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Page added on June 22, 2015
Kunstler: History in Free Verse
H istory might not rhyme, exactly, but it’s not bad for free verse. Greece is this century’s Serbia — a tiny, picturesque backwater nation blundering haplessly into the center stage of geopolitics. And the European Union is, whaddaya know, Germany in drag, on financial steroids.
Nobody knows what will happen next in the struggle to wring some kind of debt repayment promises out of poor Greece. Without “restructuring” — a virtual national bankruptcy proceeding — there can be no plausible promises of repayment. Both sides seem to have exhausted their abilities to juke their way out. The European Union and its wing-men at the European Central Bank (ECB) and the International Monetary Fund (IMF) can only pretend to kick that fabled can down the road because it has turned into a cement-filled 50-gallon drum. The Greek government can only pretend to further dismantle its civil service and pension systems lest angry citizens toss it out and replace it with a new government, perhaps an ugly and pugnacious one made up of Golden Dawn party Nazis.
In the background, Spain, Portugal, Italy, Ireland, and perhaps even France wait without peeping to see if Greece is allowed to restructure, because you can be sure they will demand the same privilege to debt relief. But that’s hardly possible because the ECB has been engineering a shift of debt-holding away from the big corporate banks — which made all the stupid loans — to the taxpayers of their member states, especially Germany, which stands to be the biggest bag-holder when a contagion of serial default seeps across the continent.
This implies, of course, that along the way to that outcome something sickening happens to the price of all the bonds that the debt is embodied in. Namely, its value craters for the simple reason that the threat of non-payment makes interest rates shoot up to reflect the actualization of risk. That would certainly set off the booby-trap of derivative interest rate swaps and credit default swaps that have been laid into history’s greatest financial minefield. Thus, the big banks that were supposedly shielded by the ECB shell game of Hide the Debt Pea Somewhere Else, will blow up in a daisy-chain of unpayable obligations.
The net effect of all that will be the disappearance of nominal wealth — it crosses an event horizon into a black hole never to be seen again. The continent discovers it is a lot poorer than it thought. Fifty years of financial engineering comes to the grief it deserves for promoting the idea that it’s possible to get something for nothing.
The same thing more or less awaits the USA, China, and Japan. For the USA in particular the signs of bankruptcy have been starkly visible for a long time outside the bubble regions of New York, Washington, and San Francisco. You see it in the amazing decrepitude of the built environment — the cities and towns left for dead, the struggling suburban strip malls tenanted if at all by wig shops and check-cashing operations, the rusted bridges, pot-holed highways, the Third World style train service. Most sickeningly you see it in a population of formerly earnest, hard-working, basically-educated people with hopes and dreams transformed into a hopeless moiling underclass of tattooed savages dressed in baby clothes devoting their leisure hours (i.e. all their time) to drug-seeking and the erasure of sexual boundaries.
That shocking social and political bankruptcy has, so far, acted as the sinkhole for all America’s financial degeneracy and the entropy it generates. The financial class (the 1 percent who own 40-plus percent of the financialized economy) must think it’s immune to the consequences of its activities, namely racketeering of one kind or another — criminal misconduct and accounting fraud in the service of money-grubbing. They must truly believe that risk has been offloaded into the ring-fenced concentration camps of capital: the derivatives pools. But risk, like rust, never sleeps and can’t be so easily contained. The obstreperous claims of debt only die down with the acknowledged disappearance of wealth, as when a bottom-feeding collection agency attempts to collect a few cents on the dollar of a car loan gone bad.
The US Federal Reserve, like the European Central Bank, sits atop a vault of bonds representing a colossal aggregate promise to repay debt that can never be repaid. Their loss of value will come to be seen for what it is: the disappearance of national wealth. We’ll have our moment, too, when the 50-gallon can full of cement can’t be kicked down the road another inch. It might come when Europe sets the example for a loss of faith in a system run to crime and rot.
10 Comments on "Kunstler: History in Free Verse"
BobInget on Mon, 22nd Jun 2015 12:38 pm
Both the euro and dollar are in a race to the bottom. http://finviz.com/forex.ashx
Devaluation seems, at this point the only alternative to an impossibly hard austerity choice.
