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First time I have agreed with EVERY word of a piece like this...
I am no Chumbawamba, buy gold bithces!
And these math questions are getting more difficult.
Seems like every time a Gloom and Doomer posts something like this, the following happens:
1. Dollar rallies to new highs, re-establishing itself as the premier reserve currency
2. Consumer stocks, REIT's go even higher as short interest reaches unsustainable levels (read today's WSJ about the insane put activity in the REITs).
3. Treasury yields collapse, as the fearful public is scared by the huge advance in stocks, and pile even more of their savings into bond funds.
4. Short-term traders instantly flock to T-Bills upon the slightest whiff of trouble in stocks. Ergo, witness today's T-Bill auction at ZERO PERCENT!!
Just more of the same self-reinforcing feedback loops, egged on by aggressive momentum traders who pay no attention to the news feeds.
GS is the Monolith, or...Polylith?
Somewhere in between the gloom and doom and a stock explosion to SnP 1400 is something very nasty, like a stagflationary environment where stocks oscillate within a trading range. IMO, however, we are at or near the top of that range, notwithstanding the bullish flag that would take us up another 50-60 SnP points or so. Dow 4000? Dunno, seems a bit extreme; however anything is possible with the O team at the helm.
Just another day at the tables.
Nothing could be more sane than put activity in the REITs.
Collapse in yields?
"Seems like every time a Gloom and Doomer posts something like this, the following happens..."
Mr. Kunstler has been consistent with his views week in and week out, year in and year out.
To investors timing is everything, it determines your profit. To the masses, if Mr. Kunstler's analysis is correct, then timing is only important to the extent that you are in a reasonably secure sustainable place when the giant turd from the sky comes crapping down.
So to the masses, did you predict the S&P in 2009 is of less importance than the trend indicated and what to do about it. Mr. Kunstler has given consistently the same analysis, adjusting for new facts along the way, as markets have been up and markets have been down.
If this is the first time you have read his work, then maybe the second time the markets will be down... taking probability AND market manipulation into account.
Totally .. Disagree. Saving the auto industry is more important than any foreign war. What Obama has failed at is re-industrialization. Banning third worlders. Putting Heavy tariffs on everything they sell. Creating a level playing field.
you are much more right than you are wrong....
industrialization is not our salvation in an
information/knowledge age but traitors gave away
the industrial crown jewels in international
games of political triage....we should recapture
our industrial heritage but it will require
putting some people in jail and restructuring tax,
regulatory, and monetary policy.
otherwise you are correct. fuck "free" trade.
For once, someone doesn't just cheer for the East.
...but then there are folks just returning the favor to junk your reply.
This will guarantee a depression and war. Anybody with children or grandchildren should junk this bullshit.
We should and do manufacture what we are the best at: tech. If industrial sectors are too incompetent or socialized to make items that people will buy, then fuck them.
Jeebus, that was funny.
I am not a Kunstler fan, and agree with many of his points grudgingly. He talks his book(s), but he certainly is articulate and readable. His biases are not hidden, so that is certainly a point in his favor. I just happen to prefer Celente when it comes to getting my bad news 200 proof.
Kunstler predicts TEOTWAWKI every Dec. 31. At least Denninger goes back and scores his predictions after the fact.
The best source of bad news 200 proof is one Bob Chapman who has been right for the past 5 years that I've been following him. Thanks to Bob, I am happily invested in safety-first assets.
Chapman, Celente, and Kunstler all agree on PMs at least
A thought provoking, if rosy, counter argument by The Economist
America - the Ponzi Scheme that Works!
"America - the Ponzi Scheme that Works!
Wouldn't claiming "I have a working Ponzi scheme you should invest in" normally constitute a felony?
until it doesn't
The Economist writers have no clue about the life in the U.S. What a fairy tale.
"European banks took the biggest hit in the Dubai default."
I was not aware there had been a default yet?
Think of it as a sort rolling default. Even an massive avalanche starts as something small. But as soon as you see it coming you cano go ahead and write yourself off.
I like JHK Clusterfuck Nation. I have it bookmarked along with ZH. I have yet to hear anyone put together a cohesive argument against anything JHK says. The thing is, much of what he says will play out over the next 50 years.
