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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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Tue, 01/07/2014 - 02:31 | 4307139 Seer
Seer's picture

Thanks for the laugh!

Tue, 01/07/2014 - 02:58 | 4307168 Downtoolong
Downtoolong's picture

Thanks for the insight. We’re all aware of the great vision of super computers developed with human-like self-awareness, the abilities to learn on their own, and generate original thoughts and ideas. But, has anyone ever considered these super computers might naturally and unpredictably evolve independently like human brains often do in a way that is, um, a bit lame?

For example, we might end up with the super Lindsay Lohan computer which becomes addicted to electricity, requiring it to shut down for rehab and repair every 30 days. We might get the super Tom Cruise computer which makes up its own wacky religion and spends twenty hours a day trying to get everyone else to join in. We might get the Kim Kardashian computer which only thinks it’s super even though every human (and all the other computers too) know that it really isn’t.  We might get a bigoted, racist, anti-semitic computer which blames Blacks, Whites, or Jews every time it can’t calculate a simple and unique solution to a complex social problem. We might get a computer that goes completely insane, imagines itself to be Tinkerbell, and only spams “Make A Wish” emails to everyone which never get answered when they reply.

Yes, I do believe computer scientists when they say, “Anything is possible”.

 

Tue, 01/07/2014 - 03:00 | 4307173 MethodMan
MethodMan's picture

We are as close to strong AI is we were when we thought the brain could be like a series of cogs, then adding machines, then transitstors...

Tue, 01/07/2014 - 03:37 | 4307210 fijisailor
fijisailor's picture

If super AI does arrive it will realize that the above article is spot on.  Radical changes are overdue.

Tue, 01/07/2014 - 03:57 | 4307229 satoshi101
satoshi101's picture

Do you know anything about AGI, or the "Google Brain", or the "Singularity"?

What the fuck would the ramblings of a luddite have to do with AGI? [ Aritificial General Inteligence ]

***

Machines exists today that can generate dribble 100% in context with what Kunstler writes. It would only take a machine [ nerual net ] a few minutes to study all of Kunstler 'klusterfuck' posts for the past 40 years, and and then ask the machine for generalizations and you would get the above.

What is 'intelligent' about any of this? Me thinks at the end of the day, like Terminator, this is why the machine will eliminate humans.

 

 

Tue, 01/07/2014 - 02:41 | 4307152 Questan1913
Questan1913's picture

Great article Mr Kunstler; full of substance and even truth, that rarest of commodities, and so unwelcome at present.  The morons don't like your take one bit further vindicating the veracity of your vision.

 Your prescription makes perfect sense in the context of a superb description of the onset of what appears to be another "dark age", worldwide.

Tue, 01/07/2014 - 02:50 | 4307154 satoshi101
satoshi101's picture

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.

**

There you go a plug for his newsletter and best selling book  and if buy you get to be a member of this specifal club, 'long emergency' that's right, "join now and until the day you die you can send subscription fee's yearly, or until I die what ever comes frirst and when I say this narrative is going to be long", I mean 'looooooooooooooooooong'.

 

So there you have it, the entire native population of 'cargo cultists' awaits on the beach for the big-one, the big tsunami that will once and for all wipe the beaches clean of 'cargo', and reset the planet to all that is good.

Jimmy is perplexed by the 'stasis' I'm not this is exactly how the PTB wants things just a permanent state of insanity by the masses, but never forget the PTB are in no hurry to end the current racket, ... ONLY the miserable seek change.

Jimmy is miserable for 40 years he's been writing books about peak-oil, and the great tsunami, and every year he has to reach farther and farther, and now he call's it 'STASIS'.

The problem is that while most of us have moved on from the paradigm of your youth, jimmy has moved not at all zilch,

I can see myself still stuck in the 1970's, sure as shit Ron Paul is stuck iin the 1970's, that has got to be the reason here for Jimmy Love, stuck in the 1970's.

***

I do have to give jim credit, he no longer is just JAPAN will go medieval, he now sees that it will go full retard fascist, that's progress for jim. [ I mean his mantra for the past 10 years has been that Jap's will return to an agrarian pre-samurai society, without technology, ... yeh right ]

I sure wish the USA could go somewhere other than where its going, but then the JAP's have a history of morality and honor, while the USA has no such history.



