Guest Post: The End Of Pretend

Tyler Durden's picture

Submitted by James H. Kunstler of,

If being wealthy was the same as pretending to be wealthy then people who care about reality would have a little less to complain about. But pretending is a poor way for a society to negotiate its way through history. It makes for accumulating distortions which eventually undermine the society’s ability to function, especially when the pretending is about money, which is society’s operating system.

The distortion that even simple people care about is that the gap between the rich and the poor is as plain, vast, and grotesque as at any time in our history — except perhaps during slavery times in Dixieland, when many of the poor did not even own their existence. We’ve had plenty of reminders of that in pop culture the last couple of years, including Quentin Tarantino’s fiercely stupid movie Django Unchained and the more recent melodrama 12 Years a Slave. But you have to wonder what young adults weighed down by unpayable college debt think when they go to see them, because without a rebellion that millennial generation will not own their own lives either. They must know it, but they must not know what to do about it.

The pretense and distortions start at the top of American life with a President who broadcasts the message that some kind of “recovery” has occurred in the economic affairs of the country. Either he just wants the public feel better, or he is misled by the people and agencies in his own government, or perhaps he just lies to keep the lid on. To truly recover from the dislocations of 2008, we would have to make a consensual decision to start behaving differently in the process of adapting to the new circumstances that the arc of history is presenting to us. We’d have to decide to leave behind the economy of financialization, suburban sprawl, car dependency, Wal-Mart consumerism, and prepare for a different way of inhabiting North America.

The dislocations of 2008 when the banking system nearly imploded were Nature’s way of telling us that dishonesty has consequences. The immediate dishonesty of that day was the racket in securitizing worthless mortgages ­— promises to pay large sums of money over long periods of time. The promises were false and the collateral was janky.  It got so bad and ran so far and deep that it essentially destroyed the mechanism of credit creation as it had been known until then, and it has not been repaired.

Since then, we have pretended to repair the operations of credit by falsely substituting bank bailouts and Federal Reserve “quantitative easing” (QE) or digital money-printing for plain dealing in borrowed money between honest brokers at the local level. The unfortunate consequence is that in the process we have distorted — and possibly destroyed — the value of our money and the various things denominated in it, especially securities, bonds, stocks and other money-like paper.

The crash of the mortgage racket occurred not just because of swindling and fraud among bankers; in fact, that was only a nasty symptom of something larger: peak oil. I know that many people have come to disbelieve in the idea of peak oil, but that is only another mode of playing pretend. Peak oil, which essentially arrived in 2006, undermined the basic conditions of credit creation in an advanced techno-industrial society dependent on increasing supplies of fossil fuels. Most people, including practically all credentialed economists, fail to understand this. There is a fundamental relationship between ever-increasing energy supplies > economic growth > and credit-based money (or “money,” if you will). When the energy inputs flatten out or decrease, growth stops, wealth is no longer generated, old loans can’t be repaid, and new loans can’t be generated honestly, i.e. with the expectation of repayment. That has been our predicament since 2008 and nothing has changed. We are pretending to compensate by issuing new unpayable debt to pay the interest on our old accumulated debt. This pretense can only go on so long before our economic relations reflect the basic dishonesty of it. Reality is a harsh mistress.

In the meantime, we amuse ourselves with fairy tales about “the shale oil revolution” and “the manufacturing renaissance.” 2014 could be the year that the forces of Nature compel our attention and give us a reason to stop all this pretending.

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Seasmoke's picture

The banking system DID implode !!!....Paulson just lied and was able to paper over it 

American34's picture

He is partially right. Technically its not about oil, but rather simply ENERGY, quite literally the ability to do work. The economy that uses the most energy most efficiency succeeds over all others simply because it get things done effectively. Our economy used to be like this, 1950's. But now we simply have a paper economy. China uses tons and tons of energy, hence their massive building boom, but it is used inefficently and for ineffective purposes that do not generate growth. We, as in the U.S. simply need to go back to using energy efficiently in a manner that promotes economic growth, which really is nothing more than "Energy used per person * the efficiency it is used."

dick cheneys ghost's picture

''Cheap fabric, and dim lighting. That's how you move merchandise.''

Morty Seinfeld


cheap oil and fake money........thats how you run an bankster economy.....


Rafferty's picture

I've been hearing about peak oil for the last ten years or more yet the price hasn't really changed much and I see 'masssive new discoveries'  announced everywhere I look, all over the world.  I sense that this is another global warning ploy by people with their own agendas.

