May 5, 2010

Fatal attraction to euro driving us over the edge

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Now things are getting really bizarre. A few weeks back, this column highlighted how Ireland had changed from a democracy to a “bankocracy”. A bankocracy is a state where government policy puts the interests of its banks over the interests of its citizens. Our Government is the conduit for the transfer of wealth from our own “outsiders” — in this case the ordinary people — to our own “insiders” in the banking system. But now it is even worse because it is transferring that wealth to the insiders in another country.

Make no mistake about it, the bailout of Greece, which will cost us €1.3bn, is not a bailout for the Greek people, it is a bailout for the banks that lent money to Greece. It is not a loan either: it is a gift. What has been dressed up as a sovereign bailout with an appeal to our sense of European solidarity is nothing more that a direct transfer of money from you to the foreign creditors of French and German banks. These creditors stood to lose if Greece defaulted last week. The “bankocracy” is now transnational.

Think about this. The bailout to Greece comes with conditions. The Greeks will have to suffer austerity and pay more taxes. But what exactly is the actual cash being used for? A considerable amount of it will be used to roll over old bonds. This means that the original investors in Greece — the banks and investment funds — will be allowed to reduce their exposure to Greece. In turn, the ordinary taxpayer — you — assumes this risk. So the Greek taxpayer and the other European taxpayers are lumped closer together, while the banks that had stood to lose out get away scot-free and are giving the bill for their errors to us, the people who had nothing to do with Greek bonds in the first place.

How could this be?

We are told that this is all being done to enhance the credibility of the euro. But how can a currency’s credibility be enhanced by something so patently incredible? How can the reputation of a financial area be made more solid by rewarding bank failure, not bank success?

When trying to understand why apparently clever people — such as central bankers and senior civil servants — do silly things, it is helpful to look at history. When discussing the fatal attraction to the euro and the inability of mainstream economists to see that the euro, as much as Greece, is the problem, it is useful to consider the similarly flawed Gold Standard.

The Gold Standard in the 1920s and 1930s, like the euro now, was considered an article of faith by the banks, the financiers, civil servants and politicians. They simply couldn’t imagine a world where money wasn’t tied to gold. Anyone who questioned the Gold Standard was ridiculed.

It was the great John Maynard Keynes who, as always, went against consensus and argued that the Gold Standard was forcing governments to cut back when they should be spending in the Depression. He argued that making Germany pay all reparations would cause a crisis because either the Germans wouldn’t be able to pay, leading to chaos in Germany or, if Germany did pay, it would be so competitive as to destroy the competitiveness of the other countries leading to mass unemployment in those other countries. He was laughed at. He then went on to say the Gold Standard should be scrapped. He was ridiculed.

The Gold Standard, like the euro, meant there was no exchange rate risk between all the big economies. This facilitated a huge increase in loans from bankers in one country to lenders in another. Britain owed vast amounts to the USA and Germany owed vast amounts to everyone. France became the banker of Europe and it lent billions to Germany, while at the same time demanding that Germany paid full reparations for the First World War. So, increasingly throughout the 1920s, the Gold Standard became the guarantor of these huge loans among countries’ banking systems.

The banks gambled that the Gold Standard was so important to the prestige of the big powers and so central to the way the big powers thought about the world, that loans would always be repaid. Doing otherwise would “undermine the credibility of the system”. Keynes saw through this canard from an early stage.

If we examine the euro in the boom, we see that it operated in exactly the same way as the Gold Standard. The single currency encouraged banks to take risky bets. The banks lent money to anyone, safe in the assumption that even if there was a crisis, the euro would be so sacrosanct in the minds of politicians, that all their loans — no matter how dodgy — would be paid back. Because to do otherwise would “undermine the credibility of the system”. Sound familiar?

Look at the cartoon above, which would be funny if it wasn’t so serious. It shows you who the Irish banking system owes money to and who owes money to us. You can see that we are at the centre of an intricate web of borrowing and why international banks are worried about possible defaults. It also explains why Greece was saved to protect the international banks rather than the Greek people.

Take the Irish balance sheet with Spain for example. Irish banks have lent €21,987,000,000 to Spanish banks, while the Spanish banks have lent us €10,153,000,000. You can see who would lose out if we were to go the way of Greece or if Spain were to topple.

Think now about the relationship in the cartoon between Germany, France and Ireland. Irish banks owe €127,458,000,000 to the German banks and €41,844,000,000 to the French banks. These are debts incurred in the good times and most of the cash was lent out to buy property in Ireland. Can we pay them now? I doubt it. Should we repay them after the guarantee expires? We will need a lot of austerity to generate the surplus to repay these loans.

Let’s just go back to history for a second. As the booming 1920s led to the collapse of the 1930s, the governments realised that they couldn’t pay back all the cash. But instead of defaulting, governments everywhere first cut spending and raised taxes. New loans were made conditional on austerity.

So a country like Germany was encouraged to borrow more through its banks to enable it to pay back more — even though, at the same time, the country was forced to embrace austerity.

This is precisely what is happening to the periphery of Europe now. We are being told to deflate, while the core countries of the euro enjoy easier credit conditions. This is hardly a recipe for stability or for an enhanced and more credible euro. It is the recipe for division and instability where unemployment on the periphery begets more instability, more tax increases and more capital flight.

In the 1930s, as Keynes predicted, the upshot was that the centre couldn’t hold and one by one the major countries abandoned the Gold Standard and defaulted on their debts.

Could the same happen the euro? It could. Particularly if, in order to keep it together, politicians have to take money from the poor outsiders to bail out rich insiders while dressing it up as European solidarity. Come off it!


  1. —- ENOUGH IS ENOUGH!—-
    The truth about the German Interests and,
    a Conversation with Birgitta Jonsdottir (Iceland)

    Welcome! Welcome to Absurdistan.

    DB reported 2,8 billion Euro profits for the first quarter. Josef Ackermann, CEO of Deutsche Bank received a Euro 10 Million bonus. Happy days.

    Happy days? Hello!

    The truth is that these profits came from the German Taxpayer.

    DB borrowed money to HRE, Hypo Real Estate, the german Version of Anglo Irish. When HRE came into difficulties because it was basically a zombie bank, well the german taxpayer was forced to bail them out.

    In Q1 now HRE had to pay back monies to the Deutsche Bank, HRE now is nationalised and was bailed out by the german taxpayer, who in return had to repay DB, this is how they reported profits for Q1, without the HRE monies, they would have reported losses, simple as that.

    Such is the politics in Absurdistan, but hold on, this get’s even better. Let’s enter the Time Machine and go back to 7th of May 2009. Right smack in the middle of this Heist. On this day the ECB lowered interest rates to 1%.

    Never before was money so cheap. Now please put that into context, for you and I, small businesses and medium businesses, money was simply not made available, no credit flow increased to our economy, nothing, nada.

    At the same time, banks got money for 1% and invested in Greek bonds with a extremely high yield. It was literally a license to print money. I come back to that later.

    Today, the Greek embassy in Germany is flooded with Hate emails, Nazi’s are demonstrating in front of the building and the BILD Zeitung (Sun Slander tabloid) drums up the hate and deliberate disinformation. Lets not forget here, the Germans sold a lot of military products to Greece, and happily made credits available for the Greeks to purchase insane amounts of tanks and submarines. This is the reality.

    Back to our banks, so they invested into Greek bonds with money that never was cheaper, with profits guaranteed.

    Guaranteed? How can you make a guaranteed profit?

    Well, the Banks not only bought greek bonds, they bought CDS, credit default swaps at the same time, a ‘Insurance package’. This is no insurance package, this is exactly what was titled a financial weapon of mass destruction. It is a little bit more complicated as they have companies sitting in between, but essentially it works this way.

    The CDS pays them in the moment where the Greeks can not pay back the bonds that the banks bought earlier. So the banks drove up the interest rates and continues to attack the greek market, because they had a vested interest in Greece to go bust, their CDS would pay them outrageous money. A license to print money!

    The Ackermann’s and Blankenfein’s and Fitzpatrick’s are the ones who continued to make profits like crazy.

    Today, the media landscapes are instructed to beat the propaganda drum, and they talk about the Greek bailout, rescue package for greece, whereby the reality is that money that goes into greece flows right back to the Deutsche Bank and French banks, demanding austerity measures from the Greek people at the same time and since last week bring the IMF Mafia into the game.

    Germany is not governed by politics, Germany is governed by Josef Ackermann and his constant and direct unhealthy influence on politics.

    I am listening to the Deutsche Bundestag as I am typing here, and I really feel like listening to the muppet show. My last contribution highlighted the role of EUROSTAT, and of course, again you have Merkel followers who state that they admit, again, that Eurostat needs better tools to be able to work with data that is not falsified.

    Of course, they now in principle agree that CDS instruments in it’s current form should be banned, well, the very same people blocked all reforms and calls for these measures in the Bundestag since years now. It is three years into this Heist rises and they have done NOTHING! Coincidence? Of course not!

    Ok, this is not entirely correct, they did a lot, they continued to look the other way, they continued on Wallstreet and in the Caymans and in Germany and France to use the same financial instruments that caused the crisis in the first place, to maximize their profits and pay outrageous boni to Ackermann and the likes.

    Of course the Germans asked the IMF to come in and bleed Greece dry now.

    Their policies, lies and greed has brought Europe into an age of social political instability, corrupted governments ruled by banksters, franko/german centric euro politics, and a web of debts brought us all to the edge.

    This is a war folks! A war where at the moment no bullets are used to kill people on European soil, but in this biggest Heist in history it will enslave generations of middle class people with instruments of debts, a totalitarian bureaucracy that constantly undermined democratic principles has enabled this, and Lisbon 2.0, thanks Colm :) , has been forced upon Europeans to further enable them to implement their new world order.

    Against the majority will of people in Germany, they increased their participation in the war in Afghanistan. Against the majority will of people in Greece they try to bring in the IMF and bailout German and French banks, claiming this to be a rescue package for the Greece people.

    Nothing but lies, and it is not astonishing, the truth is always the first victim in War.

    Folks, as I am typing here, in this very moment, people around the world are engaged in high volume CDS trades, making massive profits, bringing whole economies to their knees, while at the same time IMF and Euro members call for cuts in social spending, and austerity measures. Enough!

    Here, this causes the immigration of brains from Ireland, as it does in other countries, it causes long term suffering on a large scale, millions of people will suffer severely, people who had no hand in all this. These people need to stand up now, these people need to understand that it is THEM who are attacked here. It is them who need to stand up and shout ENOUGH IS ENOUGH!

    Their voices need to be loud and clear and echo not only in Dublin, Athen Lisbon, Berlin, Paris, Washington and in Brussels, their voices need to echo in Frankfurt, in Wallstreet and other trading places around the world, and if their voices are not heard, then they must go to these places and bring them to a halt.

    Then they must go to Dublin and Athen, and other places and bring down corrupt governments that serve the Banks interests and act against the will of the people.

