March 24, 2011

Time for us to sit tight and watch EU partners squirm

Posted in Debt · 125 comments ·
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Have you ever heard the expression “marry me now, the love will come later”? In the old days when a couple was forced together by the matchmaker, this gradual process of emotional osmosis was supposed to happen as time and loneliness took their course.

Often it didn’t and, as a result, Ireland was a country of silent homes, filled with psychological terror, violence and sadness.

Watching the depressing ‘Ballroom of Romance’ on TV the other night, I couldn’t help thinking of the dilemmas facing the architects of Economic and Monetary Union (EMU). The crisis facing the euro is one of a loveless marriage where the marriage itself has amplified differences that were evident from the start.

When assessing risks that might derail this bizarre construct, central bank economists focused on the risk of governments using the monetary union to borrow all they wanted. Therefore, the rules were drafted to prevent politicians of poorer countries — those without much access to capital — taking advantage of the monetary union to increase borrowing.

The economists forgot about the banks and the private sector and EMU became a financial crackhouse for large delinquent banks in the core of the union and their mini-wannabes in the periphery.

Take Ireland today. German and French banks only hold €10bn of our sovereign debt. But they hold €74.5bn of Irish bank debt. It is no wonder that the Europeans (led by the French and the Germans) are so keen this week to stop Ireland defaulting on the bank debt.

Anyone who pointed out this banking faultline in the early years of the 2000s was told that they “didn’t understand”. Well we understood, only too well.

We knew a monetary union without a supporting political union was a hopeful matchmaking exercise. Given that the single currency had no provision for divorce, the hope was that the unaccustomed newly-weds would learn to love each other and co-operate.

Fast forward a decade and we are now in the middle of the first monumental row of the marriage and there has been little sign of love and many indications of increased acrimony.

There is a fundamental faultline in the euro because, as it is designed at present, it means there will be periodic defaults and there is absolutely nothing the guardians of the system — France and Germany — can do about it other than threaten the weaker countries with supposed sanctions.

There is no mechanism to force the exit of one country. So the likes of the ECB’s Jean-Claude Trichet and Juergen Stark and all the others are stuck in the inconsistency of their own grand delusions.

On Monday, Trichet said he thought that Ireland could pay all its debts; it begged the question why was he so sure, when the markets thought the opposite? Yesterday, the yield on two-year money in Ireland moved above 10pc — that is above long-term yields.

There are many reasons for this but none of them would amount to any player in the market agreeing with Trichet.

We are in a serious crisis for the euro and all Trichet can do is repeat mantras. He knows, and we know, that we are caught in a debt trap. With no exit from the currency, there is nothing that the Germans and French can do but face a slow car crash of progressive defaults.

The other players in this tragedy are the markets that are shorting all peripheral markets in the expectations of a blowout. The more they sell short, the more accentuated the crisis. And it’s not just Ireland.

According to the latest figures from the Bank of International Settlements, French and German banks between them are owed €763.8bn by Ireland, Greece, Portugal and Spain. The French and Germans realise they are on the hook so they are desperately trying to rewrite history — a history where only the debtors are culpable.

But every capitalist knows that when a company goes bust, the key concept that dictates the receivership and possible subsequent rebirth is co-responsibility, where the lender and borrower are both culpable.

Every capitalist who knows a bit of economics also knows that, if you have a system where a bust country can’t pay its private debts, it will endure years of deflation and high budget deficits, which will ultimately get so big that they will have to be defaulted on and the last lender will lose everything.

There is no way out of this because the EMU architects never allowed themselves to think the unthinkable. Well, the unthinkable has happened and over the next few days our negotiators should just hold tight in the knowledge that we are all in this loveless marriage together.

There is little point in France’s Nicolas Sarkozy flying off the handle and demanding more dowry in the form of corporate tax reforms. It won’t make a jot of difference. We are now together and the only way out of this is a divorce or a two-speed Europe with default, restructuring, repudiation or whatever you’d like to call it.

The only other way out is full political and fiscal union, which the people don’t want; or the Europeanisation of all liabilities in the form of a huge, bumper European bond market, which Trichet and Germany have ruled out. Well you can’t have it every way, lads.

Our boys should just sit tight at the summit and watch the others squirm for a change.


  1. Most positive guy I heard in a long time was today Mike Ferick of Alison.com. Pointed out we should become the gateway to Europe for China and do business deals with them in relation to our debt without selling all we have something the EU wants. Lets deal with China!

    • Deco

      Absolutely ludicruous. PRC – No thanks. I will not accept money from the PRC under any circumstances. Just look at how the current Nobel Peace Prize winner is treated. Or the Tibetans. No, it is better to live without than to have a deal cut with Beijing. At the end of the say it will be a bailout for the establishment.

      I am reminded of the slogan that used to be graffitti’d onto the North Quay wall beside O’Connell bridge in the mid-1990s “Tax the horsey set”. Well, a new version of that would be “tax the deposits resting in Anglo branch in the IoM set”.

      • Gege Le Beau

        European countries are some of the biggest arms dealers in the world, NATO is running around the hills of Afghanistan in an ineffectual campaign which is just causing the death of innocent civilians (including women and children). The US is still in Iraq and Afghanistan while Guantanamo has not been closed – surely an affront to anyone who has any semblance of humanity.

        If we want to look even a closer to home, Mubarak’s tyranny was supported with $1.3 billion per annum from Washington, the French sold Gaddafi his Mirage jets (no mirage when they drop bombs on innocent civilians) and in 2010 UK companies did record sales of tear gas along with sniper scopes all classified as ‘crowd control measures’ (well documented by the Guardian newspaper which ran a series of excellent articles on the arms trade). In Libya, the West is effectively blowing up Western sold tanks and weapons which were being used to oppress people.

        China does has a poor human rights record, lack of political and press freedoms but when you look around the room there isn’t a country with clean hands. Also I think it is important to put China in some historical context (which I accept does little to ease the plight of political prisoners languishing in their archipelago of jails).

        In the 19th century it suffered brutal Western interventions, with countries trying to setup a ‘scramble for China’, during this period the British Empire was the biggest drug dealer in the world and flooded China with opium causing untold societal damage. In the 20th century, China was subject to possibly one of the most brutal and sadistic invasions by Japan (see the book ‘The Rape of Nanking’ where hundreds of thousands were killed, tortured, mass raping of women by Japanese Imperial troops). From this came the Chinese Civil War and finally the Communist forces won out under Mao which led to more brutality with the Cultural Revolution, Famines, political repression and so on.

        All of this has shaped the Chinese mind, it is paranoid about the West because it knows what it is capable of (China and the West came to direct blows in the Korean War) before detente with Nixon in the 1970s but it also needs Western markets for Chinese goods and has a massive ‘debt’ interest. But issues around Taiwan and a possible trade war which loomed late last year can upset the peace at any minute.

        I spoke to two Chinese academics on St. Patrick’s day and despite the tsunami in Japan, the Chinese still seek an apology at the very least from Japan for its World War II crimes, in fact, the Chinese feel insulted on a yearly basis that successive Japanese Prime Ministers have gone to the shrine for Japanese falled in Tokyo, this they feel rubs salt in their wounds. Regrettably, there was little sympathy on display for Japan’s current plight. Again context is important, China while wheeling and dealing with the West needs only look at its recent history or the several invasions around the world, I think this is a motivator for its ‘societal lockdown’ where it refuses to tolerate any opposition, they point to economic growth and ‘market socialism’ which they say has lifted 200 million out of poverty. They have huge internal issues to resolve (massive population of 1.6 billion and a vast territory) and there is also a potential problem in their property sector. Will the 21st century be the Chinese one? Too early to say.

        • Deco

          Nonsense.
          You are saying that Beijjing’s behaviour in Africa, deserves to be viewed in consideration of the behaviour of others towards China. Nonsense.

          The second colonization of Africa, by state owned enterprises from China like occurs in Zimbabwe, Sudan is completely and absolutely disgraceful.

