August 3, 2011

After this crisis, nothing will be the same again

Posted in Irish Independent · 189 comments ·

Irish Independent

ON this day 97 years ago, Germany declared war on France, dragging Ireland into a world war that had begun miles away with an assassination in Sarajevo and finished at home with a war of independence that ended British rule in Ireland. It is interesting that by 1921, “victorious” Britain would end up losing more of her land mass than “defeated” Germany. Empires were swept away, new countries created and the entire world, as Europeans knew it, was reinvented.

Looking back at the extraordinary second decade of the 20th Century, one of the most fascinating aspects of the story is just how few people saw it coming. With the benefit of hindsight, it is also fascinating to see just how wrong conventional wisdom was about the likelihood of war.

Equally noteworthy were the ultimate social implications of the catastrophe and the fact that the ‘insiders’ and the establishment in all countries tried to maintain the economic and social status quo as if the slaughter on the battlefield and its impact on the societies could be separated from the greater body politic.

For example, one of the best-selling books in Britain and Ireland in the run up to the war was ‘The Grand Illusion’ by Norman Angell.

Angell, a left-leaning English economist and journalist, argued that because the world was so tied together by international trade and finance, economic interdependency would ensure that no European power would fight another. He concluded that since it would make no financial sense to fight, no country would do so.

How wrong was that? Yet it was the prevailing wisdom of the elites — both on the left and the right — in most countries.

The financial markets, which — back then, as today — were supposed to assess future risk, hardly budged after the assassination in Sarajevo, preferring instead to dismiss it as a “typical” Balkan episode. Surely this couldn’t reverberate from there to engulf the whole continent?

In London and Dublin throughout July 1914, people went about their business as if nothing major was happening. Not until July 30, less than a week before all-out war, did the markets begin to panic.

We are now told — in Leaving Cert history at least — that the war was the inevitable consequence of the rivalry between Britain and Germany or between France and Germany. Actually, no one thought that at the time.

A shameful episode from the war, which killed, according to the National War Memorial, 49,000 Irish soldiers (a quarter of all Irishmen in uniform), was the attempt by the establishment to prevent the yearning for social change which follows such an experience.

For those of us watching the present financial crisis play itself out, the lessons from the pre-war nonchalance are well worth heeding. The idea that a crisis — any crisis — can be “contained” seems a bit naive. Also the notion that trade dependency or financial links can prevent Armageddon doesn’t seem to stand up.

Yesterday, Spain and Italy’s bond markets weakened substantially, signalling that the European crisis is about to get worse, not better.

At the moment, we have an enormous worldwide financial crisis and yet the official line is that it will be manageable. For example, the official view is that the dollar won’t collapse.

Why not? All it takes is for people to lose confidence in it as a permanent store of wealth and, like sterling, it will fall and fall and perhaps be replaced by some other currency.

Think about the expression “a sterling performance”, it is still being used to denote an exemplary, gold-plated effort, yet the once-strong currency from which the expression derives hasn’t put in a sterling performance in years. As soon as Britain became a serial debtor, sterling was done for.

The same is likely to happen to the US, but what we know from financial markets it that these events rarely happen in an orderly fashion. One day, everything is fine, if a little imbalanced. Next day, we have a panic.

Interestingly, the financial markets rarely get these things right, in the sense that liquidity can drain from a system overnight — as we saw in Ireland, Greece and Portugal. Italian and Spanish yields are now above 6pc, despite a massive bailout which was supposed to bring them down towards 2pc.

From a political and social point of view, wars are an extreme version of social upheaval. They change everything. Similarly, all dramatic changes to the social and political status quo — even recessions — tend to have a lasting impact on subsequent politics.

The British establishment believed during the war that they could preserve the class system, the empire and the like, despite the fact that they were ordering the slaughter of their own sons. This was particularly the case after 1916 when it became increasingly clear that their was no point to the war and the stalemate would simply lead to more and more killing.

GIVEN the fact that “victorious” Britain did in the end lose more post-war territory than Germany, it is clear that it was not “business as usual” and that the war threw everything into a state of flux, whereby even the people who ruled half the world couldn’t control their own backyard.

The present economic crises — globally, not just in Europe — could have similar consequences and the US may not even be able to control the value of its own currency.

Politically, with America owing China so much money and the American and European taxpayer lumbered with so much debt when both economies are not growing, something has to give. Either the citizens will pay or the financial market casino will pay.

If history is any guide, the end of this debt crisis globally will lead to the rightful humiliation of the interests of the banking system. We need the global banking system to be reined in.

Banks need to be seen as utilities that plod along making small profits in return for providing credit to the economy. For example, in a bankrupt country, why should €500,000 for running a public bank — which is little more than a safe-deposit facility backed by the Government and owned by the people — be seen as too little? Come on, this is nonsense.

In 1918, the victorious powers tried to superimpose the old economic model on the new Europe. The gold standard was reinstated and free markets were to be upheld. Added to this, Germany was punished in the traditional, “business as usual” way. Bankers and central bankers, counting German reparations, were given a primary role in the settlement. We know where this led.

We can’t return to business as usual. We must learn from this crisis, but before we do, we have to entertain the possibility that it is far from over.

The nonchalance of Norman Angell’s ‘The Grand Illusion’ should be a lesson to all of us. As this summer rolls on, the complacency of the summer of 1914 should be remembered, not because any war is coming, but because globally, yet more financial crises are brewing.

Sometimes it pays to allow ourselves to think the unthinkable.

  1. are the Germans victims of international banking yet again?

  2. John Q. Public

    The Germans are victims of their own and Irish stupidity.

  3. Great stuff David.
    Glad to see where you stand on the unfettered power of bankers and the banking system. Yes they need their wings clipped. Who do they think they are?

  4. The way this debt crises is playing out reminds me more of the Balkan war of 1992-1996 than of WWI.
    The way the EU reacted to the implosion of Yugoslavia was driven by domestic political agendas in Germany and other member states. The EU’s reaction was behind the curve, unhelpful and ultimately unsuccessful.

    In the end it took the US, in the form of NATO to bring the war to an end by bombing the Serb capital Belgrade into submission.

  5. Eireannach

    In precisely the same way DMcW describes that Europeans, in hindsight, could see that WW1 was inevitable given the buildup of the British navy and German dreadnoughts and so on….

    ….in precisely the same way, in future decades, everyone will understand that the advanced economies of Europe and North America began their inevitable decline after the twin zeniths of industrial civilization known as Peak Oil (2007) and the associated Peak Credit (2007).

    Peak Oil WAS (past tense) when the world was able to produce approx 90 million barrels oil/day, back in 2007. The demand for oil was so great that by 2008, oil was hovering around USD150/barrel until the poor oil-dependent subprime folk in America began to fail to meet their repayments on their mortgages.

    As their mortgages failed, the CDOs and CDSwaps based upon these mortgages also failed. The money system could no longer function as normal if the natural system (enough cheap energy to meet demand) began to malfunction because…

    …as everyone in a few decades will understand – because everyone will be of necessity ecologically literate – the money system is an ecological subset of the wider natural resources/human consumption system.

    Increasing world population and increasing per capita exhaustion of finite, depletable resources led to major malfunctions in the money system based on interest-bearing debt because the money system needs growth in the economy but after 2007, growth was no longer possible.

    So the system began to fall apart.

    Our children will be ecologically literate and will understand what happened as a simple maths equation – but not an equation of money, but of ecosytem energhy flows.

    Without cheap energy, we are energy bankrupt, so necessarily financially bankrupt.

    • I still believe in cheaper technology that will allow us to harness Gas and the resources are plentiful if delivered .

      • Eireannach

        Well John

        Technology and energy are two different things.

        For Ice Age man, spears were technology, wolly mammoth was energy.

        Suppose I said ‘we are running low on mammoth, there are only a few left then we’re going to have to eat something else’.

        But you responded ‘no, no, you don’t understand. You see, we have these new spears (technology), they are sharper and we can throw them further. Therefore, we can capture mammoth more easily. Therefore, no problem’.

        Yes, our spears are better than ever. But oil, like the mammoth, is a finite resource.

        When it’s gone, it’s gone. But who believed the mammoths could all be eaten? Ice Age men would have laughed at us if we suggested that. But it happened.

        We are running out of oil and we are not ready to understand the implications, never mind adapt in time to avoid a disaster.

    • Falls

      so let me understand this…fake mortgage loans batched to make them look like real loans and fed for years into a banking system because of the community reinvestment act was the result of peak oil credit? wow…just wow… that some real kooky links there. is that you alex jones?

      here is a something i learned. if you cant afford it you cant have it. doesnt matter what congress says. it doesnt matter what the irish govt says. spending 500k on a 3 bed room semi has frack all to do with peak oil and everything to do with crony capitalism. The US could solve its debt issue tomorrow if they would just drill. but they wont because of ridiculous over the top restrictions.

      Now to the fake peak oil. i posted this before on one of your peak oil posts.

      - 1.3 Trillion barrels of ‘proven’ oil reserves exist worldwide (EIA)
      - 1.8 to 6 Trillion barrels of oil are estimated in the U.S. Oil-Shale Reserves (DOE)
      - 986 Billion barrels of oil are estimated using Coal-to-liquids (CTL) conversion of U.S. Coal Reserves (DOE)
      - 173 to 315 Billion (1.7-2.5 Trillion potential) barrels of oil are estimated in the Oil Sands of Alberta, Canada (Alberta Department of Energy)
      - 100 Billion barrels of heavy oil are estimated in the U.S. (DOE)
      - 90 Billion barrels of oil are estimated in the Arctic (USGS)
      - 89 Billion barrels of immobile oil are estimated recoverable using CO2 injection in the U.S. (DOE)
      - 86 Billion barrels of oil are estimated in the U.S. Outer Continental Shelf (MMS)
      - 60 to 80 Billion barrels of oil are estimated in U.S. Tar Sands (DOE)
      - 32 Billion barrels of oil are estimated in ANWR, NPRA and the Central North Slope in Alaska (USGS)
      - 31.4 Billion barrels of oil are estimated in the East Greenland Rift Basins Province (USGS)
      - 7.3 Billion barrels of oil are estimated in the West Greenland—East Canada Province (USGS)
      - 4.3 Billion (167 Billion potential) barrels of oil are estimated in the U.S. Bakken shale formation in North Dakota and Montana (USGS)
      - 3.65 Billion barrels of oil are estimated in the U.S. Devonian-Mississippian Bakken Formation (USGS)
      - 1.6 Billion barrels of oil are estimated in the U.S. Eastern Great Basin Province (USGS)
      - 1.3 Billion barrels of oil are estimated in the U.S. Permian Basin Province (USGS)
      - 1.1 Billion barrels of oil are estimated in the U.S. Powder River Basin Province (USGS)
      - 990 Million barrels of oil are estimated in the U.S. Portion of the Michigan Basin (USGS)
      - 393 Million barrels of oil are estimated in the U.S. San Joaquin Basin Province of California (USGS)
      - 214 Million barrels of oil are estimated in the U.S. Illinois Basin (USGS)
      - 172 Million barrels of oil are estimated in the U.S. Yukon Flats of East-Central Alaska (USGS)
      - 131 Million barrels of oil are estimated in the U.S. Southwestern Wyoming Province (USGS)
      - 109 Million barrels of oil are estimated in the U.S. Montana Thrust Belt Province (USGS)
      - 104 Million barrels of oil are estimated in the U.S. Denver Basin Province (USGS)
      - 98.5 Million barrels of oil are estimated in the U.S. Bend Arch-Fort Worth Basin Province (USGS)
      - 94 Million barrels of oil are estimated in the U.S. Hanna, Laramie, Shirley Basins Province (USGS)

      you see that…thats just a partial list primarily from the US but not exclusively.

