Gary’s Note: We are all going to be tragically disappointed by the future…at least if we expect things to return to the good life on credit. The vast majority of Americans will become impoverished enough to make revolt all but certain. You may want to take the necessary steps to get out of their way. Jim Kunstler explains in detail below.
Whiskey & Gunpowder By James Howard Kunstler August 4, 2009 Saratoga Springs, New York, U.S.A.
Whenever the herd mentality lines up along a compass point leading to “permanent prosperity,” or a yellow brick road lined with green shoots, or something like that, I tend to see the edge of a cliff up ahead. We are now completely in the grips of the deadly diminishing returns of information technology. The more information comes to us about How Things Are, especially from TV, the more confused or wrong the conventional view gets it.
A broad consensus has formed in the news media and among government mouthpieces and even some “bearish” investors on the street that “the worst is behind us” in this tortured economy. This view is completely crazy. It will only lead to massive disappointment a few weeks or months from now, and that disappointment might easily transmute to political trouble. One even might call the situation tragic, except a closer look at the sordid spectacle of what American culture has become — a non-stop circus of the seven deadly sins — suggests that we deserve to be punished by history.
Join the “Millionaire’s Market” That Has Banked Average Gains of 91%
After 18 years in the trenches, one of my colleagues has stumbled across a way to legally “hack” this market for some serious gains — like the 107% play he closed out on Thursday, or the 143% gain he locked in on Friday after just one month.
Now, he’s willing to let a select few into his exclusive advisory — but only until the spaces on his list run out. If you want to get in on his 91% average gains this year, click here immediately…
The reason behind this mass delusion is not hard to find: it’s based on wishing, especially the wish to retain all the comforts, conveniences, luxuries, and leisure that had become normal in American life. These are now ebbing away in big gobs for most of the population — while a tiny fraction of the well-connected pile on ever larger heaps of swag, enjoying ever more privilege. Those in the broad bottom 95 percent were content as long as there was a chance that they, too, could become members of the top five percent — by dint of car-dealing, or house-building, or mortgage-selling, or some other venture enabled by easy credit and a smile. Those days and those ways are now gone. The bottom 95 percent are now left with de-laminating houses they can’t make payments on, no prospects for gainful work, re-po men hiding in the bushes to snatch the PT Cruiser, cut-off cable service, Kraft mac-and-cheese (if they’re lucky), and Larry Summers telling them their troubles are over. (If I were Larry, I’d start thinking about a move to some place like the Canary Islands.)
Too many disastrous things are lined up in the months ahead to insure that we’re entering a new phase of history: The Long Emergency.
Government at every level is worse than broke.
Our currency, the US dollar, is hemorrhaging legitimacy.
Inability to service old debt at all levels or incur new debt.
Bad (toxic) debt lurking off balance sheets everywhere.
The housing bubble fiasco is far from over.
Unemployment rising implacably.
So-called “consumers” unable to consume consumables.
Crucial energy import supply lines fragile.
Food supply subject to energy problems and climate abnormalities.
A world full of other societies who would enjoy watching us fail and suffer.
When The Long Emergency was published in 2005, I said then that the greatest danger this society faced would be its inclination to gear up a campaign to sustain the unsustainable at all costs — rather than face the need to make new arrangements for daily life. That appears to be exactly what has happened, and it didn’t happen under the rule of some backward-facing, right-wing, Jesus-haunted crypto-fascist, but rather a “progressive” party led by a dynamically affable young man unburdened by deep cultural allegiance to Wall Street.
The broader question of where we go as a nation pulses with tragedy. History is clearly presenting us with a new set of mandates: get local, get finer, downscale, and get going on it right away. Prepare for it now or nature will whack you upside the head with it not too long from now. Attempting to maintain anything on the gigantic scale will turn out to be a losing proposition, whether it is military control of people in Central Asia, or colossal bureaucracies run in the USA, or huge factory farms, or national chain store retail, or hypertrophied state universities, or global energy supply networks.
These imperatives are so outside-the-box of ordinary experience right now, that to drag them into the arena of politics can only evoke blank stares or nervous giggling. But whether we like it or not, these are the things that will really matter in the years ahead — not whether General Motors can ever make a profit again, or what Target Store’s sales figures are next quarter, or whether the latest high-rise condo-and-gambling complex in Las Vegas will be successfully marketed.
