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Jim Kunstler's 2014 Forecast - Burning Down The House

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Submitted by James H. Kunstler of Kunstler.com,

Many of us in the Long Emergency crowd and like-minded brother-and-sisterhoods remain perplexed by the amazing stasis in our national life, despite the gathering tsunami of forces arrayed to rock our economy, our culture, and our politics. Nothing has yielded to these forces already in motion, so far. Nothing changes, nothing gives, yet. It’s like being buried alive in Jell-O. It’s embarrassing to appear so out-of-tune with the consensus, but we persevere like good soldiers in a just war.

Paper and digital markets levitate, central banks pull out all the stops of their magical reality-tweaking machine to manipulate everything, accounting fraud pervades public and private enterprise, everything is mis-priced, all official statistics are lies of one kind or another, the regulating authorities sit on their hands, lost in raptures of online pornography (or dreams of future employment at Goldman Sachs), the news media sprinkles wishful-thinking propaganda about a mythical “recovery” and the “shale gas miracle” on a credulous public desperate to believe, the routine swindles of medicine get more cruel and blatant each month, a tiny cohort of financial vampire squids suck in all the nominal wealth of society, and everybody else is left whirling down the drain of posterity in a vortex of diminishing returns and scuttled expectations.

Life in the USA is like living in a broken-down, cob-jobbed, vermin-infested house that needs to be gutted, disinfected, and rebuilt — with the hope that it might come out of the restoration process retaining the better qualities of our heritage. Some of us are anxious to get on with the job, to expel all the rats, bats, bedbugs, roaches, and lice, tear out the stinking shag carpet and the moldy sheet-rock, rip off the crappy plastic siding, and start rebuilding along lines that are consistent with the demands of the future — namely, the reality of capital and material resource scarcity. But it has been apparent for a while that the current owners of the house would prefer to let it fall down, or burn down rather than renovate.

Some of us now take that outcome for granted and are left to speculate on how it will play out. These issues were the subjects of my recent non-fiction books, The Long Emergency and Too Much Magic (as well as excellent similar books by Richard Heinberg, John Michael Greer, Dmitry Orlov, and others). They describe the conditions at the end of the cheap energy techno-industrial phase of history and they laid out a conjectural sequence of outcomes that might be stated in shorthand as collapse and re-set. I think the delay in the onset of epochal change can be explained pretty simply. As the peak oil story gained traction around 2005, and was followed (as predicted) by a financial crisis, the established order fought back for its survival, utilizing its remaining dwindling capital and the tremendous inertia of its own gigantic scale, to give the appearance of vitality at all costs.

At the heart of the matter was (and continues to be) the relationship between energy and economic growth. Without increasing supplies of cheap energy, economic growth — as we have known it for a couple of centuries — does not happen anymore. At the center of the economic growth question is credit. Without continued growth, credit can’t be repaid, and new credit cannot be issued honestly — that is, with reasonable assurance of repayment — making it worthless. So, old debt goes bad and the new debt is generated knowing that it is worthless. To complicate matters, the new worthless debt is issued to pay the interest on the old debt, to maintain the pretense that it is not going bad. And then all kinds of dishonest side rackets are run around this central credit racket — shadow banking, “innovative” securities (i.e. new kinds of frauds and swindles, CDOs CDSs, etc.), flash trading, insider flimflams, pump-and-dumps, naked shorts, etc. These games give the impression of an economy that seems to work. But the reported “growth” is phony, a concoction of overcooked statistics and wishful thinking. And the net effect moves the society as a whole in the direction of more destructive ultimate failure.

Now, a number of stories have been employed lately to keep all these rackets going — or, at least, keep up the morale of the swindled masses. They issue from the corporations, government agencies, and a lazy, wishful media. Their purpose is to prop up the lie that the dying economy of yesteryear is alive and well, and can continue “normal” operation indefinitely. Here are the favorites of the past year:

  • Shale oil and gas amount to an “energy renaissance” that will keep supplies of affordable fossil fuels flowing indefinitely, will make us “energy independent,” and will make us “a bigger producer than Saudi Arabia.” This is all mendacious bullshit with a wishful thinking cherry on top. Here’s how shale oil is different from conventional oil:

PP Oil 2

  • A “manufacturing renaissance” is underway in the US, especially in the “central corridor” running from Texas north to Minnesota. That hoopla is all about a few chemical plants and fertilizer factories that have reopened to take advantage of cheaper natural gas. Note, the shale gas story is much like the shale oil story in terms of drilling and production. The depletion rates are quick and epic. In a very few years, shale gas won’t be cheap anymore. Otherwise, current talk of new manufacturing for hard goods is all about robots. How many Americans will be employed in these factories? And what about the existing manufacturing over-capacity everywhere else in the world? Are we making enough sneakers and Justin Beiber dolls? File under complete fucking nonsense.
  • The USA is “the cleanest shirt in the laundry basket,” “the best house in a bad neighborhood,” the safest harbor for international “liquidity,” making it a sure bet that both the equity and bond markets will continue to ratchet up as money seeking lower risk floods in to the Dow and S & P from other countries with dodgier economies and sicker banks. In a currency war, with all nations competitively depreciating their currencies, gaming interest rates, manipulating markets, falsely reporting numbers, hiding liabilities, backstopping bad banks, and failing to regulate banking crime, there are no safe harbors. The USA can pretend to be for a while and then that illusion will pop, along with the “asset” bubbles that inspire it.
  • The USA is enjoying huge gains from fantastic new “efficiencies of technological innovation.” The truth is not so dazzling. Computer technology, produces diminishing returns and unanticipated consequences. The server farms are huge energy sinks. Online shopping corrodes the resilience of commercial networks when only a few giant companies remain standing; and so on. Problems like these recall the central collapse theory of Joseph Tainter which states that heaping additional complexity on dysfunctional hyper-complex societies tends to induce their collapse. Hence, my insistence that downscaling, simplifying, re-localizing and re-setting the systems we depend on are imperative to keep the project of civilization going. That is, if you prefer civilization to its known alternatives.

Notice that all of these stories want to put over the general impression that the status quo is alive and well. They’re based on the dumb idea that the stock markets are a proxy for the economy, so if the Standard & Poor’s 500 keeps on going up, it’s all good. The master wish running through the American zeitgeist these days is that we might be able to keep driving to Wal-Mart forever.

The truth is that we still have a huge, deadly energy problem. Shale oil is not cheap oil, and it will stop seeming abundant soon. If the price of oil goes much above $100 a barrel, which you’d think would be great for the oil companies, it will crash demand for oil. If it crashes demand, the price will go down, hurting the profitability of the shale oil companies. It’s quite a predicament. Right now, in the $90-100-a-barrel range, it’s just slowly bleeding the economy while barely allowing the shale oil producers to keep up all the drilling. Two-thirds of all the dollars invested (more than $120 billion a year) goes just to keep production levels flat. Blogger Mark Anthony summarized it nicely:

…the shale oil and gas developers tend to use unreliable production models to project unrealistically high EURs (Estimated Ultimate Recovery) of their shale wells. They then use the over-estimated EURs to under-calculate the amortization costs of the capital spending, in order to report “profits”, despite of the fact that they have to keep borrowing more money to keep drilling new wells, and that capital spending routinely out paces revenue stream by several times… shale oil and gas producers tend to over-exaggerate productivity of their wells, under-estimate the well declines…in order to pitch their investment case to banks and investors, so they can keep borrowing more money to keep drilling shale wells.

As stated in the intro, these perversities reverberate in the investment sector. Non-cheap oil upsets the mechanisms of capital formation — financial growth is stymied — in a way that ultimately affects the financing of oil production itself. Old credit cannot be repaid, scaring off new credit (because it is even more unlikely to be repaid). At ZIRP interest, nobody saves. The capital pools dry up. So the Federal Reserve has to issue ersatz credit dollars on its computers. That credit will remain stillborn and mummified in depository institutions afraid of lending it to the likes of sharpies and hypesters in the shale gas industry.

But real, functioning capital (credit that can be paid back) is vanishing, and the coming scarcity of real capital makes it much more difficult to keep the stupendous number of rigs busy drilling and fracking new shale oil wells, which you have to do incessantly to keep production up, and as the investment in new drilling declines, and the “sweet spots” yield to the less-sweet spots or the not-sweet-at-all spots… then the Ponzis of shale oil and shale gas, too will be unmasked as the jive endeavors they are. And when people stop believing these cockamamie stories, the truth will dawn on them that we are in a predicament where further growth and wealth cannot be generated and the economy is actually in the early stages of a permanent contraction, and that will trigger an unholy host of nasty consequences proceeding from the loss of faith in these fairy tales, going so far as the meltdown of the banking system, social turmoil, and political upheaval.

The bottom line is that the “shale revolution” will be short-lived. 2014 may be the peak production year in the Bakken play of North Dakota. Eagle Ford in Texas is a little younger and may lag Bakken by a couple of years. If Federal Reserve policies create more disorder in the banking system this year, investment for shale will dry up, new drilling will nosedive, and shale oil production will go down substantially. Meanwhile. conventional oil production in the USA continues to decline remorselessly.

The End of Fed Cred

It must be scary to be a Federal Reserve governor. You have to pretend that you know what you’re doing when, in fact, Fed policy appears completely divorced from any sense of consequence, or cause-and-effect, or reality — and if it turns out you’re not so smart, and your policies and interventions undermine true economic resilience, then the scuttling of the most powerful civilization in the history of the world might be your fault — even if you went to Andover and wear tortoise-shell glasses that make you appear to be smart.

The Fed painted itself into a corner the last few years by making Quantitative Easing a permanent feature of the financial landscape. QE backstops everything now. Tragically, additional backdoor backstopping extends beyond the QE official figures (as of December 2013) of $85 billion a month. American money (or credit) is being shoveled into anything and everything, including foreign banks and probably foreign treasuries. It’s just another facet of the prevailing pervasive dishonesty infecting the system that we have no idea, really, how much money is being shoveled and sprinkled around. Anything goes and nothing matters. However, since there is an official consensus that you can’t keep QE money-pumping up forever, the Fed officially made a big show of seeking to begin ending it. So in the Spring of 2013 they announced their intention to “taper” their purchases of US Treasury paper and mortgage paper, possibly in the fall.