      Peak Oil is a political creation to support tax increases on YOU. Its OPEC and its cartel and governments looking to pay for votes. there is a PEAK OIL REFINERY crisis because we have so many rules and regs no one wants to build them, just look at shell in the west of ireland. That is political not business. no business is going to invest a minimum of $1 billion on a refinery when you have every half assed politician looking to get their grubby hands on it.

      Scare mongering like your post has been going on since oil was first pumped. there is over 230 years of oil left. more than enough time to develop a replacement which has already begun. now if you want to talk about Peak about how much of the rare earth elements are left necessary for the much vaunted solar panels? last a saw its 5 years worth. Will that get fixed with technology…yes it will. Honestly we have enough real problems, there no need to go creating phantom ones.

      • persilschein

        I am a little confused by the second last paragraph: are we Shell and is the government not us? Does Enda keep the taxes in his back pocket? Is that why we can’t pay our bills?
        I need to take a refresher course in capitalism, coz we own debt that was private, nobody should tax anybody, and politicians/vote seekers are hiding our money and if they stopped that, we’d be fine and would return to growth. Is it too late to invade Libya?

        We need horse sense, not more ideologies. A bird in the hand is worth two in the bush.

    • markco

      Eireannach is bang on -it may take a little longer but eventually the fact that perpetual global growth is something that can’t continue.. it makes no sense to continue to use increasingly more expensive energy and resources to produce unnecessary goods to sell to countries that can’t afford them.Food production is going to become more expensive and important.

  6. Malcolm McClure

    According to the Facebook insert on this page. 9093 people like David McW. To judge from her photo, Orla hasn’t quite made up her mind yet.

  7. wills


    Banking and electricity.

    Both utilities.

    Both fundamental for economy to grow.

    And both available at the flick of a light switch.

    And credit can be flicked on and flicked off.

    And when its flicked off the economy closes down.

    The credit system is been exploited by insiders to game and rig the economy.

    The last 15 years proves this.

    The credit system has been weaponized to transfer the surplus value of the workers up the pyramid into the coffers of the ruling classes.

    The banking system is the weapon used to carry this out.

    We are witnessing it right now in front of our eyes.

    The transferring of bank debt onto the NAtional debt of countries is the transfer of surplus value of the peoples labour away from the public and into the pockets of the ruling classes.

  8. David says :

    Sometimes it pays to allow ourselves to think the unthinkable.

    We know what that is : Moon WOBBLE 11/09/11

  9. piombo

    Powerful invocative imagery and provocative parallelisms.
    Don’t buy the catastrophe scenario, but then again this is one of the unlearned lessons of the article.
    Germany is our main benefactor and we should get used to this, as a nation and as a people.
    The Germans have no issue with Ireland, they just want their loans back.
    I, for one, as an Irishman would always want to act honourably and pay my debts. To coin a phrase, credit is currency and credibility as a nation is what we hold on loan for the good of our children.
    Defaulting on German-funded property loans is tantamount to robbing the honestly weaned savings of millions of Germans. This is not an honourable idea.
    More to the point would be a national mea culpa and a solemn covenant enshrined in our constitution to force our State to leave within it’s means.

    • Harper66


      Private banking debt should never have been made sovereign. Doing so is tantamount to robbing the honestly weaned pay and savings of millions of Irish.

      If those Germans honestly weaning their savings wanted a secure return on their savings they should have tried a post office account. Instead they chose to invest and were aware of the corresponding risk.

      • gizzy

        couldn’t agrre more. It seems we owe the Germans to provide risk free loans to us at a good return. What an honourable nation we are. Never a borower nor a lender be. However now it seems only the borrower carries the risk.

      • piombo

        Just let us examine which of my assertions are rubbish:
        1) The Irish government rolled over the second bank guarantee when it was patently obvious to all that neither the domestic credit system nor the Irish State were solvent and hence needed the Troika, aka German goodwill;
        2) We Irish didn’t have any savings heading into the crisis and recklessly borrowed to accumulate real estate in the persuit of wealth. I live in Milan and in 2007 real estate in Athlone was more expensive than real estate 10 minutes from the Piazza Duomo! We as a nation were not only being reckless we were also being greedy. Hence the need for the mea culpa. Forgiveness commences with contrition.
        3) Your typical German did not participate in feeding the Irish credit boom nor did they purchase Irish real estate in any significant numbers. They saved in their sparkassen and in their local banks content with the returns earned from the bunds or the dividends from their secular-established banks and industrials.
        4) You know why they didn’t do so? Demographics. They German population is an ageing one and therefore has a greater propensity to save. That their banks were as reckless as the Irish creditor banks is no reason to dump on the ordinary German saver.

        Just as David employs history as a means to explain economic flux, we need as a nation to look outside the strict confines of economics and finance to find our path. Believe me until we as a people can stand up and admit to ourselves that WE were the cause, then and only then, can each person affected honestly stand up and demand from their bank, their State and ultimately their Creditors an equitable platform from which to recommence both as an individual and as a nation.
        Guten nacht!

        • gizzy

          Should their redress not be with the German Banks and their own regulator for reckless lending when they could track easily the counterparties to whom they were lending and the underlying risk assets of those parties and the very public growth in property prices and lending levels over here. The very astute Germans had lending officers, credit committees, risk departments, asset and liability committees, senior management teams, boards, shareholders, regulators and chose to lend to our banks at the agreed return for the risk.

        • Harper66

          German goodwill? What interest rate are we being charged for their good will? We have merely recapitalised German banks AND picked up the interest tab.

          “That their banks were as reckless as the Irish creditor banks is no reason to dump on the ordinary German saver” So it is better to dump on the Irish worker and pensioner? My fathers meagre pension and many many like him is being ravaged by USC and the other “austerity measures”. Protect the German pensioner and sacrifice the Irish one? Your attitude baffles me.

          You argue German investors shouldn’t take a hit because the banks in which they put their money invested badly and yet you argue the Irish should take a hit because their banks invested badly? I’m confused.

          Furthermore can you explain why private banking debt should ever have been made sovereign?

          Finally, nothing tires me more than the rehash of the mantra “we all partied”. WE did not.

        • real terms

          German banks lent in Ireland without the constraints or strict oversight they had in Germany. Crippled for lendng opportunities at home; they willingly and naturally lend in less stringent places as Ireland and Greece. Often, Germans were involved in property investments in these countries! (There being virtually no property market in Germany). German taxpayers understandably turned a blind eye as their banks paid them interest on their deposits. BUT interest earned where is the question they should have asked. It is all one interwoven European economy after all.

          • EMMETTOR

            If anything ever proved that the “Single Market” is a joke, the current crisis does. I know it’s in hindsight, but the very idea of a single currency, without a “Eurobond” mechanism seems crazy, now. The people of Europe had been showing less and less appetite for the EU experiment but their wishes were ignored by their politicians and by the Eurocrats and wherever possible, their democratic voices were sidelined. The EU as it is currently constituted, reflects the desires of our political elite, not what the people of Europe want.

          • CitizenWhy

            Excellent comment.

        • silentobserver

          I´m amazed when I read points of view like yours Piombo. The cause of the crisis in Ireland were criminally incompetent regulators, bankers, government, and judicial system- Not the average Irish person (and just for the record, I´m not Irish). Like many, I´d be happy to see a good few of them in prison. Do you think that Irish people wanted to pay 300,000 to put a shoebox over their head? That´s why many didn´t have savings- the comparative cost of living was absurd- and still is, both for renters and buyers, because of protectionist approaches to this whole crisis. Lax lending lead to this crisis, followed by vested interests trying to save their skins, by trying to make the state culpable for losses in private institutions. Banks should have gone the way ALL insolvent companies go- into receivership! And yes, that would have meant Irish savers would have lost money too! I have not heard a single coherent valid argument as to why a single penny of taxpayers money should have been put into banks- let both the lender and borrower beware, and be careful where you put your money! It seems to have only staved off impeding catastrophe, ultimately prolonging any true recovery. I think David´s words once again could be unnervingly a prophetic- the current path leaders of many countries in finance and governance have chosen to tread is fraught with moral hazard. This type of moral hazard, if not addressed, does definitely have the potential for more serious social consequences- we´re not at the bottom of it by a long shot!

          • piombo

            Forgive the delay, I just picked up on your response. I am in full agreement with your analysis. I am spending too much time with my close family members nursing their tragedies to not only empathise, but more importantly, to resolve to do change matters.
            Not honouring our debts personally nor as a nation is beneath us as a Nation.
            I, as an ex-pat, hold very dear my Irish nationality among the business and social melieux (permit me, it is summer after all) I know here. We Irish are both proud and pragmatic and debt-default would mark us as sons of Caan for generations.
            I also hold dearly that my children love and feel proud of Ireland. We as a people can and must resolve our personal and public debts. I advocate bankruptcy reform for the personal side and Eurobonds and balanced budgets for the public side. Simple I acknowledge, but sicut est.
            On the political side, I believe a forum I’ve mentioned before could facilitate reconciliation.
            Most of all, it needs leadership both intellectual and moral. The Irish possess both in abundance. What I dearly hope is that there is a spark of moral courage which will attract
            most of our people (even those whom we believe to be part of the problem) to believe that despite current horrid circumstances, we possess within our nation the capacity to heal the shame, the fear and the hurt and to put all aside and drive forward.

          • adamabyss

            piombo, you are making some good comments, not that I agree with everything you say but I’m just wondering how and when you came across this blog seeing as you are living in Milan..?

    • Deco

      Is the sovereign Irish state responsible for the losses of German, French, UK, US banks ?

      Well, we had a Central Bank of Ireland which was supposed to be regulating and monitoring credit flow in the Irish banking system. And they were doing a very lousy job. They got a bit concerned at the end of the boom – at which point it was far too late. And any misgivings that they had tended to be buried in Appendix IV or at the bottom of Page 127. And the board was filled with the odd crony and chancer.

      We had a Financial Regulator, with hundreds of staff, and with more powers and authority over the banking system than any state organization in the history of the state, except perhaps the Revenue Commisioners. But they were playing golf with the bankers in Portmarnock and Straffan. And the board there was stuffed with even more cronies and chancers.

      Then we had the ESRI. Published some glowing forecasts.

      And we had the paper of record, the schitzo on D’Oliers Street, with a Business Supplement every Friday. And inside, the IT BS, we had the ‘Wisdom of Dan McLaughlin’. And to strengthen Dan’s analysis, we also had Austin Hughes. Both producing the BS in Bull Market. On the back page we had the captain of industry feature, with a glowing review of an Irish banker, or prominent player in the Irish business elite. And that was mild compared to the puke inducing Property Supplement. But the IT was not alone. TV Tripe had “Househunters in the sun”. RTE had property programs, and of course Duncan Stewart encouraging the citizenry to spend (“invest”) loads of money in their property makeover. It was binge porn, and property porn.

