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“Don’t look back — something might be gaining
on you,” Satchel Paige famously warned. For connoisseurs of civilizational
collapse, 2014 was merely annoying, a continued pile-up of over-investments
in complexity with mounting diminishing returns, metastasizing fragility, and
no satisfying resolution. So we enter 2015 with greater tensions than ever
before and therefore the likelihood that the inevitable breakdown will
release more destructive energy and be that much harder to recover from.
I
don’t know how anyone can trust the statistical bullshit emanating from our
government reporting agencies, or the legacy news organizations that report
them. Yet the meme has remained firmly fixed in the popular imagination: the
US economy has recovered! GDP grows 5 percent in Q3! Manufacturing
renaissance! Energy independence! Cleanest shirt in the laundry basket!
Best-looking house in a bad neighborhood…!
¡No hay problema!
This
is simply the power of wishful thinking on display. No one — with the
exception of a few “doomer” cranks — wants to believe that industrial
civilization is in trouble deep. The staggering credulity this represents
would be a fascinating case study in itself if there were not so many other
things that demand our attention right now. Let’s just write this phenomenon
off as the diminishing returns of career log-rolling in politics, finance,
media, and academia. All the professional “thought-leaders” pitch in to
support the “hologram” of eternal progress that issues their paychecks and
bonuses. This culture of pervasive racketeering that we’ve engineered has
made us obtuse. The particular brand of stupidity on display also points to
another signal vanity of our time: the conviction that if you measure things
enough, you can control them.
I’m
of the view that the measurers only pretend to measure and can only pretend
to control things, especially in the most fragile of the systems that we
depend on for running all the other systems of techno-industrial economic
life: finance. The pretense has endured a lot longer than many of us had
expected. The legerdemain employed by banking officials and their handmaidens
was greatly augmented by the sheer wish that fragility (i.e. risk) had been
successfully and permanently banished from the universe. That “magic” at
least sustained a universal faith in currencies until the middle of last year
when so many monies went south — except the dollar, levitating on blowback of
the deflationary wind flattening everything else.
All
this unreality in money and markets should be expected in the conditions just
preceding systemic collapse of an entire trans-national industrial
civilization, just as one should expect societies to construct their most
grandiose monuments to themselves shortly before collapse. The Mayans R us.
One year, they were cavorting bloodthirstily atop their garish painted
pyramids and a generation later the jungle was stealing back over the temple
steps and the population was a tenth of its former size. The same thing is
going to happen to us, except there will be a hell of a lot more worthless, toxic
debris left on the landscape.
Of
course, even that is a more long-term projection than the exercise at hand
calls for, viz.,
the forecast for measly little 2015. So without further throat-clearing,
permit me to break it down for you:
Finance and Banking
As
2014 closed out, that kit-bag of frauds, swindles, Ponzis, grifts,
bait-and-switches, and three-card-monte scams is looking at least as wobbly
as it did in 2007 when Wall Street was busy manufacturing booby-trapped MBSs
and CDOs. Except we know the true aggregate risk at stake has only
grown larger and more hazardous due to all the strenuous efforts by
authorities since the panic of 2008 to evade any natural process for clearing
mal-investment and debt gone bad. A lot of that stank was simply shoveled into
the Federal Reserve’s basement, where it sits to this day, composting
steamily. As to be expected (and averred to in my previous books and blogs)
financial repression, market intervention, and statistical distortion will
produce ever more financial perversity. That is the hazard in decoupling
truth from reality. Imposed dishonesty will always express itself in
unexpected ways. Who expected the price of oil to fall by nearly half in a
few months? (More on that below.)
These
days, perversity expresses itself in a morbidly obese dollar gorging on junk
while bulimic currencies elsewhere projectile-vomit their value away as the
economies attached to them die of malnutrition. Perhaps this comes as a
surprise to central bankers standing at their control panels like recording
engineers at the soundboard, tweaking all the dials and slides expecting to
achieve a perfect
repressive inflation rate of 2-plus percent so they can melt away the onerous
debt of sovereign balance sheets and Too Big To Fail banks — incidentally
squeezing the citizenry of purchasing power in small annual increments that
add up, after a while, to worthless money. They did manage to extend the
inflation of stock market indexes another year, which the public is supposed
to interpret as “prosperity.” Half a trillion dollars in stock buybacks of S
& P companies were executed in 2014, much of it done with money, i.e.
