The story-line behind the convulsions shaking the money centers of the world is such a hopeless labyrinth of mathematical metaphysics because abstraction unto infinity is the last refuge of those seeking to evade reality. This is why individual human beings faced with terrible choices go crazy, and it is true of societies and nations, too.

     Reality is so boringly concrete. The facts just sit there implacably like dull cement bollards in a roadway, waiting for impact with objects in motion. These facts are as follows:

     The world is dead broke. (By “world” I mean those places where the electricity is on more than it is off.) The world spent all of its future capital to stage an orgy of blow-out development and then the future arrived and there was no money to run everything.

     To make matters worse, there are massive interest payments due on all that money misspent. Nobody has the means to pay the interest. All the activity around this fact is an Olympiad of money games that amount to musical chairs and hot potato, signifying that 1) there is not enough to go around, and 2) somebody has to end up stuck with a problem.

     The orgy averred to above coincided with the last years of cheap and abundant energy supplies to run the development. That’s over and done with, too, despite the strenuous efforts of wishful thinkers, cornucopian propagandists, and corporate racketeers to pretend that technological magic can make up for dwindling cheap supplies.

     The net effect of all this is that advanced societies all over the planet have entered a comprehensive compressive contraction of activity and, more ominous, of technological progress. The world can’t cope with contraction. For one thing, it wreaks havoc in the mechanisms of capital formation. Capital can only be formed under conditions where interest can be paid. That is, loans are only tenable when they can be paid back with interest. Hence, the current insanity in world financial markets and banks – the mad scramble to pretend that interest payments will be made on bailouts tendered to nations that cannot make interest payments.

     The assumption that this craziness can go on forever without consequence is now dissolving in an international mood of frantic despair. The spotlight for the moment is on Europe because that is where the games of hot potato and musical chairs with the most players are underway. The mutual entanglements over money tendered and interest owed are so complex and abstruse that the number of moves needed to complete the games seems infinite. But trafficking with infinity is itself one of the universe’s most hazardous ventures – it invariably ends in the death of the adventurer. What’s more, the trajectory to that sorry ending accelerates fastest in the last moments of the venture. Hence, expect Europe to melt down like an overheated nuclear reactor, with an aftermath of deadly political goop oozing out to make parts of the continent unable to support human life at levels we are currently familiar with, i.e. civilized society.

     That is to say I’d expect a lot of internal disorder in the nations of Europe in the decade to come, before there is even a chance of anything that resembles war between nations breaking out – and by the time war does occur, it may be fought with crude swords and helmets forged out of the scavenged detritus of a bygone age.

     The current extravaganza across the Atlantic Ocean has taken the spotlight off doings here in our own colossal floundering confederation of quasi-sovereign American states. Our situation with money spent and interest due – and the resulting impairment of capital operations – only seem less dire in comparison. It’s just that we are playing a different game than hot potato and musical chairs. Our game is more like the old American schoolyard game called salugi (suh-looj-gee), or “keep-away.” The “big kids” (the one percenters) like Jamie Dimon, Jon Corzine, Lloyd Blankfein, et al, have stolen the baseball mitts of the dweeby little kids (the 99 percenters) so that most of the people in this country feel that they cannot participate in the national pastime anymore. The big kids have certain advantages, obviously, but sooner or later they run the risk of being torn to pieces by the vengeful mob. Of course, that happens when the game stops being simple keep-away but seems more and more a matter of larceny — “they stole our mitts!”

     When that moment arrives anything might happen politically here in the North America, from a corn-pone Nazi takeover of central government to a complete dissolution of the republic into autonomous and even hostile regions. Similar games and outcomes are possible in China, Russia, and the nations of the Middle East. In fact, the tendency world-wide in the face of accelerating compressive contraction will be to break up large political units into smaller units. The main question is: how much heat will that process of global fission generate as we lurch into a world made by hand.

5 Comments on "Kunstler: Hazardous Games"

MrEnergyCzar on Mon, 18th Jun 2012 6:14 pm 



Peak Oil effects everything in the world. The coming years should be interesting and ugly..

MrEnergyCzar

Plantagenet on Mon, 18th Jun 2012 6:36 pm 



Its no coincidence that the economies of the EU are melting down first—at $9-10 bucks for a gallon of gas, they have the highest gasoline prices in the world.

BillT on Tue, 19th Jun 2012 2:07 am 



Planet, they have had those prices for a long time. That is NOT the problem. They used those prices to produce a much more efficient transportation system than we have in the Us. They do not travel as much or as far as Americans. Their countries are state sized, not continent sized. They just are floundering on the most visible sign of peak oil, the death of for profit Capitalism and Central Banking.

RossT on Tue, 19th Jun 2012 10:37 am 



Peak Paper money and Peak Oil at the same time – How surprising! Trouble comes in threes – Peak Green scares perhaps?

RP on Thu, 21st Jun 2012 10:42 am 



Yes, Europe has a rather efficient public transportation network, but happy motoring certainly exists. It is just less exaggerated- just visit Rotterdam! The tripling of oil prices in the mid-2000 has severely affected Europeans. Energy, including for housing, was always expensive, but these increases have just increased the pain. Capital formation has stunted due to the decline of cheap energy. It’s quite likely that Europe will be more negatively affected unless Russia minimizes trade with the developing world, and instead subsidizes European growth. I doubt that’d happen, though. Those continuous growth rates – vs decline in ours – in the emerging economies means that they can pay a LOT more.