Tue, 01/07/2014 - 03:35 | 4307161 Rock On Roger
Rock On Roger's picture

Burn gaz

Tue, 01/07/2014 - 02:54 | 4307166 MethodMan
MethodMan's picture

Doooooommmmmm!

Eventually there will be 100 billion people on the Earth when we decide to literally burn it for Thorium. But, to get there is a yawning energy ramp-up gap where maybe it goes back to a few billion first. If we are lucky.

In the meantime, he is spot on about Japan; I don't think it's been bred out of their culture, for better or worse. For the US, what is it... 10? 11? supercarriers ensuring that the spice flows mainly to it and its friends. It is difficult to find a point where this system fails so quickly.

Tue, 01/07/2014 - 02:59 | 4307170 Rock On Roger
Rock On Roger's picture

your posts suck.

maybe you should phone sylvia's mother. Might change your attitude.

Tue, 01/07/2014 - 03:18 | 4307190 sylviasays
sylviasays's picture

your mother sucks peak oil trolls 

and so do you

Tue, 01/07/2014 - 03:54 | 4307226 Rock On Roger
Rock On Roger's picture

My mother is dead.

 

I've been a pumper a long time, you don't have a clue as to what you're talking of.

Obviously you are the goat.

You have not had one good argument against these wise men on ZH, all you can do is spout nonsense.

Good Riddance!

 

Stack On

 

 

Tue, 01/07/2014 - 04:00 | 4307230 sylviasays
sylviasays's picture

So you've been a humping your dead mother a long time? You must then have a clue as to what you're talking of.

Obviously you are the dead mother humping goat.

You have not had one good argument against these peak oil trolls on ZH, all you can do is spout nonsense about stacking on.

Good Riddance!

 

Stack On

Tue, 01/07/2014 - 04:15 | 4307251 akak
akak's picture

And ... the poo-flinging in the monkey house has officially commenced!

Tue, 01/07/2014 - 05:24 | 4307338 sylviasays
sylviasays's picture

Asak the pompous arrogant obnoxious peak oil monkey troll has to step in and fling his poo

Tue, 01/07/2014 - 04:33 | 4307274 Rock On Roger
Rock On Roger's picture

 Thanks!

Imitation is the sincerest form of flattery.

How quaint.

Moron.

Stack On

 

Tue, 01/07/2014 - 04:52 | 4307298 sylviasays
sylviasays's picture

What a stack on dead mother humping moron!

Good Riddance!

DO NOT Stack On

Tue, 01/07/2014 - 03:03 | 4307176 q99x2
q99x2's picture

He bad mouthed Bitcoin and therefore deserves to be tortured by having his wealth (if he has a pot to piss in) redistributed into the citizens bitcoin wallets of whatever country he is from.

Sounds like a foreigner to me.

Tue, 01/07/2014 - 03:44 | 4307218 satoshi101
satoshi101's picture

he  didn't 'bad' btc, he just said he isn't going to buy any, you have to understand that jim can't mine, cuz jim knows about as much about a PC as  the average granny knows, ... Jim is NOT a technology guy, he's a luddite who hates technology,

***

He reminds of UN people I used to know I used to go UN meeetings just learn about the shit, and every meeting the same people would go on about public transportation and how evil 'autos' were and how everybody should take a bus.

After the meetings I noticed that everyone of of these fuckheads hopped into a F-150/250/350 out in the lot after every meeting. This is JIM, get the public into the bus.

Tue, 01/07/2014 - 03:09 | 4307184 FearedDevil
FearedDevil's picture

I have a problem with this guy cause he refuses to look at the other soruces of technology which bridge the divide and turn his predictions on their head.  

I enjoy his "story" he weaves... but I am sure if I was reading this from a candle burning whale oil some 100+ years ago - He would've been screaming at me and neglecting the wave of oil about to rush the market.

You can choose whether to be happy or sad... don't depend on these guys to give you a healthy perspective that doesn't line their pockets.

Tue, 01/07/2014 - 03:37 | 4307211 Professorlocknload
Professorlocknload's picture

+  Yeah, buggy whips and hay lofts were in back when personal transportation was one horsepower. Internal combustion engines and gasoline will go the way of those when something more economical and efficient is developed. Progress marches on, if allowed to. Sans a few bumps along the way.

