Strange Days

[Crewleader]

by Jim Kunstler

Even while a wave of reflex nausea washed over America last week, and the unemployment rolls swelled by much more than another half million, the greatest stock market suckers' rally in seventy years pulled in the last of the credulous. These are strange days. The earth is heaving and the buds swelling again -- at least north of the equator, where most of the action is -- and the global economy, which was supposed to be a permanent new add-on to the human condition, is sloughing away in big horrid gobs. But no one in charge of anything can believe it. The banking fiasco has introduced so much noise into the system that world leadership can't think straight.

What they're missing is real simple: peak oil means no more ability to service debt at all levels, personal, corporate, and government. End of story. All the other exertions being performed in opposition to this basic fact-of-life amount to a spastic soft-shoe performed before a smokescreen concealing a world of hurt. If the "quantitative easing" (money creation) and fiscal legerdemain (TARPs, TARFs, et cetera) happen to jack up the "velocity" of the new funny-money, and the world resumes its previous level of oil use, the price of oil would rise again -- this time astronomically because the previous crash of oil prices crushed the development of new oil projects to offset depletion -- and the global economy will crash again. Only the next phase of the disease is liable to move beyond the financial and into the social and political realms. Disorder of various kinds will rule -- toppled governments, civil unrest, international tension and conflict.

The US is doing everything possible to avoid these awful realities, but probably the worst self-deception is the idea that everything would be okay if we could just "re-start lending." That's just not going to happen. There is no more capacity to service the debt we've already piled on. Americans borrowed too much, and the bankers who made obscene fortunes in fees and bonuses in fraudulent lending managed to leverage this unpayable debt into the greatest collective swindle the world has ever known. The swindle has sent poison into every cell of the macro socio-economic organism, and further swindles are unlikely to revive it.

http://jameshowardkunstler.typepad.com/clusterfuck_nation/

[BeFree]

1. Did you hear?

GWB is gonna start working with Habitat For Humanity?

[Jackpine Radical]

2. Wow. I been emailing this link around among my crazy friends.

The weird thing is that this is maybe the best scenario we can hope for--we have to take super-drastic action if we're gonna save our asses.

The scariest part of the problem is the Beckites are all crazy fascists who can't really distinguish between bankers and granola-crunching progressives. They don't really have a firm grip on who their enemies actually are.

[Warpy]

3. Getting them to relend at this point is hardly the problem

because I don't see people looking for new debt to take on, whether for a house or a car. Used car lots are where the action is these days and only when the old car is so far gone it doesn't pay to try to keep it going another few months.

People aren't borrowing because they're afraid their jobs aren't safe after the past couple of decades of offshoring every job that wasn't nailed down to face to face service.

This is a jobs and wages crisis more than anything else. Yes, it's nice that the banks can legally remain open, that their asset columns have been shored up.

However, it's time to correct the part of the economy that really led to the crash, the starvation of the consumer market place by depressing wages and offshoring jobs. Until people feel secure again, they're not going to borrow a dime and they're not going to spend any of the dimes they save, either.

[wuvuj]

4. A secular bear?

They will either float this biatch...or they won't.

Secular bears typically last 15 to 20 years? Another 5 to 10 years to go?

Additional problems now being US debt....peak resources...global warming...over population?

Step up folks! Place your bets? :woohoo: