Guest Post by Jim Kunstler
The shadow of Corona virus creeps ever-darker across the scene like a cosmic messenger from Karma Central telling mankind to stop and assess. We’re about to find out what we’ve wrought with the wonders and marvels of globalism. Is there anything you can think of over at the Wal Mart or the Walgreens that isn’t made in China? I mean, everything from a dustpan to a lint brush? I can’t say for sure, because I’m not over in China, but the place is apparently not open for business these days. One must surmise that a lot of activities in the USA may not be open for business much longer, either.
The action in my local supermarket yesterday had an undercurrent of stealth desperation; no overt panic buying, no fighting in the aisles, but an edge of suspense. Personally, I cleaned out an entire product-line of cat food, loaded up on cooking oil, rice, dry beans, and evaporated milk — and I wasn’t the only one checking out with the sixteen-roll bindle of toilet paper. Obviously, many products were still there on the shelves to get (minus that cat food). Is the time perhaps at hand when a lot of stuff won’t be? Just sayin’.
The message is getting out — though not from US authorities yet — that everybody may soon be spending a lot of time home alone. That’s exactly what has happened in China and a region of northern Italy. France banned events with more than 5,000 people (why that number, exactly?). Japan has canceled school for the time being — duration unknown for now. So a USA lockdown is not merely hypothetical. These, then, are two fundamental conditions the world faces for a while: nobody moves and nothing gets produced.
Are we taking this thing too seriously (some might ask)? I don’t pretend to know the answer, except, again, to point to China and think that they can’t possibly just be fooling around with all those zombified cities and shuttered factories. The next question might be: will the global economy return at some point to “normal” operating conditions, that is, the fabulously complex network of supply lines, markets, and payment arrangements as they worked up until January 2020? I am for sure not sure about that. Once a gigantic and fantastically precise mechanism breaks, I doubt it comes back together neatly and quickly. In the physical universe, the power of emergence is like the cue ball on a billiard table, and it appears that all the rest of the colored balls will be bouncing off the bumpers and sinking into pockets for while… and eventually the global table will look a lot different.
I’ve long maintained that of all the many networked systems we depend on, banking and finance are the most fragile, the most susceptible to dangerous disorder. And, of course, that is exactly what we’re seeing in the stock markets. Trillions of dollars in notional wealth have vaporized. Over on the bond side, interest rates are crashing toward zero as loose capital desperately seeks a safe harbor. But how safe is Bond Harbor, exactly, when all the advanced nations are so deep in the borrowing hole that they can never really meet their obligations? And Gawd knows what is going on with the “innovative” financial IEDs in Derivatives Land? How can they not be blowing up with price movements of the kind that went down last week?
As that colossal hairball unravels, nobody will get paid for anything for a period of time, again, duration unknown. There was chatter last week about a supposed Sunday meeting of global Central Bank poohbahs looking to come up with a battle plan for arresting the damage. It must have been mighty secretive because there’s nothing about it on the news wires Monday morning. But what can they do, really, except the only thing they know how to do, which is to jam more “money” into crumbling arrangements? And then, we must ask, when does this stuff lose its credibility as “money?” Answer: when the contours of the black hole it is disappearing into become obvious and undeniable — and some might argue that we can already see all that. If the equity markets turn up today, that will probably be an indication that the CB Boyz and Gurls have launched a direct stock-buying blitz… meaning that, until further notice, markets are not really markets. That would be a set-up for another round of cratering when the CBs shoot their wads on that gambit.
One thing I’m hearing a lot is how much this emergency spotlights the USA’s need to reindustrialize. That would be a natural conclusion, but I warn you it will not work out the way they’re saying. I’m not going to harp on this for now, but our energy supply situation is not what it’s cracked up to be, specifically shale oil, which depends utterly on a reliable stream of loans to keep up the incessant fracking — not a bright prospect with credit markets frozen — and above and beyond that, it’s an industry that doesn’t pay for itself, doesn’t make a red cent. So, watch for carnage in the shale oil patches. The next trick will be to nationalize the industry, and that will only add another layer to a looming national bankruptcy.
