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Page added on November 9, 2015
Kunstler: The Leviathan
The economic picture manufactured by the national consensus trance has never been more out of touch with reality in my lifetime. And so the questions as to what anyone might do can hardly be addressed. How can I protect my savings? Who do I vote for? How do I think about where my country is going? Incoherence reigns, especially in the circles ruled by those who guard the status quo, which includes the failing legacy news media.
The Federal Reserve has morphed from being a faceless background institution of the most limited purpose to a claque of necromancers and astrologasters, led by one grand vizier, in full public view pretending to steer a gigantic economic vessel that has, in fact, lost its rudder and is drifting into a maelstrom.
For more than a year, the fate of the nation has hung on whether the Fed might raise their benchmark interest rate one quarter of a percent. They talk about it incessantly, and therefore the mob of financial market observers has to chatter about it incessantly, and the chatter itself has appeared to obviate the need for any actual action on the matter. The Fed gets to influence markets without ever having to do anything. And mostly it has worked to produce the false narrative of an advanced economy that is working splendidly well to the advantage of the common good.
This is all occurring against the background of a larger global network of economic relations that is quite clearly breaking apart. The rising tensions between the US, Russia, China, and the Euro Union grew out of monetary mischief “innovated” by our central bank, especially the shenanigans around debt monetization, which have created dangerous distortions in markets, trade, and perceptions of national interest. Nations are rattling sabers at one another and bluster is in the air. The world is bankrupt after thirty years of borrowing from the future to throw a party in the present, and the authorities can’t acknowledge that.
But they can provide the conditions for disguising it, especially in the statistical hall of mirrors that once-upon-a-time produced meaningful signals for the movement of capital. Instead of reality-based choices and decisions, the task at hand for the people in charge has been the ever more baroque elaboration of a Potemkin economic false-front, behind which lies a landscape of ruin scavenged by desperate racketeers. That this racketeering has moved so seamlessly into the once-sacred precincts of medicine and higher ed ought to inform us how desperate and perilous it has become.
The latest installment of the disinformation game was Friday’s employment release from the US Bureau of Labor Statistics. It was a “blockbuster,” implying blue skies everywhere from Montauk to Malibu. Except that no one with a remaining shred of critical faculty can be expected to believe it. 80 percent of the new jobs numbers were attributed to the mystical birth-death model, a pseudo-scientific fantasy of hypothetical new business starts and associated hypothetical new hires. Demographically, the most new jobs went to the over-55 age cohort — grocery baggers and Walmart greeters — and the fewest to men 25 to 54 (that bracket substantially lost jobs). The official unemployment rate fell to 5.0 rate, with no meaningful discussion of the huge numbers of discouraged people who have dropped out of the workforce.
But the perception of an economy on full throttle chug sent the stock indexes up. The Dow, the S & P and the NASDAQ are the only signaling mechanisms that the legacy media pays attention to, and the politicos take their cues from them, in a feedback loop of false information that begets more delusional positive psychology in those same markets. I suspect the sentiment that reigns now is about nothing more than getting through the holiday season without a financial accident.
But this Fed now finds itself in a trap of its own making. Having so interminably yapped about the interest rate hike, the central bank will have to put up or shut up in December. Only the year-final BLS employment figures might give them an out, if the numbers don’t look so phosphorescent. I think the truth is, this phony baloney economy can’t withstand even a measly quarter-point benchmark interest rate hike. For one thing, it would blow up the operating models of Fannie Mae and Freddie Mac, the buyers of home mortgages who are keeping the construction industry on life support, as well as the parallel rackets in securitized auto and student loans. Imagine all the derivatives bets that would go south. In reality, the Fed knows that it will have to shovel more ZIRP money into the debt-saturated maw of a dying financial leviathan. It can do that, of course, and probably will in the coming winter of 2016, but when that time comes, it will have absolutely no credibility left. And the leviathan will be a little closer to heaving up dead on the beach.
33 Comments on "Kunstler: The Leviathan"
onlooker on Mon, 9th Nov 2015 11:37 am
It has always been about confidence in the system. As a proverbial Ponzi scheme it cannot continue
if their is not constantly newcomers enlarging the pie and players contributing to the game or staying in the game. The result as aptly pointed out by Kunstler is this huge disconnect between reality and the talking heads, official disclosures and media emissions. In fact a neat website seems to keep track of this constant hyperbole coming out from official channels. http://www.shadowstats.com/
Plantagenet on Mon, 9th Nov 2015 12:15 pm
Obama and the Ds tell us over and over again that the economy is doing great and job numbers are booming. I’m with Kunstler on this one—I don’t the economy is doing nearly as well as Obama claims it is.
Cheers!
Boat on Mon, 9th Nov 2015 1:19 pm
It’s all spin Plant. Compared to 2009, the economy is awesome. Compared to 2005, not so much.
Dredd on Mon, 9th Nov 2015 1:24 pm
Let them eat jellyfish (A Paper From Hansen et al. Is Now Open For Discussion – 3).
shortonoil on Mon, 9th Nov 2015 1:38 pm
The FED is owned by its member banks; the TBTF pack. After the 2008 crash those banks were left holding $trillions of “assets” (crappy home loans) that were marked to myth, and became worth somewhere between 5 and 20 cents on the dollar. They were technically insolvent. To save those banks and itself, it received permission from Congress to print up a few $trillion to cover the losses. The FED’s action were never to save the nation, they were to save its self.
The FED doesn’t print shoes, automobiles, houses, or Big Macs; it prints currency. The money (real things) to back up their currency must come from somewhere else. That somewhere has been a massive expansion of debt. The Shale fiasco accounted for a $trillion dollars in development of uneconomical production that can never pay back what it has spent. Subprime auto loans, student loans, and more Freddie Mac are a few more $trillion that will never be paid back! The US is now swimming in debt it can never repay.
Oil was the nation’s ace in the hole; the Petrodollar was used to buy US debt. With oil at $100 the oil producing nations had plenty of dollars to buy that debt. With oil at $45 (thanks in part to the FED subsidizing uneconomical production) they are going broke, and soon are gong to want some of that money back. The only problem is – its not there; the TBTF banks soaked it up in bad investments, and $500,000 per year bonuses. Congress helped by financing $billions to wage war on terrorists that never appeared, and blowing up Middle Eastern wedding parties.
The oil age is now in its golden years. King Oil has now become a decrepit old relic that can barely power his own production. The King owned the Goose that laid the Golden Egg, but the FED is trying to kill the bird for a final feast. They are planning on having stewed Goose for the last banquet that they host! EXXON, Chevron, Marathon, and Hess will be saved for desert!
Plantagenet on Mon, 9th Nov 2015 1:58 pm
Nice blog, Dredd.
Lots of good info there.
I’ll check your blog out often in the future.
Cheers!
idontknowmyself on Mon, 9th Nov 2015 2:10 pm
Here are the three main narratives about white man supremacy:
1- Feminism: white man is violent and has oppressed women in past. He must redeemed himself be letting the state to fuck him over in divorce court.
2- Racism: white man is a supremacist and violent racism. He must redeemed himself by opening his countries to immigrant and provide for them.
3- Lack empathy: white man lack emotional compassion and he should make sure not to offend anybody by his words ,opinions or actions. He must redeemed himself by not speaking and obey the power structure in place.
People wonder after that why the white man is killing himself at a greater rate or disconnecting himself from the society
If you are a white man and want to kill yourself. you should try dead by ass smothering. Here is a sample how to do it
http://www.ballbustingtube.com/video/1965883/facesitting-bust
idontknowmyself on Mon, 9th Nov 2015 2:24 pm
University Of Missouri President Resigns After Claims He “Enabled A Culture Of Racism”
http://www.zerohedge.com/news/2015-11-09/amid-growing-tensions-mizzou-president-resigns-after-claims-he-enabled-culture-racis
I forget a forth narrative:
Global warming: You must say human are bad and cause global warming, even if their mathematical models have been proven to be complete bullshit and Antarctica and arctic ice cap are growing.
onlooker on Mon, 9th Nov 2015 2:41 pm
IDontknow, I presume you are a white man in which case a fifth narrative should be included white men are dumb. Seriously you are embarrassing yourself and all white men with your global warming denial and your victimization posture. Is your position also one of denying white men have held and hold inordinate power in the world?
As for the post by Short, yes we will be attached to oil for as long as we possibly can, which may be too long considering climate change.
Pennsyguy on Mon, 9th Nov 2015 4:41 pm
Help me John Wayne—girls and minorities ae picking on me!!!!!
energy investor on Mon, 9th Nov 2015 4:56 pm
Onlooker, on global warming…99+% of us have no idea whether humans are the principle cause of climate change or not. We just accept what the “experts” tell us.
So I am content to embarrass myself by saying that I am still sitting on the fence because there is enough reason to do so in our part of the world.
It does make me extremely uncomfortable that dissenting views and data are ridiculed rather than reasoned with. I suppose it will soon be illegal to hold opposing views?
If/When that happens I will obey the law…however reluctantly, until I am able to satisfy my curiosity.
onlooker on Mon, 9th Nov 2015 5:10 pm
Energy, it is not what the experts tell us, it is what the science tells us and is deciphered by the experts. Measurements have been made of solar output and they cannot and do not account of the level of warming we have had. What is more the CO2 that has been emitted in the last century or so along with the current levels all point to and direct correlation between high CO2 amounts and emissions and global climate change. Their is nothing particularly mysterious about all this. The sciences is quite clear that is why their is practically unanimous consensus among climate scientists of global warming and of our role in this process.
rattus on Mon, 9th Nov 2015 5:22 pm
Thank you energy investor. Finally someone who’s not afraid to go against the so called “consensus” of these so called “experts”.
Please share with us all that dissenting data showing that human are not the principle cause of climate change. I’ve been looking for this data but everything I found so far deserved to be ridiculed.
Thanks in advance!
ghung on Mon, 9th Nov 2015 5:23 pm
energy investor said; “99+% of us have no idea whether humans are the principle cause of climate change or not.”
Not sure where you came up with that number, but I expect you just pulled it out of your ass. Either way, you can put me in the 1%. Anyone who has any kind of science and mathematics background, and common freaking sense, can figure out that dumping gigatons of fossilised carbon into the atmosphere every year will have serious effects on the climate, especially as we degrade the biosphere’s capacity to re-absorb that carbon in some extraordinary and massive ways. Principle cause? Jeez… It doesn’t take a climate scientist to figure that out; just someone not prone to religiose self-deception and an IQ over about 80. I’m thinking most of you have serious problems understanding huge numbers and deep time; the time it took geological processes to bury all of this carbon. We dug it up and burned it in a couple of hundred years.
Whether or not it’s stupidity or a cowardly inability to admit that we, humans, are trashing the planet won’t matter much to our grandkids. They’ll hate our guts and piss on our graves.
idontknowmyself on Mon, 9th Nov 2015 5:46 pm
kdjkdjeoijdmlkdlk;mdpoiemldm kddkldkl klddddc kldkldkljdkljdkl
idontknowmyself on Mon, 9th Nov 2015 5:47 pm
kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk
onlooker on Mon, 9th Nov 2015 5:52 pm
Are you some troll?
idontknowmyself on Mon, 9th Nov 2015 5:53 pm
ereee
Plantagenet on Mon, 9th Nov 2015 6:02 pm
idon’tknow is a computer. Right now its offline. When it reboots it will stop posting gibberish and return to posting disconnected sentence fragments from its corrupted hard disks.
idontknowmyself on Mon, 9th Nov 2015 6:02 pm
i cannot believe how stupid the young Canadian and American are. Young people are totally worthless, cannot : sew, cannot weld, cannot build anything
onlooker on Mon, 9th Nov 2015 6:11 pm
Oh I see Know is a Bot with a bad attitude hahaha
idontknowmyself on Mon, 9th Nov 2015 6:54 pm
Another thing youngtards, don’t expect us old fart to give a shit when this thing collapse and participate to rebuilding it.
You are alone youngtards.
This is what another older man think of you stupid yourgtards:
https://www.youtube.com/watch?v=s3BlyPLEyQc
apneaman on Mon, 9th Nov 2015 6:56 pm
energy investor, try investing in a book (and study it) on debate, logic and rhetoric. You’re a fucking amature. Seriously, a child denier could do better than that. Here, I’ll just do a couple of minor changes to your comment so you can see what I’m getting at.
Onlooker, on gravity…99+% of us have no idea whether it’s the principle cause of humans not floating off into space or not. We just accept what the “experts” tell us.
So I am content to embarrass myself by saying that I am still sitting on the fence because there is enough reason to do so in our part of the world.
It does make me extremely uncomfortable that dissenting views (the any thing but gravity theorists) and data are ridiculed rather than reasoned with. I suppose it will soon be illegal to hold opposing views?
If/When that happens I will obey the law…however reluctantly, until I am able to satisfy my curiosity.
See gravity or climate change the’re both physics – who can trust those people and their so called scientific method? What has it ever done for us?
makati1 on Mon, 9th Nov 2015 7:04 pm
JHK is spot on again. The world is just about to drop into the shitter and the big hand of reality is hovering over the lever. You can already smell the sewer we call the financial system. It’s just a matter of time.
THAT is why I ignore articles about Social Security running out in X number of years. It will not exist before that date arrives. When the US economy goes, all the government money will dry up.
Nor do I have any ‘retirement plans’ that involve the financial system in any way. Those ‘plans’ are just ones and zeros in a computer and will vanish in the blink of an eye someday soon.
Ditto for bank accounts or loans or credit cards. I use debit cards and only keep enough in my bank accounts to keep them open. Less than $100 total.
But then, I do not live where you need to be in debt, and therefore, in servitude to the masters. Bad enough I have to be electronically strip searched when I make my annual visit to the Us. I look forward to the day when I can just stay in the Ps.
BTW: Just saw a cartoon of a group of sheep in a field.
The ewe asks: “Kids, do you know why we are permanently surrounded by these barbed wire fences?
The Lamb replies: “I do Mommy. It’s to keep the terrorists out, so we can all enjoy our freedom.”
makati1 on Mon, 9th Nov 2015 7:05 pm
Why are the comments running off the screen to the right if they are not reduced to tiny letters? Or is it my PC?
Most of the comments are cut off if they are large enough to read.
idontknowmyself on Mon, 9th Nov 2015 7:05 pm
apneman is a typical example of young stupid kid.
apneaman on Mon, 9th Nov 2015 7:10 pm
dontknow, the youngtards are sometimes called a lost generation, but that is wrong. More like abandoned. Every generation is a reflection of those who brought them along. Where does one learn their values from? It used to be the parents and grandparents until recently when they handed that over to the corporate state or at least did not put up much of a fight.
GregT on Mon, 9th Nov 2015 7:58 pm
“Most of the comments are cut off if they are large enough to read.”
Happening to me as well on this thread Mak.
Joe D on Mon, 9th Nov 2015 8:58 pm
I had to copy and paste shortonoil’s comment to a Word document just to read it. Well worth the time and the read as always shortonoil!
GregT on Mon, 9th Nov 2015 10:08 pm
Thanks for the tip Joe D!
theedrich on Tue, 10th Nov 2015 3:40 am
Economics has long been faith-based religion.
The world has an obligation to believe ardently in the “full faith and credit” of the U.S. regime.
Once that belief system is lost, the game is over.
Given this fact, the Fed and the crepuscular creature in the oval office are ramping up the hypnosis program
that has proven so successful for so long.
But somehow the facts of corruption and Grand Theft Government are beginning to dawn on Joe Average.
So the media are accelerating their efforts to manipulate the mass mind with sedatives and diversions.
They are fixated on their hatred of Trump, their “concern” about the misrememberings of Carson the Negro,
while they shower their affections on Hotflash Hillary.
(In a former election cycle, concerned women nationwide wanted to buy the same eyeglasses as vice presidential candidate Sarah Palin.
Perhaps this time, they will be clamoring to know where Hotflash has bought her false teeth.)
Meanwhile, prompted by Christian “values,” the White man has lost his desire to live.
Filling in the resulting vacuum are the chimpanzees who claim that their lives matter.
Seeing their opportunity, Mohammedans are also jumping in on the feeding frenzy.
As the economy begins to disintegrate, we can expect its masks to deterioriate.
When the Christmas buying season is over and the temp employees are dismissed, the fun will really begin.
The nation will turn economically atheist.
MSN Fanboy on Tue, 10th Nov 2015 5:38 am
theedrich
I read everyone of your posts and find myself in complete agreement.
I guess that makes me a “racist” lol
But seriously, you speak truth to power, and nobody likes truth.
theedrich on Wed, 11th Nov 2015 1:21 am
Thanks, Fanboy. Truth can be painful in the extreme. Especially when it causes cognitive dissonance by opposing popular wishdreams.
Just one example: the maniacal onslaught on biologists and paleontologists for daring to say that evolution really happened,and that man belongs to the primate order.
Every ad hominem attack in the book has been thrown at the proponents of evolutionary science (even against those who are religious).
And, of course, few can bring themselves to reject the ancient ancient perversion of the Adam and Eve myth
(i.e., of man’s rise to consciousness) — and its “talking snake” (a metaphor for curiosity) — as the true basis of White Guilt,
a perversion now dragging us into the grave.