The last time a dictator attempted austerity
in Europe it led to WW/2. Hitler as deranged as he was, knew Germany needed to pay for war preparations.
In the West we have been putting our wars on plastic since 1964.
Now, it’s time to charge yet another
regional war gone international and none but a few oily rich nations have the funds for the long wars that confront them.
If air power alone won’t do the trick, if ‘boots’
at least ones with white feet, isn’t a go, nuclear weapons, neutron bombs to be precise, (not to harm oil) seem an affordable alternative.
Don’t for a second believe , it’s not about oil,
it is.
This, just being reported;
http://www.nytimes.com/2015/06/23/world/asia/taliban-attack-afghan-parliament-and-seize-a-2nd-district-in-north.html?_r=0
Northwest Resident on Mon, 22nd Jun 2015 1:37 pm
The reason Greece matters so much is because in reality we are almost all “Greece”, meaning that there are very few if any nations on planet earth that are not in debt up to their eyeballs with ZERO prospects to ever be able to pay it off. It seems to me that Greece is just the one that has been set up to fall first, having been squeezed for everything they are worth to keep the EU “dream” alive for a little while longer. The whole world is staggering under unpayable debt. After Greece falls, there will be another insolvent country to step into the media circus spotlight so we can enjoy the drama of watching them squirm and haggle to the bitter end, at which time they will be bust. Eventually we’ll reach critical mass — some time in the near future I suspect — and the whole shebang will blow apart. Get some popcorn. Learn to grow your own food. Get prepared. Kick back and watch the show — the greatest show in the history of mankind!!!
Rodster on Mon, 22nd Jun 2015 2:02 pm
“The reason Greece matters so much is because in reality we are almost all “Greece”,”
It’s even WORSE than that, much worse, actually. The truth of the matter is that the ENTIRE planet including China in reality is GREECE. The entire financial system is three card monte. The game has been rigged for many decades.
It’s just that now we are seeing the ugly side of our decadence and future spending and the Ponzi scheme known as fractional reserve banking.
penury on Mon, 22nd Jun 2015 2:19 pm
You must understand, the Greek crisis will become the Italian crisis, the Spanish crisis etc etc. The only reason the crisis exists is the money changers make a profit. Greece has been worth billions to the banks and the stock market. As long as the pump and dump works Greece will suffer, When that ploy starts to get moldy it will be the fate of someone else to be “greeked”. The U.S. will continue the pressure on NATO to assure that the pipeline never gets built. If the pipeline thru Greece is built the U.S. will lose the billion we have invested in the Me and the billions we have invested in Ukraine both militarily (NATO) or thru the IMF. We shall never allow this.
BobInget on Mon, 22nd Jun 2015 3:03 pm
Anyone here old enough to remember movie ‘serials’. In the forties we kids could walk or ride bikes safely to the movies on Saturday.
Besides two or even three feature films there were ‘shorts’ and always the serial.
Near the end of each installment one of the ‘good guys’ was al;ways in deep shit. Tied to a bomb or RR track or pushed off a tall building or hanging from the wing of a fast plane we kids too were left hanging for an entire week. Somehow, you guessed it, the hero always escaped in the last frame of last week’s episode that never seemed to be
showed the previous week.
Today, we see the same cheap drama played out week after week.
Greece’s entire GDP equals that of the great state of Connecticut.
Here, check it out;
https://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_countries_by_GDP_(nominal) (2012 figures)
IOW’s even if Greece, Italy, Spain and Portugal were to default the world would not end.
From 1939 to 1945 most of Europe and Asia
were decimated. Twelve, fifteen years later we we in love with Honda’s, VW’s even MG’s and Citroens.
Allies bombed the crap out of Germany and Japan. Talk about economic destruction!
Since 1945 we’ve bombed Korea, Vietnam and Cambodia. Each has come back to open great fast food trucks across America.