Now, that suggests to me that we’re not actually able to return to manufacturing at the scale we abandoned a few decades ago — in other words, Make America Great Again. If we make anything, it’ll be at a much smaller scale, and maybe even a scale that would seem laughably humble. When the dust settles from present financial meltdown — and that might take a while — Americans with any remaining capital might want to invest in water-power and hydroelectric sites. (Note, there are plenty here in Washington County, New York.) The hydroelectric part is a bit iffy, since that does require a lot of copper and steel for the turbines. But water-power itself can drive machinery. Again, just sayin’.
Of course, one of the ironies of this situation is that the entire news media assumes that the election contest is proceeding along the usual formal trajectory. No one seems to wonder whether the party conventions can even be held if the corona virus sticks around through the spring, or even the election, for that matter.
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We have many questions but only guesses for answers.
An aside, money market “savings accounts” yield a bit more interest
earned than a basic account. Yet MM $ is subject to market value.
Maybe switch?
There were vile “laws”/banking legislation passed in 2013 and 2014.
Bottom line = even derivatives will come B4 savers. Remember?
People say, “get all your $ out of the bank lest it is seized.” Any pattern
of cash withdrawal can and will be reported as a SAR (suspicious activity
report) and may be investigated. Great…and how long B4 that dirty green
paper gets outlawed anyway? We are in a bad place people.
“ARE YOU READY FOR SOME FOOTBALL___!!!” This is the greatest off-season in years!
Once the Democrats deliver free housing, healthcare and food for the non-plutocrats, no one will need “money”.
Forward!
Further to supply chain disruptions from the Nuclear Explosion shock waves radiating out around the world………
WHAT FULL DEAD STOP LOOKS LIKE!! Procter & Gamble 17,000 consumer products to Wal Mart, electronic and car mfg parts, etc…………
What can they do to get the monster machine restarted any time soon???
http://charleshughsmith.blogspot.com/2020/03/the-limits-of-force-bayonet-in-back.html
I appreciate the authors musings. Especially regarding the electrical grid and its power base (fuel).
https://www.zerohedge.com/news/2020-03-01/introducing-pandemic-brothers
We’ve got centuries’ worth of coal alone. Some of the best minds in the world are working on cheap, safe nuclear options. Recoverable natural gas is becoming increasingly abundant. Solar and battery technology improves steadily. Keep the government out of it, and we’ve got no problems. Money being handed out by government to Tesla, Solyndra, and other black holes is money that could have been spent by private inventors and entrepreneurs developing the energy tech we’ll need in the future.
“We’ve got centuries’ worth of coal alone.”
how much of the power grid still takes coal?
All of it. It’s just wires hooked to whatever you are using today to generate the power.
Clean coal plants are easy enough to build. The only reason they’re not being built is because natural gas plants are even cheaper and easier. Plus gas can be shipped via pipelines, so are safer and cheaper to fuel. If gas becomes too expensive, coal plants will be built, if the government doesn’t prevent it. Again, the villain is government. Point is, we’re NOT running out of energy. Any shortages are artificial.
That is the stone cold truth Dan. I wish more folks could or would wrap their heads around this issue of energy availability.
Coal is transferred in pipelines as well in a liquid slush fyi
I like your half glass full mindset – it’s tough these days, thanks.
“Globalism” isn’t the problem. MAGA will happen when the dollar is no longer the world’s reserve currency. Instead of the manufacturing and economic powerhouse we used to be, we’ve become the world’s biggest counterfeiter. Why would you make something here when other countries are willing to sell it to you for fake money conjured out of thin air?
It wouldn’t be right, but we could have continued this con for a long, long time. Instead, our politicians have weaponized the dollar and other countries are de-dollaring as fast as they can without being obvious. A lot of Americans who claim they want to MAGA are not going to like it when they find out what that means.
“MAGA will happen when the dollar is no longer the world’s reserve currency”
will the united states survive losing the world reserve currency?
Sterling was the reserve until being replaced by the Dollar. England is still there-sort of. LOL!
It’s too bad there doesn’t exist some form of money that has real value, a fairly stable supply, and can’t be inflated by central banks or governments.
