September 26, 2011

Till French debt do us part

Posted in Sunday Business Post · 233 comments ·

Over the past few weeks, one of the most perplexing positions taken by many of Ireland’s so-called ‘sensible’ commentators is that the euro is not workable in its present form, but that breaking from it would be inconceivable.

But where does that conundrum leave us? It means we are in a currency union which is tearing itself apart from the inside, yet is apparently unfixable. But this is plain silly. If the thing is broken, fix it; if it is unfixable, break it up and start afresh. The problem is that no one wants to pay the price of fixing the euro. No one except the ‘serial integrationists’ in the elites of Europe wants closer political or fiscal integration. Integration’s popular rejectionwas evidenced by the past three failed referendums here, in Holland and in France. So Europe is stuck.

Maybe because the generation that remembers the SecondWorldWar is now dying out, there is now no leader who can muster up a transnational sense of European solidarity,which is needed to drive the project forward.Or maybe it is because we have reached the limits of European integration and, without a credible external threat, there is no sense of urgency.

One thing is clear: Europe, unlike the US, can’t react as one with sufficient dexterity and force to address the major financial problems that are now emerging. The crisis has migrated fromthe much caricatured ‘Pigs’ to the haughty aristocrats at the core. France and French banks are now the battleground and, having worked for BNP/Paribas, I know how French banks are regarded in Paris as part and parcel of the French state’s prestige.

However, I also understand, from the same experience, how wedded the French establishment is to the status quo. In fact, it is one of the few countries where indignation can suffice as a policy and where concerns about prestige and ‘losing face’ can dominate, leading to stupid policies being followed long after they have outlived any usefulness. If Europe is putting all its faith in the ability of the French financial establishment to get it right,we are in big trouble.They always make a mess of things.French elite thinking on economics hasn’t changed much since the gold standard.

During the 1920s and 1930s, the French central bank hoarded gold, rather than injecting money into its ailing economy. It built up huge amounts of this useless commodity, believing that France was symbolically strong even though its economy remained manifestly weak.This behaviour can be put down to the narcissism of insecure prestige. Now we are at crossroads.Let’s be in no doubt: the next phase of this crisis is a run on the French banking system. In this regard, the developments in the Irish banking system where a problemof illiquiditymorphed quickly into a problem of insolvency may prove to be the blueprint.For France in the autumn of 2011, read Ireland in autumn 2009.

Clearly there are differences.The French banking system is not as dependenton foreign liquidity as ourswas, so the consequent deleveraging might not have to be as severe, but the pattern is similar. The first phase is the one where certain banks won’t lend to French banks because they are worried that the French have too muchGreek assets on their books.This forces up interbank rates.

The next phase is when large depositors get jittery.For example, Siemens reportedly withdrew e500 million last week fromone largeFrench bank and now has a total of e6 billion deposited with the ECB.The large depositor is not being ‘paid’ forFrenchbank risk, sowhy would it bother leaving its money there? The third phase is the denial phase, where the chief executives of the banks come out and say there is no need for fresh capital. As their noses strangely get bigger, the market sells French assets.The boss of BNP was out lastFriday wrapping himself in the tricolour and, though stopping short of singing La Marseillaise at Place de la Republique, he waxed indignant about attacks on France.

Meanwhile, the business class lounges of Air France at Charles deGaulle airport were full of French bankers flying to the Middle East, hoping that years of pan- Arabism might lead to a fat cheque from the oil-rich gulf.Put simply,the ‘chiens sur les rues’ know there is a problem and the elites’ fear is that the sans-culottes will twig it.

The liquidity issue should be containable by the ECB;a fter all, that is what a central bank should do in a crisis ^ it should provide liquidity.But all the while,the share capital of the bank is being wiped out as share prices collapse. Equally, the bonds of the banks tumble and large depositors move money out. In time, the average Jean Claude and Claudine begin to get worried and they take their money out too because, after all, the French government only a few months back said there was nothing toworry about.Now they are spooked.

In short order, a remote liquidity problemturns into a real insolvency catastrophe. Ultimately, the French government will need to inject capital into its banking system just as the Irish did.But where will it get the cash? Does anyone know howbig the hole in the banks is? After years of saying all was okay, can anyone trust anyone anymore?

So the banks will have to be ‘overcapitalised’. But where does the money come from? It will have to come fromthe French treasury. So the French government will have to set aside billions to cover bank losses. But thismeans the sovereign debt market becomes overloaded and the banking crisis contaminates the ‘sovereign’. If this happens, French bond yields decouple from Germany and then France finds itself in the same position as Italy and Spain.By this stage Greece has been give yet another e8 billion at the very last moment by the EU/ECB/IMF troika,but the crisis spreads everywhere.

German bond yields collapse as investors flock to German assets and the German newspapers side with those who say Germany should not pay for everyone. ‘France should pay’makes the headlines in Germany again for the first time in many years. Already, the leading indicators for the eurozone point downwards.This process is starting with manufacturing orders and the opinions of purchasing managers showing rapid reversals.

Now is this a currency union that can work? I don’t think so.Andwhat is the alternative?Well, as this column has argued again and again for many years, there has never been a recovery froma recession like ours without a huge drop in the value of the currency.Without this, austerity fails. But we are told this logical step is impossible, sowhat are we left with?We are left with the option of no other option at all.

Europe’s attitude now seems dreadfully reminiscent of the gold standard in the 1930s when central bankers made mistake after mistake and crushed the real economy, leading to social implosion.The world is on the verge of anotherGreat Depression.TheUS doesn’t have the resources to drag us out,China doesn’t want to and Europe hasboxed itself inover silly budgetary rules. All the while,money is fleeing, credit is tightening and unemployment rising.This is not a growth strategy;i t is debt strategy. And debt without growth leads to mass default ^ and what happens then to the euro?

David McWilliams has devised and will teach a new economics diploma, Economics Without Boundaries, from October 11. See

  1. breltub

    Recession 3 years and counting. Neither banks nor politicians are any use in fixing their own mess. You can only depend on yourself and protect your own assets and family from their exploitive behaviour.

    Perhaps instead of focussing on what they should do to rectify the situation, we should take it that they cannot and will not and we should instead focus on what we can do ourselves to be best positioned when they eventually reach the holy grail of f**k ups!

    It would appear we will not see a solution until the last banker is hung with the guts of the last politician…


    Comment from Yanis Varoufakis’s blog.

    Georg R. Baumann
    September 26, 2011

    Very interesting Monday morning read, thanks for that! I would like to contribute a few thoughts of my own.

    I never saw the modest proposal as a solution to cure the ills of a chronic, perhaps terminal patient, but rather as a very short term solution, immediate pain management if you will. — Constant pain is a strange thing, you get used to it to a degree, but it does change the psyche, now substitute psyche with social fabric and it becomes obvious in my view that these ‘pain inducing forces’ are about to change exactly this thin and fragile layer of social fabric! -

    C. Flowers made very important points in my view, and I would encourage the diligent observer of the historical events unfolding to keep a close eye on the mining and production of raw materials, this is were one of the main powers in this game is located, and the increased power concentration in the past few years is substantial. I would like to remind to Glencore as a striking example in this context.

    In the past few weeks I was watching and reading material from the roaring twenties, a time that was also ‘credit financed’ to be precise, to refresh my own memory on the events. From the Dawes-Plan to the Young-Plan, the Hoover Moratorium, Lausanne, Bruening and so on, one thing stood out for me all the time and sadly it confirms my own observations.

    The loss of democracy!

    As flawed and abused the current european democratic foundation may be, it is the only one we have.

    The crash of 24th October 1929 was direct result of surplus capacities in productivity and equally credit financed mass speculation. The following four years of recession caused a massive credit crunch.

    The economical beneficiaries of this crisis were the major banks, or in our sound bites world of today, too big too fail got bigger. Banks at this time were intrinsically connected to the success of industrial production. When one of the big Industrialists came into troubled water, it’s ripples could bring down a Bank as happened with Danatbank in 1931.

    The election in September 1930 and the crash of Austria’s Credit Institution, Louis Rothschild, the largest Bank in central Europe at this time, triggered the collapse and capital flight.

    It was Bruening who introduced Banking Regulation, it was enshrined in the KWG (Kreditwesensgesetz) law in 1934, and perhaps astonishing to some readers, only with Basel II in 2007, they attempted to strengthen Regulation.

    It is Basel III that makes me think that we probably will witness the same outcome that history has taught us, the economical winners of the banking crisis 1931 were, surprise, surprise, the Banks! The political winners, the Nazi’s.

    So perhaps this is a good time to state the obvious and to take the liberty to address some fellow german readers who may have stumbled across Yanis’s blog here. Your money that is proposed as ‘bail-out’ does not ever reach Greece, Ireland or other peripheral EU countries in distress, the destinations are German and French banks that created losses in the ‘parasitic economy’, not the real economy.

    The real economy’s output was something in the region of 50 trillion globally. Parasitic economy is estimated around 10 times as high, and I also call it parasitic (Roland Benedikter — Social Finanance, Social banking) as it’s losses are used to suck capital from the first the real economy, simple as that. Then we have the murky waters of currency exchange (Forex), here the figures are even more jaw dropping.

    According to BIS ( Bank for International Settlement) Triennial Central Bank Survey from 09/2010 the global foreign exchange market average daily turnover was around 4 Trillion!

    This would be a good time now to say ‘I rest my case’, but the insight alone that the centuries old pathological greed of Bankers, rich and super rich elitist families is a reality, does not explain the structures that allow them to repeat history at this point in time.

    If we look at the foggy and insufficient plan that Basel III consists of, then it is here that we need to ask the hard questions and ideally assign political accountability as well.

    If we are to strive for a EU wide fiscal consolidation in one way or the other, then it is de facto and morally wrong to deliberately neglect the system inherent regulatory problems that allowed for a socialisation of private losses in the first place.


  3. NeilW

    The only other option is a countrywide cut in wages for everybody by X% – which is what a currency devaluation essentially amounts to.

    Prices and debt then fall to where they need to be given the new income level.

    But organising that politically would cause a riot.

    • But we’ll never be able to compete with a chinese slave labour force…but soon we will be at their level.

    • breltub

      That’s a great idea! We should all take a pay cut, and who exactly benefits from this?

      How does the debt, still denominated in Euros, fall?

      Shall we just roll that Debt into NAMA as well, and pull on the green jersey and take one for the team and pay higher taxes on our smaller wages to dig our way out of this recession to pay bondholders!

  4. Alf

    The answer is known, we are just waiting for them to see it. Just because there is a delay doesn’t mean the answer is wrong. Maybe we have the dumbest people at the top, I don’t know but the debt is unpayable. There is no logic to lending more to a bankrupt pay off old debt at a higher interest rate. It’s mindless nonsense. The stalemate we see is simply idiot politicians running up against the results of their own policies. Default is not just inevitable, it has already happened. The are still giving CPR to a corpse.

    • The are still giving CPR to a corpse.

      All banks in Europe, I repeat, all banks are de facto bankrupt!

    • Alf,
      they are not mindless or dumb politicians. They are just being run by very clever bankers and know exactly where they are taking us.

      Merkel is from the old communist east Germany, something to remember as we enter the new Soviet.

      • 33square


        bitcoin/google wallet/nfc is the synthesis.

        antithesis is the “financial crisis”.

        what is the thesis?.

      • Deco

        Merkel lived through a collapse and probably things that after a collapse, things get better.

        We in the free West, are saturated with advertising and “infotainment” to the point that we assume that a collapse of the structure is something like an acopolytic scene in a Hollywood production.

        Actually, Merkel is right. We would have survived the termination of Anglo, INBS, and the EBS.

  5. El Duderino

    What happened to spell check David! Made for a difficult read!

  6. JHShanahan

    This is a developing story and one that bears watching closely. Stephanie Flanders, the BBC’s economics editor, has written a piece on this subject, published this morning. See for details. The EU single-currency union is being whip-sawed by the disparate politics of its members and the consequences, especially for smaller members such as Ireland, are very significant.