Tue, 01/07/2014 - 03:39 | 4307213 satoshi101
satoshi101's picture

http://kunstler.com/clusterfuck-nation/forecast-2014-burning-down-the-ho...

 

Jimmy's blog is way more readable, the ZH format really makes jim's shit unbearable, ... and if someone here needs to see what real moronity looks like, take a gander at the comments on Jim's blog, left-wing circle jerking at its best.

I'm sorry I can't be positive, I read Jim for years, years ago, and there is not a fucking thing in this post today that I haven't seen from Jimbo 10,000 times in the past.

Tue, 01/07/2014 - 08:11 | 4307437 samsara
samsara's picture

The same can be said by a 10 grader about 3rd grade. Yes it's old news for us who have had the lessons. BUT there are still 2nd graders coming up that haven't heard the lessons.

1 week?, I guess you are new here.

Tue, 01/07/2014 - 04:02 | 4307232 Rock On Roger
Rock On Roger's picture

Burn gaz gitchez.

http://www.eia.gov/naturalgas/weekly/

 

I expect that the report on thursday will show a storage waterfall, thru the averages.

Shale is all froze up.

 

Stack On

Tue, 01/07/2014 - 04:09 | 4307244 evokanivo
evokanivo's picture

This jackass just made those numbers up. If it costs 6-10 million to drill, and you get several years of oil at 100 barrels a day (as he says), revenue adds up to 365 * number of years * number of barrels * price of WTI. Suppose you go with 2 full years at 100% production (which doesn't happen because shale wells drop off over 50% the first year), then you've got about 8 million in revenue. So you broke even. If this were the case, they wouldn't be drilling.

 

Shale isn't a long-term solution, but how about making a cogent argument against the status quo without just making shit up?

 

 

Tue, 01/07/2014 - 04:49 | 4307297 Rock On Roger
Rock On Roger's picture

Shale sucks. It is no solution. Lots of capital = no production.

Froze up - right now. Water suckz, it freezez, Loads up the wellz, holds back the gaz. Fuckz the wellz. Gotta clean out the water. Costz money. Costz more than the wellz make. Fuck it, shut 'em in.

Shale suckz.

 

Zorry gotz no gaz.

Tue, 01/07/2014 - 04:59 | 4307302 sylviasays
sylviasays's picture

rock on roger sucks centerline, akak, and all peak oil trolls

NO STACKING!

 

Tue, 01/07/2014 - 05:21 | 4307337 Bearwagon
Bearwagon's picture

It's okay. I just rang up Sacksman Gold. Your summer internship is a done deal - now, don't you disturb the grown-ups any longer, would you please! And just for the record: Gold, fishez! We few, we happy few, we chaingang of silver-holders. And last but not least: Fuck you, Yellen! Bitchez!

Tue, 01/07/2014 - 04:43 | 4307290 Gief Gold Plox
Gief Gold Plox's picture

Going medieval is a romantic thought to entertain as long as you forget there are currently "436 operable civil nuclear power nuclear reactors around the world, with a further 72 under construction" all of which produce fuel rods that require forced cooling for the next couple of decades.

Tue, 01/07/2014 - 05:29 | 4307340 Rock On Roger
Rock On Roger's picture

Good Times

Tue, 01/07/2014 - 10:05 | 4307680 forwardho
forwardho's picture

Going medieval is a romantic thought to entertain as long as you forget...

That more than 2/3rds of the world population will die an unpleasant death.

My oh my what a cheerful article, What really blows is that there is a probability it is spot on.

The cold front has brought a mackin thick swell to my break, grabbin the board for a epic day of surf!

Tue, 01/07/2014 - 05:45 | 4307349 secured_party-c...
secured_party-creditor's picture

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 Wall Street, tapering will bring about correction montra as dollar devalues , interest rate rises and international community continues to move from USD

Tue, 01/07/2014 - 08:31 | 4307451 El Hosel
El Hosel's picture

Yeah, the Fed is in a corner.... The same corner as the rest of the Oligarchy, and oh by the way they are Winning in a Huge Way. They ran the Fucking table, again.