“England is still there”
sterling was not the world reserve currency, silver/gold was, sterling was only one form of it. sterling was the means of world trade because it was backed by england itself – its culture, its military, its political control, its economy, its banks. the same situation does not apply to the united states today.
I think you are correct. The problem with the dollar and any other currency today is, it is all fiat. We are all being hosed by the world bank and federal reserve.
Not the sharpest knife in the drawer but…that sounds EXACTLY like it is today.
(deleted)
My money’s on NO
The shale oil is not designed to produce profits, nobody seems to understand this.
it is a strategic plan to accomplish:
allow US rather than OPEC to determine market price of energy (mission accomplished)
without these two achieved goals, we would be facing:
1. $4 a gallon fuel for home/auto
which would have triggered recession that would have started much sooner this quarter.
checked out our local walmart, hardware stores, grocery stores.
no crowds. no lines. all racks full. no supply issues.
https://en.wikipedia.org/wiki/2019%E2%80%9320_coronavirus_outbreak_by_country_and_territory
It takes a month or so for crap from China to cross the ocean, so there is about a month of lag time between manufacturing problems in China and supply problems in the US.
yep, and that might wind up being a very serious issue with the u.s. – yesterday saw the china pollution map tracked by nasa or somebody, zero across the board, looks like china is .90 shut down economically. just pointing out there’s no covid19 panic in my corner of the u.s. which seems significant – dozens of our people fly out across the u.s. and back every single week of the year, and we have nothing at all re covid19.
Those of us who have worried for years about Weimar-style hyperinflation, always assumed it would be caused by government printing money with reckless abandon. I never really considered the other half of the supply/demand equation, that is, money chasing less and less product.
When supplies of normal stuff that we get from China start to get really, really had to obtain, then the price will increase astronomically. You want that last bottle of hand sanitizer, that will be $50. You dropped your iPhone and need a new one, fork over $10,000.
Of course, the government and media will call this price gouging and slap on rules to prevent it. But that will just force the products onto the black market. Walmart will look like a Soviet department store from the 60s and anything you really need will only be available in the back alleys.
The fed can print money 24/7, but if no products exist to buy with the money, the money becomes worthless.
You’re so right. The whole point of an “economy” is to deal with scarcity. We don’t buy the air that we breathe or the dirt we walk on – plenty of that around. Prices are the automatic way a free economy allocates scarce resources to where they are needed the most.
Printing money destroys the whole pricing mechanism and allocates scarce resources (wealth) to those who get the money first (think Wall St. bankers and their ilk) as well as causes the fake money to be poured into malinvestments like WeWork and Blue Apron. These would never happen in a sound economy.
Also, like you said, scarcity causes prices to go up. This is a feature, not a bug. The higher prices lure new entrepreneurs into producing the scarce items, increasing the quantity and lowering the price. Government “solutions”, like rationing or “anti-gouging” laws only make things much worse, which ironically increase cries for more government interference to “fix” things.
You’ve hit the nail on the head. Very soon a scenario could appear where the Fed goes insane and begins handing out money but, as you’ve said, there will be nothing to buy. Well, nothing of practical use.
The D.C government is voting on whether or not to give every DC resident a $100 metro card EVERY MONTH.
welcome back–
I did a bit of shopping today,got some more rice/tuna/cans of beef stew/beans and did notice a lot of shoppers for a Monday,that said,most shelves still had stuff.I did though stop @ dollar store and got 9 4 packs of toilet paper,that cleaned em out.I do have about 200 rolls also so OK on that but was a crack I saw.Will stop in a few days and see if they got more deliveries,do realize folks do majority shopping on weekend.I also got more 91% alcohol and hydrogen peroxide @ the wally world,shelves there for moment seemed pretty well stocked but with China goods on hold feel the warehouses will soon be empty.Check your stuff,fill the holes and products like say windshield wipers ect.,well,get extras while you easily can.
vitamins, tires, eyeglasses.
“I do have about 200 rolls also so OK on that but was a crack I saw.”
Was that intended? hahaha.
