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JH Kunstler's 2012 Forecast: Bang and Whimper

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JHK's 2012 Forecast: Bang and Whimper .. 1/2/2012

Zombification, deterioration demand leadership

================================================

 

JHK's Predictions : http://kunstler.com/blog/2012/01/2012-forecast-bang-and-whimper.html

 

JamesHowardKunstler_by_CalCrary.jpg

 

SUMMARY in EXCERPTS:

"The industrial world underwent complete zombification in 2011"

 

"The biggest political shock awaiting us is the massive disruption of the major party nominating conventions next summer,

 

"President Obama... can't wrap his mind around the simple fact that we will never be "energy independent"... running 260 million cars and trucks... And: Why does he still employ an Attorney General who has not started one prosecution for financial misconduct amid a panorama of arrant swindling and fraud? (Ditto: heads of the SEC, CFTC, etc.)

 

"Meanwhile, the Republicans labor to convert themselves into the party of corn-pone Nazism ...because they lack the brains to understand where history is taking us and what the mandates of reality are shouting at us about the urgent need to reorganize American life.

 

"I think this gang, too, will be sent packing by the mobs of 2012. I have a nagging intimation that some third party candidate will emerge. The two personalities I keep seeing in that role are Howard Dean and Michael Bloomberg. Both of them are imperfect, but both of them are clear-headed and action-oriented, and I have a feeling that both of them are stewing in the background."

 

"Conditions could deteriorate so badly that a Pentagon general might have to step into national leadership just to keep the grocery stores supplied with basic rations ."

 

"The USA is diving into an economic depression... the whole thing will just topple over. There will be a lot of bewildered, angry, dispossessed people from sea to shining sea.

 

"The people of Greece, Portugal, Ireland, Spain, Italy, Belgium will have less income, fewer government services, lost wages and pensions, less comfort than they have had for a couple of generations. Meanwhile, France is drowning in bad paper and the German banks are choking on it. There is really only one plausible outcome and that is default. The reckoning of the bondholders is at hand. Everybody will get poorer simultaneously - and if not, there will be not just regime change but civil war and revolution."

 

"We're entering the rutted wagon-road of de-industrializing and un-advancing. What awaits us in a "time-out" from hyperbolic technological progress. Wrap your mind around life in an economy organized around farming, with a much sparser distribution of big urban centers, and far fewer people overall."

 

"2012 will be the year of internal strife in these "advanced" nations, of people fighting over the table scraps of modernity among their own, in their own backyards, a desperate sorting out of the remnants."

 

"Don't be surprised if some hostilities break out between Turkey and Iran, since a battleground named Iraq lies between them. Iraq is a basket-case despite an immense reserve of oil under its sands, and having had the US military babysit it for eight years. ... The dangerous position of Israel vis-à-vis all these quarreling players is probably as bad as it has been in two generations. An attack by a neighbor or getting caught in a crossfire between neighbors would stimulate a lusty response, and perhaps World War Three."

 

"2012 is the year that China proves to be a mortal nation and rolls over with a very bad case of the vapors. Their banking system is a sham. Their property bubble is a fiasco. Their government has no formal legitimacy and will install a new leadership group this year, while exports crash and mass factory layoffs happen. There will be a lot of pissed off people in China, and they may express themselves politically in ways that have seemed unthinkable for decades.

 

"The abiding question as we turn the corner into the New Year is: how come Jon Corzine is still at large? (Not to mention Angelo Mozilo, plus the entire executive floor of Goldman Sachs, and about 5000 other assorted Wall Street grifters still on the loose.)

 

"Longtime readers of this blog know how much I love predicting the Dow Jones Industrial Average to crash down to 4000 every year. I never disappoint - though I am often disappointed.... This year I change the tune slightly: I predict the DJIA will go to 4000, with the catch that the number is only a way-station to 1000, which it will hit in 2014.

=== ===

 

Thread on K-Cast :: http://kunstlercast.com/forum/index.php?topic=5347.msg62319#msg62319

 

My Reaction follows

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JHK's 2012 Forecast: Bang and Whimper .. 1/2/2012

My Reaction follows

I think Jim is too bearish for 2012.

 

Hard times are coming, but they need not be delivered in a single year. I cannot see the Dow hitting 4,000 in 2012. My own target is for SPX-850 in mid-summer, and that may be retested in September, or October. That 850, might be equivalent to Dow-8,000 - which is double JHK's 4,000. And after that, I would expect a rally. And that rally could be inspired by a cheaper dollar. Money printing can stave off a crash, or allow a crash to happen without the index falling as much as it would if measured in "real prices."