    ENOUGH!
    x x x x

    This week I had a long conversation with Birgitta Jonsdottir, member of Parliament in Iceland. I had her permission to record and publish this. I am just a one man band Folks, and I am preparing this right now, I try to split it in sizable chunks to make it available for you folks to listen to.

    In the small amount of time we touched on many topics, and we will continue our talks in the future and I will make them available for you to listen too.

    @David and others:

    This is a difficult war to fight, and I am grateful to David, Constantin Gurdgiev and so many others here and around the world who understand that, and who did not hesitate to enter the war zone by using the most important weapon at our disposal, the TRUTH!

    After that, it is up to the people to make informed decisions, up to you and me, it is only us who can change this.

    Best
    Georg

    • tony_murphy

      Thank You Georg. That was incredibly enlightening for me.

      Thanks David for your Article as well.

    • Peter R.

      This is by far the most frightening article I have read in here so far. The question is, what happens when the mainstream government parties fail (like they did in the 30′s)? I hope we’re not going to be condemned to the same fate.

      • No shot was fired in Iceland, no violence has taken place.

        The system has failed Peter. It has failed all of us and we sat beside and let it happen.

        The first step out of this is to call for this current government to step down. Cowen, Lenihan, Gormley and the rest of them have to leave power.

        The second step is for an interim government to take over business, this can be a group of opposition parties willing to step in, but and this is essential, at the same time people who have no strings attached to politics, from the public, need to be empowered to join this interim government to work on solutions and steps forward.

        We can not leave this up entirely to the people who are in the system since decades regardless what party they belong or the long term Independents who are nothing but the bribery tool of the ruling party.

        We need people in there who have no party strings attached, like it happened with The Movement in Iceland, that now has become part of the system and is sitting in committees and drives change and uncovers the truth.

        The democratic system needs modernization and reforms to enable a greater participation of the people.

        We need to bring TRANSPARENCY to the people and allow them to participate in major decisions that affect all of us.

        We have, unique in Europe, this tool of Referenda, but we need to modernize it and use it in the right way, not the way it was abused by the second Lisbon.

        • Peter R.

          @ Georg — I hope you’re right in hoping that rational choices will be made. Unfortunately, human beings are sometimes far less than rational, as we saw in Athens this week. Failure in mainstream politics often leads people to vote for those representing extreme politics as a form of protest (this happens in Europe a lot). This cannot be good for anyone.

          • Yes. The current democratic system in Ireland needs to be reformed from the ground up.

            This task can not be trusted to the established parties alone.

            We need people with brains who have no political strings attached to sit in government and drive this changes forward.

            When I say government, then I do not mean the existing inept procrastinators, but a new government with strong participation of a peoples movement, that I would call The Irish Democratic Reform Movement, this need not be aParty in the conventional thinking to start with.

            The senate and the dail, legislative as well, our entire democratic structures need to be modernized and reformed to enable higher grades of political transparency and accountability throughout the system.

            Yes Peter, Netherlands is a good example for extremist charlatans who gain from such turbulent times.

            @Black Cat,
            I am not sure what you mean?

  2. daramac

    Time to shout stop! — Time to act!

    “Our banks, uniquely, have weathered this storm. We are in a zone of financial stability in a very troubled financial world”.

    These are the words of Minister for Finance, Brian Lenihan T.D in September 2008. A short two weeks later he described the bank guarantee which the government was forced to implement to save those financial institutions from imminent collapse as “the cheapest bail-out in the world so far”. The guarantee, the government proclaimed, had addressed the crisis in our financial institutions. This crisis, they claimed, had come about due to the credit crunch which followed the collapse of Lehmans Bank and had nothing to do with bad business practice in our financial community. “The public could rest assured that everything was under control and that credit would begin to flow once more into the coffers of the financial institutions, and from there to the public”, Minister Lenihan confidently declared.

    When the assurance of the government’s financial regulator, Patrick Neary, that “bad lending by Irish banks had nothing to do with the crisis”, and that “Irish banks had plenty of capital to absorb any losses in the property sector”, failed to reassure an increasingly worried public, the minister commissioned the auditors, Price, Waterhouse, Coopers to examine the banks’ books. Minister Lenihan was delighted to subsequently inform the public that the auditors report confirmed that the “banks were well capitalised and would not require recapitalisation”.

    Almost two years later the full outrageous cost of the calamitous decisions taken by this incompetent government are all too sadly evident to an outraged public. As a result of the crony capitalism, and incompetence beyond ones wildest imagination, the government’s decision, to guarantee our banks, has left the citizens of this state lumbered with financial debts which will disastrously affect the quality of life of this, and indeed, many future generations.

    NAMA, the vehicle which the government chose to adopt to ensure that the outrageous debts which the wealthy elite had created during the boom, could now be transferred to the public purse, would, Minister Lenihan blithely assured us, “wash its own face and possibly even make a profit for the tax-payer”. Again time has told us a different story and those who were aghast at this proposal from the outset and warned of its real and disastrous intent have been proven correct. Prominent amongst those was the American Nobel Prize winning economist, Joseph Stiglitz, who blasted NAMA as “highway robbery” and that it represented “a simple transfer from taxpayers to bondholders which would saddle generations to come”. His comment that the NAMA project was similar to mechanisms which economists had witnessed before only with “guns pointing at the heads of political leaders” and that he had been “very disappointed to see that it had happened, not only in banana republics, but in advanced industrialised countries”, reflected the truly scandalous nature of the Irish government’s intentions.

    The true cost of the latest decisions taken by our political class for the benefit of the privileged elite in this country is fast becoming evident to all. Every man, woman and child now has a personal tax-debt which currently amounts to €18,000. When one considers that the most privileged members of Irish society pay little or no tax the outrageous inequity of this situation becomes all the more evident. The Minister for Finance then refused to consider implementing changes to our tax-system which would require the richest to make some contribution to cleaning up the economic mess they had been integrally involved in creating, on the basis that “the elite would leave the country”.

    Instead the government chose to take between €10 to €12 billion out of the economy by increasing taxes, cutting wages and reducing services, all of which caused great hardship to ordinary citizens in both public and private sectors and did irreparable harm to the very economy they were supposed to be trying to protect. This was at odds with nearly every other country in the world that chose to fight the worst recession the world had witnessed in eighty years by stimulating their economies with vast investment. In Britain, both Labour and the Liberal Democrats have fought this election vigorously opposing the Conservatives plans to take just £6 billion from their vast economy, on the basis that these cuts risked tipping the country into a double dip recession.

    In Ireland, the government, aided by their allies in the elite ‘partnership of privilege’, have decreed that the policies which they employed to create our excessive boom are now to be employed to help us exit the severest economic depression the State has ever witnessed. It is this blind ignorance which is leading us day by day nearer to economic oblivion from which it will be hard to escape. From the very initial stages of this homemade economic crisis, when the government refused to accept that there was even a problem, to the current day when every single decision they take proves to be economically disastrous it has become increasingly evident that they are not fit for duty.

    The contempt which the Irish government holds for its citizens is clear from Brian Lenihan’s arrogant declaration that had his combination of tax-hikes and spending cuts been taken by the French Finance minister then “such harsh decisions, would have been met by riots on the streets”. Their incompetence can be perfectly illustrated by the manner in which almost every policy, decision and indeed statement is inevitably proven incorrect.

    “We are not Greece”, we were repeatedly informed by our government and their allies over the past few months. Now, as a result of the billions which our government is ploughing into the incinerator that is Anglo Irish Bank, and the countless other billions which are being used to bail-out the other financial institutions, we are officially the most indebted nation in the Eurozone.

    This may be the ideal time to reflect on the mutterings of one angry Greek demonstrator who took to the streets in Athens to protest at his government’s attempts to correct the financial mess in Greece by adopting some of the measures which Brian Lenihan had employed in this country. Speaking to the BBC he bluntly declared,

    “We are not Ireland! We will not lie down and let our government punish us for a financial crisis we were not responsible for creating!”

    Expecting the elite to endanger their privileged position in Irish Society by upsetting the status quo is futile and unrealistic. It is time for ordinary citizens of Ireland to act immediately in the interest of future generations. Protect jobs and services.

    We must not fail our children. We must not compromise their futures.

    We must act now to stop the bank bail-outs.

    In the future what will you say when they ask you, What did you do?

    It’s time to act. Join the march to the Dáil. Tuesday 11 May 7.30. From the Garden of Remembrance to Dáil Éireann. Keynote speaker: Fintan O’Toole. Protect all our children’s futures not just theirs. Spread the word, Send to all.

      • ThomasFergus

        +1. Would love to see David go to it as well. McWilliams and O’Toole have been shining lights in this whole fog of lies and manipulation.

    • Deco

      Daramac – I was with you all the way until you mentioned Tintan O’Fool. I don’t have time for somebody who advised that Ireland needed a coaltion FF/ILP with Bertie Ahern as Taoiseach. I don’t have time for somebody who is all into eliminating tax exemptions but who is OK with the fact that Bono and pals are tax diaspora. No time for opportunists.

      • PMC

        Why don’t you post up exactly what Fintan OToole said at the time, because it wasn’t as cut and dried as you make out.
        Fair play DaraMac by the way.

  3. SLICKMICK

    If 3,000 people turn up , I will be surprised.The level of apathy is incredible, the disaffected are emigrating (again).Who can afford to bail out Spain?.

  4. SM

    Thanks Laughingbear. That is inspiring.

    One of the major problems with mobilising people in Ireland is the sinister ‘divide and conquer’ tactic of the Irish government whereby public and private sector are pitched against each other in order to distract them from the truth. Union membership in the private sector is much lower and therefore these people are harder to reach and organise. That must be addressed.

    We need to unite public and private sector and eliminate the distinction between the two and then focus our attention on the government, financial systems and the judiciary of this state.

    And most importantly of all, this is an international fight and must be fought consistently and in chorus with other countries, otherwise it will fail. It is the French Revolution on a global stage.

    The new Royal families are people like the Goldmans and the Rothschilds. In the 18th and 19th centuries, vast estates were owned by the ruling few and served by the many poor who had to pay rent on the land and a tax from their produce. They were not free to choose their destiny. They were shackled as we are now.

    The new Royal Estates are the so called free democracies embracing the global capitalist model. Our crops are our skills, our farms are our homes and businesses, our politicians are the foremen and estate managers, our masters are still the same people they were hundreds of years ago. And they still take our taxes and we still carry on suffering when they decide they want more.

    As nations homogenise and the world becomes global, so too does the cause of ordinary people.

  5. The Flag

    ‘We the American People want…
    …..to allow us the American People have…..lets make no mistake about it all the American People agree to….Our President has said that the American People have decided ….the American People will fight to defend ……’

    Has anyone heard of the European People ? Is there such thing? Who is deciding for who and by who these austerity measures ?We have no Federal Reserve only an ECB basket of currencies so that disqualifies us as a collective people as the Americans call themselves.

    • JohnAllen,
      From Stiglitz yesterday in an interview with BBC Radio 4;

      “The future of the euro may be limited.”

      This comment will turn out to be the understatement of the decade, methinks.