  7. Praetorian

    The French may well get their mega-Nama, with €1-2 trillion to manage the crisis in the eurozone, Cameron, Geithner et al have put Sarkozy on notice, the French presidency of the EU has to see the issue dealt with regardless of domestic political considerations, no doubt the Chinese are pushing as well for some kind of resolution as the instability is badly impacting global markets. Probably not fair to single out the French, easily the most indecisive leadership in Europe in the post-war era. The tensions and rivalaries at the heart of the so called European project which were literally papered over with money are now coming to the fore, the ‘union’ in European Union is under threat and if it gets bad enough countries like Germany made decide to act unilaterally. Headlines indicate that some ring fencing of the problems in Ireland, Greece and Portugal may occur, but the big two outside that, Italy and Spain may drag the EU further down, let us hope we see some bold action and not yet another plaster on a life threatening wound.

    • Praetorian

      EU given six weeks to protect itself against ‘inevitable Greek default’

      European Union governments will spend the next six weeks building a financial firewall to protect their fragile banking systems against what is now seen as an inevitable Greek default.

      G20 sources said that up to 50% was likely to be wiped from the face value of Greece’s €350bn debt — but not until Europe had put into place a war chest to prevent the contagion spreading.

      More money will be disbursed by the International Monetary Fund and the EU next month to keep the Greek government afloat, but this is seen as a short-term fix while Europe’s leaders beef up the eurozone bailout fund, the European Financial Stability Facility.


    “The great uncertainty of all data in war is a peculiar difficulty, because all action must, to a certain extent, be planned in a mere twilight, which in addition not infrequently – like the effect of a fog or moonlight – gives to things exaggerated dimensions and unnatural appearance.”[4]

    We are in the midst of a financial war. German banks mistrust the French banks and a contagion of mistrust is spreading across the EMU fed by the logic in DmcW thought provoking article.

    What do we need, from above link: “(War is an area of uncertainty; three quarters of the things on which all action in War is based on are lying in a fog of uncertainty to a greater or lesser extent. The first thing (needed) here is a fine, piercing mind, to feel the truth with the measure of its judgment)”

    At the moment, we are at the stage of bluff and bluster and Confidence building and smoke and mirrors. But time is quickly running out.

    Three questions have not been addressed: a) what the losses are; b) who has them on their books; who and by what means will the losses be paid for.

    As Georg states above, “The crash of 24th October 1929 was direct result of surplus capacities in productivity and equally credit financed mass speculation. The following four years of recession caused a massive credit crunch.”

    We’ve done the credit fueled mass speculation in Europe and the PIIGS have put their hands up and called them.

    Europe’s elite are in the same danger the Irish elite were in a short number of years ago when they were conned with false information and lies.

    The French and European banks are up to their necks in debt exposed to the losses above.

    These vampire banking elite have the people of Europe in their sights to pay for these losses.

    Other losses have not been called yet, exposure of French and German banks to peripheral losses, losses on the Forex market, mentioned also by Georg above, plus
    the 2008 losses in subprime financial instruments that UK, US have come clean on, but French and German banks have been shy to own up to.

    Its time to act against the financial industry on behalf of the people of europe. Will we get this responsible leadership from EMU politicians, judging from our own lot and messages coming out of the EMU at the moment, No!

    Anyways, thanks for DmcW’s blog and the work of other sources and journalists helping sift through the civic amenity messy dump of the EMU at the moment, to look for gems of truth.

    One final point, sorry for the blah blah, but EMU problems are the tip of the iceberg. The dollar, because of the corrosive policies going back nearly 30 years now, is sitting on a vast pileup of debt fuelled mess.

    Do we fix the mess and make it worse; or, do we deal with the mess itself and eradicate it?

  9. Peter R.

    Put the stones in a row:

    29.09 – the Bundestag is due to vote on EFSF.

    01.10 – the short-selling ban on some European Financial Institution is due to end (incl. French banks).

    So what will happen on 03.10?

    How long before the Germans decide to go back on the DEM?

    This is does not look good ….

  10. piombo

    Good afternoon all,
    Accurate sentiments on French establishment behaviour. Although it is not only the Greek exposure but Italian public debt which is causing even more concern.
    That said, let us be in no doubt that the solution is being trashed out as we speak and the market has already cogged it this morning.
    We will have the €2 trillion recapitalisation (five times the EFSF “equity”) achieved through a coordinated IMF/BOE/BOC/ECB liquidity injection under the form of 30year G20 bonds.
    This “Brady-bond” style injection will circumvent the German reservations and allow claims that these are super-national bonds and not a specific to any one area.
    The downside of this for Ireland, Greece and Portugal is that this intervention will allow the IMF/ECB/EU to dictate unilaterally any and all terms for access to the new superfund.
    Ireland, Greece and Portugal up to now all possessed the implicit but real advantage of threatening to blow the Euro project to Kingdom come with a default. Simply, this will not be possible once the €2 trillion facility is put in place.
    I would venture that debt-relief will be granted to these three countries in exchange for an alignment of their internal economies to the Franco-German models as follows:
    Greek restructuring in exchange for pension reforms and public sector reductions;
    Portuguese retsrructuring in exchange for public sector reductions and privatisation of public utilities;
    Irish restructuriing in exchange for Corporation tax alignment to at least 20%, social welfare cuts, public sector pay cuts and privatisation of ESB and Oil/Gas reserves

    • Praetorian


      • Malcolm McClure

        Agreed, perceptive review by Piombo.
        The only alternative for Ireland is return to the Sterling zone. We might get less onerous terms there than from IMF/ECB/EU.
        Ben Broadbent of BoE monetary policy committee gave a very level headed resumé of the UK’s situation on Reuters this morning.

        • uchrisn

          Malcom I reckon a currency regime similar to that of signapore and sweden would be better. Basically our currency value would be linked to a basket of currencies, kept secret and with a higher percentage of our major trading partners currencies.

          • Malcolm McClure

            uchrisn: Please explain. I don’t see how currency value would be linked to a basket of currencies, kept secret. Surely any currency’s value depends on the perception of the exchange market?
            Listening to Dunphy show on Newstalk yesterday, it is clear that McGuiness’s entry to the presidential race has caused an existential crisis amongst the chattering classes. They are starting to turn over the state’s foundation stones and they don’t seem to like what they are finding underneath. John Waters seems to be living with shattered dreams and searching for a way forward.
            Time to revisit the idea of rejoining the Commonwealth? Establish a Commonwealth Currency with UK Canada and Australia?

          • Praetorian

            @ Malcolm, can we have a Republic dominated by neither some faltering domestic elite that has bankrputed the nation or some ‘club’ of nations with imperial antecedents. Let us stand on our own two feet, it is a wonderful time for new energies to emerge, the centre can no longer hold, please let us not bury long repressed ambition under some monolithic force, this is the people’s time, they were kept down long enough. Norris and McGuinness have put a cat among the Irish pigeons who have shat all over the people, I am thankful for their entry, they are shaking things up further and exposing the rotten, conservative core. The gap between official Ireland and the people of Ireland is there for all those who wish to open their eyes.

          • Malcolm McClure

            Praetorian: You obviously have a deep understanding of the French republic and I have gained better insight to a country I don’t know from your contributions today, particularly your 3:42 piece.

            In view of the chaos and anti-clericalism that attended the aftermath of the French revolution, I have always wondered how Ireland managed to combine its own Rebublican ideals with an avid obesiance to the Church for so much of its short history.

            In spite of your reservations about the dichotomy of class, secrecy and censorship in France and Ireland you still seem convinced that the best way to organize nation states is with a Republican constitution. Please explain.

          • Praetorian

            @ Malcolm – there are many reasonable ways for a country to develop politically, soci-economically, after something of an impetuous youth, I have the humility to say that I am not the Oracle at Delphi, in fact, I relish the council of wiser, more informed and more intelligent people than me, it is how I learn the best. I am a Francophone, I lived in France (in the provinces and in Paris), I have been following events there for 20 years (as closely as one can), a student of history with a specialisation in European, primarily French history etc

            There is the ideal of a Republic and all that entails and there is what emerged after the French Revolution (the brutal terror, a reaction to the Ancien Regime). There are countries like Ireland and I daresay France who play lipservice to what it is to be a Republic, have it printed on their offical paper and so on. There are those who use the cloak of Republican ideals for their own corrupt, make marches to cemetaries and attempt to claim the patriotic dead as their own, exclusive, giving them legitimacy and then return to the pub after solemn speeches to do grubby deals, money making schemes while selling out the Republic (for it is often a journey, not some precise end point, towards a more meritocratic state with equality in distribution, proper rights and working conditions where the citizen is central not on the periphery as we see in Eire (an end point speaks of complacency).

            Ireland is no Republic, ot is barely a democracy in any meaningful sense, it is a country that never really got off the ground for some of the reasons you mention, it was cut off at the pass, for a truly awakened and empowered citizenry would be a threat to the power elite, as it with a lot of things, it was fudged in Ireland, we traded one group of masters for a home grown bunch, with working families crammed into tenements when land was plentiful ‘en les environs’, I suspect the country hills in my home city mocked the city folk in their unhygenic conditions, more space for cows than for people, people whose time and labour was exploited so others could enjoy the feast at the top table and land which today is traded in quiet rooms by the connected few to the detriment of the many. That is no Republic.

            I hold out that the Republic that was put on hold, the Republic that was lost in France in a sea of blood may yet still emerge (they are on their 5th Republic (much happened in the previous 4), but the French people have not given up, the system failed time and again, but each time they restarted, we on the other hand are on our first Republic and as you know, there have been calls a new one, some say a 2nd others like Michael D Higgins talk of revitalising the original Republic, more still point to Wolfe Tone’s Republican ideals, at least this debate is surfacing now having been anesthetized, put off by the consumerism and greed of the Celtic Tiger years, an economy without a society, a parliament without a connection to the people.

            There are many who seek a Republic with access to health care on the basis of need not abiliy to pay, access to education, access to housing without having to prostitute yourself to the ‘market’, an end to exploitation at the hands of a few moneymen who by dint of history and circumstance have a strangle hold in certain so called ‘professions’, a Republic based on merit not on ‘who you know’, I have lost count of the number of times people have challenged such basic rights as ‘idealism’ others totally defeated say ‘it will never happen’, regardless it is important to keep such thoughts alive least the light goes out fully. ‘Equalite, Fraternite, Liberte’ simply but beautifully put, 3 words which sum up the desire of the oppressed.

            Instead of running from one group to another, British Empire to EU to Commonwealth, lets slow it down and for once use this opportunity when the governing elite have been brought to their knees in politcs, business and the church hierarchy to try to find out what we are really about as a ‘nation’, are we just a collection of people who happen to find themselves on a large rock on the periphery of the European continent, or is there something there, in history, culture, literature, some societal connection that binds us as a people?

          • Malcolm McClure

            Praetorian: Your criticism of Ireland’s Republic credentials provides plenty of food for thought and hopefully will stimulate plenty of responses that are equally constructive.
            If I may add another element to the discussion, could we also consider the function of a president in a proper republic. In France and USA, Sarkozy and Obama are the principal movers and shakers. In Ireland the president is a ribbon-cutter with hands firmly tied by the constitution. The post is obviously based on the Westminster model with the head of state divorced from politics.

            Why would action man McGuinness want such a job? Does he see himself as King of Ireland?

          • Praetorian

            @ Malcolm, the role of the president in the US and France is interesting, in a properly functioning democracy, a system of checks and balances prevents too much power being concentrated in the executive and too little in the Congress/Senate and vice versa. However, since the 1970s, corporate power has grown to astonishing levels, certainly beyond what the founding fathers ever imagined while Eisenhower warned against such a build up of power in that famous final speech, but it has taken place and worse, was backed up by the recent US supreme court decision to allow unrestricted corporate financing of campaigns, so hey presto, you get political candidates with a ‘pro-business’ message.

            Seasoned commentators now point to a reduced US president, some say a puppet of big business who is compromised from the get go (next election likely to hit the $1 billion mark), terms in office have become fairly predictable in terms of policy with the odd bone thrown to the masses to keep them happy.

