We're
Entering A Dangerous New Period In History
James
Howard Kunstler
10
July, 2012
News
that that a swarm of termites deep inside the British banking system
have been fiddling the interbank interest rates (LIBOR) for years in
order to systematically vacuum a few billion pence off the exchange
floors for themselves is the latest blow to the credibility of the
global money system - and probably a fine overture to a looming
climactic implosion of the gigantic, creaking, smoldering, reeking,
duck-taped edifice of broken promises, booby-trapped hedge
obligations, counterparty follies, central bank euchres, sovereign
flim-flams, and countless chicanes too various, dark, and deep to
smoke out.
Next,
we'll probably hear that Lloyd Blankfein over at Goldman Sachs has
been tinkering with the rotation of the earth in order to gain a few
micro-milliseconds of advantage in his firm's high frequency trading
rackets. After all, back in 2008 Lloyd himself claimed to be "doing
God's work."
In
short, world banking is now hopelessly pranged, and I am not at all
sure the project of civilization (modern edition) can continue by
other means. The impairments of capital formation are now so profound
that no one and nothing can be trusted.
Not
only are all bets off, but nobody will want to make any new bets -
and by that I mean venture to invest accumulated wealth (capital) in
some useful project designed to sustain human well-being. What
remains is just the desperate hoarding of whatever remains in assets
uncontaminated by the pledges of others to pony up.
All
this points to a dangerous new period of political history, a deadly
Hobbesian scramble to evade the falling timber in a burning house as
the rudiments of a worldwide social contract go up in flames. Such is
the importance of legitimacy: the basic condition for governance,
especially among supposedly free people.
You
can meddle in a lot of distributory issues - who gets what - but when
you mess with the most basic operations of money to the extent that
no one is sure what it's really worth, or what it represents, then
you are deeply undermining society. This is now the condition that is
set to blow up republics.
Reality
dislikes fraud and accounting tricks. Reality is serious about
settling scores. Reality eventually intervenes and puts an end to
monkey business. What will it be this time?
Europe
and America have been buying a month here, a month there (of a
fragile, continuing status quo) on the installment plan. That's what
QE, TARPs, LTRO, EFSF, Operation Twist, et cetera, are all about.
Think of them as multi-billion dollar (euro) fire extinguishers
bought on credit cards. Europe is now completely out of credit to buy
more fire fighting equipment.
For
months now it has been down to whether Germany intends to keep
supporting Spain, Italy, Greece, Portugal, Ireland, the French banks
(and a few stray forgotten places between the backwaters of the
Danube and the Gulf of Finland) without any say in how they manage
their allowance. Much as Germany enjoyed the Ponzi heyday of the Euro
zone, a big "tilt" sign now flashes ominously over the
continent, signaling game over. All fall down.
Everybody
gets real poor real fast. M. Hollandaise over in Paris has already
sealed his fate with his stupid plan to return to "go" on
the Ponzi game-board. Merkel's tattered scarecrow of a coalition will
blow away in the next national election. The Club Med countries will
soon boil up in street-fighting, Holland and Finland will drink
themselves to death, and across the channel outsider Britain will
fizzle away to a burnt bowl of mulligatawny. That's what the end of
the summer looks like to me.
Over
here, in this sorry-ass edition of America, the election will look
more and more like a World Wrestling Federation staged dumb-show
between two catamite hostages of a foul corporate oligarchy. Imagine
that horse's ass Mitt Romney spending the next four months denouncing
Obama-care, modeled on his own health care reform in Massachusetts,
while Obama pretends he has a grip on an economy where the rule of
law is absent due to Obama's own omissions and negligence.
And
if you can't stand that spectacle, just look around at America
itself: a wasteland of futile motoring and discount shopping
populated by depressed, overfed clowns bedizened with sinister
tattoos, pretending to be Star Warriors. No nation ever seen in human
history ever laid such a disappointing egg. Only to have it fry on
the sidewalk.
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