“leverage,” borrowed at zero interest. Stock buybacks boost share prices, of
course, but they don’t represent any real increased value in a given company.
They’re just snakes eating their own tails.
The
belief that the world’s “reserve” currency is an implacable force, and that
central bankers are omnipotent has made this trade appear to be an
irresistible trend — Don’t
fight the Fed! Since it’s a matrix of fraud based on thin air
money detached from real productive activity, it is certain to blow up. And
since 2015 is seven years past the last blowup, it can happen any time. All
it requires is some small slippage somewhere, that one equivalent extra grain
of sand or snowflake to bring the accumulate mass of false value down in a
financial earthquake or avalanche. That obese dollar has been gorging on the
equivalent of cheez kurls and Little Debbie Snack cakes, so it only grows
more diseased as it gains weight. Sentient observers cannot fail to notice
the advancing sickness.
Meanwhile,
the US is stupidly waging currency war against other nations that can only
blow back by incurring the animosity of every trading partner we have on the
only planet available to live on. In 2015, I expect Russia to enlist China’s
aid in undermining the dollar’s reserve status. Both countries have weaponry
in the form of cash reserves and gold in their vaults. They also have the
computer hacking expertise to start seriously messing with US markets — as
much Fed technicians and TBTF bank algos do — bringing on mysterious flash
crashes, derivatives “accidents,” and other abnormal events that will leave
even the Goldman Sachs MIT graduates scratching their heads. Such hacking may
accomplish what years of arrant market interventions by US technicians failed
to produce: a deadly loss of faith on all the institutions that govern money
and markets. Then the US will be the cleanest shirt in a laundry basket that
is on fire.
The
dollar these days represents two kinds of capital. The first is the stuff
that the US has built and invested in since, say, the end of World War Two: a
wasteland of aging and decrepitating suburban sprawl, that is, the infrastructure
of a living arrangement with no future, the greatest entropic sink in human
history. It extends to whole cities and their subsystems, e.g. the hell-hole
of Las Vegas with Hoover dam and the dwindling reservoir of Lake Mead. Before
mid-century, Las Vegas will be as desolate as Egypt’s Valley of the Kings.
Try to imagine the money that went into building all that stupid shit in the
desert. In another decade, across America, the housing subdivisions and
commercial highway strips filled with tilt-up box stores, muffler shops and
burger dispensaries will retain less value than the pyramids of Palenque had
for the Mayans after their society rolled over and died. The so-called real
economy is a New Age serfdom of burger fryers and janitors, indentured to
that entropic sink. Below them is a widening slough of methedrine, child
abuse, and tattoo art on its way to becoming Soylent Green. To put it
bluntly, the dollar is entropy’s algo bitch.
The
second kind of capital the dollar represents is the imaginary value based on
sheer lying, making shit up, and borrowing from a future that has no chance
of being paid back. This is the capital ginned up on “American
exceptionalism” and “energy independence,” fairy tale memes functioning as
collateral for the aforementioned malinvestments that add up to “The American
way of life.” This capital has no substance, since it is just made up of
intellectual and emotional dishonesty. This is the kind of constructed
narrative that addicts and other functional cripples resort to to justify
their behavior, and the fragility of it will sooner or later lead to the
well-known condition of “hitting bottom.” That is the event horizon where the
remnants of America enter what I call the World Made By Hand. It will
be the greatest socio-economic shift since the fall of Rome, only much
swifter.
Oil
It
really deserves a sub-category of its own because it is the primary resource
of our techno-industrial society and its troubles lie behind much of the present
disturbances of our times. Despite the triumphal agitprop of the past few
years, peak oil is for real. It just manifests more strangely than most
people thought, namely, the simpleminded idea that it would only show up as
ever-rising prices. No, I made point in The Long Emergency (2005) —
and other commentators did too — that peak oil would manifest as volatility.