      Official Ireland was out in force, telling the Germans and the locals here that this was a boom that would last for decades.

      I reckon that the foreign banks might have a case to make against official Ireland that Official Ireland, with useless compromizes quangos, and deceitful media organs, engaged in a deceit and is therefore liable for misrepresentation.

      Yeah – as a solution, can the foreign bankers please take the money off the establishment who lied to the people and the foreign banks, instead of trying to get it out of the people.

      • Deco

        The sovereign Irish state may not be responsible – but given the nonsense coming out of state quangoes who were stupid drunk on mania, the Irish state could be liable for an enormous amount of deception via official reports from quangoes, which failed to get to the bottom of what was really going on.

        Looking forward to some hypothethical case in future where a housebuyer sues the IT PS for distortion, or maybe somebody with an overpriced apartment on the Med sues TV Tripe for househunters in the sun : )

      • piombo

        Hi Deco,
        I agree with your sentiments entirely on the culpability of the Regulatory and Media sectors. In the case of the latter, unfortunately tort would be very hard to establish as the media do not have a duty of care toward it’s readership. In the case of the former, a duty of care in common law definitely exists, whether however, this duty has been assumed vicariously by the Minister of Finance is another matter. If so, only a tort action for failure to carry out statutory duties could be moved by a party directly damaged…..very tricky stuff indeed. A german bank might move such an action whenever it found itself “iced” in a default situation. One would however need to be mindful of the Statute of Limitations….
        A political solution such as the forum I mentioned earlier this morning would allow greater disclosure without fear of criminal proceeding recriminations. Think of it as a 21th century version of Savonarola’s bonfire of the vanities to cleanse Irish society of the aftermath of the crisis.
        In parallel to this healing initative and in addition to the proposed bankruptcy reform earlier mentioned, a concrete measure to alleviate people’s negative equity on their homes would be to faciliate that the chunk of the price paid now in negative equity, for example 40% be converted into an equity stake to be held by NAMA (for want of a better vehicle). This would allow people to pay lower mortgage repayments based on lower outstanding debts and would allow the Banks to apply the write-down provisions to the loans already transferred to Nama. Nama would would faciliate this debt for equity swap. There would be a cash flow benefit for the household and a negative for either the bank/nama. I believe Nama’s operating profits could absorb such a hit. Nama would co-own the house and thus participate in any sale proceeds.
        The immediate and long standing benefit from such a proposal would be to unblock the housing market and the bank’s balance sheets thus benefiting both and the entire Irish economy.

  10. Eireannach

    Economic growth is over, forever!

    Life will go on, but economic growth will not on a finite planet. It is over.

    • dwalsh

      @ Eireannach

      “Economic growth is over, forever!”

      If by this you mean capitalism; i.e. economic growth = growth of profit, I agree. Capitalism is dead in the water. This crisis is the ship sinking. What will come next is uncertain. We shall see I guess.

      For myself I believe another kind of growth is possible. Growth that is not merely a by-product of rampant greed. Real sustainable growth in all areas that promote quality of life and human expression. It is possible and it opens out a new and virtually infinite horizon for humanity to colonise; but to see that horizon we have to think differently about life and value and growth.

      • Eireannach


        Yes, I only mean capitalist growth. Obviously trees and planets and animals and children will grow.

        Maybe everything else on Earth will be given a chance to grow when the economy can no longer get more insane in terms of wastage of resources (ie. “grow”).

    • Thats a very good point/video Eireannach.
      there is a chinese proverb: “you may own a thousand acres of land, but you can only eat one bowl of rice every day”
      meanwhile we have to make our own country a better, more egalitarian society.
      If I may digress a little,the introduction of biometric/tamperproof ID cards would save more billions in fraud.
      Instead we now have an array of new ‘flat rate’ taxes coming down the line with promises of equality in the distant future. The various exemptions for those who cant pay; coupled with the resistance from those who-on principle-wont pay; may make these new taxes a nightmare for this coalition.
      I hope so.
      and here is a kiss for the man who piloted us to doom:

    • Why do we need growth?
      Is it necessary?
      Why can’t we not just chill out and enjoy life instead of striving in the rat race?
      All work and no play makes Jack a dull boy.

  11. octo

    Someone’s been reading “Future Babble: Why Expert Predictions Fail – And Why We Believe Them Anyway” by Dan Gardner

    • Octo,

      I haven’t read it. Worth a look?


      • gerry

        Hi David. I’ve just finished reading it and can see were ‘Octo’ made the connection. The book begins like your article at the turn of the century, with quotes from ‘experts’, such as H.G. Wells as to why there wouldn’t be another world war and how we were entering the age of prosperity for all. He also talks about all the experts throughout the 20th century who predicted famines, depressions, end of civilizations and how nearly all of them have been wrong.And indeed why they were wrong and why we still go back to them to ask them for their future predictions – something that you’ve written about in previous articles.

        I’d highly recommend it. Alongside, The Black Swan and Fooled by Randomness I’d say it’s one of the most important books on the psychology of prediction that I’ve read.



  12. Malcolm McClure

    Who writes these headlines? “AFTER THIS CRISIS, NOTHING WILL BE THE SAME AGAIN.” That can safely be filed in the same trash bin as “THE WAR TO END ALL WARS”
    After this crisis;
    Water will still be wet.
    Irish people will still eat potatoes and drink milk or something stronger.
    Cigarettes will still cause cancer.
    Poor people will still dream of becoming rich.
    The Angelus will still toll from dreary steeples throughout the land.
    And so on ad infinitum.

    Some people will see it as a crisis and others as an opportunity.

    • Malcolm

      The sub editors at the newspaper write the titles!

      Best, David

    • Crisis?
      What crisis?
      I don’t have money and I don’t own property.
      I did not party and I avoided debt. Result = happiness.

      I am poor but unlike your above statement I have no wish to become cash or asset rich. I am already rich in ways that money can’t buy

      If I had spent all my energy on the pursuit of wealth I would have been a poorer person for it

      • adamabyss

        Exactly Paul, simple living is what it’s all about. You don’t need all that crap that our ‘advertising sponsors’ are trying to sell us. There is a healthy population of of people on this site that see through the scam that the elites perpetually attempt to perpetrate on the rest of mankind for their own financial benefit.

        • Thanks for the confirmation adamabyss.
          It is people on this site who kept me sane during the past and will continue to do so.
          Personally speaking I live very simply and travel light. No possessions, no ego and no illusions. Its the happiest I’ve ever been and I really mean that

          • adamabyss

            Same here Pauldiv, I used to boast I could fit all my possessions in two bags back in the Caribbean and on a couple of hairy occasions I had to actually prove it by packing up!

  13. dwalsh

    “Sometimes it pays to allow ourselves to think the unthinkable.”
    The unthinkable today is that the value of the dollar will probably soon begin to collapse…and with it the global financial house of cards will come tumbling down.

    How has it come to this?
    The financial sector is the culprit. It has by means of rampant leveraged gambling — euphemistically called investment — bankrupted the entire planet. It has erected a financial tower of Babel; an inverted pyramid of virtual capital (estimated as being at least $700 trillion and possibly as much as $1,500 trillion) tottering on the back of the real physical economy we all live in and rely upon for our daily sustenance (estimated at $65 – $75 trillion global GDP).
    It is an outrage that the financial sharks who operate in the global market casinos are permitted to gamble with the livelihoods and the lives of ordinary folk. It is a moral abomination that these sharks are permitted to wage financial war upon entire nations; impoverishing their citizens to feed their lust for profit.

    “We can’t return to business as usual.”
    Business as usual has degenerated into a Sodom and Gomorrah nightmare. This is not civilisation; it is barbarism and shameful; a sure sign our civilisation is in meltdown. And thus far our political leaders seem determined to heap the lot of us onto the sacrificial pyre of the Golden Calf in an attempt to revive the god of greed.

    I agree with David: banks should be public utilities, not gambling syndicates.
    In the 1987 movie ‘Wall Street’ Gordon Gekko enunciated the philosophy of greed — “greed, for lack of a better word, is good”. This was deliciously scandalous and racy at the time and it is said Douglas’ character inspired a generation to aspire to serve in the temples of greed. In fact this philosophy of greed was also enunciated by the Nobel laureate evangelist for neoliberal economics, Milton Friedman. I’ve heard him in interview declare that personal greed is the appropriate basis for civilisation. I don’t know what any of you think, but I think such a view is contemptible.

    I am heartened by David’s article. I hope other influential thinkers will begin to awaken to how insane, disgusting and indefensible the whole thing is; and I hope eventually our politicians will come to their senses and awaken from the trance of awe they all seem to under to the money masters.

    • Eireannach


      Milton Friedman’s view about greed and competition fueling “progress” in a capitalist society is appropriate for an Age of Exuberance, when America was young and the frontier was way out West or into outer space and the future was bright and gleaming.

      That Age of Exuberance is over and the promise of a bright and gleaming future is fading into memory. So Milton Friedman’s philosophy is grotesque for our times.

      We need to change all our institutions which are predicated upon expansion and growth on a finite planet.

      The deadliest and most dangerous institution of this kind is interest-charging banking. Usury is a totally disaster in a world economy that cannot grow any more for ecological reasons.

      • dwalsh

        As I say above in another reply to you we will continue to grow, but in a different manner. Life is growth…or development; either life grows or it dies.
        I am convinced humanity is only begining. We are facing an important watershed in this century in that the engine that powered the “Age of Exuberance” as you call it is no longer viable and actually threatens to destroy us. Our task as a species in this century is to develop a new engine to power the development of the next level of civilisation.

      • Deco

        Friedman might have had a point concerning the role of competition in improving the cost and quality of products and services for ordinary consumers.

        But, his theory of Monetarism – which has been tried by everybody from Art Laffer under Reagan, to Gordon Brown in the UK – with it’s belief in the permanence of ponzi-financing, has been a absolute disaster.

        And the worrying thing about Bernanke, is that Bernanke actually believes in monetarism – as did Greenspan more or less. Every time the bubble bursts, bring down interest rates, and get another bubble going again.

        Paul Krugman, a Keynesian, does not seem to have any problem with this – and is welcoming the fact that the US Federal Reserve is now printing money to buy Treasury Bonds.

        Bernanke – Print, baby, print.

        Krugman – borrow, baby, borrow.

    • gizzy

      Well said the almost total collapse of citibank was brought about by about 250 bond traders and senior management and 100,000 employees lost their jobs. HSBC is back making multi billion profits but wants to make 30,000 redundant. These guys are not in the least interested in the social consequences of their actions during upturns or down turns. Gordon Gekko was as real as it gets.


      Nail on head. Compare how our governments treat the real economy and the financial markets: If you’re manufacturing anything and your turnover is more than a couple of million, the EU and your own government will pile regulation after regulation on you, (anyone ever have any encounters with the Eurostat reporting system ?). However, if you’re in the Financial Markets you can move billions around the planet electronically and nobody in government, apparently, needs, or wants, to know. How did these huge financial juggernauts end up being less regulated than a corner shop?