Apply Force's picture

Right, right... and with these massive new discoveries prices have declined dramatically - - oh wait, that's not what's happening at all.  Oil prices have not changed in the last 10+ years?!?  Joking, right?  Speaking of something does not make it exist, nor does it make it magically economically feasible even if it does exist.

It's not the fall, but the landing that hurts.  A ride that took over 100 years to go up might just take longer than 10 years to come down (but likely not much longer than that).

cynicalskeptic's picture

Like it or not we're on a planet with FINITE limits and FINITE resources.  EVERY natural resource is becoming harder and harder to extract with incremental costs rising dramatically.  It's harder and harder to get more oil and it costs more to get it.  The costs and damage to the planet in extracting oil from tar sands and in fracking to extract oil and gas are enormous - not to mention the real existing and future damage to the oceans from drilling there. 

And oil is nothing compared to WATER which is far more necessary for life but we're willing to squander that in trying to get the last drop of oil and gas out of the earth.

Easily accessible cheap oil is gone but we have yet to accept that fact.  The US is living far beyond its energy means and paying for it on borrowed money.  Energy consumption per capita has exploded.  We have appliances to do everything and everyone owns a car.  Growing up in the 60's we didn't have clothes dryers, dishwashers, etc and we had ONE car and ONE television - no computers, game systems, stereos, etc.  And Air Conditioning? -what was THAT?  Hell, now even the 'poorest' in the US expect more than we had as a working middle class family - and the rest of the world (who are workign as hard - and usually harder) are asking how the US 'deserves' our standard of living - one they still aspire to, one that is absolutely impossible for the number of people that aspire to it considering the very limited resources of our planet.

stinkhammer's picture

So please don't tell me to can it. JANET. There's one thing to say and that's DAMN IT! JANET! LET'S GO SCREW the american children!!

Colonel Klink's picture

I believe it was early in his presidency when he was being a bit more "honest" about the condition of things that he was counselled by Slick Willie that he needs to lie in order to stop the markets from plunging and causing people to panic.  He's been BOLD FACE lying every since, that's opposed to his "general" lying he was doing prior.

Ghordius's picture

I believe that too much credit is given to national nominal top leaders. hell, even full fledged dictators like in North Korea can't rule alone, and have lots of pressures to bend to

say what you want about the current Prez of the US, his job is to react to needs as presented to him. by Congress, by the two parties, by the media, by the political funding needs of the parties, by the economy in general, etc. etc.

as such, if/when he lies it's like putting a facade of truthiness: lots of important and less important people want to hear it this way

political systems (and where elections happen their basis, electoral systems) are way more important than the top leaders, imho

Colonel Klink's picture

Oh no doubt about it.  Obama is an empty suit, vapid of his own ideas and ideals.  He's been fed the BS he's spewing his entire life.  Parrot in Chief!!

Stanley Lord's picture

Obama is not an empty suit and he is not a Democrat- he knows exactly what he is doing.

I don't trust Kunstler, he is another Liberal (not small L liberal) go way back and  read the drivel he wrote when he worked for Rolling Stone, he could not suck government cock fast enough.

Also go back to when Bush invaded Iraq ( I was against that), Krugman said Bush would spend so much money he would bankrupt the US, now Krugman thinks we are not spending enough so he is just a political hack, not unlike Kunstler.

NotApplicable's picture

There's never been an honest man anywhere near that position. You were just more naive back then.

Citxmech's picture

I still like to give props to Eisenhower.  The MIC speech is/was pretty darn truthy.  

Stanley Lord's picture

The gap between the rich and the poor is caused by the United States Government AKA The Fed.

All our probems are caused by the US Government, no where in this article does he mention that.

And there are no black swans.

Kreditanstalt's picture

Well said!   Been waiting & waiting for a long, long time to hear someone make the connection between energy & credit.

Atomizer's picture

The new wealth is only appraised in the amount of unpayable debt you hold. Old school wealth mentality is much different than today’s standards.

Robert Miles - Children [Dream Version]


Kreditanstalt's picture

I'll bet "old wealth" holds bullion while "new" consists of mortgage & other debt...

amadeusb4's picture

This is a pretty mature post. Oh, because it's Kunstler. Well, thanks anyway, Tyler.

SoberOne's picture

Care to elaborate?  I don't know much about Kuntsler so I'm assuming there is an implied sarc. Just curious.

amadeusb4's picture

I was being serious about the quality of the post.

I'm familiar w Kunstler. Came across his stuff almost a decade ago now. Never met face to face but we've exchanged board posts here and there. He can be rough around the edges but thoughtful ideas make it worth paying attention.