And so since the actual moment of peak conventional crude around 2005, we’ve
seen pretty wild oscillations in the price of oil. This is due to the harsh
reality that the price people and enterprises can afford to pay for
increasingly harder-to-get oil is less than the price that makes it possible
to get it. This sets up a yo-yo-ing instability in economic performance that
exacerbates even normal wave patterns in the business cycle (which are, in
turn, aggravated by banks and governments’ interventions such as ZIRP to
suppress those cycles). Below $70-a-barrel the producers go broke; above
$70-a-barrel the customers go broke. So the price wobbles up and down as
financial Ponzis like shale oil are introduced onto the scene in the hope
that debt finagling and mineral rights leasing scams can substitute for
physics and geological reality. One trouble with this is that each violent
oscillation generates more economic and financial destruction. Activities
like motoring, aviation, manufacturing, and retail are badly affected and the
entire financial system is made more fragile by worsening increments. Most
importantly, the cost structure of the oil industry itself gets battered to a
degree that fewer companies can survive to produce the remaining oil.
The
big story for 2014 was the crash of oil prices. It is yet being celebrated in
other blogger’s 2015 forecasts as a boon to America. Wait until they find out
that almost all of the “good jobs” added in recent years were associated with
the shale drilling industry that is now being put out of business by low oil
prices. Wait until they find out how the failure of junk bond financing
thunders through the bond markets and the savage wilderness of derivatives —
and ultimately into their ruined pension funds. Wait until they discover that
it was but a symptom of the compressive deflationary depression now gripping
the entire techno-industrialized world.
Here are my financial forecast particulars for 2015:
- Early
in 2015 the ECB proposes a lame QE program and is laughed out of the
room. European
markets tank.
- Greek
elections in January produce a government that stands up to the EU and
ECB and causes a fatal slippage of faith in the ability of that project
to continue.
- Second
half of 2015, the rest of the world gangs up and counter-attacks the US
dollar.
- Bond
markets in Europe implode in first half and the contagion spreads to the
US as fear and distrust rises about viability of US safe haven status.
- Derivatives
associated with currencies, interest rates, and junk bonds trigger a
bloodbath in credit default swaps (CDS) and the appearance of countless
black holes through which debt and “wealth” disappear forever.
- US
stock markets continue to bid upward in the first half of 2015, crater
in Q3 as faith in paper and pixels erodes. DJA and S & P fall 30 to
40 percent in the initial crash, then further into 2016.
- Gold
and silver slide in the first half, then take off as debt and equity
markets craters, faith in abstract instruments evaporates, faith in
central bank omnipotence dissolves, and citizens all over the world
desperately seek safety from currency war.
- Goldman
Sachs, Citicorp, Morgan Stanley, Bank of America, DeutscheBank, SocGen,
all succumb to insolvency. American government and Federal Reserve
officials don’t dare attempt to rescue them again.
- By
the end of 2015, central banks everywhere stand in general discredit. In
the US, the Federal Reserve’s mandate is publically debated and revised
back to its original mission as lender of last resort. It is forbidden
to engage in further interventions and a new less-secretive mechanism is
drawn up for regulating basic interest rates.
- Oil
prices creep back into the $65 – $70 range by May 2015. It is not enough
to halt the destruction in the shale, tar sand, and deepwater sectors.
As contraction in the failing global economy accelerates, oil sinks back
to the $40 range in October…
- …unless
mischief in the Middle East (in particular, the Islamic State messing
with Saudi Arabia) leads to gross and perhaps fatally permanent
disruption in world oil markets — and then all bets are off for both the
continuity of advanced economies and for peace between nations.
Geopolitics
The signal
event of 2015 will be the disintegration of Tom Friedman’s global economy,
the trade and banking relations we have known for about a quarter century,
especially the frictionless flow of goods and capital between East and West.
The tactical blunders of the USA and its Euro-partners drive the so-called
emerging markets, led by China’s Shanghai Cooperation Organization, into a
skein of work-arounds to undermine and avoid the US dollar trade. They don’t
exactly replace the dollar as the world’s reserve currency but the
workarounds lead to a period of worldwide currency turmoil that can only be
resolved by monies being at least partially backed by gold. Both China and
Russia will continue to work to convert their dollar reserves into Gold
whenever possible. Meanwhile, America and Great Britain’s campaign to
discredit and devalue gold will only permit their rivals to acquire more at a
cheaper price.