Well, it turned out they didn’t or couldn’t taper. As the fall equinox approached, with everyone keenly anticipating the first dose of taper, the equity markets wobbled and the interest rate on the 10-year treasury — the index for mortgage loans and car loans — climbed to 3.00 percent from its May low of 1.63 — well over 100 basis points — and the Fed chickened out. No September taper. Fake out. So, the markets relaxed, the interest rate on the 10-year went back down, and the equity markets resumed their grand ramp into the Christmas climax. However, the Fed’s credibility took a hit, especially after all their confabulating bullshit “forward guidance” in the spring and summer when they couldn’t get their taper story straight. And in the meantime, the Larry-Summers-for-Fed-Chair float unfloated, and Janet Yellen was officially picked to succeed Ben Bernanke, with her reputation as an extreme easy money softie (more QE, more ZIRP), and a bunch of hearings were staged to make the Bernanke-Yellen transition look more reassuring.

And then on December 18, outgoing chair Bernanke announced, with much fanfare, that the taper would happen after all, early in the first quarter of 2014 ­— after he is safely out of his office in the Eccles building and back in his bomb shelter on the Princeton campus. The Fed meant it this time, the public was given to understand.

The only catch here, as I write, after the latest taper announcement, is that interest on the 10-year treasury note has crept stealthily back up over 3 percent. Wuh-oh. Not a good sign, since it means more expensive mortgages and car loans, which happen to represent the two things that the current economy relies on to appear “normal.” (House sales and car sales = normal in a suburban sprawl economy.)

I think the truth is the Fed just did too darn much QE and ZIRP and they waited way too long to cut it out, and now they can’t end it without scuttling both the stock and bond markets. But they can’t really go forward with the taper, either. A rock and a hard place. So, my guess is that they’ll pretend to taper in March, and then they’ll just as quickly un-taper. Note the curious report out of the American Enterprise Institute ten days ago by John H. Makin saying that the Fed’s actual purchase of debt paper amounted to an average $94 billion a month through the year 2013, not $85 billion. Which would pretty much negate the proposed taper of $5 billion + $5 billion (Treasury paper + Mortgage paper).

And in so faking and so doing they may succeed in completely destroying the credibility of the Federal Reserve. When that happens, capital will be disappearing so efficiently that the USA will find itself in a compressive deflationary spiral — because that’s what happens when faith in the authority behind credit is destroyed, and new loans to cover the interest on old loans are no longer offered in the non-government banking system, and old loans can’t be serviced. At which point the Federal Reserve freaks out and announces new extra-special QE way above the former 2013 level of $85 billion a month, and the government chips in with currency controls. And that sets in motion the awful prospect of the dreaded “crack-up boom” into extraordinary inflation, when dollars turn into hot potatoes and people can’t get rid of them fast enough. Well, is that going to happen this year? It depends on how spooked the Fed gets. In any case, there is a difference between high inflation and hyper-inflation. High inflation is bad enough to provoke socio-political convulsion. I don’t really see how the Fed gets around this March taper bid without falling into the trap I’ve just outlined. It wouldn’t be a pretty situation for poor Ms. Janet Yellen, but nobody forced her to take the job, and she’s had the look all along of a chump, the perfect sucker to be left holding a big honking bag of flop.

We’re long overdue for a return to realistic pricing in all markets. The Government and its handmaiden, the Fed, have tweaked the machinery so strenuously for so long that these efforts have entered the wilderness of diminishing returns. Instead of propping up the markets, all they can accomplish now is further erosion of the credibility of the equity markets and the Fed itself — and that bodes darkly for a money system that is essentially run on faith. I think the indexes have topped. The “margin” (money borrowed to buy stock) in the system is at dangerous, historically unprecedented highs. There may be one final reach upward in the first quarter. Then the equities crater, if not sooner. I still think the Dow and S &P could oversell by 90 percent of their value if the falsehoods of the post-2008  interventions stopped working their hoodoo on the collective wishful consciousness.

The worldwide rise in interest rates holds every possibility for igniting a shitstorm in interest rate swaps and upsetting the whole apple-cart of shadow banking and derivatives. That would be a bullet in the head to the TBTF banks, and would therefore lead to a worldwide crisis. In that event, the eventual winners would be the largest holders of gold, who could claim to offer the world a trustworthy gold-backed currency, especially for transactions in vital resources like oil. That would, of course, be China. The process would be awfully disorderly and fraught with political animus. Given the fact that China’s own balance sheet is hopelessly non-transparent and part-and-parcel of a dishonest crony banking system, China would have to use some powerful smoke-and-mirrors to assume that kind of dominant authority. But in the end, it comes down to who has the real goods, and who screwed up (the USA, Europe, Japan) and China, for all its faults and perversities, has the gold.

The wholesale transfer of gold tonnage from the West to the East was one of the salient events of 2013. There were lots of conspiracy theories as to what drove the price of gold down by 28 percent. I do think the painful move was partly a cyclical correction following the decade-long run up to $1900 an ounce. Within that cyclical correction, there was a lot of room for the so-called “bullion banks” to pound the gold and silver prices down with their shorting orgy. Numerous times the past year, somebody had laid a fat finger on the “sell” key, like, at four o’clock in the morning New York time when no traders were in their offices, and the record of those weird transactions is plain to see in the daily charts. My own theory is that an effort was made — in effect, a policy — to suppress the gold price via collusion between the Fed, the US Treasury, the bullion banks, and China, as a way to allow China to accumulate gold to offset the anticipated loss of value in the US Treasury paper held by them, throwing China a big golden bone, so to speak — in other words, to keep China from getting hugely pissed off. The gold crash had the happy effect for the US Treasury of making the dollar appear strong at a time when many other nations were getting sick of US dollar domination, especially in the oil markets, and were threatening to instigate a new currency regime by hook or by crook. Throwing China the golden bone is also consistent with the USA’s official position that gold is a meaningless barbaric relic where national currencies are concerned, and therefore nobody but the barbaric yellow hordes of Asia would care about it.

Other nations don’t feel that way. Russia and Switzerland have been accumulating gold like crazy at bargain prices this year. Last year, Germany requested its sovereign gold cache (300 tons) to be returned from the vaults in America, where it was stored through all the decades of the cold war, safe from the reach of the Soviets. But American officials told the Germans it would take seven years to accomplish the return. Seven years ! ! ! WTF? Is there a shortage of banana boats? The sentiment in goldville is that the USA long ago “leased” or sold off or rehypothecated or lost that gold. Anyway, Germany’s 300 tons was a small fraction of the 6,700 tons supposedly held in the Fed’s vaults. Who knows? No auditors have been allowed into the Fed vaults to actually see what’s up with the collateral. This in and of itself ought to make the prudent nervous.

I think we’re near the end of these reindeer games with gold, largely because so many vaults in the West have been emptied. That places constraints on further shenanigans in the paper gold (and silver) markets. In an environment where both the destructive forces of deflation and inflation can be unleashed in sequence, uncertainty is the greatest motivator, trumping the usual greed and fear seen in markets that can be fairly measured against stable currencies. In 2014, the public has become aware of the bank “bail-in” phenomenon which, along with rehypothication schemes, just amounts to the seizure of customer and client accounts — a really new wrinkle in contemporary banking relations. Nobody knows if it’s safe to park cash money anywhere except inside the mattress. The precedent set in Cyprus, and the MF Global affair, and other confiscation events, would tend to support an interest in precious metals held outside the institutional framework. Uncertainty rules.

Miscellany

I get a lot of email on the subject of Bitcoin. Here’s how I feel about it.
It’s an even more abstract form of “money” than fiat currencies or securities based on fiat currencies. Do we need more abstraction in our economic lives? I don’t think so. I believe the trend will be toward what is real. For the moment, Bitcoin seems to be enjoying some success as it beats back successive crashes. I’m not very comfortable with the idea of investing in an algorithm. I don’t see how it is impervious to government hacking. In fact, I’d bet that somewhere in the DOD or the NSA or the CIA right now some nerd is working on that. Bitcoin is provoking imitators, other new computer “currencies.” Why would Bitcoin necessarily enjoy dominance? And how many competing algorithmic currencies can the world stand? Wouldn’t that defeat the whole purpose of an alternative “go to” currency? All I can say is that I’m not buying Bitcoins.

Will ObamaCare crash and burn. It’s not doing very well so far. In fact, it’s a poster-child for Murphy’s Law (Anything that can go wrong, will go wrong). I suppose the primary question is whether they can enroll enough healthy young people to correct the actuarial nightmare that health insurance has become. That’s not looking so good either now. But really, how can anyone trust a law that was written by the insurance companies and the pharmaceutical industry? And how can it be repealed when so many individuals, groups, companies, have already lost their pre-ObamaCare policies? What is there to go back to? Therefore, I’d have to predict turmoil in the health care system for 2014. The failure to resolve the inadequacies of ObamaCare also may be a prime symptom of the increasing impotence of the federal government to accomplish anything. That failure would prompt an even faster downscaling of governance as states, counties, communities, and individuals realize that they are on their own.

Sorry to skip around, but a few stray words about the state of American culture. Outside the capitals of the “one percent” — Manhattan, San Francisco, Boston, Washington, etc. — American material culture is in spectacular disrepair. Car culture and chain store tyranny have destroyed the physical fabric of our communities and wrecked social relations. These days, a successful Main Street is one that has a wig shop and a check-cashing office. It is sickening to see what we have become. Our popular entertainments are just what you would design to produce a programmed population of criminals and sex offenders. The spectacle of the way our people look —overfed, tattooed, pierced, clothed in the raiment of clowns — suggests an end-of-empire zeitgeist more disturbing than a Fellini movie. The fact is, it simply mirrors the way we act, our gross, barbaric collective demeanor. A walk down any airport concourse makes the Barnum & Bailey freak shows of yore look quaint. In short, the rot throughout our national life is so conspicuous that a fair assessment would be that we are a wicked people who deserve to be punished.