 

Further out, to 2014 and beyond, real stock prices may go much lower, as the depression gets worse, or as a money-printing-induced inflation hits the real value of stocks.

 

No doubt, JHK is right that a dramatic restructuring of the American way of life is needed. We simply cannot carry on operating a massive fleet of 250 million cars and trucks as the world moves past peak oil, and other nations - with more real wealth than the US - bid for limited oil resources.

 

If US politicians are unable or unwilling to lead the country in facing this very real challenge, then "surprise" crises will reoccur until they force the country to deal with reality. I think it will take many years of a recurrent cycle crisis, followed by panic reactions, to bring the country as a whole to a level of awareness where the average person is facing reality. Along the way, there may be periods where oil is scarce and rationed, and so is food. These crises may take years to emerge. And one of their sad effects may be the "die-off" of parts of the US population that JHK seems to hint at, without coming out and saying. The survivors are likely to be those who have followed his prescription of moving towards a "life in an economy organized around farming".

 

Personally, I think that some of the events that reduce US population may be natural disasters. I do not subscribe to the notion of a pole shift in December, as some think the Mayan calendar foretells. But I do think that the rising tide of earthquakes, tsunamis, and active volcanoes, is a trend that is destined to continue for the next 5-10 years. I cannot tell you what is bringing on these stresses, but it could be that a long cycle of 12,000 years or whatever is bringing our planet and its sun into an alignment which inspires more Earth Changes. This will be an area of study for me in the years to come.

 

A wake up period is painful, and I think we are going through one now. We are learning that whilst asleep the elites of our country and most other countries on our planet have grabbed too much power. Push back is coming, and if enough people awaken, the push back will be successful eventually. As this wake-up occurs, we will also learn that we have wasted too many resources, and they are becoming increasingly scarce. An adult response to our power imbalances should help to trigger an adult response to our planetary imbalances too.

 

I am optimistic, and believe that by the end of this momentous year, the number of people who are seeking to address our national and global challenges as adults will be sufficient that a plan for cooperation amongst adults will be developing. Perhaps that will be the third party that JHK is asking for.

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Thanks DrBubb, I agree with you.

I think 2012 is gonna be awesome (but then I like rapidly changing environments =) with lots of people

snapping out of the slumber they are in. I'd predict the bulk of pain across 2013-14.

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''Turning to Japan....That sore beset kingdom is suffering all the blowback of modern times at once: the Godzilla syndrome up in Fukushima; a demographic collapse; an imminent bond crisis; the collapse of export market partners; and a long, agonizing death spiral of its banks. I stick by a prediction I tendered back in March, after the deadly tsunami: Japan will decisively opt for a return to pre-industrial civilization. Why not? The rest of the world will be dragged kicking and screaming to the same place. Let Japan get there first and enjoy the advantage of the early adapter - back to an economy of local, hand-made stuff, rigid social hierarchy, folkloric hijinks in whispering bamboo groves, silk robes, and frequent time outs for the tea ceremony.''

 

It's very well written...but he is a writer and Japan is a doomers wet dream to rag on at the moment. I feel sure there is a considerable long way to go before ' Japan decisively opts for a return to pre-industrial civilisation'.

I suspect it is more that parts of the country and certain people in it, are dying a slow death...or turning away from traditional industrial civilisation. So a forced minority, at the moment, are opting out. But not the corpus. You can see this with the events in Tokyo. The people should probably not be living there for their own safety, yet how easy it is to suspend the reality! People will resist change especially while they still have their careers and their mortgages, car loans and kids education bills. ie they are trying to ignore and dispell the future prefering to swallow the 'solar my house, and scale down the electric consumption'. It seems that they feel they can out run the bear. Can they?

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''...Japan will decisively opt for a return to pre-industrial civilization.[/color] Why not? The rest of the world will be dragged kicking and screaming to the same place. Let Japan get there first and enjoy the advantage of the early adapter - back to an economy of local, hand-made stuff, rigid social hierarchy, folkloric hijinks in whispering bamboo groves, silk robes, and frequent time outs for the tea ceremony.''

. . .

I suspect it is more that parts of the country and certain people in it, are dying a slow death...or turning away from traditional industrial civilisation. So a forced minority, at the moment, are opting out. But not the corpus.

An interesting trend to watch.