      • It seems that the 110bn Greek bailout just kept the argument moving. It was the Eurozones best shot, given tensions and the German elections. It missed the bullseye and is now part of the problem.

        Spreads are rising across Europe again. The Americans have the hump because the American taxpayer provides a huge tranche of the IMF war chest. The American taxpayer is in no mood nor condition to extend largesse to Europe. Germany is becoming more and more protectionist whilst the “Auslanders” are getting very angry with the onset of the poverty train.
        Somewhere from my Leaving Cert history classes, I seem to remember this set of conditions converging before.

        I was angry previously, now I’m getting very concerned with the direction this is taking.

  6. thughbyrne@eircom.net

    I am gobsmacked literally with what I am learning from Davids articles and from Laughingbears analyses as well. I thought I had a handle on what is going on but this is way over my head as an uneducated punter. Having said that I would never have thought just 2 years ago that I would see a banner on the Acropolis calling for “Peoples of Europe to Rise Up”, a call to revolution no less, in this day and age. Is this what we are heading towards or will They be able to slip the austerity packages gently or hard to us and we will accept it? it remains to be seen. Im a married man with 4 kids, I’m not so sure I want to be on the streets throwing stones at this stage, and I wonder is there another way to get this virus out of our system?

    • SM

      No, there isn’t. Get out onto the streets with three hundred million others in Europe.

    • No stones, no violence!

      Look to Iceland, the ‘Pots and Pans’ Revolution!

      Yes, we need to bring this government down now! Ever increasin amount of people, daily, going to the places, Anglo Irish Bank and the government buildings.

      EVERY DAY, until they step down.

      No stones, no violence!

      Peaceful but persistent!

      • I second that Georg. Remember that M Ghandi threw out the largest colonial force in the world by just sitting down and crippling the system.

      • SM

        Absolutely no violence.

        • Malcolm McClure

          Violence is not needed with the garda on our side and the defence force invisible.

          • paulmcd

            I am writing a letter at the moment to the editor of the Sunday Independent (Gosh, it is already Wednesday, I only buy S. Indo. to read Kerrigan:-) The letter will not be for publication but here is an extract:

            CONFRONTATION

            The 2010 BUDGET amounted to a declaration of economic war on the middle-, lower-, and no-income groups, with the lower echelons only of the public service, such as the Gardaí, coming in for special attention — the upper echelons were simply pussyfooted, as were the rich and super-rich in our society.

            There was no FAIRNESS or BALANCE in the Budget. The pro-Lenihan bias in the media is causing increasing alienation in society. This is turning moderate trade unionists into militants with an increasing risk of CONFRONTATION.

            The chickens are coming home to roost and unfortunately, some in the media to want to be part of the problem by cheerleading undue impositions on those who can least afford to pay.

            The redress which I would recommend is that the Media should fight for the cause of FAIRNESS and BALANCE in the Budget. Your newspaper, for example, might call for the abolition of levies on various income groups to be replaced by just one EMERGENCY LEVY of 50% on the balance of gross income above 100,000 euros. This would be a simpler solution to ensuring that those who can afford most will pay proportionately without the need to abolish existing tax avoidance schemes or plugging loopholes; and the levy will remain in place until we can judge that the EMERGENCY has passed. (An additional super-levy may be needed to deal with the super rich who consider gambling on financial derivatives or at the casinos royales to be appropriate pastimes.)

  7. The fact is the euro is now a dying currency encircled by sharks as it weakens and weakens. Its been poisoned by unregulated banks that have driven a stake through fiscal rectitude and the economic well being of the euro currency itself. Banks have to be held to account alongside their puppeteer incompetent politicos who’ve allowed this to happen.

    How is it so? Its breaking its own rules that were built in to protect its survival. These rules have been broken and replaced by a bankocracy for whom bailouts were not allowed, now they are first recourse to deal with countries who break the rules. The rules themselves have been broken at will
    “no country was permitted to accumulate debts exceeding 60 percent of its gross domestic product”.

    Who are breaking the rules? The bondholder banks of Germany, France, Spain mainly, also Goldman
    for which there’s evidence of collusion with Greek insiders to manipulate figures, deferred military expenditure debt, another big scam.

    The activities, lawlessness and corrupt plundering of the fiscal system by a so-called banking elite needs to be deeply questioned and probed. The Sheriff of Nottingham bankocracy is replacing democracy in europe with a new feudal economic imperialism model of penury and servitude for the masses, the taxpayers.

    How dare the bast–rds demand austerity measures, cuts in social welfare for the poor, higher taxes, more illegal profits, when they’ve plundered the eurozone with banking based on lack of due diligence, rule breaking and criminal
    deception and exploitation of taxpayers. They must be held to account.

    http://www.spiegel.de/international/europe/0,1518,682432,00.html

    “Article 125 of the Treaty on the Functioning of the European Union, the so-called “no bailout” clause, states unequivocally: ” A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State.”

    As D says, bailouts for bankers, not taxpayers!

    “In addition, the then-German Finance Minister Theo Waigel pushed for the so-called Stability Pact. Only financially sound nations were to be accepted, and to satisfy this criterion, the pact stipulated so-called stability criteria for the member states. Under these criteria, no country was permitted to accumulate debts exceeding 60 percent of its gross domestic product. In addition, member states were only permitted to take on new debt if the scope of the loans did not exceed 3 percent of their GDP. “Three point zero is three point
    zero,” Waigel’s rule stated. Violations were to be rigorously punished.”

    Its time we copped on. Currently the SEC is sticking its nose into Goldman in the US. Its time the European Court or so-called banking regulatory regimes were fitted to purpose to haul the bondholders before a court of criminal investigation.

    The truth is the banking system itself
    is in a cluster shit firestorm of financial schenanigans of rule breaking, criminal financial instruments, CDO’s, CDS, Derivatives, engineering of scam financial products all leading to a global debt crisis that needs to be sorted asap. European bondholder banks with the own unique take on the scam as above.

    Right now the euro is like the Hindenberg with bailouts for PIIGS pumping it up with more Helium gas. Firestorm awaits unless the banks get tackled, and that does not appear to be on the horizon!

    • We’ll see what goes down on Friday, see below. Surprisingly, the good professors below do not seem to have Article 125 of the Treaty or the Stability Pact in their sights, only the rather opaque: “undermine the German constitution’s pledges to preserve private property and uphold social fairness”. Hope its not a load of peacocking!

      on Friday also ” government leaders of the eurozone will convene in Brussels for an extraordinary summit to wrap up the rescue package and look at ways to avoid it in the future.”

      No doubt a polite warning will be issued to naughty taxpayers, ” take your medicine now, or the poisonous Midgard Banker Serpents, who live beyond the law and make their own laws, will be coming to get YOU.

      http://bit.ly/bDAtZE

      ‘We’ll hand in the docket at 12 noon and announce why,’ said Karl Albrecht Schachtschneider, a retired professor of public law.

      He told the German Press Agency dpa he was backed by three economics professors, Joachim Starbatty, Wilhelm Noelling and Wilhelm Hankel, as well as by retired Thyssen chief executive Dieter Spethmann.

      Schachtschneider mounted an unsuccessful court challenge in 1998 against Germany’s abolition of its deutschmark currency and adoption of the euro. He contended then Germany should be guided solely by its own national interests.
      He said in Karlsruhe that aid to Greece would trigger an inflationary policy that would undermine the German constitution’s pledges to preserve private property and uphold social fairness.

      He charged the bill would also overstep criteria laid down by the constitutional court last year when it said the European Union’s Treaty of Lisbon encroached on rights of the German parliament. Germany had to revise its treaty legislation after that ruling.

      The constitutional court in Karlsruhe has a history of judicial activism, often ruling that Berlin legislation is unconstitutional.

      Berlin is set to rush the legislation through this Friday.”

  8. BrianC

    Great article and great insight from laughingbear.

    The Euro is a humpty dumpty and its days are numbered.

    The Money Masters win again as they always do since they took control of the FED in 1912 or was it 1913. You can always look up the Money Masters on the web. It explains all. David is right on the mark ‘enslavement of EU citizens to the few who control the banks’.

    We have the delusion of democracy in Europe. Do you remember when Minister Lenihan was giving his first outline on the cuts to be made. He was shadowed by a Eurocrat from Brussels who interceded to ensure that Lenihan stated that unemployment benefit would be cut. This had less to do with saving money and more to do with showing who the real hand was on the tiller of the economic ship of Ireland; a subtle message to the Money Masters.

    Great articles and love the comments keep going as I like to be informed especially as to is shafting me.

    • Dilly

      Brian,

      They created the FED out of thin air. Did you know, that they used the words ‘Federal’ and ‘bank’ in order to throw people off, and make them think it was a government run organisation. Nothing is what is seems.

  9. sobreacain

    Thanks for the invitation daramac! I’ll be there on May the 11th. If we want a good turnout then it’s up to us – spread the word to everyone you know and ask them to do the same!

  10. G

    Greeks are trying to storm the parliament building to prevent the vote on the bailout……..
    http://news.bbc.co.uk/2/hi/europe/8661385.stm

  11. wills

    Posters:

    David NOW on NEWSTALK:

    • Colin_in_exile

      Peter Power called David a hurler in the ditch. Typical FF slur. David responds by telling Peter that he has experience of working in the banking industry.

      I’ll be convincing everyone in my neighbourhood not to vote for Power in the next election.

    • liam

      David, why didn’t you just call this guy what he is, a liar?

      • wills

        Liam.

        Hamlet come to mind. David is fighting through his own inner narrative, similar to Hamlet, struggling to overcome inner resistance on going ‘toe to toe with the ruskies’.

  12. wills

    The Euro is a Monopoly board game bankster holds all the cards free money for the insiders project.

    The insiders will do whatever it takes to keep with the Euro money printer ‘cos its riches beyond their wildest dreams.

  13. wills

    The ‘Euro money printing machine’ reigns supreme over free market non rigged capitalism.

  14. The people are to blame. Those in power are just doing what those in power do. Which is, to get more power and authority. It was OUR role in a republic to curtail their power and we failed dismally. We handed away our responsibilities and what little freedoms we had for the dream of a free lunch. Our citizens, who are supposed to be well educated couldn’t come up with a conclusion to save their lives. The answer is what the media, politicians or for a few up the line what McWilliams says it is. Now you guys are calling for revolt. For What? So we can put a bunch of left wing authoritarians in place of the current bunch of right wing (neo-liberal) authoritarians. Frying pan/fire Hitler/Stalin.
    How about a real republic http://irishsovereignty.wordpress.com/2010/04/06/irish-sovereignty-party/

  15. Lius

    The democratic political system is too weak to fight the powerful evil of the Banks.

    The Irish people need to stop WHINGING about this and get up off their backsides and do something.

    A Revolution is the only Solution but we need a strong leader to start the charge — come on DAVID be our Collins.

  16. Credit expansion, central banking and a fiat money is a deadly cocktail. Any of these ingredients on their own would be unable to cause too much damage. David’s solution is pretty much the same system on a smaller i.e. country scale. Let’s explore the alternatives before we jump in. Or as with global warming is the science conclusive?

  17. [...] Fatal attraction to euro driving us over the edge | David McWilliams [...]

  18. DarraghD

    @SM…

    I don’t agree that there is a policy of “divide and conquer” on the part of the government. The division and outrage that is emerging is only the natural reaction that can be expected when people in my own position have taken MASSIVE austerity measures to date, up to and including the closure of entire businesses. If I was to listen to public sector unions, I’d have to accept that for some insane reason, I elected to close businesses that were profitable.

    It falls to people in my own position to start up new businesses from the rubble of old businesses, without any assistance from a government that is literally talking out of its arsehole when it comes to job creation. I have beef with people working in public sector positions who are unaccountable to nobody in terms of performance, who receive AUTOMATIC pay increments, entirely unrelated to performance within any review period.

    Yes we need a revolution, a peaceful one but we need to down tools and get rid of this government before the country starts falling into the sea or something.

    • SM

      Darragh. I own a small business and employ people and am sick to death of civil servants who’ll take a sick day for spilling hot tea on themselves. I have no time for slackers and blaggers. And myself and my staff have all taken up 40% cuts over the last year.

      But I also have no time for IBEC and SFA who would lead you to believe workers were evil little bastards intend on ruining you. I rarely agree with their little PR moments on RTE News.

      But there was a campaign against public workers by the Government and it was pushed by the media which led to an ‘us and them’ mentality. It’s distracting and it’s wasting time and sentiment better spent on ousting our criminal government.

    • Dilly

      It is one of the oldest political tricks in the book. Get people on each otheres backs, and it buys you more time at the trough.

  19. They were all at it.

    http://www.xe.com/news/2010/05/05/1124337.htm?c=1&t=

    Question is; Did the German Banks pump money at our lot during the “BOOM” and then hedge for a default?

    European Union my ass. More like a Ponzi scheme of gigantic proportions.

    • Are they hedging for a default on the bailout?
      Its a turkey shoot for bankers!
      No accountability, no transparency, no regulatory oversight, not even a eurozone FED……….

      Poor eurozone village taxpayers besieged by a group of bandito banker bondholders……where did I hear that story before?

  20. AndrewGMooney

    Three tragic deaths after bank petrol bombed by asshole anarchists. General state of alert. Government buildings in flames. ……. Sadly, I’m not surprised. The Greeks have outmanoeuvred everyone, hoisting Angela by the petard of her misguided realpolitiking around upcoming regional elections. Pledging austerity the Greeks will now pass the poison EU bankruptcy chalice to the other PIIGS. All of whom must wait to see who the bond market vigilantes target next. Angela can’t countenancee another bailout on this scale, that would be taking the P.I.I.S out of the Bild reading untermensch to whom she has shamefully pandered.

    PASOK now has a golden opportunity now to bring the criminal elites to book, reform the nepotistic public services, introduce a modern taxation system, and generally raise hell against the corruption they inherited. Yes, it means temporary savage cuts, but the sovereignty and integrity of the Greek nation is in safe hands as far as I can tell. Greece will take the bailout money, play along with austerity, whilst planing an ‘EU/ECB/Euro exit strategy’. Then when the bailout patience is exhausted, it’s payback time:

    http://www.telegraph.co.uk/news/worldnews/europe/greece/7681518/Greece-bail-out-money-is-reparation-for-Second-World-War.html

    Athens to Paris and Berlin in 2012: “Thanks for the ‘rescue’ billions. Thanks for playing our game. Now drop dead. And thanks to the other PIIGS for contributing to the resurrection of the Greek Nation” PASOK will implement terrifying austerity, but to rescue the Greek nation: Not for the reasons Angela and Nicola credulously imagine! Not to rejoin the poisoned European dream in perpetual debt peonage, but to prepare to blow it apart once the other ex-PIIGS, P.I.I.Sant ex-countries are led to the slaughter pen. Anyone who understood Greek history, thought and culture would suss what’s on the event horizon. Angela and Nicholas, being uneducated ignorant functionaries, have walked into a death trap. They’re gonna fill the PASOK ‘Trojan Horse’ with 105 billion Euros which can never be repaid? ROFLOL! You couldn’t make this up! Greece is bankrupt. In a rational world, you don’t rescue a bankrupt by giving them more debt. You accept they are bankrupt, restructure their obligations and let them earn a living after a suitable penance. In the US and the UK it’s a year. In Ireland it’s 12 years because Ireland is a civilised country that doesn’t penalise entrepreneurial risk *rollseyes*. Not sure what the bankruptcy laws are in Greece, but I’m pretty sure a Greek government in the next few years will declare all debts to the ECB/EU to be ‘unconstitutional’. And they’ll be right. “Debts that can’t be repaid won’t be”, etc. Ireland may pay a terrible price for being the ‘cute hoor’ to US-uk and HardCoreEuro, and for failing to strategically plan for this terrifying denouement by cowering and snivelling before the ECB, eviscerating their economy to appease their new masters, rather than facing down the fearmongering Frankfurt paranoid patient in intensive care.

    Ireland Inc? What kind of a demeaning, degrading signifier was that for a Nation? “Greece is not Ireland!” say the banners on the streets of Athens. Too right. What’s Greek for ‘balls of steel’? And guess what? “Ireland Inc is not Ireland”. There you go. A good banner for the Dublin demos. Melanie McDonagh clearly hasn’t studied Greek history and culture either. ‘ Unlike the Greeks, the Irish are facing up to their plight.’ Are they? I don’t think so. Hollowing out the country so it’s just a Euro base for US companies, a financial whorehouse for German casino gamblers in the I.F.S.C,whilst ‘volunteering’ the rest of the population to feck off? Doesn’t seem a very rational course of action to me.

    http://www.telegraph.co.uk/news/worldnews/europe/greece/7671505/Unlike-the-Greeks-the-Irish-are-facing-up-to-their-plight.html

    ‘People here in Ireland are looking, with bewildered incomprehension, at what the Greeks are doing,’ “What do they think the alternative to a deal is?” said a friend of mine in Cork, wonderingly. The engineering firm he used to work for is imposing 30 per cent pay cuts; his daughter, an engineer, is going for interviews in London because “there are just no jobs”. But his wife, a teacher, is about to vote in favour of the government’s latest austerity deal, which will freeze her pay for the next four years. That’s on top of the 17 per cent pay cut she took last year, if you count the increase in pension contributions. Can you see the Greeks doing that? Or the British? “

    Er, no, I can’t see the Greeks or the decadent Keynesian British acquiescing to an entirely selfish renewed bout of German self-destructive behaviour. But I can see Gordon Brown taking over the IMF/World Bank/EU/ECB and organising the mother of all QE SDRs to contain this descent into hell. Ireland is utterly dependent on the reflation of the US-uk credit(debt) machine. Germany will not help Greece. Or Ireland. Only themselves. In a myopic, delusional, self-defeatist deflation death spiral. Time for U2 to decamp to Athens and actually write a relevant album again. One that reflects the coming turmoil. Maybe they’ll repatriate their corporation from Core Euro Nederlands and pay patriotic taxes? PIIGs will fly. The Brits on the Western flank suspected this treachery from the outset, hence the amorphously cryptic Treasury Tests for Euro entry. One day Britain will step up to the plate and ensure a coherent synthesis of Anglo-Saxon and Napoleonic legal, trade and cultural systems which will free the enslaved masses of France and Germany. Shakespeare + Keynes, etc. I realise this might be a ‘controversial’ position, but events are proving me right. “Events, dear boy! Events.” Ireland is bankrupt on many levels. And it always was right from the foundational disasters of the State:

    http://www.independent.ie/opinion/columnists/kevin-myers/kevin-myers-national-debt-is-nothing-new-but-it-allows-us-a-good-moan-2164537.html

    One of my degree theses was on the post WW2 settlement. On the notion of Europe. ‘Europa’. I examined Nikos Kazantzakis as an exemplar of ‘The Outsider’ who couldn’t easily be placed into the accepted narratives of hegemonic Franco-German thought and culture. Was Greece now part of Europe? If so, how would Europe accommodate this singular and volatile nation ‘going forward’. I concluded that Europe could only integrate Greece by being transformed by it. “The full catastrophe” as Zorba said. Now the Germans will get to dance to the Greek tune of ‘full catastrophe living’, whether they like it or not. I wrote this in 1982! At long last, I am vindicated. I must write to my old university demanding a retrospective First. The cheek of those eejits to challenge my intellectual supremacy!

    best wishes
    ‘mad’ ‘Paddy’ from Brum,
    aka: Garda O’Boyce-Mooney:’The Saxon Foe who destroyed FF/FG’.
    aka: The cultural Taoiseach of the Second Uprising of 2016′, etc.

    • Deco

      Andrew – the Napoleonic method of government was a refinement of the earlier centralist concept that was derived from Cardinal Richeliu. Richeliue was the father of French centralist foreign policy. It was said that his agents opened every letter that entered France and every letter that left France during his regime.

      I think that the Magna Carta tradition of the freeman having rights that were independent of the ruler’s whims, that this is a much better system. And that compromise with the Richelieu authority doctrine is unhealthy. It is this that is the same doctrine of authority that inculcated the Irish Catholic Church in the decades following the 1798 rebellion, and which comes from Brussels today.

      • Yep, Banks have assumed a new religious authority role, with bankers their new religious elite.

        Taxpayers are expected to pay due homage to banker gargoyles such as Fingers/Neary/Seanie, and here’s the sucker punch, politicians are their high priests.

        We need a big spotlight to probe the dark corners of the erstwhile shenanigans they’ve got away with through exploiting our trust in the past.

        But even if you only got a small torch like mine:), that’s OK, turn it on, ask the hard questions. They hate the light and there’s a lot hidden away in the dark.

        Trust is gone. Time for forensic probing, deep interrogation, accountability and transparency. We need answers!

        :)

    • ThomasFergus

      Great stuff Andrew. Riveting post. More Mad Paddies are what we need!

    • “Three tragic deaths after bank petrol bombed by asshole anarchists.”

      She was a young pregnant kid. Some mothers daughter. Just earning a few bob.
      And now she’s dead, burned alive with her unborn child.

      Someone else will find better words than me to signify why this mother and child died.

      To all ye people who brought this about, with all ye’re scams and rackets, may God forgive me, but may ye roast in Hell.

  21. LdvLon

    What I don’t like about this article is that it gives the impression that sovereign defaults have little consequences. They don’t. The reputation of a country that defaults will be paid, just like the debts, in higher interest rates for the decades to come. Just look at Argentina.

    • Malcolm McClure

      Ardebtina, Iceland, Russia etc. were isolated cases and The Big Banks were able to pick them off one by one. The difference now is that the entire Eurozone can collapse. US, China, India, Brazil, Russia and possibly UK are hovering like buzzards to pick over whatever skeletons remain.

      • Philip

        US, China etc have no more firepower than anyone else. They are all in a mess financially and their economies non-sustainable without a large buyer economy like the eurozone.. The Eurozone implosion will take the rest of them with it. We;ll be lucky if we stop a rollback to around 1970s.

        • Malcolm McClure

          Philip: In this economic war, firepower is any currency that is widely trusted. The dollar is America’s AK-47 and get-out-of-jail-free card all in one. Euro collapse automatically makes the dollar strong again. Likewise with the renminbi etc.
          Also consider the Norwegian Krona as a hedge against Euro decline. Foreign exchange booths are going to have a field day. Every village will have at least one. Bye bye banks.

  22. dwalsh

    This is the way I read the present global economic crisis.
    There are two economies – deeply interwoven now due to the dismantling of regulations. They are the physical economy and the financial economy.
    The financial economy is bankrupt (not just morally). At its core there is a black hole of approximately $1.5 quadrillion (1,500 trillion) in toxic financial speculative instruments (derivatives) which in theory ultimately derive their value from the physical economy. At this time this black hole of toxic abstract or metaphysical wealth is sucking the real wealth out of the physical economy – with the support (thus far) of the political elite.
    The financial sector is a parasitical predator on the physical economy and ultimately on the livelihoods and very lives of all ordinary humans. The speculative financial institutions are really gambling organisations and should be wound-up and their activities outlawed…permanently.
    The only people with access to the power to do this are the politicians; but for now they are in thrall to the Doges of international finance.

  23. SM

    Frank Daly, chairman of the National Asset Management Agency, said no borrower is “too big to fail”.

    Too big to fail. Now where did I hear that before?

    http://www.independent.ie/business/irish/no-borrower-lsquotoo-big-to-failrsquo-says-nama-chairman-2166167.html

  24. paddyjones

    EU was transformed from an economic union into a political project. As an economic union it was prosperous. As a political project it is almost certain to fail. Last 10 years demonstrate world wide abandonment of economic realism in favor of costly political projects and unrestrained government spending. China and several other emerging economies have maintained their focus on economic development. The results are crystal clear.
    Alot of posters on here really fancy themselves, I ask you if you were given the choice between Lenihan or Bruton which would you choose ….right Lenihan everytime.
    There is no conspiracy they are all just winging it Lenihan, LeGarde and Merkel they have no idea what they are doing!
    Outside the PIIGS things are relatively normal , it is just us Irish who are ranting and raving when we woke up to find we owe 600 billion. We had a party and now we are where we are. My worry is that this is a long term problem , debt is being transferred about but the buck will stop when it becomes sovereign debt. This debt will get rolled over and over and we pay by austerity and higher taxes.
    In relation to the markets they don’t like this one bit because it is long term that is why I sold all my shares last week and will stay out of the market for a long time. Only when the euro is about to break up will I buy on the DAX to avoid the devaluation in the punt2.

  25. G

    UK budget deficit ‘to surpass Greece’s as worst in EU’European commission’s spring forecasts put UK budget deficit this year at 12% of GDP — the highest in the European Union and worse than Treasury estimates
    http://www.guardian.co.uk/business/2010/may/05/uk-budget-deficit-worse-than-greece

    • Deco

      Yes, I seen that earlier.

      I imagine that Gordon Brown is absolutely furious that the EU Commision dropped this bombshell the day before the British General Election. It has effectively stated that the current British Administration is trying to bankrupt the UK. Really, they should have said this last week, when there was time to argue about it.

      And this is a serious problem for Ireland, because this type of news drives down the value of sterling and makes the most labour intensive part of our manufacturing sector uncompetitive.

      In other words, this costs Ireland manufacturing jobs.

  26. stiofanc02

    David, you smashed The ministers teeth down his throat today on Newstalk. Nice one. I could smell the stench coming from his lying filthy mouth and feel his queasy and nervous stomach as you gutted him. Sweet………They all make me sick with the same old sh!t..over and over and over… you are a true patriot and one of my heros.

  27. Philip

    The financial system as it stands and as it has been allowed to operate is bust.

    Why bother protesting? This government is finished irrespective of what they or their replacement do. The Greeks can jump up and down all they like. It matters not. Europe will blow up with or without them.

    My advice? Stand back and watch the fireworks. Look after your community and protect yourselves. I’d say we have about another year for this blog and the underlying telecoms networks fall apart.

    Barter is back. Buy what you can now that is useful. Learn a manual trade or 2. All we need is Katla and we will certainly be grounded for about a decade.

  28. Its hard to believe there’s not so much as a bang or a whimper, all quiet on the western legal front no raising challenges against the bailout, both our own and that of Greece, see article 35.1.

    Court of Justice of the European Union should be testing if the bailouts are even allowable under competition rules, plus article 125

    “1. The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.”

    Surely this specifically precludes bailouts that only go to pay bondholder debt obligation payouts, never mind the servicing of social services and the like??

    Article 35

    Judicial control and related matters

    35.1. The acts or omissions of the ECB shall be open to review or interpretation by the Court of Justice of the European Union in the cases and under the conditions laid down in the Treaty on the Functioning of the European Union. The ECB may institute proceedings in the cases and under the conditions laid down in the Treaty on the Functioning of the European Union.

    Nobody going to challenge the legality of the Greek bailout (here’s a debt anchor to hang around your neck, now jump in the ocean and swim to us with your bond coupon interest premiums please.

    35.2. Disputes between the ECB, on the one hand, and its creditors, debtors or any other person, on the other, shall be decided by the competent national courts, save where jurisdiction has been conferred upon the Court of Justice of the European Union.

    35.3. The ECB shall be subject to the liability regime provided for in Article 288 of the Treaty on the Functioning of the European Union. The national central banks shall be liable according to their respective national laws.

    35.4. The Court of Justice of the European Union shall have jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the ECB, whether that contract be governed by public or private law.

    35.5. A decision of the ECB to bring an action before the Court of Justice of the European Union shall be taken by the Governing Council.

    35.6. The Court of Justice of the European Union shall have jurisdiction in disputes concerning the fulfilment by a national central bank of obligations under the Treaties and this Statute. If the ECB considers that a national central bank has failed to fulfil an obligation under the Treaties and this Statute, it shall deliver a reasoned opinion on the matter after giving the national central bank concerned the opportunity to submit its observations. If the national central bank concerned does not comply with the opinion within the period laid down by the ECB, the latter may bring the matter before the Court of Justice of the European Union.

    On the other hand, when the legal industry here gets pumped with NAMA and property bubble2, go figure?

    Overall lack of prudent due diligence on the part of bondholder banks should be fairly easy to prove before a Court of Justice of the European Union. The outcome could be a levy tax on all transactions of the bondholder banks, enough to offset a release from all bondholder obligations with damages for all the PIIGS, plus stiff sentences for Jean Claude Trichet and his gang of miscreants! Isn’t it time to get back the eurozone from the lawless, robber bondholders ….?

    Guess the euro will finish up fairly ignominiously not with a bang but with a whimper…

    http://www.artofeurope.com/eliot/eli2.htm

  29. Deco

    I think the Greek mega-bailout of bankers will become sundered as a result of the upcoming General election in The Netherlands.

    The Dutch people have made more of a contribution per capita than anybody else to the EU. And they are fed up with the waste, the incompetence, the corruption, and even the bureacracy. Even if the German regional election does not upset the German government’s majority, I expect Dutch to stand forward and prevent this madness going through. And when they do, we will owe them a great gratitude.

  30. Deco

    This is an analysis of what is really going on in Greece, with regard to riots and strikes. It is amazing that a gang of thugs, are running amok and literally crippling the ability of a country to get itself out of this mess.

    http://www.guardian.co.uk/commentisfree/2010/may/04/greece-dont-believe-fights

    I know this might sound a bit conspiratist – but I have a slight suspicion that Russian money could be involved somewhere in a deliberate attempt to undermine the EU. I mean Putin must be laughing at the way the EU is all tied up in knots over this. And then two weeks ago the Chinese, who always seem to pop up with interesting comments when the Russians are up to something, made a comment that Greek government debt was complete malinvestement. (they never said this about US Treasury bonds).

    Is this part of the game of chess that is Russian foreign policy ? If it is then clearly they have won. Russia is run by the brightest brains from the former KGB, who are post socialist, and the EU is run by a collection of bumbling idiots who were once student politicians and who are implementing a socialist response to a capitalist headache.

    If Greece gets kicked out of the EU, then the Greeks will be reliant on Russian support. And if Greece remains in the EU, then it pulls the whole place down. Checkmate to Ivan !

    • Its not capitalism as that requires capital, the headache is creditism. This system may require no savings. Their cure is stimulus of synthetic credit and more regulation which is seen to be vigorously enforced. http://vimtrading.blogspot.com/2010/04/get-credit-flowing.html

    • Colin_in_exile

      You’re onto something there Deco,

      Look at the map and you’ll find Russia and Greece on the same side.

      THE EASTERN BOUNDARY OF
      WESTERN CIVILIZATION

      http://s02.middlebury.edu/FS056A/Herb_war/clash4.htm

      Greeks and Russians share the same kinship, which matters most in this day and age.

      • Deco

        The way of history suggests that if the Russians have a better thought out strategy that they will win.

        Russia is very close to Bulgaria and Serbia. Greece was a long term objective. Every Tsar since Catherine the Great has been trying to edge closer to the Mediteranean at the expense of Austro-Hungary and the Ottomans. Stalin funded Greek Marxists after WW2, and the Greek Marxists nearly won a Civil War were it not for British backing for the pro-Western side in the Civil War. The Russians are watching this area. They behave as if German money, and the British Navy, is what keeps Greece looking West. After the behaviour of the previous few weeks, the link between EU membership and the history of Athens in 500 BC is less important. If the Greeks have to hand the money back, then the Greeks might better disposed towards cooperation with Moscow.

  31. shaneomeara

    This is some mess, but not surprising, and I am sure, foreseen by many. Thanks for the insightful Article David.

    Here in the U.S. I see no difference – bailouts were plentiful and bountiful, debts are massive, deficits are budgeted in perpetuity, unemployment over 10% and stuck in never-ending and un-winnable wars. The ability to print money and have the taxpayer pay the bill through inflation seems like the temporary solution. An un-audited Federal Reserve, is akin to the fox guarding the hen house.

    My question is, who is really pulling the world strings, and what individuals are really benefiting from all this?

    Behind most world problems one will invariably hear one of the names Rothschild, Morgan, Goldman, Rockefeller, etc.. being mentioned. For example, who is/are the Rothschild’s, and how could they exert influence over the world economics?

  32. wills

    Posters.

    We are perhaps witnessing an ‘ol fashioned currency gunfight between Dollar and Sterling and Euro for primary world currency reserve status.

    Any takers………..!!

  33. Tim

    Folks, Europe’s Debt Crisis Isn’t Only Reason Stocks Are Dropping:

    http://bit.ly/cgEhf7

  34. Tim

    Greeks: “We are not Ireland; we do not sacrifice ourselves for the rich”.
    (Quote from Greek protestor on RTE News at 9).

  35. Tim

    Folks, a few questions about the “off-balance sheet” accounting at NAMA here:

    http://www.progressive-economy.ie/2009/10/its-ok-to-borrow-off-sheet-when-it.html

  36. Instead of the bailout’s, why didn’t the ECB go for Stakeouts.

    Instead of Eurozone bonds, the ECB invests directly in the banks that as in the case of Ireland can be wasted by incompetents such as Lenihan .

    By the way if ever you need a lexicon to interpret what Lenihan says, take his words and do a boolean uturn to get the opposite of what he’s trying to say, this will give you an approximation of the truth behind what he’s saying.

    In the case of Ireland, what if the ECB took big holding stakes in the banks enough to maintain liquidity and manage the toxic stuff.

    Cut out the middleman, the Irish government. Benefits, greater monetary ECB cohesion/supervision across the PIIGS.

    No bailing out of delinquent Governments, remove the previous boards of the banks, no bond repayment obligations for Greece or Ireland but a larger involvement of the ECB at the micro level in the banking sectors of PIIG countries as a result of their new majority shareholding?

    Stakeholder representation of the ECB on local banks for the sake of monetary union cohesion?

    Any ideas on this?

    • wills

      Yep, cbweb I reckon your hypothesis maybe overlooking this. The banks across national borders are controlled by each PIIG set of insiders and controlling interests and there is no way will each subset of royal patronage and special holding interest holding sway within each jurisdiction secede any power to the ECB.

      • @wills,

        If alternative is closure/bankruptcy of their bank they might, but I agree, there are other sovereignty issues at stake, the question is does the eurozone want to go there!

  37. MaxKeiser

    If an one holds savings of Euro in Irish Banks would you be wise to move that money to a Euro German bank?

  38. bankstershill

    Tizz true that the ‘Greek crisis’ provides a nice pretext for Greece to be used as a conduit to funnel the peoples wealth to the Euro banks. However what David didn’t mention was the question of how solvent many of these institutions are. The fact is they are on their last legs. The entire edifice of private credit creation through fractional reserve central banking has reached its mathematical limits of exponential money growth, after nearly three hundred years since the birth of the queen flea , the Bank of England. One of the features of this system of banking is that by its very design its doom is inevitable. Private banks with the power to create money at interest ,are compelled to keep lending and lending if they are to remain solvent. Since by this system all money is lent into existence at interest , then new loans must be issued in order for the interest on old loans to be paid, further inflating the money supply. In order for inflation to be held at bay ,physical productivity of consumer and capital goods has to keep up with the exponential money growth. The problem now is that the physical output of the western economies can’t keep pace with the required money expansion. So consequently the banks are not willing to lend in the private producer sector, only to speculative enterprises like the housing boom, and when that blew out now only to governments by buying their sovereign bonds, in the vain hope that if governments were to impose the austerity measures then the banks could get a good return on their bonds and stem of insolvency. My point is in all this that its is the privately held parasitical western banking system which is bankrupt, including the central banks, and not individual nation states like Greece. All Greece is doing now is calling the bankers bluff, and the bankers are scared and weak. Now is the opportunity for the individual nation states of Europe, in a spirit of cooperation, to place their respective major financial institutions into receivership and reorganization, and for each to establish a sovereign credit system with each nation assuming the authority to issue its own money backed by the potential of the physical productivity of its economy, and all nations linked by a flexible system of exchange rates grounded on the relative purchasing power within each of an agreed upon basket of commodities. Already in the US Congress there is a push to reinstate the Glass Steagal laws which would effectively force a bankruptcy reorganization of the entire federal reserve system, and if happens an equivalent measure will be taken in Europe. Its the only solution that will work. Welcome to the era of low or no interest sovereign credit.
    Examples of sovereign credit:
    1 the English tally system
    2 Benjamin Franklin’s continental script,
    3 Lincoln’s greenbacks
    4 The Guernsey public credit system
    6 JFK’s silver certificates
    7 The peoples bank of China

    • wills

      Banksterhill, great comment and the guts of it of the problem purloined out onto the DMcW’s blog table.

      The crux of your comment….

      ‘The problem now is that the physical output of the western economies can’t keep pace with the required money expansion. So consequently the banks are not willing to lend in the private producer sector, only to speculative enterprises like the housing boom,’ ………… is accurate, but can I add accurate to a degree and missing the following facet of truth………

      The engineers and controlling interests behind the central banking model use the fractional reserve banking system in tandem with a fiat paper counterfeit money system and stretch it like an elastic band until it snaps and then wheel out the replacement to take its place.

      So, for example, the euro was a replacement wheeled out to replace the basket of currencies in europe.

      If the euro fails the plutocrats will return another money system and GO again in tandem with the level of wealth generation underway in that space and time whatever it is and no matter what the level of wealth generation in the world now has never been bettered.

      Brazil China Oceania Russia are flying and european and USA investment holdings in these countries are ginormous and unstoppable in investment return.

    • dwalsh

      Excellent analysis. We need a new economic system; and not in private hands. A system that is based in the soverign power of the people through democratic government.
      We dont have true democratic governments today because capital has usurped the political order and governments run countries on behalf of the financial elites who fund them.
      The only people who have access to the power to change the system are the politicians; but for now they are in thrall to the financial elite.
      The current bailouts will not solve the problem as you say. They are only buying us time. The global banking system is bankrupt beyond recovery. It would require a feudal regime for generations to pay their gambling debts. But those debts are between themselves and are not our responsibility. There is no reason the entire palnet should have to pay the gambling debts of a few thousand reckless and irresponsible financiers.
      And they should not be permitted to continue their predatory and parasitic attacks on national curriencies. It is an outrage that such irresponsible behaviour is tolerated by the international community. It is nothing less than economic warfare against the lives and livelihoods of the citizens of the countries they speculate against.

    • MT25

      Great Post bankstershill – very clear thinking. Alway’s a bit suspect of Statements such as “Its the only solution that will work.” You might be right tho!

  39. paddythepig

    Why are these spoilt Greeks protesting? They are living beyond their means.

    If they made a serious effort to reduce their costs down to the bare minimum, I’d be more inclined to listen to the protestors.

    They are the authors of their own misfortune. They have no-one to blame except themselves.

    Paddy

    • Deco

      But if you were used to living beyond your means, you not want to cut back either.
      Just look at Jim McDaid, for example. Or Johnny Cash – he had severe problems giving up the lifestyle.

      Lifestyle. “I have lifestyle, therefore I am.”

    • dwalsh

      That’s what others like you will say when the IMF moves in here…”they have no-one to blame except themselves.” Wise words indeed…not!

      • paddythepig

        We have no-one to blame except ourselves. We are totally at fault for our own problems.

        Who do you blame?

    • I think you are confusing the Greek people with the Greek political and banking leadership.

      Don’t blame Joe Soap for living on a wage decided by his political masters.

      Corruption generally comes from the top. It may filter down but it comes from a position of power and is an abuse of that power.

      Or do you believe Joa Soep should have returned his pensionable rights, his benefits and asked the politico and banking elite to mend their ways?

      I’d say most of the dissent in Greece is coming from those who are making a public protest at the abuse of power and at the state their country has been left in by the insiders responsible for this.

      Such arguments as yours are the usual precursor to a raid on the taxpayers purse strings to pay for the gambling debts and corruption of corrupt bankers and politicians.

      NB NB aint the politicians/bankers true authors of misfortune protesting in the streets!

    • SM

      Are you stoking the fire there Paddy or do really mean that?

      If a parent feeds a child sweets from an early age, the child will expect sweets whenever he wants them. He knows no better.

      Bankers prey on human nature. They are complicit in lending money to people who are high risk. They didn’t follow their own rules.

      • paddythepig

        I really do mean it SM. I believe in taking responsibility for your own actions, and not passing the buck.

        No-one forced the Greeks to borrow all this money, they asked for the money. They are to blame for mismanaging their economy, as we are ours.

        cbweb : who voted for the ‘political masters’? Answer : the people did. The so called elite are merely a reflection of those who put them there. And yes, people should question their salary & pension renumeration if they are not sustainable. People are not as spoonfed as you make out, they have choices.

        In the event Greece reduces it costs to the very bare minimum, and then say ‘I can pay no more’ then at that point the ballgame changes, and the lenders then have to take responsibility for their stupidity.

        But we’re not even close to that point.

        Paddy

        • @paddythepig

          Anyways, I admire your tenacity In the face of overwhelming evidence to the contrary .

          Fact is the people did not vote to be robbed by the banks. Young people in negative equity did not vote for the housing bubble.The people did not vote for FF to screw the economy.

          The people voted in a Government they thought fit to mind the store.

          They were fed propaganda to the effect FF were able to mind the store and do this well. Catastrophe evidence surrounds us the goons hadn’t a clue at best, corrupt and incompetent at worst. Unfortunately, we never took out catastrophe bonds when we voted them in.

          Incompetence combined with a corruption egged on by them, Section 23 Tax incentives, responsibility for a screw us all banking system, a laisser faire leadership in bed with back door developers,the buck stops with them.

          Avoidance of responsibility, opaqueness instead of transparency, dodging accountability
          is not a healthy trait.

          That’s the past, but the gobshites set about screwing the future with the bankster bailout and NAMA. They’re over in Luxembourg today probly smiling all over the place telling the Greeks we’ve turned the corner and we’re well able to pay our debts, what’s the problem??

          Their bullshit legacy of incompetence, greed and corruption is a mountain of mess to clean up after them.

      • Colin_in_exile

        “If a parent feeds a child sweets from an early age, the child will expect sweets whenever he wants them. He knows no better.” – that’s downright bad parenting, am I allowed to even say that these days?

        Growing up in the 80s with 2 siblings, we received a 100g bar of Chocolate once a week to share between us and Mum and Dad. There were 21 squares in the bar, so everyone got 4 squares each, and there was one left over, usually given to the person who made the tea that night. None of us bought into the Celtic Tiger sharade, none of us have shares or second properties – some don’t even own primary properties. None of us voted FF.

  40. Deco

    The next crisis –
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aXVDYwRKdfF8&pos=2

    Once again political consideration is overruling economic intelligence. And from dithering and denial eventually comes decline and disaster.

    The General Election in the UK occurs tomorrow. The IT has decided that the UK can handle a hung Parlaiment. But the financial markets reckon that a hung Parlaiment will be incapable of fixing Britain’s fiscal crisis. We will know on Friday morning, when we watch the Sterling Euro exchange rate.

    Of course, the real question is….how will Ireland cope with the sort of indecision that comes from a Hung Parlaiment from Westminster. We did not have to deal with this scenario since 1976 – and that chaotic. If the Pound Sterling goes 1:1 with the Euro, how fit are weto deal with this. (That was the last thought on the mind of the knowitall penning opinion peices in the IT – and it usually is the last thing considered). I reckon it will cause us very serious trouble.

  41. “”"Contagion pressures continue to rage unabated,” said Marco Annunziata, Europe economist at UniCredit. “The flames have rushed through the firewall of the IMF/EU programme for Greece and now threaten other peripheral countries.”

    “While the sell-off on sovereign bond markets so far remains discriminating, the risk that it might suddenly mutate into irrational panic can no longer be ignored. Eurozone policymakers need to take further steps quickly,” he said.
    Julian Callow from Barclays Capital said Greece must reduce its primary budget balance by 14.5pc of GDP over five years, a task that is “unprecedented in European experience”. The country will end up with a debt of 151pc, even it if complies.

