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Can you see those swans coming in for a landing on Pond USA? They’re not exactly black swans, because you knew they were out there circling, but they’re dark enough against the twilight’s last gleaming to give you the heebie jeebies.

Troubles and portents of more trouble are stacking up as we approach the Ides of March zone of financial turmoil. You must surely surmise that a debt ceiling impact, a Federal Reserve interest rate hike, and the election of a Dutch anti-EU leader all scheduled for that one day are a good start on the greater unravel to follow. Glowering in the spotlight at center stage will be President Donald Trump, designated bag-holder of the Deep State and its myrmidons. And what’s in that bag he’s holding? Just a couple of shit sandwiches and a hair shirt for his journey down the lonely road to exile. But getting rid of Trump would only leave the Deep State with a bigger problem: itself. That is, an economy and a society that can’t be governed by any means.

I think many professional observers-of-the-scene are missing something in this unspooling story: the Deep State is actually becoming more impotent and ineffectual, not omnipotent. Case in point: RussiaGate — come on, let’s finally call it that — the popular idea that Russia hacked the 2016 presidential election. It’s popular because it’s such a convenient excuse for the failure of a corrupt, exhausted, and brain-dead Democratic establishment. But all the exertions of the Deep State to put over this story since last summer were negated this week by two events.

First, there was former NSA Director James Clapper’s appearance on NBC’s Sunday Meet the Press show with Chuck Todd featuring the following interchange:

CHUCK TODD:
Does intelligence exist that can definitively answer the following question, whether there were improper contacts between the Trump campaign and Russian officials?

…click on the above link to read the rest of the article…

Great Expectations (Not)

March 6, 2017

Great Expectations (Not)

Halloween’s coming super-early this year and it will be a shocking surprise to those currently busy looking for Russians behind every potted plant in Washington DC. First, accept the premise that your country has lost its mind.

This is what happens when societies (and individuals) can’t face the true quandaries of a particular moment in their history. All of their attention gets channeled into fantasy: spooks, sexual freakery, conspiracies, persecution narratives, savior fairy tales. It’s been quite a cavalcade of unreality for the past six months, with great entertainment value for connoisseurs of the bizarre — until you’re reminded that the fate of the nation is at stake.

The questions Americans might more profitably ask ourselves: can we continue living the way we do? And by what means? These matters of home economics have been sequestered in some forgotten storage unit of the collective mind for at least a year while a clock ticks in the time-bomb that sits on the national welcome mat. That bomb is made of financial plutonium and it’s getting ready to blow. When it does, all the distracting spookery and freakery will vaporize and the shell-shocked citizens will have a clear view of the bleak, toxic, devastated landscape they actually inhabit.

March 15 is when the temporary suspension of the national debt ceiling — engineered in a 2015 deal between Barack Obama and then House Speaker John Boehner — finally expires, meaning the government loses its authority to continue borrowing money. The chance that congress can pass a bill raising the debt ceiling to enable further borrowing is about the same as the chance that Xi Jinping will send every American household a dim sum breakfast next Sunday morning by FedEx.

…click on the above link to read the rest of the article…

Fumbling Towards Collapse

February 20, 2017

Fumbling Towards Collapse

In all the smoke and fog emitted by Trump and his adversaries, it must be hard to make out the actual issues dogging this society, and even when you can, to find a coherent position on them. This was nicely illustrated in Paul Krugman’s fatuous column in Monday’s New York Times, “On Economic Arrogance” — the title describes Krugman’s own attitude to a T.

In it, Krugman attempts to account for the no-growth economy by marshaling the stock-in-trade legerdemain of academic economics: productivity, demographics, and labor metrics. Krugman actually knows zip about what afflicts us in the present disposition of things, namely the falling energy-return-on-energy-investment in the oil industry, which is approaching the point where the immense activity of getting oil out of the ground won’t be worth the cost and trouble of doing it. And since most of the things we do and produce in this economy are based on cheap oil — with no reality-based prospect of replacing it with so-called “renewables” or as yet undiscovered energy rescue remedies — we can’t generate enough wealth to maintain anything close to our assumed standard of living. We can’t even generate enough wealth to pay the interest on the debt we’ve racked up in order to hide our growing energy predicament. And that, in a nutshell, is what will blow up the financial system. And when that department of the economy goes, the rest will follow.