The
rest of the world is sick of America’s interventionist shenanigans and its
moronic exported culture of burgers, Grand Theft Auto, and twerking Jezebels.
They are aided by America’s own obdurate foolishness and poor strategic
choices, for instance the blowback from the Ukraine misadventure of 2014. Who
in the White House, Pentagon, or State Department thought it was a great idea
to undermine the fragile stability of Ukraine? Is there any question that
Ukraine was ever not in Russia’s sphere of influence? Or that Russia would
allow it to be dragooned into NATO and used as a forward base for American
firepower? Dmitry Orlov’s explanation for all this is the most
cogent on the web:
“What the
Anglo-imperialists were paying for in corrupting Ukraine’s politics was a
ring-side seat at a fight between Ukraine and Russia. And what they got
instead is a two-legged stool at a bar-room brawl between Eastern and Western
Ukraine.”
Read
the whole darn thing; it’s not long.
We
succeeded in turning a marginally-bankrupt, marginally-independent nation
into a complete basketcase that is going Dark Age as I write — no money, no
work, no fuel, no heat, no food, no prospects. Having completely botched the
operation, and misplayed the game against Russia’s Putin — and Russia’s
legitimate interest in a stable next-door neighbor — the US will now abandon
Ukraine. It will be forgotten as surely as the US-sponsored Ukrainian air
force’s role in the crash of Malaysian Airlines Flight 17 — the incriminating
details of which were buried by the Dutch investigating officials.
Eventually, the Russians will have to care for the dying Ukraine. They will
not be enthusiastic about it. They will do little and do it slowly.
Likewise
our economic sanctions campaign against Russia (including the attack on the
ruble) is now blowing back on the Eurozone’s export economy. Russia has
survived much worse than Western sanctions in recent history. Russia will
survive by turning east to Asia. This is already happening and is well
publicized. What it means for Europe sooner than later is the loss of their
access to imported oil and gas from Russia. Meanwhile, the North Sea fields
and the Dutch Groningen gas field are dying. Good luck staying warm, Europe.
The
blowback of Europe’s foolish partnership with the US campaign to punish
Russia can only discredit the ruling parties and boost new right-wing parties
such as France’s National Front and Britain’s UK Independence Party, both
deeply nationalistic, anti Euro Union, and anti endless immigration.
The
Islamic State was another legacy of blowback from American foreign
adventurism. It was spawned out of the remnants of Al Qaeda in poor, broken
Iraq and its conquests in 2014 ranged clear across northern Syria to several
major cities in Iraq (Faluja, Tikrit, Mosul) right up to the suburbs of
Baghdad. They made a lot of money off of captured oil wells and ransoming
western hostages, and they shocked Western decency with their YouTube
decapitations of hostages that the US and UK refused to ransom. The US’s
response now is to bomb their installations and bivouacs. That can only drive
them, literally, underground. IS will thrive on Western punishment. It has
vast potential to recruit the population of idle, under-employed young men
all across North Africa and the Middle East, and beyond to Europe and the
band of Islamic society that stretches below Russia across mid-Asia. The
catch is, if and when they come to actually rule most of these territories,
they will be running economies reduced to Dark Age levels.
As I
write, King Abdullah of Saudi Arabia has just entered the hospital. At 91, he
is closer to the end of his story than the middle. Meanwhile, the tanking of
crude oil prices has critically impaired an Arabian economy that depends on
oil sales for more than 80 percent of its operating revenue. Much of that
revenue goes to a national welfare system that pays just about everybody to
not work. There will be a lot less money to go around now and a lot of
grievance over it. The population of the Arabian Peninsula is so far beyond
critical overshoot that the situation can only get ugly, especially since a
large part of that excessive population consists of testosterone-jacked young
men under 30 with nothing to occupy their hours but chitchat over tea and
religious mummery. Consider also that when King Abdullah goes, there is
liable to be a deeply destabilizing fight for the throne among the hordes of
princes and competing clans — despite whomever Abdullah has named as his
successor. You may be sure the Islamic State will be standing by to add fuel
to those fires. That, in and of itself, could bring on a fast end of the oil
age. Bear in mind, too, that the eastern side of Saudi Arabia, where most of
the oil infrastructure is, contains a majority Shi’ite population. In a
conflict between Sunni IS and Iran-backed Arabian Shia, a lot of stuff could
just get blown up. At the least, itr could badly interrupt 30 percent of the
world’s oil supply.