  14. lff12

    I am surprised at the demands for lifting the ceiling from the treacherous, avaricious banker class that got us here in the first place.

    The question I have is what kind of so-called “regulation” turns on its government master and backs such a call? It is Elderfield who should be sacked his audacity in suggesting this ceiling be lifted.

    Essentially Ireland’s banks are on the scale of small private banks elsewhere. There is simply no justification for paying rates a la HSBC or Barclays. The days when Irish banks deluded themselves into thinking they were on that scale are long gone.

    Gizzy – the number of bond traders who brought about the collapse of citibank and others was far tinier – they could only sell what products others in the bank designed. The very design of many CDOs were flawed in the first placce, and CDSes were grossly undervalued because of understating risks.

  15. rebean

    I read about recessions and booms being preplanned by people like the Rothchilds who own half the world and control the world economies. I never actually believed any of the conspiracy theories. I am not so sure any more I am beginning to wonder who do we all owe the money to ? Has anyone ever told you who the creditor of the debt actually is ? Mayb they dont actually know. We are told that China has a huge portion of the worlds wealth yet their economy is slowing down. I think that it would be in everyones interest to know who holds the can. WE might be very surprised by the actual facts

    • Eireannach

      Google Videos:

      ‘Money as Debt’

      An animation by Paul Grignon


      6% of the world’s population own 59% of the wealth. That 59% will be wielded, in whatever way necessary, to benefit the 6%, even if that means destroying the lives of the other 94%.

      • Deco

        That 6% must control the media, because if they control the media the other 94% are more likely to remain clueless as to what is going on.

        Bread and circuses.

  16. [...] David McWilliams – After this crisis, nothing will be the same again: If history is any guide, the end of this debt crisis globally will lead to the rightful [...]

  17. Some say the genesis of WWI was 1909, when the Brits danced in the streets after Lloyd George introduced “The People’s Budget” featuring a land tax, David. The Lords broke tradition to block the budget. But they had to do more than that, to cast doubts on the Liberal government’s loyalty, because Asquith and Lloyd George had also reduced the building of Dreadnought battleships from 6 to 4. “We want 8 and we won’t wait!” the aristocracy demanded.

    The Lords didn’t want a land tax but they were raring for a war.

  18. adamabyss

    The Crack Was 90 in the Isle of Man.

  19. ShaneH

    Enough, enough enough. With respect, David shut the F**K up. Take a sabbatical please. You are a parasite feeding of the vulnerability and ignorance of the people. Week in week out you churn out this nonsense that’s lapped up by the majority of the people on here. Every few days you pull another one of these mind numbing articles from your backside and you’d think that it was write from the hand of god himself the way it’s received.

    You’re as reprehensible as the banking system you come from and are now so content on commentating on. “Addicted to money” get real man. Prancing around the globe like some modern day Buddha, dispensing you wisdom to one and all. Portraying people as some junky looking for the next money fix. I despair as this whole corrupt monetary system comes crashing down and I see a clown like you constantly distracting the most vulnerable people from understanding the systemic flaws contained within the money system itself and worse still, profiteering from these same people.


    • Tull McAdoo

      O.K. now that you have got that off your chest, tell us what you really think about Irelands economic situation and how you see thing’s evolving from here.???

      • ShaneH

        Tull, I see it as dire. But what is infuriating is listening to this alternative camp, McWilliams, gurdgiev, Hobbs, Sinn Fein, etc Along with the conventional wisdom of the last two governments these groups are two sides of the same coin. People can argue and counter argue till the end of time about the superficial aspects, and McWilliams proves this with article after article, book after book, TV, Video etc.

        Don’t get me wrong these are important on one level as they impact the day to day lives of most people, but they fail to address the root cause, the who’s, how’s and whys of money creation and control. It is no different than going to the doctor with a rash and a sore stomach. Doctor treats the symptoms by dispensing a cream for the rash and painkillers for the sore stomach. Now this may cure the symptoms for a period of time, the cause of the symptoms is never looked for, or discussed, and is left to fester on.

        • Eireannach

          It is true that DMcW never goes to the root of the problem, the usurious practices of the money changers.

          Principal is lent into existence, but banks demand to be paid back principal plus interest. Where does the interest come from? It was never lent into existence, it is ghost money that was never issued into circulation in the form of a loan. It’s a kind of carrot on the end of a donkey’s nose to keep borrowing and enslavement to the money masters going.

          And where do the money masters get the money from? The Central Banks create the money and wire it as an email. It looks like this:


          And that’s all a Central Bank loan to a treasury or commercial bank is. A credit email. Oh, with interest due back that wasn’t included in the email!

          But DMcW never talks about this. Usury is the heart of the death star.

          Like anyone else who has watched “Money Masters”, “Money as Debt” or read anything by Richard Douthwaite of FEASTA Ireland, I’d make a better public educator than DMcW. Fact – I would. Because I’d talk about the heart of the death star, not this or that largely superficial detail as DMcW does.

          • EMMETTOR

            If you walk out on to a football pitch and tell the players that the rules have been suspended, eventually, football is going to be replaced by something far more brutal. This is what happened to our financial systems when regulation was almost eliminated. Usury has existed for thousands of years, to the benefit of all, under strict control. Or imagine if you “deregulated” the roads, drive on whatever side of the road you like, turn left, right, ignore the traffic lights, etc. That is the state of our financial markets, car crash after car crash. This will continue indefinitely, until and unless regulation is restored.

          • ShaneH

            I agree in the spirit of what you are saying. Where I would disagree is that usury or interest by itself is the problem. Many arguments can be made for why it’s morally or ethically corrupt to charge interest on money lent. But in my opinion interest is not the problem in itself; interest can be technically paid back as long as the money that is being paid back is then being made available to the borrower to earn back again.

            The problem with interest is that the money is not consistently made available to be earned back again. Interest is the banks profit, a certain amount of which is invested or re-loaned elsewhere, thereby not making it possible to be earned back by the original borrower.

            But again I do agree with the spirit of what you are saying.


          • ShaneH

            With respect I think you are ill informed at best. May I ask at what point was the regulation almost eliminated? Interest or usury benefits those who receive it. I question the legitimacy of such a practice. Because something is done for a period of time neither makes it right or wrong. Its endurance does not automatically prove of its rightfulness, it may as likely be the result of the gains it brings to those that have control over such matters. We can look at history and see practices that was at some point considered just and right and which may now today be condemned.

            Let me give you two quick examples of interest in the real world. Please accept again that I say this from a view point that doesn’t put the blame on interest as the reason of the underlining root cause for the system failure only that its effects can be that much greater when the crash comes.

            Margit Kennedy writes on a study on the effects of interest in the economy. Apart from the increase of costs on goods and services there is also a very unjust and hidden cost on the poorest in society. Taking a large section of German households spilt into a group of 10 staring with the poorest moving up to the richest. What was discovered was the first 8 groups were paying more interest than they ever received, section 9 was just marginally better of and section 10 (the richest) done the best. The conclusion was that the first 8 sections were paying for the profits of the last two. The people who had the least money (and needed more) had less money as a result of interest, and the people that had the most money gained even more.

            The combined national debt of Africa in the early seventies was 11 Billion. In 2002 it was 295 Billion, and over the 30 odd yrs it paid 550 billion on 540billion of loans. And again i state in 2002 it had a debt of 295 billion and still had the poorest nations on the planet.

            To argue that interest somehow benefits us all is misguided.

        • Shane,

          Thnaks for your comment…and I mean it. This forum is much the better for those who think I am a tool as much as those who think what I have to say is worthwhile. Differening opinions is what makes a market, buyers and sellers…and all that malarky.

          Just one thing, in case you missed it, which would be hard, “Addicted to Money” was precisely about how the financial system is THE problem which might explain why, outside this vindictive little goldfish bowl called Ireland, it won five seperate “best doc” awards and nominations in countries as disparate as Australia, China and Canada.

          Why do you think we began the third series with the end of the Mayan civilisation?? Civilisations end, sometimes abrupty and the seeds are usually evident. In our case the biggest threat is the “coup d’etat” orcehestrated on government by the banking industry.

          All the best and thanks for chosing to read stuff you don’t have to.


          • stiofanc02

            Yeah David, it is far a better forum with the love and hate. And I always enjoy when you mop the floor with these keyboard comedians who cant slap them selves in the arse with both hands. There is a name for these types,…lets see,… its coming to me,…oh yeah unsuccesfull wannabe losers!

          • Eireannach


            You’re right, this blogroll is all the better for the fact that not everyone is a DMcW arse-licker like you, pal.

          • ShaneH

            Tnx for taking time out of what must be a surely a very hectic schedule. I’m sure as a multi award winner your time must be very scarce, indeed much like the premise from which money derives its value, but that’s another story.

            I could only watch about 20mins of part 1 of Addicted to Money. So I will have to bow the expert consensus of the judges who awarded you such great critical acclaim. I also think you give me way more credit than I deserve by suggesting I read stuff I don’t need to. I have an occasional gander at your stuff, which is about as much as I can take; I guess a small amount on an infrequent bases would best describe my reading habits here.

            But I will grant you this; I think you are a highly intelligent man, with a great grasp of written English and a very talented writer. I think you are somewhat deluded in you commentary of the articles I have read.

            I’m assuming by using the phrase “vindictive little goldfish bowl” while referring to Ireland, I’m not your only critic. Pity you see the country in such a way. If I were a betting man, I’d put a wager that this vindictive little country has seen you (one of the very few) right over the last few years.


        • Deco


          I reckon you need to draw a clear line through what you got from the Irish establishment.

          You need to differentiate between those that lied to you over the past twenty years, and fed the lemming run – who organized grand schemes for their ego projects based on other people’s money, who patronized you (and who still do).


          those that spoke the truth, who did their own thinking, who never bought any of the new-era nonse, who stated clearly what was going on, or anybody who tried to give you some leeway in a very controlled environment, so that you could save and prepare yourself for the disaster that is now unfolding.

          Saipan again.

          • stiofanc02

            @Eireannach, firstly I can assure you I am not your pal. You are a punk. Secondly I am a real fan of Daivds and have no shame in letting everyone know that. If you would make a better educator Than David, as you claim, than go do it. Talk is cheap especially from someone like you who makes claims but cant back them up. But you cant do it, and wont. I know your type, hen pecked pussy whipped guy whos own children hate him, who is a tough guy when you are hiding behind your screen huh? Youre the type who has had little or no success with women too I imagine. As well as that you are a loser. I am sure I will not see you in print anytime soon and I am endebted to David for his insights and his accuracy. Thanks David, you are one of my heros. Eireannach, Admit it, you are nothing,zero, and all of your dreams shattered and shall never come ture because you are weak. Weak of mind, body and ability to even be able to reach around and slap yourself in the arse with both hands. HA!