            The Irish system of largely symbolic presidents could and should be looked at, more importantly it is the type of person who gets elected, the Icelandic President sent their bank bailout to the people in the form of a referendum, which was rightly rejected, as posters have commented here, that didn’t happen in Ireland and for obvious reasons.

            The presidency can have a positive social role, the last two presidents have attempted to make it somewhat relevant, but it rarely if ever bites the hand that feeds it, so in essence, it comes back to the nature of the system and my earlier point, the failed Republic.

            I prefer the Irish system with Prime Minister, a cabinet of elected representatives (not appointees as you have in the US system), an American also remarked at the availability of our politicians, the fact you can visit a clinic and meet a minister but I guess our small population facilitates such a thing, but maybe it is something positive we overlook, some criticise it as the kind of clientalism that has ruined the system, there are pros and cons.

            The President is elected by the people and is there to serve the interests of the people, I personally think the NAMA/banking legislation should have been dealt with differently but when people are told they have to do this to save the country, what are you gonna do?

            The French Presidential terms are too long (was 7 reduced to 5 years a piece), so a two term president can be there for a decade which is excessive to me, 4 year terms are reasonable but in the US the first term is practically written off because as soon as you take office you are practically campaigning for the second term, and less prepared to take two many risks, although Obama did push healthcare reform which hasn’t worked out too well.

            Interesting to compare systems, maybe Citizenwhy can talk about the American system in more detail, bound to be more familiar with State v Federal system etc

          • CitizenWhy

            The American Presidency and American Politics

            The American Presidency was an office designed to replace the British monarch and the royal governors of the American colonies.

            The framers of the US Constitution came out of the parliamentary (vs monarchist) faction in England. They wanted a President who could run the government as bound by the Constitution and laws passed by Congress, but an elected President answerable to the Congress. In each of the colonies, before the War of Independence, the framers had an experience of a legislature most often at odds with the royally appointed governor, who tended to claim monarchist powers. In the New England and Virginia colonies the favorite term for government was Res Publica, translated as Commonwealth to avoid the word Republic, but everyone understood that the concept desired was a Republic. Saying Republic out loud would have been construed as rebellion against the king and his governors.

            The framers had negative experiences with the governors/executives, and did not want an overly powerful President. There were many who wanted George Washington to be crowned king, and even if not a king, referred to as His Majesty. Washington himself put a stop to this by saying that he would be addressed as Mr. President. Yet Washington was a federalist, the articulate group that wanted a strong central government, and their opinions prevailed in the adoption of the Constitution. Yet there was a strong reaction against the proposed Constitution until a Bill of Rights was added. This assuaged the fear of a government that would drift into monarchial powers.

            Once Washington had a law on his side he acted with extreme (but restrained in manner) authority. He deliberately led the 15.000 troops he mustered to put down a tax rebellion in western Pennsylvania (Shay’s Rebellion). There remained strong opposition to the federal government, especially among the Scotch-Irish in the hills and mountains. The Scotch-Irish (Protestants)cam out of the experience in Scotland and Ireland of a Steward monarchy that insisted on the divine right of kings. The Scotch-Irish, with a decentralized, republican church government, favored a parliamentary government, but wanted local government to prevail over a central government. But Washington was determined to establish the higher authority of the federal government, and he did.

            Until the election of Andrew Jackson (Scoth-Irish) the US government was in the hands of patricians who came from the parliamentary, squirearchy families of England. They did not want monarchy, but they also feared populist rule, and wanted a rule by educated men (from propertied families) who would ensure the rule of law. At Congregationalist Harvard, for instance, students were openly ranked by the wealth of their parents, not by their lineage.

            The Constitution under the patricians consisted of a House of Representatives with one third popularly elected every two years, and a Senate whose members were appointed by each state legislature. The government made treaties with various native tribes and, in accordance with the rule of law, intended to honor those treaties. When Andrew Johnson (from the frontier) was elected President he proceeded to violate those treaties as he pleased despite a unanimous decision by the Supreme Court that his actions were unconstitutional and must be stopped. he did as he pleased, with Congressional backing.

            Why this early history? Because certain tensions/contradictions emerged that still plague the US today. Racism. The belief that local government is supreme over the central government (the Confederate and Tea Party interpretation of the Constitution). Contempt between educated elites and business elites. These issues are tearing apart the US and almost making the federal government unable to function. Rendering the federal government powerless domestically and imperial abroad is the basic agenda of the American far right. That is what they mean by “honoring the Constitution.” As with the Bible they set up an absolutist, rigid interpretation that has no real basis in the wording of the Constitution and its development over the years (it was designed to be developed rather than replaced, as in France).

            Other problems with the US Constitution:

            1. Designed for an agrarian society, not an industrial society or a society dominated by finance capitalism. Adjustments have been made but its structure and laws do not in any restrict the politically subversive power of corporations.

            2. Lincoln finally redefined the role of the federal government by declaring, on the “sacred ground” of Gettysburg as republican in structure but democratic in mission, a government “of the people, by the people, for the people.” Not everyone agrees. In effect we now have a functioning Republic of the Propertied combined with some aspects of the welfare state (which the American right is determined to dismantle). They want to dismantle Social Democracy in Europe by enshrining “liberalization” (privatization) as the solution to every problem. The Republican leadership made a point to come to New York after 911 and declare the New york Stock Exchange as their “sacred ground,” a deliberate rebuke to Lincoln.

            3. For decades after the Civil war the federal government acted as the enforcer of laws that recognized property rights as supreme over labor rights and human rights. It tolerated the re-slavery of Afro-American through Jim Crow laws and a Southern prison system designed to imprison large numbers of blacks and rent them out as cheap labor to business owners and plantation owners. It put down labor strikes and tolerated violence against workers. The FDR revolution reversed this pro-property interpretation of the US Constitution (citing the stated purpose of the Constitution in its Preamble to be “to provide for the general welfare.

            4. During the Cold WEar all factions within the US united into a social contract that set out to prove that Capitalism/Democracy (they were equated) could provide far better material prosperity for its workers than could Communism/the USSR system. They were certainly proven right. During this period lowering the taxes on the rich could have the effect of their investing that money into business growth in the US. that’s why one of the first acts of Pres. John kennedy was to lower the taxes on the wealthy. This action worked, and produced a surplus for the federal government, as theory dictated.

            5. After the end of the Cold War this progressive social contract was disowned by the US business elites in favor of globalization and maximization of “shareholder value” and profits, and the promotion of a rigid meritocracy (you get what you work for and losers in the marketplace should not be rewarded). Shipping jobs abroad and sloughing off large numbers of US workers into chronic unemployment or underemployment became a moral virtue. Real earnings among the many went down and income inequality went up. It was relatively cheap to buy off Congress yet liberal legislation (in the US sense of social democratic) still was dominant.

            6. Finance capitalism came to dominate and that is what we have now. The liberals, from the northeast, where financial corporations are the major employers and dominate, shifted from economic concerns to social concerns. they could not afford to bite the hand that feeds them.

            At the same time the US committed itself fully to becoming the dominant world military and economic empire. This started with FDR’s agreement with the Saudis for the cheap energy needed to rebuild Europe, make American production hum and provide many good jobs and bloomed under the theology of the Cold War. Presidents came and went but John Foster Dulles continued to run the foreign policy of the government from behind the scenes through the CIA and the military. Even when not officially in the government he, a secular theologian, ran things.

            In effect any Republican Constitution is simply a framework for political and moral philosophy and can be used to support very different philosophies and policies, dependent on whether coherent political parties can educate the public and avoid becoming dependent on special interests.

            The right prevails because it has a clear agenda, huge corporate support, and a powerful propaganda infrastructure. Meanwhile every left organization ends up supporting an endless laundry list of “demands” (if only 60s language would go away) with no clear priorities and focus. The left also falls into automatic pieties and poses and refuses to work out, as conservative social democrats do in Scandinavia, how a welfare state and public payroll and pension system can be afforded.

            The US Constitution, and the role of its President, can support a progressive social democratic polity or a reactionary right wing polity or something in between. Right now liberals are moderate and right wingers are extremist. The right has learned the art of insurrection, aiming to paralyze the enemy (a liberal federal government) instead of defeating it through national elections. Yet they may win in national elections because people now think Obama is a patsy, a big talker and an easy folder in a state of financial and psychological dependency on Wall Street. The right is rather insightful. The left needs the federal government as its instrument of social policy. The right does not. Therefore the right, except for the military, can happily make the federal government ineffective.

            Obviously I’m biased. Ultimately I believe that government, once a decent Constitution is in place, is a neutral creature that solves no problems in itself but can be used by politically coherent parties to solve problems or ameliorate them or ignore them or sell itself to special interests.

          • coldblow


            Great post, although I don’t agree with quite all of it (seeing as I probably don’t agree with some of your starting premises).

            “If we don’t cut this sh*t out, some Pentagon general is going to have to ride across the Potomac and call a time-out on the constitution.”


            You make some good points under no. 6. Firstly: The liberals have shifted from economic concerns to social concerns. I agree but it goes much deeper in my opinion. Hudson goes into this a little too. I can’t remember who the Observer columnist is who, about 3 years ago, looked at the attitude of the liberal prof. classes in London towards the extremely wealthy: they were mesmerized and could sense their own comfortable financial situation under threat as they found themselves priced out of property in Hampstead etc. By the way I saw a bit of a doc. on Ch4 last night exploring how Blair has made far more money on retirement than any ex-PM before him.

            You also say that the liberals haven’t worked out in clear practical form a way of paying for a welfare state. I’d go much farther than this in that I don’t think that modern liberal ideology is fatally riven with contradiction.

            Finally, you say that the US liberals have been driven out of necessity to reliance on big govt. Again I go further: I believe this is an essential element of who they are.

            While I agree that the Tea Party are the instrument of US wealth and privilege I susepct that their supporters have genuine grievances that should be addressed and which liberalism cannot do for them(although they do find themselves acting as useful idiots).

          • coldblow

            I don’t think should read I think.

    • re “achieved through a coordinated IMF/BOE/BOC/ECB liquidity injection under the form of 30year G20 bonds.”

      thx for the info there. Any further info on the 30year G20 bonds deal, where does the finance, repayment terms come from, for €2 trillion. BOC = Bank of Canada?

      • piombo

        Hi Colm,
        The BOC stands for Bank of China. The financing is provided through the issuance of guarantees issued by these entities to the EFSF, who in turn, will provide convertible 30 year money to the banks who need “recapitalisation”. The modus operandi is similar but not identical to TARP with the Fed being the “quartet” and the EFSF being the Treasury.
        Hi Josey,
        Only three exploration licences have been issued. Nothing yet on the Production side. Ireland will get the crumbs through a PRT-lite tax (Petroleum Revenue Tax).
        Hi CitizenWhy,
        The privatisation of the Oil & Gas will be played as a “sacrifice” to maintain the Public Service/Permanent Government apparatus, no doubt about that. The interesting thing will be to see how much they can get away with.
        No matter which way it plays, we will have our debt pared back to approximately 60% GNP at the end of the process. Afterwards, it will not be a country for the old, poor or sick.

        • Hi Piombo,

          >>The financing is provided through the issuance of >>guarantees issued by these entities to the EFSF, who >>in turn, will provide convertible 30 year money to the >>banks who need “recapitalisation”.

          Not possible under the rules of the EFSF as constituted under the Lisbon Treaty, in fact this is expressly forbidden.

          Its even a step further than eurobonds.

          Correct me if I’m wrong, but where’s the legal authority under the rules of the Treaty coming for this. Obama has the power to do QE, but the Treaty hasn’t given any such power to the EU parliament, ECB; in fact, EFSF, I can root out the clauses if you like, expressly prevents QE of this kind.

          So how is the above to happen?