          • Gege Le Beau

            I am not saying that at all, I am not excusing China’s behaviour, I am trying to contextualise with a view to explaining why they do what they do, to speak of China now in isolation of the massive events I have outlined is the true nonsense.

            I am familiar with China’s role in Africa, which isn’t going down well with Africans who view them as clinical and cold, as I said, few countries if any around the table have clean hands.

          • Deco

            Gege.
            China buys the elite in Africa. And the elite in Africa have a proven record at plundering from the people, and sticking the money in Zurich or London.

            I think there is only one context – the context of the people who are being robbed and bullied. My bone with China is the deals it does with non-elected regimes in the third world, or regimes like Zimbabwe where democracy is a complete sham.

          • http://www.guardian.co.uk/world/2011/feb/06/chinas-economic-invasion-of-africa

            Corruption is a big problem, money for commodities mined out of the ground not reaching the people, siphoned into the pockets of corrupt ‘elite’…

          • Gege Le Beau

            Think you may have misread my comment also I was referring to the Western ‘scramble for CHINA’ (a play on Pakenham’s ‘Scramble For Africa’ (which is an excellent book)) in the 19th century, not a Chinese scramble for Africa, however all major powers are back in Africa exploiting the natural resources there, in fact, many never left, Western colonialism in Africa just morphed into what is referred to as ‘unofficial Empire’ via the transnational organisations like the British Commonwealth, the French run something similar.

            Walter Rodney’s book ‘How Europe Underdeveloped Africa’ is an exceptional read, especially the section that discussues how Western financial institutions such as Barclays and Lloyds of London benefitted from the slave trade.

            “The connections between slavery and capitalism in the growth of England is adequately documented by Eric Williams in his well-known book Capitalism and Slavery. Williams gives a clear picture of the numerous benefits which England derived from trading and exploiting slaves, and he identified by name several of the personalities and capitalist firms who were the beneficiaries. Outstanding examples are provided in the persons of David and Alexander Barclay, who were engaging in slave trade in 1756 and who later used the loot to set up Barclays’ Bank. There was a similar progression in the case of Lloyds – from being a small London coffee house to being one of the world’s largest banking and insurance houses, after dipping into profits from slave trade and slavery. Then there was James Watt, expressing eternal gratitude to the West Indian slave owners who directly financed his famous steam engine, and took it from the drawing-board to the factory.
            A similar picture would emerge from any detailed study of French capitalism and slavery, given the fact that during the 18th century the West Indies accounted for 20% of France’s external trade-much more than the whole of Africa in the present century.

            Of course, benefits were not always directly proportionate to the amount of involvement of a given European state in the Atlantic trade. The enormous profits of Portuguese overseas enterprise passed rapidly out of the Portuguese economy into the hands of the more developed Western European capitalist nations who supplied Portugal with capital, ships and trade goods. Germany was included in this category, along with England, Holland and France.

            Commerce deriving from Africa helped a great deal to strengthen trans-national links within the Western European economy, bearing in mind that American produce was the consequence of African labour. Brazilian dyewoods, for example, were re-exported from Portugal into the Mediterranean, the North Sea and the Baltic, and passed into the continental cloth industry of the 17th century. Sugar from the Caribbean was re-exported from England and France to other parts of Europe to such an extent that Hamburg in Germany was the biggest sugar-refining centre in Europe in the first half of the 18th century. Germany supplied manufactures to Scandinavia, Holland, England, France and Portugal for resale in Africa. England, France and Holland found it necessary to exchange various classes of goods the better to deal with Africans for gold, slaves and ivory. The financiers and merchants of Genoa were the powers behind the markets of Lisbon and Seville; while Dutch bankers played a similar role with respect to Scandinavia and England.”
            http://www.marxists.org/subject/africa/rodney-walter/how-europe/ch03.htm

            Rodney was later assassinated in 1980, his death was a terrible loss and the truth has suffered ever since.

          • Gege Le Beau

            @ Deco

            “My bone with China is the deals it does with non-elected regimes in the third world, or regimes like Zimbabwe where democracy is a complete sham.”

            The same accusation can be levelled at any Western country which is doing with corrupt, despotic, and tyrannical regimes across the globe, I can’t abide double standards.

          • Deco

            The greatest curse that can befall a country and it’s inhabitants is a treasure of commodities under it.

          • Gege Le Beau

            The curse is those who coming looking for the natural resources and at any cost, human or environmental. As Professor Noam Chomsky has consistenly pointed out: “If Iraq’s main export was asparagus, the US would not have invaded”.

          • michaelcoughlan

            Hi Gege,

            I am smiling too but I am perfectly serious. If wars can be foughtover bananas, soccer, pastry, and water why not Asparagus?

            http://en.wikipedia.org/wiki/Soccer_War

            http://en.wikipedia.org/wiki/Banana_Wars

            http://en.wikipedia.org/wiki/Pastry_War

            http://en.wikipedia.org/wiki/Water_war

        • michaelcoughlan

          Hi,

          Same old same old Gege. What you describe is the failure in the human being itself. All of the great powers have blood on their hands they always will. As for asparagus if Iraq was the only supplier of asparagus in the world and we all needed it as a matter of prime economic importance you can bet your ass the US would be in there especially if asparagus suppling Iraq was a dictatorship opposed to everyone, Westerner, Iranian, Kuwaiti alike!

      • Having spent a couple of years in Nigeria in my earlier years before I grew cobwebs:) I should point out that tribalism in Africa makes western style democracy more problematic for them. Its true the history of colonialism eg the plundering of Belgian Congo exposed by our own Casement is a troubled history that continues to this day, but Africa and South America are both emerging from the dark ages and economic cooperation is beginning to overcome corruption and the negative consequences of tribalism. Its also true that many aspects of Chinese involvement in Africa have benefited both continents, and arguably China has done more for Africa than the west has.

        • Save the People

          Absolutely correct. It is totally ridiculous for anyone in Ireland to say that they are not prepared to accept finance or do business with China based on its human rights records.

          These people need to wake up and smell the coffee. The fact is we are currently part of the EU which is run effectively by Germany and the UK, neither of which are shining lights of innocence when it comes to human rights. Our other proposed option for finance by Enda Kenny is the US, who are currently reeking havoc throughout the middle east in the name of “democracy”. Unsurprisingly they are only interested in bringing democracy to oil rich nations.

          The reality is that China, whether you like it or not, is Ireland’s best chance of recovery for the following reasons:

          1) They have the finance available in the form of the $2 trillion foreign investment fund.

          2) The rates and terms available for finance from China are far more attractive in comparison to the draconian IMF ECB loan our government seem hell bent on accepting.China’s interest rates range from 0.2% to 3.6% and terms of usually 12 years.

          3) They have the skills and the finance available to assist us in developing our gas fields,(which should be nationalised).

          4) They have a policy of non interference in the sovereignty of countries they have loaned money too.

          Our government should be actively seeking assistance from China. The ECB and our EU “friends” attitude regarding the restructuring of our debt would immediately and dramatically change if there was even a hint of a possibility of finance from China.

          • adamabyss

            I fully agree.

          • Save the People

            Also, for all of you above, stating that having natural resources is a curse due to those it attracts to take them at any cost, here’s something to ponder:

            The middle east is in turmoil due to U.S and their allies attempt to effectively steal their oil. China are currently involved in drilling oil, gas and other minerals from Africa, Australia etc. I have yet to hear of any major war, dispute or otherwise in the areas where China are involved. Seems to me that it may be a case of “better the devil you don’t know”.

    • CrystalBalls

      we should just start selling european passports….€50,000 each

    • Save the People

      Glengara. With the greatest of respect i have been saying this for months on my facebook group, ‘National Crisis, Save the People!!’. I’ve also been saying it on this page, and on David McWilliams website. China is our answer.

      • Save the People

        apologies, i meant to say i.ve been stating it on my group, this website and David’s facebook page.

      • Deco

        “China is the answer”.

