?), that Goldman Sachs was going around the country buying up real estate mortgages that they knew full well were toxic, then bundling them up and selling them to foreign banks and pension funds. Meanwhile, they took out insurance against these derivatives so than when they failed, they would cash in. When the most prestigious financial institution is doing shit like this, with all the domestic and international ramifications, there seems to be no limit to how far they will sink. And, their perception of the people involved at the other end of these transactions are as dispassionate as the grey aliens are reported to be when observing a hapless abductee undergoing an anal probe. The banksters, the stockbrokers, and their minions in the legislatures are the aliens, and we are the herd suffering the mutilation. Sucked dry of our life’s blood and lying bloated in tent cities and underpasses, wild-eyed and crazed, or simply dazed and confused, the misery of the masses is about to get worse.
Why not? The Federal Reserve has already devalued the purchasing power of the dollar by 97 cents since 1913 and gotten away with it. The wealthiest five percent now own ninety percent of the wealth of the land, since Reagan and his chuckle headed “trickle down” theory of economics became the law of the land. The false flag event of 9/11 threw enough people into a panic that the constitution has been dismantled, and now virtually anyone can be labeled an “enemy combatant” and renditioned, tortured, and incarcerated forever without trial. The NSA just opened up a new center to help with the surveillance of our e-mails and electronic transactions – and they plan to invite corporate entities to man the facility as well. We can probably look forward to having quotas set on items to buy. I can hear the call now…”Hello, Ms. Freeacre, this is Hal, from Business Watch. We notice that you have not purchased the minimum telecommunication services and food products to keep your credit in good standing. Is there anything wrong? How may we help you?”
Oh, crap, there I go again… getting all paranoid and shit. But then, there was this Mossad agent surrounded by a zillion cops with advanced weaponry who was arrested and apparently sent back to Israel to suffer consequences after he divulged that the swine flu virus has been weaponized. It may be what is causing this hideous bleeding lungs epidemic in the Ukraine. Suddenly the web bot predictions on immanent disaster don’t seem so far from the mark. If you aren’t certain of what I am referring to, just go to today’s (11/2) Urban Survival site (linked at right) and read the column and follow the links. Or Cryptogon. Just reading this stuff is enough to give one a nose bleed. If Baxter Corp. (Donald Rumsfeld just happens to sit on their board of directors) has, indeed, released the Spanish Flu into the world again, we are looking at millions of deaths. And, if the vaccine is contaminated with adjuvants of squalene and mercury, we can anticipate additional long term suffering beyond measure. Oh, yeah, and that guy from U.N. who was found dead at the bottom of a stairwell who was working on seismic monitoring of possible nuclear testing sites also used to work in biological warfare… well, I’m just connecting some dots here. Don’t mind me. His was the second “suicide” from that lethal stairwell at the U.N., by the way. In addition to the scores of dead micro-biologists world-wide. Nothing here, citizen, just move along and buy something at your local mall.
Well, with all this, the “Death of the Dollar” and the possible attack on Iran by Israel doesn’t seem so far-fetched after all, does it? Oh, wait… we have comforting “news” by Katie Couric, et al, on the lamestream media that assures us that things are looking up for the “recovery.” Just who’s recovery is not real certain, but it looks like it doesn’t extend beyond the reptilian sector.......
Grievance or Gratitude
freeacre
Monday, and I feel compelled to get a quick post up because we have well over sixty comments going on the previous post. All excellent, by the way. A much brainier post is in the works by Belgium. I stole the phrase “grievance or gratitude” from James Howard Kunstler’s latest Clusterfuck Nation essay this morning. He is referring to the upcoming Thanksgiving season, which seems to be buried in the malls by Halloween hoopla and the Christmas marketing blitz. He doesn’t think that folks are feeling particularly grateful this season, since unemployment is still on the upswing, many unemployment checks are expiring, the federal government is on the verge of bankruptcy, commercial real estate is about to go bust, and so forth. In fact, he intuits that when people get wind of the outlandish bonuses that will be paid on Wall St. around Christmas, a fair-sized segment of the population just might go postal. He even envisions a possible coup or some sort of disintegration of the federal government itself! That seems a tad over the top, even to me.
