Forecast 2013: Contraction, Contagion, and Contradiction By James Howard Kunstler [Archive]

woodman

1st January 2013, 07:54 AM

I get a kick out of Kunstler. He is dead on in many respects but I certainly don't agree with his politics nor his belief in global warming and love of nuclear power. His take on the markets in this article is pretty accurate and as usual I love his description of it.

" It was a classic case out of the Joseph Tainter playbook: diminishing returns of ever-increasing complexity addressed with ever-more layers of complexity, larded with systematic lying based on mystifying, opaque jargon, sanctioned statistical misreporting, felonious cronyism, and scuttling of the rule of law. In short, the markets have been taken over in effect by a criminal racketeering syndicate. In doing this, so much resilience has been removed from these market structures that they are riddled with rot, like a mansion infested with carpenter ants. In other words, borrowing a term from Taleb, they are hopelessly fragile. Any little vibration could reduce the whole creaking arrangement into a heap of rubble and ashes. There's plenty of vibration available out there."

agnut

1st January 2013, 02:50 PM

Good appraisal Woodman. Kunstler’s article here was more pleasurable reading with his “flowery” descriptions than those in the past. Just my take.

I’ll be thinking about his 2013 predictions. Gold at $2,500 with silver at $125 by the end of 2013 ? That would be a G:S ratio of 1:20. If accurate, would be a wise move to trade out of gold and into silver while the G:S ratio is about 1:55 now. I already did that years ago when it was favorable. I still have in my possession the most expensive gold in the world : two wedding rings from past marriages. HaHa

And food shouldn’t be a problem with the cattle, chickens and preps we have. I am a bit concerned with the future costs and reliability of electric power. Last Sunday I was at a garage sale and got a small diesel engine for $180. It is a Chinese three horse model and weighs about 80 pounds. Hooked to a generator it should recharge my 24 six volt batteries rather than have to run the Lister 12K diesel every time I have to recharge, thus using less than 1/3 the diesel fuel. Still not hooked up to solar or wind power but thinking about its benefits versus costs.

I seem to be “infected” with Ponce’s plan behind the plan behind the plan fever. Or was that inoculated ? Anyway, having multiple options is the ticket to future potentials. Thanks uncle Ponce !

Having several bricks of nickels cost me no more than having paper hundred dollar bills unless you consider the cost of chiropractic relief. Hauling two bricks at a time out of the bank ain’t for wimps ! Again, thanks Ponce for the nickel heads up.

I wonder if 2013 will be the year that nickels cease to be minted. Pennies too. Hope and Change ? You’d better hope that you have lots of change when the fiat system becomes the flat system (as in flat broke). Only pennies and nickels have what we call intrinsic value; their metal content is equal or greater than their face value. Paper dollars are best kept only for historical lesson value (like the Zimbabwe paper currency). Yeah, I know, dollars pay for needs now and have value. But like all other fiat currencies throughout history, the dollar will join them in their worthlessness and as curiosity artifacts. The only question is when.

My oldest friend passed away last year. He was 81 years old. We had known each other for 25 years and had talked on the phone countless times. The last couple of years he had told me that everything I had predicted had come true and that he had learned to listen to me. I told him that I was no seer but that I had been reading articles on the internet since 1998. Of course, not all articles were accurate but to have revealed how the world really works was a great leap forward. It got the gears turning in my head to where I was able to examine data presented and discern its validity as well as its potential impact to my future. It was like obtaining the ability to hear the train coming down the tracks or seeing the headlight in the distance. Next was having the good sense to get off the tracks and warn loved ones.

Our fellowship here at GS-US is priceless. Life changing. Not to be diminished by petty arguments. We all need to focus on sharing our wisdom and telling the good news to others that the future is not hopeless but actually exciting and full of opportunities. Oh, really agnut ?

Yeah, really ! What we are facing is that most of the world around us will be swept up in the chaos of the death of the old system. If there is to be a new dawn, we are to be an integral part of it. Most of the world will lose almost everything since it is not really theirs but borrowed through loans. The word deleveraging has been thrown around but on a personal level it means that goods would find their total cash on the barrelhead price rather than what they can be possessed by their monthly payment. We are seeing this happening now as banks are reluctant to lend on housing. They can profit more and with less risk with buying treasury bonds. I do feel that this will blow up in their faces.

Preparing for the future has become more difficult to ascertain which investment vehicles are the best, the safest, the least likely to be derailed by governmental edicts, the easiest to store and so on. Why is this so ? I believe that I would lay all of this burning bag of excremental uncertainty at the doorstep of the Fed, light a match and ring the doorbell.

Going Galt; opting out of the system as much as possible works for me. How about you ?

Best wishes,

agnut