I didn't catch the author until well into the article when I realized that this isn't the typical anti-bitcoin, anti-climate change, gold hoarding, von Mises clickbait that Tyler typically posts to rile up the board trolls to spruce up page view stats for their advertiser promo packs.

Imminent Crucible's picture

Yes, that amalgamation of assumed pejoratives leaves one at a loss for words, does it not?

Of course, it goes without saying that any self-respecting gold-hoarding Austrian clickbait would be a climate-change denier.  Doesn't it?

I'll have to quote Alan Greenspan: "It's impossible to identify a climate change until several hundred years after the fact."

QQQBall's picture

USSA is full of posers. 

dick cheneys ghost's picture

TARP was an 'interest' payment to our banking overlords......

''you increase credit/debt until you peak and then it collapses into a mess.   You run a usury pyramid scheme and at the end of the line you are surprised by the results.... hahaha. 

The outcome has always been known, and if the next system is just like the present system it will happen exactly the same way yet again.   The function of the system is to rise, peak, collapse and implode.'' 

Mako ZH 2010

Father Lucifer's picture

Evil lurks in the halls of power.

Michelle's picture

Peak oil my ass. Oil is abiotic.

Colonel Klink's picture

Yeah but there seems to be a proliferation of abiotic resistant Staff.

As evidenced by your down votes. ;)

On a long enough timeline, there will be MOAR oil.  FACT!

Michelle's picture

Ha Ha, good one!

Gotta make sure everyone believes in unrenewable energy to keep prices high.

Colonel Klink's picture

Problem is it will take millions of years for much of the low producing fields to "refill".  I do believe there is plenty of oil still left on the planet, much of it is just getting harder to get to.  This is based upon having lived as the child of an oil exploration VP.

Unfortunately when I hear the term "dry hole" I think of the Amurikan population.  We all know who's doing the "drilling"!

The Wisp's picture

In The End days, They will Kiss a Thousand times, Anyone who  Speaks the Truth...

Imminent Crucible's picture

I don't think it works that way.  I think in the End Days, they will run an MRAP over anyone who speaks the truth. 

bozzy's picture

OK - So the numbers are bollocks, the economic growth of the American Century needed ever more energy, and the result has been destruction of all financial integrity, and a minority of very fat cats who hope to escape the consequences.

They wont.

FORK AND DANGLE! And whilst you are doing that, please get America out of our faces.


Colonel Klink's picture

We may be slow, but we're still ahead of you!  Enjoy looking at our BIG FAT ASSES!

bozzy's picture

Klinky - you bin lapped - you just don't know it.

The question is why do nations want to be? Not just America - history is littered with the corpses of empires. Surely we need to understand just WHY exactly the POS administrations find it AOK to lie cheat and deceive their way to domination.  What is the supposed ultimate good?

Imminent Crucible's picture

Power and wealth.  And the wealth is only desired because it brings power.  "The point of power is...power."

Colonel Klink's picture

Bozzy, it's not so much that I disagree but I believe England is one of those empire corpses.  Thus we're ahead of you.  As for looking at our FAT ASSES, just take a look at the 'Murikan population.

The "ultimate good" to lie, cheat, and deceive is to the benefit of the self-serving elites to stay in power.

Any more questions?

Recognizer's picture

Ahh, but the rich and the poor are alike in one very important way.

They are both unhappy.


I think I see a pattern.

MedicalQuack's picture

It's all modeled with math formulas and here's the latest from MasterCard..more marketing for the "underbanked", I hate that term as it's so segmenting and and to me represents some more steroid marketing to suck more in.  Who in the heck cares about their "credit card persona"..a marketing scheme from MasterCard to make you think that being in one of the five categories (segmentation again) they's all bunk..they want in to your "internet pants" so keep your fly up.."dude, your internet fly is open"...

There's way too much quantitated smoke and mirrors out there and good video clip at this post makes that point.  When you read the news no matter how stupid some article may be, if the marketers can add a formula, bingo it becomes believable...mathematician Siefe from NYU explains..he also wrote the book "Proofiness, The Dark Arts of Mathematical Deception"..

There's also another short clip with Mike Osinski, who wrote the software the banks used and abused and remodeled for sub prime, who has an oyster farm now and left the tech area completely.."with software you can do something about anything" "you can modify anything and make a virtual world but we are constrained by the real world" think about that statement when it comes to bitcoins too:) The virtual world and the real world don't always work well together, depending on how far out one goes with their virtual world they create..when non linear methodologies are brought in to some scenarios, it is getting pretty ridiculous and thus so "put that math formula in print with the press so we can prove it's so"...