The consensus of opinion, at least from our little slice of consciousness at the Campfire, seems to be that President Obama is impotent to protect us from the banking and corporate globalists at best, and, at worst, a willing shill for the Reptilian puppet masters. I think of the sociopathic Big Boys pulling the strings as reptilian, due to their seeming inhumanity. They seem to be incredibly unconnected to the vast majority of regular people as to be another species dressed up in a suit. Cold-blooded, ruthless, greed-driven, malicious, and monstrous, they have proven capable of entrapping their victims whole, wrapping them up in a web of deceit, and eating them alive, like spiders. Okay, I know that spiders are arachnids, not reptiles, but they are not human, that’s for sure. The latest report this weekend on Huffington Post, and quoted by Kunstler (or was it George Ure?), that Goldman Sachs was going around the country buying up real estate mortgages that they knew full well were toxic, then bundling them up and selling them to foreign banks and pension funds. Meanwhile, they took out insurance against these derivatives so than when they failed, they would cash in. When the most prestigious financial institution is doing shit like this, with all the domestic and international ramifications, there seems to be no limit to how far they will sink. And, their perception of the people involved at the other end of these transactions are as dispassionate as the grey aliens are reported to be when observing a hapless abductee undergoing an anal probe. The banksters, the stockbrokers, and their minions in the legislatures are the aliens, and we are the herd suffering the mutilation. Sucked dry of our life’s blood and lying bloated in tent cities and underpasses, wild-eyed and crazed, or simply dazed and confused, the misery of the masses is about to get worse.
Why not? The Federal Reserve has already devalued the purchasing power of the dollar by 97 cents since 1913 and gotten away with it. The wealthiest five percent now own ninety percent of the wealth of the land, since Reagan and his chuckle headed “trickle down” theory of economics became the law of the land. The false flag event of 9/11 threw enough people into a panic that the constitution has been dismantled, and now virtually anyone can be labeled an “enemy combatant” and renditioned, tortured, and incarcerated forever without trial. The NSA just opened up a new center to help with the surveillance of our e-mails and electronic transactions – and they plan to invite corporate entities to man the facility as well. We can probably look forward to having quotas set on items to buy. I can hear the call now…”Hello, Ms. Freeacre, this is Hal, from Business Watch. We notice that you have not purchased the minimum telecommunication services and food products to keep your credit in good standing. Is there anything wrong? How may we help you?”
Oh, crap, there I go again… getting all paranoid and shit. But then, there was this Mossad agent surrounded by a zillion cops with advanced weaponry who was arrested and apparently sent back to Israel to suffer consequences after he divulged that the swine flu virus has been weaponized. It may be what is causing this hideous bleeding lungs epidemic in the Ukraine. Suddenly the web bot predictions on immanent disaster don’t seem so far from the mark. If you aren’t certain of what I am referring to, just go to today’s (11/2) Urban Survival site (linked at right) and read the column and follow the links. Or Cryptogon. Just reading this stuff is enough to give one a nose bleed. If Baxter Corp. (Donald Rumsfeld just happens to sit on their board of directors) has, indeed, released the Spanish Flu into the world again, we are looking at millions of deaths. And, if the vaccine is contaminated with adjuvants of squalene and mercury, we can anticipate additional long term suffering beyond measure. Oh, yeah, and that guy from U.N. who was found dead at the bottom of a stairwell who was working on seismic monitoring of possible nuclear testing sites also used to work in biological warfare… well, I’m just connecting some dots here. Don’t mind me. His was the second “suicide” from that lethal stairwell at the U.N., by the way. In addition to the scores of dead micro-biologists world-wide. Nothing here, citizen, just move along and buy something at your local mall.
Well, with all this, the “Death of the Dollar” and the possible attack on Iran by Israel doesn’t seem so far-fetched after all, does it? Oh, wait… we have comforting “news” by Katie Couric, et al, on the lamestream media that assures us that things are looking up for the “recovery.” Just who’s recovery is not real certain, but it looks like it doesn’t extend beyond the reptilian sector.......
SC98-1
http://kunstler.com/blog/2009/11/thinking-the-unthinkable.html
draffen November 2, 2009 4:38 PM Reply
Yes, the gods are unhappy. Mother Nature is unhappy. Santa Claus is unhappy. The smiley face at Walmart is - umm - shall we say turned from upbeat icon to oxymoron. A coup d'etat by a branch of our military? Possibly. A collapse of industrial civilization within the next twenty years? Most likely.
How can you tell when a politician is lying? When he (or she) moves the mouth. Mouths have been moving a lot lately and little truth or useful information has been coming out of those mouths lately that would be of much benefit to the average American especially in the light of what is coming.
