Gary’s Note: The American public begins to see that fraud can crop up anywhere…including governments and currencies. Jim Kunstler is on the case. Send your questions and comments to gary@whiskeyandgunpowder.com …or post to our website www.whiskeyandgunpowder.com. Whiskey & Gunpowder
December 26, 2008
By James Howard Kunstler
Saratoga Springs, New York, U.S.A.
Legitimacy Dwindles
Zounds! Public sentiment toward the accelerating economic fiasco has shifted, seemingly overnight, from a mood of nauseated amazement to one of panicked grievance as the United States moves closer to an apparent comprehensive collapse — and so ill-timed, wouldn’t you know it, to coincide with the annual rigors of Santa Claus. The tipping point seems to be the Bernie Madoff $50 billion Ponzi scandal, which represents the grossest failure of authority and hence legitimacy in finance to date in as much as Mr. Madoff was a former chairman of the NASDAQ, for godsake. It’s like discovering that Ben Bernanke is running a meth lab inside the Federal Reserve. And out in the heartland, of course, there is the spectacle of Illinois governor Rod Blagojevich trying to desperately dodge a racketeering rap behind an implausible hairdo. ~~~~~~~~~~~~~Special~~~~~~~~~~~~~ Money for Nothing...and Checks for Free Collecting royalties has been called the “best business in the world.” Michael Jackson does it. Paul McCartney does it. And you can too...without penning a Top 40 hit. Find out how you can tap into this pool of wealth that piles up by itself here. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ What seems to spook people now is the possibility that everybody in charge of everything is a fraud or a crook. Legitimacy has left the system. Not even the the legions of Obama are immune as his reliance on Wall Street capos Robert Rubin, Tim Geithner, and Larry Summers seem tainted by the same reckless thinking that brought on the fiasco. His pick last week for chief of the SEC, Mary Shapiro, is already being dissed as a shill for the Big Bank status quo. In a few days we’ll discover what kind of bonuses are being ladled out by the remaining Wall Street banks with TARP money and a new chorus of howls will ring out. This is very dangerous territory. In dollar terms, the numbers being applied to the various problems are so colossal — trillions! — that the death of our currency seems assured. And in defiance of Congress’s express intentions, none of the TARP “money” has been applied to its targeted purpose of buying up “toxic” (i.e. fraudulent) securities hidden in the vaults of banks, pension funds, and municipal portfolios. George W. Bush’s personal bailout of General Motors and Chrysler is designed solely to postpone their bankruptcy and mass job layoffs until after the holidays. Otherwise, the $17.4 billion will probably be used by the companies to underwrite the extensive legal work required for the moment they must declare bankruptcy — when Mr. Obama is in the White House. Meanwhile, the President-elect has ramped up his job-creation target overnight from two to three million, and some observers are catching a whiff of Soviet-style economic engineering (“...we pretend to work and they pretend to pay us....”). ~~~~~~~~~~~~~Special~~~~~~~~~~~~~ Get Gold Cheap… Before It Takes Off Again Gold is giving you another chance to get in for the inevitable ride up at a bargain. Here’s how to get it at a discount and multiply those gains. Click here to read more… ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The years since Jimmy Carter have produced an astoundingly flaccid public, sunk in various addictions and distractions, but this is about to change. The darkling mood of political protest and violent activism that saturated my own young adult years is scudding up again on the horizon. Mr. Obama’s pick for attorney general, the mild-looking Eric Holder, may be the key figure in the early months of the new government. If he doesn’t commence some aggressive investigations and prosecutions — beginning with Henry Paulson for insider trading when he was in charge of Goldman Sachs and shorting his own company’s mortgage-backed securities — then the whole Obama enterprise could fall under suspicion of illegitimacy. The bums who ran the U.S. banking sector into a ditch have to account for their turpitudes. They can’t be allowed to hide under a TARP. Unfortunately, the legal system, and probably the legislative system, will be so buried in procedural B.S. from the unwind of countless enterprises and institutions, and the sorting out of the remnants, that it remains to be seen whether this generation of people-in-charge can even embark on a fresh start of anything connected to real everyday life in America. All this is starting to alarm the tattered residue of the middle classes, and from here it’s a very short path to them being really pissed off. When legitimacy erodes, anything goes. Nothing is respected including rules and personalities. The center doesn’t hold and the new vacuum there is a tumultuous place. The same crisis of authority and legitimacy is spreading from nation to nation now. Soon, China will contend with a discontented army of the unemployed. Greece has been in an uproar for two weeks. Belgium’s government just collapsed. Trade barriers are going up. Exports are falling away. The world’s energy markets are not immune to these disorders. I would expect problems with the currently seamless supply lines that bring America two-thirds of the oil we use. Even a mild disruption of oil supplies could attach an anvil to the ankle of an economy already falling off a cliff. ~~~~~~~~~~~~~Special~~~~~~~~~~~~~ The Bailout Time Bomb Our faithful central bank is busier than ever. It’s feverishly working to nationalize as much as it can and destroy our currency in the process. Here’s a way for you to stay a step ahead. Just click here to learn more. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Right now, the overwhelming sentiment is to get this country back to where we were, say, ten years ago, when everything was humming nicely: Clinton nostalgia. We’re definitely not gong back there, though. It’s an idle wish. And any set of policies designed to lead in that direction will prove very disappointing. Our destination is a land of much smaller-scaled local economies. We could retain our federal ties if the federal government can scale back appropriately from the bloated, feckless enterprise it has become. Otherwise, it might only get in the way and make matters worse, and the public in one region or another of North America might reach a decision that they are better off without it. That would be what’s called a revolution. Regards,
Jim Kunstler
www.kunstler.com | 
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