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[bob ford <bobford79 AT yahoo.com>]

I don't consider Kunstler predictions with the same regard as someone like 
Peter Schiff; simply because Schiff's calls have been timely and correct, and 
Kuntsler's still have , yet, to be fulfilled.

  But, he is very bright and does have quite a following, and, who knows, if 
his new projection of super inflation might be correct.  It falls right in 
line with Schiff, Sinlair, Ron Paul, et al. 

 If you are not familiar with Kuntlser, he believes that, soon, travel will 
almost cease to exist, which I find wild-eyed; but; he always makes a good 
case................... 


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 Zombie Economics: Super-inflation snap-back will occur six to eighteen 
months from now


By James Kunstler 



 
(Kunstler) -- Though Citicorp is deemed too big to fail, it's hardly 
reassuring to know that it's been allowed to sink its fangs into the Mother 
Zombie that the US Treasury has become and sucked out a multi-billion dollar 
dose of embalming fluid so it can go on pretending to be a bank for a while 
longer. I employ this somewhat clunky metaphor to point out that the US 
Government is no more solvent than the financial zombies it is keeping on 
walking-dead support. And so this serial mummery of weekend bailout schemes 
is as much of a fraud and a swindle as the algorithm-derived-securities 
shenanigans that induced the disease of bank zombification in the first 
place. The main question it raises is whether, eventually, the creation of 
evermore zombified US dollars will exceed the amount of previously-created US 
dollars now vanishing into oblivion through compressive debt deflation. 

My guess, given the usual time-lag factor, is that the super-inflation 
snap-back will occur six to eighteen months from now. And the main result of 
all this will be our inability to buy the imported oil that comprises 
two-thirds of the oil we require to keep WalMart and Walt Disney World 
running. At some point, then, in the early months of the Obama 
administration, we'll learn that "change" is not a set of mere lifestyle 
choices but a wrenching transition away from all our familiar and comfortable 
habits into a stark and rigorous new economic landscape. 

The credit economy is dead and the dead credit residue of that dead economy 
is going where dead things go. It came into the world as "money" and it is 
going out of this world as a death-dealing disease, and we're not going to 
get over this disease until we stop generating additional zombie money out of 
no productive activity whatsoever. The campaign to sustain the unsustainable 
is, besides war, the greatest pitfall this society can stumble into. It 
represents a squandering of our remaining scant resources and can only 
produce the kind of extreme political disappointment that wrecks nations and 
leads to major conflicts between them. I don't know how much Mr. Obama buys 
into the current adopt-a-zombie program -- his Treasury designee Timothy 
Geithner was apparently in on this weekend's Citicorp deal -- but the 
President would be wise to steer clear of whatever the walking dead in the 
Bush corner are still up to. 

All the activities based on getting something-for-nothing are dead or dying 
now, in particular buying houses and cars on credit and so it should not be a 
surprise that the two major victims are the housing and car industries. 
Notice, by the way, that these are the two major ingredients of an economy 
based on building suburban sprawl. That's over, too. We're done building it 
and the stuff we've already built is destined to loose both money value and 
usefulness as the wrenching transition goes forward. 

All this obviously begs the question: what kind of economy are we going to 
live in if the old one is toast? Well, it's also pretty obvious that it will 
have to be based on activities productively aimed at keeping human beings 
alive in an ecology that has a future. Once you grasp this, you will see that 
there is no reason to despair and more than enough for all of us to do, so we 
can recover from the zombie nation disease and get on with the next chapter 
of American history -- and I sure hope that Mr. Obama will get with the new 
program. 

To be specific about this new economy, we're going to have to make things 
again, and raise things out of the earth, locally, and trade these things for 
money of some kind that we earn through our own productive activities. Don't 
make the mistake of thinking this is optional. The only other option is to go 
through a violent sociopolitical convulsion. We ought to know from prior 
examples in world history that this is not a desirable experience. So, to 
avoid that, we really have to put our shoulders to the wheel and get to work 
on things that matter, and do it at a scale that is consistent with what the 
world really has to offer right now, especially in terms of available energy. 

In my view -- and I know this is controversial -- a much larger proportion of 
the US population will have to be employed in growing the food we eat. There 
are many ways of arranging this, some more fair than others, and I hope the 
better angels of our nature steer us in the direction of fairness and 
justice. The prospects of a devalued dollar imply that we very shortly will 
not be able to get the all the oil-and-gas based "inputs" that have made 
petro-agriculture possible the past century. The consequences of this are so 
unthinkable that we have not been thinking about it. And, of course, the 
further implications of current land-use allocation, and the property 
ownership issues entailed, suggests formidable difficulties in re-arranging 
the farming sector. The sooner we face all this, the better. 

