WORLD NEWS TRUST: The Nausea Express (James Kunstler)

[Tace]

James Kunstler -- World News Trust

Oct. 13, 2008 -- The G-7 world, the club of "developed" western nations plus Japan, has commenced an ordeal of suddenly waking up much poorer.

All the desperate work-arounds being engineered by governments and central banks on an al fresco basis are intended to overcome this stunning basic fact, and none of them will. The benchmarks of everything are in flux -- stocks, bond values and yields, commodity prices, most especially currencies -- but these tend to disguise the basic fact of growing and spreading impoverishment. Is oil priced at $80 a barrel this morning? That's nice. Except if the company that employs you is about to fold up and you face a holiday season of driving frantically around Atlanta in search of another job, which the odds are against you'll find. Or if you're living on a retirement fund that's just lost 37 percent of its value and it's time to fill the heating oil tank.

Iceland is the poster-child du jour for this. The little island nation of about 320,000 souls (roughly half of Vermont's population) lately grew a banking sector that thrived on something-for-nothing finance. In little more than a month, its banks have imploded like mini death stars, leaving Iceland with a pariah currency. Since it has to import just about everything, and it suddenly finds itself unable to pay for imports, the people are stripping the grocery markets of whatever remains there now. You wonder what they will do in two weeks. Ten years from now there may be 32,000 of them left, subsisting on blubber sandwiches.

I exaggerate perhaps a little, but who really knows where all this leads? Here in the USA, the Treasury, enjoying new and seemingly limitless powers of discretionary spending, has begun shoveling dollars into every truck that backs up to the loading dock. The numbers are staggering. In ten days it's reached into the trillions in loans and handouts. Most of this money is getting sucked directly into the black hole of debt and margin calls of one kind or another. This is previously-presumed wealth that is now un-presumed. It's leaving the system, never to be seen again. One useful way of thinking about it is to regard it as our society's previous borrowings against our own future. Thus, we are seeing our future vanish into a black hole -- our future comfort, health, and basic nourishment.

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http://www.worldnewstrust.com/wnt-reports/commentary/the-nausea-express-james-kunstler.html

[Eurobabe]

1. Man that is depressing....

I've read Kunstler before, but in this article he is grim. And probably right. :shrug:

[Tace]

3. Better Than Last Week

He was sort of gloating about the impending market collapse. He's not as gleeful about it this week.

[ixion]

2. Yep, this is spot on

we've allowed our leaders to screw us royally with all these bailouts, and we'll be paying for it through the nose for decades.