    • You could always start your own blog and contribute to the debate Shane. If you channeled your anger into something more productive it might be you who is picking up a writing award one day. Reading below I see you have some interesting points which would be very interesting if they were expressed with less anger and more focus

      Same for anyone else out there who has a lot to say. Don’t let your anger destroy you inside and instead focus it outside by using it as a weapon to express yourself and influence others

      I do agree that McWilliams is no Max Keiser and that for some reason he is not in a position to tell us what he REALLY thinks but he at least provides clues as to where to start looking for the answers

  20. piombo

    Good morning all,
    A few quick points:
    1) German loans and their interest are not being funded by the USC and other tax increases introduced over the past 18 months. These additional taxes are funding the Irish civil service and State which continue to run a full year deficit of €15 billion (even excluding the bank bail out monies);
    2) Attacking David McWilliams for not advocating unilateral declaration of war on the Global Financial system is puerile;
    3) German goodwill is not intended as charity, it is of course motivated by self interest. Let us imagine as a nation trying to fund ourselves without even this benevolence (Berlin has proved to be a lot closer to us than Boston when push came to shove);
    4) An urgent and radical reform of Bankruptcy law (along the lines of the US Chapter 11 & 7) would allow hundreds of thousands of Irish people to renegotiate and rearrange their mortgages with their banks free from the fear of being cast into a modern sort of Gehenna;
    5) “A Truth and Reconciliation” type of public forum presided over by the President of Ireland to allow all matters and issues from this crisis to be aired and debated. An amnesty from criminal prosecution could be offered as an incentive to all the “insiders” to participate. The forum would have a life span of no more than six months and the President would then be obliged to mandate a constitutional referendum within three months to put to the people whatever proposed changes would result from this forum.
    Whilst on a personal level a lot of people need to go through the mea culpa, as a society, I hold we need the above mechanism as a civilised way of preventing not another World War I but another 1916/civil war.

    • Eireannach

      DMcW writes articles about different experiences around the world – the Russian debt crisis, Argentina, Japan, Scandinavia in the early 90s. Iceland recently and so on and so forth.

      It’s about time he wrote an article on Islamic banking, which charges no interest on loans. How does it, or can it, work? Why was Europe opposed to usury for so long, and how and why did it all change?

      The world financial system WILL CRASH because the amount of money due to be repaid is structural greater than the amount of money issued into circulation:

      Principal + Interest (due for repayment) ≠ Principal (actually in circulation)

      Usury was outlawed in both Christianity and Islam because of centuries of experience by older civilizations in the Middle East, notable Babylonia, Judea and among the Phoenicians. They knew that compound interest could never be paid because the money had never been issued by the money lenders to repay it.

      FYI I have no personal debt and no need for contrition. However, when examining a problem, I go straight to the heart of it.

      The heart of the problem is usury, the charging of interest on loans. Early civilizations of the Middle East outlawed it based on their practical experience. We can still see this in Islam today,

      • CitizenWhy

        Islamic banking/lending is not really that different. The home buyer and the bank jointly purchase a property for cash. The homebuyer makes regular payments to “buy out” the bank and eventually owns 100%. The total cost of the property is set at the time of purchase at a real value, as opposed to saying you are buying a house under a mortgage at $200,000 and then over the course of the mortgage paying out, let’s say, $500,000.

        Islamic banks also have to be prudent and very considerate of buyers or else get into religious trouble as well as civil trouble.

        Since our civil societies have lost the ability or the will to discipline our banks, perhaps Islamic banking is the way to go.

        Non-Muslims can work with Islamic banks on their financial needs.

      • stiofanc02

        @Eireannach Abdul Chutney Mohhamed, Go get a prayer rug, bend over and put your arse up in the air you creep.

    • Harper66

      You are being pedantic or perhaps purposefully misleading? The reason the state is taking usc is because it can no longer borrow the money required for running the state from the international money markets due to the fact it bankrupted itself by absorbing private banking debt.

      If the state had not bankrupted itself by taking on private bank debt it could have continued to sell its debt on the international sovereign bond markets and then rightly addressed the deficit but in a far more measured way.

      Private banking debt sank the sovereign. They are now one and your attempt to separate usc from the effect of banking debt on the Irish economy is an attempt at slight of hand. Nothing more.

      Why Italy still in the international markets is even thought it has been running a deficit for years? Because they did not take on private banking debt.

      I am glad to see you have accepted Germanys role is motivated by self interest.

      • paddythepig

        Wasn’t that Berlusconi I saw the other night on the box trying to calm international bond markets, after introducing an austerity package of 49 billion, and with Italian bond yields hitting 6%.

        You might want to revisit your theory.

        • Harper66

          Dont need to revisit any theory Paddy. Yet again a sovereign state is being dragged down by its exposure to private banking debt.

          The word “contagion” is European newspeak for private banking debt.Europes policy of propping up insolvent banks IS the problem.

          I expected better from you paddy ;)

          • paddythepig

            The Italian state is being dragged down by it’s own public debt, which is of the order of 1.3 trillion euros.

            What bank debt has been absorbed by the Italian sovereign?

          • Harper66

            European bank debt is being absorbed by Italian sovereign, as it is spending euro and part of the euro zone.As an EU member state Italy has under written the European bail out fund. Therefore it has exposed itself to the debt of European banks.

            Italy has had a deficit and zero growth for as long as italians care to remember. It has serviced this debt up to this point. Exposing itself to liabilities of both national and bank debt (through the bail out fund) has alerted the markets who have acted accordingly.

            Attempting to seperate Italy from EU policy is pointless and shows a grave lack of understanding of the entire situation.

            “The EU’s reaffirmation of its commitment to do whatever is needed to ensure the financial stability of the euro zone was initially greeted with relief. Similar ”shock and awe” declarations a year earlier bought a few months of respite. This time celebrations lasted for less than a week. By Tuesday markets had become more circumspect as interest rates on Spanish and Italian bonds rose to levels seen before the bailout was announced. Investors realised that the deal had not reduced the risk of financial contagion in the euro zone.”

            Read more:

          • paddythepig

            So you think a contribution of 78 billion from Italy to the bail-out fund, which may or may be drawn down, will make the bond market not want to buy Italian sovereign bonds, when the total Italian debt prior to the bail-out fund is 1.3 trillion, and where the fiscal deficit for 2010 (prior to the bail-out) was 71 billion, and the fiscal deficit for 2009 was 40 billion.

            Dream on.

          • Harper66

            Its 78 billion they dont have,so therefore its 78 billion no right minded investor would gamble on….

            Ireland,Greece and now Italy and then factor in Spain and Portugal and you think the fund may or may not be drawn down – your the one dreaming ;)

          • paddythepig

            So you baulk at a one off 78 bilion for a bailout fund but see no problem with borrowing 70 billion in a single year to overspend on day to day stuff. Then you disregard the impact of an existing 1.3 trillion in already accrued debt, and don’t seem too bothered by future day to day related fiscal deficits. That sounds like an ideological position rather than a logical one.

          • Harper66

            I am interested in the truth.

            I am not trying to offer my personal opinion or push an ideological position and rest easy paddy, I am also not trying to excuse Italian profligate spending.

  21. vincent

    “miles away with an assassination in Sarajevo and finished at home with a war of independence that ended British rule in Ireland”- What kind of Independence did we get? We took on the same Banking system and the same Legal system(which operates within the Bar system-British Accredited Registry) as the “previous establishment” I have many friends and family living on the land known as Britain and I know that they are as ordinary and decent as anyone living on this land known as Ireland…

  22. Another excellent thought provoking article from David.

    “As soon as Britain became a serial debtor, sterling was done for.”

    One of the fixes for the US and EU to their economic woes is QE or ‘print more money’, a euphemism for ‘print more debt’ or ‘another round for the alcoholic’.

    We are at the stage where alcoholics can’t find their way home.

    The financial, casino fiat currency capitalism fed by derivative speculation that has led us here needs root and branch reform.

    DmcW and others on the list, denounced by government with a tide of criticism with labels such as wacky, ridiculous nonsense, should take heart and be vindicated in their prescience.

    The ill informed, wacky nonsense emanating from banking and political circles in Ireland and abroad, telling us to suck up the the great austerity programme ‘successfully’ negotiated for us, should be seen to be the poisoned chalice it really is.

    • CitizenWhy

      Over the past two years the US federal bank/Central Bank has distributed over $14 trillion to banks in the US and abroad. That’s the official number from a recent US govt audit.

      Has the $14 trillion benefitted any ordinary citizens of any country?

      • CitizenWhy

        That should be the US Federal Reserve bank. It is privately owned but in charge of the money supply. In cooperation with the Presidential Administration and the US Treasury, the Federal reserve prints and distributes money, the printing known coyly as quantitative easing.

  23. Deco

    War ! What is it good for ? Absauluutely Nawtin.

    And it continues.

    • It’s good for the Bankers who fund both sides, it’s good for contractors who are brought in to rebuild the conquered countries, it’s good for the Arms companies supplying weapons.

      It’s good for business :-)

  24. Peter Schum

    Alas I agree David, there is a lot more yet to come. It is very hard to be optimistic and to see a way out of the current situation. Please excuse me while I put my head back in the sand!!

  25. Harper66

    The root of the problem in attempting to sustain continous growth .

  26. Deco

    Heard on Newstalk the other day.

    “The main movers today were the banks in light of ongoing difficulties over the Euro.
    AIB down 1, to 10.
    BoI up 1, to 11.
    Permo down a half, to 5 cent. ”

    The humiliation of the Ballsbridge banking culture. The aristocrats of the ISEQ are much weakened. The problem is that they are still there when they should have been thrown to the wolves. Kind of disappointed that we did not see some real capitalism at work – you know the type that Dan McLaughlin advocated concerning staff working below the minimum wage in Ferries working between Ireland and the UK.

    The one they left out – Anglo. Anglo no change, still at Zero.

    Next episode – the tale of the Two “Pillar” Banks. How about calling them the two “Plonker” banks, given the policy of promoting clueless idiots.

  27. uchrisn

    The G20 should get its act togethter to regulate finance globally. I know there are many on this site that don’t like the idea of global governance. As corporations and banks are now global and in every country much stronger global governance and regulation is needed. Ireland is not helping here with our “race to the bottom” along with London on banking regulation to lure the global banks and our “race to the bottom” with corporation tax. Sure everyone could charge corporations 12% tax or nothing at all, the corporations would be delighted. Sure everyone could have lax regulation – look what happened when they did.
    The UN could have a much stronger role with authority to make rules for finance as they do for weapons disarmenment.

    Also there is too much involvement of finance in elections. How much do the main political parties in all countries owe the banks in loans? together hundreds of billions, will this debt ever get less or paid back? This is apart from direct funding by the banks of elections. So what chance the smaller parties and independents.

  28. No more national debt:


    re “The G20 should get its act togethter to regulate finance globally.”

    Corrupt banking financiers eg Fingers/Seanie allied to corrupt and incompetent politicians is a deadly combination; and they are hell bent on hoovering out hard won democratic freedoms including the financing of public services.

    In Ireland, US, the EU, politicians are puppets of global banking schemes, but the schemes no longer work.

    Those behind such schemes who carry responsibility for them need to be removed.

    New people with talent are required to fix the mess.

    Interesting times ahead.

    • uchrisn

      Politicans are puppets of the global banking system alright. That is because the global banking system is much more co-ordinated in its purpose and can flatten any one nation.
      So nations should unite and legislate against the large global banks. Simon Johnson reccomends breaking them up. You could have Glass-Seagul. You could have CDS outlawed.
      However that would be bad news for countires heavily dependent on the financial industry and the standard of living of their people. The U.S., U.K. and Ireland fall into that category. Unfortuntly many voters in these countries do not want their current standard of living affected and as such do not care about doing the right thing.

