Saturday, September 7, 2019

Unsettled Weather - Kunstler (And that ain't all that's unsettled!)

After leaving the Bahamas for dead, Hurricane Dorian barely grazed the US mainland en route to the Canadian shoals of oblivion, perhaps saving America’s insurance industry. But the steamy west coast of Africa is hurling out a cavalcade of replacements as the high season for Atlantic storms commences, so better keep the plywood sheets at hand. Lots of things are looking stormy around the world just now: nations, markets, politics — everything really except all three divisions of the American League… yawn….
The world is in a nervous place these days The US is something like the world’s crazy old auntie, whom everyone else would like to lock in the attic. Except she happens to be cradling a bazooka, so they’ll go on trying to ignore her a while longer, hoping she doesn’t launch any rockets at the neighbors.
Britain courts chaos in its attempt to keep staving off the Brexit quandary, which itself seems to promise a hearty dose of chaos as thousands of unresolved trade issues threaten the country’s economic future walking out on Europe. The majority who voted Brexit feel that the EU is already crushing them under bureaucratic diktat and immigration quotas. New Prime Minister Bo-Jo has tried one ploy after another in his quest to reach the Halloween Brexit ramp. Everyone is ganging up on him, even his own brother, Jo Johnson, who has quit the cabinet and is ditching his seat in parliament. Bo-Jo wants to call an election because there is no one else to take his place, and many of those piling on him also detest the opposition Labor Party leader, Jeremy Corbyn. Events are outrunning anybody’s ability to see what happens next. Street violence is not out of the question.
What’s at stake behind all the pushing-and-shoving is the question of national sovereignty. Does it matter anymore? I suspect it will matter increasingly for everyone in many nations, and at a smaller and smaller scale of political divisions so that, for instance, Great Britain itself will be faced with surrendering its dominion over Scotland and Northern Ireland. This is churning in the zeitgeist now, actually has been for some time since the Soviet Union and Yugoslavia cracked up. Even the United States finds itself increasingly disunited and it’s not inconceivable that before the century ends some regions may go their own way. Texans have been talking it up for years, and California is already acting like she’s started divorce proceedings.
China, meanwhile, is whipping its quasi-vassal Hong Kong like a dog because Xi Jinping is not in a position to bust Donald Trump upside the head and Xi’s got to take it out on somebody. Everything was looking so rosy for China as it burst out of its medieval cocoon into industrial adulthood, and now Mr. Trump is ruining the global arrangements that turned the sclerotic old outfit into a global super-dragon. They’ve had a blast driving down the capitalist road — even if they’re actually ruled by communists — but a storm of bad debt is coming up on them from behind, and if it catches up, the joyride is over and some kind of dreadful crackup happens.

All the abiding normality of the past seventy years is slipping away into flux. Modernity is finally yielding – to what? Nobody knows. And nowhere is this more obvious than in the realm of money and economy. Beyond all the other quarrels of modern times — democracy versus communism, Islam versus the West, the wealthy north versus the poor south — one thing remained pretty steady: the flow of oil into the engines of economy. Turned out, the world didn’t have to run out of oil for that normality to fray badly; the oil just had to become marginally unaffordable, and voila! It’s hard for people to grok, especially here in the USA with oil production so far above the old 1970 prior peak that the proposition seems absurd.

But it is so. The companies chasing shale oil have done it on tons of borrowed money, and now having demonstrated that it’s not a profitable business, investors have soured on them and they can’t get new loans. A contagion of bankruptcies is underway among them and it’s going to get worse because the business model for shale oil is a joke.
But the business model for the nations of the world is also a joke: borrow as much as you can from your own future and pray for a happy ending. It is driving the whole world insane. It’s exactly why people in the USA think it’s a good idea for trannies with arrest records to read stories to six-year-olds. These delusions and the financial head trips that spawn them will also get worse as the nations of the world go deeper into the alternative universe of zero-interest financing and Ponzi pretense. Without that cheap oil, growth is impossible, and without growth, crackup is inevitable.