    There is mounting concern that the IMF is squandering its fire-power on a dubious plan, rather than ring-fencing Greece with a controlled default and reserving its clout to defend a more credible line on Iberian debt — which is what really matters for Europe’s banks. By failing to fix achievable priorities, the IMF risks a drift into deeper crisis.”"

    From The Telegraph @ 10.00pm this evening.

    The cornflakes are going to be interesting in the morning.

  42. —- BLITZKRIEG—-
    Battle of Britain 2011

    1940 Nazi Armies swiftly had run over Belgium, Netherland and Northern France in May. The ‘Blitzkrieg’ idea of close coordination between ground troops and airforce was put into a game plan and executed.

    August 13th, 1940 the assault started.

    The german airforce lost 1,700 aircraft in less tan five months, the RAF 915. London was attacked 18 times and they dropped 18,000 tons of bombs onto the city. The switch to focus on bombing British cities proved a fatal strategic error. In September, Operation Sealion, the invasion of Britain was cancelled.

    Hitler now focussed on Russia and nine months later in June 1941 launched Operation Barbarossa, to invade Soviet Union.

    My Uncle was a survivor of Stalingrad, he lost both feet to the frost, and had quite some gut wrenching stories to tell.

    I was 14 when I pestered him with questions about Stalingrad, usually getting the evil eye, very disapproving looks from my Mother, or more straight forward corrections from my father to not bother him. Until one day I visited him alone for an entire week in his beautiful place overlooking Lake Starnberg in southern Bavaria and had a chance to continue pestering him with my naive curiosity without nagging parents in my neck.

    Today I think, he only refused it in the presence of my parents, because he quickly gave in and made a deal with me.

    For every story he told me, I had to play at least an hour Joh Seb. Bach’s English Concertos on his Grand Piano, to which I happily agreed.

    x x x x

    Tomorrow are elections in UK and it looks as if a political Patt, to use that term from chess, where both players agree that no one can win the game anymore, is not out of the question, on the contrary.

    Who will give credit to the UK in such a political situation?

    Anticipating this scenario, Frank Binacheri, Scientific Director of the LEAP/E2020 Think Tank, comes to the conclusion that Greece is only a hint on what may come in the US and UK economy in 2011.

    Already heavily indebted, both US and UK could get a severe wake up call. He writes in the German Handelsblatt from today, the same situation that we see in Greece now can unfold in UK very quick, after the elections, politicians will have to smell the roses and will be forced to admit that their situation is much worse than what they wanted the rest of world to believe until now.

    Come summer, The Battle Of Britain will begin. The Sterling will not come out of this undamaged, that much is certain, and UK will have to implement austerity measures on a scale that are unsurpassed for Great Britain, eventually even the IMF and EU have to come to aid.
    Looking to the US, no Institution can help here anymore, with a re financing requirement for 2011 of 5,000 billion USD, which more than likely will cause the implosion of the US Bond Bubble.

    Then the FED has no other choice but to raise the interest rates higher to be able to finance public debts, which in return will cause more banks to go belly up.

    I think Binacheri has a point here, and lets not forget one thing here that is not often mentioned in context, whether ECB or others, Central Banks can go bust as well if there is nothing left but virtual assets, and I predict that ECB will have to go down the embarrassing road very soon and buy bonds direct from any of the European states in trouble. In deed, they have no choice! This could lead to this virtual assets only scenario very quick.

    Of course, the real ticking time bomb is the Yen.

    x x x x

    Our dependency on privately owned and deeply corrupted rating agencies is one problem at the core of this Heist.

    Our politicians failed to protect Nations from the Greed of a few and their unethical motives, well, they not only failed, they became part of the heist themselves. No one stopped Law firm Maples & Calder in their tracks in Ireland, on the contrary, they were welcomed here, so was Goldman Sachs and others.

    The system failed, but not only the financial system, no, the entire system collapsed, morally, practically, on all levels.

    What has been described as a financial crisis, in reality is a confidence crisis of epic proportions.

    Even the least educated person by now has an idea about the truth behind all this. Often enough they do know this instinctively.

    Like Lady Ingram a 98 years old woman who used to live close to Greystones/Wicklow and who I was honored to know. She was blind, bound to a wheelchair, broke her hip with 87 I think, got the shingles with 92, broke her wrist with 94, but whenever I meet her, she was the most amazing person you can imagine.

    Skin and bones, but a raiser sharp brain and humor, always on the ball what is going on in the world, one ear glued to the radio, her only channel to the outside, except the few visitors. She was of the old school of course, and of course disapproved of any slightest use of foul language, but, and this was always funny, whenever I made comments about Bertie Ahern on the news like What a mean-lipped-stupid-greedy-little-sucker-of-a- peacock he really is, she could not help it but chuckle, and of course, only to correct me a second later with a ‘Ts ts ts’ but still chuckling and nodding her head agreement.

    She was around when the Battle of Britain took place. She was around when soldiers died in the trenches on the Somme in the first WW, she was in Ireland before the first car came here.

    I was thinking of her today, and I was wondering.

    I envisioned a conversation with her, where I would have explained to her, and even with her advanced age, no doubts, she would have understood the complex matters if explained slowly and in appropriate ways, and then would have told her that I think the unthinkable, that I really considers this an option, the only option. She probably would have turned her head at me and asked ‘What do you mean?”

    I would have answered, ‘I mean Revolution Mrs.Ingram, a soft and non violent Revolution’ and I can see her forehead starting to cloud up, her face expressing worries and her mind grasping the weight of this word. Revolution.

    Sitting here tonight and thinking about this, she might have answered, with a heavy heart, but clear mind They are not backing of, they are not stepping down, they will never admit what they did. There is nothing else really we could do, or is there?

    Hands on heart, I am quite certain something like this would have been here answer!

    Both, Mrs Ingram and my Uncle are not amongst us anymore, and I wonder what my Uncle would have answered. He became a Priest after he came back from Stalingrad, always in a Fight with the church authorities above him, they truly feared him coming to Munich, he was well known to not take their shit. :)

    We need a much greater transparency in our democratic structures and this needs to start with uncovering the Truth. The Truth about Anglo Irish and Irish nationwide is no matter for closed doors at all. Public hearings are required, and much more in that respect has to change. Yes, Brian Cowen has to enter a witness stand as well, and testify under oath, and many more.

    If Mrs. Ingram would still be around, her allowance of weekly personal care assistant hours would have been slashed in half by now and some district stupid bureaucrat would have told her helper not to use as many pampers anymore on her incontinence clients. – To the reader who did not follow all the threads here, the latter is a true story and this phone call happened 2009! –

    Disabled children, school children, the sick, the elderly, unemployed, the most disadvantaged in our society are treated in a way where I can only say so much, it is our ethical duty to stand up against this.

    I am so deeply saddened by the events today, you can think of me what you wish, but just the thought brings tears to my eyes, three people died a horrible death today in flames in a Greek Bank, a pregnant woman amongst them.

    This death was caused by misguided people, and they acted wrong, there is absolutely no excuse. It may sound strange to some, but I hope they can forgive themselves one of these days for what they did today, it will take a very long time though.

    Peace
    Georg

    • I spoke with JohnALLEN recently over a very convivial coffee. He’s a lovely man and and intellectually gifted.
      Georg took the time to call me recently and we had a very varied, wide ranging conversation. Highly enjoyable.

      As I’ve said here many times before, I knew nothing of economics before I became involved here and judging by the quality of (most of) the posts, I still have a way to go. That so many more people are starting to contribute is an indication that intelligent debate will once more be valued in our country.
      The fluency of language used on this site should be the stuff of Theses for economics students.
      It would be grossly unfair to single out any one poster for excellence but I would single out one for consistency and logic.

      That would be Deco.

      His/Her (??) rhetoric has allowed other reasonable debaters to consider joining the fray.
      In the past few months, more and more have contributed their point of view. This is healthy democratic debate at work and if you compare the Pro & Con discussed here vis a vis our Dáil, I rest my case.

      Someone said we really fancy ourselves on here, like some sort of Elite I suppose.
      Not so.
      This site is not moderated to it’s credit. Open house and free to all. If you have something to say, say it, just have a good read anda little think before you start tapping.

      So back to Georg and JohnALLEN.
      “Never above you, Never beneath you, Always equal”
      Peas in a pod.

      Thank you David McWilliams for bringing it all back home.
      F

    • Forgot to mention Georg.
      I buried a lovely lady just like your friend some weeks ago. Right there with you my friend.

  43. Folks,

    In addition to my post ENOUGH, here are the people and the companies that do the damage while our impotent and bankourrpted politicians are sitting on the side line fully aware about it and doing nothing…. since three years now!

    http://online.wsj.com/article/SB10001424052748703795004575087741848074392.html

    Note the date on this one here:

    http://www.barcap.com/About+Barclays+Capital/Press+Office/News+releases/News%2C1569%2CBarclays+launches+exclusive+ETN+linked+to+European+market+volatility

  44. “”Human Cooperation

    [Excerpted from Ludwig von Mises on Money and Inflation: A Synthesis of Several Lectures, compiled by Bettina Bien Greaves. This lecture was given at the Foundation for Economic Education (FEE).]

    Human cooperation is different from the activities that took place under prehuman conditions in the animal kingdom and among isolated persons or groups during the primitive ages. The specific human faculty that distinguishes man from animal is cooperation. Men cooperate. That means that, in their activities, they anticipate that activities on the part of other people will accomplish certain things in order to bring about the results they are aiming at with their own work.

    The market is that state of affairs under which I am giving something to you in order to receive something from you. I don’t know how many of you have some inkling, or idea, of the Latin language, but in a Latin pronouncement 2,000 years ago already, there was the best description of the market – do ut des – I give in order that you should give. I contribute something in order that you should contribute something else. Out of this there developed human society, the market, peaceful cooperation of individuals. Social cooperation means the division of labor.

    The various members, the various individuals, in a society do not live their own lives without any reference or connection with other individuals. Thanks to the division of labor, we are connected with others by working for them and by receiving and consuming what others have produced for us. As a result, we have an exchange economy which consists in the cooperation of many individuals. Everybody produces, not only for himself alone, but for other people in the expectation that these other people will produce for him. This system requires acts of exchange.

    The peaceful cooperation, the peaceful achievements of men, are effected on the market. Cooperation necessarily means that people are exchanging services and goods, the products of services. These exchanges bring about the market. The market is precisely the freedom of people to produce, to consume, to determine what has to be produced, in whatever quantity, in whatever quality, and to whomever these products are to go. Such a free system without a market is impossible; such a free system is the market.

    We have the idea that the institutions of men are either (1) the market, exchange between individuals, or (2) the government, an institution that, in the minds of many people, is something superior to the market and could exist in the absence of the market. The truth is that the government – that is the recourse to violence, necessarily the recourse to violence – cannot produce anything. Everything that is produced is produced by the activities of individuals and is used on the market in order to receive something in exchange for it.