As for his '10 prediction, my fiancee is a prosecutor for the state. One paragraph rang especially true:
"Unlike the 1930s, we are no longer a nation who call each other "Mister" and "Ma'am," where even the down-and-out wear neckties and speak a discernible variant of regular English, where hoboes say "thank you," and where, in short, there is something like a common culture of shared values. We're a nation of thugs and louts with flames tattooed on our necks, who call each other "motherfucker" and are skilled only in playing video games based on mass murder."
Thugs and Louts indeed.
After that Barbara Boxer incident, I don't think we'll be hearing the word "ma'am" anymore.
In California, if you call a woman around your age "ma'am" they instantly think:
1. You are calling them old.... grandma old.
2. You are implying they are much older than you (see 1).
Unless you have a southern accent. My friend says "ma'am" with his big ole thick Ar Kansas accents and women eat it up. I said it and I got "Don't you 'ma'am' me!" It's a regional thing...
Perhaps she prefers to be called Babs. Somebody dropped a house on her sister fo' sho'
Yup. That is the sort of raw meta-analysis JHK does best. You have to read his stuff very carefully and think about what he is saying about people as much as about situations. It is the people that will either save you, or kill you.
"The Long Emergency" was a breathtaking read. His exact predictions could be 100% wrong and yet he remains 100% correct. And if you don't understand how could work then you don't really understand the human drama.
But again, he is wrong: We have always been a nation of thugs and louts! The "sir" and "Ma'am" stuff comes out of his own idealized notion of the 1950s. And the younger generations are far more educated and far less brutal than even his own.
Your fiancee is a prosecutor for crissake--she only sees one kind of person! It's like Doctors complaining about motorcycles--they build up a foregone conclusion about only what they themselves observe. It is a very skewed manner of looking at the world.
I actually found this one of the most wrong-headed statements in this rant. More to the point unlike the 1930's we have social security, unemployment insurance and foodstamps. I won't argue that these are infinitely sustainable, but the fact is we don't have and won't soon see the kind of desperate anger that having an empty belly and hungry children at home breeds.
Thank you James Kunstler for breathily rewording every facet of obviousness from 2001 till now and acting as if you're bringing it to us for the first time.
Can I have my 5 minutes back please?
saw this yesterday. Kunstler and Chris Martenson are some of the more interesting (and eloquent) voices in the forest of the trees.
Jim, is a very smart guy. People who don't like him, are people that just don't get it.
Kindles and swindles bitches!!
It seems that all the predictions range from not so bad to buy gold and go long on lead...if those are the margins then either way its not gonna be pretty. Im an economic idiot so its scary watching the debate in that light...I rarely see anybody say the sun is rising and the birds are chirping ,all is well in The Republic.
I rarely see anybody say the sun is rising and the birds are chirping ,all is well in The Republic.
I rarely see anybody say the sun is rising and the birds are chirping ,all is well in The Republic.
Just turn on any of the major networks or CNBC... stay away from Bloomberg though. Not enough Prozac being shipped there, apparently.
What is scary about Kunstler is that he digs into what motivates people, and what they do from motivation. He's a lot like Albert Hitchcock that way. Bordering creepy.
Readers on ZH like to focus on discrete outcomes, like the price of an asset, because that is where the arbitrage opportunities exist. But lurking in the shadows behind outcomes are motivations. Motivations shape great events, and we are currently mired in a great event. Perhaps the greatest in a century. Or even ten centuries. And the unexamined motivations of the playerz are driving everyone forward into the unknown like sheep to a precipice.
It will turn out to be much tougher to arbitrage the unknown. That is the realm of politics and demagoguery, not economics (CDS not withstanding) and the unknown often becomes the fertile ground of much mischief and madness.
"What is scary about Kunstler is that he digs into what motivates people"
He imputes motives and denigrates anyone different than himself. His groupies will be ones to watch out for SHTF.
But he has never once been right at correctly characterizing those motivations!
I vividly recall the public outrage and distrust of government during the VietNam era. But I have not witnessed those same feelings applying to BOTH government AND private financial institutions simultaneously until now. I suspect the mood will worsen with the incompetent, greedy and corrupt leadership we presently have in both sectors.
Furthermore, a surprise military conflict of major proportion is very likely in a period of multinational economic distress......not a Grenada, Iraq, Afghanistan skirmish......but a much more resource heavy confrontation bred by policymaking weaknesses and sovereign debt defaults.
