FORECAST FOR 2009 By Jim Kunstler (author of the book the future after peak oil, The Long Emergency)
A summary of his commentary: December 28, 2008: I worry that the avalanche of troubles already ongoing will overwhelm Mr. Obama and his people. ... President Obama's ( role will be) largely symbolic -- as a reassuring presence encouraging the distressed public to bravely bear their hardships, and to be kind and helpful among their neighbors. This is an idle hope, and 2009 will be very sobering for those who imagine that hybrid cars, or electric cars, or natural gas cars, or any other kind of car technology will save the day. Even if President Obama mounts an "infrastructure stimulus" program, it will not keep up with all the necessary routine road repair that our highway system requires. The extreme financial hardship faced by localities and states insures that they will have to postpone a lot of expensive highway maintenance -- even if the federal government fixes a big bunch of bridges and tunnels -- and so we face the interesting prospect that our roadway systems will enter their own deadly zone of systemic failure even before the whole car issue is settled. The car is going to fail in manifold ways whether we like it or not, and it will fail due to circumstances already underway. For one thing, it will cease to be democratic as the remnants of the middle class find it impossible to get car loans, or pay for fuel, or insurance, and that will set in motion a very impressive politics-of-grievance setting apart those who are still able to enjoy motoring and those who have been foreclosed from it. Contrary to what you might make of the the current situation in the oil markets, we are in for a heap of trouble with both the price and supply of petroleum (more on this below). And there is no chance in hell that any techno rescue remedy to keep all the cars running by other means will materialize. We could see the start of serious inflation sometime in 2009. To some extent, all currencies are now free-falling together, but the situation of the U.S. dollar is so grotesquely dire, An inflationary campaign to avoid compressive deflation can so easily lead to a fiasco of super or hyper inflation -- the kind that kills governments and turns societies into murderous monsters. I'll forecast the that the U.S. dollar is worth 40 percent of its current value by next Christmas. By May of 2009, the stock markets will resume crashing with the ultimate destination of a Dow 4000 before the end of the year. Meanwhile, jobs will vanish by the millions and companies will go bankrupt by the thousands, especially in the so-called service sector, and in all the suppliers of such, along with the landlords in all the malls and strip malls. the consumer economy is dead, and that there is no more available credit of the kind that Americans are in the habit of enjoying. In 2009, we will discover that we are a much poorer nation than we thought because from now on credit will be extremely hard to get for anyone for anything. The businesses that survive will have to keep going on the basis of accounts receivable. This is the area where the crash of giants will be heard. ... (there will be a) comprehensive downscaling in all our activities, from farming to business to schooling to governance, will be the categorical imperative of the years ahead. The federal government will tend to flounder just as General Motors, Citicorp, Target Stores, and other gigantic enterprises will tend to flounder. Counties, municipalities, and states will join in the bankruptcy fiesta. It would be reasonable to expect collapsing services as a result. This would be a situation fraught with danger -- of rising crime, of public health emergencies as water systems are not kept up and sewage treatment becomes unaffordable. I don't imagine the federal government stepping into every Podunk or Metropolis from sea to shining sea and propping up these services. People will have to cope with danger and deprivation. A lot of families will lose everything. They will sift and disperse into the housing owned by other family members -- parents, siblings -- and a strange new not-altogether comfortable kind of togetherness will become common. Over time, a lot of people will go looking for casual work "under-the-table"( and probably low-paying). To some degree, these workers will begin to look and act like a new servant class, and before too long they may be absorbed into the households of people who employ them. There will be plenty of room for them there. 2009 may be the point where we begin to understand what kinds of places will be more hospitable to human society further ahead. I maintain that our giant urban metroplexes have way overshot their sustainable scale and will contract severely. With all the economic hardship, we ought to expect a lot of demographic churning, people leaving hopeless places and moving on to something more promising. I believe we will see them move to smaller towns and smaller cities. The reorganization of the rural landscape into smaller-scaled farms has not begun to occur -- though 2009 might be very hard on agribusiness, given the shortage of capital and if oil begins to march up in price by late winter. Eventually, the rural landscape will require the labor of many more people than is currently the case. Whatever else happens, 2009 will surely see a massive return to home gardening as budgets become strained to the extreme. Jim Hansen's Master Resource Report says that gasoline consumption dropped from 9.29 million barrels a day in 2007 to 8.99 million barrels a day for 2008. That's not much of a fall-off, especially compared to the price drop. So much capital is leaving the oil production-- system and so the hope of offsetting very-near-future depletions in old giant oil fields looks dimmer and dimmer. Mexico's super-giant Cantarell oil field, the second-largest ever discovered after SaudiArabia's Ghawar field, has shown a 30 percent depletion rate in the past year alone. Mexico is America's third largest source of imports My prediction for 2009 is that we will see two things occur, possibly at the same time: a resumption of rising prices, and spot shortages. China's internal problems are still enormous and worsening. They're in trouble with water, food imports, mass unemployment, and energy. They have locked in some oil contracts around the world, but they are still susceptible to vagaries in the oil markets and Black Swan events. As the U.S. consumer economy falls into a coma, and the shipping containers from China to WalMart get sparser, the Chinese government will face the wrath of millions of unemployed workers. I believe they will struggle through 2009, perhaps growing more surly as the U.S. dollar inflates and their holdings of Treasury bills begins to look more like a swindle. Russia may be suffering economically for the moment due to the crash of oil prices, but they are energy resource-rich -- at least for the next couple of decades -- and if they don't like the current price, they can keep more of their oil in the ground until the price looks more attractive. Japan import 95 percent of the energy they use. NOTE: Also see the current issue of Foreign Affairs magazine, "The Great Crash, 2008," subtitle, A geopolitical setback for the West, by Roger C. Altman. The over-arching geopolitical theme of 2009 will be the end of robust globalism as we've known it for some time. Reduced trade, competition for energy resources, sore feelings over debts and currencies will drive the nations inward or, at least, direct their energies toward their own regions. The big theme for 2009 economically will be contraction. This contraction will do its work in unpleasant ways, driving down standards of living, shearing away hopes and expectations for a particular life of comfort, and introducing disorder to so many of the systems we have depended on for so long. People will starve, lose their homes, lose incomes and status, and lose the security of living in peaceful societies. It will become clear that the Long Emergency is underway. more here: http://jameshowardkunstler.typepad.com/clusterfuck_nation/2008/12/forecast-for-2009.html --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "ShadowGovernment" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/ShadowGovernment -~----------~----~----~----~------~----~------~--~---