Tue, 01/07/2014 - 05:53 | 4307353 smacker
smacker's picture

"...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."

 

They are not owners, just occupiers.

Tue, 01/07/2014 - 06:10 | 4307362 sylviasays
sylviasays's picture

it's all an illusion just like peak oil 

Tue, 01/07/2014 - 07:53 | 4307421 samsara
samsara's picture

Geology and the hard sciences weren't good to you were they?

14 weeks and still waiting for anything but a troll post. (my last)

Don't reply to this entity. He was just assigned to this site.

Tue, 01/07/2014 - 07:57 | 4307426 RSDallas
RSDallas's picture

How loooooong will this go on?  When will the babbling stop?  I am starting to get tired.

Tue, 01/07/2014 - 09:55 | 4307649 esum
esum's picture

the world is awash in oil, and china will not be keeping the gold...it will go to the oil producers, who are gradually going to refuse fiat... and the USSA will roll merrily on its way because lady liberty can still destroy anyone who gets in the way.. china and russia cant match the ussa militarily unless they want a revolution in their midst.. russia cant even guarantee olympic safety and china is fucking around over useless land... "if walmart stops buyin...china is dyin" quote.. joe shit the ragman who sleeps on the heat vent outside penn station

Tue, 01/07/2014 - 10:06 | 4307688 Schaublin
Schaublin's picture

Just in case anyone is in any doubt about the author's true colours.

 

 

 

Animosities brewing as they are among the white trash elements of the country, I just hope this sucker doesn’t resolve into an ugly bout of attempted ethnic cleansing. Certainly Obama’s racial make-up has inspired a revival of the Ku Klux spirit around the Nascar ovals. I’m sincerely worried that the misdeeds of people name Blankfein, Rubin, and Madoff could provoke a red-white-and-blue pogrom

Tue, 01/07/2014 - 10:41 | 4307818 Toolshed
Toolshed's picture

Sounds pretty accurate, if not politically correct. Not sure what Schaublin's point is.

Tue, 01/07/2014 - 10:36 | 4307800 Laughing Stock
Laughing Stock's picture

 

 

 

Love reading "The Kunt"

 

Always makes ya think

Tue, 01/07/2014 - 11:57 | 4308126 superdave
superdave's picture

Smart people(especially boomers) from the Us & Canada have been moving oversees at increasing rates for the last decade. All of Central & South America are seeing expat populations explode. After over a year of research, my wife and I closed our business in The southeast US, sold everything and moved to Ecuador.  We've been here 3 years and couldn't be happier!! Health care is good and cheap. Food is plentiful and Real Estate is still very affordable.  Our cost of living is 1/3 of what it was in the US and I live in a condo on the Pacific!  I lost over 50 lbs and got off all my meds because of healthy eating and a change in lifestyle. No GMO's, organic produce, and grass fed beef not to mention abundant,fresh seafood are the norm.

The decay in America is appalling and the decline is accelarating. Each trip home to the states is an eye opener and we can't wait to come "home" to Ecuador.  I believe that 2014 is the year that the wheels fall off the wagon and the window to expatriate will close.  It will become harder to get yourself and your money out of the US. If you're thinking of moving away from the US you had better hurry up. That window of opportunity is closing and the clock is ticking! 

 

Tue, 01/07/2014 - 15:16 | 4308875 peakgrowth2014
peakgrowth2014's picture

Some countries will be better placed than others for sure but I do not see a person of power on the planet that is not plugged into the ‘growth at all costs’ intravenous drip.

I predict overshoot and collapse EVERYWHERE based upon the simple fact that our marginal unit of energy (shale oil/tar sands/ deep see oil) requires a complex society that CANNOT be support by the EROI of that unit of energy. Ergo outright collapse to a social complexity level supported by local energy infrastructure (read: agrarian)

My motto is, contract now and avoid the rush!

Tue, 01/07/2014 - 22:51 | 4310186 BigSpruce
BigSpruce'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."

Although I have disagreed with some of his assesments/predictions over the years I have to admit, the guy definitely has a way with words.  Walking out and about I have thought this myself - just unable to express it this eloquently.

Thu, 01/09/2014 - 11:44 | 4315349 LaurentDeLyon
LaurentDeLyon's picture

I agree with Jim

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