The Halloween Pumpkin, the Thanksgiving Turkey and the Santa Claus are icons, three of the thousands and thousands of icons that front the consumer society. Icons that are bombed at the population 24 hours a day, seven days a week by the gods of Globalization.
Globalization is the grand experiment of the twentieth century that has failed. The idea that all 6.748 billion people under one sky can burn natural resources like no tomorrow to become one mammoth, gargantuan industrial civilization with all the trappings of modern life including personal autos, large homes, flat screen TV's, college educations - the works. The idea that "economic growth" can just continue forever, without bounds, consuming ever more water, food, resources and land for an ever increasing population.
The politicians and the bankers just love globalization and its many icons - the Santa Claus, the Golden Arches, the Pepsi, Coke, Ford, Mercedes, the football teams, the airlines and on and on and on.
So why were the bankers doing these rather rash things they have been doing recently? Why were they underwriting loans to just about anybody that had a pulse? Well, first they were just as mesmerized and addicted to the Ponzi scheme of globalization as just about every modern American citizen (and the citizens of most Western countries) were. Secondly, they knew that almost every industry that made any actual product worth having had been "offshored" to China or some other "low cost" part of the world - in the name of Globalization - and therefore, in order to make any real money they would have to primarily "invest" in real estate and all its derivatives.
Everybody that was anybody know, way back in 2005, that the price of real estate is like the arrow of time, it only moves in one direction, and in the case of real estate that is up. So, since we had no real manufacturing base left in this country any more then real estate became the last great bubble.
Why did the real estate bubble pop, anyway? This goes back to the real problem underlying the concept of Globalization and why it will not work - at least in the way it is configured.
The real estate bubble burst because Globalization itself has started to tremble and creak like so much old infrastructure that surrounds us. Basically, unfettered capitalism that is Globalization has hit absolute limits and growth cannot continue under any circumstances. As they say, the party's over.
What are these limits you ask? Basically they are set by the laws of thermodynamics. We industrialized humans are sitting on this planet of finite size running a global economy primarily on a fossil energy source that is not replenishable on any time scale we can imagine. As more and more people jump on the bandwagon of globalization the demands from the finite earth become ever greater. Something has got to give. And give it has!
Globalization is in the process of taking a big tumble. It has failed and failed miserably. The crash will be spectacular. This period of history will be remembered for a really long time - just like the fall of the Roman Empire. People in the distant future - assuming any survive - will be wondering "what were those people of the 20th century thinking? What Kool-Aid were they drinking?".
The "Low Battery" light is flashing furiously on the dashboard of Globalization. Everywhere there are shortages on the horizon. Food, water, topsoil, copper, oil, gas, uranium, you name it. And the climate is changing and the skies and ground are getting filled with pollution - the oceans are dying.
Our politicians are really lying. So are our news anchors. They are lying like no tomorrow (is there a tomorrow?). We know the bankers are up to something no good because they are breathing. We know the politicians are lying because they are talking. They are all collectively assuring their fellow Americans that even though we are in a "rough patch" right now all is getting better soon. Maybe even in time for Christmas. They say there is a "recovery" coming from sea to shining sea and after a little delay the unemployment rolls will start to shrink and Americans will be back at work. It will be business as usual, just don't fret and have faith in us and please, please, get out your credit cards and hit the stores! Santa Claus says so!
draffen November 2, 2009 4:38 PM Reply
Yes, the gods are unhappy. Mother Nature is unhappy. Santa Claus is unhappy. The smiley face at Walmart is - umm - shall we say turned from upbeat icon to oxymoron. A coup d'etat by a branch of our military? Possibly. A collapse of industrial civilization within the next twenty years? Most likely.
How can you tell when a politician is lying? When he (or she) moves the mouth. Mouths have been moving a lot lately and little truth or useful information has been coming out of those mouths lately that would be of much benefit to the average American especially in the light of what is coming.
The Halloween Pumpkin, the Thanksgiving Turkey and the Santa Claus are icons, three of the thousands and thousands of icons that front the consumer society. Icons that are bombed at the population 24 hours a day, seven days a week by the gods of Globalization.
Globalization is the grand experiment of the twentieth century that has failed. The idea that all 6.748 billion people under one sky can burn natural resources like no tomorrow to become one mammoth, gargantuan industrial civilization with all the trappings of modern life including personal autos, large homes, flat screen TV's, college educations - the works. The idea that "economic growth" can just continue forever, without bounds, consuming ever more water, food, resources and land for an ever increasing population.
