Whacked by a Financial Two-by-Four

“Normal” Died This Week [The Daily Reckoning] August 10, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Whacked by a Financial Two-by-Four Saratoga Springs, New York Editor’s note: Global markets took a major hit this week. Markets have stabilized for now, but don’t get complacent, warns James Howard Kunstler. Today, James shows you how we’re confronting a new bout of global financial instability. [James Howard Kunstler] JAMES HOWARD KUNSTLER Dear Reader, The stock market has stabilized after Monday’s major stumble — for now. Don’t sound the all-clear signal just yet. Yes, the U.S. markets look temporarily stabilized… while the Bank of Japan suffered a major anxiety attack, declaring it would turn around the very modest 25 basis point interest rate lift that crashed their markets for three days by 20% — and also stated they would no longer even try to raise interest rates again. That means the yen gonna crash — big inflation for Japanese people — so sayonara purchasing power. But it doesn’t just affect Japan. The bigger picture suggests that a gigantic armature of derivative bets rests on the yen carry trade. The whole thing is a setup for an even worse bout of global financial instability. And just remember: The American on-the-ground economy is sinking rapidly. That’s real business and real paychecks and real trouble. Getting Whacked by a Two-by-Four So… about that two-by-four upside our country’s head you’ve been waiting to get whomped with? Well, it looks like it’s landing now. We got a banger back in 2008. You do remember that, right? Maybe you don’t even remember these people (or at least you don’t want to remember them), but then Treasury Secretary Hank Paulson and Fed Chair Ben Bernanke came in like a code blue squad. They proceeded to hook up the banks to an IV-drip speedball of cocaine and heroin, i.e., “money” that didn’t actually exist (aka “liquidity,” hallucinated capital), and that crew kept it coming for years. That was just the start. The Waiting Game Is Over Then Janet Yellen and her posse kept it coming with never-ending zero interest rate policy (ZIRP) until the national debt canceled America’s future. It now stands at $35 trillion and climbing by the second. That left Jerome Powell pretending there was a way out of this doom-loop. Then came the repo market spasm in September 2019 that freaked out the blob so badly they shut down the whole world with the ensuing COVID and locked-down economies. [Critical Account Message Issued For: {EMAIL}]( [click here for more]( A recent announcement from Nvidia has put us on the cusp of a 5-digit gain opportunity in the next year, and in the wake of a potential market meltdown, this idea just became CRITICAL. While news outlets are ringing alarm bells on the market, they aren’t talking about this legendary move from the undisputed leader of the AI industry. All of the details of this opportunity can be found in your urgent account message. [View It Now]( And everything since then has been a waiting game. The financial world was in hospice. The wait is over. Everything that can break is in the process of breaking: stock markets, bond markets, the galaxy of derivatives — bets on this and that, which will never be honored. Banks are next. Gold and silver are hanging in there for dear life just now, because they’re actually worth something. (And because they are worth something, they’ll eventually sell off some too, to cover additional margin calls on other stuff hemorrhaging value. But they will not go to zero like a lot of other stuff, and they’ll come back stronger). The Old Gimmicks Won’t Work This Time You need to understand that this can’t play out like it did in 2008–2009. The authorities are out of tricks and out of fake money. They can try the emergency interest rate cut, but it won’t change what is actually happening. What is actually happening? Nothing less than the epic revaluation of everything humans make and own — with much of it losing value and quite a bit losing all value because it never really had any. The spooky catch is that there will be an attempt, in this wild and terrifying process, for certain devious, unprincipled parties to take possession of many things shaking loose — what remains of collateral... real things... commodities... facilities... properties... chattels... artworks... and, of course, whatever securities still have a relationship to realities of production. This brings a sharp end to the current political sitcom, especially the situation of the Democratic Party. They will get blamed for the economic carnage left behind by the shattered money system. They lied about everything for years, every number, every index, every supposed “policy.” [Attention ! Before You Read Any Further…]( Before you read any further in today’s issue, an urgent situation needs your immediate attention. If you don’t plan on [claiming this new upgrade to your Strategic Intelligence subscription]( you’re missing out on a huge opportunity. Right now is your chance to grab one of the biggest (and most valuable) upgrades our company has ever made to a newsletter. I’m taking Strategic Intelligence to an entirely new level and I’d hate to see you left behind. [Click Here Now]( Will Kamala Survive the Democratic Convention? You can say that because the policies that they promote are obviously inimical to our country’s well-being — open borders, harassment, arrest and censorship of political opponents, the pointless Ukraine war, sexual mutilation of children, mass digital surveillance, medical quaCkery and a policy of lying about absolutely all of it. Many still recognize insanity when they see it in action. These matters are not defensible and, deep down, they must know it, Kamala Harris won’t be cackling her way out of this. I know they’re practically coronating her and the media’s lining up behind her, predictably. But her VP selection is already backfiring on her. It’s come out that the guy lied about his military record for starters. His hard-left record also won’t appeal to centrist voters. There must be a few unfettered souls among the Dem delegates who detect that, without the smoke and mirrors of the media matrix, Harris & Walz can’t possibly make the case for getting elected honestly. And the odds of successfully rigging another national election seem to be on-the-fade, too, with such obvious pranks as registering 371 illegal aliens (non-citizens) to vote using an address that turns out to be a Walmart parking lot. It’s hard to see how Harris might remain the party’s nominee. She can’t even speak to the massive catalog of prior failures to govern our country coherently and effectively. Interesting Times And it’s equally hard to figure how “Joe Biden,” still presiding emptily over this fiasco, can get Twenty-Fifthed out of the way for his feckless veep. More likely, the coming Democratic convention will be a desperate, bloody mass cage fight and somebody else will stagger out of it to go through the motions of campaigning in a hopeless cause. Hillary might even decline the role in this horror show. But wait, there’s more! You’ve probably noticed that a new Middle East war is brewing between Israel and Iran. It could kick off any day now. May you live in interesting times, says an old Chinese curse. Well, you certainly live in interesting times. Regards, James Howard Kunstler for The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) Editor’s note: [A recent announcement from Nvidia]( has flown relatively under-the-radar in the wake of this week’s market meltdown. But we wanted to make sure you got eyes on this… Which is why we are issuing an URGENT ACCOUNT UPDATE. And after Nvidia released [THIS]( that No. 1 profitable idea became obvious. This is it. That’s why we’re reaching out today. [Click here for the details on it now.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) [James Howard Kunstler] [James Howard Kunstler]( is perhaps best known for his 2005 book [The Long Emergency]( which predicted the financial meltdown and the implications of the peak oil problem. His 1993 book, [The Geography of Nowhere]( about the fiasco of suburbia, is a campus cult classic among the architecture and urban planning students. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox by [whitelisting The Daily Reckoning.](