      • uchrisn

        of course you also have the issue of massive funding of politcal parties through donations or loans by financial insitutions.
        Then the ‘intellectual capture’ with influential people in countires treasuries and central banks coming in from huge global banks.

  29. Praetorian

    “From a political and social point of view, wars are an extreme version of social upheaval.”

    European wars, especially the First World War, could also be interpreted as attempts to offset social changes, like nearly every war, WWI was started by monarchies/elites and fought by the poor.

    In Tsarist Russia, the rotten house fell in after 3 years of slaughter, Austria-Hungary broke up, Germany was much reduced and humiliated, Britain’s balance sheet was severely impacted and Empire put under pressure, but was still in a commanding position, France was setback losing millions of working men, a setback it never really recovered from and allowd Hitler to roll in 20 years later while America put in place the foundations of its emergence but in the inter-war period opted for isolation, and could you blame them, they had a massive territory far from the European theatre.

    If anything, Norman Angell’s thesis could be more applied today, where the large ‘democratic’ powers are unlikely to go to war, especially with the existence of nuclear weapons (‘mutually assured destruction). What has been predicted are smaller, regional battles over resources, this seems highly likely. From such conflict the potential exists for a wider conflagration to emerge which would surely be the last act of man on this stage.

    Barbara Tuchman’s ‘The Guns of August’ (which JFK liked and may have influenced his thinking during flash points in the Cold War) is an interesting read, the system of military alliances and the jingoistic mood at the time played the leading role in plunging Europe into 4.5 years of pure madness with the Irish playing no small role.

    I agree with the main thesis in this article that th economic crisis has a lot more in it, we are at stage II of a long process. Gustav Stresemann, Ger,an Finance Minister (May 10, 1878 — October 3, 1929), commented during the Great Depression that Germany was ‘dancing on the edge of a volcano’, the same could be said of the Western socio-economic system, the rise of the right is of particular concern but gets very little mention.

    Ironcially, the Germans haven’t learned from history, they were bailed out by the Dawes Plan (1924), the Young Plan (1929) and the Marshall Plan (1948), yet they turn around at Ireland’s worse moment and have the ECB impose a lunatic interest rate while the French give out about our corporation tax rate. With friends like these who needs enemies but as Thucydides said over 2000 years ago: “large states do what they wish, small states do what they must or “when elephants fight the grass gets hurt”.

    • uchrisn

      Yes Thucydides quote is quite apt. Irelands population is miniscule in the Eurozone and it has no say practically in what happens. The set-up of the decision making process in the ECB should have been a warning to Ireland, the Danes stayed out.
      I am personally dissapionted by the attitude of the Germans and French whom I imagined would be fairer. I understand the reason they did what they did to Ireland, pure desperation to save their own banking system. Also I understand it was not their public so much as their politicans and bankers who made those decisions.
      Actually it seems that the elite and some politicans are attemtping to turn the general populations in the EU against each other. Really its a case of general population aganst elite in the EU rather than nation against nation. I would like to see more co-ordination of trade unions and peoples groups across the EU.

      • Praetorian

        Yes, points well made. When has it been any different with elites. There is talk of the ‘International’, Michael Davitt 120 years ago talked of the commonalities between Irish workers and the workers in the Lancashire Mills (where as a child he lost an arm) and the need to unite.

        Divide and conquer has long been a critical strategy of the power elite, played out in Ireland effectively, private v public worker, while those who made criminally bad decisions got away with it all.

        • CitizenWhy

          In the Irish General Strike the Protestant and atheistic workers of Britain took in the children of Dublin as the British were deliberately starving the city. Unfortunately some fanatical Catholics (middle class or wealthy) tried to prevent the evacuation of the children but Jim Connolly’s union held firm against them.

      • Praetorian

        Michael Davitt:

        -Social reformer
        -Member of Parliament
        -GAA patron
        -Advocator of women’s rights and reform within the prison system
        -Labour leader
        -International humanitarian

        Labour Rights Activist
        Having suffered in an industrial accident himself (his right arm had to be amputated) Davitt was an avid supporter of labour rights and founded the Irish Democratic Trade and Labour Federation. Suggesting the formation of an All-Ireland Trade Union, Davitt paved the way for its formation in 1894.

        Author, International Humanitarian
        As an author, Davitt highlighted the plight of the underprivileged internationally including the Boers in South Africa, the Maoris in New Zealand, the Aborigines in Australia and the Jews in Russia, and people serving penal servitude. He was the author of six books, ‘Leaves from a prison diary’, ‘Michael Davitt’s speech before the Special Commission’, ‘Life and Progress in Australia’, ‘The Boer Fight for Freedom’, ‘Within the Pale’, and ‘The Fall of Feudalism in Ireland’. He supported himself with writing and lectures and as a journalist defended the underprivileged.

        Land League
        In in 1885 when he described farmers as in ‘self-interest’ rather than ‘self-sacrifice’ (sound familiar?). Mahatma Gandhi attributed the origin of his own mass movement of peaceful resistance in India to Davitt and the Land League.

        Davitt is commonly regarded as one of the founders of the British Labour Party; his support for socialism in his latter years was based on the premise that Ireland could only achieve independence with the support of the British working class. In Glasgow, where he had a strong following, Davitt’s prestige was attested to by the fact that he was invited to lay the centre-turf at Celtic Park at the time of the football club’s inauguration in 1888.

        Davitt died in Elphis Hospital, Dublin on 30 May 1906, aged 60, from blood poisoning. The fact that the Lord Lieutenant of Ireland attended the funeral was a public indication of the dramatic political journey this former Fenian prisoner had taken. The plan had been not to have a public funeral, and hence Davitt’s body was brought quietly to the Carmelite Friary, Clarendon Street, Dublin. However, the next day over 20,000 people filed past his coffin. His remains were then taken by train to Foxford, County Mayo, and buried in the grounds of Straide Abbey at Straide (near Foxford), near where he was born.

  30. The Dork of Cork

    The first world war was all about gaining control of the new oil wealth , navies were already converting with huge strategic implications.
    The post Napoleonic Europe of euro bond markets & the gold standard was perhaps suited to the static capital intensive coal industries of the day but once oil came on the scene the real money repositioned into a more fluid technological & capital lose period.

    The first world war happened one year after the FED was created – European Gold went to New York to pay for the War.
    This was not a coincidence.

  31. Malcolm McClure

    FT editorial says, in effect: “Be scared. –Be very scared.”

  32. And The Heavens Opened

    Yes TOMORROW the 7th Day B4 The Full Moon and the PULL begins once more and The World will hear the Great Change commence .

    Friday & Monday will see the visible impacts crack the Walls of China and the ‘Chinese Walls’ was we know them will become transparent .

    The Week ahead will shorten many a holiday maker where real business matters and the fuse burns ….and burns …..and The Gods LAUGH Loud .

    • Malcolm McClure

      John ALLEN: the actual quotation is: “Want To Make God Laugh? Tell Him Your Plans” but I can’t find the original source. Very appropriate response to all sorts of recent events.

      We could be approaching a darwinian ‘Extinction Event’. Observe the Syrian model closely. Those in power have guns and are prepared to use them. The rest are potential cannon fodder. The dinosaurs will attack each other until they are too weak to stand.

      Overcrowding raises the aggression level in all animals. But remember:
      “Blessed are the meek: for they shall inherit the earth”. Dinosaurs were replaced by little furry creatures.

      • Juanjo R

        Awwww…I’m glad they are gettin’ somethin’ ’cause they ‘ave a ‘ell of a time.

      • CitizenWhy

        I have heard that the “Blessed are the meek for they shall inherit the earth” is mistranslated. It should be “Blessed are the meek for they shall eat dirt.” Verb: eat, consume, take in, inherit. I have also heard that the “meek” are the animals.

  33. gizzy

    Just logged in and enjoyed the read both the views that are closer to my own and the challenge of those that are not.For comments such as arse licker leave it out.

  34. Philip

    David, great article again. We are now entering a phase where those US Treasury notes are about to undergo a dramatic revaluation. China is sitting of a trillion of these – that’ll put a stop to their buying power. That’ll impact raw material prices and I suspect put an accelerator on the downward drop of the litre of petril.

    Had China more debt or more imports, it would have been a far better position and so too would its trading partners.

    So, I expect with the sudden drop in energy prices, we’ll have a recovery, followed by a drop and oscillating away until the current lack of innovation in motive and heating technologies eventually gets us in our collective asses. Very interesting talk on rise and falls of cities and organisation see following.

    The root cause of all the above? Yes…I agree with the financal scam. A very bright colleague of mine explained it thus…I buy insurance for your car without your knowledge (illegal practice by the way), it is in my interest to see you crash. The derivatives and CDSs were mis-used like this. Enconomic crashes and lots of them is what makes money for these ba$tard$. The rug has been pulled, the policies have been claimed upon and guess what?, the cupboard is bare. These guys are wetting themselves laughing at the way we remonstrate one another for over saving or profligate spending. All David is saying here is wake up as a people and stop squabbling.

    Over the last decade, I have been accused of being very negative about these matters and thus have been drawn to these articles. I think a false positive (thinking there is a tiger in tghe grass) is far better option than winding up as cat food. Do not be afraid to look at the dark side. But use this as a lever for change. Stick close to your community. Encourage new ways of thinking and entertain all innovation. We need it more than ever now.

    • uchrisn

      Philip, you may be using a negative word to tell people about to jump into the fire that they will get burnt.
      However you are actually an optimist cause you’re showing them a way to keep from burning themselves.

  35. Philip

    As a matter of interest, I believe Ireland was sitting on 45 billion of this US Debt a year ago. This is now down to 30. In the meantime UK increased their exposure by a delta of about 100Bn. Something positive?

    • ex_pat_northerner

      It would be interesting to see the fallout from a ratings agency downgrading US credit rating. My understanding of the banking system is that banks have to have so much in AAA rated assets. If US rated downwards then I’m presuming US treasury bonds “the so called safest place” would also lose AAA rating. Where/how would banks get AAA rated assets.. Gold ? Interesting times.

  36. Sark meets Merk

    Sark: We need one sheet fits all

    Merk: The PIIGS drag us all down

    Sark: Its time for abattoir and cut em loose

    Merk: Those stupid Irish they guarantee Anglo and all their banks without letting us know.

    They’ve huge fiscal deficit, still the dopes add all banking debt to sovereign debt.

    Then they borrow from us to buy all their toxic property, they were trying to use our money to buy everywhere, UK, USA, Europe.

    Stupid Trichet didn’t bat an eye.

    Sark: Don’t blame Trichet, its those stupid officials in head in sand Dept Finance who led their leaders astray.

    Sacre bleu. Do you have any idea of the schenanigans over their CT?

    Will I call Kenny and tell him to call Osborne, maybe he can talk some sense to him and get Kenny to leave us alone and leave euro, that problem solved?

    If some PIIGS don’t get sent to abattoir, we all go there!