          • piombo

            Hi Colm,
            I don’t wish to appear cynical, but from what I hear from private equity funds is that there is frantic activity in progress around the EFSF. The fact that the “SPV” newsbite got out this morning I believe is evidence that we are near a solution.
            My perception is that given the current situation, no single country will bring a legal challenge due to non-compliance with Lisbon, but rather on the basis, they haven’t got a good deal.
            I might be wrong, but why did our Finance minister return from Washington with renewed gusto on the need to achieve the 8.6% current account defecit as per the troika agreement? The reason, I believe, is that he has been reassured of a balance sheet solution as long as he stays on program. This balance sheet solution can only emanate from what I believe is being prepared.
            Either way, the banks will be recapitalised and Ireland, Portgual and Greece will be forced into what I listed yesterday as the “do ut des” for stabilisation.
            Finally, I am also convinced that Italy and Spain will also be “straight-jacketed” in return for EFSF stabilisation support

    • Our Oil and Gas reserves were already privatized and given away for free.

      This alone would have saved us.

    • CitizenWhy

      The Economist laid out a “solution” that called for more liberalization (selling off public assets cheaply to private interests, as in Russia).

      The big issues for Ireland:

      Will the “solution” force Ireland to sell its energy assets cheaply to private interests?

      Will the Irish government reduce the cost of its payroll, or will it continue to protect the politically “in” crowd working ion government, and only reduce social benefits?

      • Deco

        Sell the energy assets ? I told some gombeen already threw them away – to the point that we have zilch to sell.

        Amazing how we regulate in favour of the powerful….

        • Praetorian

          @ Deco, that is why they are called powerful, they bend politicians and policy to their interests. Saw some Fine Gael politician claiming credit in a newspaper for proposing a solution to the European financial crisis, humour is alive and well I see! The land of sinners and comedians.

    • Eireannach


      That’s it, more or less. You’re more or less right.

      I read in the Irish Examiner today (27 Oct) that talk is of a 50% write-down for Greek banking debt.

      So the borrows are 50% responsible, and the core European bank lenders 50% responsible.

      It is THE solution that is “fair”, so to speak. It is the solution that is hard not to accept for all parties.

      Hence the talk of a run on French banks – their Greek debts will get a 50% write-down.

      The EU will then become a true United States of Europe, that’s the endgame.

  11. CitizenWhy

    If I have a credit card debt of $10,000 it sucks spendable cash out of my spending for real life, but I can handle it.

    If I have a credit card debt of $100,000, and all my neighbors do too, then:

    … Either the credit card payments (mostly simply paying interest, very little paying off principal) suck almost all cash out of our real lives and, though we spent a great deal on purchasing things in the past, we won’t be spending any more than the bare minimum and the businesses that depend on our spending will begin to shrink and will let people go and even then may collapse. Our little economy is shrinking every day in every way. … or …

    … We declare bankruptcy and we move on. We can’t borrow to spend so our spending is less than in the past but we are spending again. In effect our spending power has been devalued but we are able to meet all our needs and we are supporting some businesses with our new spending. Our little economy is growing again. Maybe the bank that foolishly let our debts run up way too high will lose money and possibly collapse, but another bank will replace it. But the rich people in the other neighborhood would lose money from the bank’s collapse so they will get the government to impose a huge tax on me (but not on them) so the government can give the revenues to the bank. So we won’t have any money to spend again and our neighborhood businesses will begin to fail again.

    Sounds like a weird loop we’re stuck in.

  12. paddyjones

    The total Greek debt exposure of French banks is 8 billion , Soc Gen 900 million , German exposure is 10 billion. I dont see this as a big problem and I think its overdone in the media.
    Going on past experience I dont see the EU taking action , I think we will just muddle along on the same path as before. The Germans and French dont panic they are conservative.
    Austerity is the answer to Europes problems , the total EU deficit is 4.5% and will be 3 % next year , thats healthy much better than the US or Japan , look at the big picture , the EU/Eurozone is strong.
    No need to panic just adopt austerity and it will sort itself out.

    • You sound like the late Brian Lenihan there.

      We can’t believe those figures. They only represent the known knowns, you’re not counting the unknown knowns, never mind the unknown unknowns, eg Spain, Italy.

      Plus, we’re largely an unknown quantity here with ¢250 bn knowns, but black hole status if property dive continues downward, unemployment escalates etc

      Austerity not only is not working, but its crippling Greece at present and figures show its not working.

      NB there’s a difference between rejoicing at finding a solution to EMU monetary policy and finding one solution that actually works!

  13. wills

    Stanley Kubrick’s Paths of Glory banned in France for 30 years.

    Nuff’ said!

      • Praetorian

        For being truthful perhaps. French commanders got a reputation for being less than interested in the lives of French soldiers throughout WWI, they too seemed to adhere to the war of attrition ‘strategy’, that you literally bleed your enemy dry (Verdun), unfortunately it also meant bleeding your own forces dry in the process, the last man standing won, or so the ‘theory’ went. The British were exponents of this as well and lost 60,000 men on the first day of the Battle of the Somme.

        There were numerous instants of revolt, desertion etc French Army Mutinities and fallout in 1917, by 1918 French army was exahusted and in no mood for offensive operations, there was a risk of an all out mutiny along the entire Western front, similar to what the Russians did in 1917, they simply had enough of being led to their slaughter. The film focuses on one regiment that refused to take part in a suicidal action, they were pulled from front line duty and a random number were selected for execution as an example for other units.

        On the real battlefield, in light of the situation in 1917, The French command though didn’t take too many chances and put a stop to all major assaults, changed commanders and tried to improve soldiers conditions. The Germans launched their Spring 1918 offensive which almost came off, but they were held back and later their forces capitulated along the front, bringing the war to an end.

        Kubrick’s film, which captures of the insanity of war, with a remarkable performance from Kirk Douglas, has long been regarded as one of the great anti-war films and was deemed culturally significant by the US Library of Congress.

        This is what wikipedia has to say on the issue of the films ‘banning’:

        “The release of the film and its showing in parts of Europe were controversial. Active and retired military personnel, offended by the way the French military was portrayed in the film, vehemently criticized it after its showing in Brussels (although the film was otherwise well received). Contrary to a persistent urban legend, the film was not banned in France; however, the French government placed enormous pressure on United Artists, the European distributor for the film, through diplomatic channels, to refrain from releasing the film. As a result, the film was not submitted to French censors, and was not shown in France until 1975, when moral codes had changed. In Germany, the film was not allowed to be shown for two years after its release to avoid any strain in relations with France. The film was also officially censored in Spain by the government of Francisco Franco for its anti-military content, and was not released in that country until 1986, 11 years after Franco’s death.”

        • Deco

          For a good example of French insistence of military persistence in the place of political compromise and intelligence – just look at IndoChina.

          In VietNam, a pastoral, extremely Buddhist society was driven into Communism, as a resulf of the French establishment’s need for empire. Only De Gaulle pulled them out of it. Same applies to Algeria.

          They tried to assasinate him for doing the sensible thing. And they eventually shafted him, and made sure that the French people got rid of him, in a whim with their newspapers.

          • Praetorian

            De Gaulle to his credit also warned Kennedy about Vietnam, saying that it will have 500,000 troops wandering around the jungles of Southeast Asia (he was right).

            Kennedy seemed to take this on board: “Vietnam will be like Berlin. The troops will march in, the crowds will cheer and in four days everyone will have forgotten. Then we will be told we will have to send in more troops. It’s like drinking a glass of water the effects soon wear off” but continued to insert military ‘advisors’, some 16,000 before he was assassinated. With the Johnson Administration it was a different ball-game. They misjudged the character of the Vietnamese resistance which was a continuation of the nationalist struggle going back centuries when they fought the Chinese, the French, the Japanese, the French again, the Americans and are now looking warily at the Chinese again (if ever a country suffered it is Vietnam).

            Equally, Chirac kept France out of Iraq probably one of his greatest achievements (isn’t stopping a strange court process against him though).

      • wills


        Praetorian covers extensive answer below.

        I can add the following.

        Paths of Glory covers a number of themes. Many themes. Kubrick hones in on the realities driving the war. The hidden realities deep in the core of the corrupt empire imperialist system driving France into an insane confrontation in WW1.

        Kubrick focuses in on the military Generals and their conceit in regards to their vanities and megalomaniacal personalities on the loose with access to power on a titanic scale in relation to waging aggressive war.

        Kubrick deconstructs the realities at play and lets the viewer decide for themselves based on his objective analysis on the lunacy behind the lines driving the war machine from the comfort of palatial surroundings the Generals are seated.

        • wills

          Now, one can transpose this analysis and instead of military war put currency war in its place. The same headbangers are in charge. The same lust for material wealth and power and prestige. The same access to tools etc to carry out ones mental ideas on the world stage.

          • Praetorian

            Check out ‘Oh What A Lovely War’, a variation on a theme, with General Haig’s losses at the Somme represented by a cricket score board, some terrific scenes in that film. Black Adder Goes Forth captures it using ‘black humour’, the cynical Captain Black Adder, the public school boy officer George alongside him, the ‘squaddie’ Baldrick, Captain Darling and the General fond of the spirits and women ‘back at the chateau’ (all episodes available on youtube). Brilliant characterisation.

            John Keegan’s book on the origins of the First World War is well worth a read. Clemenceau commented after the Versailles Treaty that it had guaranteed war ‘within 20 years’, he was out by two months and 10 days. Interestingly, Hitler was involved in the full 1914-1918 war, injured twice, awarded two iron crosses (first and second class if my memory serves me correctly), he was recovering from a gas attack when word got through of the armistice, he was enraged at what he saw as a betrayal or ‘stab in the back of the German soldier’, the seeds of the second world war were planted in the dying embers of the first.

          • coldblow

            What a Lovely War affected me when I was 20, but I doubt if it would now. It’s a good film all right, but probably a bit of a caricature.

            60,000 casualties on day 1 of the Somme is what I learned. Someone said here once that that was 60k deaths, but 40k were wounded.

            I’m afraid that last episode of Black Adder that people praise so much let the series down. It wanted to make a Serious point: War is Bad and all that.

    • Banned in Ireland, some like Kurbrik’s were banned up to 2001, or Life of Brian banned 1979-1987

      A Clockwork Orange (1971)

      From Dusk Till Dawn (1996)

      Natural Born Killers (1994)

      Life of Brian (1979)

      • Praetorian

        It seems to be of the few things the Republic does, censor, censored literary works the rest of the world welcomed with open arms, censored politicians keeping the conflict in Northern Ireland in limbo, censored films, what kind of a country is this? Seems to be attempting to silence one presidential candidate ‘the letter scare’ while attacking another for being unfit for office and yet he is deputy first minister of Northern Ireland.

        • It is a country lead into disaster by reactionary gobshites

        • CitizenWhy

          What kind of country? One that learned its censorship and secrecy habits from the Vatican and the bishops.

          • Praetorian

            @ Citizenwhy, yes, particular expertise in confidentiality agreements.

          • coldblow

            What does ‘reactionary’ actually mean?

            Of course, we’d all be in a state of perfect harmony with each other and with nature if we had only been left undisturbed in our Garden of Eden. I think the Vatican has a lot to learn from the Irish as regards keeping things under wraps.

            This is lazy thinking. An intelligent child reading through this would agree.

      • coldblow

        I think Burgess regretted writing Clockwork Orange in view of the film and the message it ‘sent out’. I would have been 13 in 1971 and i got the very strong impression that the film was central in bringing in the permissive society. I’m a fan of Burgess but I never bothered with the film (or read the book).

        I saw the Life of Brian in Bristol soon after its release. I was visiting a friend there. There was a cricket team there, could have been Derbyshire or something, as my mate recognized Steele, a middle aged cricketer who’d just got onto the England team. Their game must have been rained off. On the way out I heard them discussing the film, which they agreed was poor. I was a big Monty Python fan myself but thought (and still think) the film was greatly over-rated. Their support film, a mock travelogue, was funnier. The Life of Brian is for people who enjoy obvious humour. They probably think it’s subversive.

    • Thanks all for the great explanations. I must watch this film.

      Just learned also where the word “decimation” came from, looks like the French army used a variant on it in WW1.