CO2,unintended but glad you enjoyed it.The ability to laugh as times get tough our best weapon!Listening at moment to some classic Tull/Yes ect. just enjoying life with a beer,i.e. the best weapon against sadness/misery!
A quarter century ago, I read Robert Prechter’s Crest of the Tidal Wave and what I remember most clearly was his observation that a nation that allows its industrial base to deteriorate is in deep doo-doo. It was then that I decided to emigrate as soon as it became financially feasible for me to do so. Fortunate circumstances made it possible three years later. Since then, I’ve been able to acquire a small (bit under three acres) piece of fertile property in a rural area with a mild climate, put two houses on it and have my son, his wife and three grandchildren sixty yards away. The extended family is another great loss the USA has experienced. I’ve been more or less preparing for an eventuality much like that envisioned by Mr K in the above essay and at 73, it’s a lot easier with young people on hand to help.
My capital has been and is now ever-more-quickly being converted to tangibles, productive tangibles in some cases, but in all cases useful. It would not surprise me if a societal “correction” (financial and otherwise) is possibly just around the corner. Having the proper equipment and the still-available raw materials, one might make a growing concern out of small-scale washboard manufacture if Mr K’s predictions are accurate. Mr. Prechter’s market predictions were very wrong, but his non-Elliot-Wave observations were worthy of note. A major financial collapse coupled with an energy crisis and the halcyon days of the 50s may return with a vengeance, but not necessarily in all the ways one might like. In fact, the 50s might end up more like the 1850s.
I don’t believe the world is going to hell in a handbasket, but it might well be headed for an extended stay in purgatory.
Might be a good idea to buy an extra bottle of plain unscented bleach and a eye dropper.
https://www.epa.gov/sites/production/files/2017-09/documents/emergency_disinfection_of_drinking_water_sept2017.pdf
If you have a filter, and it’s not 0.02 micron (please take careful note of the decimal), it won’t filter out viral contamination.
https://international.sawyer.com/products/water-purification-kits/
At worst, you’ll have an eyedropper you don’t need.
People may turn up their noses at the idea of using bleach to purify water, but this is one of those MUST HAVE measures for last resort water purification. Good tip.
Or you could get one of these, have had one in storage for years:
Or one of these in every domicile and vehicle:
As the Economy goes down, the public will have less cash to buy directly from Farmers and Ranchers. Will our Taxes go down? or will our Taxes go up to keep the FSA comfortable in the Lifestyle they have become accustomed to of doing nothing? Regarding HSF’s essay on the necessities of Property and other Taxes: all true, but there is a point where the Farm’s Taxes exceed the Farm’s income and there is a negative incentive to farming. For land near cities, most people realize that point has been passed and no one is starting farms (actually the opposite) near cities even though many want to.
“Will our Taxes go down?”
nope.
“or will our Taxes go up”
state taxes will skyrocket. federal taxes probably not, they’ll just print money (using one excuse or another – mmt, secret monetization, whatever).
“there is a point where the Farm’s Taxes exceed the Farm’s income”
that’s the plan – to confiscate the farm collateral.
I can tell you from American history, farmers will defend having farms even harder than gamers will defend having video games. Midwest farmers will kill, no doubt about it.
People frequently cite the amount of taxes being so high people lose their farms over it. Property taxes are part of owning property. Perhaps people shouldn’t own more than they can afford. If you own so much land that the taxes are high, you do have the option of making the land productive so that it generates more than enough from it. We do things pretty simply, no hired help of any kind and we manage to pay our taxes. And I don’t ever feel like I’m being taken advantage of even if I’m not crazy about paying money for something that’s often pretty nebulous- until your barn catches on fire and then all of a sudden men show up and risk their lives for you. Then you think, you know what, that was worth the tax rate. Not to mention farmland isn’t taxed the same way commercial property or investment property is.
Most people don’t start farms because it involves a lifetime commitment and a lot of hard work, often 365 days a year without a break and there’s not a lot of people like that left around a consumer culture in the late stages of post modern collapse.
