Gary's Note: The merry-go-round of financial fraudulence and bailouts will probably result in the destruction of the dollar's value. Jim Kunstler says in the end, the wasteful activity will cease and we will be free to start doing useful things like reestablishing local food production and manufacturing. Read on. And send all questions and comments to gary@whiskeyandgunpowder.com. Whiskey & Gunpowder
Though Citicorp is deemed too big to fail, it's hardly reassuring to know that it's been allowed to sink its fangs into the Mother Zombie that the U.S. Treasury has become and sucked out a multi-billion dollar dose of embalming fluid so it can go on pretending to be a bank for a while longer. I employ this somewhat clunky metaphor to point out that the U.S. Government is no more solvent than the financial zombies it is keeping on walking-dead support. And so this serial mummery of weekend bailout schemes is as much of a fraud and a swindle as the algorithm-derived-securities shenanigans that induced the disease of bank zombification in the first place. The main question it raises is whether, eventually, the creation of evermore zombified U.S. dollars will exceed the amount of previously-created U.S. dollars now vanishing into oblivion through compressive debt deflation. ~~~~~~~~~~~~~Special~~~~~~~~~~~~~ Closed to New Investors for the Last 6 Years — Now Open Again... In 2002, the same royalty "paycheck program" that paid out $50 for every $1 invested...decided to shut the door to new "members." In 2008, that door is open again...and it just got easier than ever to "make money while you sleep"... But there's no telling when it could close again, so check it out before it's too late… ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ My guess, given the usual time-lag factor, is that the super-inflation snap-back will occur six to eighteen months from now. And the main result of all this will be our inability to buy the imported oil that comprises two-thirds of the oil we require to keep Wal-Mart and Walt Disney World running. At some point, then, in the early months of the Obama administration, we'll learn that "change" is not a set of mere lifestyle choices but a wrenching transition away from all our familiar and comfortable habits into a stark and rigorous new economic landscape. The credit economy is dead and the dead credit residue of that dead economy is going where dead things go. It came into the world as "money" and it is going out of this world as a death-dealing disease, and we're not going to get over this disease until we stop generating additional zombie money out of no productive activity whatsoever. The campaign to sustain the unsustainable is, besides war, the greatest pitfall this society can stumble into. It represents a squandering of our remaining scant resources and can only produce the kind of extreme political disappointment that wrecks nations and leads to major conflicts between them. I don't know how much Mr. Obama buys into the current adopt-a-zombie program — his Treasury designee Timothy Geithner was apparently in on this weekend's Citicorp deal — but the President would be wise to steer clear of whatever the walking dead in the Bush corner are still up to. All the activities based on getting something-for-nothing are dead or dying now, in particular buying houses and cars on credit and so it should not be a surprise that the two major victims are the housing and car industries. Notice, by the way, that these are the two major ingredients of an economy based on building suburban sprawl. That's over, too. We're done building it and the stuff we've already built is destined to lose both money value and usefulness as the wrenching transition goes forward. All this obviously begs the question: what kind of economy are we going to live in if the old one is toast? Well, it's also pretty obvious that it will have to be based on activities productively aimed at keeping human beings alive in an ecology that has a future. Once you grasp this, you will see that there is no reason to despair and more than enough for all of us to do, so we can recover from the zombie nation disease and get on with the next chapter of American history — and I sure hope that Mr. Obama will get with the new program. To be specific about this new economy, we're going to have to make things again, and raise things out of the earth, locally, and trade these things for money of some kind that we earn through our own productive activities. Don't make the mistake of thinking this is optional. The only other option is to go through a violent sociopolitical convulsion. We ought to know from prior examples in world history that this is not a desirable experience. So, to avoid that, we really have to put our shoulders to the wheel and get to work on things that matter, and do it at a scale that is consistent with what the world really has to offer right now, especially in terms of available energy. ~~~~~~~~~~~~~Special~~~~~~~~~~~~~ HOW TO SNAP UP RAW GOLD... AT JUST ONE PENNY PER OUNCE! There's no alchemy involved. No secret technology. And no smoke and mirrors. But a small, upstart new mining company is doing exactly that… ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ In my view — and I know this is controversial — a much larger proportion of the U.S. population will have to be employed in growing the food we eat. There are many ways of arranging this, some more fair than others, and I hope the better angels of our nature steer us in the direction of fairness and justice. The prospects of a devalued dollar imply that we very shortly will not be able to get the all the oil-and-gas based "inputs" that have made petro-agriculture possible the past century. The consequences of this are so unthinkable that we have not been thinking about it. And, of course, the further implications of current land-use allocation, and the property ownership issues entailed, suggests formidable difficulties in re-arranging the farming sector. The sooner we face all this, the better. Regards, Parting Shot: As usual you can visit Jim at www.Kunstler.com for more. A lot of people are wondering what they're going to do as we move further and further into this world-changing crisis. I wouldn't worry; there will be plenty of useful activity to keep us all busy. It may not resemble what we've been used to doing…but there will be work. No more thinking while the rest of the world sweats. There are going to be a lot more Americans with rolled up sleeves and dirty hands. As Jim said, we're going to be growing the food we eat close to home and making the things we use. I don't think this sounds like a bad thing. We'll have to start forming local connections again — actual communities! — and I doubt we'll be driving as much…but I bet we'll all be a lot happier as we shed some of our credit card-sustained electronic distractions and regain immediate purpose. At least I hope so. Jim's latest novel details what one corner of the U.S. may look like in coming years. Jim promises a sequel will be available soon. The changes will probably not be all that smooth, but here's a way to cushion some of the blows. Best, |
Whiskey & Gunpowder Special Reports New "Backlash" Set to Rocket Oil Past $150...and Send Gas Soaring to Over $6 per Gallon The 10 Shocking Reasons for China's Pollution Problem Geothermal Energy: Investment in the Future Here's One Coal Stock That's Set to Skyrocket Investing in Exchange Traded Funds The Real Story Behind the True Gold Bull Market If someone forwarded you this copy, please look here to start your own subscription. Wanna let us know what you thought of today's issue? Now you can... click on this link. Whiskey & Gunpowder is a free e-mail service brought to you by a team of rebellious brigands. If you have not already done so, please click here to confirm your subscription. This will help us ensure you get every Whiskey & Gunpowder without interruption. Are you having trouble receiving your Whiskey & Gunpowder? You can ensure its arrival in your mailbox here. Please note: we sent this e-mail to finan4@finanmart.com because you subscribed to this service. To end your Whiskey & Gunpowder e-mail subscription, click here. Nothing in this e-mail should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice.We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. © 2008 Agora Financial, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the World Wide Web), in whole or in part, is strictly prohibited without the express written permission of Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. |