Elsewhere in the World

Globalism, in the Tom Friedman euphoric sense, is unwinding. Currency wars are wearing down the players, conflicts and tensions are breaking out where before there were only Wal-Mart share price triumphs and Foxconn profits. Both American and European middle-classes are too exhausted financially to continue the consumer orgy of the early millennium. The trade imbalances are horrific. Unpayable debt saturates everything. Sick economies will weigh down commodity prices except for food-related things. The planet Earth has probably reached peak food production, including peak fertilizer. Supplies of grain will be inadequate in 2014 to feed the still-expanding masses of the poor places in the world.

The nervous calm in finance and economies since 2008 has its mirror in the relative calm of the political scene. Uprisings and skirmishes have broken out, but nothing that so far threatens the peace between great powers. There have been the now-historic revolts in Egypt, Libya, Syria, and other Middle East and North African (MENA) states. Iraq is once again disintegrating after a decade of American “nation-building.” Greece is falling apart. Spain and Italy should be falling apart but haven’t yet. France is sinking into bankruptcy. The UK is in on the grift with the USA and insulated from the Euro, but the British Isles are way over-populated with a volatile multi-ethnic mix and not much of an economy outside the financial district of London. There were riots in — of all places — Sweden this year. Turkey entered crisis just a few weeks ago along with Ukraine.

I predict more colorful political strife in Europe this year, boots in the street, barricades, gunfire, and bombs. The populations of these countries will want relief measures from their national governments, but the sad news is that these governments are broke, so austerity seems to be the order of the day no matter what. I think this will prod incipient revolts in a rightward nationalist direction. If it was up to Marine LePen’s rising National Front party, they would solve the employment problem by expelling all the recent immigrants — though the mere attempt would probably provoke widespread race war in France.

The quarrel between China and Japan over the Senkaku Islands is a diversion from the real action in the South China Sea, said to hold large underwater petroleum reserves. China is the world’s second greatest oil importer. Their economy and the credibility of its non-elected government depends on keeping the oil supply up. They are a long way from other places in the world where oil comes from, hence their eagerness to secure and dominate the South China Sea. The idea is that China would make a fuss over the Senkaku group, get Japan and the US to the negotiating table, and cede the dispute over them to Japan in exchange for Japan and the US supporting China’s claims in the South China Sea against the other neighbors there: Vietnam, Indonesia, Malaysia, and the Philippines.

The catch is that Japan may be going politically insane just now between the rigors of (Shinzo) Abenomics and the mystical horrors of Fukushima. Japan’s distress appears to be provoking a new mood of nationalist militarism of a kind not seen there since the 1940s. They’re talking about arming up, rewriting the pacifist articles in their constitution. Scary, if you have a memory of the mid-20th century. China should know something about national psychotic breaks, having not so long ago endured the insanity of Mao Zedong’s Cultural Revolution (1966-71). So they might want to handle Japan with care. On the other hand, China surely nurtures a deep, deadly grudge over the crimes perpetrated by Japan in the Second World War, and now has a disciplined, world-class military, and so maybe they would like to kick Japan’s ass. It’s a hard one to call. I suspect that in 2014, the ball is in Japan’s court. What will they do? If the US doesn’t stay out of the way of that action, then we are insane, too.

That said, I stick by my story from last year’s forecast: Japan’s ultimate destination is to “go medieval.” They’re never going to recover from Fukushima, their economy is unraveling, they have no fossil fuels of their own and have to import everything, and their balance of payments is completely out of whack. The best course for them will be to just throw in the towel on modernity. Everybody else is headed that way, too, eventually, so Japan might as well get there first and set a good example.

By “go medieval” I mean re-set to a pre-industrial World Made By Hand level of operation. I’m sure that outcome seems laughably implausible to most readers, but I maintain that both the human race and the planet Earth need a “time out” from the ravages of “progress,” and circumstances are going to force the issue anyway, so we might as well kick back and get with the program: go local, downscale, learn useful skills, cultivate our gardens, get to know our neighbors, learn how to play a musical instrument, work, dine, and dance with our friends.

 

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Mon, 01/06/2014 - 20:58 | 4306181 centerline
centerline's picture

EROEI is one mean bitch.

Mon, 01/06/2014 - 23:42 | 4306777 Seer
Seer's picture

EROEI is served up by the real bitchress- ENTROPY.

Mon, 01/06/2014 - 20:59 | 4306184 JR
JR's picture

The banks are richer; the people are poorer. And the banks are in charge. What’s wrong with this picture?

Meanwhile, mergers and bank fee income soar. According to Markets Buoyant, Merger Activity Picks up: “Companies from New York to San Francisco announced more than $1 trillion worth of deals during the year, the most since the financial crisis. That led the United States to account for 43 percent of all deals worldwide, the biggest proportion since 2001.” – Deal Book, Jan. 1, 2014

In the meantime: Banks on course for record private equity fee income, 30 Aug 2013 : 

Investment bank revenue generated from global private equity deals is on course to hit one of the highest levels on record this year, according to data provider Dealogic.

Figures to August 28 show investment banks have reaped income of $10.2 billion from private equity deals so far this year, the highest level since the same period in 2007 when revenue was $13.4 billion.

The figures mean this year could be one of the most profitable for investment banks working on private equity deals should the rest of the year continue with the same level of activity. The highest full-year figure was also recorded in 2007 at $17.7 billion.

Fee income year to date is up 36% on the same period in 2012, mainly due to the strength of the US private equity market.

Revenue generated by investment banks from private equity deals has increased 47% in Europe compared to the same period last year, to $2.3 billion. There was a 34% increase in the Americas, to $7.4 billion, and 18% increase in Asia Pacific, to $500 million. Revenue by location is based on where the fee payer is located.

The figures include exits, new entry deals, and portfolio company M&A deals, as well as any related equity capital markets and debt capital markets loans, Dealogic said.

JP Morgan reaped the highest amount of income from these deals, collecting $1.1 billion. Goldman Sachs is ranked second with $982 million, and Credit Suisse received $874 million in fees, according to the data provider.

Fees have been driven by high levels of activity from some of the largest buyout firms in the US. Apollo Global Management is ranked first by fees paid, Carlyle Group second and Bain Capital third. Other notable inclusions in the top 10 include 3G Capital Partners, the Brazilian private equity firm which hit the headlines earlier this year with a $23 billion buyout of HJ Heinz alongside Berkshire Hathaway.

Meanwhile, CVC Capital Partners, the UK-based firm which raised Europe’s third largest-ever buyout fund earlier this year, is the only European firm on the list, after a flurry of deal activity so far in 2013.

http://www.efinancialnews.com/story/2013-08-30/investment-bank-fee-income-private-equity-deals-apollo-cvc-carlyle-bain-blackstone-3g-berkshire-dealogic?ea9c8a2de0ee111045601ab04d673622

Mon, 01/06/2014 - 21:26 | 4306274 Jack Burton
Jack Burton's picture

Banker power has never been at a peak like this! The result of the bank's crimes pre 2008 crash, was not to slay the bad banks. No, it was just the reverse, it was to multiply the power of bad banks. Using their political power in Washington DC, the failed bankers demanded and got oceans of bailout money and a promise of new Fderal Reserve policies of zero interest rates and unlimited QE, in other words unlimited free money given to banks to speculate with while the Fed took all the failed paper off the banks books. Presto, maximum bank profits, and the bonus culture has gone wild. See the wealth in the financial centers of London and New York to witness where all that bailout and Fed money has gone.

Kunstler, missed much on the banking side. He also missed much on the police state side, in 2013 Americans, who seem to love police and armies, was finally told for sure that "yes" YOU are spied on by Washington DC, your every thought, deed and action is on file and every new one is added every single minute of every single day. This goes beyond what even the most paranoid people were claiming. Thus, Americans must come to terms with this news, and they can no longer pretend it is not true, as Snowden adds new files every day.

Mon, 01/06/2014 - 21:43 | 4306342 new game
new game's picture

the guy just rubs me wrong...

fucking liberal bastard. once a liberal always a fucking liberal!

the fucker would take your money and impliment his plan in a heartbeat if you gave him that power. fuck kunsler...

Tue, 01/07/2014 - 02:23 | 4307116 PrecipiceWatching
PrecipiceWatching's picture

America does not love police and armies.  We are highly suspicious of both.

 

Ridiculous comment.

Mon, 01/06/2014 - 23:47 | 4306796 Seer
Seer's picture

"The banks are richer; the people are poorer. And the banks are in charge. What’s wrong with this picture?"

It's all on paper.

It's always been their picture: think Rothchild.

Perpetual growth on a finite planet, no matter who hold the books, is a Ponzi.

Mon, 01/06/2014 - 20:59 | 4306185 Griphook
Griphook's picture

I like Kunstler's writing and I share most of his visions of doom.  A common thread of all doomer/prepper 'philosophy' however, is forging closer ties among your locals, whether they be friends, family, or neighbors.

Given his acerbic wit and frequent obnoxiousness towards those with whom he disagrees...I have a hard time imagining him with a lot of friends once TSHTF.  The few like him that I know personally are relying on the current social order to stay alive.  I hope, for his sake, that he has a different face among his neighbors.  One that is, perhaps, more polite.

Mon, 01/06/2014 - 21:10 | 4306217 knukles
knukles's picture

Always best to know families with many small children.  They are more flavorful, tender and easier to cook.

Mon, 01/06/2014 - 22:15 | 4306448 acetinker
acetinker's picture

Knuks, you're a sick fuck, but I greened you anyway.

Mon, 01/06/2014 - 22:48 | 4306584 logicalman
logicalman's picture

You know this for a fact??

Mon, 01/06/2014 - 22:49 | 4306592 Serenity Now
Serenity Now's picture

It's knuk.  Please don't ask him that.  LOL.

Mon, 01/06/2014 - 22:48 | 4306583 Serenity Now
Serenity Now's picture

Kunstler is a good writer, but he is an asshole who has utter contempt for most of his fellow Americans.  His hatred for the South and suburban America borders on hysteria.

He makes fun of "happy-motoring" USA while he jets around the world going to central planning conferences.  His greatest wish is to figure out how to destroy the suburbs and make people live in little centrally planned town centers (what I call "urbania,") not unlike in the USSR.