    But Kenny is on holiday and his secretary say he will deal with bond crisis next September! They say everything is fine and growth is returning. They are confident everything is rosy.

    • piombo

      Well done Colm, very funny.
      You’re probably not too far from the truth, though!
      Best line of all
      “If some PIIGS don’t get sent to abattoir, we all go there!”
      BTW, this morning the Italian Fiscal Police are stopping EVERY car/lorry heading into Lugano and Chiasso and searching for the cash.

  37. Malcolm McClure

    Shortly after we realized that Ireland was the classic case of fubar, we now find that Italy is much, much, more fubar; the ECB is obliged to throw up its hands in despair and admit that Ireland isn’t such a bad case after all, rewarding our puny efforts with today’s purchases of Irish bonds.

    So: where is our revered European Central Bank in the midst of all this? Is its Great Steward Jean-Claude Trichet on the beach of some ritzy private island somewhere? Well no, he isn’t actually. He’s at his desk, is old Tricky. M.Trichet has no need of holidays, as he is asleep for much of the time anyway. This is what he told French mag Le Point at the weekend:

    “Let me say again, the euro, as a currency, is sound and credible, and is not affected by the pressures on sovereign risks.”

    What this is hiding of course is the inevitability of devaluation. Expect this weekend a reprise of Harold Wilson’s lame: ” It does not mean, of course, that the pound here in Britain, in your pocket or purse or in your bank, has been devalued.” after the pound dropped 14% in value.

    You can always rely upon politicians to sell you down the river.

    • piombo

      Hi Malcolm, Paddythepig, Harper66,
      Italy State debt I believe to be in the region of €1850 billion, comfortably over the GNP by at least 15%. Taking into account the black economy, we’re probably taking at about 90% GNP.
      However, it does not end there. There are 21 regions in Italy, all of whom raise OTC debt through securitisation etc., You also have hundreds of “comuni”/town councils who are swamped with OTC financing.
      Although Italy has chronic tax evasion, it does seem to collect more as a % of GDP than Ireland, 27% vs 19% (I stand corrected on the exact numbers). No comfort to anyone, but it is a fact.
      What differentiates the Italians most from the Irish in situations such as the one in which we find ourselves, is that the former don’t associate their own personal destinities to that of the State whilst we Irish have a much stronger attachment to our State. Hence we are more vocal. Your everyday northern Italian will only take notice of what is going down in Rome if they see a hit to their own personal circumstances. This is what is occurring as we speak.
      There is a crescendo of comment about the introduction of a “tasso patrimoniale”, a wealth tax in other words.
      What is the reaction I see here in Milan? Protests, letters to the papers….Nope, only queues of cars to the nearest Canton.
      Your average Italian could not tell you who their representatives are on the board of the ECB or that the next ECB President is one of their own. They simply could not care less as long as their own interests are not touched.
      Another difference to we Irish is that they have gotten used to living for alomst an entire generation with debt levels of the sort Ireland has just incurred.
      I liked Malcolm’s “fubar”. In Italian they say “furbo” which was the word the French Napoleonic soldiers invented for the Italians as they were being constantly robbed (with a smile of course) whilst they “invaded” Italy. Maybe Jean-Claude is experiencing that fuzzy feeling his compatriots experienced two hundreds years ago.

  38. And The Heavens Opened

    This Show is Still At Full Speed Do Not Dispair There is Lots More To Come Stay Tuned .

    • adamabyss

      John, what happens to your credibility if we get to September 11th and we don’t have a major upheaval like you have predicted? Wouldn’t you be in the same boat then as the guy who predicted the ‘Rapture’ on May 21st? Can you be so sure? And anyway, how can one (anyone) look into the future? Physically, that is not possible John and I think we all know that, notwithstanding the fact that the culmination of trends and / or events can be postulated…

      • @

        I know nothing to be honest I never did .I only read the stars when I have time .Its their credibility you question .
        Do you listen to the weather forcasters ?

        • The September 11 th 2011 date is also more daunting because it is the first such date of an ’911′ after the death of Osama bin Laden in fact this next date will be ’91111′ .

          What is also interesting is that this week the downgrading of USA had begun on Obama birthday.

          • It is better to be ‘tuned in ‘to the current events as they unfold so as to seek a privileged position of awareness and experience and it should be easier to listen as it unfolds. In that way you learn more and perhaps get an advantage .Many world leaders seek astrology experts in times of difficulty to highten their awareness and proper decision making.

            For Sarko and Berlusconi they cannot live without it .The Vatican have their own Jesuit Astrologers .There is even a scholar in Glenstal Abbey in Limerick who wrote a book on it .And of course the Gaelic Tongue is a language built from a deep rich culture all around astrology and is the word template for all english speaking astrologers as latin is for medicin.This is another proof that Atlantis ( Gaelic ) came originally from Western Africa and up along the Atlantic coast and not from the Celts that we are enforced upon in our own national education.

          • The Primacy of Primacy

            Currently we have a moment where political leaders discuss what is primacy .Is it Politics ? Is it The Markets ? Is it something else?

            I believe that the Political Leader that holds the Primacy of Politics now is Merkel.Her policies now are that she believes that the Primacy of Politics should dictate over the Primacy of The Markets .The Markets are very different to Polics .The Markets dictate ‘Change ‘ and that she is not in a position to cede control to because it de-thrones her leadership and the primacy of politics that she hold a tight rein on.She is not someone who likes ‘CHANGE’ ( she is a cancerian ).She is more at ease with an ‘emotional stability ‘ that has a past record.

            As we know The Markets are real ‘Change Makers’ and that is what markets are about .Markets do not hold to the past.She is therefore in conflict with The Common Realm ‘ she professes to govern.The common realm being all social behaviour of the citizens of europe between themselves and the world.Unless she Adapts and that will take someone/ something powerful to convince her, she will loose her credibility in Germany and in Europe .To do otherwise will amount to social /economic suicide .

            She may fail to adapt if her strong cancerian personality perseveres and may sucumb to the bossom of either a ‘Ubber Deutschland ‘ ie stand alone or a ‘Charlemaign Twin ‘ ie German / France/ Nederland Alliance.

            And to the Dungeon of new national currency the ‘A Periffs’ ie periferals , will go.

            So hold your meal on that !

      • I have a friend who predicts the future all the time adam and she is telling me that something big is on the horizon

        People pay to see her and her predictions about what is coming down the tracks in their lives are usually deadly accurate and she has a fine reputation

        This is possible because she is tuned into many dimensions and not just the one we think of as ‘reality’

        We are capable of flitting between dimensions but somewhere along the line we lost the ability to do so. Some people are descended from those who had access to ‘the knowledge’ and if they are born to parents who are both descendents it can reactivate the codes and give them access to the other dimensions. Something like that

        I was skeptical too until I saw the evidence for myself and I am glad I kept an open mind

  39. Nina Ogden

    People are ready to cast out of office the traitors who have gone along with raping the sovereignty and real wealth of our nations. Passing Glass-Steagall in the US will issue the bankruptcy papers to all those who are already bankrupt –the ECB. Wall St. City of London et alm by refusing to bailout the banksters gambling debts.
    The debt ceiling farce terrified the US Congress into giving up the power of Congress and the famous constitutional separation of powers, but the markets they were so scared of crashed anyway. Across the world the Indignant ones are gathering. On August 9 the Occupy Wall Street forces will fittingly meet at the Irish Potato Famine Memorial in Battery Park Manhatten. Those FDR called the forgotten man are gathering to take their dignity back.
    For an overview watch:

  40. Nina Ogden

    Now for a clear solution watch:

  41. adamabyss

    I digress: Good song from the Caribbean – Brown Skin…

    Colm, how you like that one?

  42. CitizenWhy

    The “markets” used to be primarily equity markets and, as far as debt is concerned, corporate and municipal + sovereign bonds. All very clear. There were also commodities and future markets, not very complicated.

    Now the markets are primarily debt markets, but not in the form of corporate bonds, municipal bonds, and sovereign bonds.

    Today’s markets are based on complex bonds/debts based on mathematical models of cash flows, leaving the so-called “investment banks” free to multiple debt way beyond the combined GDPs of all nations.

    The US has become completely dependent of jobs in the financial sector.

    None of this is sustainable. There are meltdowns (Greece, for instance) and slow leaks (nearly everyone else). Slow leaks eventually expand into big leaks.

    But there are positive developments:

    1. A 21 year old US design student has invented a tent coat. Water proof. Warm and dry in the day. Turns into a warm and dry sleeping bag at night. Works in severely cold weather. Hence sleeping outdoors becomes tolerable. People can retreat into the country side and grow food or hunt. Or use back yards of abandoned homes for gardens, chickens, etc.

    2. An Atlanta, US entrepreneur has turned shipping cars into fully equipped gardens (water based, hence able to work anywhere there is a water supply). climate controlled atmosphere, clear top. This makes “growing your own” even in cities simple and practical.

    3. An Australian has designed a recumbent bicycle you can grow in your backyard and shape into the finished form as it grows. Hence sustainable Transportation even with economic collapse collapse, oil scarcity.

    More inventions like these and we can live through a cashless society. True or not true?

  43. CitizenWhy

    Bear in mind that the US Federal Reserve Bank (central bank) has distributed over $14 trillion to banks worldwide. This figure is from an official audit conducted by an accounting branch of the US government.

    What has been the effect? Who knows?

  44. CitizenWhy

    Another positive development for surviving disaster are fake IDs from China. With these easy to obtain, excellent quality fake IDs you can walk away from your present life, get passports, start anew, etc.

  45. S&P has downgraded US to AA+

    Welcome to the world debt lifting championships:

    PIIGS already eliminated

    Italy/France/Spain up next week

    US, a previous favorite for winner coming under pressure

    A certain unknown and highly reclusive contender, Mr RotChild expected to make a late run to scoop the title, but will take a loss.

    Merkel and Wren back from holidays, Titanic Kenny on a holiday cruise?

    • Gege Le Beau

      Have to say, although I was aware of the warning, I thought US political and economic power would see this downgrade averted.

      But then the ratings agencies give triple AAA or slighly below that to leading banks before they collapsed in 2008.

      But interesting times, will be tougher to avoid a second recession, the impact on the world economy is so obvious it hardly needs stating, good luck to those who are trying to reinflate the Irish property market, hopefully it will see the end of that, bring on the crash so houses can become affordable homes.

  46. Stage One G20 or G7 should convene a global bankruptcy hearing to resolve the debt crisis, decide on what can/should be paid as part of a global bankruptcy settlement ; Stage Two, a renewed Glass Steagal with lending rules eliminating casino debt capitalism and currency flotations based on debt; Stage Three, movement towards a properly regulated world currency with elimination of private banking at its core and the establishment of global financial banking rules; Stage Four, elimination of private banks with a world currency supported by a new public banking model, ‘nb state owned banks’; Stage 5, the creation of democratic models for the regulation and development of World Banking, democratic global participation dedicated to the preservation of the planet and advancement of civilisation; Stage 6, a global regulatory think tank to advance the above development model; Stage 7, fire Titanic Enda FG/ILP out of government asap with their support of banking heist of Irish taxpayers.

