kunstler | What's going on is as follows: America's central bank is trying to
compensate for a floundering economy that will never return to its prior
state. The economy is floundering because its scale and mode of
operation are no longer consistent with what reality offers in the way
of available resources at the right price, especially oil. So, rather
than change the scale and mode of operations in this economy -- that is,
do things differently -- we try to keep doing things the same by
flushing more "money" into the system, as though it were a captive beast
receiving nutriment.
One problem with that is that the
"money" is no longer money. That is, it's not really an effective store
of value, or pricing reference. It remains for the moment a medium of
exchange, but the persons exchanging it grow suspicious of what this
"money" purports to represent. Does it stand for promises of future
repayment? Hmmmm. Those promises are looking sketchy lately, especially
since this is an economy that does not generate enough new real wealth
to make the interest payments, let alone manage to pay back the
principal. Is it a claim on future work? Some are afraid that the future
work deliverable will be less than they expect. Whatever else it is,
does it find respect in other societies where different money is used?
These questions are making a lot of people nervous these days. Of
course, a time will come when all matters concerning this particular
incarnation of money will be seen as strictly ceremonial. Ben Bernanke,
we will understand, was not stating facts before congress but rather
singing a song, or rather chanting in a low, repetitive, tedious way in
the primal manner of a frightened person trying to comfort himself with
reassuring sound -- that is, prayer. You'd be surprised how well that
goes over in a place like congress, which is stuffed with prayerful
characters, people who exist in a religious delirium. These are not the
people who are nervous, by the way. The nervous tend to be more secular,
and inhabit the margins of life where unconventional thinking thrives
weedlike at a remove from all the mental toxicity at the center.
These nervous ones are looking ever more closely these days at the
distant nation of Japan, where an interesting scenario is playing out:
the last days of a giant industrial-technocratic economy. The story
there is actually pretty simple if you peel away the quasi-metaphysical
bullshit it comes wrapped in these days from astrologasters like John
Mauldin and Paul Krugman, viz. Japan has no fossil fuel resources. Zip.
You can't run their kind of economy without the stuff. And they can't.
Japan is crapping out, as they say in Las Vegas. Tilt! Game over. As
this happens, Japan issues a lot of distracting financial noise that
involves evermore "creation" of their own "money," and the knock-on
effects of that, but it's all just noise. Japan's only good choice is to
go medieval, that is, to give up on the rather hopeless 150-year-long
project of being an industrial-technocratic modern super-state, and go
back to being an island of a beautiful artistic hand-made culture. I
call that "going medieval," though you could quibble as to whether
that's the best word for it, since I'm not talking about cathedrals or
crusades.