I believe in peak oil.  But Kunstler is a disingenuous white liberal (hat tip to Trav7) who I believe has a very dark heart.

JMHO.

Mon, 01/06/2014 - 23:11 | 4306669 Imminent Crucible
Imminent Crucible's picture

Kunstler is very easy to dislike, and I've never been a fan.  That said, this is one of the most spot-on pieces he's written.  Especially the bit about us appearing to be a wicked people who are likely to get what they deserve.

Mon, 01/06/2014 - 23:18 | 4306694 Serenity Now
Serenity Now's picture

"wicked people who are likely to get what they deserve"

 

See?  Utter contempt for everyone but himself.  

I agree that he has written many spot-on pieces, but he could do it without his hatred for Americans.

Mon, 01/06/2014 - 23:50 | 4306809 akak
akak's picture

Hey, at least he's not AnAnonymous and blaming every single ill of the world on some deranged "US 'american' citizenism", whatever the fuck that was supposed to mean anyway.

Tue, 01/07/2014 - 00:21 | 4306879 Serenity Now
Serenity Now's picture

LOL, I see your point.  But at least that little fucker was taking up for his own.  Kunstler despises his fellow Americans.

Love your posts, by the way.  Don't always agree, but you are funny.

Tue, 01/07/2014 - 00:37 | 4306910 akak
akak's picture

I must be honest, Kunstler has a lot of reasons to despise his fellow Americans as a whole.  I often feel the same way.  But I have at best a love-hate relationship with the guy, as I can stomach and even often agree with this diagnoses of our many financial, political and social ills, but I bristle whenever he starts descending into laying out his implicitly elitist, central-planning-tainted "cures" for those many ills.

Just stick to the diagnosis, Kunstler, and forget about trying to peddle snakeoil statist remedies.

Tue, 01/07/2014 - 01:03 | 4306970 Seer
Seer's picture

"Just stick to the diagnosis, Kunstler, and forget about trying to peddle snakeoil statist remedies."

I've found it to be true of just about everyone.  Many can and have correctly painted how things are fucked up, but then when any solutions are offered...  It's one reason why I don't bother to offer any "solutions."

Tue, 01/07/2014 - 01:39 | 4307037 akak
akak's picture

Many problems and many situations have no "solutions", only possible remediations --- and sometimes not even much of that.

Tue, 01/07/2014 - 03:00 | 4307172 sylviasays
sylviasays's picture

akak the peak oil troll bristles at statist remedies?

Mon, 01/06/2014 - 23:53 | 4306817 Seer
Seer's picture

I don't know whether he's a "disingenuos white liberal," but I do agree with the basic notion that he's hypocritical.  HOWEVER, as I always say: Message; messenger.  I prefer to discuss messages rather than messengers because discussing messengers generally devolves into name-calling (and though some may be appropriate, it distracts from proper analysis of the message).

Tue, 01/07/2014 - 00:23 | 4306884 Serenity Now
Serenity Now's picture

I agree with you in general, but Kunstler always brings the fight first.  His hatred of Southerners and most other Americans is central to his writing.  It's hard to ignore when reading his work.  So I don't.

Tue, 01/07/2014 - 01:09 | 4306977 Seer
Seer's picture

He's got issues with most of our "culture."  And, well, he's pretty spot-on that we really have created just about the worst cultures that have ever existed, to the point where it's really questionable whether they can be called cultures.

Who knows, maybe it's the slave thing that bothers him about the South.  One could rectify that by informing him that the North actually was home to the largest slave importer.

People blast where I'm from as well.  I pay little attention to it.  I'm not insecure.

If you're really bothered by something then do something about it or quit wasting your energy.  Just cold hard logic.

Tue, 01/07/2014 - 07:17 | 4307395 eddiebe
eddiebe's picture

I know this thread is getting long, but I wonder if anyone here thinks it is possible that the elite can be persuaded to ease up on the greed without bringing down the whole house a la french revolution? 

Wed, 01/08/2014 - 07:46 | 4310876 Bearwagon
Bearwagon's picture

I think that could be managed. If done right, they wouldn't even notice ...

Tue, 01/07/2014 - 09:28 | 4307571 Schaublin
Schaublin's picture

Absolutely right - with one exception; Kuntstler is not a disingenuous white liberal but a Cheesepope and his hatred is not only for Southerners but for all Europeans (race).

Mon, 01/06/2014 - 21:22 | 4306210 Tinky
Tinky's picture

"Last year, Germany requested its sovereign gold cache (300 tons) to be returned from the vaults in America, where it was stored through all the decades of the cold war, safe from the reach of the Soviets. But American officials told the Germans it would take seven years to accomplish the return. Seven years ! ! ! WTF? Is there a shortage of banana boats? The sentiment in goldville is that the USA long ago “leased” or sold off or rehypothecated or lost that gold. Anyway, Germany’s 300 tons was a small fraction of the 6,700 tons supposedly held in the Fed’s vaults. Who knows? No auditors have been allowed into the Fed vaults to actually see what’s up with the collateral. This in and of itself ought to make the prudent nervous."

While this is old news to ZH readers, I'd argue that it was – and by a wide margin – the single most important gold-related event of 2013, and will eventually be looked back at as the major inflection point leading to the impending crisis/reset.

Anyone with a modest understanding of macroeconomics should have instantly recognized the profound meaning of the event. It was no coincidence that the supression of the paper price of gold went into overdrive immediately after Germany's request was made public. TPTB had no choice, as their feeble response to the request clearly confirmed long-held suspicions about the actual amount of bullion held by the U.S. 

There is no other plausible explanation.

As a Hail Mary tactic, the smackdown worked reasonably well. But at the end of the day, all that it accomplished was a brief delay of the inevitable, and a shakeout of the proverbial "weak hands".

To quote our own LawsofPhysics: tick-tock motherfuckers

Mon, 01/06/2014 - 22:35 | 4306526 acetinker
acetinker's picture

I'm with ya' tinky, that Germany would accept a slow repatriation of their hard assets, by a so-called "trusted" world ally, speaks volumes.  Future historians will view this as a true WTF moment.

Mon, 01/06/2014 - 22:50 | 4306593 logicalman
logicalman's picture

WTF 7 years.

Mon, 01/06/2014 - 23:59 | 4306832 Seer
Seer's picture

300 tons maps to 9,600,000 ounces?  At current gold prices that would be like $12 billion USD.  If the US is trying to claw a bunch of gold back out of the market it could likely only do so slowly lest it push the prices up underneath its attempts to grab back Germany's gold.  So, yeah, supressing gold via paper fiddling (the masters DO know how to fiddle paper) would be a good thing for the US.

And, if you are right, and I think there's lots of votes that would line up there, then maybe even bigger would be Merkel's phone being tapped.  The US would want to monitor for any signs of panic, as that could blow it totally open.

Tue, 01/07/2014 - 02:14 | 4307103 satoshi101
satoshi101's picture

The capitalization of BTC today, and beanie-babys in 1999.

My how times have changed.

 

Mon, 01/06/2014 - 21:10 | 4306220 kragsquest
kragsquest's picture

I don't particularly care for this guy; there are so many others more articulate without the profanity.  "Kunstler", with a name like that I would be embarrassed.

Mon, 01/06/2014 - 22:10 | 4306435 samsara
samsara's picture

Fuckin Right!

Mon, 01/06/2014 - 22:15 | 4306452 MsCreant
MsCreant's picture

Yeah! 

Mon, 01/06/2014 - 22:58 | 4306442 MsCreant
MsCreant's picture

Why the fuck are you reading this goddamn, mother fuckin', cock suckin', two balled bitch of a website then, if you object so much to the Kunstler man's pixelated potty prose?

Edit: Who knew there were so many prudes on this website?

I make a valid point. The language is cleaner on Zero Hedge than Kunstler? Really? 

Mon, 01/06/2014 - 23:06 | 4306637 El Vaquero
El Vaquero's picture

Why the fuck would you post a comment denigrating Kunstler's use of profanity on this site, where it is obvious that there would be responses where people post things like "twat," "cock'n balls," "shitsniffer," etc... and then turn around and make a crass allegation that the guy should be embarrassed about last name, which happens to sound a lot like CUNTler?

Mon, 01/06/2014 - 21:15 | 4306234 DonS
DonS's picture

Excellent article/blog

Mon, 01/06/2014 - 21:17 | 4306242 max2205
max2205's picture

Same old spin..... But remember there is death to those who underestimate the Fed

Mon, 01/06/2014 - 21:25 | 4306271 saulysw
saulysw's picture

I found this an exceptionally good read - something of a rarity on Zerohedge these days, sadly. Although I don't buy into everything he says, Jim always has the ring of truth about him.

Mon, 01/06/2014 - 22:25 | 4306486 weyes1
weyes1's picture

an exceptionally good read - something of a rarity on ZH these days 

I couldn't agree more, except that I would heavily emphasize the word SADLY.

Mon, 01/06/2014 - 21:29 | 4306290 Jack Burton
Jack Burton's picture

This energy topic is politically charged, perhaps on the same level as climate science is. Certain people have unshakable faith in fossil fuels, in their unlimited cheapness, and unlimited availability. ANy old fool can run the numbers and see that fracking is not drilling for conventional oil. By it's nature it taps smaller pools for each well and comes at extremely heavy capital investment for each well. Since we now frack and mine tar to oil up the economy, who cares to argue for continued cheap oil? Not me, that is for sure.

Tue, 01/07/2014 - 01:35 | 4307029 sylviasays
sylviasays's picture

maybe you prefer phony green energy instead where billions of taxpayer dollars disapper into slush funds to re-elect democraps? 

Tue, 01/07/2014 - 01:37 | 4307034 akak
akak's picture

Tell me, do you have to wear more than one diaper to contain that many non sequiturds?

Tue, 01/07/2014 - 03:03 | 4307177 sylviasays
sylviasays's picture

I don't wear diapers. Only peak oil libturd trolls like you do. 

Isn't it way past your bedtime or did you have to get up after wetting the bed again? 