Watch the screaming video at the end too that shows how algorithmic journalism exits...pretty scary and you may or may not know that Forbes is trying to sell Forbes Media which uses an algorithm for some of articles you see there, of course mixed in with "real journalists" bot news the future too as the algorithms can be trained easily enough to spot those formulas and plop them out there with "content farm journalism" and you know how that goes, keep repeating the same thing over and over and people will begin to think "it must be so as I keep reading the same thoughts on it over and over"...just pray for a human to see the BS is best I can say with some of this too:)

JustObserving's picture

Mr Kunstler, we will stop pretending if you will:

  I regard the 9/11 conspiracy theories as a fantasy and a distraction from the real problems we face. It is especially unfortunate that they became associated with the Peak Oil issue, and that was obviously a result of Mike Ruppert's elaboration of them in his book Across the Rubicon, which brought discredit to his otherwise good reporting on the global oil situation, and tainted others like myself who regard energy as the crucial geopolitical and economic issue of our time.There is enough confusion in this nation without conflating the real concerns over energy with paranoid fantasies about government plots. Kunstler

The purpose of our Iraq project was to stabilize the Middle East by creating a successful buffer state between Iran and Pakistan to the east and the nations west of Iraq, especially Saudi Arabia.  Kuntlser

Nice euphemism on calling our illegal invasion of Iraq that killed hundreds of thousands on fake intelligence as a project.  BTW, Obama almost started a project in Syria on fake intelligence:

Colonel Klink's picture

Yep, and he got the S and the T in his name transposed.

FeralSerf's picture

Kunstler is a Zionist. He's admitted that. His statements wrt 9/11 and Iraq should be taken as additional evidence of Zionist involvement in the 9/11 terror attacks.

"The lady doth protest too much, methinks."

jhkunstler's picture

You dumb fuck, I'm not a Zionist. I'm Jewish. That is not the same as being a zionist.


Imminent Crucible's picture

Don't troll your own articles, Jim. It's demeaning. 

Colonel Klink's picture

Being Jewish doesn't doesn't automatically make you Zionist.  But frankly it ups the odds considerably, since you can't be without being Jewish.  Just sayin.

Do you subscribe to the teachings of the Talmud?  It's a fair question.  Difference is if you give an honest answer.  And even then, your answer will be suspect because one would lie anyways if they did.  It's not a sin to lie to Goy, and therein lies the realization that it's hard to trust any of you.

Ghordius's picture

how about all the Christians in the US who subscribe to the different millenarian or Millenialism creeds about Jerusalem? don't they all end up supporting a more muscular and aggressive form of Zionism?

btw, Zionism as such is only the movement which asked for a homeland for Jews. in a way, even Hitler was a Zionist, then he proposed Madagaskar for this scope. you can't understand the whole thing without going back to how Jews fared in Europe in the 19th century (at least)

and this "It's not a sin to lie to Goy" it's not only beneath you, it's also quite stale. please point out which part of the Talmud irks you so, it's quite a vast collection of writings, subject to endless debate and interpretation

Rafferty's picture

Anyone who's reasonably intelligent and well read and who denies that 911 was a conspiracy involving elements within US government (and agencies), the Saudis and Israelis is quite simply a liar.


The spell cast on Amerika over the teevee........BUY, CONSUME, OBEY, SHOP, SPEND,SPEND, SPEND....was black majick of the .01%. Do not point the finger oh wicked ones at the sheep for you are the herders.

Zero Hung's picture

End the pretence? Let's see:

- ZeroHedge can stop pretending that it isn't probably a virutal honeypot set up spooks to know which nutjobs in advance should be liquidated during the future economic DefCon5;

- Mainstream neo-cunnilingus economics can fess up to being an invention of the 1% to maintain their elite status compliments of the ocean of neo-feudal debt serfs;

- Democratic governments can stop pretending they are anything but representatives of a jackboot-on-the-throat, totalitarian, Police-state corporatocracy;

- Peak oil, peak stupidity, peak 1% theft, peak corruption, peak environmental destruction, peak hopium, peak fucking Botox-imbued senators sucking corporate cock, peak United Stasi of good old dumb fuck USA, pretty well all guarantee the future is not so damn bright.

But don't worry bitchez. All is not lost, after all, you probably didn't take the red pill, but really are a sub-routine in some grand quantum computer ancestor simultation. So take your binary, virutal ass (iteration number ?), out on New Year's Eve and enjoy the electronic buzz instead of wondering when the grand QE scheme will come crashing down. And it WILL come crashing down soon enough....


Colonel Klink's picture

Oddly stated but I agree.  I'll have you know I wear the title "nutjob" as a badge of courage!