 

The best setting for doing that (returning to pre-industrial civilization) is probably a traditional farming village.

 

japfarmvillage.jpg

 

I believe they still exist in Japan. How self-sufficient are they? Are they able to hold onto any of the young people?

 

I love this photo:

japfarmhouse.jpg

 

/source:

This is from the remote village of Shirakawa-go. This is a small farming village that most people didn’t even know existed until recent years. It has now become a UNESCO World Heritage Site, most famous for the traditional gassho-zukuri farmhouses.

 

/see: http://japandave.com/tag/shirakawa-go/

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Catherine Austin Fitts...

 

Optimistic about 2012 - She thinks "we are finally facing the beast"

 

 

"There needs to be a global conversation about what is going on. I welcome the conversation."

 

"Once you centralise, there's a whole group in the middle that you no longer need anymore."

"The empire needs taxes to keep the social services going to the Baby Boomers."

"I saw (back in 1998) that they (the NWO) were planning on de-populating."

 

In the US in recent months: Record gun sales.

People are worried about imminent collapse, and they think "the government is criminal."

 

CAF to AJ: "Have you heard about the Maker Movement?" (people learning how to make things.)

"The interest in growing fresh foods is exploding."

 

"Let's circulate money locally. How do we build local equity markets?"

 

 

"If we shift our own lives, by operating more at the local level, then they do not have a target to shoot at."

 

"Once we can see more clearly who they are, we can see who to withdraw support from."

"Freedom is not free. But I am not afraid. I don't think they will shoot people, for just doing community bartering."

"Their resources are spread very thin."

 

 

"We can solve this at a local level."

 

economist.jpg

 

"Stand back, I'm a Central Banker."

But they aren't the ones to fix the problem. They are the ones that caused it.

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Catherine has some more interesting views in this interview with The Daily Bell

 

Catherine Austin Fitts on Wall Street's Corruption,

the Austrian School and Who's 'Really' in Charge

 

EXCERPT

Daily Bell: Do you have an opinion on China? We believe it's headed for a crash landing.

 

Catherine Austin Fitts: China is struggling in the shift from exporter to the West to a country with more significant internal consumption. Their political challenges are formidable – including keeping one billion people employed and managing a new generation that is dominated by too many single male children.

 

However, China has an extremely productive culture and people. They think strategically, are very hard-working and love to learn and invest. The Roman Empire and the British Empire went broke trading with the Chinese, until the Brits turned to opium.

 

I think a growing China is here to stay. Yes, they may slow down as, like the rest of us, they choke on misallocations of capital that occur in bubbles. I don't think they will crash unless the currency wars lead to a global meltdown and war. Their long-term outlook is quite positive. Remember that our success is very much tied to their success.

 

Oversimplified, if the young people of this world are not successful what would happen to all of us? Elders need youngsters. In part, that is what the shift of capital to the emerging markets is all about.

 

Daily Bell: What are some of the most important issues pertaining to free markets, in your opinion?

 

Catherine Austin Fitts: The most important issue is transparency. The second is integrity of contracts and agreements.

 

Daily Bell: What are the fundamental obstacles to recovery?

 

Catherine Austin Fitts: We are experiencing an ongoing financial coup d'état that is centralizing power. Symptoms include an absence of transparency, deteriorating integrity of contracts and agreements, environmental deterioration, a "breakaway civilization" that appears "out of control." I would add to this the use of financial markets for warfare as opposed to facilitating the allocation of capital and trade.

 

The ultimate codification of things like transparency and integrity of transactions is not the law; it is the culture. A variety of forces are systematically breaking down our physical health and our culture. That cultural corruption is the greatest obstacle.

 

Daily Bell: What are the fundamental issues pertaining to a healthy recovery?

 

Catherine Austin Fitts: We have to get to the bottom of who has been centralizing and why, what is the technology they have and where it is they are planning to go with this.

 

Daily Bell: Is there a power elite that is trying to create one-world government? If so, is it succeeding?

 

Catherine Austin Fitts: Yes, there is a concerted effort to create a one-world government and evolve to a one-world currency. It has been succeeding. As the "financial coup d'état" becomes more obvious, centralization is entering a critical stage as more and more people globally react negatively to the effort and related tactics.

 

Indeed, our current currency wars reflect a natural pulling away from centralization that is healthy.

. . .

Daily Bell: What are the most important – seminal – works of yours that you would encourage everyone to read? Where can they be found?