China
is obviously struggling to prevent a financial freefall brought on by 20-plus
years of extravagant debt creation and a lot mal-investment in the service of
a very late entry into the techno-industrial frolic. It can’t be denied that
they made a good show of it in a very short time, but they got in at the
blow-off stage. Now conditions are changing unfavorably. The global economy
that made China the world’s workshop is unwinding in a vortex of currency
war, trade friction, territorial dispute, ethnic ill-will, and the
disturbances that attend the great background problem of peak cheap oil.
The
Chinese will work sedulously to try for a soft landing in the great economic
contraction that looms. Chinese banking being non-transparent, overly subject
to blundering central control, and deeply corrupt, may not bode well for that
project. However, China has many cushions to fall back on short-term in the
form of foreign money reserves and stockpiles of raw materials. But sooner or
later they have to reckon with their dependence on continued oil imports.
That is clearly the basis of China’s current flirtation with Russia — but
with Russia arguably past its own oil production peak, that’s not a long-term
strategy. China has cranked up the world’s mightiest production line of
photovoltaic hardware, but solar won’t replace oil the way things currently
run, and whatever they rig up may not last more than one generation if
there’s no supporting platform of an oil economy for the manufacture of solar
replacement parts.
Japan’s
suicidal experiment with hyper-turbo ZIRP and QE is not accomplishing much
except exacerbating global currency carry trades and driving down the
nation’s standard of living. It may succeed in destroying the Yen and what
remains of its economy in 2015. Fukushima remains unresolved and Japan’s
energy future looks plain dismal. They have no energy resources of their own
whatsoever. Any serious mischief in the Middle East oil fields will finish
them off. The nation has been on the fast track to become the first
post-industrial neo-medieval society. They could be fortunate to land back
there and set up their shop while there are still residual riches in the
world to work with. They might also go cuckoo and start a war with China for
control over the oil fields of the South China sea. It is hard to see any
other outcome from such a conflict other than China kicking Japan’s ass.
Geopolitical
forecast particulars for 2015
- Russia
toughs out sanctions imposed by the USA; European partners drop their
sanctions as self-evidently counter-productive. Russia threatens to
post-pone debt repayments to Western banks. The ruble stabilizes.
- Russia
endures Islamic terrorist attacks and responds very harshly,
embarrassing the wimpy West.
- Baghdad
Falls to Islamic State forces. Years of American endeavor are lost just
like that. The IS attempts to use Iraqi oil reserves to fund its
operations. It has a hard time keeping the infrastructure in repair. The
USA refrains from bombing Iraqi oil installations, a decision viewed as
weakness by IS.
- The
Islamic State makes inroads across North Africa. Libya, Egypt, Algeria,
Tunisia, Morocco are all susceptible.
- Formerly
marginal political parties win big across Europe, forcing nations to
rethink wide-open immigration policies. Neo-liberalism sinks into deep
Weimar-style discredit. Open ethnic warfare breaks out in France,
Britain, the Netherlands, Sweden.
- European
economies continue to sink for the simple reason that the growth era of
techno-industrialism is over, along with affordable oil, and no amount
of debt production will bring it back. All the machinations of the EU
and the ECB are dedicated to overcoming this implacable reality, and
thus will only lead to deeper and more intractable problems.
- Beginning
with the late January elections, which Alexis Tsipras’s Syriza
party wins, Greece plays hardball with the EU for debt restructuring
that amounts really to forgiveness of utterly unpayable €322 billion
($398 billion). If the EU calls Greece’s bluff and kicks them out, a
European banking meltdown is almost certain. If Greece stays, then other
hopelessly indebted nations of the EU declare they want the same deal.
Pretty much a rock and hard place. Impossible to call except to say the
situation promises mucho turmoil in 2015. ¡Hay problema!
- Ebola
contagion persists and rips across sub-Saharan Africa. Other nations are
forced to pass severe travel restrictions to-and-from Africa.
- Nigeria
descends into bloody political turmoil as its oil industry falls apart
in response to low prices. UN intervention accomplishes nothing. In wartime
conditions, Ebola gains a foothold in Lagos, one of the world’s most
overpopulated slum cities.
- Pakistan
and Afghanistan both continue to melt down into ungovernability. India
is forced to take over administration of Pakistan and remove nukes. America
continues to pretend that its mission in Afghanistan has some purpose,
but it only remains a black hole of military expenditure and becomes a
rancorous issue in the run-up to the 2016 Presidential election.
The USA Homefront 2015
For
one who has been a close observer of the US socio-political-economic scene
since the Kennedy era, the nation has gotten itself into a pretty sorry
state. The pervasive racketeering that poisons American life from the
money-in-politics farce, to the shameless, chiseling medical-pharma cabal, to
the SNAP-card and disability rights empire of grift, to the college loan
swindle, to the disgusting security state apparatus, to the corporate tyranny
of local life and economies, to the delusional techno-narcissism of the
media, to the despotic and puerile gender preoccupations of academia — all of
it adds up to a society that cares as little for the present as it does for
the future. And that’s aside from the pathetic digital device addiction of
the generation coming up, and the sheer sordid behavior of the tattooed,
drug-saturated, pornified masses of adults now forever foreclosed from a
purposeful existence or a decent standard of living.
Even
physically America is a sorry-ass spectacle: between our decrepitating
cities, abandoned Main Streets, gruesome strip-mall highways, repellent and
monotonous suburbs, dreary industrial ruins, profaned countryside, and
desecrated coastline, there is little left to actually love about This land
is Your Land. We’ve made so many collective bad choices about how we live
that one can’t help feeling we are simply a wicked people who deserve to be
punished.
Whole
classes already are, of course. What used to be a working class with
aspirations has devolved to the forlorn savagery averred to above. Our thought-leaders
are devoid of thought. Our hopes and dreams are absurd sci-fi fantasies
prompting us toward robot-assisted suicide. Our political stratagems of
recent years accomplish nothing except making more trouble for ourselves
while inciting the enmity of people elsewhere.
Barack
Obama’s signal failure — aside from letting the banks get away with murder
and omitting to counter the Supreme Court’s Citizens United decision —
has been his total evasion of measures that would prepare the nation for the
vast changes in social and economic imperative that will attend the
transition out of the techno-industrial era when he is out of office. These
include supporting local small scale agriculture (rather than giant corporate
agri-biz); promoting and supporting the reconstruction of local economic
networks (Main Street business); eliminating multitudinous federal
regulations that prevent individuals and small enterprises from operating;
closing the hundreds of superfluous US military bases around the world;
giving federal support to rebuild the US passenger rail system; promoting
walkable communities — especially the re-activation of existing small towns
and cities — instead of mindless obeisance to the suburban “home-building”
industry (and its step-child in the commercial highway strip development
racket) — and truly reforming medical care without the connivance of the
insurance racketeers.
Obama
and his party can be faulted for fostering the myth that every young person
needs a college degree — leading a whole generation into debt penury for no
good purpose, while depriving society of a long list of vocational roles and
livelihoods based on providing genuine service or value. We will be a nation
of unemployed gender studies graduates instead of plumbers, electricians,
organic farmers, arborists, carpenters, machinists, nurses and paramedics,
small business owners, et cetera.
This
enormous bundles of myths and misplaced expectations for yesterday’s tomorrow
prevents the collective national imagination from summoning a revised
American Dream based on repairing the massive destruction of recent decades.
The
political mood has not been murkier in my longish lifetime. Both major
parties edge toward extinction as the Whigs did in the mid-1850s. The
citizenry not sunk in drugs and depravity — that is, people who still read
the news in some form and would like to care about their country — deserve a
new faction or party that can at least express their discontent with the
current situation. They will surely not get this in the generally supposed
coming contest between Hillary Clinton and Jeb Bush. I hope they will be so
insulted by this dynastic grab that more than one new party will form and
make a big stank
about it. The Tea Party was a good start in that spirit, but it tripped on
its internal contradictions and its association with Dixieland-style
religious fundamentalist idiocy and cracker war-mongering.
