Kunstler says it real well sometimes:
This sucker is going down because the train of bankruptcies underway has a remorseless self-reinforcing power to provoke more and more bankruptcies at every stop along the line as every promise to pay is welshed on. The mortgages will not be paid and securities will not pay their investors and the banks will choke on the bad paper promises in their vaults and the pension funds will not pay their beneficiaries and the states and counties and municipalities will go broke and not pay their employees and creditors, and the federal government will not be able to “print” new money in sufficient quantities fast enough to compensate for all the money not being paid up-and-down the line… and one morning we will wake up and discover that all those promises to pay were sham promises based on no productive activity whatsoever… and that will be a sad day. Perhaps the Dow Jones Industrial Average will hit 35,000 on that day.
There’s a lot of fat in the system, here’s a short list of “normal” crap that can be discarded with very little jolting of personal well being:
Ipods and all the peripheral gadgetry – back to low power am radio.
Cell phones and calling plans etc – POTS on a landline once again.
The new car, or the second car. Insurance on 1 vehicle is hard enough.
Jet ski atv speedboat, and the dock space, trailers, and vehicles to haul them around.
Netflix, computer games, Dominoe’s pizza..
The list can go on, and the thing that I look for is indications that these are being discarded. A boat on the side of the road for sale means that household is culling fat. Stumps me why the same yard isn’t turned over to a vegetable garden. How can the climate be so bad if new furniture stores are still open – when 2nd hand shops are packed with hardly used stuff at half the price? Do you sell your jet ski and go buy a sofa set?
And who’s buying all the shit for sale? Everybody I know is just cranked down economically pummeled and yet there are 8 walmarts within 50 miles of me – and this is not a metropolitan area by any stretch of the imagination.
I’m gotten past the sense of imminent catabolic collapse but I can’t understand how shit keeps going on and on – there’s no manufacturing, no production of real goods, no real reason for people to have any pocket change at all! When a mortgage goes belly up does some entity profit, and send the proceeds trickling down the food chain enabling a quicky mart clerk to head to the mall and buy a 50 dollar pair of jeans for his kid?
It must be some kind of magic. A strange voodoo on money where it doesn’t take any to have buying power. From the same article:
And there is likewise surely a huge effort underway in the banking sector right now to cream off as much cash as possible so that when this sucker does go down they will bethink themselves better positioned to survive the consequences.
I think the huge effort part is right, but it is an effort to absorb as much devaluation as possible as fast as it can be absorbed. “Consumers” may not be borrowing much these days but they are still making those interest payments which may be the voodoo money keeping everything alive. 1 out of 10 defaults means 9 are still feeding the vampire. The financial community seems to be absorbing the defaults fairly well, and as long as it continues we can contract our way down to a bag of turnips without things going bazzoo.
So here’s to the power masters handling the decent into our agrarian peasant future – good job so far and best of luck in the days ahead. 300 million bummed out people resigned to a state of general crappiness is a lot better than 300 million going ape shit. Joe Blow used as much gas as Mr. Jet Set so peak oil is on everybodies scorecard, along with any other type of resource depletion. The typical credit card holder spent money he didn’t make just like the banksters created shit out of thin air so share the blame ‘merica – everybody is all in. The future of the sheeple is shit no matter which way it goes, but the future of the elite is still up in the air. Joe Blow is still going to mindlessly spend every dime he can get his hands on buying shit he doesn’t need if he can, but those at the top have a lot more to loose and if they don’t play their cards right it’s blood in the streets time. I’m going to root for the Ivy Leaguers on this one.
WTF Comrade? You gone soft on us? Nope. The right wing is screaming louder at the banks that the socialists ever did, so I figured I ought to spend some time making sure my reality tunnel wasn’t too ridged. It’s a luxury I can indulge in since my food doesn’t come from the Wal Mart…
I just read your column here, I gotta put some thoughts together, maybe tomorrow. I wish I could be so “eloquent” in writing as you are, Comrade. You seem to always envoke a think-tank of sorts for me.
The whole thing is smoke and mirrors. Funny money pulled out of thin air. The only reason things haven’t gone “bazoo” is because John Q. Public ain’t quite bright enough to realize that his FRNs and his Monopoly money are interchangeable. As long as John Q can get his beer and funyuns, all is well in la la land. It’s gonna take a major jolt to wake ol’ John up, the PTB know it, and they’re doing their best to shore up the dam with toothpicks and bubblegum. Like Kunstler said, so the big cheeses can skim as much as they can before the bazoo hits the fan, when they’ll be safely tucked away in their well stocked bunkers, surrounded by armed goons. Safe from the torch ‘n’ pitchfork crowd. Hold on to yer hat Comrade, it’ll be a slow slide, but that last bit will be a doozie….
Yeah Charlie, it’s become so trendy to rail at the evil bankers that I figured alternate thinking may be in order to see through the run of red herrings clotting the consciousness stream.
I think about Mayberry’s phrase “going Galt” What if the money wizards just took their pie and went home… Instantly that would be TEOTWAWKI
“What if” TPTB weren’t “skimming” but working their ass off to keep this contraction from rupturing like a bad appendix. Forget about a Maddoff here and there, I visualize serious financial heads burning the midnight oil in their quest to zero out trillions of dollars worth of derivative liabilities. Hoping to god that John Q just STFU and stays glued to the tv.
At Endgame there are only two classes of humans… Petroleum Man and Non Petroleum man. John Q is just as dependent as the Power Elite.
Hahahaha… kind of like republican and democrat.
It will keep running until one day it just stops. The coyote will look down and finally notice he just followed the road runner off a cliff. It could get ugly, real ugly.
Well on my way to being Non Petroleum man. Using 5 – 10% of what I used to burn. Who can afford that stuff anyway?
I’m simply amazed at how long the whole mess has kept going. Plenty of people invested in the current system. (or at least the current illusion).
I’ve spent time scratching my head about the same thing. Saw an article in the Sacramento Bee the other day that sales tax revenues were down 25%. That’s the losses so far. I figure that about 25% of the economy actually produces some needed good or service and the rest is carefully whitewashed socialism.
Not that I’m against socialism mind you; it’s just that I think if that’s the system we’re going to have we should quit pretending it’s something else.
I think you may be right, TPTB are running scared, hoping to god the sheep don’t find out what the hell they’ve been up to. Hoping “Jo-Six-Pack” doesn’t find out how bad he been getting it in the ass all these years. I gotta still feed the beast, but everyday seem to drift further away from it, slowly becoming, as my in-laws say, a bit “anti-social” these days. Nah, just spent waaaay to many years runnin’ on the ‘ol rat wheel. People gotta realize the whole world is a great big ponzi scheme. There’s only so long we can clip each others toenails, and cut hair for a living, without actually producing a damned thing. The “economic freight-train” has done run outta steam, she’s slowin’ down.
What’s real is whats growing in the garden, the critters munching and pecking, and the sun will still rise this morning, and the cycle of life will continue.
Seems to me that there are two groups that we might call preppers. At the top of the heap are those that are raking in the bailout bucks and building mountain retreats and underground bunkers. At the bottom of the manure pile are… well, us! Since all history seems to be revisionist to some extent, I’m not sure if it would be possible or if it would even make sense to determine if it was better to be on the top or the bottom of the manure pile. I think I’ll leave this one alone at this point, but like always, I do have my own opinion.
tired john