 

Tue, 01/07/2014 - 07:46 | 4307415 Jayda1850
Jayda1850's picture

I was reading an economics textbook published in 2007 a couple years ago, textbook reading a weird hobby of mine, and I remembered a section talking about the then rocketing of oil prices. The author blamed it on speculation and say that they would revert to the historical average price of $30 a barrel. Author was correct, but took the world economy to total collapse. And here we all are in the same exact place and I guarantee the textbooks out today are saying the exact thing. 

Mon, 01/06/2014 - 21:30 | 4306295 rsnoble
rsnoble's picture

"so we might as well kick back and get with the program: go local, downscale, learn useful skills, cultivate our gardens, get to know our neighbors, learn how to play a musical instrument, work, dine, and dance with our friends."

I love a horror show with a happy ending. 

Tue, 01/07/2014 - 00:10 | 4306853 Seer
Seer's picture

Actually, here's a nice movie that puts it all together (has a suggestion for a happy ending):

http://www.youtube.com/watch?v=h2em1x2j9-o

Mon, 01/06/2014 - 21:33 | 4306301 eddiebe
eddiebe's picture

Mr. Kunstler seems to have a good handle on what is going on. I've been wondering though about how much we who are out of the loop of the inside insiders, the true elite that are in control of the show can speculate with that limited knowledge about what is going to happen. One of the real biggies that James talks about (and rightly so) is Oil and Gas. I can't help thinking that TPTB already have an alternative power-suppy and are figuring out ways to market it.

Another thing that really worries me is what TPTB have planned to keep world population down to a dull roar.

Tue, 01/07/2014 - 00:20 | 4306878 Seer
Seer's picture

"I can't help thinking that TPTB already have an alternative power-suppy and are figuring out ways to market it."

It's a possibility, but I think the probability is low.

A more probable outcome is that TPTB will secure more of the remaining resources for themselves.

New infrastructure is something that huge swaths of massively in-debt people just cannot afford.  And if one were to normalize food costs to a more historical basis it would tell us that we're going to be spending more of our available income/wealth on food, which means less on energy.

750 million people in India live on $0.50/day.  A good 2/3 of the world's population lives on $3/day or less.  I'm not thinking that any new "solutions" will be affordable at a large enough scale to support them (the solutions).

Tue, 01/07/2014 - 06:49 | 4307379 eddiebe
eddiebe's picture

The way to keep the dollar strong is to have people grubbing for pennies. 

Tue, 01/07/2014 - 03:57 | 4306302 Yenbot
Yenbot's picture

Love the profanity, Krag. It's doomgasm to the (mad) max!

That said, I stick by my story from last year’s forecast: Japan’s ultimate destination is to “go medieval.”

Well, probably not possible. China et.al. would be all over that with machineguns. May be possible if the Japanese Self Defense Forces are supported with a hi-tech manufacturing core and the general population is tasked down to Organian/Darkover/Ecotopia lifestyles. Wait, I just described North Korea...

Mon, 01/06/2014 - 21:33 | 4306303 Rusty Shorts
Rusty Shorts's picture

The Course of the Empire 
 - Thomas Cole -1836

 

 http://www.jcrows.com/cole.html

Mon, 01/06/2014 - 21:39 | 4306326 indio007
indio007's picture

Ignorance dominates this article. The author needs to get out of his familiar circles. 

 

 

Mon, 01/06/2014 - 21:40 | 4306330 MaxFrost
MaxFrost's picture

I like reading Kunstler's doom-porn as well as the next guy, but how did his 2013 predictions pan out? Oh that's right - he got EVERYTHING completely wrong. And I mean REALLY wrong. He might well be right in the long run, but you could go broke in the meantime. 

 

So, finally my picks for 2013:       -- Dow 4000 (What!? Did he say that!? Again!?). Even the algos will run squealing into the underbrush this time. -- Gold $2500 by 12/31/2013 (and headed higher) after a Q-1 deleveraging swoon. Silver $125. Uncertainty trumps greed and fear. -- Two-way Stagflation -- massive asset deflation combined with high energy and food costs. Americans go broke fast, go hungry, go nowhere. -- California, Illinois, and New Jersey beg the broke federal government for bailouts. The federal government pretends to bail them out. Austerity has a field day. -- Despite willingness to do so, the Federal Reserve can no longer "print" money to overcome the deflationary contraction of wealth. They are finally "out of ammunition." They will try nonetheless. Consequently some nations will stop accepting dollars for trade, possibly the Middle Eastern oil exporters. That would be very bad news. -- Shale oil and gas production stop increasing, possibly turns around to decline. The event hugely demoralizes "energy independence" cornucopians. -- Gasoline shortages return to the USA on a scale last seen in the 1970s. Cause: broken oil market allocation system. Some regions suffer more than others.  -- Drought continues in the US heartland. The grain belt withers in 2013. Dixieland cooks like a chicken-fried steak. Food costs go crazy. The American public finally begins to freak out when confronted with $9 boxes of Cheerios. -- A major earthquake hits the West Coast.

Mon, 01/06/2014 - 21:43 | 4306343 akak
akak's picture

Optimist!

Mon, 01/06/2014 - 21:51 | 4306373 Rusty Shorts
Rusty Shorts's picture

... i like the way you didn't mention the Zombies +1

Mon, 01/06/2014 - 22:18 | 4306459 akak
akak's picture

The neighborhood always goes to Hell once the zombies start moving in.

Mon, 01/06/2014 - 23:11 | 4306670 El Vaquero
Mon, 01/06/2014 - 23:17 | 4306690 MsCreant
MsCreant's picture

 

 

 

  1. "Cardio"
  2. "Double tap"
  3. "Beware of bathrooms"
  4. "Seatbelts"
  5. "Cast iron skillet"
  6. "Travel light"
  7. "Get a kickass partner"
  8. "Bounty paper towels"
  9. "Bowling Ball"
  10. "Don't be a hero." Columbus changes the rule to "Be a hero" at the amusement park, facing his greatest fear, a clown-zombie, to save Wichita and Little Rock.
  11. "Limber up"
  12. "Ziploc bags"
  13. "Avoid strip clubs"
  14. "When in doubt, know your way out"
  15. "The buddy system"
  16. "Check the back seat"
  17. "Enjoy the little things"
  18. "Swiss army knife"
  19. "Clean socks"
  20. "Hygiene"
  21. "Always have backup"

Some rules from Zombieland, stolen from Wiki.

Tue, 01/07/2014 - 05:15 | 4307328 lakecity55
lakecity55's picture

"The riots began in Chicago's South Side when Cheetos went to 10$ an ounce."

Mon, 01/06/2014 - 21:47 | 4306358 Stanley Lord
Stanley Lord's picture

There is way too much emotion here and not enough fact.

Knustler is community college thinking at it's best.

Tue, 01/07/2014 - 01:20 | 4307000 Seer
Seer's picture

Hey, thanks for providing us with the "facts!"

Mon, 01/06/2014 - 22:01 | 4306407 exartizo
exartizo's picture

The man has an interesting kind of fun "End Of The World" writing style.

I've always enjoyed well written sci-fi. Of course, he does have a few plot holes (like completely missing the NSA problem).

However most of this information is at best a colorful rehash of what most ZH'ers know and have been tracking for years.

The world is in decline because, in the least common denominator, there are too many people and not enough resources.

Mon, 01/06/2014 - 22:05 | 4306419 samsara
samsara's picture

Thank you Tylers...

This one was pretty good by Jim.

Mon, 01/06/2014 - 22:09 | 4306429 Uncle Remus
Uncle Remus's picture

This is exciting!

Mon, 01/06/2014 - 22:18 | 4306462 kragsquest
kragsquest's picture

They had this jerk at a NOFA organic farming end of winter keynote speech.  Look at the guy.  Look at the consequences of these doomsayers.  Yes the society has been going down the tubes for a long time, but people like this fail to give the solutions, mainly the problems.  Look at the consequences of his style of rhetoric.

Tue, 01/07/2014 - 01:25 | 4307012 Seer
Seer's picture

WOW!  And look at all your down-votes!

Someone above said that his solutions sucked.  You say that he fails to give solutions.  Someone's wrong.  But...

If you're looking for solutions then you're too late, no hope for you.  Sorry. (I don't give solutions even though I KNOW what's coming; one nees to find their own way [else they'll blame anyone and everyone for any failures]; but, I DO say this: base things off of the true fundamentals and you'll be on good footing: Food, Shelter and Water)

Mon, 01/06/2014 - 22:22 | 4306478 jtz5
jtz5's picture

"I still think the Dow and S &P could oversell by 90 percent of their value if the falsehoods of the post-2008 interventions stopped working their hoodoo on the collective wishful consciousness."

I am a bear, but let's face it, volatility is dead. No way this market crashes to those levels. These douchebags are in control...my guess is we end 2014 at same level we started.

Mon, 01/06/2014 - 22:23 | 4306482 Carl Popper
Carl Popper's picture

Kunster the one trick pony. 

 

I call Popper's law.  Debate is over if anyone brings up Kunster to support their argument. 

Mon, 01/06/2014 - 22:26 | 4306492 Uncle Remus
Uncle Remus's picture

"Kunster the one trick pony."

Meh. Apparently, it pays. I don't disagree though.

Mon, 01/06/2014 - 22:37 | 4306534 Carl Popper
Carl Popper's picture

My favorite philosopher. uncle Remus. 

 

Could have saved us a lot of trouble if politicians could recognize tar babies when they see them.  

 

Humpty Dumpty had a lot to say about path dependency too  

 

Will you people please listen to Humpty Dumpty!!

Mon, 01/06/2014 - 22:28 | 4306496 GeorgeHayduke
GeorgeHayduke's picture

"The spectacle of the way our people look —overfed, tattooed, pierced, clothed in the raiment of clowns — suggests an end-of-empire zeitgeist more disturbing than a Fellini movie. The fact is, it simply mirrors the way we act, our gross, barbaric collective demeanor. A walk down any airport concourse makes the Barnum & Bailey freak shows of yore look quaint. In short, the rot throughout our national life is so conspicuous that a fair assessment would be that we are a wicked people who deserve to be punished."

These sentences sum up nearly any encounter I have with the public anymore. I used to loathe the few times I might be forced to wander through an airport or into a Walmart, etc... Anymore I see it as a chance to attend a first rate freak show. Hell, it's getting to the point that I may go to places like Walmart and similar cultural crap piles purely for the free entertainment spectacle. I'll just have to stay out from between the behemoths and the cheap waffle irons.