All
that redounds on the current state of the Republican Party, a gang of venal
ignoramuses pimping for lost causes. Despite having won the 2014 midterms,
and capturing both houses of congress and governorships, they seem
increasingly out-of-touch with the realities of economic contraction, peak
oil, and climate irregularities. The old magic of stirring up the animals on
social issues of abortion, bedroom activities, and allegiance to Jesus fail
to move the old base, which is becoming economically quite desperate. That
base also becomes conscious of how they have been hornswoggled into voting
against their own interests for years in the sense that author Thomas Frank
so aptly described in What’s
the Matter With Kansas.
Race
relations turned very sour in 2014 with more highly publicized killings of
young black men in ambiguous circumstances. The chief martyr of the year,
Michael Brown of Ferguson, Mo., was a poor candidate for sainthood, and did
not help advance the credibility of claims that police brutality rather than
the misbehavior of young men is behind a lot of strife abroad in the land.
One gets the feeling that black race hustlers are in the driver’s seat
recklessly pushing African Americans toward open warfare with everybody else.
My view of the situation is not popular with Progressives, viz: that black
separatism and its offshoots in “diversity” politics and multi-culturalism
tragically promote an antagonistic, alienated, oppositional black politics at
the expense of a common culture for blacks and whites with common values and
common standards of behavior. It has gotten so bad that reasonable people can
sadly conclude that the long civil rights project has ended in failure. We
are treading on dangerous ground here, with foolishly outmoded ideas about
what to expect from each other, and of course all this begs the questions:
What now? What next?
Domestic
Forecast Particulars for 2015
- Markets
tanking in Q3 destroy the illusion of “recovery.” It becomes obvious
that the story was a lie and the public mood grows much more surly.
- 2014
proves to be the year of peak shale oil. After the shakeout of 2015 due
to low oil prices, production never returns to previous levels. The
fairy tales of “energy independence” and “Saudi America” fall apart,
deeply demoralizing a gulled public and adding yet another layer of
discredit to the people in charge of things.
- Different
kinds of political revolt break out around the country among varied
groups, left, right, and center. Some of it revolves around
life-and-death struggles for the souls of the floundering major parties.
Some of it is organized violence against the government and especially against
the US security state apparatus, including overly militarized local
police forces.
- Low-grade
racial warfare erupts across the US. Flash mobs, knock-out games,
lootings, and hammer attack type outrages generate counter-attacks. By
summertime the conflict heats up. Firefights become routine and
casualties mount. President Obama proves to be tragically ineffectual in
restoring peace.
- Anti-immigration
sentiment in Europe spreads to the US as falling oil prices produce political
disorder in Mexico prompting tens of thousands to try to flee north.
- Bank
of America is the first of the Too Big To Fails to enter the event
horizon of failure. Obama can’t get congress to go along with a bailout.
By Thanksgiving, there is turmoil among the banks as they scramble to
cover losses. A public furor over using taxpayer money to cover
derivatives losses leads to an unprecedented concerted action by states
to attempt “nullification” campaigns.
- Citibank
applies for a bail-in of account holders. Dithering, frightened federal
authorities are too slow to respond, permitting a run on deposits.
- Hillary
is loudly booed and hectored at campaign stops as “a tool of Wall
Street.” Her coffers overflow with TBTF bank contributions. She bows out
of the presidential contest as the public mood toward her sours. But not
before she generates a lot of resentful opposition and alienates many
Democratic Party voters who are also furious over the eight-years of
Obama’s “hope” and “change” hand-jive. Elizabeth Warren is dragooned to
replace her — dubbed the “Un-Hillary” — rescuing the party from a
near-death experience. She openly feuds with party bosses, who plot
against her, and undermine her campaign.
- Senator
Rand Paul agitates to abolish the Federal Reserve. His senate colleagues
are shamed into considering legislative reform of the Fed’s mandate.
Debate on the issue is the only thing the Republican dominated congress
and senate accomplish in 2015. Paul decides to challenge Jeb Bush for
the 2016 nomination. This blows the Republican party apart.
- At
Christmas 2015, the DJA sits at 13,500, the S & P is at 1200. Gold is at 1750, silver at 42.
Good
luck everybody. Gird your loins and fasten your seat belts.
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