Saddle up for a rough ride these next 3 years.
Righteous rant. "Year of the Zombie" and Afghanistan critique are priceless. What's Marty Armstrong have to offer us?
It all boils down to one (three) question(s). "Can you get something for nothing, is there a free lunch, and does money grow on trees?"
If the answer is yes, then all is well, Bernanke has indeed saved the world, and life will continue as before.
If the answer is no, then prepare for Financial and Social Armageddon, and soon.
And what's really strange right now is that I don't think anyone can clearly make a case the it is either "yes" or "no".
This is life at the bottom of the rabbit hole, where the rules are made up as you go. If the answer is "yes you can do that" then what sort of world emerges on the other side? I mean, think about that a moment. It's like we've passed through a black hole in space-time and end up in another universe with vastly different physical laws.
The "laws" of economics gleaned over centuries as if by a priestly class interpreting the Divine Will of God as revealed in chicken entrails would simply cease to exist. All we thought we knew about fiat money systems would need to be rewritten. Ideas concerning asset real value, reexamined. The proper role of central banking, up for grabs. I seriously cannot guess where we end up if the answer turns out to be "yes you can do that".
I wouldn't worry about this too much, because I don't see it being possible that "yes you can do that" will work indefinitely. I do remember that absurd things have a tendency to last longer than they should, but not forever.
What if "capitalism" as we frame it is the absurdity? A couple hundred years is a good run, but it might have been fueled less on pragmatism and reality and more on free energy, and the shift might have happened a long time ago and been lost to racial memory. The invisible hand may be invisible precisely because it is not there.
Many here lament the "death of real capitalism". So I'm not too far off the mark. The question must then be... will it ever return?
Well ... what if it can't? What if the engine not only has fallen out the bottom, but was never evident? The whole thing could have been a head-fake which the winners (every one of us here) took as a literal blessing from God and a sign of The Most Wondrous Machine.
Probably not the usual fodder for ZH. I'm just grappling with the prospect that BB+gang pull of something and that this is a signal all by itself. A signal that we've been fooling ourselves. We won't know for a few years ... but if this Ponzi fraud turns out to have legs, then I'm saying the prior rules of the game are toast and everything we thought about value and productive investment is then as useless a yardstick as smoke to measure anything.
I smell the beginnings of a new smash bestseller
'Shorting the Apocalypse'
'How I learned to love the war on terror'
That's an interesting point, but my knowledge of history (and it wasn't my major) tells me that some form of capitalism has been the standard and default form of human existence since the Sumerians, and all other "economic systems" have been short term aberrations.
Of course, you could quite reasonably argue that the modern US system really is not capitalism.
The absudity is the Ponzi Scheme of perpetual growth on a finite planet. Capitalism just happens to be the most efficient vehicle for growth-creation. Capitalism is best defined through/by Jevons Paradox.
Economics itself is the story line told by the ruling rich. It's the story that keeps them in power: infinite growth is no different than "just click your heels together"... (BTW - I'd once heard that The Wizrd of Oz was based on the rich greedy bankers)
Bear in mind that the athenians continued to accept copper coins at face long after their true value had fallen. They knew it was a token currency and yet everybody conspired to say so what.
The answers to those questions posed are easy...no, no, and no.
You cannot get something for nothing. The laws of physics TRUMP the supposed laws of economics. Don't give a shit how cheaply you give money away, it won't make pumping water uphill to let it flow downhill produce more net energy. Period. The laws of thermodynamics and all physical sciences are INVIOLABLE.
You pit the will of man against the physical world and the world wins. This isn't The Matrix, where reality is plastic.
Money does not melt steel. Money does not power cars. Money does not make things move. Energy does. Our entire set of beliefs about economics is a joke...it always was about energy. Don't believe me? Try not eating, see how far your creativity stretches.
I'd be cautious using physics metaphors when talking about economics, they don't really apply the way you think they do. I happen to think the world *is* very much like the Matrix, reality is concocted on the fly, every hour of every day and human behavior influenced by a grand illusion. That is why when posters on here bitterly complain about the pump monkeys of CNBC, or Obama proclaiming the recession to be over, I just laugh because what else would those poeple do?
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