So, the real issue hidden in plain sight is how America — indeed all the so-called “developed” nations — are going to navigate to a stepped-down mode of living, without slip-sliding all the way into a dark age, or something worse. By the way, the Ole Maestro, Alan Greenspan, also chimed in on the “productivity” question last week to equally specious effect in this Business Insider article.

…click on the above link to read the rest of the article…

Made For Each Other

February 13, 2017

Made For Each Other

Don’t be fooled by the idiotic exertions of the Red team and the Blue team. They’re just playing a game of “Capture the Flag” on the deck of the Titanic. The ship is the techno-industrial economy. It’s going down because it has taken on too much water (debt), and the bilge pump (the oil industry) is losing its mojo.

Neither faction understands what is happening, though they each have an elaborate delusional narrative to spin in the absence of any credible plan for adapting the life of our nation to the precipitating realities. The Blues and Reds are mirrors of each other’s illusions, and rage follows when illusions die, so watch out. Both factions are ready to blow up the country before they come to terms with what is coming down.

What’s coming down is the fruit of the gross mismanagement of our society since it became clear in the 1970s that we couldn’t keep living the way we do indefinitely — that is, in a 24/7 blue-light-special demolition derby. It’s amazing what you can accomplish with accounting fraud, but in the end it is an affront to reality, and reality has a way of dealing with punks like us. Reality has a magic trick of its own: it can make the mirage of false prosperity evaporate.

That’s exactly what’s going to happen and it will happen because finance is the least grounded, most abstract, of the many systems we depend on. It runs on the sheer faith that parties can trust each other to meet obligations. When that conceit crumbles, and banks can’t trust other banks, credit relations seize up, money vanishes, and stuff stops working. You can’t get any cash out of the ATM. The trucker with a load of avocados won’t make delivery to the supermarket because he knows he won’t be paid.

…click on the above link to read the rest of the article…

James Howard Kunstler: The World’s Greatest Misallocation Of Resources

January 23, 2017

James Howard Kunstler: The World’s Greatest Misallocation Of Resources

And why we appear poised to repeat it

James Howard Kunstler returns to the podcast this week, observing that despite the baton being handed to a new American president, the massive predicaments we face as a society remain the same. And it seems the incoming administration is just as in denial of them as the old.

Kunstler adds fresh critique to his now decades-old warning that we are sleepwalking our way deep into the Long Emergency. The longer we delude ourselves and waste our energies in pursuit of reviving the failed “endless growth” model, the farther our journey back to a sustainable way of living will be when our current system collapses:

I don’t think there is any sense that they really know where we’re headed, what our destination is, and what the imperatives are and what the future is actually telling us that we need to do. Don’t forget that the so-called psychology of previous investment is a very powerful force in American life and it’s prompting us to do everything we can to maintain the investments we’ve already made. Those investments are the ones I have already mentioned: the freeways, the suburban housing developments, the strip malls.

A lot of the hope pinned on Trump is based on the idea that he’s assembling this team of mega-competent capitalist movers and shakers who know how to make deals — the Wilbur Rosses and Rex Tillersons of the world — and that they are going to conjure up a tremendous surge of economic activity that will be majorly fruitful going forward in the future and produce a tremendous amount of new wealth. Of course the stock market has been pricing that in.

…click on the above link to read the rest of the article…

Forecast 2017: The Wheels Finally Come Off

January 2, 2017

Forecast 2017: The Wheels Finally Come Off

“There is no other endeavor in which men and women of enormous intellectual power have shown total disregard for higher-order reasoning than monetary policy.
— David Collum

American Notes

Apart from all the ill-feeling about the election, one constant ‘out there’ since November 8 is the Ayn Randian rapture that infects the money scene. Wall Street and big business believe that the country has passed through a magic portal into a new age of heroic businessmen-warriors (Trump, Rex T, Mnuchin, Wilbur Ross, et. al.) who will go forth creating untold wealth from super-savvy deal-making that un-does all the self-defeating malarkey of the detested Deep State technocratic regulation regime of recent years. The main signs in the sky, they say, are the virile near-penetration of the Dow Jones 20,000-point maidenhead and the rocket ride of Ole King Dollar to supremacy of the global currency-space.

I hate to pound sleet on this manic parade, but, to put it gently, mob psychology is outrunning both experience and reality. Let’s offer a few hypotheses regarding this supposed coming Trumptopian nirvana.