But they will.
on the other hand what freeman would allow someone else to tell him he must pay if he is to keep what is already his? if you have to continuously pay to keep something, you don’t own it. i understand and accept property taxes in less rural areas as there are community features which need to be paid for. other than muh roads in rural areas are there so many services as to require large property taxes? perhaps proper balance between the two is only feasible in high cohesion white society.
In a situation like this the most important thing is to think rationally. What do we actually know about this situation.
1. It is probably an engineered (weaponized) virus created in the lab next to the open air market. This means it is much worse than your run of the mill flu virus.
2. It is spreading worldwide exponentially.
3. The most effective way to limit the spread of this virus at present is the kind of quarantine we are seeing in China.
4. If the virus hits, people will avoid public places for an extended period..
5. Nothing the Fed does will change the fact that people will avoid going out and spending money in public places.
6. Most small business’s and their employees cannot financially survive a protracted period of time without income.
7. Eventually, the virus inspired boycott of public places will eventually work its way into corporate earnings and PE ratios. In industries like travel, hospitality, and entertainment, it will happen immediately.
8. Business and consumers are way too far in debt, an economic calamity will cause many to default on that debt. That debt is being held by bond funds and banks. While the banks can expect to be bailed out, it is not clear that bond funds can expect the same.
When we look at what we know now, the future looks to have some major issues. It would be prudent not to expect this to blow over quickly.
Last week I heard the cruise industry was already down 40%. Expect bankruptcies to start in the near future.
Perhaps there will be a fire on the boats when in dry dock for refitting.
Even before this, big cruise ships were known to be germ factories. It’s always a roll of the dice to take one of those cruises.
As far as I can suppose, it will likely take it’s course and some tiny sliver of the world will die, lotsa old people. In the big scheme of things, so what? The only caveat is this ‘reinfection’ thing. It is legit? If this is a specially engineered virus, then it should be more deadly than a basic flu. If there are lotsa take-2 deaths, then I’ll consider it a serious systemic problem. But again, so what? There is not a fucking actionable thing to be done. Can’t contain, can only delay, and build the bureaucracy on opportunistic misery that in reality has nothing to do with helping the public with health. It’s a natural virus now. I think we will be safe enough until mid-fall. Lotsa fear-mongering.
The 2nd exposure is fact and the mechanism is understood (the white cells bond to the virus but don’t destroy them, then carry them into healthy cells that would have stopped it). I would not be surprised if the people vaccinated have a higher death rate (for the second exposure) of a coronavirus.
Then were fucked except probably some humans will be resistant. Then we are all playing biological Powerball. And if it’s true, then either the Chinese made it and good that is was deployed in central China, or it was planted there (which is a scarier thought). I’m not convinced it’s Dengue yet. I’m not convinced it’s not either.
https://www.youtube.com/watch?v=jShMQw2H2cM
Just today, I was sharing my concerns with a friend who owns a machine shop, they rebuild engines and cylinder heads for autos and tractors. I asked him what percentage of parts such as pistons, rings, bearings, valves etc are manufactured in China? He replied, “I hate to admit this, but all of it.”
Later, I was explaining my conversation with another man I know (60 yrs old), and he replied “Good!, We need to bring manufacturing back here.” I wanted to poke him in the eye with my greasy finger. However did we arrive to the point that Americans are so darn stupid. It takes years to accomplish such a feat, and where we will find the workforce in the first place? This younger bunch isn’t going to do it, they are too busy head down playing on the phone bouncing off of buildings and such. And what if we could bring it back? In the meantime?
My prediction is this, if China doesn’t get back up and going and fast, we are in serious trouble. But what do I know? I am just old and grumpy and work on all this broken down junk.
*while wearing protective goggles*
I second bringing back manufacturing jobs, hell, well-paid jobs. It takes time, but time is NOT the problem. Sovereignty, i.e. power. It takes power. No one here is willing to have THAT conversation. It should be a given for most of us here. Darn stupid? We need the serious trouble, my friend. We need to BE serious trouble. Don’t know what it’s gonna take to get you fucks to see Solutions Are Obvious. *smh* ‘N if’n you just want to run out the clock in yur golden yars, to hell with that.