Here, in the dog days of summer, it seems to me that the situation in the USA is so fundamentally bad, so unpromising, so booby-trapped for failure, that I wonder if there has ever been a society so badly deluded as ours. We’re prisoners of our wishes, living in a strange dream-time, oblivious to the forces gathering at the margins of our vision, lost in a wilderness of our own making.
Anything can happen now. I certainly wouldn’t rule out international mischief as we arc around into fall. The air is so full of black swans that the white swan now seems like the exceptional thing. Whatever else happens, it sure will be interesting to see the public’s reaction to Wall Street’s announcement of Christmas bonuses. The folks at Rockefeller Center better be thinking about getting a fireproof tree.
Regards, James Howard Kunstler
Gary’s Endnote: Where will you be when the public starts to “react”? My own considerations of this question inspired the Whiskey & Gunpowder Trade of the Decade, first announced at this year’s Agora Financial Investment Symposium. And we’ll be talking about that trade a lot more. Promise me you’ll tune in.
This is gonna be good!
I don't think you are going to get those indignant responses -- those folks have probably already hit the unsubscribe button. On the other hand, I appreciate the continuing information and opinion -- this newsletter confirms that there is still SOME intelligent and intellectually honest life in the country.
Hard facts and clear explanations that I come across in W&G often go into my conversations on various topics with my acquaintances, friends and family who lean towards government intervention in all things. It is amazing how many otherwise intelligent people just assume that it is everyone’s "right" to be taken care of by the government if they cannot (or will not) take care of themselves. When I can explain (patiently, and usually using small words) the true costs, both monetarily and in personal freedom, we pay for the government to be mommy and daddy to us all, I occasionally see a glimmer of understanding begin to spread across their faces -- and sometimes even a little outrage. Keep it up! There is still hope.
Heh. Thanks. And of course I agree with you, but don’t be so sure about those indignant responses, Shooter. Meet your neighbor in the Whiskey inbox…
I just drank the last of my whiskey so thought I'd send a comment your way before I go take a nap.
Some of the stuff you write is pretty good, like your views on legalizing drugs, but some of it stinks.
As for your views on a government health care program, that you don’t want the government telling you what care you can get, what doctors you can see, etc, well, that’s how it is right now. My insurance co. tells me what services they will cover, what doctors I can see, etc, so what’s the difference?
Also, the folks in the military have pretty darn good insurance, and guess what, its a government-run plan.
Admittedly there is not a perfect solution, but is watching a loved one suffer or die because you cant afford the cost of treatment or the premiums for the insurance really the best we can do in this country? Two years ago I spent 24 hours, just one day, in a hospital to get my heart tested from a chest pain. The bill was $13000.
Have you lost all compassion for your fellow man? Just what is your solution for health care?
Anyway, you seem to have a lot to complain about, it must be tough being you. It could be worse ya know.
You’re for legalizing drugs, but want everyone to have health insurance? I smell a neo-liberal! I will keep that in mind as I answer.
I mostly worry that for the rest of my life people will insist that it’s right that I pay for their relatives’ life-saving operations. They will have the government take my money either by outright taxation or the stealth tax of inflation.
When I can then no longer afford to pay for my own healthcare, they will say “See! You need our system!”
Break my leg, offer me a crutch, then congratulate themselves on their compassion…
And you’re also okay with an insurance company telling you what you need and what sort of care you have access to? Wouldn’t you rather the market allow you to make informed choices and for competition to bring down the cost of care and improve the quality?
But don’t just listen to me rant. Rather do yourself a great favor and check out what Charles Hugh Smith has to say on the subject.
(And thanks to friend James Howard Kunstler for bringing this article to my attention by linking to it on his site.)
And complaining? Moi? I’d call it justifiable anger and pithy — even charmingly humorous — ranting.
Do you have any idea how hard it is to find a woman who agrees with me on anything? All my potential baby-mammas are Obama-worshippers.
Something about nanny politics really appeals to this addled generation, the women in particular. (And sadly far too many young men have had their estrogen levels boosted by tofu-filled vegetarian diets…so biochemically they’re essentially young women and prone to the same folly.)
I refuse to lie about my hatred of government or my rabid capitalist ideation, so I’ve had to take drastic measures, Shooters…but more on that later.
Whiskey & Gunpowder, a free e-letter, is the independent investor's daily guide to gold, commodities, profits and freedom. We sent this e-mail to BRAD0222002.ECONOMY@blogger.com because you or someone using your e-mail address subscribed to this service.
To end your Whiskey & Gunpowder e-mail subscription, click: Unsubscribe.
Nothing in this e-mail should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.