 

Catherine Austin Fitts: I have spent quite a lot of time thinking about how we could shift the management of institutional capital to a new model.

 

You can read more about the Solari Investment Model here:

http://solari.com/blog/the-solari-investment-model/ .

 

Daily Bell: Finally, give us your best estimate of where is gold headed, pricewise, over the near- and long-term.

 

Catherine Austin Fitts: Gold is still in a long-term bull market. I anticipate the high for 2012 being somewhere between $2000-2200. Where the price ends up long-term is very much a function of monetary policy in the long-run. Gold is not increasing in value so much as fiat currencies are debasing.

 

I believe that inflation will continue to be the policy choice to manage global debt positions.

 

/more: http://thedailybell.com/3420/Staff-Report-Catherine-Austin-Fitts-on-Wall-Streets-Corruption-the-Austrian-School-and-Whos-Really-in-Charge

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Ugh ! It just gets worse

 

This is from a pictoral in this week's TIME about an American baby born in 2012

Hello. My Name is Sophia

My parents see me as a blessing to the world

===============================================

 

"There's a 60% chance that I will live in the suburbs. 28% that I'll live in a city."

 

"I can expect to live 81.3 years - until 2093.

(American boys born in 2012 have a life expectancy of 76.2 years - five years less than girls.

Is that thanks to the 'constant state of war' by America, perhaps.)

 

"I am one of 4 million babies who will be born in the US in 2012."

(China will be home to 16 million new babies in the year.)

 

"35% of my American peers will be obese in adulthood."

(7.6% of Chinese babies will grow up to be obese.)

=== ===

 

Maybe one day Americans will defy JHK's expectations and stop being such ill-disciplined suburban slobs

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Thanks to CMJ for starting a thread in the Fringe section, with the Chris Hedges interview

An Awesome in-depth interview.

Looking for the Truth in the American soul, by a man who has a deep moral sense.

 

Here's the YouTube version

http://www.youtube.com/watch?v=7zotYU21qcU

 

"The US is following the trajectory of other declines... all the signs are there."

He describes Goldman Sachs as "a criminal enterprise"

"Our children have not chance of having the same lifestyle that we enjoyed."

"OWS has a message: 'The corporate coup has to be reversed.' "

"Those in power are tone-deaf and out-of-touch."

 

My response- to his headline:

Will the decline be terrifying as the descent in the UK, as its empire crumbled?

(We may be that lucky, but only if fortune smiles.)

 

Other than that...

 

I think of him as sharing JH Kunstler's bleak view of the future, but without the humor

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Ron Paul threatens the Tapeworm economy

 

Ron Paul’s Plan to Restore America challenges secret trillion dollar Black Budget

 

The heart of Paul’s economic message is outlined in his “Plan to Restore America” Paul’s plan to eliminate five cabinet level departments and trillion dollar budget cut appeals to a cross spectrum of American society, while also alarming some Americans that benefit from a host of programs funded by these Federal departments. It will be surprise to many that among those likely to be most alarmed by Paul’s “Plan to Restore America” are not private citizens; but powerful corporate, government and military entities that use excesses, inefficiencies and waste in these five government departments as a cover for secretly funding a vast network of classified projects. A secret trillion dollar Black Budget has been created to fund this network of projects, which has all been hidden from most Americans, the media, the U.S. Congress, and even the President himself!

. . .

There is however compelling evidence that the covert world of highly classified projects is primarily funded by a black budget created by the CIA rather than the DoD. Rather than being a beneficiary of a Congressionally sanctioned DoD ‘black budget’, the CIA has its own ‘unofficial’ black budget. The CIA’s black budget is a conduit for funds secretly siphoned into the various military intelligence agencies and private contractors associated with both the CIA and the DoD, for intelligence activities, covert operations, and weapons research and development.

 

The CIA has the unique legal ability among all U.S. government departments and agencies to generate funds through appropriations of other federal government agencies and other sources “without regard to any provisions of law,” and without regard to the intent behind Congressional appropriations.

 

Every year, according to Catherine Austin Fitts, a former Assistant Secretary of HUD (United States Department of Housing and Urban Development), billions of dollars of Congressional appropriations are diverted from their Congressionally sanctioned purposes to CIA and DoD based intelligence agencies without knowledge of the public and with the collusion of Congressional leaders. The covert world of ‘black programs’ acts with virtual impunity, overseen and regulated by itself, funding itself through secret slush funds, and is free of the limitations that come from Congressional oversight, proper auditing procedures and public scrutiny. The departments from which many of these black budget funds are secretly siphoned from are the very same as those proposed by Ron Paul for elimination: Energy, Housing and Urban Development, Commerce, Interior, and Education.

