Kunstler’s Zombie Deathwatch Forecast

Here’s one for all you cynics with eyes wide open. James Howard Kunstler posted his “Bang and Whimper” forecast at Phil’s Stock World, and it’s a humdinger. Some highlights:

The biggest political shock awaiting us is the massive disruption of the major party nominating conventions next summer, when thousands of angry citizens descend on Tampa and Charlotte demanding a reality test. The parties will attempt to go about their ritual business, ignoring the mischief outside the convention centers, and both parties will make the mistake of siccing the cops on the protestors. …

The two major parties are completely bankrupt zombie organizations and this election may be their last stand – if they even survive the conventions. Neither of them can come to grips with the reality-based issues of the day: epochal financial and economic contraction, peak energy (and many other resources), climate change, the absence of the rule of law in banking, and generational grievance – or, perhaps more to the point, the manifestations of these giant trends as presented in unemployment, debt slavery, foreclosure, bankruptcy, homelessness, hunger, and X-million family tragedies. Both parties can only promise the return to a bygone status quo that is largely mythical. …

When the Democratic Party re-nominates Obama, it will be sealing its death warrant, and it will be on its way to the same cosmic vacuum where the memory of the Whigs lingers on. Meanwhile, the Republicans labor to convert themselves into the party of corn-pone Nazism with all their unconcealed lust to push everybody around under the plastic eagle rubrics of “Freedom” and “Liberty.” … They masquerade as “job creators,” but they promote the off-shoring of every activity that corporate America can shed in its quest for ever-greater executive compensation. The lip-service they pay to “freedom” is belied by their intent to control everybody’s personal life, commoditize the public interest, and sell out their grandchildren’s future for a few extra rounds of golf. 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. …

Whatever party ends up running things, and whomever fronts it, is going to be in for a helluva wild ride. The USA is diving into an economic depression that will make the 1930s look like a Busby Berkeley production number. Compressive contraction will have its way with us, whatever Ben Bernanke thinks. …

The global banking system was on death-watch all through 2011. Somehow the various doctors in the central banks and finance ministries were able to muster enough accounting legerdemain to give the appearance of a system still showing a pulse. But in a compressive debt deflation, there are only so many accounting tricks you can pull off as money (and wealth) literally disappears down a cosmic worm-hole. …

We’re entering the rutted wagon-road of de-industrializing and un-advancing. … The question, then, is what kind of hardship and disorder will attend our journey out of the industrial era into post-technological age we are entering. Will we just turn the world into a Michael Bay movie and blow everything up? Or will we make some graceful descent and retain what is really best about the human spirit? …

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.

Full forecast

Hat tip: Michael

This entry was posted in Global Economy, Stock Market Forecasts, US politics. Bookmark the permalink. Both comments and trackbacks are currently closed.


  1. Posted February 1, 2012 at 3:53 pm | Permalink

    What an excellent article. A pity that it comes with a situation that sounds so dire.
    The description of the Republican activity sounds like what has been inspired to be done even here way over in New Zealand. But the activity seems to cut through to the Left, too.

  2. Kirk Madsen
    Posted January 31, 2012 at 3:09 am | Permalink

    I like salt as much as the next guy, but this is one massive grain of salt.

    • Dirk
      Posted February 7, 2012 at 4:44 am | Permalink

      You’d better forget the salt and start taking aspirin, Kirk, when all that ‘wealth’ you thought you had turns out to be so many digital dots and dashes in a computer someplace as worthless as any paper it may or may not be printed on.

      Kunstler also stated “in the end there will be people with a lot of money that isn’t worth anything and people with no money.” That is the essence of it. You can deny it, disbelieve it all you want, sonny boy, but whether you believe it or whether you don’t matters not at all: compressive contraction is upon us like a hard frost and it’s not going away. Ever.

      Listen, it’s very simple: For you to make money somebody has to lose money; it’s a finite system dependent on finite wealth (REAL wealth, not the contrived stuff your retirement is based on, sadly) and more importantly finite energy that is going away; at least the cheap stuff capitalism and the ‘free market’ depends on for growth. Not everyone can be wealthy no matter what the grifters in the investment offices tell us — and the ones who are wealthy really don’t want you to be. Now you may call Jim Kunstler a purveyor of ‘gloom and doom’ but he’s exactly right in many ways.

      Stock up on aspirin there, Kirk; you have a bad migrain heading your way. Cheers!

  3. Evan
    Posted January 27, 2012 at 3:17 am | Permalink


    I really enjoy reading your posts here, but they have not all been arriving in my email inbox lately. I received the one titled “Japan Cuts Growth Forecast”, but not the others on this page. It would be convenient if you would send an email whenever you post something on your page. That way we wouldn’t have to constantly check here to see if you posted something.


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