And Suddenly Things Change
James Howard Kunstler

“The global economy is becoming unburdened by what has been.” — Jordan Schachtel on “X”

That two-by-four upside our country’s head you’ve been waiting to get whomped with? Looks like it’s landing now. We got a banger in 2008, but it didn’t make a much of an impression. Maybe you don’t even remember these people, but then Treasury Secretary Hank Paulson and Fed Chair Ben Bernanke came in like a code blue squad and hooked up the banks to an IV-drip speedball of cocaine and heroin, i.e., “money” that didn’t actually exist (a.k.a. “liquidity,” hallucinated capital), and that crew kept it coming for years.

And then Janet Yellen and her posse kept it coming with never-ending zero interest rate policy (ZIRP) until the national debt canceled America’s future. And that left Jerome Powell pretending there was a way out of this doom-loop. Then came the repo market spasm in September 2019 that freaked out the blob so badly they shut down the whole world with Covid and locked-down economies. And everything since then has been a waiting game. The financial world was in hospice.

The wait is over. Everything that can break is breaking: stock markets, bond markets, the galaxy of derivatives — bets on this and that, which will never be honored. Banks are next. Gold and silver are hanging in there for dear life just now, because they’re actually worth something. (And because they are worth something, they‘ll eventually sell off some too, to cover margin calls on other stuff hemorrhaging value. But they will not go to zero  like a lot of other stuff, and they’ll come back stronger.)

You understand this can’t play out like it did in 2008-9. The authorities are out of tricks and out of fake money. They can try the emergency interest rate cut, but it won’t change what is actually happening: the epic revaluation of everything humans make and own — with much of it losing value and quite a bit losing all value because it never really had any. The spooky catch is that there will be an attempt in this wild and terrifying process, for certain devious, unprincipled  parties to take possession of many things shaking loose — what remains of collateral. . . real things. . . commodities. . . facilities. . . properties. . . chattels. . . artworks. . . and, of course, whatever securities still have a relationship to realities of production.

This brings a sharp end to the current political sitcom, especially the situation of the Democratic Party. They will get blamed for the economic carnage left behind by the shattered money system. They lied about everything for years, every number, every index, every supposed “policy”.

Kamala Harris won’t be cackling her way out of this. It’s hard to see how she might remain the party’s nominee. She can’t even speak to the massive catalog of prior failures to govern our country coherently and effectively. And it’s equally hard to figure how “Joe Biden,” still presiding emptily over this fiasco, can get Twenty-fifthed out of the way for his feckless veep. More likely, the coming convention will be a desperate, bloody mass cage fight and somebody else will stagger out of it to go through the motions of campaigning in a hopeless cause. Hillary might even decline the roll in this horror show.

Now, I began writing this post well before dawn, eastern time. The action in Asia, across the international date line, was a slaughter. Europe got smacked hard, but not catastrophically. Maybe the Wall Street wonderboys can stop the bleeding here, but the futures numbers sure look grim. I’ll come back later when the US markets have spoken and add a few observations on the situation.

Oh, and you’ve probably noticed that World War Three is shaping up to kick off today.
Interesting times. . . And I’m supposed to be on vacation this week.

 

 

James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

 

 

 

 

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