The current narrative weaves an expectation that manufacturing industry will return to the USA complete with all the 1962-vintage societal benefits of great-paying blue collar jobs, plus an orgy of infrastructure-building. I think both ideas are flawed, even allowing for good intentions. For one thing, most of the factories are either standing in ruin or scraped off the landscape. So, it’s not like we’re going to reactivate some mothballed sleeping giant of productive capacity. New state-of-the-art factories would require an Everest of private capital investment that is simply impossible to manifest in a system that is already leveraged up to its eyeballs.

…click on the above link to read the rest of the article…

The Deep State Blues

December 24, 2016

The Deep State Blues

Lest you wonder, not only did I not vote for Mr. Trump (or Hillary), but I relished heaping opprobrium on him during the election campaign. Just so you know, I’m not advocating for him, but I’m alarmed that the Deep State (the White House + the Intel Agency gang) now appears to be trying to hack the electoral college vote against him.

The headline deployed everywhere last week, “Russia Hacks Election,” was designed by the Deep State players to deviously lead the broadly dim public to think that Russia somehow interfered with the balloting process, which was not possible since voting machines are not hooked up to the internet. And then it was repeated endlessly by the cable news networks and the newspapers, under the number one rule of propaganda: that if you repeat something often enough, the public will swallow it.

This dishonest meme was also designed to distract the public from the substance of the emails disclosed by WikiLeaks — namely, the scamming and trickery of the Democratic National Committee (DNC), and the influence-peddling of Hillary Clinton and the Clinton Foundation, which had her flirting with indictment last summer, and only reinforced her already-established public image as an unscrupulous person.

The New York Times especially worked the “Russia Hacks Election” story to a fare-the-well, saying in its Sunday edition:

The Central Intelligence Agency has concluded that Moscow put its thumb on the scale for Mr. Trump through the release of hacked Democratic emails, which provided fodder for many of the most pernicious false attacks on Mrs. Clinton on social media.

False attacks? What, that Hillary’s cronies put the DNC’s “thumb on the scale” against Bernie Sanders? That Donna Brazille gave Hillary debate questions beforehand? That as Secretary of State Hillary gave more face-time to foreign supplicants based on their contributions to the Clinton Foundation, and expedited arms deals for especially big givers?

…click on the above link to read the rest of the article…

KunstlerCast with Dimitry Orlov

September 17, 2016

KunstlerCast with Dimitry Orlov

Kunstler: Hello and welcome to the KunstlerCast. Thanks for listening in. If you’d like to support this podcast, you can become a patron of the show by making a small monthly contribution through my Patreon page. To do that, you can either search for me on Patreon.com or use the link in the upper right hand corner of my website, kunstler.com. My guest today is Dmitry Orlov, an old friend of the podcast. He’s been here many times. He’s the author of Reinventing Collapse and many other books. He’s also become a publisher lately. One of the books that he’s published we shall be talking about today, 150-Strong: A Pathway to a Different Future by Rob O’Grady. I’m a long-time fan of Dmitry Orlov. He brings a clear eyed worldview and mordant sense of humor to the rather confusing and confounding events of our time. Listen up now. There will be a quiz as we discuss 150-Strong by Rob O’Grady. Tell the listeners, if you would, why I’m interviewing you about it and not Rob O’Grady.

Orlov: Well, Rob has sort of indicated that he’s perfectly comfortable with having me do interviews on his behalf and I’m happy to do it. I’m not only his publisher, I’m also his publicist. That’s suits both of us fine.

Kunstler: Is he shy?

Orlov: He’s not particularly shy. But he’s your typical engineer. He’s very soft spoken and talks in long paragraphs and that sort of thing. Maybe I’m a little bit more effective having done so many interviews over the years.

Kunstler: Well, it’s fine with me if we talk about this his book through you. I found it to be a bit of an intellectual puzzle box but let’s try to unwrap parts of the puzzle and see where it takes us.

…click on the above link to read the rest of the article…

A Pleasant Lull

September 10, 2016

A Pleasant Lull

A pleasant lull lies over the land where today fewer people labor honestly — and some labor gruelingly for too little — while a matrix of rackets sustains the illusion that our living arrangements have a future. Is Quarterback Colin Kaepernick on the minds of the millions moiling around their backyard barbeques? I applaud his refusal to stand for the national anthem, though not for the reasons he stated. Rather, because I’m sick of vulgar symbolism in a dark moment of a fraying culture that demands more than cheap talk and lame gestures.

In case you’re wondering, the reason we’re subject to all these repetitions of The Star Spangled Banner is not for love-of-country but something quite the opposite: the fear that its promises are empty. Ever wonder why every public official in the land has to wear a flag lapel pin? Should it be necessary for the president of the US to signal his devotion to duty? Wouldn’t we normally just assume this to be the case? No, it signals the widespread and generalized anxiety that the national condition is dire and that we don’t have the confidence or the clarity to face the challenges of the time. President Obama might as well wear a crucifix or a bulb of garlic in his lapel.

In this presidential election year especially, Labor Day serves as a sort of collective deep breath before the plunge into a season of political anguish. The number of potential voters disgusted with the choice between two clueless monsters of egotism must be epic. If WalMart held a sale on bullshit filters, they might stand a chance of turning a Q3 profit. Otherwise, expect economic performance to be increasingly frightening even if The New York Times and CNN continue to spin out tales of unicorns jumping rainbows.

…click on the above link to read the rest of the article…

Lit and Sputtering

July 17, 2016

Lit and Sputtering

You can see where the trajectory of events is leading. The country will be distracted by racial strife this summer while the global banking system implodes, disabling trade relations and the super-long supply chains we depend on for all common goods from oil to fresh food. Unless the remnants of the Republican Party act responsibly and find a way to replace Trump with a capable candidate, the nation will get what it deserves: a clown in the white house at the climax of the Fourth Turning.

The racial events of recent days resonate in a fog of cognitive dissonance. What really happened in those two incidents involving Philando Castile in Falcon Heights, Minnesota, and Alton Sterling in Baton Rouge Louisiana? Too many people pretend to know exactly why these two men were shot by cops. The video recordings of the incidents are ambiguous. In the Castile case, the recording doesn’t start until just after the deed is done.

Given the universal hyper-awareness of the current mood around the country, I doubt that policemen would throw away their livelihoods for a few thrilling seconds of malice. They know exactly what happens after the gun comes out: suspension, investigation, end-of-career, possibly civil prosecution, lawyers and more lawyers, a special hell of lawyers, and no way to make a living in the meantime. In a word: ruin.

These two incidents were followed by the shootings in Dallas by one Micah Johnson of twelve cops, five of whom died. That matter was not so ambiguous. The authorities quickly determined what happened and why. It is likely to lead to more assassinations and bushwhackings of police because a peculiar social mechanism gives people permission to re-enact atrocities once certain lines are crossed. We saw that in the political assassinations that commenced in the 1960s. The Jihadi beheadings and other monstrosities work similarly.

…click on the above link to read the rest of the article…

Death to All Zombies!

July 3, 2016

Death to All Zombies!

Wait a minute. They’re already dead. Brexit just reveals that not everybody’s brains have been eaten. A viral contagion now threatens the zombified institutions of daily life, especially the workings of politics and finance. Just as zombies exist only in the collective imagination, so do these two principal activities of society operate mainly on trust, an ephemeral product of the hive-mind.

When things fall apart in stressed complex systems, they tend to fall apart fast. It’s called phase change. Too many things in 21st century life have depended on sheer trust that the people-in-charge know what they are doing. That trust has subsisted on the doling out of money-from-nothing: debt, reckless bond issuance. TARP, QEs, bailouts, bail-ins, Operation Twists, Ponzi schemes… the whole sad-ass armamentarium of banking necromancy. The politicians let it get out of hand. Things that can’t go on don’t, and now they won’t.

The politics of Great Britain are now falling apart landslide-style. Since just about everybody in or near power can be blamed for the national predicament, there’s nobody to turn to, at least not yet. The Labour party just acted out The Caine Mutiny, starring Jeremy Corbyn as Captain Queeg. The Tory Cameron gave three months notice without any plausible replacement in view. Now Cameron’s people are hinting in the media that they can just drag their feet on Brexit, that is, not do anything to enable it from actually happening for a while. Of course, that’s what the monkeyshines of banking and finance have done: postponed the inevitable reckoning with the realities of our time: growing resource scarcity, population overshoot, climate change, ecological holocaust, and the diminishing returns of technology.

…click on the above link to read the rest of the article…

The Elephant Cometh

April 18, 2016

The Elephant Cometh

The elephant’s not even in the room, which is why the 2016 election campaign is such a soap opera. The elephant outside the room is named Discontinuity. That’s perhaps an intimidating word, but it is exactly what the USA is in for. It means that a lot of familiar things come to an end, stop, don’t work the way they are supposed to — beginning, manifestly, with the election process now underway in all its unprecedented bizarreness.