  14. Deco

    The French establishment is in denial. They have Sarko to do thier bidding. But, it is no longer a sensible or workable course of action. On paper, France has immense wealth. The problem is that the French designed a system that sent a lot of the wealth abroad looking for a return. And which also managed to send a large proportion of the graduate population abroad looking for a return on their investment.

    Between 1948 and 1979, France enjoyed “les trentes gloreueses” (that is probably not spelt correctly). Everything was in forward gear. Since 1980 France has been stuck in first, or stuck in reverse, or stuck in neutral. The real problem is that the French economy is not creating jobs like it did previously.

    And the wealth as invested outside of France, in countries that were not particularly transparent, in banks that were run by idiots (Irl), or which had G-Sucks to help doctor the statistics. The French, being honest in their financial dealings are one step away from being enraged at the behaviour of Greek politicians, and Irish reglulators. (Where is sNeary these days ??). And possibly Spanish banks as well.

    In France, you can go to prison for not paying your debts. In Ireland that only applies to the TV licence. Basically, the assumption is that you will take responsibility for taking on your debts. That logic seems to have been extended to Ireland and Greece. Doing time for the sins of Anglo. And for voting in “free stuff for nothing” politicians in Club Med.

    The EU is loaded up with regulations. And yet, the complexity of human behaviour has been shown to be above all of that. Europe tried to fix risk, via low interest rates, and it messed up everything.

    This is the pain that is caused by politicians who give stuff to people for free. This is the pain that exists when interest rates are doctored and manipulated so that the cost of money is too cheap.

    Europe is regulating itself in a disaster.

    It would have been better to simply not allow the PIGIS to access this vast funding engine in the first place. I can remember a government minister saying years ago, about how access to this massive pool of deposits would be great for the Irish economy. Not sure who exactly it was. Completely clueless.

    The ultimate form of regulation is no bailout at all for the bankers. Let them deal with the consequences of their failure, just like they turn the underclass out into the cold. What is good for the goose….

    • Praetorian

      Loss of colonies played a role as well, couldn’t suck off North Africa, South East Asia, and had been pretty badly smashed up in WWII and later in Indochina (nicely portrayed in Graham Greene’s ‘The Quiet American’), a lot of war dead, weariness of the French elite (summer of ’68 and student revolts) etc plus, as in Britain, the ‘Empire came home’ with the population swelled by immigrants seeking work in the 1960s economy only for it to stagnate 15-20 years later. 1980s and 1990s France defined itself in terms of the EU, desperate to retain a place on the world stage and what is sometimes referred to as its ‘unofficial Empire’ in Africa and the Caribbean where it exercises disproportionate influence.

      But France faces serious social issues which have been covered up for decades, youth employment is an issue, French have a long tradition of agitation, small but organised Unions who can bring the country to a halt, which Dominic De Villepin discovered to his cost. The big struggle is against what one commentator termed Sarkozy’s efforts to ‘Americanise’ the French economy which he has wisely stepped back from: longer working hours, reduced holidays and benefits, which the French population guard jealously and rightly so, hence the shift in support to the Left in France and the possibility that Sarkozy (regarded as the ‘bling, bling president’) may be a one termer (which would suit Ireland).

      As in most countries, there is quite a profound disconnect between the French elite and the French population, politicians on both sides of the Assemble Nationale are largely drawn from a certain quarter with the Ecoles Superier making regular appearences on CVs, comes across as almost a feudal system, with patronage, connections, family background playing a role, not too dissimilar to Ireland and both ‘Republics’, on paper at least.

      There is also a long standing issue with the manner in which minorities are treated, if the disparate groups, students, and middle class find common cause then you could see something interesting, the French elite know they can only go so far, all they need do is open a history textbook.

      • uchrisn

        The turmoil in the middle east and the fall of dicators there has not helped France or Italy. Gaddafi was a large buyer of Italies debt with the oil money, seduced by Berlisconi. The ECB is now making up that shortfall. Both himself and Murabat were close to the French. If Saudi Arabia, other oil rich arab states and China went democratic that would also negatively affect the EU and US. I hope they do. Whatever about Irish people getting a short straw, people who live in authoritarian regimes are getting a shorter one.

        • Praetorian

          Sarkozy was put on notice by a section of the French diplomatic core, who basically told him in an anonymous letter that he was ‘diminishing France’s role on the international stage’, clearly there was an opportunity with the Arab Spring in Libya (especially after sticking with Mubarak initially) plus the French couldn’t let the British take all the credit, not in what is regarded as France’s backyard (plus big domestic Arab/Muslim population and historic ties from Morocco, across North Africa to Syria).

          Guardian – 23 February 2011

          “Nicolas Sarkozy’s foreign policies denounced by rebel diplomats. Anonymous letter accuses president of diminishing France’s role on the international stage

          Nicolas Sarkozy is facing an unprecedented revolt by French diplomats who warn that his foreign policy gaffes have left France pathetically diminished on the world stage.

          After weeks of embarrassing French slip-ups — including Paris blindly standing by the Tunisian and Egyptian dictatorships until the last minute — a group of diplomats have published a scathing attack on the president in Le Monde.

          The anonymous letter from serving and former diplomats warns: “France’s voice in the world has disappeared.” They accuse Sarkozy of amateurism, acting on impulse, ignoring ambassadors and caring more about how he looks on TV than the fundamentals of foreign affairs.”

        • Deco

          Sarko got rid of Gadaffi. And the demand for Italian debt dropped. Exposing French banks. I bet they love Sarko now……

  15. Deco

    The leading British scientist Buckminster Fuller, devised a theory of human group behaviour. He called it “Ephermalization”.

    It means that something gets bigger and bigger, and more successful. And then it melts into nothing. And gets replaced by something smaller, and less centralized.

    The EU has reached it’s point of Ephermalization. We can tell this because there is a massive gulf of difference between the people on the street, and the leaders in the plush offices. And we know this, because the leaders have denounced the reluctance of the people, as being a defect. This is active aggressive denial. An attempt to make the denial an officially sanctioned means of thinking. But as we are seeing it is pointless. And it fails.

    • Praetorian

      Interesting article in the Guardian (which is streets ahead of most papers I find, nothing remotely like it in Ireland, just look at the opinion pieces in today’s Irish Times).

      “This economic collapse is a ‘crisis of bigness’

      Leopold Kohr warned 50 years ago that the gigantist global system would grow until it imploded. We should have listened”

      • CitizenWhy

        Thanks for this link. Bigness is another word for grandiosity, which is a delusional state.

      • uchrisn

        The economics editor of the Irish times has been so drastically and consisently wrong. Its incredible and one would have to assume something or someone is unbalancing him. I once visted the home of a journalist in South America. The rest of his family was finacially comfortable, he was mega rich, lived in a mansion with all the trappings. I just know he did’t get the money from his journalistic salary. Things are mre obviuos there.
        I actually saw a lady journalist from the independent go on a talk show to defend an elite insider accused of wrong doing and corruption with Lowry. Pretty obviuos whos wing she is under.

        • Deco

          The objective of the Irish Times has never been to provide accurate economic forecasts.

          Providing forecasts that maximize consumer spending are a far more worthy objective.

          Spend, baby, spend. If you have to then “borrow, baby borrow”.

  16. Adam Byrne


  17. dwalsh

    For paddyjones et al

    The European banks are insolvent. They are sitting on off-balance sheet derivatives black holes. No amount of bailouts or austerity can fill those holes. It’s just a matter of time.

    Media is a circus; a soap opera. To extract anything true from it you have to imbibe it through a series of decoding filters…you have to have the right codecs installed.

    It definitely cannot be understood through the media-installed codecs known as neoliberalism.

    • John Q. Public

      Can’t fault you there dwalsh, well said, in layman’s language your bullshit detector has to be finely calibrated. Con’s blog breaks things down well like this one on our debt where he says that ‘we are more bust than the most bust economy in the world – Japan’.
      Puts it all in perspective.

    • The European banks are insolvent. They are sitting on off-balance sheet derivatives black holes. No amount of bailouts or austerity can fill those holes. It’s just a matter of time.

      Bingo, and the mater of time is a fixed value, 2013 that is, when ECB is finished!

      • John Q. Public

        Georg, the ECB is just an entity, not the same as a business. It can take on way more of our debts combined and as David has said in the past we can tell them to hump off and whistle for their money, that’s capitalism.

        • A further ‘printing’ for/in the PIGS after 2013 will become automatically inflationary, but this is rather technical central bank stuff and no subject for a Keynesian comedy site.

          • It is also the reason why you always heard them talking about the EU safety net to be installed 2013, it is for this very reason that the ECB is not able to continue this policy after 2013 anymore. They shot themselves in the foot and everyone else in the stomach.

          • Malcolm McClure

            Georg: Nobody seems to know where the 2 trillion is coming from. If it is from the printing press or its electronic equivalent, presumably the ECB thinks that if it closes its eyes and wishes, then putting that amount of money into circulation won’t be inflationary.

            In reality, within weeks, the Euro will be worth 25% of its previous value. Presumably this is what the Germans are afraid of, hence they are dragging their heels.

          • When you say 2 trillion, I assume you mean the 1475 billion Euro, roughly 2 Trillion USD that is the total value at risk, for Greece alone that is.

            The ECB credit financed monetary base will be inflationary after 2013, probably earlier.

      • dwalsh

        Hey George

        So far our local soothsayers have been less than spectacular in their auguries. You have been sensible in choosing a remote target date.

        I also predict that by 2013 our world will have begun to change in ways we can barely imagine now. Extraordinary times call forth extraordinary means and ends.

        • With OTC’s now under scrutiny the bastards shifted to ETF’s instead. More than 22.4 billion of derivative contracts were traded on exchanges 2010 compared to 17.8 billion in 2009, that is an increase of 25 percent, futures trade increased by 35%.

          ETF’s globally are at 1,3 trillion already.

          It definitely cannot be understood through the media-installed codecs known as neoliberalism.

          Very true, it is all lies and manufactured consent they produce, their goal is to avoid social unrest. If there is a nuclear mushroom cloud in the sky, they will tell you it is just a wee bit of a bad weather front.

          Personal remark on a side note. BOYCOTT THE PRESIDENTIAL ELECTION FARCE!

          • dwalsh

            In 2010 the notional value of the OTC market in America alone was admitted to be more than 20 times the size of the American economy. Since the trade is what they call a ‘dark’ market this estimation is probably more media speak than truth. Globally it dwarfs planetary GDP. Some put it as high 1.5 Quadrillion.

            Obama for ex-president.

          • Malcolm McClure

            dwalsh: Waahaaat? Somebody finally mentioned the unmentionable? Heeere we go!
            Any advance on a quadrillion? Do I hear a quintillion? Anybody? Anybody?

          • CitizenWhy

            What about a zedtillion? So much that it is equivalent to nothing.

  18. uchrisn

    Political integration in Europe is the way forward, a kind of a lighter version of a United states of Europe. In the U.S., states still control much of their fiscal policy and run a state budjet.

    Currently the EU is being run by Presidents of the larger countries, representing only their people. At least if they were ‘president’ of Europe their mandate would demand that they represent the Irish people too. Lets be honest those presidents will be calling the shots in Ireland, Portugal and Greece and maybe Spain and Italy for years.

    Let the countries who reject political integration stay out at the beginning they can always join later.

    I saw the IIE bankers assosiation had a swanky party for Trichets leaving in New York, with the CEOs of all major global banks. They said he did a great job and I sense real sincerity in their voices, he really did do a great job for them by protecting all senior bondholers and their insurers at the expense of the taxpayers. He even threatened not to send anymore Euros to Ireland if we didn’t obey.

    Ackerman the chairman joked that he would like to thank the 1000 disabled Irish people who had their benefits cut to pay for the night of steaks and champagne.
    (ok I made the last bit up but me might as well have said it).

  19. Dorothy Jones

    S&P ‘warn’ that an extension of the EFSF fund can compromise Germany’s credit rating…, latest article this evening.
    Margaret E Ward’s comments about sharks on VB the other evening set the tone…

  20. dgbooth


    • Deco

      Well, if you are really that worried, you could buy a house in eastern Germany and use it as a means to deposit money in a bank.