The politicians and the bankers just love globalization and its many icons - the Santa Claus, the Golden Arches, the Pepsi, Coke, Ford, Mercedes, the football teams, the airlines and on and on and on.
So why were the bankers doing these rather rash things they have been doing recently? Why were they underwriting loans to just about anybody that had a pulse? Well, first they were just as mesmerized and addicted to the Ponzi scheme of globalization as just about every modern American citizen (and the citizens of most Western countries) were. Secondly, they knew that almost every industry that made any actual product worth having had been "offshored" to China or some other "low cost" part of the world - in the name of Globalization - and therefore, in order to make any real money they would have to primarily "invest" in real estate and all its derivatives.
Everybody that was anybody know, way back in 2005, that the price of real estate is like the arrow of time, it only moves in one direction, and in the case of real estate that is up. So, since we had no real manufacturing base left in this country any more then real estate became the last great bubble.
Why did the real estate bubble pop, anyway? This goes back to the real problem underlying the concept of Globalization and why it will not work - at least in the way it is configured.
The real estate bubble burst because Globalization itself has started to tremble and creak like so much old infrastructure that surrounds us. Basically, unfettered capitalism that is Globalization has hit absolute limits and growth cannot continue under any circumstances. As they say, the party's over.
What are these limits you ask? Basically they are set by the laws of thermodynamics. We industrialized humans are sitting on this planet of finite size running a global economy primarily on a fossil energy source that is not replenishable on any time scale we can imagine. As more and more people jump on the bandwagon of globalization the demands from the finite earth become ever greater. Something has got to give. And give it has!
Globalization is in the process of taking a big tumble. It has failed and failed miserably. The crash will be spectacular. This period of history will be remembered for a really long time - just like the fall of the Roman Empire. People in the distant future - assuming any survive - will be wondering "what were those people of the 20th century thinking? What Kool-Aid were they drinking?".
The "Low Battery" light is flashing furiously on the dashboard of Globalization. Everywhere there are shortages on the horizon. Food, water, topsoil, copper, oil, gas, uranium, you name it. And the climate is changing and the skies and ground are getting filled with pollution - the oceans are dying.
Our politicians are really lying. So are our news anchors. They are lying like no tomorrow (is there a tomorrow?). We know the bankers are up to something no good because they are breathing. We know the politicians are lying because they are talking. They are all collectively assuring their fellow Americans that even though we are in a "rough patch" right now all is getting better soon. Maybe even in time for Christmas. They say there is a "recovery" coming from sea to shining sea and after a little delay the unemployment rolls will start to shrink and Americans will be back at work. It will be business as usual, just don't fret and have faith in us and please, please, get out your credit cards and hit the stores! Santa Claus says so!
Sunday, November 1, 2009
SC97-15
http://energybulletin.net/50558
The recession is dead ... long live the recession!
The world’s first peak-oil recession has come to a close, according to third-quarter numbers invented by the federal government. Apparently dumping trillions of dollars onto big banks, insurance companies, and automobile manufacturers interrupted the plummeting descent of American Empire. The stock markets skyrocketed expectedly. Predictably, so did the commodities markets.
In fact, the lifeblood of western civilization is bumping up against the “Goldilocks” limit of $80/bbl, as I predicted would occur under economic growth. A minimum price of $60/bbl allows oil suppliers to make enough money to justify new projects, so per-barrel prices between $60 and $80 are supposed to be “just right,” even though today’s price is four times higher than the 20-year average. The “Goldilocks” minimum price of $60/bbl matches the “Goldilocks” maximum price of 2005. As recently as 2003, OPEC had an official “Goldilocks” zone between $22/bbl and $28/bbl.
For a little historical context, consider this: In 1969, the U.S. refused a ten-year, locked-in offer of $1/bbl oil from the Shah of Iran because the price was too high.Among the many consequences of passing the world oil peak: the days of cheap inexpensive food are behind us. And, too, every time the inflation-adjusted price of oil tops $80/bbl, we head into a recession.
Most commentators think Saudi Arabia will continue to bail us out, but the kingdom clearly has reached peak extraction. Thanks to renewed growth in the world’s industrial economy, led by China’s 9% annual growth, we’re headed for triple-digit oil in the short term, and double that by 2012. If you thought $147 oil put the brakes on economic growth, it’s not too tough to imagine a full-scale meltdown of the industrial economy with $200 oil. We can hope $150 oil next year will do the trick, rapidly crashing the stock markets and transforming globalization into relocalization.