As the fiesta of "globalism" (Tom Friedman-style) draws to a close -- another 
consequence of currency problems -- we'll have to figure out how to make 
things in this country again. We will not be manufacturing things at the 
scale, or in the manner, we were used to in, say, 1962. We'll have to do it 
far more modestly, using much more meager amounts of energy than we did in 
the past. My guess is that we will get the electricity for doing this mostly 
from water. It may actually be too late -- from a remaining capital resources 
point-of-view -- to ramp up a new phase of the nuclear power industry (and 
there are plenty of arguments from the practical and economic to the ethical 
against it). But we have to hold a public discussion about it, if only to 
clear the air and get on with other things, namely the new activites of 
alt.energy. But I would hasten to warn readers (again!) that we'll probably 
have to do these things more modestly too (don't count on giant
 wind "farms"), and that we are liable to be disappointed by what they can 
actually provide for us (don't expect to run WalMart on wind, solar, 
algae-fuels, etc). 

In any case, we're not going back to a "consumer" economy. We're heading into 
a hard work economy in which people derive their pleasures and gratification 
more traditionally -- mainly through the company of their fellow human beings 
(which is saying a lot, for those of you who have forgotten what that's 
about). Our current investments in "education" -- i.e. training people to 
become marketing executives for chain stores -- will delude Americans for a 
while about what kind of work is really available. But before long, the 
younger adults will realize that there are enormous opportunities for them in 
a new and very different economy. We will still have commerce -- even if it's 
not the K-Mart blue-light-special variety -- and the coming generation will 
have to rebuild all the local, multi-layered networks of commercial 
inter-dependency that were destroyed by the rise of the chain stores. In 
short, get ready for local business. It will surely be
 part-and-parcel of our local food-growing and manufacturing activities. 

I hate to keep harping on this -- but since nobody else is really talking 
about it, at least in the organs of public discussion, the job is left to me 
-- we have to get cracking on the revival of the railroad system in this 
country, if we expect to remain a united country. This is such a no-brainer 
that the absence of any talk about it is a prime symptom of the zombie 
disease that has eaten away our brains. Automobiles (the way we use them) and 
airplanes are utterly dependent on liquid hydrocarbon fuels, and you can be 
certain we'll have trouble getting them. You can run trains by other means -- 
electricity being state-of-the-art in those parts of the world that do it 
most successfully. I know that California just voted to create a high-speed 
rail link between Los Angeles and San Francisco. It's an optimistic sign, but 
it shows more than a little techno-grandiose over-reach. High speed rail 
would require a mega-expensive re-do of the tracks. We need to
 scale our ambitions for this more realistically. California (and every other 
region of America) would benefit much more from normal-speed trains running 
every hour on the hour on tracks that already exist than from a 
mega-expensive, grandiose sci-fi program that might not get built for ten 
years. The dregs of the Big Three automakers can and should be reorganized to 
produce the rolling stock for a revived railroad system. 

Even amidst the financial carnage underway right now, the public is enjoying 
a respite from high-priced gasoline, but it is due to be short-lived. As I've 
already said, we are in danger not just of oil prices going way back up 
again, but of losing access to our supplies from the exporting countries. In 
other words, we're just as likely to face shortages as high prices, and soon. 
Oil shortages are certain to produce a political freak-out here unless we get 
our heads screwed on right -- and this means that Mr. Obama had better 
prepare quickly for a comprehensive action plan in the face of such an 
emergency (which has to include a robust public information initiative). 

In the meantime, Mr. Obama must dissociate himself from all activities aimed 
at the care-and-feeding of zombies. Mr. Obama is correct that there is one 
president and one government at a time, and since this is the case in 
reality, he must avoid being contaminated by the choices they make as their 
clock ticks out. Obviously, world markets might be more disturbed if Mr. 
Obama were to step up and actively contradict everything that is being done 
to cultivate zombies right now. He is in a very delicate position. But being 
a man of intelligence and sensibility, he may successfully navigate this 
rough passage. 

That this melt-down is building straight into the Christmas holidays is one 
of those accidents of history that leaves one reeling in wonder and nausea. 
The cable networks better be prepared to bombard the public with 
round-the-clock showings of It's A Wonderful Life, because they're going to 
need all the moral support they can get as zombies stalk through the silent 
night, holy night.