      But, I reckon we will get advance notice.

      And you are going to see a fight for collateral before the next bailout goes to the Greeks. This is a sign of increasing levels of informedness amongst those who are providing the bailout, as to the probability that the Greeks will not pay.

      There are wealthy people in Greece – but you may as well be chasing Bono, for all the good you will get.

      The Greeks if they reformed their system, can actually get their current account in balance.

      But the vested interests would rather pull off a nasty default….

      • redriversix

        Hi Deco

        I do not think we will get “advance notice” of any financial decision.

        That would cause a huge run on bank deposits.

        The Decision over Greek default or any major financial change will be made on a Friday evening , perhaps a Bank holiday weekend and not necessarily an Irish one.

        I do not believe the Greeks will reform their systems as they simple do not have the expertise to do so.If they had , they would have done it years ago as part of there progression as a sovereign nation.

        They will default , as well as many other EU nations.As I stated before , the money is simply not around to pay these massive debts.

        Gold price took a massive hit today , dropping by as much as $300.00 per ounce.
        If ” people ” are selling Gold to change their assests back to cash…

        ” Who’s cash ? Who’s Currency

        The value of Oil is Falling yet production is way down due to Arab spring rising , Libya etc….makes no sense…

        ” But what does anymore ” ?

        Surely they are not reverting back to stock markets….

        Noonan hints today that Budget cuts will be higher than €3.6 Billion he forecasted.

        Someone pointed out earlier ” to cut wages instead of devaluation ” This would only attract Companies to take more advantage of our skilled workforce , they would not cut their prices in line with the reduction in costs and would further erode the already dying middle class and increase the amount of people on welfare subsidies as the basic cost of living would remain static as the Banking / Euro crisis still remains.

        America financed France’s adventure’s in Vietnam.

        America had advisors in Vietnam with the French.

        Some scholars would say that President Kennedy was going to withdraw from Vietnam as the reports he was getting back , regarding South Vietnamese Government were not in Line with initial agreed policy

        When LBJ was appointed President , one of the first ” acts “he undertook was to escalate the Vietnam War with the now discredited ” Gulf of Tonkin ” incident.

        This 10.000 day war cost 58,000 American lives , over 250,000 maimed U.S soldiers and 3 million dead Vietnamese.

        Vietnam is the only Country in the world which has ” defeated ” 3 of the 5 permanent members of the UN Security Council….
        China , France and America.

        No Country has ever defeated a Guerilla army with such resolve as the Vietnamese.

        This present War is Financial….and you and me will be , or already are the……..

        “collateral Damage “….

        In relation to Credit union question regarding ” how safe is their money ”

        I have no idea were is safe anymore to put your money except maybe under your bed and that leads to other problems.

        October…? end of the line..maybe

    • Dorothy Jones

      You could perhaps look at some alternatives such as the use of a domestic currency. Sure, this may be an academic concept right now and the implementation some way in the future, but it is an interesting read nonetheless. Check out WIR Banking in Switzerland on Wiki in English; there’s a link to its wesite also for further detail in German.

    • There’s a consumer helpline here plus a link to

      DGS Depositor Guarantee Scheme exists for institutions including credit unions up to ¢100,000 and currently there is no end date.

      Recently those switching from euros to swiss franc got burned when the swiss franc devalued by 9%, so there is risk attached in moving from one currency to another. I would avoid stocks and shares, Irish government bonds offer a good return but the euro currency is at risk; commodities such as metals are a good investment, but the market is highly manipulated at the moment. But if you have a bride in mind, good time to buy a diamond I guess. Property though is still diving.

      A good plan is to try to use savings to pay off any debt asap.

      Another plan is to take a good holiday with some of the proceeds. Yet another plan is to invest in a new 911 porche carrera at ; or, depending on how you are feeling, perhaps a grave site in a nice location close to worms:)

      Sorry, my imagination getting the better of me, caveat emptor as always. I suppose some of the ideas above are not so good when you think about it:)

    • Philip

      There is no plan becasue none can be devised for the longer term. Money is being in the process of being destroyed as are any other means of hi-value barter (Gold will be a short term gain for sure).

      This will all blow over. All we are seeing are the last belch and gasp the the whole lot finally implodes taking every bank and financial instrument with it. Siemens pulling 6Bn out of banks really means no where is safe. If Siemens only solution is to run to the ECB and we are looking at debt holes larger than several trillons, it shows it is beyond the layman’s ability to take any evasive action.

    • dwalsh

      First of all there will be no warning when the next crash comes — which could be any day now. To believe the government or the media will tell us it’s coming is an error.

      At the same time if you have the right mental codecs installed you may be able to detect the early seismic rumblings and duck. That means you take no statement by a politician or ECB heads etc on face value. You have to read the subtle signs in the phraseology they use and so on. Remember how B Lenihan and his cohorts lied consistently from the beginning of the crisis. Geithner lies all the time; a couple of days before the US downgrade he lied that it wouldn’t happen. Now he’s saying talk of panic and bank runs has to be taken off the table — that sounds to me very like he is expecting something bad soon. These people cannot tell the truth. It seems to be a condition that all politicians suffer; or rather that we have to suffer.

      I’m not able to give any advice about savings. There are others here much more in the know than me on such matters. I’m a pauper. But for what it’s worth (& that’s not much); real estate is probably the best bet if one has enough cash…don’t use debt. Buy in a group if necessary. There’s probably not enough time left to organise that now; but maybe there is. No matter what happens — almost — real estate will have some value afterwards. Deposits could vanish in spite of guarantees. Cash could be worthless — but I would have some to hand for when the ATMs shut down. Gold could be confiscated (compulsory purchase) like it was in the US years ago if they decide to use it as a standard; but if not it will retain some value – but not its current value IMO.

      I could be wrong about everything I have said (except about the media and politicians). Sorry.

      I think cb has some good suggestions; except his taste in cars is a bit off — a Porche? Yeuch!

      As redriversix often reminds us our most valuable assets will be our homes, families and friends and neighbours…you know, those things the neoliberals claim don’t exist and which some here think are for wimps & huggers — ‘society’, ‘cooperation’, ‘respect’ etc.

      And a big garden if you have one. It could get that bad. But maybe not.

  21. dwalsh

    @ piombo

    Thank you for you excellent briefing. It will be interesting to see if this is real; and if so, how it will play-out.

    In my view it will not resolve the underlying crisis unless the arrangement entails a separation and radical restructuring of the banking and financial sectors.

    Under present conditions the global derivitives market would chew-up a couple of trillion in no time…meaning…it would only buy time.

    As I have argued previously, I contend this crisis cannot be solved within the structures of the current system, because…

    The system is the crisis.

    “Tweaking the system is like the addict adjusting his addictive behaviour; the alcoholic trying to manage his drinking. It does not address the issue at all and it cannot work.”

  22. tony_murphy

    “Maybe because the generation that remembers the SecondWorldWar is now dying out, there is now no leader who can muster up a transnational sense of European solidarity,which is needed to drive the project forward.Or maybe it is because we have reached the limits of European integration and, without a credible external threat, there is no sense of urgency.

    One thing is clear: Europe, unlike the US, can’t react as one with sufficient dexterity and force to address the major financial problems that are now emerging”

    If Dick Cheney or Peter Sutherland wrote this, I wouldn’t be surprised… But each to their own.

    I’m off to buy more Gold, Silver and popcorn

  23. Focus here on the balancing act being played out by the ECB as it plays the game of matching funding of bonds issued to participating central banks against the diminishing value of collateral and assets held by national cb’s

    Will increasing the firepower of the ¢440 bn firewall by * 5 to do this merely make a bad monetary system worse? How will this funding be underwritten in terms of the laws governing the EMU? How will this QE effect the EMU?

    Will it create jobs, or be spent on the banks to enlarge their profits and help the europeans pay their debts to the bondholders?

    Should the people of europe vote for this in a referendum?

  24. wills

    News tonight across mainstream appears 2 trillion euro bailout on the way.

    Now as far as I am concerned this surely once and for all proves the euro is a paper ponzi scam. Or, a virtual money ponzi scam.


    Well, lets look at it like this,

    The materialization of 2 trillion euros proves

    1/ Its been made out of thin air.

    2/ Its been provided by wealthy interests.

    3/ Its a bluff and its not going to happen.

    4/ Its real, its going to happen, its going to be materialized into existence and it is then going to vanish into a financial banking twilight zone of private interests behind smoking jackets, cigars and creaky armchairs.

    Now, massive debts are getting the blame for the need to materialize 2 trillion onto the euro table.

    The massive debts spawned massive loans which went into very deep pockets.

    The loaning out of these massive loans creating these massive debts is a bank robbery from the inside.

    The money hosed out of the banks into the insiders pockets using the making of gargantuan debts using dead pools of mutant financial instruments has been robbed.

    Now, from what I can make out the robbery is not over yet.

    If one looks at this crisis today what is apparent is the 2 trillion about to be made out of thin air on the excuse that there is a euro crisis has all the hall marks of the continuance of the inside bank job which started with the dismantling of the glass steagall act in 1999.

    I do not believe this euro crisis. It is a fiction underway to steal more money. Two trillion.

    • I think you are right.Just let all the banks collapse. Burn every bondholder.Sure private pensions collaps but so do public service wages and pensions.Let us all start again.The Germans had to after world war 2.

    • Wills,
      this will surely mean massive inflation for us all right?

    • dwalsh

      4. It’s an offering to the maw of Mammon; which will be soaked-up like everything else by the “private interests behind smoking jackets, cigars and creaky armchairs” behind the curtain.

      It’s utter foolishness.

      But for us it buys a little more time to prepare…for those who can.

  25. wills


    Thanks for recommendations above.

  26. Gege Le Beau

    One trader is already dismissing the €2 trillion bailout. Time to protect assets and buy government bonds and dollars apparently.

    Trader on the BBC says Eurozone Market will crash

    • Wow,
      can’t belive the BBC boradcast that.

      RTE would never allow it, bless ‘em.

      • Gege Le Beau

        Yes, a rare moment when something gets through the net, tends to happen before something big, like the complete collapse of the euro currency, cui bono?

        Sky news reporting that Obama commented that the crisis in the eurozone is ‘scaring the world’, if accurate, big help there then with confidence levels.

        The €2-3 trillion bailout to save Europe?

    • Malcolm McClure

      Don’t disparage the trader. That’s his job. He is totally transparent about his motives. It’s not greed. It is about out-thinking his competitors in a (very) lightly regulated market. His job is to make money. It is somebody else’s job to consider the needs of the sick, the unemployed and the skint.

      Wouldn’t you be glad to have him investing your pension fund?

  27. Adam Byrne

    Incredible comments and analysis on here today chaps (and chapettes). Well done.

    • Juanjo R

      Utter rubbish. The quality of discussion here reads like this – Wikipedia – which can be edited by any preducial idiot and is littered wih inaccuracies says this – and those ( fictional ) films I saw and read about told me this and all this has led me to the educated conclusion that…


      You are all hiding from your own problems on this blog thats all thats going on.

      Spain will put a sword through the euro…Zapatero is calling an election early cause he saw what happened to Cowen et all…and Spain will say in one unified voice “nada mas!”. End of.

      You lot will be still be discussing military tactics when it happens.

      BTW attrition was the rule not the exception in warfare…conflicts as diverse as any Prussian wars involving Freddie the great, the chaco wars in south america any russia vs german or france conflict from the last 200 years or so showed this. Don’t you know the phrase ‘pyrrhic victory’? its a victory won’t at a crippling cost coined in 300 BC or so – a long time before Verdun.

      A load of Bs is all I hear here.

      Ate mais!

      • BrianC

        There are some who put great effort into what they write and clearly they have great knowledge and also great ability to engage in research. So the comment of rubbish is a bit over the top. You will always learn something new on this forum. And yes you will always get contributers who just like to hear themselves talk and make no real sense. Thankfully very few on this site.