When localization is back in style, and globalization is dead, we won’t need to worry about politicians ignoring -- and even mandating -- torture in the name of greed. Not to mention a host of other nasties. That’ll be a nice change.Maybe, just maybe, completion of the imperial decline will lead us to real wealth instead of encouraging us to pursue the phantom wealth of money, as described by David Korten:So what is real wealth? We might say it is anything that has a real intrinsic value: land, labor, knowledge, food, education.Most valuable of all are those forms of wealth that are beyond price: Love, a healthy, happy child, a job that provides a sense of self-worth and contribution, membership in a strong caring community, a healthy vibrant natural environment, peace—none of which find any place on Wall Street balance sheets or in our calculations of GDP.
Pull back the curtain, as the financial crash has done, and the truth is revealed that Wall Street acquires its power by destroying real living wealth to create phantom financial wealth. Wall Street is more than immoral, it is an institutional manifestation of evil.I don’t think we will overcome the ideology of evil (i.e., empire) by nibbling around the edges, as most people believe, or even by restructuring the economy in the ways Korten suggests. For one thing, the people who benefit from the current economy are the ones who would need to take leadership as we make the necessary changes, and I don’t think they’re interested.In my mind, at least, and even in my dreams, that leaves one solution: the industrial economy has to run its course. As I’ve indicated before, that’s the route we’ll need to save what’s left of the living planet, including our own species, as well as restoring our long-lost humanity.
The recession is dead ... long live the recession!
The world’s first peak-oil recession has come to a close, according to third-quarter numbers invented by the federal government. Apparently dumping trillions of dollars onto big banks, insurance companies, and automobile manufacturers interrupted the plummeting descent of American Empire. The stock markets skyrocketed expectedly. Predictably, so did the commodities markets.
In fact, the lifeblood of western civilization is bumping up against the “Goldilocks” limit of $80/bbl, as I predicted would occur under economic growth. A minimum price of $60/bbl allows oil suppliers to make enough money to justify new projects, so per-barrel prices between $60 and $80 are supposed to be “just right,” even though today’s price is four times higher than the 20-year average. The “Goldilocks” minimum price of $60/bbl matches the “Goldilocks” maximum price of 2005. As recently as 2003, OPEC had an official “Goldilocks” zone between $22/bbl and $28/bbl.
For a little historical context, consider this: In 1969, the U.S. refused a ten-year, locked-in offer of $1/bbl oil from the Shah of Iran because the price was too high.Among the many consequences of passing the world oil peak: the days of cheap inexpensive food are behind us. And, too, every time the inflation-adjusted price of oil tops $80/bbl, we head into a recession.
Most commentators think Saudi Arabia will continue to bail us out, but the kingdom clearly has reached peak extraction. Thanks to renewed growth in the world’s industrial economy, led by China’s 9% annual growth, we’re headed for triple-digit oil in the short term, and double that by 2012. If you thought $147 oil put the brakes on economic growth, it’s not too tough to imagine a full-scale meltdown of the industrial economy with $200 oil. We can hope $150 oil next year will do the trick, rapidly crashing the stock markets and transforming globalization into relocalization.
When localization is back in style, and globalization is dead, we won’t need to worry about politicians ignoring -- and even mandating -- torture in the name of greed. Not to mention a host of other nasties. That’ll be a nice change.Maybe, just maybe, completion of the imperial decline will lead us to real wealth instead of encouraging us to pursue the phantom wealth of money, as described by David Korten:So what is real wealth? We might say it is anything that has a real intrinsic value: land, labor, knowledge, food, education.Most valuable of all are those forms of wealth that are beyond price: Love, a healthy, happy child, a job that provides a sense of self-worth and contribution, membership in a strong caring community, a healthy vibrant natural environment, peace—none of which find any place on Wall Street balance sheets or in our calculations of GDP.
Pull back the curtain, as the financial crash has done, and the truth is revealed that Wall Street acquires its power by destroying real living wealth to create phantom financial wealth. Wall Street is more than immoral, it is an institutional manifestation of evil.I don’t think we will overcome the ideology of evil (i.e., empire) by nibbling around the edges, as most people believe, or even by restructuring the economy in the ways Korten suggests. For one thing, the people who benefit from the current economy are the ones who would need to take leadership as we make the necessary changes, and I don’t think they’re interested.In my mind, at least, and even in my dreams, that leaves one solution: the industrial economy has to run its course. As I’ve indicated before, that’s the route we’ll need to save what’s left of the living planet, including our own species, as well as restoring our long-lost humanity.
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