Mon, 01/06/2014 - 22:43 | 4306562 Carl Popper
Carl Popper's picture

We are less physically fit and tough than our ancestors who physically labored.

 

 The completion of the machine age should make us stupider too.  

 

This is utopia in a way. we don't have to think or labor. I am not sure that this is all bad.  A fat, drunk, stupid (and pierced) future might be better than the horrors of the 20th century. 

Mon, 01/06/2014 - 23:00 | 4306609 logicalman
logicalman's picture

The part of the 20th century that I experienced was pretty decent.

But then, I was lucky.

Sometimes I'm drunk, but I don't think I'm stupid and I know I'm not fat. I was born with just the right number of holes in my body, so I've never felt the need to add more.

I try to choose carefully!

Mon, 01/06/2014 - 23:20 | 4306705 GeorgeHayduke
GeorgeHayduke's picture

The economy has not adjusted accordingly. Any mention on these pages of a fat, drunk and lazy person without a job, yet receiving some sort of assistance bring many howls of disdain and antiquated terms like Marxist, communist, et. al. The economy would need to change with the drunkeness, laziness, ignorance and all the rest of it.

Also, since we don't have the robots envisioned for decades by the techno-religious crowd, there are still a lot of labor intensive jobs that are needed for basic essentials, and that aren't so condusive to fat, lazy drunks.

From an evolutionary standpoint, I don't see pierced, fat, lazy, ignorant and drunk as a move in the right direction. Although, it'll likely make for a quicker and more expansive dieoff if any of the nastier scenarios about social collapse come true. It's sure to make it easier for the fit, healthy and sober in getting through those initial uggly weeks and months as the stupid tubbies die off in droves.

Tue, 01/07/2014 - 05:11 | 4307323 lakecity55
lakecity55's picture

We have forgotten about Space Exploration. Had the socialists not won in welfare programs, we could be exploiting resources on the moon and asteroid belt by now.

I am old enough to remember the 'social justus' crowd calling out that space exploration was cheating the poor.

Of note is the fact China is now going full speed ahead with Lunar Exploration while we cannot even get it up- except for moar spy satellites.

Tue, 01/07/2014 - 10:08 | 4307692 GeorgeHayduke
GeorgeHayduke's picture

Yeah right. The sociialist saying this were what? 0.01% or less of the country, Yet you say EVERYTHING went their way? Have any of you ever actually been to a capitol building and actually talked to state rep or congress person? Money is how that game works I don't think the socialist bring enough money with them to accomplish their goals.

You know who does bring enough money with them? Military contractors. Maybe the reason we didn't do more space exploration is due to all the welfare we give the military industry. They want space exploration as long as it gives them more weapons and shit in space for their use, but screw the rest of it.

Although, you may be right about the socialism now that I think about it. We have had extreme socialism for the wealthy and well connect since at least Reagan and likely much longer than that. Somehow that socialism is overlooked by most people bitching and moaning endlessly abuot socialism.

Tue, 01/07/2014 - 01:36 | 4307033 Seer
Seer's picture

Every chance I get I'm outside working hard, doing physical shit.  Today I'd spent a couple of hours swinging a machete (did that the day before too).  Got an old Legitimus and Collins like this one: http://www.ebay.com/itm/ws/eBayISAPI.dll?ViewItem&item=321292285036&item... I can swing/have swung this sucker all day long, switching between hands.  My favorite tool (besides my tractor).

Tue, 01/07/2014 - 02:53 | 4307165 Jam
Jam's picture

You're so full of shit..and yourself.

Tue, 01/07/2014 - 02:11 | 4307095 PrecipiceWatching
PrecipiceWatching's picture

Dup

Tue, 01/07/2014 - 02:15 | 4307096 PrecipiceWatching
PrecipiceWatching's picture

I concur with your observations, but Americans have hardly cornred the market in cultural depravity and bathing in amorality.

The Europeans don't "look" any better, though they have mastered all manifestions of smug to a very high degree.

See ZH for palpable examples. 

Mon, 01/06/2014 - 22:41 | 4306555 ISEEIT
ISEEIT's picture

Reality is beautiful.

We just generally have forgotten what it looks like.

 

Mon, 01/06/2014 - 22:43 | 4306564 Spungo
Spungo's picture

Blah blah blah, more fear mongering about lack of energy. We have literally thousands of years worth of nuclear power, and we can use it to create all kinds of liquid fuels.

Mon, 01/06/2014 - 23:30 | 4306738 DaddyO
DaddyO's picture

Yep, just look at how successfully things are going on in Japan right now.

Fukashima is just a rocking powerhouse with liquid fuel pouring out all over...

DaddyO

Tue, 01/07/2014 - 01:40 | 4307039 sylviasays
sylviasays's picture

no doubt DaddyO prefers green energy where billions of taxpayer dollars disappear into bankrupt companies like solyndra or disppear into slush funds set up to relect corrupt democraps

Tue, 01/07/2014 - 01:06 | 4306973 Setarcos
Setarcos's picture

How?  Please explain how boilng water to make steam, to power turbines, to produce electricity can "create all kinds of lquid fuels"?

Leaving aside considerations like Chernobyl, Three Mile Island and Fukushima; I assume you are aware that nuclear reactors are 'just' highly complex "pressure cookers".

Tue, 01/07/2014 - 01:45 | 4307046 sylviasays
sylviasays's picture

and green energy = taxpayer dollars wasted = crony capitalism = corrupt democraps 

Tue, 01/07/2014 - 02:02 | 4307086 Spungo
Spungo's picture

Alberta alone has enough tar sand for more than 100 years.
http://en.wikipedia.org/wiki/Tar_sand

USA has several TRILLION barrels worth of shale oil.
http://en.wikipedia.org/wiki/Oil_shale_reserves

Alcohols can be made by distilling any fermented organic material. Fermented wood makes methanol. Fermented sugar makes ethanol. Other carbohydrates can be fermented into propanol and butanol.

The first diesel engines were actually designed to burn plant oil, and the world is covered with plants. Scientists are looking to use algae or bacteria to create diesel in the future.

CO2 can be converted into methane or methanol through simple chemical reactions.

It's a complete mystery who started this myth about fuel shortages. We have so much fuel that we can pick and choose the ones we like.

Tue, 01/07/2014 - 03:09 | 4307183 sylviasays
sylviasays's picture

brilliant!

the myth about fuel shortages started with peak oil libturd trolls like akak and centerline

they both own windmills that were bought and paid for with stolen taxpayer money

 

Tue, 01/07/2014 - 01:43 | 4307045 Seer
Seer's picture

Um, those reactors just run on water?  The folks mining uranium are just increasing our rates of leukemia for giggles?  But, we have a thousand years worth of uranium even if we use more and more of it?

Tue, 01/07/2014 - 09:02 | 4307503 samsara
samsara's picture

And a Nuc plant produces how many barrels of complex hydrocarbons per day???

Oh, that's right PV, Wind Turbines and Nuc plants don't make hydrocarbons...

Mon, 01/06/2014 - 22:48 | 4306582 Pike Bishop
Pike Bishop's picture

I think the truth is the Fed just did too darn much QE and ZIRP and they waited way too long to cut it out, and now they can’t end it without scuttling both the stock and bond markets

Pull back slowly. Burn the foreign markets first.


Mon, 01/06/2014 - 22:49 | 4306590 drdolittle
drdolittle's picture

exactly, way of lif not suited to new land combined with they hit it during a warm spell and were then outcompeted by the innuit

Mon, 01/06/2014 - 22:55 | 4306608 Dr. Bonzo
Dr. Bonzo's picture

I enjoy good writing, and Jimmie can write, that's for sure. And while we can generally agree on the sorry state of affairs in our economy and the eventual outcome, I just don't share Jimmie's Luddite views. The core of our energy paradigm is based on ideas conceived in the 18th and 19th century. If our mass communications were in such a state we would still be waiting on the invention of the wireless.

The internal combustion engine has only persisted as the masthead of modernity because the abundance of cheap fossil fuels. There are more engineers and scientists alive today than have lived in all of human civilization, with more information and information sharing systems at their disposal than at any other time in human history. Our transition to a new energy paradigm is only a matter of time. In that respect an energy crisis seems almost an unfortunate but necessary inevitability given the prevailing misallocations of capital and resources.

If we were not transitioning away from fossil fuels to new energy systems within the next 30~50 years it would mean a tragic failure of human imagination indeed.

 

Mon, 01/06/2014 - 23:09 | 4306665 MsCreant
MsCreant's picture

You might be right.

I am not willing to rely on something that we don't have in our hands yet. To just "trust they will resolve it" is a level of shoving my head in the sand that I am not hard headed enough to attempt. Everything is finite because we are stuck on the planet. If we don't get off the rock, it will stay finite. We need to get off the rock in order to have infinite resources. We are not headed in the right direction, at all, in that regard. 

In my book Kunstler looks closer to correct than your perspective, one that we call cornucopian.

Tue, 01/07/2014 - 01:43 | 4307043 hidingfromhelis
hidingfromhelis's picture

I always love the "imminent technological solution argument" given as an excuse for not being able to solve a particular problem.  How's that theory working out on disposal of nuclear waste?  Any day now, right?

Tue, 01/07/2014 - 00:20 | 4306838 aka_ces
aka_ces's picture

"I just don't share Jimmie's Luddite view" -- the Luddites opposed industrialization because it destroyed the economic utility of their particular skills.  Kunstler goes much deeper and broader, arguing that the industrial world will collapse without infinite, cheap energy and infinite, cheap finance.  The argument for finitude is Malthusian, not Luddite.  And Malthus was interested in physical resources, but not financial resources.  I also think you might be right, but It's a race against time, and few are even aware that there's a race, apparently to the contentment of those with influence, who must be, well, blithely indifferent ?

Tue, 01/07/2014 - 01:09 | 4306979 Dr. Bonzo
Dr. Bonzo's picture

I understand his argument. I'm referring to his sentment. I chararterize him as a Luddite because Jimmie often references a vision of small self-sustaining local communities with a degree of preindustrial romanticism--longing if you will--that he juxtaposes to his scathing indictment of modern consumer culture in general.