        I never heard of the Greek Economist Yanis ….. posted by Georg R. Baumann. He is very interesting to listen to and explains matters very elequently and rationally. So I would not say he is talking rubbish. He hits the nail on the head the banks are maligned to the point they are totally impaired thus insolvent. There is no mechanism in Europe to address this impairment. Yanis avers to G. Soros who advised that the EU has a common currency without a common treasury presided over by divergent political economic philosophies that negate a common sense common purpose approach to resolving the crisis where the need it to inject trillions into the system. Whilst Soros discussed such in great length Yanis has the vision to point out the cracks in Europe are so great you cannot revert to the people of Europe to pull together therefore you must use what is at hand to reinflate this bubble. he gives a masterful insight into the broad mechanics.

        My own opinion is that we are at the triple bypass solution and whilst the patient may survive the frb disease in the blood will solidify the blood and kill the patient in the near future anyway. FRB just does not work simple as that. So not alone are the banks kicking the can down the road to hide their true state of affairs regards exposure to sovereign debt to bankrupt countries and exposure to financial derivatives pointless paper money the political entities cannot face up to the reality of the real problem thus unable to define the problem correctly as their thought structures are rooted in nationalistic perspectives.

        If Spain pierces the heart of the EU I will be only too delighted becuase then maybe the political decision makers will be forced to define the problem correctly and take the right unified action required. But based on previous behaviour I would not hold much faith in them making the right decisions.

        Yes I think you are correct in your view regards attrition in war fare but it is only one element in the battle between projectile and shield. The key elements are capacity to make decisions quickly under great duress unify actions and display iniative. Julius Ceasar demonstrated the effect of such in the are of Warfare and he was a minnow when compared to Sun Tzu. But for a very modern radical perspective I would point in the direction of Colonel John Boyd USAF.

        I trust I make some sense and I yearn for and welcome Spain’s unified voice and action to kill off the Euro. The question I ask is this do they have the nerve.

        • Juanjo R


          Why are you talking about Sun Tzu and the murdering bastard that was Julius Cesear in your reply on an ECONOMICS BLOG if you REALLY understand my post?

          Its an ECONOMICS BLOG.

          See below for the rest of my reply.

      • dwalsh

        Hey Juanjo R

        I found it impossible to make any sense of your fanatical rant. Apart form the bile and insults I couldn’t discern anything coherent.

        Perhaps next time, after you’ve finishing ranting, delete the bile and insults and leave whatever’s left…if there is anything left that is. We are interested in all views here.

        • Juanjo R

          Your barking like a little terrier there dwalsh with the intelligence of one too…

          You have made it clear to me before that you don’t except my views and you lectured me on this…it was because you don’t want to hear any point of view other than your own. Thats why you commented here your intolerant.

          Its like this.

          LOGIC ( GENERALLY )

          Premise / Factual statement + premise/Factual Statment => Conclusion.

          THIS BLOG

          Wikipedia inaccuracies + fictional films + what I personally think non matter how inaccurate and unresearched I am and uninformed + that opinion piece that agreed a bit with what i think also un backed up + JP satre said + any random topic that comes to mind + carefully guarding of what every postion I hold or part of the status quo that is mine + venting of prejucdies + general anger at non blog topics in my life + a bit of egotistical reaction to some of the other t**ts on the site => results in TOTAL AND UTTER RUBBISH.

          Logical discussion permits communication – its independent of the ego and depends on facts – therefore its a reliable way to move a topic on.

          However, the mainly undisciplined wandering commentaries present here don’t constitute anything of any logical value.

      • Praetorian

        @ Juanjo R – well as Clausewitz said ‘politics is war by other means’, today politicians are as carefree with the lives of the citizenry as First World War commanders were with their soldiers, austerity is a kind of slaughter all of its own, rubbishing people’s comments is a very unpleasant activity. No one said attrition was unique to the First World War but it was the first ‘industrial war’ with unprecendented deaths and casualties on all sides, it was unlike any other conflict.

        • Juanjo R


          People die in other wars as well as in WW1 – whats the difference if you are dead?

          Plus you are only counting military deaths. Other wars had huge effects like famine and disease.

          Please do me a favour and stop quoting books you haven’t read.

      • Juanjo R, keep posting, you get plenty re Ireland here, share more insights on Spain?

        Spain and Ireland have a lot in common, the mess the euro is in:)

        • Deco

          Ghost estates…..useless politicians who are all responsible to some degree or another…..ministers for Finance who engage in PR stunts…..insolvent banks…..youth unemployment…..welfare extras… programs that fail….bond market jitters….off balance sheet accounting gimicks….public sector nepotists knocking on people’s doors telling them how to vote….

          lots in common….except weather….

          • coldblow


            Re Spain, if OT, I saw this in last week’s IT@


            The writer says the movement is not political but then politicizes his article by attributing the 2004 bombings to Spanish involvement in Ireq. He also says that that 12m protested against the Spanish govt’s initial claim that ETA were behind it. Unless my memory fails me, tv news reports here the day after the bombings showed millions of Spanish solemnly protestging not against their govt but against ETA.

        • Juanjo R

          Why are you talking about Sun Tzu and the murdering bastard that was Julius Cesear in your reply on an ECONOMICS BLOG if you REALLY understand my post?

          Its an ECONOMICS BLOG.

          See below for the rest of my reply.

  28. dwalsh

    This is an absolute must see guys

    This confirms everything some of us have been saying IMO.

  29. Let Us All Rejoice

    Today is a New MOON and is a time ‘to think’. It is a time to wish for all those things you ever wanted to do but never had the time to do so.Rationality is your forte today because from tomorrow it will gradually slip between your fingers ( even when covered with mittens ) and a new Gravity will be born to begin to PULL .

    Just like in a Scrum a Gravity pulls forward or backwards and eventually it wins .Emotion then comes to the fore and Passion and everything around you seems gone and only what the foolish Eye sees does the body follow .This is where Lucky or Unlucky arrives and then Consequences follows.

    Today is the starting journey to a long 14 day Experience to the Arrival of The Full MOON.

    So be Prepared there is Nothing like this that has happened before in Your Life.

  30. dwalsh

    In response to David’s article.

    David continues to avoid the real underlying issues and to promote his arguments for the break-up of the Euro and Europe.

    As to main issue which he avoids; in the very paragraph he writes:

    “we are in a currency union which is tearing itself apart from the inside”

    This is not correct. Europe, along with much of the rest of the world, is being torn apart from without by the global speculators and hedge funds. The demonic legions of Mammon operating though Wall Street. These packs of rabid hyenas are singling out individual prey to harry and weaken; steadily working their way through the herd to the prime animals; which in the European case will be Germany and finally the Union itself.

    There is nothing normal or business-like about the feeding frenzy the financial markets are in. Anyone who has watched the testimony of the pathetic Wall Street creature (victim I would say) on the BBC last evening, can be in no doubt that these lost souls have completely lost the plot. The collapse of the global economy is a profit opportunity for them. It is their ultimate wet-dream. Normal business just doesn’t feed their addiction anymore.

    There will be no winners from this debacle; least of all Ireland. We will not be safer or better off alone and without Europe in a world that considers such barbaric economic practices to be acceptable behaviour. We will be reduced to feudal debt servitude. Everything in what is left of our nation will be determined by The Markets.

    There is only one way forward; only one option left to us. Shut down the financial markets. We should be discussing the orderly dismantling of the financial sector; not the orderly default and collapse of our political structures and nations.

    The tail is surely wagging the dog.

    • BrianC

      Makes no difference when the Euro goes they all go as the banks are all interlinked throughout Europe even the US and all their balance sheets are impaired and they are all insolvent. So sterling is no safe haven and besides the British economy is nothing to look up to and weaker than most other economies plus the fact that the square mile is stuffed with worthless derivatives.

      At the moment there is reluctance to lend to each other overnight as no one knows who is the worst off despite the fact they are all impaired. The dead carrying the dead, it is just a matter of who is put into the grave first. They are looking for the light of new manna but the politico’s are afraid and in paralysis to do the necessary evil deed of recapitalisation.

      If the politico’s do engineer recapitalisation by whatever means mechanics they rescue the diseased bodies dying in the grave yard waiting to be committed to nothingness and holy joe public picks up a hellish bill that will chain him even more to the slavish rogue behaviour of banks who are only interested in one thing satiating their own avarice.

      If you are sitting on cash purchase assets that will withstand the oncoming crash shock or whatever you want to call the oncoming onslaught. The trillion dollar skill is identifying the right assets; precious metals look good but could drop as fast as they weigh.

  31. Praetorian

    @ Website moderator – any possibility you can change the format of posts so that they can be read across as opposed to the current format where they seem to scale downwards in narrow fashion, not that user friendly but good for working the chin muscles.

    • Malcolm McClure

      Praetorian: I agree that format restrictions here can limit useful discussion.

      Another enhancement would be to have emailed comments button-link directly to their place in the blog so that interesting contributions could be seen in their context with others about the same point.

      How many readers scroll back to read the updates? How many just read the blog and dispense with email updates? If the forum is to maximise its potential for constructive thought, comments require segue (or follow-ability) rather than serendipitous encounter at one point in time.

  32. @ dwalsh

    Good link, that, also thx to other contributors for interesting conversations above.

    I’d like to make a point to add to that made by that trader in the clip and re points made by piombo earlier.

    On first reading and hearing about ‘The New Plan’ = 2+ trillion backstop of the euro, I thought, well, better than nothing, at least its a plan.

    Actually, the plan is worse than nothing. No greater signal of the incompetence of political leadership in the EU, exists; this ‘The New Plan’ is a total con job to borrow time from the markets, time that’s run out.

    Bear with me here, some important points to follow. Firstly, could I nominate Dr John Whittaker, Lancaster University Management School work on Intra-eurosystem debts particularly a paper .pdf labelled Monetary Research dated 30 March 2011.

    Recommend him for Kilkenomics not only because he had a PHD in Nuclear Physics before turning to economics in the 1980s but purely because of the quality of his work on monetary research, its referred to here:

    “While most of the CBI lending to Irish banks
    has been granted in the normal way via repos
    against ECB-approved collateral, increasing
    use has been made of Emergency Liquidity
    Assistance (ELA), with this form of support
    reaching €50bn at the end of 2010 (see Chart
    2). ELA is overnight lending granted by the
    CBI on its own initiative. It is supposed to be
    for short periods and is not subject to ECB
    collateral requirements.

    Another way in which Irish banks are
    borrowing from the CBI while avoiding the
    ECB’s usual collateral rules is by issuing
    unsecured debt to themselves which is then
    given an Eligible Liabilities Guarantee3 by the
    Irish government.

    The ECB has deemed that
    this credit enhancement makes the debt
    acceptable as collateral for ordinary repo
    funding, and €27bn of bank debt had received
    this guarantee at the end of 2010.”

    …………”However, through its central bank, Germany is currently lending €325bn (December 2010) to other central banks in the eurosystem. The Central Bank of Ireland (CBI) has borrowed €146bn from the eurosystem in order to support its banks.
    ï‚· This ‘bailout’ of Ireland via the eurosystem is larger than its official EU ‘bailout’ (€146bn as against €67bn) and much cheaper (1% interest as against 5.8%), but it exposes Germany to similar risks.”

    My main point is that Germany has been torpedoed big time by losses on the Peripherals, to a much greater extent than official bailouts would have us believe. Its worth it to spend some time with Dr Whittaker’s explanation on how ELA Target2 funding works across the central banks in the eurozone.

    Add to the above the strange comment by Obama that losses relating to the crash in 2007-8 have not been dealt with by EMU banks(that should stabilise things not) and the euro is being riven apart from two angles.

    The ESM(European Stability Mechanism) is meant to follow on from EFSF(European Financial Stability Facility) in 2013. I’m presuming the €2.5 trillion proposal currently mooted will be funded some way through this mechanism.

    The question Germany will have to decide, is, will German pockets pay for a recovery in the eurozone; or, will Germany expose itself to greater contingent liabilities in a monetary union, that can’t work under present conditions, that politically will be rejected by member states?

