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A
waterfall of woe broke over all the realms of money last week - including
especially the realm where we determine just what money is supposed to mean -
and a lot of folks barely made it to a rooftop, or a floating log, or some
scrap of high ground, where they sit wet and shivering, expecting to get
slammed again. The torrent of events is still flowing and there are countless
dangerous objects bobbing in it. Remember what that in-rushing ocean was like
in the Fukushima tsunami? A wall of miso soup strewn with Toyotas and houses
instead of squid rings and fish balls. Try swimming in that. (Try swimming in
your Cuisinart on the guacamole setting.)
Europe
is telling itself one cockamamie story after another. We've got a rescue
fund! Only it has no money! But we will bail out Italy nonetheless! But Italy
is too big to bail out - and we tried stuffing it under the carpet, but
there's no more room with Greece, Ireland, and Portugal already suffocating
in there. The whole G-20 is yakking on the phone as I write, hatching
fresh cockamamie stories. Oh, now it looks like the European Central Bank
will ride to the rescue with a dispatch satchel full of good intentions. They
said the same thing last time, a month or so ago, when a caryatid fell on
Greece's head. They are not so sure what money is either. Is a bond like
money? Maybe not so much anymore. A stock portfolio? Feh!
A Euro? The damned thing is starting to look like a ball-and-chain
custom-crafted to weigh down Germans. (And, let's face it: they never did pay
any of us for World War Two, really, except what they had to fork over to get
the communist side of their own country out of hock. Their guilt-o-meter is
still buzzing, I'm sure.) All I know is I hope the whole gang printed up some
fresh lira, francs, marks, drachma, pesetas, punts, and whatnot. It would be
nice to go back to one of these cute places some day at a discount.
Did
you admire Standard and Poor's sly, Friday night downgrade of the United
States Treasury bond rating? I was probably the only one in the whole country
besides Anderson Cooper not out eating something bigger than my own head at Applebees,
or watching the "Footwear Clearance" show over on the Shopping
Network. However, I'm not the only one in America asking where do these S and
P punks get off downgrading US bonds when three years ago they wore out their
Triple-A rubber stamps on the cartloads of stinking offal that Angelo Mozillo and other mortgage rustlers were pawning off as
bond-fodder on every Frankenstein "investment opportunity" pumped
out of the Wall Street CDO mills. Government officials were righteously
seething over S and P's chutzpah, but I suppose when they tried to ring-up
Eric Holder over at the DOJ they got connected to some call center in Uttar
Pradesh where a friendly fellow named "Dale" picked up. China's
government-run newspaper virtually spanked the US: "Learn (thwack) to
live (thwack) within (thwack) your (thwack) means!"
I'm
not convinced that the US bond rating will even matter that much because
nobody knows what anything is worth anymore - especially when governments
teeter and the folks in the public square (or the parking lot in America's
case), start yelling for blood. Merkel, Sarkozy, Berlusconi, Zapatero, will
soon be swept away by that selfsame rolling torrent of dreck-strewn woe - in
their case a bouillabaisse - while poor Obama looks like one of those
hapless, floating creatures in the second-to-last scene of O Brother,
Where Art Thou. Even the gold bugs are scared the price will collapse in
a debt deflation, or that the federal government will slap a giant
extra-special punitive capital gains tax on precious metal sales, or will try
to confiscate it from the public altogether like Franklin Roosevelt did -
though, given the vast arsenals of private firearms across this land, and the
martial spirit lingering in many pissed-off factions of the Tea Party ilk,
nothing would invite a revolution, or civil war, or civic upheaval as surely
as trying to snatch folks' gold. As a capital preservation refuge, I'm
sympathetic to gold, of course, though not so much to buggery.
Everybody
is broke now: national treasuries, giant banks, pension funds, insurance
companies. The wonder so far is that credit default swaps have not yet been
triggered by interest rate changes or some other silly shit, but when that
comes to pass there is no way the counterparties can settle their contracts.
Ruin will thunder through the financial system like winged death. Everybody
is broke and there's a lot less real "money" (whatever it is) out
there. Everybody's quailing at the prospect of QE 3, in all its cosmic
futility. The United States has already half killed itself at the Golden
Corral steam-table of deep-fried debt. I guess we could go all the way and
shoot what remains of the dollar in its pitiful, lolling head.
There
is a welling recognition that the dice have been cast and the world has
rolled snake eyes. The casino is on fire and a flash flood is boiling down
the strip. It's no fun running to the exits only to find the revolving doors
already eyeball deep in dirty water. America gibbers to itself but nobody has
a clue. I'll try to help: this is a compressive financial and economic
contraction (one is money, the other is activity). Late-summer storm that it
is, it looks to be intensifying. Everything that's super-big is going down
sooner or later. The exact sequence of failures is unpredictable. But you can
be sure Nature is telling you to get local, get smaller, get finer,
downscale, solidify your friendships, and drop your stupid grandiose fantasies
about running WalMart on algae. This is change you
don't have to believe in, because it is about to jump up and bite you on the
lips.
James
Howard Kunstler
James
Howard Kunstler’s new novel of the post-oil future, World
Made By Hand, is available at all booksellers.
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