One reason it’s difficult to comprehend discontinuity is because so many operations and institutions of daily life in America have insidiously become rackets, meaning that they are kept going only by dishonest means. If we didn’t lie to ourselves about them, they couldn’t continue.

For instance the automobile racket. Without a solid, solvent middle-class, you can’t sell cars. Americans are used to paying for cars on installment loans. If the middle class is so crippled by prior debt and the disappearance of good-paying jobs that they can’t qualify for car loans, well, the answer is to give them loans anyway, on terms that don’t really pencil out — such as 7-year loans at 0 percent interest for used cars (that will be worth next to nothing long before the loan expires).

This will go on until it can’t, which is what discontinuity is all about. The car companies and the banks (with help from government regulators and political cheerleaders) have created this work-around by treating “sub-prime” car loans the same way they treated sub-prime mortgages: they bundle them into larger packages of bonds called collateralized loan obligations. These, in turn, are sold mainly to big pension fund and insurance companies desperate for “yield” (higher interest) on “safe” investments that ostensibly preserve their principal.

…click on the above link to read the rest of the article…

Repricing Reality

February 15, 2016

Repricing Reality

It ought to be a foregone conclusion that Mr. Obama’s replacement starting January 20, 2017 will preside over conditions of disorder in everyday life and economy never seen before. For the supposedly thinking class in America, the end of reality-optional politics will come as the surprise of their lives.

Where has that hypothetical thinking class been, by the way, the past eight years? Don’t look for it in what used to be called “the newspapers.” The New York Times has become so reality-averse that the editors traded in their blue pencils for Federal Reserve cheerleader pompoms after the Lehman incident of 2008. Every information-dispensing organ has followed their lede: The Recovery Continues! It’s a sturdy plank for promoting the impaired asset known as Hillary.

Don’t look for the thinking class in the universities. They’ve surrendered their traditional duties to a new hybrid persecution campaign that is equal parts Mao Zedong, the Witches of Loudon, and the Asylum at Charenton. For instance the President of Princeton, Mr. Eisgruber, was confronted with a list of demands that included 1) erasure of arch-segregationist Woodrow Wilson’s name from everything on campus, and 2) creation of a new all-black (i.e. segregated) student center. He didn’t blink. Note: nobody in the media asked him about this apparent contradiction. That’s how we roll these days.

Don’t look for the thinking class in business. The C-suites are jammed with people still busy buying back stock in their own companies at outlandish prices with borrowed money. Why? To artificially boost share price and thus their salaries and bonuses. Does it do anything for the fitness of enterprise? No, in fact it makes future failure more likely. Why is their no governance of their insane behavior?

…click on the above link to read the rest of the article…

Notes from the Locked Ward

February 8, 2016

Notes from the Locked Ward

The remaining Americans sound-of-mind must view the primary election spectacle with mounting sensations of wonder, nausea, and panic. It’s one thing for the financial system to crack up, and another thing for social norms to disintegrate, and still another for the political system to become a locked ward of obvious psychopathology. Even the neurosurgeon on duty went narcoleptic the other night when his name was called to take the stage.

Last week’s candidate “debates” (or boasting contests) only underscored the human frailty on display. Marco Rubio was unmasked as an android with a broken flash drive. For a few moments I thought I was seeing an clip from the old movie Alien. In fact, the Republican melodrama more and more echoes the tone and plot of that story: a hapless, bumbling crew lost in space. One of these nights, something unspeakable is going to shoot out of Donald Trump’s mouth and there will be blood all over the podiums.

The Democratic boasting contest was not more reassuring. Bernie blew his biggest chance yet to harpoon the white whale known as Hillary when he cast some glancing aspersions on Mz It’s-My-Turn’s special side-job as errand girl of the Too-Big-To-Fail banks. Together, Bill and Hillary racked up $7.7 million on 39 speaking gigs to that gang, with Hillary clocking $1.8 million of the total for eight blabs. When Bernie alluded to this raft of grift, MzIMT retorted, “If you’ve got something to say, say it directly.”

There was a lot Bernie could have said, but didn’t. Such as: what did you tell them that was worth over $200,000 a pop? Whatever it was, it must have made them feel all warm and fuzzy inside. Did it occur to you that this might look bad sometime in the near future?

…click on the above link to read the rest of the article…

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