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The Darkest Pool

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Published : July 08th, 2013
927 words - Reading time : 2 - 3 minutes
( 19 votes, 3.7/5 ) , 4 commentaries
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Category : Editorials





My new book will make you laugh. Git one! Click.

Like entropy, the diminishing returns of technology never sleep. The hubristic techno-narcissism of the day, as seen in mankind’s efforts to fake-out the universe, will eventually get our one-way ticket to Palookaville punched. Perhaps there’s such a thing as being too cool after all.

     The trick so far has been to create massive inflation, export the effects of it to other trading partners, and end up with a lot more money here in the USA, or the illusion of more money. Well, loans, for houses, cars, and college tuitions. In a word: debt. Let’s call it “Rainman Economics,” because it begins to resemble the behavior of a severely autistic human being who performs a small range of obsessive actions over and over and over, often centered on numbers. Rainman Economics is the policy of the Federal Reserve and, indirectly, the government under Mr. Obama.

     The suave and genial Mr. Obama just doesn’t know what’s going on — despite being surrounded by minions with briefing folders, sages and vizeers, quantitative augurers neck-deep in mathematical goat entrails, and (always) the lone, silent soldier toting the dire nuclear “football.” Mr. Obama doesn’t know that the universe has launched us on a journey to a place beyond techno-industrialism — and it’s not Ray Kurzweil’s infinity of orgasms. It’s a place where no ring-tones are heard and not so much as a stretch-mark of the Kardashians remains to be found.

     This is the eeriest summer. The coordinated effort to devalue gold — so as to maintain the sagging reputation of the world’s re$erve currency — has had the effect mainly of funneling it out of weak hands in the west to strong hands in the east, to countries that at one time or another we regarded as adversaries. China and Russia have been backing up their respective trucks at the gold warehouse loading dock, and before too long they will have yuan and rubles with more credibility than the US dollar.

      In these games of currency war, there are too many moving parts for comfort. Paradoxically, the American position is all about maintaining undeserved comfort, that is a standard of living that is no longer earned but borrowed from the darkest pool of magic capital: the future of declining expectations. Enjoy the flat screen TVs, water-parks, RVs, and Happy Meals while you can. There is sand in the gears of the moving parts that have made all that possible. It’s quite a trick to debase your currency for strategic advantage and at the same time maintain the world’s credibility in it. The strategic advantage is that debasement allows you to dissipate existing debt by stealth. But that trick is not working too well at the moment in the USA because too many other players are trying the same thing, and doing it badly, so people in foreign lands are dumping their currencies to take refuge in the dollar. The chief product of all this motion is not “prosperity” but instability. That is the last thing that economies need, even if the gamesters in the financial markets can arbitrage it to their advantage.

     Instability translates into uncertainty, especially about the relative value of currencies. For the moment, holders of weakening currencies are seeking refuge in seemingly “stronger” dollars in bubbling equity markets. Many more dollars have been stashed on the balance sheets of the Federal Reserve in the form of bonds purchased in galumphing bales since 2009 — only the catch is that many of these bonds are worthless, especially the mortgage-backed securities. The collateral exists in the form of mold-infused sheetrock, swimming pools with algae blooms, and strip malls left with a single tenant: the wig shop. The Fed will never be able to unload this hoard of garbage, even if it “tapers” its buying of new garbage. The dollars that the Fed creates out of nothing are trapped in this fetid backwater of rotting capital, destined to go nowhere — surely not into activity that produces real wealth, or the means to continue being civilized.

     Something’s in the air this hot, soggy summer and it smells like the loss of faith. In another month, as the nights grow cool we’ll approach the sober season of fall, when the air seems to possess powers of magnification and suddenly things can be seen clearly. The high frequency robo trading bots are good at detecting microscopic differences in digital quant pools, but they don’t have the finer sensory antennae of human brains for forces outside the rather narrow math narrative.

     For instance, I communed with my fellow citizens this Fourth of July weekend for a few hours at a little beach in a Vermont state park. It was a family kind of place. The mommies and daddies were putting on a competitive tattoo display (along with competitive eating). So many skulls, Devil heads, snakes, screaming eagles, flags, and thunderbolts. I suppose they acquire these totem images to ward off some apprehended greater harm, the metaphysically inchoate forces marshalling at the margins of what little normal life remains in this nation of rackets, swindles, and tears. All was nonetheless tranquility, there by the little lakeside, with the weenies grilling and the pop-tops popping. A three-year-old came by where I was working on my tan on a towel in the grass, supine. He asked me if I was dead. Not yet, I told him. Behind him a skull smoking a doobie loomed in blue and red ink on his daddy’s thigh. My people. My country.



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James Howard Kunstler has worked as a reporter and feature writer for a number of newspapers, and finally as a staff writer for Rolling Stone Magazine. In 1975, he dropped out to write books on a full-time basis. His nonfiction book, "The Long Emergency," describes the changes that American society faces in the 21st century. Discerning an imminent future of protracted socioeconomic crisis, Kunstler foresees the progressive dilapidation of subdivisions and strip malls, the depopulation of the American Southwest, and, amid a world at war over oil, military invasions of the West Coast; when the convulsion subsides, Americans will live in smaller places and eat locally grown food.
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I liked your article James and agree with your analysis. The FED is certainly playing games of the rich and powerful in the belief that it can control the future. Whilst things are holding for the moment it will more than likely all blow up and then the dumb and apathetic population will be running around looking for somebody to blame for their misfortune. Sadly ALL Americans will have to share the pain but as normal the working class will be the hardest hit. It is this group which does not enjoy the lifestyle you talked about (above) and this is the illusion of "the American dream". It is a dream because only a few can access it. And of course some abuse it to the extreme, supported by government which for the most part it has elected for its own needs.

It is hard to believe that those in charge are permitting the emptying of the gold and silver vaults. But don't worry. When things get bad the same recalcitrant leaders will send their servants who will come knocking at your door demanding you hand over YOUR gold to make up for THEIR BAD GOVERNMENT. Such is life...and irresponsible and corrupt governments.
James, there's a country song that just came out by The Band Perry called "DONE". The lyrics read a lot like it was written about America's current predicament ~ although ~ the song is intended to be the ending of a love/hate relationship between Lovers. This collapse, manipulation, to-big-to-fail, Iraq, Egypt, al-Qada, jobs picture, student loan fiasco, M F Global, . . . . . . I could go on and on . . . when ALL I WANT TO BE IS "DONE". so Done . .

I know what you mean: My People. My Country.
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Unfortunately when the interests of a nation are concerned you meddle in the politics of others. Don't be fooled about what is right because it is rarely about such moral high ground. Iraq was about defending oil reserves. And now that shale gas is coming online in plentiful supply in the US we are seeing the withdrawal of troops from the Middle East. And if you do not agree then I ask why did the US not intervene when Pol Pot was murdering millions in Asia or when Idi Amin was doing the same in Africa? Answer: no strategic benefit. We do live in a sad world run by white collar criminals of the worst kind.
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Kunstler's ire is not really directed at the FED or the dilution of our currency, but at the whole concept of technology itself. As he writes the EPA, given extra powers by Obama, is preparing to further decimate the coal industry and anything else smacking of human intelligence.

The idea is control, and to control you must first destroy all means of production and reduce the population to living 'in a world made by hand.'
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James, there's a country song that just came out by The Band Perry called "DONE". The lyrics read a lot like it was written about America's current predicament ~ although ~ the song is intended to be the ending of a love/hate relationship between Lovers  Read more
Gypsy - 7/9/2013 at 1:04 AM GMT
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