"my target number for the DJIA is 4000, which coincidentally may be exactly where gold is going, too. In a true correction process, historically, the stock market's indexed value meets the equivalent value of an ounce of gold."
Forecast 2011 - Gird Your Loins for Lower Living Standards By James Howard Kunstler
Sheesh. Was I ever wrong last year about those stock market indexes. I called for Dow 4000 and look where the darn thing ended up: 11,577.50. Some of those fabled "green shoots" must have grown clean through my brain-pan while I slept off 2010's New Year's Eve festivities.The damage was so severe, apparently, that I missed the takeover of Wall Street by front-running high frequency computer programs battling for supremacy of the algo-space which, along with massive insider trading, daily tweaks stage-managed by the Federal Reserve via their trusted allies in large banks, and relentless propagandistic cheerleading on the theme of if-you-wish-it-so-it-will-be, kept the Dow Jones and Standard & Poors indexes in a frothy state of perma-levitation through the year.XXX
The outstanding question from the get-go of 2011 is just this: can a political economy be kept floating along like a Winnie-the-Pooh balloon on gusts of sheer fakery? To me, the simple answer is no. The people running things in the USA have tried everything from pervasive accounting fraud to complete opacity in trading procedures to looting the republic's future. The consensus trance of "recovery" makes itself manifest through every conduit of public utterance - cable TV news, The New York Times, the pronouncements of every last elected official - even though the Consumer Price Index omits items such as food, gasoline, and heating oil in its calibrations, while heaping on fictional "hedonic" adjustments.
XXX What's left of the American economy is a web of financial rackets divorced from the production of real wealth, dependent on an elaborate computerized three-card-monte edifice of swindling. Those groans and creakings you hear are the agonies of this ediface swaying under its burden of lies, while underneath it the ground of history shifts.
XXX A secondary outstanding question - I get it all the time - is whether the people running things know how fake this picture is, and how horrifying the view behind-the-curtain is. Does President Obama understand the relation of our energy predicament to the workings of our economy? How could he not? Certainly he has had a conversation or two with Energy Secretary (and eminent physicist) Steven Chu over the past two years. Mr. Chu should have explained to the president that a decline in the primary energy resource used by an industrial society portends a decline in living standards, which can be expressed in an economy, for instance, by people having less money, or by people having lots of money that is increasingly worthless. This concept may lie outside the strict purview of physics, but surely somebody like Paul Volker was at hand in the White House to connect the dots - and perhaps explain further that anything in the picture beyond that equation amounts to a looting operation by people positioned to systematically cream off the dwindling equity base of a roughly 200-year-old venture.
XXXX The rest is here:http://kunstler.com/blog/2011/01/forecast-2011---gird-your-loins-for-lower-living-standards.html