        It is amazing the conclusions that people arrive at when they are desperate for hope. China is not some sort of charity organization.

        The last thing any country needs is a “partnership” (sic) with a currency manipulator like China. China has hollowed out American industry. Just look at the former rust belt states in the US. Look at the unemployment in cities like Cincinatti, Detroit, Columbus, etc…Wall Street turning the other way as they make a profit from the entire thing.

        Also, there is possibility that China might explode. A much smarter idea would be to strengthen ties with a transparent democratic regime like South Korea or India. But keep away from China. That is only a suitable wavelength for lifelong spoofers like Mammy O’Rourke and Biffo Cowen. There are serious issues of conscience with regard to the regime in Beijjing.

        • Gege Le Beau

          Deco – I think the US government with its financialisation of the US economy beginning in the 1970s and treaties like NAFTA did more than anyone else to undermine its own manufactruing industry and smash the Labour movement and Unions in the US. Quite a concerted campaign, all well documented.

          Posted this before, but quite an interesting take on Detroit
          http://www.youtube.com/watch?v=joMysMDHdb4

          • Deco

            gege – again you are minimizing the effects of the currency regime in the PRC.

            This is causing problems not just for the US. The suppressed yuan is also undercutting labour in Egypt and is one of the factors influencing unemployment levels in the Middle East. Beijjing will not be happy to see populist, worker freindly regimes in the Arab world.

          • Gege Le Beau

            @ Deco – I agree, China feels threatened by the democratic dominos, it is the elephant in the room and repression will be stepped up, but as Egypt, Syria, Yemen and Libya illustrate you can only suppress the people for so long. The Chinese are making the classic error of being too rigid and when a tree is too rigid the wind snaps it in too. The West has some genuine freedoms and the semblance of many more, hence like buildings in Tokyo, Western societies have some give in them for protest etc but there is brutality inherent in the system which quickly comes to the surface when it is deemed people ‘have pushed it too far’.
            I also agree there are games around the currency being played but that is true for all sides while the financial crisis originated in Western countries so China will think ‘what the hell, look what they have brought about’.

            I hope to be in China in the next couple of months and will have a more informed assessment of thinking on the ground which I can share if you wish.

          • michaelcoughlan

            I agree with your point here Gege about the USA however I feel that the USA committed a fatal mistake as far back as 1913 when ceeding to the “federal reserve” the right to produce the currency of the United States. It has been downhill ever since.

            Nixon exacerbated the problem when he unhitched the dollar from the gold standard at the end of the Vietnam War.

          • Gege Le Beau

            @ Michael, there have been more than a few ‘mis-steps’, the squandering of goodwill towards the US in the post 9-11 period must surely rank well up there with Nixon’s efforts at the wholesale financialisation of the US economy.

            “In the early 1970s, about 90% of capital in international exchanges was for investment and trade, 10% for speculation. By 1990, those figures had reversed, and a 1993 estimate is that only 5% is related to “real economic transactions”. The consequences were understood early on. In his 1978 presidential address to the American Economics Association, Nobel laureate James Tobin suggested that taxes be imposed to slow down speculative flows, which, if unimpeded, would drive the world towards a low-growth, low-wage economy, with booming profits as well. By now, the point is widely recognized; a commission headed by Paul Volcker, former chairman of the Federal Reserve, attributes about half of the 50% decline in growth rates since the early 1970s to the huge growth of currency speculation.”
            http://www.thirdworldtraveler.com/Chomsky/Rollback_Part4_Chom.html

            Within this policy was a by-product, the undermining of unions and destruction of labour power, which the Chambers of Commerce hardly weep about while you will almost never see a reference by any senior American government official to America’s ‘working class’ let alone poor, all you hear from the President is ‘America’s hard pressed middle class’, because focus groups and politicians worked out that they are the ones that swing elections and ultimately put people in power while those who are not ‘middle class’ largely aspire to be. So this large block are acknowledged and reassured with warm speeches but policies speak for themselves. As Elizabeth Warren pointed out, the middle class in America is slowly and deliberately being wiped out as capital concentrates itself firmly among the uber wealthy.

            The housing ‘boom’ which so many clung to as a way of slinging them into a higher societal bracket (at the expense of others) is having the opposite effect, the same can be said of Ireland.

          • michaelcoughlan

            Hi,

            I agree with you whole heartedly. My problem is that Joe average is too fat dumb and happy to do anything about his plight and since he is doesn’t respect himself enough to do anything about his plight then I have decided I can only help those who want to be helped. I am nearly 40 any have only come to that conclusion very recently.

            You have just highlighted something which I have been waxing lyrical about. The sociopaths in the banks control Joe Average through the control of the money supply and surely you must now see the altruist aim in my argument for the citizens freeing themselves from financial tyranny through the private ownership and use of gold as a medium of exchange during the trading process. Gold can’t be as easily manipulated as fiat currency and will protect the Wealth of the ordinary citizen. True American Patriots in previous centuries went as far as paying off the national debt and returned the currency to the ownership of the citizens at enormous personal cost. But alas the “Federal Reserve” has control of the entire world through the money supply and is about to get control of most of the world assets through the fire sale of these assets to pay down unsustainable debt.

            Is this generation of Irish people so weak as not to be able to see and act in their own interest?

            Probably not too busy watching desperate housewives whilst desperate husbands like myself spend that particular hour of awful nonsense out walking or reading or whatever but hey I grew up before dumbed down TV.

          • Gege Le Beau

            @ michael, every device possible is used to dumb down people, undermine them, suck the confidence out them, make them feel hopeless, as Bolivar said “the greatest weapon the enemy possesses is the mind of the oppressed’.

            I still hold out hope for people, because inside, many know right from wrong and also know how to right the wrongs.

        • Save the People

          @Deco “It is amazing the conclusions that people arrive at when they are desperate for hope.” is a ridiculous statement. I am not desperate for hope. I am a realist who sees the that if we act correctly should be in a position of strength, not weakness.

          It is also totally ridiculous for anyone in Ireland to say that they are not prepared to accept finance or do business with China based on its human rights records.These people need to wake up and smell the coffee.

          The fact is we are currently part of the EU which is run effectively by Germany and the UK, neither of which are shining lights of innocence when it comes to human rights. Our other proposed option for finance by Enda Kenny is the US, who are currently reeking havoc throughout the middle east in the name of “democracy”. Unsurprisingly they are only interested in bringing democracy to oil rich nations.

          China, of course, are not a charity. However,given the rates and terms of finance available from them, they are more than charitable in comparison to the ECB IMF offer.

          The reality is that China, whether you like it or not, is Ireland’s best chance of recovery for the following reasons:

          1) They have the finance available in the form of the $2 trillion foreign investment fund.

          2) The rates and terms available for finance from China are far more attractive in comparison to the draconian IMF ECB loan our government seem hell bent on accepting.China’s interest rates range from 0.2% to 3.6% and terms of usually 12 years.

          3) They have the skills and the finance available to assist us in developing our gas fields,(which should be nationalised).

          4) They have a policy of non interference in the sovereignty of countries they have loaned money too.

          Our government should be actively seeking assistance from China. The ECB and our EU “friends” attitude regarding the restructuring of our debt would immediately and dramatically change if there was even a hint of a possibility of finance from China.

  2. adamabyss

    subscribe.

  3. The Meek Shall Inherit The Earth

    Now I am beginning to feel in awe of all those in negative equity and large land bank loans they have used their God gifted talents and may now have their bank commitments devalued with a consequent land / property value RISE once more .

    C’est Possible ne pas?

    Tody the Sun continues to Shine.

  4. Deco

    Yeah, I reckon that the dominant emotion inside Brussels every time this crisis erupts is fear. Fear that the whole thing might get found out. And there is a lot of squirming going on in Paris.

    If you want to see what the EU is in one country, then look at Belgium. It has no government at national level. Government at local level is functioning fairly efficiently in one part, and badly in the other.

    http://www.youtube.com/watch?v=ToK4w8FbCtc

    Can somebody please tell me what exactly happened during the Belgian presidency of the EU ? Did they discuss the parallels between what the way Belgium is heading, and the finances of the EU.