As someday will Yemen, Iraq, Afghanistan, Pakistan, Libya, Sudan and God knows what great gastronomic treats lay in store.
Northwest Resident on Mon, 22nd Jun 2015 3:38 pm
BobInget — Good points. But one thing to keep in mind is that after the wars in Korea, Vietnam and Cambodia, there was still quite a bit of the “good” oil left to burn. There was till plenty of room left for economic growth (excessive resource exploitation), and that rising tide of exploited resource floated the Korean, Vietnamese and Cambodian boats to America with a lot of chefs and their tasty ingredients on board. Not so with the Yemen, Iraq and Afghanistan military actions. There is very little “good” oil left to burn, and there won’t be a lot of boats making their way to America from those places. Heck, the whole economy could collapse any day now. At least, according to this writer:
The Crash of 2015: On Track, Behind Schedule
http://www.dailyimpact.net/2015/06/22/the-crash-of-2015-on-track-behind-schedule/
Makati1 on Mon, 22nd Jun 2015 10:10 pm
Anyone NOT preparing with all of their ability, for the coming collapse, deserves what he/she gets.
I just posted a reminder on my Facebook, for my friends and family:
The Future: Failure to prepare is to prepare to fail.
Bernd1964 on Tue, 23rd Jun 2015 10:38 am
Kunstler doesn’t mention that the US Federal Reserve and the European Central Bank are both private entities, owned by a few (in numbers: 85) super-rich families. He fails to see that there are no nations and peoples anymore but only corporations and oligarches. The nations and peoples of the West were obliterated intentionally by globalization, they were turned into consumer-slaves of the corporate empire Babylon. The proud expression ‘We the people’ of the US constitution has turned into ‘We the slaves’ intangled in a matrix of evil corporate power, which is clearly a political and social situation created and controlled by perfidious few elites. The fiat money system and even the whole system of Western civilization has now become a fraudulent elitist enterprise. As we enter the horrific age of the Long Emergency, the once hidden corporate empire Babylon has turned into a detestable solid tyranny.
theedrich on Wed, 24th Jun 2015 2:30 am
Not to worry, mates! The only thing the MSM lets us know about is how much more White guilt we need to download. Never mind small items such as 18*10^6 personal IDs hacked at government servers, the collapse of a corrupt Iraq left in the care of American-trained unicorns (with something similar prognosed for Afghanistan), upgrading Russian nukes, criminal invasion of our country by ThirdWorlders, etc. ad nauseam. No problem. BigBiz will wipe every tear from every maiden’s eye. Just keep worshipping at the Church of Obam, soon to be led by HotFlash Hillary. Now that the Senate has approved shipping American manufacturing eastward, all we have to do is wait for our monthly welfare chex. What’s not to like?
Davy on Wed, 24th Jun 2015 6:54 am
Yea, Bern, consumption has really been turned into a religion and religion is about control. The doctrine must be maintained and its following enforced. I don’t see this as a “they” are doing this. I see it as a self-organizing expression of human nature gone amok from being allowed too much growth. This growth came at the expense of our humanity and nature’s global ecosystem.
Many consumers have a good life. It is comfortable and rewarding for many but the costs are so great when one looks at the larger picture. We have basically ruined a world in 200 years. We have put our entire species at risk for a little material comfort and our mistaken notion of exceptionalism. The powers to be are just pawns of their own avarice. Power has always corrupted. It is a vicious circle of unsatisfied want.
Fossil fuels have allowed a kind of corruption that has to be among the highest on the list of human evil. How can one deny or justify the destruction of the world and the path of extinction other than evil. I am not saying evil in a religious sense this is the mechanization of death of a planet and our species for illegitimate and delusional reasons.
The consumption drive has lifted population so far above what it should be per a healthy species and ecosystem. Our large brains are appearing increasingly likely to be our evolutionary dead end. We evolved as semi-nomadic hunter gatherers and became earth killers in 10,000 years. I can only say the top is but an expression of 10,000 years of a process of an evolutionary dead end and another great extinction. We are just one of those species of nature that will cause an evolution through extinction. We will likely not be around to see the rebirth.