    Cannot do the above straight away. So, all the above gets divided into two stages. Stage A: A world greenback system based on gold could be setup immediately and governments could be issued bonds based on this triple AAA system as they gradually convert across; Stage B: new Glass Steagal

    Ending of Glass Steagal and contagion of world banking by rigged market, debt capitalism has us where we are.

    We are in Homer’s Springfield with the hidden debt they concealed away in the mines now polluting the water supply and coming out of the golf courses and city streets in a volcano.

    Time for a fight back:)

    • Nina Ogden

      Yes Colm, Time to fight back and the potent instrument is the restoration of Glass-Steagall.
      The US Congress, in a breathless farce signed its’ Constitutional rights away and allowed a SUPERCONGRESS- automatic trigger to be enacted. This was a Coup more final than tanks and guns.A sizable number of both Republicans and Democrats voted against what Rep. Emmanuel Cleaver called, “a sugar coated satan sandwhich.” The traitors sighed a sigh of relief— for two days—then voila-DOWNGRADE.
      We say crush the rating agencies as the Italian government has begun to do. Argentina is moving in the same direction.

      • Hi Nina,

        May I take opportunity to distance myself from the horrific Larouchepac movement in the USA.

        I’m against right wing fascist cults of any kind.

        I may have a view on Glass Steagal you find empathy with, but I’m up there with Stieg Larsson and those who actively campaign against such groups.

        Larouche is too close to the dangerous political right in the USA:

        I’m more Abraham Lincoln than LaRouche:)

        “”LaRouche was a perennial presidential candidate from 1976 to 2004, running once for his own U.S. Labor Party and campaigning seven times for the Democratic Party nomination, though he failed to attract appreciable electoral support. He was sentenced to 15 years’ imprisonment in 1988 for conspiracy to commit mail fraud and tax code violations, but continued his political activities from behind bars until his release in 1994 on parole. Ramsey Clark, his chief appellate attorney and a former U.S. Attorney General, argued that LaRouche was denied a fair trial but the Court of Appeals unanimously rejected the appeal.[2]
        Members of the LaRouche movement see LaRouche as a political leader in the tradition of Franklin D. Roosevelt. Other commentators, including The Washington Post and The New York Times, have described him over the years as a conspiracy theorist, fascist, and anti-Semite, and have characterized his movement as a cult.[3] Norman Bailey, formerly with the National Security Council, described LaRouche’s staff in 1984 as one of the best private intelligence services in the world, while the Heritage Foundation, a conservative think tank, wrote that he leads “what may well be one of the strangest political groups in American history.”[4]”


        “According to The Los Angeles Times, LaRouche established ties with the Ku Klux Klan and the Liberty Lobby in 1974.[42] Frank Donner and Randall Rothenberg wrote that he made successful overtures to the Liberty Lobby and George Wallace’s American Independent Party, adding that the “racist” policies of LaRouche’s U.S. Labor Party endeared it to members of the Ku Klux Klan.[43] Gregory Rose, a former chief of counter-intelligence for LaRouche who became an FBI informant in 1973, said the contacts with the Liberty Lobby were extensive. George and Wilcox say that while the contact is often used to imply “‘links’ and ‘ties’ between LaRouche and the extreme right”, it was in fact transient and marked by mutual suspicion. The Liberty Lobby pronounced itself disillusioned with LaRouche’s views in 1981, because of what they described as his softness on “the major Zionist groups”. According to George and Wilcox, American neo-Nazi leaders expressed suspicion over the number of Jews and members of other minority groups in his organization, and did not consider LaRouche an ally.[44]
        Howard Blum wrote in The New York Times that, from 1976 onwards, party members sent reports to the FBI and local police on members of left-wing organizations. In 1977, he wrote, commercial reports on U.S. anti-apartheid groups were prepared by LaRouche members for the South African government; student dissidents were reported to the Shah of Iran’s Savak secret police; and the anti-nuclear movement was investigated on behalf of power companies. By the late 1970s, members were exchanging almost daily information with Roy Frankhouser, who called himself the Grand Dragon of the Ku Klux Klan in Pennsylvania, and who had been accused of being a member of the American Nazi Party.[45]”

        Put me on your list as a Larouche non sympathiser:)

        It’s very worrisome the political instability brought about by the current assault by financial debt casino bank socialism against democracies and the welfare states they seek to promote, is also at risk from the far right made up of Tea Party and cults such as Larouche who exploit hate and ignorance.

        • Nina Ogden

          Hi Colm,
          I’m sorry you get your opinions on from Wikipedia, which on most controversial issues is slanted.LaRouche has been called right wing and left wingm communist and fascist. Why do you think that is.
          You’re generally a smart guy so you should be able to easily see that someone who supports Franklin Delano Roosevelt’s Glass-Steagall Act, couldn’t possibly be a right winger. And someone who talks about the model of Abraham Lincoln’s national improvements which brought about key breakthroughs made for the U,S. and imitated throughout the world, couldn’t be a right winger. And just to get personal, someone who devoted their teenage years to the civil right movement, couldn’t possibly be a right wing fascist. In case you haven’t guessed yet, that someone would be me.
          Olease take a look at this video devoted to FDR called 1932 and let me know what you think.


  47. Incident

    The stage is now virtually set for the next World War and the Tea Party are just the people to get it going.

    You may well laugh at the notion but stop for a moment and look at where things stand.

    1)The imminent demise of the Obama administration.
    2)The rapid rise in Christian Fundamentalist Organisations (ie The Tea Party)
    3)The imminent death of Capitalism
    4)The fact that China owns the globe
    5)The utter absence of leadership in the Western Hemisphere.

    The trigger happy Tea Party with its extreme right stance that is void of intelligent and coherent policies, will at a moments notice fire the first missile if it perceives that the U.S. of A. is on the verge of collapse.

    • Juanjo R

      you are way behind it…the christian fundamentalists have been actively looking for a war in the middle east in order to be ‘raptured’…

      Read all about it here…

      • CitizenWhy

        You are absolutely correct about the US Christian fundamentalist wanting a war between Israel and the Arabs in order to usher in the Tribulation (Armegeddon) in which true Christians will be raptured, carried immediately body and soul up into heaven while the rest of the world spins in torture and pain. They get quite enthusiastic about that torture and pain.

        Some of the leading Republican contenders for the Presidency have openly espoused the war, the turbulence, the rapture and the torture. George Bush stated that he believed in it, perhaps insincerely, as a vote getter among his “base.” The way Ronald Reagan was “opposed” to abortion but never did anything against it.

        Many of the Fundamentalist Christians believe that the Second Coming of Christ and the Rapture cannot take place until the Jewish Temple is restored in Jerusalem. The problem: the Temple Mount is now a Muslim mosque (Dome of the Rock), the third holiest mosque in Islam.

        I have been told by an Israeli person I know, who may not be trustworthy, that Christians eager to start the final war have been arrested planting bombs to blow up the Dome of the Rock mosque on the Temple Mount in Jerusalem. Hushed up, of course.

        Many of the Tea Partiers are not fundamentalist Christians, or particularly religious, They just want to restore laissez-faire capitalism, do away with all regulation (including environmental), eliminate union rights, and restrict the vote so that conservatives dominate. Of course they play up to fundamentalist Christians, many of whom are into small business and want to see federal regulation of any business eliminated.

  48. piombo

    I came across this blog over a couple of years ago when one of my family starting to mention this David McWilliams guy. I visit Ireland once a month as our Group headquarters is based there, although I’ve lived now for almost thirteen years in Italy.

    • Juanjo R

      Se si vive in Italia perché non attenzione ai vostri affari? Perché si passa il tempo qui? Vi piace a gongolare e predicare?

      There are two parties in creating debts – the BORROWER and the LENDER – both have responsibility in the matter. We had a clear sizeable property bubble underway in the early to mid noughties we were transparent and didn’t fudge any figures ( unlike Greece for instance ) yet LENDERS kept throwing more and more money into the PRIVATE development ponzi scheme here hoping the government / Euro zone – ECB would underwrite it and guarantee THEIR returns no matter how stupidly they behaved.

      I’d liken this to going to a casino and expecting the casino will pay out win or lose.

      I as an Irish citizen living here during that period that didn’t buy a property I owe these irresponsible LENDERS nothing for their PRIVATE dealings.

      Lets see how you feel when you and yours end up coughing up for Italian Bank losses for dodgy Swiss Franc loans to eastern Europe eh?

      • piombo

        Pur vivendo In Italia ho ogni buon diritto di interessarmi dell’Irlanda essendo Irlandese e avendo la sede della mia società li!
        Although I live in Italy I have very right to involve myself in matters at home as I am an Irishmand and have chosen to headquarter my company there!
        I pay personal and corporate taxes in Ireland, Italy, UK & Germany.
        I take no pleasure in my own country sufferings. As I’ve said here before some of my own family members are going through hell because of the crisis and I wish that we Irish did not have to suffer as we are doing.
        I follow this forum due to the heterodoxy of the contributions and as my brother says McWilliams has called it right for the last six/seven years.
        I also enjoy the forum because people can be serious, weird and funny in what they write.
        Have a pleasant Sunday e arrivederci!

        • Juanjo R

          Grazie, e lo stesso per voi e la vostra famiglia.

          I’d recommend Morgan Kelly’s small number of articles in the IT ( 2 or 3 ) if you are interested in someone who has called it correctly to date and whose current predictions could well have serious ramifications for your cross-Europe based business.
          Its something like DMcW’s point od view distilled into a single strong shot.


  49. Interesting, while not 100% certain at the beginning, now I am more than happy with my decision not to comment on this blog here anymore, for many reasons, but one being the observation that ultra radical right wing cult propaganda posted on this blog goes unnoticed, is not commented on, and not for the first time I might add.

    Thanks for hospitality.


    • Is anyone aware of such ultra radical right wing cult propaganda on this blog?

      I am missing something?

      • Juanjo R

        yeah Paul – seriously – did you not notice that scandanavian guy called ‘andersbb’ who used to post here all the time?…you must emember…some stuff about what you could do with a room full of farm fertilliser and how theres nothing but kebabs to eat in downtown Olso now at 3AM after a night out on the beer?

        Ring a bell?

        • No Juanjo but thanks for replying all the same.
          I’ve never heard of ‘andersbb’.

          I’ve lost interest in a lot of shit and rarely even watch the news now. No point

          I didn’t cause the world to end up like this, can’t change it and just want to get by. Can’t fucking stand listening to it any more man

          All I know is that Georg is someone worth listening to and when he raises an alarm bell I tend to listen

          Is someone going to fill me in with more info on what is going on here please? Just say it!

        • Juanjo R

          Paul – my post was a joke. I thought the references were obvious. Oslo for example?

          I’ve seen no ultra right wing propaganda here what have seen is people jumping in the back of valid points making unsuported odd statements / throwing red herrings in here and very frequently tarring lots of things with one brush.

          Its the norm in here.

    • dwalsh

      @ George R. Baumann

      Surely you support freedom of speech?
      Your observation is correct but it is an extremely dodgy objection and reason not to comment.

    • @ Georg,

      Appears you’ve chosen a silence, some would say was a national trait at one time, which condoned “ultra radical right wing cult propaganda”

      Surely its better to speak out about it. If more did this, what happened in Oslo, may not have happened.

      Bye again:)

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