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Entering The Greatest Depression In History

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Kunstler: The Fog Of Numbers: http://kunstler.com/blog/2009/08/the-fog-o...#comment-panels

There's something happenin' here

What it is ain't exactly clear....

-- Buffalo Springfield

One of main reasons behind the vast confusion now reigning in the USA, our failure to construct a coherent consensus about what is happening to us (or what to do about it), is our foolish obsession with econometrics -- viewing the world solely through the "lens" of mathematical models. We think that just because we can measure things in numbers, we can make sense of them.

For decades we measured the health of our economy (and therefore of our society) by the number of "housing starts" recorded month-to-month. For decades, this translated into the number of suburban tract houses being built in the asteroid belts of our towns and cities. When housing starts were up, the simple-minded declared that things were good; when down, bad. What this view failed to consider was that all these suburban houses added up to a living arrangement with no future. That's what we were so busy actually doing. Which is why I refer to this monumentally unwise investment as the greatest misallocation of resources in the history of the world.

Even this interpretation -- severe as it is -- does not encompass the sheer damage done by the act itself, on-the-ground and to our social and cultural relations. Suburbia destroyed the magnificent American landscape as effectively as it destroyed the social development of children, the worth of public space, the quality of civic life, and each person's ability to really care about the place they called home.

It's especially ironic that given our preoccupation with numbers, we have arrived at the point where numbers just can't be comprehended anymore. This week, outstanding world derivatives were declared to have reached the 1 quadrillion mark. Commentators lately -- e.g. NPR's "Planet Money" broadcast -- have struggled to explain to listeners exactly what a trillion is in images such as the number of dollar bills stacked up to the planet Venus or the number of seconds that add up to three ice ages plus two warmings. A quadrillion is just off the charts, out of this world, not really subject to reality-based interpretation. You might as well say "infinity." We have flown up our own collective numeric bung-hole.

The number problems we face are now hopeless. America will never be able to cover its current outstanding debt. We're effectively finished at all three levels: household, corporate, and government. Who, for instance, can really comprehend what to do about the number problems infesting Fannie Mae and the mortgages associated with her? There's really only one way out of this predicament: to get ready for a much lower standard of living and much different daily living arrangements. We can't wrap our minds around this, so the exercise du jour is to play games with numbers to persuade ourselves that we don't have to face reality. We're entertaining ourselves with shell games, musical chairs, Chinese fire drills, Ponzi schemes, and Polish blanket tricks (where, to make your blanket longer, you cut twelve inches off the top and sew it onto the bottom).

Now that Newsweek Magazine -- along with the mendacious cretins at CNBC -- have declared the "recession" officially over, it's a sure thing that we are entering the zone of greatest danger. Some foul odor rides the late summer wind, as of a rough beast slouching toward the US Treasury. The stock markets have gathered in the critical mass of suckers needed to flush all remaining hope out of the system. The foreign holders of US promissory notes are sharpening their long knives in the humid darkness. The suburban householders are watching sharks swim in their driveways. The REIT executives are getting ready to gargle with Gillette blue blades. The Goldman Sachs bonus babies are trying to imagine the good life in Paraguay or the archepelego of Tristan da Cunha.

While extremely allergic to paranoid memes and conspiracy theories, I begin to wonder about the impressive volume of World Wide Web chatter about an upcoming bank holiday -- meaning that the US government might find itself constrained to shut down the banking system for a period of time to deal with a rapidly developing emergency that might prompt the public to make a run on reserves. God knows, there are enough black swans crowding the skies these days to blot out the sun. I hesitate to suggest that readers who are able to should consider stealthily withdrawing a month's worth of walking-around money from their accounts.

The week past, some so-called "conservative" political action groups (read: brownshirts pimped by corporate medical interests) trumped up a few incidents of civil unrest at "town meetings" around the country, ostensibly to counter health care reform ideas. The people behind these capers may be playing with dynamite. It's one thing to yell at a congressman over "single payer" abstractions. It'll be another thing when the dispossessed and repossessed Palin worshippers, Nascar morons, and Jesus Jokers haul the ordnance out of their closets and start tossing Molotov cocktails into the First National Bank of Chiggerville.

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I think the Black Death was a pretty bad period that devastated the World economy for a good 100 years afterwards. Took ages for the economy to get back sorted but when it did there was a boom due to the huge growth and shortage of people - everyone had a job... even the village idiot :unsure:

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I wonder if anyone reaches for a length of rope or gets a shotgun out of the drawer after reading that? I only glanced through it and now have a need for some SSRIs!

It is very depressing reading, especially as we know it's true. The thing that really scares me is the bit where he says that central banks won't raise interest when they need to for fear of snuffing out any illusory recovery and that will lead to hyperinflation. I can so easily see the UK and US going down that road...not Europe though. I think we will see hyoperinflation due to currency runs and not asset inflation, what that means for property prices is anyone's guess, but there could come a time when a house is worth no more than your next meal...of course this time would only be brief before the banksters reset the system.

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