    It is important to remember that everything that is done, everything that man has done, everything that society does, is the result of such voluntary cooperation and agreements. Social cooperation among men – and this means the market – is what brings about civilization and it is what has brought about all the improvements in human conditions we are enjoying today.”"

    Well now. What a crock of absolute self absorbed hubristic Shoyte.
    And this is the drivel people were taught in the Olden Days before The Great Realism.

    Feck me.

  45. Herewith the Ponzi Boys Anthem;

    “”Please allow me to introduce myself
    I’m a man of wealth and taste
    I’ve been around for a long, long year
    Stole many a man’s soul and faith

    And I was ’round when Jesus Christ
    Had His moment of doubt and pain
    Made damn sure that Pilate
    Washed his hands and sealed His fate

    Pleased to meet you, hope you guess my name
    But what’s puzzling you is the nature of my game

    Stuck around St. Petersburg
    When I saw it was a time for a change
    Killed the Czar and his ministers
    Anastasia screamed in vain
    I rode a tank, held a general’s rank
    When the Blitzkrieg raged and the bodies stank

    I watched with glee while your kings and queens
    Fought for ten decades for the Gods they made
    I shouted out, who killed the Kennedys
    When after all, it was you and me

    Let me please introduce myself
    I’m a man of wealth and taste
    And I lay traps for troubadours
    Who get killed before they reached Bombay

    Just as every cop is a criminal
    And all the sinners saints
    As heads is tails, just call me Lucifer
    ‘Cause I’m in need of some restraint

    So if you meet me, have some courtesy
    Have some sympathy, and some taste
    Use all your well learned politesse
    Or I’ll lay your soul to waste,

    Tell me baby, what’s my name
    Tell me honey, can you guess my name
    Tell me baby, what’s my name
    I tell you one time, you’re to blame

    all right
    What’s my name
    Tell me, baby, what’s my name
    Tell me, sweetie, what’s my name
    all right”"

    Frightening.

    Reminds me of this;

    http://vlog.xuite.net/play/WktBeUt3LTI1NjE3NjUuZmx2

    • Its from Jaggers song, Sympathy for the devil, lyrics
      http://bit.ly/c7LqWK

      Here’s Wolfmother, could do with a few improvements:)Lol

      http://bit.ly/bmH8Mm

      • Nah, wrong for the first time here Colm.
        Seanie Fitz wrote this and Jagger took it as collateral to get Seanie set up.
        The stuff I know is surreal.

        MMM. These cornflakes taste of Ambrosia and Nectar.

        • Your right, I’m wrong again!

          But I FigurOwed it out, little operatic ensemble when they agreed on NAMA and the bankster bailout:

          (Seanie to Clowen)
          “So if you meet me, have some courtesy
          Have some sympathy, and some taste
          Use all your well learned politesse
          Or I’ll lay your soul to waste,”

          (Clowen to Seanie)

          “Just as every cop is a criminal
          And all the sinners saints
          As heads is tails, just call me Lucifer
          ‘Cause I’m in need of some restraint”

          or was that t’other way round:)

  46. I’ve had a bit of a blogfest but to hell with the begrudgers. I had a free site so I went a bit mad.
    Anyway, herewith the last rant from F;

    And this is inane in the extreme;

    “Taoiseach Brian Cowen yesterday insisted Greece would pay back the loans as its economy improved. The Taoiseach will attend a meeting of EU leaders tomorrow night to conclude the agreement. He said the process would safeguard the financial stability of the eurozone area.”

    Yadda Yadda Yadda. The poor man is so out of his depth , he’s gurgling bogwater.

    I’ll leave ye alone now.

    • @Furrylugs,

      “We’re on the up” chorused Mary Hanafin to Aine Lawlor, Morning Ireland,(podcast available) on Pravda RTE.

      First reason
      “The main difference between us and Greece is we don’t have trouble raising money on the international bond markets.”

      Polyanna Mary hmmmmmmm, she’s got a bit of a communication problem to sort out. You see DOF no longer directly involved with this, so they can’t keep her informed as well as before. The NTMA are the new authority handling this directly themselves and they report to Lenihan. They arn’t answerable to DOF but only directly to Lenihan. Appears Lenihan mustn’t have told DOF, who mustn’t have told Mary Hanafin, who has lied to us again.

      http://bit.ly/9Ljbsh

      “Last week, Irish rates soared by 36 basis points to 5.1%, the third-largest increase in Europe after Greece and Hungary. The NTMA may have the option to cancel an auction or two. But sooner or later it will have to lock in higher interest payments.

      May 2, 2010″

      Perhaps a Prime Time Emergency Special on Ireland’s growing debt crisis to put the nation straight……I doubt it!!!!!!!!

      Supplication, unquestioning and obedient critique of ministerial lies, a craven deference to the unchallenged falsehoods of FF propaganda from Pravda RTE once again …..We’ll be on the up only when barefaced lies to the Irish public are exposed !!

    • Dilly

      These guys should have their own stand up show ‘Live at the Apollo’.

  47. insider

    Can anyone shed any light on what is happening in Australia right now? The housing market after a brief downturn last year has exploded again. I don’t think this is sustainable.

    What crisis in Europe? Here, it’s all optimism. They don’t seem to pay any attention to world affairs except for the DOW Jones. The commentators here are all focused on China. The theory is simply as long as China and India are going good then the Aussies can dig more holes in the ground and sell it to Asia to fuel the economy. But on the ground as far as I can see (Sydney at least) – there is a chronic shortage of skilled people across most industries. So I don’t see how Australia can grow at any strong rate outside of the mining industry. Anyone else confirm/deny this observation?

    • Over to you Deco.
      This was discussed here some time ago.
      Bear with me insider, an answer will surely come.

    • Alan42

      Insider , The Aussie banks had no exposure to the GFC and the stimulas package worked . Most Aussies are aware that there is / was something called the GFC but it does not concern them as it is happening somewhere very far away .
      Here in Melbourne we are having a good old fashioned housing boom . Most Aussies own an investment property as there is lots of tax advantages for negitive gearing . ( I own several ) .

      My bank actually rang me last week and asked if I would be interested in buying another house . Thats a big red flashing light for me . I told the bank that we were close to the top of the market as interest rates are shooting up here , almost by the month . I think that they thought that I was mad .

      It will go pop soon but the main banks will be ok as there is strong bank regulation here along with the 4 piller policy . However there is a lot of subprime lending and a shed load of personal debt with the likes of GE money .

      But as long as there is plenty of ‘ yellow cake ‘ in the outback it all good mate !

    • silentobserver

      I would be interested also if anyone has insight. I was there in December (Melbourne), and it seems there are similarities to here about 3 to 4 years ago- only difference is massive mineral wealth. Australia was my plan B if things got too bad here- but now not so sure. Mineral wealth is fine for those in the sector, but think it may be causing those in un related sectors to overstretch themselves. Property has always been boom and bust there, but with this boom there is more foreign property purchasing as regulation regarding foreign ownership has loosened. (Naturally of great benefit to the average Ozzy). Melbourne has been ring fenced, so increases land value. Don’t know much about Sydney (typical Melbournite!)- anyody else?

  48. —–BRIAN COWEN ARRESTED!—-

    This morning at 8:00 AM Brian Cowen was arrested in his residence. Garadai questions Mr. Cowen in relation to alleged financial irregularities during his time as finance minister 2004-2008 as well as other allegations that were not further specified at this point.

    Members of the Garda Bureau of Fraud Investigation were granted a search warrant and are at his residence.

    In a brief statement on the phone, Minister for Finance Brian Lenihan said he was “eager to see justice take its course”.

    http://dl.dropbox.com/u/4914840/cowen_arrested.jpg

  49. Dilly

    Relax everyone Mary Hanifan says everything is ok.

    “There are two very significant differences between Ireland and Greece,”

    “The first is that Ireland is not having any difficulty raising money on the international markets. Our bond spread is very good and there is confidence in those markets and we haven’t had a problem. Greece has and that’s why they have had to turn to Europe for help.

    • (a) Raising = Borrowing Mary dear
      (b) Spread is very good….yes Dear

      I’m bored now. Time to let the real economic commentators cut loose.

      Must head off to fill the Fridge.

    • Tull McAdoo

      In a strange peverted way I was more comfortable thinking that FF were just out to screw everyone that was’nt FF. I was happy with conspiracy theories etc. because I re-assured myself ,with the notion, that at the back of it all these must be very clever people, to pull off these bare faced robberies and cute hoor strokes as they have always done, but once their usual un-bridled greed had been satisfied to some degree, they would then return some normality to Ireland ,even if it meant a general election and so onn……….. The scary truth is that having listened to Cowen , Linehan, Coughlan, Hanifan, Dempsey et al I am left in absolutely NO doubt that these absolute gobshites have NO clue what so or ever about Economics, Finance, Banking. Shocking.Shocking. Shocking.

      • Tull McAdoo

        If all that was’nt depressing enough , how about the notion that NTMA/ NAMA et al have now snuggled up beside the Banks in Ireland with their own version of self-regulation, and most importantly, the Irish Taxpayer has become the main backstop for these shisters. Democracy or the bit of a say most people had up to this point is well and truely bypassed at this stage…………..Who would have thought it all was possible……..Smart Economy Cowen said with a grin on his auld fat puss, Jasus that must have given him a laugh in the Dail Bar.

  50. insider

    @Deco and @Colin_in_exile RE Russian involvement. Have you read “The next 100 years” by Friedman. He argues Russia is on a mission to buffer her borders. Primarily this would be by reclaiming the old Soviet states. But maybe they are shooting further. From his 4 Europes illustration, Greece doesn’t figure in any of them…

    • Colin_in_exile

      Insider,

      I know that very recently, Russia has convinced Ukraine to allow her to base her Black Sea Fleet in Ukrainian Waters in return for cheap gas.

      http://news.bbc.co.uk/2/hi/europe/8645847.stm

      Burgas—Alexandroupoli oil pipeline is a joint enterprise between Russia, Bulgaria and Greece, which bypasses the Bosporus, which allows Russia transport its valuable oil into the Greek Mediterranean port. It also displays cooperation of the three Orthodox states against the interests of Turkey, close to Turkey’s borders, who is a traditional foe of all three states involved in this enterprise.

      http://en.wikipedia.org/wiki/Burgas%E2%80%93Alexandroupoli_pipeline

      I’ll check out Friedman, thanks for the heads up.

      • insider

        Interesting Friedman identifies Turkey as a new world power – rising population etc. And what you have just said does not contradict Friedman. There are many “geopolitical fault lines” around Russia.

        Agree with Jon ALLEN the Chinese are into everything including the Aussie housing market – I have many contacts in China and have seen first hand the ghost estates of Suzhou – and it’s not like there is a lack of land. It might not be a unimaginable that Australia is to the leveraged Chinese that Bulgaria or Turkey was to the Irish during that bubble. You could probably draw similarities between China now and the Japan banking crisis – relationships and trust is everything in that country . I’m sitting tight – it’s going to be an interesting year ahead.

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