You won’t get no argument out of me. If I had one dollar for every time I have heard an older man say, “I sure feel sorry for my grandchildren, but I won’t be here to see it.” Why not just call yourself a coward? And I have news for most of them, they are going to see it! But most of them have become as women and will be whimpering like a baby with no clue how to take care of what needs to be done.
I think it would be good doing what needs to be done. The profound truth of the term ‘punchable face’ will be palpable then, young and old. lol
“time is NOT the problem”
getting it done before necessary infrastructure fails and is lost is indeed the problem. there aren’t any horses, few know how to garden, few have any reserve of anything at all for a downturn, and no-one at all anywhere is prepared for a normal and typical crop failure famine. effectively the modern technology-supported population is at a nomadic forager level personally, they’re not going to be able to step up to 19th century agriculture and industry in a few years.
Yes, I still garden with a horse but………so many factors to consider.
“I still garden with a horse”
then you’ll be a hundred years ahead of everyone else.
and they’ll all see that, and come calling ….
>>> It takes power. No one here is willing to have THAT conversation.
For starters, everyone who has a corner office in lower Manhattan will have to be… um, re-educated.
Maybe Bernie Sanders IS the right man at the right time….
Let the Jews win. It will be educational, like living behind the Iron Curtain for 100 years.
“In the meantime?”
horse and buggy, with no horses or buggies. the road, with no shoes. mad max, with no pigs supplying methane. 1917, with no field hospitals.
but lots of guns. 400 million guns and 4 trillion cartridges of ammunition and 1000 yard sniper scopes and IR and NV. oh yeah, lots of guns.
“an armed society is a polite society.” dunno man, kinda think it won’t be.
I think it will depend upon the civility of the community prior to the “significant event.”
Exactly
Civility is an overrated concept of the feminine and effeminate. Civilization is not congruent with civility. That’s why we are this lost and miserable in the first place. Let’s get back to basics. It’s a man’s world. Cuing James Brown, wife beater and a great man. I don’t speak highly of many so swarthy. The man worked hard and was smart enough to win and no pussy. Hi, gman!
https://www.youtube.com/watch?v=eE0taRRlIIs
“Civility is an overrated concept of the feminine and effeminate”
in an environment overloaded with guns, civility is a necessary component of survival. you may be a big hefty well-trained well-experienced he-man who other men fear and all the ladies love and palpably punching people in the face left and right, but a bullet, from a man or a wimp, simply overrides all that.
Pussy. To answer my question for you: you assume everyone but you can organize for power, can take power. Why can’t you kill your enemy? Why is it that you are always the prey? Yes, a bullet can. And who has a monopoly on retaliatory bullets these days? Damn you, pussy. You are effeminate.
“Why can’t you kill your enemy?”
ah, but you can. and they can kill you. just as easily, in exactly the same way, at any time, for any reason or no reason. just like you.
“And who has a monopoly on retaliatory bullets these days?”
nobody.
who has a monopoly on shooting first?
“You are effeminate.”
bullets aren’t.
We are being killed now, just slowly in the Overton Window, a social construct of cucks like you. Manhood is not an optional feature of man.
gman,
Bottom line you are a defeatist.
And guess what…no matter what happens…you will be defeated.
Defeat radiates from too many of your your comments like heat from a radiator.
The hissing is your ‘all is lost’ steam…leaking out and announcing your defeat, before you even enter the arena.
Buck up.
People better be polite because as an old soldier knows, defense loses to a surprise offense so I don’t play defense…
It wouldn’t be a surprise if you didn’t take so damn many naps.
Yea Anon, me and robert learned how to sleep with one eye open…the hard way (or maybe its just our our Bell’s palsy…acting up?).
^THIS^ (robert h siddell jr’s comment)
That is a critical realization. I did not need to have a perfect don’t-lose defense, as instilled by my parents. I only need to neutralize the hostile in front of me. It’s a much easier task. Everybody must sleep, shit, eat, take off the armor, put down the gun.
Im gonna venture a guess that after this is all over and before one freighter leaves china again, the chicoms will want to re negotiate the trade deal, and by god, they might have the upper hand this round. Lord help us…..literally.