I also think you might be right, but It's a race against time, and few are even aware that there's a race, to the contentment of those with influence, who must be, well, blithely indifferent ?

That succinctly sums it up. These are however political problems, not technological ones. I think people conflate the two. Energy solutions exist. Whether they are adapted and implemented is another matter. People can feel free to be glum and fill their basement with candles for the Big Day When All The Lights Go Out Forever And Ever And Evermore. Have fun.

I don't think there's anything in the slighest fanciful in wagering that there are workable alternative energy solutions available within our lifetime. That wager is called Investment.

Please feel free to invest in candle wax. I'm putting my money on alt energy.

 

Tue, 01/07/2014 - 01:55 | 4307074 Seer
Seer's picture

"I chararterize him as a Luddite because Jimmie often references a vision of small self-sustaining local communities with a degree of preindustrial romanticism--longing if you will--that he juxtaposes to his scathing indictment of modern consumer culture in general."

Luddite is someone who is skeptical of modern shit.  Yeah, pretty silly... cough, Fukushima, cough iCrap (NSA) (Aldus Huxley warned us)

"preindustrial romanticism" That's your characterization, one I'm thinking that you're leaning on because you are unprepared for anything like it.  And, well, as someone who toils in mud, animal shit and whatnot, I can see why...

"These are however political problems, not technological ones. I think people conflate the two. Energy solutions exist. Whether they are adapted and implemented is another matter."

Everything is political!  Using that word allows you to put it into the court of others being responsible for it (and takes it out of your hands to do something yourself).

TECHNOLOGY IS A PROCESS, not a physical resource.

We have abundant "energy 'solutions'."  And by "we" I'm assuming you/I/ folks here.  And, well, there's the notion of the non-elitists out in the world, the 4+ billion who live off of $3/day or less- yeah, the "energy 'solutions'" will be there for them, just like it's always NOT been.

I deal with real SHIT every fucking day.  And, well, it's clear that you dont have a concept of what real shit is.  Must be a city boy...

Tue, 01/07/2014 - 03:01 | 4307174 satoshi101
satoshi101's picture

Seer,

I think your missing the POINT, jimmy is a luddite, he hates technology, and wants everybody to go amish, this has always been his schtick,

IHMO the PTB want the slaves to go AMISH, but I tell you the elite, have no desire to quit their TESLA, they just want the poor off the streets.

TPTB need guys like JIM to help sell the AL-GORE dream of the poor at home, in their prison.

Tue, 01/07/2014 - 03:33 | 4307205 One of We
One of We's picture

Gonna leave this town, yeah
Gonna leave this town
Gonna make a whole lotta money
Gonna be big, yeah
Gonna be big, yeah
I'm gonna buy this town
I'm gonna buy this town
An' put it all in my shoe.............

Tue, 01/07/2014 - 05:11 | 4307324 Bearwagon
Bearwagon's picture

Thumbs up for "Hear My Train A-Comin'".

"Take me
from this
lonesome place!"

Tue, 01/07/2014 - 01:47 | 4307050 Seer
Seer's picture

"There are more engineers and scientists alive today than have lived in all of human civilization, with more information and information sharing systems at their disposal than at any other time in human history. Our transition to a new energy paradigm is only a matter of time."

And yet here we are, with high energy costs and a collapsing economic system.

Law of diminishing returns.

Jevons Paradox.

Ah, but it was a great dream while it lasted, eh?

Tue, 01/07/2014 - 09:00 | 4307475 samsara
samsara's picture

But, But We got Technology Man!

I am thinking of getting that app on my iphone to heat my house.....

Keep that dream alive...

All the while the laws of thermodynamics will kick our ass.

ps, Where the fuck is my flying car I saw on Popular Science 40 years ago. We weren't even supposed to be driving anymore....

Mon, 01/06/2014 - 22:59 | 4306624 booboo
booboo's picture

What? No "Corn Po southern hicks" in his latest rant? He now bans anyone calling Oblamo names so yea, he's a statist at heart. Give him the reins of power and we will be grinding corn meal with a stone with a cat fo nine tail on your back, and him jetting from medieval village to medieval village collecting his virgins. 

Mon, 01/06/2014 - 23:54 | 4306818 akak
akak's picture

I like cornbread!

Tue, 01/07/2014 - 03:11 | 4307187 sylviasays
sylviasays's picture

peak oil libturd trolls usually do...

Tue, 01/07/2014 - 05:54 | 4307354 Bearwagon
Bearwagon's picture

"'Cause she was raised upon that cornbread
I know that woman give me some"  ;-)

Lynyrd Skynyrd; "Mississippi Kid": http://www.youtube.com/watch?v=v_jMBh7GCYo

Tue, 01/07/2014 - 05:02 | 4307312 lakecity55
lakecity55's picture

"The current cold weather is a fluke. I have issued new EOs requiring everyone to buy a Volt. Global Warming must be defeated."

"Mr pResident! Studies show there is not enough electricity to charge all these care since you shut down so many power plants."

"OK, we will drive and charge on odd-even daze."

"All our current cars will be sent to China."

Mon, 01/06/2014 - 23:21 | 4306709 Spungo
Spungo's picture

Oh no, we're lacking power!!!!
http://www.youtube.com/watch?v=uK367T7h6ZY

Mon, 01/06/2014 - 23:27 | 4306729 Prairie Dog
Prairie Dog's picture

The end is nigh, part 3,094. yawn

Tue, 01/07/2014 - 01:57 | 4307076 Seer
Seer's picture

And yet here you are, taking time out of your life to drop in on what you alreay knew about to tell us that you're bored?

Mon, 01/06/2014 - 23:34 | 4306751 Spungo
Spungo's picture

Feel free to turn the lights off and go live in a cave. It's a fact that coal is much worse than nuclear because coal contains trace amounts of uranium. Burning coal releases a lot of radioactive crap into the air.
http://www.scientificamerican.com/article.cfm?id=coal-ash-is-more-radioa...

Tue, 01/07/2014 - 02:01 | 4307082 Seer
Seer's picture

As far as people are looking to measure...  But, who said we should do coal?

Here, here's the nice little bonus from our longings for uranium:

http://www.counterpunch.org/2014/01/02/uranium-the-demon-metal-that-thre...

Mon, 01/06/2014 - 23:36 | 4306759 Madcow
Madcow's picture

forgot about the evacuation of California - which has already begun. http://www.youtube.com/watch?v=LcQLxT49ZP0#t=125

 

Tue, 01/07/2014 - 02:04 | 4307088 Seer
Seer's picture

Migration map:

http://vizynary.com/2013/11/18/restless-america-state-to-state-migration...

Interesting to see folks leaving California for... Texas.

Tue, 01/07/2014 - 03:15 | 4307188 sylviasays
sylviasays's picture

Where's the migration map for illegals pouring into democrap etitlement land (aka California)?

Tue, 01/07/2014 - 00:08 | 4306843 perelmanfan
perelmanfan's picture

There's a difference between going medieval and going European. The average European uses roughly half the energy of the average American, but not by traveling via oxcart or living in a mud hut.Instead, he uses public transport, smaller cars and bikes when appropriate, and lives in a smaller, better insulated home, one that likely shares walls with a neighbor. Kuntsler desperately desires a radically low-tech world, but we will instead transition to one that leverages every possible high-tech way to use less energy.

Tue, 01/07/2014 - 02:15 | 4307104 Seer
Seer's picture

Did you not get the memo that the Europeans were fucked?   Lots of infrastructure.  No energy.  Everyone's in debt.  Median age is increasing.

"lives in a smaller, better insulated home, one that likely shares walls with a neighbor."

How fucking snobish!

Most people cannot afford a "better insulated home."  In case you weren't aware of how most of the world lives, 2/3 of the worlds' population lives on $3/day or less- that's some 4+ BILLION.

But... you miss the whole reason why Europe's infrastruture and living arrangements are what they are.  Yes, you guessed it, it's because of horse and carriage.  Everything was sized around travel by horse.  All that you blast is actually what set up the "better" arrangement that it is now.  In the US, outside of the small village clusted in the Eastern US, things are sprawled because things were based on homesteading and later high speed/range of transportation.

"Kuntsler desperately desires a radically low-tech world, but we will instead transition to one that leverages every possible high-tech way to use less energy."

Does he say that he's desperately wanting that?  I believe he's saying that that's the likely outcome.  Like myself, rather than pretend that the world is something that it isn't or can't be I go with what I figure has the highests probability of being.  I don't have to LIKE it to do it/live it, but it's better to accept it than to fight something that you cannot do anything about.

Tue, 01/07/2014 - 08:28 | 4307449 samsara
samsara's picture

Beautiful lucid post Seer. All the negative comments are mostly people in the "Anger" phase of the 7 steps laid out by Ms. Ross.

"But we don't Deserve to live with out (fill in the blank)"

As Clint Eastwood said as Bill Munny in The Unforgiven,
"Deserves has nothing to do with it"

Whether the world is what I would like, I have to live with the reality...
Great post Seer.

Tue, 01/07/2014 - 00:20 | 4306875 dust to dust
dust to dust's picture

 Keep track of all our Elected Senators who will vote for Janet. Last chance to make a difference. 

Tue, 01/07/2014 - 02:18 | 4307107 Seer
Seer's picture

"Last chance to make a difference."

With what?

There is NO way the debts we have can be repaid.  It's done.  Over.  Nothing but the fighting left...