 

The key to uncovering the true size of the black budget is the chronic accounting anomalies in the DoD budget. In the three year period from 1998-2000 when the DoD was audited by the Office of the Inspector General, it was found that an average of 1.7 trillion dollars per year could not be accounted for. These auditing anomalies is evidence that over one trillion U.S. dollars annually is being siphoned by the CIA into the DoD for secret distribution to various military intelligence agencies and corporate contractors, and the ‘deep black’ programs they support. Such siphoning, with dubious constitutional status, is made legal by various Congressional enactments, senior Congressional officials, and the Executive Office.

 

/more: http://news.exopoliticsinstitute.org/index.php/18210/

 

The criminal enterprises sucking away the wealth of America must be concerned

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Here's a passionate Linda Morton-Howe alarmed at recent losses of Freedom in America

 

http://www.youtube.com/watch?v=SOzjGw-zSPs

 

"Lies take a priority of facts... in order for the government to retain control."

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THE ELITES screwed up badly back in the 1840's too. Look what happened:

 

MURMURATION - by JHK

 

Investment guru James Dines introduced another seminal idea on Eric King's podcast last week. Dines's work over the years has focused much more on human mob psychology than technical market analysis - which he seems to regard as akin to augury with chicken entrails. Dines now introduces the term "murmuration" to describe the way that rapid changes occur in the realm of human activities. The word refers to behaviors also seen in other living species, such as the way a large flock of starlings will all turn in the sky at the same instant without any apparent communication. We don't know how they do that. It seems to be some kind of collective cognitive processing beyond our understanding.

 

Dines goes on to suggest that the political stirrings and upheavals of the past year represent an instance of human "murmuration" that will lead to even greater epochal changes in geopolitical and economic life. Now, I've often said 1) history doesn't repeat, but it rhymes [thank you, Mark Twain], and 2) that these times are like the 1850s. To be more precise today, these two concepts of "the trust horizon" and "murmuration" point to a moment in time that I believe we are now rhyming with: the revolutions of 1848 and the events that grew out of it.

 

The spring of that year was an inflection point when discontent over the changes sweeping through European society broke into open insurrection in France, Prussia, Austria, Italy, Poland, South America, and other places all seemingly at once - despite the absence of television and the internet. However, the upheavals of 1848 occurred not long after the first practical installation of a telegraph line from Annapolis, Maryland, to Washington, DC (and then in Europe). It was also a time when the first railroad networks were linking up.

 

In February that crucial year, the liberal "Citizen King" Louis-Philippe of France was driven off the throne after an 18-year-reign characterized by tranquility and prosperity compared to the decades that preceded it. In March, street protests and violence spread through the grab-bag of kingdoms, dukedoms, and obscure principalities (Prussia... Saxony... Hesse... Fulda...) that would eventually make up the super-state of greater Germany. The Austrian empire began its slide into senility as its constituent states rioted. Even the people in Switzerland went batshit. And so on. Enter, stage left, Marx and Engels with a new political theory...

. . .

In any case, the main point is that so many people across a continent got the same idea in the first weeks of a particular year, and then set about expressing themselves violently. More to my point is how things worked out in America. You have no doubt realized by now that there was no uprising in the USA in 1848 (though we did prosecute a war with Mexico). Yet, in the best Fourth Turning sense of history, a new generation had come of age and was producing the revolution in ideas that included Emerson and Thoreau's Transcendentalism, and the abolition movement, dedicated to ending slavery. This combination of broadly-held idealistic notions boiled away for another decade and led to the "mumuration" that precipitated the biggest bloodbath of the civilized world in the 19th century: the American Civil War. The Revolution of 1848 expressed itself most horrifically in the place that thought itself most specially insulated from its effects.

 

/more: http://kunstler.com/blog/2012/01/murmuration.html

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He finishes with this bit:

 

Hence, when you read an idiot such as Paul Krugman in Monday's New York Times Op-Ed kindergarten, prating on the end of hard times in the USA, swallow a good half-pound of kosher salt. James Dines is right, a great human "murmuration" is underway, vibrating like a bass chord through bodies politic all over the world. Wait until you see what breaks loose at the Democratic and Republican conventions later this year.

-- --

paul-krugman.jpg

 

Anyone who ridicules the villainous PK must be on the right track

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