Submitted by James H. Kunstler via Kunstler.com
,
“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 points 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.