Tue, 01/07/2014 - 00:29 | 4306882 satoshi101
satoshi101's picture

2  more cent's on jimmy

1.) Jimmy is an admitted AIPAC whore, ..enough said

2.) I too spent many a years working in geophysics for big-oil, so yes I agree with other people in the know, that not only is jimmy an idiot who writes well, but he don't know shit about science; ergo lots of oil still in the ground

3.) jimmy is also a HO for the DEM party, and that is not a good thing, he is a blind HO to boot

4.) yes, jimmy ban's anybody on his site that calls OBAMA an OREO, yet jimmy calls main-st america corn-po-nazis... go figure jimmy is a reverse racist of the highest order, and a self appointed HISO blue-blood to boot

5.) Jimmy has been calling the end of the day forever, ... eventually like rogers he'll be right

6.) lastly jimmy is no hunter s. thompson, now there was a real man, jimmy is what we call a lady-man, or metro-sexual man,

**

 

have a good laugh, but consider the source

 

***

regarding JAPAN, let me just say that if your a PUSSY like JIM, then you run and hide and put your little head under the covers,

As a long time SAMURAI myself, my entire fucking life, I see it another way, I see new leadership in JAPAN coming forward and leading the country out of the MORASS and into a new FASCISM that fucking blows the west out of its mind,

The JAPAN that we know doesn't have to COWER if it finds new leadership, ... JIMMY and the DEM's will neve see it coming if they continue their mind myth that world of men have all been taken over by women-minds, ... just like HILLARY&YELLEN controlling ameriKKKa that's a myth, a clever cover a show

***

THe USA I see the frog boiled dead, and civilians will become cheap slaves and whores, but I see JAPAN rising, and not falling for this SLAVE SHIT.

 

Tue, 01/07/2014 - 02:20 | 4307111 Seer
Seer's picture

You just spent how much of your life attacking the messenger?

Yeah, so fucking what.  Now then, the MESSAGE!  THAT is the actionable/debatable thing...

Tue, 01/07/2014 - 02:57 | 4307135 satoshi101
satoshi101's picture

Jimmy the Messenger? Excuse me dude, but I have been listening to a little too much message coming from ADL, AIPAC, and southern poverty justice center a little too long.

It's all AIPAC/LIKUD party right-wing nut case shit. Sure Jim associates himself with the DEM's, but his passion is AIPAC dogma, that's why HE will not mention NSA, cuz HE backs PELOSI & FEINSTEIN, because the AIPAC tells them to do so.

Jimmy sells' book he sells book about PEAK-OIL, and its a narrative he has rany since 1970's and he don't know other rant, he write well, but he is a professional 'fiction' writer, so fucking what, the dude is 100% ignorant of real science, but I agree when I started reading jimmy back in 2002 on the web I laughed, but I laughed the first time I heard Rush Libmaugh in the 1980's but the laughs ran thin  and quick. If you have been read jimmy's stuff for 10 years too then you know that his shit is timeless, meaning it never changes,

If jim's shit is a 'message', then its only cuz its NEW TO YOU, ... but for any of us that have been around, Jims shit ain't new.

A message from AIPAC, now who could have guessed?

What are we to do with the message?

Japan going midieval my ass, more like the USA going full penal colony like day-one, but japs are salt of the earth working folk, and USA citizens are hair-lips, I vote japs when the long war any day.

Are we all fucked? hell yes, is this a new message? fuck no

 

Tue, 01/07/2014 - 00:24 | 4306886 Downtoolong
Downtoolong's picture

Very well written article. 9.7 out of 10.0 on the ZH scale, far surpassing any comments I've ever made.

What I like most about the truth of our economy and monetary system these days is how it can hurt and feel good at the same time at about the same level.

So, now tell me the bad news.  

Tue, 01/07/2014 - 00:25 | 4306891 Downtoolong
Downtoolong's picture

Without continued growth, credit can’t be repaid, and new credit cannot be issued honestly — that is, with reasonable assurance of repayment — making it worthless. So, old debt goes bad and the new debt is generated knowing that it is worthless.

As one borrower from a Brazil once explained it to me back in 1984, we never pay off our old debts, and we let our new debts become old.

Tue, 01/07/2014 - 00:25 | 4306893 Musashi Miyamoto
Musashi Miyamoto's picture

Williams county is the last boomtown in this country after the Bakken and Eagle-Ford dry up this the US frontier will be completely developed. Next Stop, $10/gal

https://pathofmusashi.wordpress.com/

Tue, 01/07/2014 - 02:24 | 4307121 Seer
Seer's picture

"Next Stop, $10/gal"

Not necessarily.

Best not to try and affix any numbers to oil/gas.  Consider those 750 million people in India who live on $0.50/day, do you think that the price of oil up to now has been affordable?

That said, there's clearly a point where producers have to have a minimal support price.  And as more and more people don't have money that'll really put pressure on the producers to drop, but they won't be able to do so: so, prices could still be $3/gal, but if people can't afford it then the producers won't be selling at $3/gal even!

Tue, 01/07/2014 - 08:22 | 4307444 samsara
samsara's picture

A sting of fine posts as usual Seer.

Tue, 01/07/2014 - 00:27 | 4306894 Musashi Miyamoto
Musashi Miyamoto's picture

double

Tue, 01/07/2014 - 00:26 | 4306895 Downtoolong
Downtoolong's picture

But, they can’t really go forward with the taper either; a rock and a hard place. And in so faking and so doing they may succeed in completely destroying the credibility of the Federal Reserve.

Or possibly accomplishing their ultimate goal, which is for the Federal Reserve to be all that matters to money and markets and asset value, regardless of anything else that happens.

Tue, 01/07/2014 - 02:26 | 4307126 Seer
Seer's picture

They'll keep on doing what they have ALWAYS been doing for as long as they can.   No shocker.

I figure, however, that the Fed will eat all the debt and then implode.  If that were to happen I'd think that most here would be OK with that.  And who would ever know whether that is the actual "plan" or not?  In my mind it matters little; I just figure this as now having a high probablity (I'd thought it possible years ago, but now it's looking more like the outcome).

Tue, 01/07/2014 - 00:43 | 4306929 CactusLand
CactusLand's picture

What keeps this ponzi scheme going is the fiat myth, if we can smash that myth, we can take them down.  Their next target for gold is $960, take it down 50% from the all time high.  They will do it, and they will do it this year.  This article explains why and gives an example of how:

 

http://www.thecactusland.com/2014/01/gold-will-break-below-960-its-in-script.html

Tue, 01/07/2014 - 02:28 | 4307129 Seer
Seer's picture

Why do I care who is going to "smash the myth" when I KNOW that the myth will be smashed?  Mother Nature for the block and win, Alex.

Tue, 01/07/2014 - 00:56 | 4306956 Spungo
Spungo's picture

We've hit peak algae! Everybody panic right now!
http://www.youtube.com/watch?v=7TlEklj7Y1M

Tue, 01/07/2014 - 04:54 | 4307301 lakecity55
lakecity55's picture

We have hit Peak Radiation! Everyone has a Glow!

Tue, 01/07/2014 - 01:23 | 4307007 22winmag
Tue, 01/07/2014 - 01:54 | 4307071 Flakmeister
Flakmeister's picture

Let's all hit the spell checker....

\facepalm....

Tue, 01/07/2014 - 01:46 | 4307047 joego1
joego1's picture

I agree with a lot of this article. I think that China is getting a gold bone. We are going to run out of some major ingredient for the continuation of the great global economic experiment sometime within the next 20 years or so. If we don't run out explicitly we will have imbalances created by geopolitical events which create the same results. The world unfortunately can't go back in time and live off the land and support current populations. That means that the elite are now figuring out who gets to go in the lifeboats if they in fact can see the writing on he wall. For the rest of us we hope that the neighbors don't bite as things get tough.

Tue, 01/07/2014 - 04:53 | 4307299 lakecity55
lakecity55's picture

Yes!  Why would you 'give away' your Au unless it was to placate someone whose anger you may find unpalatable?

The Jig was up when the Jerries asked for their gold back and could not get it within 30 days...

Tue, 01/07/2014 - 01:47 | 4307051 zipit
zipit's picture

Kunstler, like many people, does not YET get Bitcoin. But eventually they will. 

Tue, 01/07/2014 - 02:30 | 4307137 Seer
Seer's picture

And apparently you, like many people, don't get reality.  But eventually you will...

Got electricity?

Tue, 01/07/2014 - 02:31 | 4307140 PN7
PN7's picture

I believe you're correct.  I recall Richard Feynman writing that he was stunned when his father didn't understand a solution to a math problem that seemed almost self-evident to Feynman Jr.  Apparently, bitcoin is going to take a bit of time getting accepted; and when accepted may never be quite understood by many.

This reminds me that Max Tegmark is coming out with a book tomorrow, Jan 7, 2014 named "Our Mathematical Universe."  You may enjoy it.  Max says that when he's sitting on a plane and his neighbor wants to chat he has a tactic:  if he feels like talking he tells the person he's a cosmologist.  This often gets them to respond "Oh.  Wonderful.  I'm a Virgo.  What's your sign?" or "Just what I need.  My friends tell me I use too much eyeliner...what do you think?"  If Max doesn't feel like talking he says, "I'm a physicist." ..to which they generally reply "I hated math." and Max gets to fly in quiet.

You might enjoy Max's book.  Despite the title there's hardly any math in the book.  And unfortunately Max doesn't address Bitcoins.  If he looked into the math supporting the concept I think he would approve.

Tue, 01/07/2014 - 01:55 | 4307072 luna_man
luna_man's picture

 

 

Very good reading...MY MAIN MAN!!

Tue, 01/07/2014 - 02:00 | 4307081 reader2010
reader2010's picture

"Those who know don't talk; those who talk don't know."

_Lao Tzu

Tue, 01/07/2014 - 02:07 | 4307090 Medieval Man
Medieval Man's picture

Someone call me?

Tue, 01/07/2014 - 02:09 | 4307092 Medieval Man
Medieval Man's picture

Interest rates in the bond market WILL rise; question is will it be all at once, or gradual.

 

But Kuntsler is correct: we're doomed...

Tue, 01/07/2014 - 02:22 | 4307114 mdkersey
mdkersey's picture

"Go medieval"?

 

Following Malthus and other  doom-and-gloom'ers, Kunstler shows only the past as possibility. He has no thought of what wonders the future might hold for us.

In our near future we will develop thinking machines. They will radically change our world. Solutions to previously insurmountable problems will be found and their implementation bootstrapped by robotic systems that work hand-in-hand with our artificial intelligences. Fasten your seat belts and enjoy the ride.

If there is a temporary economic slowdown, even for two decades, before we transition to an AI world, it makes little difference. We are on the path and will get there.

Do NOT follow this link or you will be banned from the site!