    The more I think of it, the more I admire the Czechs and the Slovaks for the really civil, respectful and dignified with which they broke up into two countries. And they spoke two extremely similar languages. And they had no quarrel over money either. The two parts of Belgium are quarrelling non-stop over money.

    Yeah. I present to you the former Czechoslovakia as a prototype on how to get on in a civil and respectful manner.

    • Gege Le Beau

      I agree with you on this. I know politicans very well having worked with them in Ireland and in Brussels, their first law is 1) self-preservation and 2) credit for as much as you can get for anything that moves.

      One of the main issues, very well teased out on Prime Time last night, is that politicians are ‘playing politics’ with very serious financial and economic issues and the noose is tightening around their necks and they are looking for mechanisms to kick the can down the road, their domestic elections take precedence which may well see the entire European project go up in smoke especially if the so called peripheral countries start to break up financially, which looks increasing likely.

      Spain is the key in that archstone as it is a huge piece in the European project, with Ireland, Greece and Portugal bringing up the rear. Constantin Gurdgiev outlined the numbers exceptionally well last night and basically stated that it wasn’t a bailout from Germany who gave a loan at a high interest rate, instead we are being ripped off as we are paying back the German banks to the tune of about €25 billion (with the Germans holding €13 billion of Irish debt), with their banks being covered by the blanket guarantee, milking the Irish citizens via austerity. It could not have been more clear while Pat Cox said the German political elite have failed clearly to communicate the real issues to the German public because they know the heat will come back to them so they deflect onto ‘wild, out of country’ countries like Greece and Italy when it was German and French banks that led the charge of the financial light brigade.

      No prisoners are being taken, there is a fundamental dishonesty and for those reasons Europe, at elite level, probably deserves to fall.

  5. ps200306

    Unfortunately the noises being made about the summit is that the can is just going to get kicked further along the road. We can’t make any decisions now in case our banks end up needing more money after the end of the “stress tests”. So let’s deal with the whole problem en bloc later.

    If it was me I’d say we should be marching on the Dáil to tell Enda to tell the French and Germans the game is up and we won’t be paying for their banks. But there is no spirit in Ireland for that sort of action.

  6. dwalsh

    Well as David says the problem was created by the private sector – the financial sector. Financial capitalism has usurped the political and social order and has bankrupted the entire planet. The only solution is to severely regulate their activities (in fact ideally to get rid of them altogether) and the only people with access to the power to rein them in are politicians. But they will only act if they have to; and it will have to get a lot worse before they will have to. Meanwhile they are busy rearranging the deck chairs.

    • uchrisn

      A group of top University profeesors in the States are proposing banks there have much larger reseerves and are not allowed to be to become ‘too big to fail’ or be broken up.
      However the financial industry does not agree. Neither do the politicans. Why
      1. They know that their banks are massive with global business bigger than the US economy. They know that the emerging economies such as indonesia, india, brazil etc are growing at rates of 8% and they want their banks to be there to get that business and money. They are competing against banks from other countries such as Swiss, UK and Chinese in those markets.
      2. So there is a stand off in the G20. If all countries could agree to provide the same regulations for their multinational superbanks then everything would be ok. Unfortunatly they can’t. Canada, China and Austrailia are saying to the3 U.S, U.K., look our banks never really had a problem like yours so why would we have to regulate them now.

      I think the issue here is also the relative importance of the financial industry to different countries. Its big for US, UK, Swiss etc with their global banks, not so big for others. They are a ‘special interest’ group in those countries like agriculture was in France in the 60′s disagreements in the EEC.

      • Deco

        3. Derivatives exposure. As Warren Buffet commented “financial weapons of mass destruction”.

      • dwalsh

        The financial and banking elite are permanent and dynastic whereas politicians come and go at the whim of corporate owned media and benighted populations. The financial elite trump the political and the social. Our politicians are really just middle management – provincial managers.
        We do need a new banking system and we will get it…but it will probably be their system which I’m certain is already designed and ready to roll-out once the derivatives generated crisis has completely bankrupted the nations.
        We are living through the twilight of the nation state. David’s calls for unilateral default are in vain; we are no longer soverign; our local financial and political elites know this. Nationalism is an anachonism…or at best a tourist product.

  7. Deco

    Given the chronic inability of the French economy to generate growth, employment and opportunities for young people, Sarko might be doing a lot of squirming. Merkel is actually open to the idea that allowing incompetence to get it’s just reward might be beneficial. But Sarko is resolved to be completely against the idea.

    • @deco

      Sarko is so low down below its sometimes hard to see him squirm unless he stands on a box.

      • Deco

        I have heard the phrase punch above your weight overused in respect of this county, in recent years, on the basis of our intellectual acheivements in previous eras. Though our intellectual achievements since the mid 1960s have gradually decreased. Maybe popular culture is responsible for dumbing the people down – well, that is a debate for another era. We no longer produce Beckets or Behans. Now it is Bertosconis and Denace the Menace.

        Sarkozy – a man who squirms above his own height.

        Thanks to then elevated shoes he wears.

        Whatever would Dr. Freud have made of it ?

  8. paddyjones

    David finds many different ways of telling us his mantra forecast…..default will happen.
    This is not necessarily a given, Ireland may be allowed to restructure over a longer period of time, this is the more likely scenario as Europe is good at “kicking the can down the road”. In fact sovereign debt never gets repaid it just keeps rolling over.
    In 2014 our national debt will be 176 billion, currently its 95 billion. The budget wont be balanced until 2016 at the earliest. Kenny and Gilmore have no intention of dealing with the debt they will just pass it on to the next government.
    As for the EU squirming we are part of the EU and we are squirming the most as far as I can see.
    I dont like Davids “them and us” attitude we are indebted to the EU in every conseveable way.

    • @paddyjones

      Logic is Dead …it was buried a long time ago by Berti the Waffler.Loosen yourself more and learn to be philosophical .The art of thinking has better rewards .

      • paddyjones

        Thats the problem with many posters here they are poets and philosofers. That does not get you anywhere it costs them in money terms to be like that. I like talking figures and I live my life through figures ….its all that counts.
        I like logic, finance , economics and math , there is no money in culture so I avoid it.

  9. Philip

    Markets are shorting the hell out of the peripheries. There will be no kicking cans down the road for much longer. Euuuu…Mon Trichet, you av a liddal margin call or deux to honour….can you please attend to this immediatment or German and French baaanques may find their overnight facility disparu.

    The only thing I blame is the naivety of the EU bankers and the regulators in believing this could go on and on.

    This is the great unraveling. Enda and the lads only need to sit tight. Cannot wait to see what number will pop up out of the stress tests!

  10. Eire1

    Paddyjones you miss the point. we should not be considering paying the bank debt at all. This talk of repaying over longer periods or a rate reduction is just wrong. There is no other word for it. We should not be paying the bank debt. We should, however, be concentrating on the sovereign debt which each and every one of us is responsible for and benefits (in most cases) from.

    The banks got greedy, lazy and frenzied. They neglected due diligence and should take it on the chin. I find it absolutely ridiculous that we are even entertaining this. And before the issue is raised of how much Ireland has gained from joining the EU and its contributions to our infrastructure etc, please take the time to inform yourself of how much we have handed over by way of fishing rights etc since our wedding day. We gave presents too.

    We should not be seen as the cap in hand members. We have contributed fairly and most probably equally to this union. The only thing to let us down in our own long standing subservient mindset. Watch the IBEC video Ireland by the Numbers and try telling me we are not worth saving.

    (http://www.youtube.com/watch?v=eA6iBKc0O0E&feature=relate)

    We have nothing to be ashamed of in fighting our corner. Our shame resides on those we call our own who have sold us out in relation to the gas fields, the property bubble, the arrival of this ‘bailout’ and now potentially our forests and perhaps even other gas fields yet to be deemed viable & exploited. If we thought of ourselves as a solid member rather than a dependent we would fair better as a country and a nation. This attitude needs to change from top to bottom. the ‘poor me’ syndrome must stop. It’s not that we don’t need Europe. It’s nice to know your neighbours and contribute & participate when you can for the sake of a better life for everyone. Not so nice to watch your neighbours struggle while you eat, drink & sleep well.

    But they need us. They know it, we don’t. We are a gateway, We are a charming nation. Most of us are law abiding people who enjoy life when we can. We are sitting on the edge and have within our reach the future of european energy between our gas, oil, wind, tidal possibilities. Let’s cut to the chase boys. Your banks & institutes got greedy. They will take the hit. We, the ordinary people of Ireland only failed ourselves by listening to our well paid corrupt government. We will repay our mortgages. We will repay our sovereign debt. We will not pay debts that are not ours. And we will do better next time. We will grow, innovate, rebuild a more robust, transparent & solid country and we will be great at it and no one will confine us and our children to the dust bin in order to repay arrogance.

    This attitude should be innate in Enda Kenny and every single person who calls this place home.

  11. Malcolm McClure

    DMcW writes: “The economists forgot about the banks and the private sector and EMU became a financial crackhouse for large delinquent banks in the core of the union and their mini-wannabes in the periphery.”

    Can someone please deconstruct this sentence and throw some illumination on what David actually means here?

    And:”Every capitalist who knows a bit of economics also knows that, if you have a system where a bust country can’t pay its private debts, it will endure years of deflation and high budget deficits, which will ultimately get so big that they will have to be defaulted on and the last lender will lose everything.”

    Oh, really?? That is an elementary law of economics?

    Are the Indy sub-editors all on holiday?

    • wills

      Malcolm,

      On the first one.

      I reckon its *cracking* open Davids conclusion that there is a shadow banking system in operation at the heart of the EU Euro enterprise and it criss crosses across all EU countries and national interest and is akin to an vampire squid sucking the life and the soul outta of the real economy.

      On the second one.

      I reckon its making the point that the consumers where shafted up the hole by the banks when they sold their souls to the satan banks to own a home when the banks deliberately punched up the property prices to make a killing, literally, a killing, a mass slaughter of the economy and the citizens future.

      And I agree.

  12. Eire1

    A small typo above (p4) ‘fair’ as opposed to ‘fare’ but I like it there…subliminal messaging…hopefully the lads in Brussels will read this!

  13. To all our European partners I wish to see none squirm. Rather I offer the wisdom of Somerset Maugham who observed in “The Razors Edge, 1943″

    - Nothing in the world is permanent, and we’re foolish when we ask anything to last, but surely we’re still more foolish not to take delight in it while we have it.
    If change is of the essence of existence one would have thought it only sensible to make it the premise of our philosophy.

    • irishminx

      Ain’t that one truth, that man finds difficult to accept?

      Great post David, I love the analogy. However, as nothing in life is absolute, other than we die, there are always options and choices.

      I just wonder will Kenny & Noonan sit tight?!?

      The trick is to know, a body always has choices and knowing there are lot’s of them!

      No matter how hemmed in we may think we are!

      ;)

  14. wills

    David.

    It seems that you are nailing the EU insiders for permitting a shadow banking system to operate and use the euro to destroy the PIIGS real economy.

    If you are I reckon you are spot on.

    And Constantine on RTE primetime tonight came very very close to uttering this point blank.

    Germany and France insider elites in tandem with elites in the countries across EU are using the Euro to game the citizens of the EU and shaft the citizens up the Kyber, real good and then make us eat the peanuts outta their shit.

    • Deco

      I was impressed with Dr. Gurdgiev’s assessment of the situation. He actually grasped what was going on.

      Cox is a waffler. He started with the opening comment “we must differentiate with the emotions and feelings of the ordinary people in Germany, and with the political elite, who have a better understanding of the complexities….. As usual the elite always know better than the people. This justifies why the elite are allowed to bail out banks, while ordinary people get stuck with the bill. And onwards sauntered Cox. Ten minutes waffling about what a nice thing the European project is, and how it will all work our perfectly well.

      But hold on a minute. The type of rubbish you would expect from a super pension earner from the EU gravy train.

      The Portuguese commentator also talked a lot of sense, though for most of the show he was left out. The German jounalist was an even worse waffler than Cox. In the end I don’t know if he stated anything concrete. The Portuguese commentator indicated that Portugal did not have a housing bubble – or at least not involving Portuguese people, though Irish sports “personalities” were Oceanico properties on TV3 a few years back. He indicated that the Protuguese private sector is being starved of credit. Portugal as a state has it’s costs in line. And there is no funny business and off-balance sheet state accounting tricks like occurs in Spain and Greece (and perhaps Italy). He and Constantin agreed on the vulnerability of Spain. But Cox and the German journalist completely avoided the issue. The German journalist did comment that the Euro might end. First time I heard that stated on television – so it must be something that can no longer be ruled out by jawboning.

      • Gege Le Beau

        I was also impressed by Gurdgiev’s assessment. Cox is notoriously verbose (he was President of the European Parliament when I worked in Brussels and to be fair to him, did a good job especially in his representation for Ireland, I just wouldn’t agree with his politics). Naturally, he was a champion (maybe he still is) of the European ‘project’, but when the chips are down the true colours show.

        I agree with your observations on the comment: ‘the German political elite’ which always gives me a slight chill as does the term ‘the political class’ repeated at nausea by Gormley when he was knocking around, it reflects the hierarchal mindset and the remove of one group from the masses who elect them, politicians are supposed to be servants of their respective populations and not modern day Lords of the Political Manor. Your other observations I would be in general agreement with but thought the German journalist did make some valid points.

        Astonishing to think Europe could come to a grinding halt because of a local election in Baden-Württemberg. But then I always thought the foundations quite rotten, had to come to this.

        • Deco

          Personally I am not concerned if the regional elections in B-W cause ramifications. I mean the citizens are entitled to their views. Current proposals is about them paying the bills. I am sure they have their own concerns and their own views on what should be done.

          But the shady backroom deals, and the agenda of Sarko is a bit much to endure in this day and age. Not keen on this idea of ‘Marxist interventionism for multi-millionaires’ being shoved from the Elysee Palace. Whatever happened to capitalist consequences for capitalist misadventure ? What about the intellectual ramifications in society, for a continual tendency to issue new bailouts and see the resources squandered in new speculative bubbles ?

          • Gege Le Beau

            It is the local, regional and national elections which are causing Merkel to dig in (similar situation in France where Sarkozy will be lucky to be re-elected), political self-interest from the leading parties is causing the major sticking points hence the unreality of suggestions like ‘Ireland needing to give more’ or ‘increase the corporation tax rate’ as if that is going to improve the situation.

          • wills

            Spot on there Deco.

            Speculative bubbles squandering resources.

            Exactly.

            This is why this funny money scam by insiders is criminal.

            Particularly in a world with so many of its people in misery and poverty.

  15. The Dork of Cork

    “There is no way out of this because the EMU architects never allowed themselves to think the unthinkable”

    Ah but they have – the answer lies on the asset side of the balance sheet.
    The Euro was constructed in such a way as to create a crisis – they wish to transfer dollar reserves into this asset.
    I am not sure if Spain or Italy will be the trigger.

  16. bara

    Well it looks like our goverment are going to be saved from the embarrassment of been force to holding a referendum on the bail out,as the ECB is going to explode from the insice what a bang.

  17. Dionysius

    This is my opinion from the United States where I have resided for past 35 years. I, hopefully, can read the crisis with a somewhat mid-atlantic filter for what it is worth. As an experienced Aerospace Engineer (this just means aged and tired, not wise and clairvoyant I might admit!) I have to say that the ad hoc non-designed currencies and fiscal systems of the entire planet are all destined to implode and will be forced to go back to the drawing board. The Euro, which is not a new currency but rather a collage of legacy systems, and the US dollar both are experiencing very similar instabilities. The reason why these barbs and chinks and cracks are becoming more and more apparent is an outcrop from the amazing new age of enlightenment that the Information Technology (aka web etc.) revolution has already brought and will continue to bring at time warp speed. The global mind is acting at a scale never yet experienced by our species. My advice to Ireland is to (a) Listen to David McWilliams and let him continue to influence the process. (I do believe that the Dail and the leadership is/are taking notes but they are needing much more political undivided feedback from the rank and file, that is you, so keep giving it out) (b) Demand of Mr Kenny to default on any banking bailout. The ultimate solution for all will be to move to a cyber one world currency where all of us who have worked hard and saved will be short-changed (aka inflation, remember the 70′s only worse but it will have a new name such as redesignation or something fancy) or we will all return back to a one world dark ages of fortress economies and economic wars. Mother Nature will tell you the future if you listen to her. The long cycles of life seem to always need to repeat themselves……unfortunately.

    Bye for now from Seattle and I wish you well. Life goes on with or without a thing called money which is just an abstraction. As individuals we are survivors but as a species we appear doomed.

  18. Ciaran H

    PARTY! I do not know how much we have drawn down on the eu/imf lone. But I am guessing it’s 14 billion. If we draw down the rest in one, go and do not put it the banks we could have 75 billion parties that would be over 18 thousands for every man woman and Child. So lets party while the banks go bust we can pay of the interest for fifty or more years or we could use the 75 billion the invest in industry and then sells good to China. But the partying alone would generate lots of jobs we have great growth and a shiny new tiger with teeth.Party Time ha ha.

  19. ‘Roll Me Over In The Clover Do It Again’ – Rugby song

    South Kerry ( Rebels) and North Kerry ( Bardic Norman )are still The Kingdom and have continued to play it out over history and share their Annual Financial Budget and roll along as they say .

    The ROI is likewise to follow same .Why bother , why deny your family a good meal because of what you believe in no wonder Healy Rae bacame so popular in the poorer camp because they became so desperate anything would do as long as something worked.

  20. Aparitions

    The coastal people of all Kerry always looked west into the sea waves when in need .It filled their empty souls and gave them hope and a choice .Where landlords held large swaths of land they pioneered the art of fishing to find alternative.And they did .There was galore of whisky washed up , tons of wheat , galleons of foreign stocks including olives , and weapons and many new breeds of sallow men to fulfill the local lassies.

    So when you see a Kerry Lady look out to sea as her mother did and her mother now you know they await a fancy .

  21. Deco

    This is the Kenny doctrine.

    http://www.independent.ie/national-news/kenny-calls-for-new-eu-cash-to-end-bank-crisis-2594288.html

    It sounds familiar. Familiar to what is going on in the US – the Paul Krugman doctrine – “borrow, baby, borrow” and the Bernanke doctrine “print-baby, print”. The Krugman doctrine will bankrupt America. The Bernanke doctrine will destroy the US dollar, and the credit system for a generation. Therefore I am sceptical of both these strategies.

    There are trees somewhere, and this money grows on those trees. We just have to find it…..

    Actually, in consideration of the lander elections in SW Germany, this is a bad timing by Kenny. But he is putting ut up to the ECB to stop dithering. And that is something that nobody in the EU has yet done so far in this crisis.

    • @Deco

      If all we know is that we either ‘borrow’ or ‘steal’ie print money and if the only people the public want to see saying this are Krugman and Bernake respectively then both these men are ‘Parrots’ ….they repeat what we already know.

  22. ‘to think the unthinkable ‘ – EU / EMU

    The hour has cometh and the pain has touched the torch and the burn increases and the wave flow dislodges and the wind speed increases and the DENIAL continues ….until ( just like FF ) to be no more.

  23. Morning

    I thought Constantine was very clear and concise last night on the telly. It seems that the world is moving rapidly in the right direction. Markets are unambiguous but the polticians seem to be playing for time which arguably has got us into the mess we are in.

    Best David

    • Gege Le Beau

      Think it was the clearest I have ever seen him, laid out the figures in impressive fashion, super context, I for one have a much better idea of what is actually going on after his explanation, confirmed my thinking that the leading players in Brussels are putting everything through a political filter to save their hides which is having very damaging socio-economic results. We need more of that kind of clarity and brevity, really illustrates a grasping of the central issues.

      Pure political theatre in Brussels.

    • wills

      David.

      Agreed he was.

      But, he did stay utterly locked onto the ECB to place the responsibility.

      My point is the following, ECB is not in the politics game, its a bank ??!!

    • John Q. Public

      The expression is ‘kicking the can down the street’ for what the politicians are doing. Is it not common knowledge among the banking elites that we can’t even afford the interest on this mammoth millstone around our necks. Those guys are squirming anyway so why don’t they come clean and admit that the paltry few bob we could give them in interest wouldn’t do them any good anyway.

  24. Very good article thx. But I think there is possibly another way out of this on the cards.

    That figure of €763.8 bn owed by Ireland, Greece, Portugal and Spain comes as a bit of a surprise. I would’ve thought the figure to be over a trillion at the moment, but there you are. I thought the big fear was Spain with up to a trillion on the debt cards and the biggest worry at the moment!

    Up ahead I would be surprised if rather than restructuring or default that EZ will try instead QE as the US have done. But printing a trillion will lead to deflation and is currently strongly resisted by Trichet, who incidentally got very unctuous at the US for its QE over the past two years.

    The money could then be used to help systemic banks and countries restructure their debt over a longer period of time allowing for mixture of default and inflate away debt. The trap is already being prepared.

    I would point to the current exchange rate of dollar at €1.42 as evidence for my conspiracy theory. The dollar is being allowed to slowly rise against the euro to cushion the euro against the day QE will be announced and countries queue up outside the QE office to renegotiate their debt fix leading to a drop in the value of the euro.

    As a capitalist, I’d like the eventual solution to go along capitalist lines as DmcW suggests and allow banks to default, banks to close, end of citizens and taxpayers on tap for bank/bondholder losses.

    Tricky Trichet was horrified at Lehmans, but his refusal to countenance restructuring of eg Anglo has had a multiplier effect in the damage this has caused to the Irish economy.

    His bailout strategy of piling bailout debt upon debt without restructuring is having a devastating consequence economically and politically across Europe.

    But his policy of socialism for the banks will fail. The Berlin wall he’s built around banking institutions such as the ECB will eventually come down.

    The danger is he may use a solution to the crisis such as Quantitive Easing(QE). This will increase the grip of financial fascism as it has done in the US; while here in Europe, lead to further destruction of European economies and more inflationary pressures, fires in the holds, that can destroy the euro.

    Better to have a controlled bush fire now rather than QE inflating the problems of the euro even further leading to a complete collapse of the euro in the not too distant future.

    Burn bondholders, rather than taxpayers! QED:)

    • oops “But printing a trillion will lead to deflation” I meant inflation

      • Deco

        Yes. They can print the money, but they cannot control where it ends up. In the past two years, banks speculated the money they were given in “liquidity injections” (by Gordon Brown, Hank Paulson, etc..) causing speculative bubbles in areas like emerging markets, mining, oil, and wheat.

        The inflation is now showing up in Britain (which had a head start under Mervy King), and the US (which followed closely).

        Really, at the end of the day, it is possible that we will find that the cheapest option of see default of the debt. Capitalist consequences for capitalist misadventure. A bit like the fool who spent his money on the horses, and has to go hungry afterwards. Something which never happened to Ditherer – though ditherer did his best to making speculation and funny money deals look presentable.

        • Incompetent politicians have allowed citizens to be put on the hook for all bank losses..Only friend of citizens are the markets, who’ve seen and called the heist.

          It appears politicians across EZ are on hook to the banks with long summit meetings about nothing that decide nothing because apparently they know nothing, so they’ll get destroyed like FF, as the markets alone take down the Berlin wall of the banks…Enjoy the show!

          Interesting next Thursday when the latest stress tests propose a new set of figures for our banks. On the basis of past results and performance, are they believable..alas, probably not.

          May I suggest they take a break at the summit today for a good game of blind man’s buff:)

    • shtove

      “I would point to the current exchange rate of dollar at €1.42 as evidence for my conspiracy theory. The dollar is being allowed to slowly rise against the euro to cushion the euro against the day QE will be announced and countries queue up outside the QE office to renegotiate their debt fix leading to a drop in the value of the euro.”

      You’ve got that backwards – the $ is dying a slow death as it reduces in value, most obviously against commodity backed currencies and gold, but also against the €.

      It’s widely recognised that central bank induced weakness in the currency has been the driver for stock market strength since March 2009. There’s alot of talk about accelerating Asian growth, but that too shall pass.

      Ultimately I don’t think the attempt by the US to surrender the reserve status of the $ will work. My guess is that the inflation we’re perceiving is an acute panic during a chronic deflation.

      • Nope, don’t agree with that. The only argument expressed I’ve heard aired to describe the odd rise of euro against dollar has been the view that markets believe Germany will ride to rescue of peripherals thus enhancing the strength of the euro against dollar.

        But since the arrival of Portugal into the firing line, there’s been a slight dip of the euro, maybe markets are beginning to react against the euro’s failure to deal with the growing problems in the peripherals ..

  25. Dorothy Jones

    Hello David
    This is a comment on your previous article. I liked your analogy of Trim Castle and the ‘lines of defence’ of the banks. So did namawinelake! You are featured in the first paragraph in his? article on 23rd March 2011. Namawinelake is heroic and does the public a great service with his blogs by publishing information on NAMA.

    • irishminx

      I absolutely agree with you there Dorothy.
      I hope you are well girl?

      Any chance of a meet up any time soon girls and guys?

      • @minx

        A – CLUB

        Actually Murice Artois and myself are initiating a meeting in Adare around 15.30 Monday 28th Mars in the Heritage Center ……all are welcome .

        Among the topics of conversation is Can any old Old Tree Default or does it Root out The Problem itself ( eject from EU )….and are leaves a single or a collage of legacy systems ( a basket of paper )…and does every tree need a Tree Doctor ( IMF ) …so we are going to walk around in circles and count the rims in the Barks ( previous plantations ) and explore when is a circle a square ie when will the EU take the politics out of the running of the EU business and try to govern instead .

        Its a Posh place and and this location can usually be called the A- Club .

        All Vintage cars are welcome …for inspiration.

        • irishminx

          John, I’ll be there, though I don’t know exactly where the Heritage Center is………….But you have my contact details.

          Am I vintage?!?…………..I couldn’t resist! Oops!!

          :)

          Thank you or the opportunity.

          • minx – its right in the center of the village ..I suggested calling it the A-Club because the K-Club reminds me it is only a slimming down version.

        • Shall I bring the Shamans pipe and some hallucinogenic substance?
          ….Or will we just have the scones?

          • @Paul

            Adare has an abbott austerity garden in front of the Heritage Center and a running stream and lots of faery mushrooms of the independent mink variety .Roscommon accents are common here .

            ~I am bringing a gas lighter.

      • Dorothy Jones

        Minx; Unfortunately I cannot be there with ye on the 28 in Adare, but enjoy it. The garden [John's post below] is fantastic and will be especially beautiful in the sunshine.
        I am happy to organise a meet-up in April; when I get back.
        I have set up an email Dorothy.Jones.helmethead@googlemail.com ; should any posters be interested in meeting up, please send me your contact and I’ll set something up.

  26. malone

    A bit off beam
    David To quote
    “Have you ever heard the expression “marry me now, the love will come later”? In the old days when a couple was forced together by the matchmaker, this gradual process of emotional osmosis was supposed to happen as time and loneliness took their course.

    Often it didn’t and, as a result, Ireland was a country of silent homes, filled with psychological terror, violence and sadness.”

    Let me explain a little bit about the matchmaking process. The parents of the young people that they wanted to marry looked around a lot and there was a lot of searching to find a suitable partner for a woman/fella. This involved people and the matchmaker who knew the girl well and also the fella and who knew whether or not they would get on and also how well they would get on together. It wasnt a case of just getting the fella a local wan who would lift her skirt up easily or the fella who would get up on a cracked plate for the wan. It often times took a year maybe more for a match to be found. Remember too that this was a rural community where everybody knew everybody else for miles around so the couple would have been know to each other for a long time beforehand and often these marriages worked well.

    Im not saying that these things did not go on. They did and still go on today even without arranged marrages but Ireland was not a country of silent homes and violence. This unfortunatly is one of your famous sweeping statements and is very inaccurate.

  27. manofiona

    The markets are putting it to the member states of the Eurozone that the decision to create the Euro set in motion a process that can only have one of two results: the political unity of Europe or, with the explosion of the currency, the effective abandoning of the whole European integration project.

    Mrs Merkel and Mr Sarkozy have publicly said that they will do whatever is necessary in order to preserve the Euro. Perhaps without realising it, they have effectively committed themselves to European political unity.

    The Irish debt problem is one of many tests which the Euro will meet over the years. In order to successfully meet those tests, the integration project will have to be driven ever further towards the goal of political union. Europeans have only begun to get a glimpse of the political upheavals which they will endure as the 21st century progresses and the issue of political union will be squarely faced if not by us then by our children or our grandchildren.

  28. Philip

    Europe and the EU has just been an excuse for MEP gravy trains. There is no real work going on. Most of the effort of the last 40 years has been focused on Integration, Synergy and providing a playground for wafflers on a range of topics ranging from flower arranging to high tech.

    The only good thing to come out of Europe and being in the club has been tax payer sponsored tourism for the elite and so called “experts” who are normally failed in the real business or government. Many have developed a taste of good wine and coffee and have all managed to taste the whole range of belgian beers staring at the Groot Mart hotel de ville spire on a sunney afternoon – while trying to figure out a new means of sticking a straw into the funds for such and such a program. You only have to look at Cox and his ilk and their nice suits covering a slightly over-inflated well fed form.

    Now, you could argue that all this pomp and fun did a lot of good in making feel we all belonged together. The remarkable thing is that this feeling lasted so long. Indeed, I would guess that since global deregulation of banks got underway since the 80s, the whole credit boom allowed this to mushroom without anyone looking at value for money or the elements of real political integration – which never really got off the ground.

    The proof is in the eating – and we now see that the divisions never really wnet away or more appropriately, the integration never happened.

    What I expect is that countries will be set against one another as push comes to shove. I expect we will see the peripheries expressing their victimisation by the big centrals and the latter despising the ungratfulness. This will be the play of the banks who will stop at nothing to welsh every cent out of the system.

    The EU is very very fragile. It is not level playing ground – never was. However, it is not the sovereigns or their peoples who are to blame. This union is about to break. As soon as the defaults kick off – and they will becasue the markets will force it (trying to stop it will encourage the shorters more – it’s a positive feedback loop), the rest will crumble very rapidly. Right now, we are witnessing a behind the scenes lobbying campaign to keep the shorting run going – and I expect the next play will be to encourage finger pointing at sovereigns.

    Let’s hope I am wrong. Unfortunately my record to date has been near 100%.

  29. irishminx

    Author: John Q. Public
    Comment:
    The expression is ‘kicking the can down the street’ for what the politicians are doing. Is it not common knowledge among the banking elites that we can’t even afford the interest on this mammoth millstone around our necks. Those guys are squirming anyway so why don’t they come clean and admit that the paltry few bob we could give them in interest wouldn’t do them any good anyway.

    It’s called DENIAL John. Nothing more, nothing less!
    It is what the Irish and the world were good at, but it’s a changing………………..Thank God!

    • Malcolm McClure

      Irishminx: It sometimes seems that hackneyed metaphors and ad hominems are substituted for clearly expressed evaluation of the causes and possible solutions to our economic predicament.

      “Now that the political boot is on the other foot, we are kicking the can down the street towards the endgame. Perhaps George Lee was a sacrificial lamb and Bruton a stalking horse, but after muckraking and mudslinging the eminence gris, they are merely lame ducks and millstones around FG’s neck. There are so many sacred cows that many grassroots FG supporters have found they were turkeys voting for Christmas.”

      And so on ad infinitum. We can do better.

  30. grougho

    ladies, gentlemen,
    something i came across today and found very interesting indeed, ballyhea says no
    every sunday for the past 4 these people in north cork have been making small waves protesting in their village
    http://www.corkindependent.com/local-news/local-news/ballyhea-says-enough/

  31. Lets Think

    Will the solution we are waiting for be written by the Banks that caused the problems in the first place ?

    Who else can write it ?

    The Politicians dont know how to write it .They are been told.

    Does all of this begin in the secret room of The Federal Reserve ?

    Has the EMU got a direct line to the Federal Reserve so thay can copy their version ?

    What Irish Bankers are relevant to write the Irish version of the solution for The Nation ? Is there a conflict of Interest?

    Lastly who will be paying and who will be wining ?

    Who Prints and Who receives ?

    Is it all just another Ponzi Scheme again and maybe with a new name ?

  32. If you missed it, PrimeTime Gurdgiev, Cox, Macedo, Shieritz….

    http://www.rte.ie/player/#v=1094824

  33. Tull McAdoo

    Kenny and Gilmore are wandering around the ruins, waiting for redemption. These are but the latest “Abbots of Austerity” wheeled out in vane to save the old order, the status quo.
    “If we can cut X then maybe that will appease…….. maybe if we cut Y……or cut some of zzzzzzzzz”

    What we do know now is the lengths that these rulers of Irish Society were prepared to go to, to retain their privileges. They will bankrupt the Nation to hide their own debts and losses.

    The ones who cannot hide have cut and run, whilst hiding behind their wives apron strings. These people are forever holding Ireland to ransom, so the next time the call comes for another bailout, answer thus…..

    I pray thee, bear my former answer back:
    Bid them default me and then sell my bonds.
    Good God! Why should they mock poor fellows thus?
    We are but warriors for the working class;
    And time hath worn us into slavery:
    But, by the mass, our hearts are in the trim;

    Herald, save thou thy labour;
    Come thou no more for ransom, gentle herald:
    They shall have none, I swear, but these my sovereign bonds;
    Which if they have as I will leave ‘em them,
    Shall yield them little, tell the ECB
    Kenny and Gilmore are wandering around the ruins, waiting for redemption. These are but the latest “Abbots of Austerity” wheeled out in vane to save the old order, the status quo.
    “If we can cut X then maybe that will appease…….. maybe if we cut Y……or cut some of zzzzzzzzz”

    What we do know now is the lengths that these rulers of Irish Society were prepared to go to, to retain their privileges. They will bankrupt the Nation to hide their own debts and losses.
    The ones who cannot hide have cut and run, whilst hiding behind their wives apron strings. These people are forever holding Ireland to ransom, so the next time the call comes for another bailout, answer thus…..

    I pray thee, bear my former answer back:
    Bid them default me and then sell my bonds.
    Good God! Why should they mock poor fellows thus?
    We are but warriors for the working class;
    And time hath worn us into slavery:
    But, by the mass, our hearts are in the trim;

    Herald, save thou thy labour;
    Come thou no more for ransom, gentle herald:
    They shall have none, I swear, but these my sovereign bonds;
    Which if they have as I will leave ‘em them,
    Shall yield them little, tell the ECB

    http://www.youtube.com/watch?v=FfRAiTtOVEY&feature=related

    • Tull McAdoo

      Not sure what happened there. Post seems to have duplicated itself……..Not sure if the World is ready for Tull McAdoo in stereo haha…I suppose there are even those who think that Tull McAdoo in mono is a bit…..( now now be nice)!!!!!

  34. bara

    It seems our minister Alan Shatter is upset at the the attack on our judiciary, it would be more in line for the minister to investigate some of the crap decision that our so called judges have made.Like taking homes off families because they cannot sell or pay there mortgages, of course our so called judges likes to overlook the fact that “it was the banks” that caused the total wipe out of the economy and the destruction of the property market.
    This is the same mentality coming from the crooked trilogy of the Banks, and there buddies the judges, and the Government.

  35. SLICKMICK

    The euro is overvalued by 20% versus sterling, why is this never mentioned ? Irl loses the most.

    • Philip

      Funny you should say that and I agree. But the joke is that if anything, Germany has benefitted enormously from the fact that it never valued more than it is. So as Ireland suffers by virtue of imported uncompetitiveness from Germany etc, Germany benefits from imported competitiveness from other countries. My guess is that if they had the DMark, their exports to the rest of europe would have been wiped out. Makes ya think?

    • paddythepig

      The market doesn’t agree with you. If the market thought the euro was overvalued by 20% versus sterling, the euro would be 20% lower versus sterling. But it isn’t.

  36. Extraordinary Breakthrough :

    In advance of the forthcoming summit in Adare on Monday traffic is already increasing and becoming heavy and nobody is talking to explain why.This is not unusual as the main street in Adare has been renown as the street of the squinting windows and instead of old haggs sitting at the windows there are foreigners sitting in the front gardens of the cottages drinking black coffee and looking on.Many carry large bags strapped around them.There is a feeling in the air that something is happening and small sparrows are singing just as did Edith Piaf in Paris at the Congres .There are no regrets about the moments ahead and the sparrows even tell us that .What is important is the new revelations about to be disclosed.Thus the reason why the local coffee houses were instructed to ensure the caffeine contents remain high in every cup.

    Earlier yesterday a rare blue blossom appeared in the nearby grounds of the Manor and the adjoing old graveyard that hugs the Maigue river.The importance of this blossom is the rare purity in the blue dye ink it creates and its long absence from its native Israel and this has been a phenomenon .Men with wigs can be seen and the only giveaway is their large hairy biceps.No one yet has mentioned spies and no one has spotted them going into the ladies in the Dunraven Arms Hotel.

    It is believed the local trees have had a rare allignment last week and the graveyard shook.

    This graveyard is unusual in some respects ( no pun intended) insofar that the water level from the river is very high and every coffin installed is under water .Anyway that is a local secret nobody will divulge.

    An ageing local craftsman whoes family were once from Palatine ( Germany ) discovered the dislodged old rags along the sandbanks and recognised the petals that make the secret dye .These rags were made by the ancient local monks buried there .He has gone undercover and is presently preparing ‘real currency’ that cannot be erased or devalued and immune to any international bodmarket blackmail.

    Every central bank wants to get their hand on this rare golden blossom as it is no where else to be found so that they can hold the equivalent in Gold after all world currencies implode and deciminate all they own.

    This summit is now more important as the secret and the blossoms and rags are now in a vault and and worth €lblns blns and discussions will focus what happens next.

    Your proposals are welcome.

  37. uchrisn

    bloggers here minht find this article interesting, an anaylsis of all financial crises in since ww2 and the current crisis. They expect about another 7 years of hard times based on the data trends. By Reinhardt, University of Maryland http://www.kansascityfed.org/publicat/sympos/2010/2010-08-17-reinhart.pdf

  38. uchrisn

    Another notable finding is for unemployment. For 10 of the 15 countries experiencing severe crises (before 2007) unemployment has never dropped to pre crisis lows. In all of the 5 developed countries, Norway, Sweden, Japan, Spain and Finland unemployment has never gone back to pre-crisis lows.
    So its a big challenge to get Ireland back to our pre crises unemployment lows even in the next 30 years.

  39. Euro Strengthens as Inflation Accelerates; Fed Official Suggests Rate Move…

    The 17-nation currency pared gains after comments from aFederal Reserve official fueled speculation about the timing ofpotential U.S. interest rate increases. The dollar weakened asfewer Americans filed jobless benefits applications last weekbefore th….

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