    Whittaker writes “However, while Germany is clearly uncomfortable about underwriting the EFSF, it has not expressed similar concern about its large exposure to Ireland and others through the eurosystem. Perhaps this is because it is powerless to do much about it.”

    Germany is uncomfortable, its courts have shown this, with the EFSF; clearly, its not on for Germany to similarly underwrite a €2.5 trillion bailout for the eurozone filled with leaking vessels on the periphery, in a monetary union that is a total mess from top to bottom.

    Bye bye euro!

    We need to move on and clean up the mess, not make it worse!

    • Malcolm McClure

      colm brazel: thx for this. The cumulative knowledge freely provided by many contributors here is priceless. The occasional nay-sayers dismiss this opportunity to learn at their own cost.

    • Philip

      This is a shorting exercise at a national level. There will be guranteed margin calls within 6-12 months. Complete madness.

  33. dwalsh

    If one is in denial about the cause of a problem the problem cannot be solved.

    Wall Street greed is the problem.

    They can be blamed and held responsible for it and for the destruction they are wreaking on our planet.

    Those who consider the anti-human civilisation wrecking activities of Wall Street to be acceptable business behaviour are also part of the problem. Their suggestions for rearranging the deck chairs will avail nothing.

    Until our political elites wake up and correctly diagnose the problem there can be no solution.

  34. Philip

    A government without control of its own financial function is a country without a government. We the poeple have had our democratic rights ripped from us.

    Is it not very sad the way certain conundrums are being played out at the expense of real people’s day to day lives.

    I know that spending and borrowing beyond one’s means was part of this overall problem. We see moral hazard being played out becasue if I “the saver” see Him “the borrower” getting a debt writeoff we are not happy.

    Can our leader not see that the real issue is that entire countries are about to be demolished. That soon enough all you vat, tax, PRSI etc will be headed to the coffers of the likes of Goldman Sachs who ultimately will decide if we have a metro, a health care system or your child has an education…or for you righteous types you never got burned…if you get to keep your savings etc.

    Wake up

  35. “ Scheisse glänzt nicht, wenn man sie poliert –Shit won’t shine, even if you polish it,”

    Worth repeating link by businesslunch, well worth the read.

    • Dorothy Jones

      Colm…that article’s been around for a while…link was posted on this blog previously…I may be wrong…..Personally I feel it is ‘oberflaechlich’….. to say the least….taking random statistics to achieve the desired results..Brownian Motion

  36. david I thought the most critical comment in your article was about the chinese towards the end – the irony now is unless the chinese economy really steps up the plate and revalues the RMb, all the capital they are sitting on cannot be released into the global economy to stimulate it. Under the streets of Beijing there are now trillions of US dollars, gold reserves and US and European Government bonds, effectively China owns us – but they need us to succeed in order that their own grand plans can succeed. Its ironic that we now need the chinese to save global capitalism. If china continues to protect its export market and suppress its production costs through currency control, then the global economy will not move forward. The US became the engine of global capitalism in the period from 1890 – 1914, it was the emerging market, we now have to accept that its not the US that will drive growth in the free market globl capital system but China,and until this happens – it is my belief we are all snookered.

  37. dgbooth



    • Thx for great link. There’s a financial war going on in Europe. Geithner and Wall St are pulling every pressure point they can, to persuade Europe to do essentially what our lot did, accept an impailment bailout. A large portion of the €2.5 trillion, notice this is being put out there without any agreement or even description, of who’ll pay for this in the EMU, is of course earmarked to bail out Wall St losses on French/German banks. The pressure is on Sarkozy and Merkel to accept a deal.

      But here’s the thing, Merkel is no pushover, neither is Sarkozy. My money is on a bet they have already scuppered this deal, same way eurobonds got scuppered. .

      Both will say, ‘NOn’ ‘NEIn’, and the euro will unravel; but they won’t allow their own people to become victims of the debt scam, or become debt eunuchs, run by the likes of quisslings like Sutherland, Spring, Bruton, Dukes….

  38. Dorothy Jones

    The world as we know it may be changing forever. As individuals or collectively, we have certain spheres of influence to either instigate change or limit damage.
    Whether it is the right panel of Bosch’s triptych ‘Garden of Earthly Delights’ in the Prado or the rendition of Götterdämmerung from the last of the Ring Cycle by Wagner which takes your fancy [or none of the above!]; depictions of Weltuntergang were unfounded throughout history. The world did not end then and it won’t end now.
    Although the Euro may crash and burn, Icarus-style, the fact that the stage is set in Greece at the outset is poignant.
    The sun is shining on this benign and beautiful September day.
    Bond yields and markets are weather conditions or may be dictated by them, but the world has a funny stubborn little habit of turning on its axis and the sun continues to rise each day.

  39. dgbooth


    Some suggestions were –
    Property – Land.
    Other currency – Norweign Krones.
    Financial instruments – Bonds.

    Suggestions welcome.

    • breltub

      Save up enough and buy a peat burning power station, you’ll be king kong when it all goes belly up as everyone needs electricity and all we will have left is turf!

    • Deco

      Polish Zloty. It sounds like a long shot – backed by one of the most capable workforces in Europe….

  40. Praetorian

    Saving the Rich, Losing the Economy
    Economic policy in the United States and Europe has failed, and people are suffering.

    Economic policy failed for three reasons: (1) policymakers focused on enabling offshoring corporations to move middle class jobs, and the consumer demand, tax base, GDP, and careers associated with the jobs, to foreign countries, such as China and India, where labor is inexpensive; (2) policymakers permitted financial deregulation that unleashed fraud and debt leverage on a scale previously unimaginable; (3) policymakers responded to the resulting financial crisis by imposing austerity on the population and running the printing press in order to bail out banks and prevent any losses to the banks regardless of the cost to national economies and innocent parties.

    • uchrisn

      Thats a succint explaination. Point 1 is ok because Chinese and Indian people are equal to Americans and they gained. 2 and 3 are insider robbieries which has been happening since the start of history. This is the first time people can communicate easily by internet so I see some steam building of people who are becoming more aware of being ruled by an ‘elite’

  41. wills


    Inflation wise I reckon the 2 trillion ponzi scheme bailout will stay in the insiders economy where inflation does not exist.

  42. dwalsh

    Excellent interview from Wall Street with Chris Hedges; a voice for sanity and humanity.

    • BrianC

      Very interesting. From the bit I heard privilege and power will oust truth and justice unless society mobilizes against the corporate powers that promote and foster privilege and power. So how do people mobilize their communities to engage in civil disobedience to express the will of the people?

      Every time I see RTE giving airtime to Peter Sutherland I feel physically sick to the stomach having to listen to his bile. He epitomizes privilege and power.

      And another thing while I am venting vexations. I wish Pat Kenny would remember who actually pays his salary. It is the people of this country.

      Why on earth does he have to carry on like a moron entertaining incorrect facts given on Frontline without driving home the point that such should not be allowed to be aired on Frontline. For example the incorrect figures always trotted out regards unemployment benefit to assert people are better off on social welfare than working. It beggars belief.

      How come four years ago most of the people who are are unemployed now and the many in receipt of social welfare were working. What happened? Did they all just decide they would be better off leaving their jobs and drawing social welfare?

      PK is always highlighting the fact that his original background is in engineering hence implying he is skilled in analytical thinking. He is an intelligent guy why on earth doesn’t he at least make some attempt to muster a credible attempt at holding those who make spurious remarks to account. He ought to spend more time interviewing people like Chris Hedges to air this type of thinking. Why do I have to learn about such people here on this blog? The journalists in RTE have a duty to the Irish People and they should start doing some real journalism instead of interviewing the same old heads with the same old stuck in the mud status quo views but then again I am quite sure you will tell me they are there to serve the thin layer of managers who work to create and preserve privilege and power.

  43. dwalsh


    Turning and turning in the widening gyre
    The falcon cannot hear the falconer;
    Things fall apart; the centre cannot hold;
    Mere anarchy is loosed upon the world,
    The blood-dimmed tide is loosed, and everywhere
    The ceremony of innocence is drowned;
    The best lack all conviction, while the worst
    Are full of passionate intensity.

    Surely some revelation is at hand;
    Surely the Second Coming is at hand.
    The Second Coming! Hardly are those words out
    When a vast image out of Spiritus Mundi
    Troubles my sight: a waste of desert sand;
    A shape with lion body and the head of a man,
    A gaze blank and pitiless as the sun,
    Is moving its slow thighs, while all about it
    Wind shadows of the indignant desert birds.

    The darkness drops again but now I know
    That twenty centuries of stony sleep
    Were vexed to nightmare by a rocking cradle,
    And what rough beast, its hour come round at last,
    Slouches towards Bethlehem to be born?

    W.B. Yeats

    • I used to have a theory, now I’m not talking about plagiarism here, but Yeats was definitely doing a copycat of Shelley’s Ozymandias jealous of the fame Shelley had because of it, what do you think?

      I met a traveller from an antique land
      Who said: `Two vast and trunkless legs of stone
      Stand in the desert. Near them, on the sand,
      Half sunk, a shattered visage lies, whose frown,
      And wrinkled lip, and sneer of cold command,
      Tell that its sculptor well those passions read
      Which yet survive, stamped on these lifeless things,
      The hand that mocked them and the heart that fed.
      And on the pedestal these words appear –
      “My name is Ozymandias, king of kings:
      Look on my works, ye Mighty, and despair!”
      Nothing beside remains. Round the decay
      Of that colossal wreck, boundless and bare
      The lone and level sands stretch far away.’

      Chris Hedges probably means well, but is a bit of a whiner. I’m actually optimistic the world will be a better place after the euro and the fiat dollar go:)

      We need to get away from virtual, pretend money, and get back to basics, where money doesn’t matter that much:) After all, a fine day is freely given out by nature, unless you get clamped:)

      • Praetorian

        He’s got a lot to ‘whine’ about.

        • dwalsh

          NB people who care about the planet are whiners apparently.

          CB wants to rearrange the deck chairs and sail-on…over the edge!

          • Malcolm McClure

            dwalsh said: Wall Street greed …is responsible…for the destruction they are wreaking on our planet.
            Hang on a sec. Improvement in living standards everywhere depends education, which requires funding, which requires an economy, which requires banks, which requires stock exchanges etc. The funds require collateral, which require development of the national economy, which require exploitation of minerals and other natural resources. Are you sure you have thought this through?
            What alternative do you propose?
            The planet is well able to look after itself, and has been for billions of years. I suppose the man who invented fire was accused of wreaking destruction on the planet.

          • Its all balance, of course you need productive economies to deliver goods and services necessary for a healthy society, it is fair to say that an incentive system that allows people to try, fail and or succeed on their own terms taking their own risks works, clearly what has transpired is that a corporate interest has captured government and all critical decisions in which they have a stake will ensure that the decisions are made in their favor. Regulated constrained responsible capitalism works, the principles that governments allegedly espouse but always disregard when such principles come in conflict with the corporate interests. The US is gone so far, in Europe there is still a chance to assert the rights of the many against the dominant interest of a few

          • @dwalsh

            You’s like the world to be a cube with edges or flat, but in fact its round:) So I won’t be sailing anyone over the edge.Lol

          • dwalsh

            Hey cb.

            You have such a literal mind.
            You completely miss metaphor and figures of speech.
            Interesting that.
            You’re really good on figures, as in numbers, though; I’ll give you that…oh and deck chair arranging :)

          • @dwalsh,

            Re “You have such a literal mind.
            You completely miss metaphor and figures of speech.
            Interesting that.
            You’re really good on figures, as in numbers, though; I’ll give you that…oh and deck chair arranging :)”

            I’ve a postgrad MA in Modern English and American Literature from UCD to prove I don’t miss metaphor and figures of speech. That’s why later I had to go back and do Math, so yur wrong there as well.

            No worries, you are right about the demons of Wall Street and their whole derivative mess.

            Loosen up there. You’ve more to learn:)

          • dwalsh

            UCD MA in English explains it. Thanks.
            Challenged in the sense of humour department too it seems.

          • dwalsh

            In fact cb your response just underlined what I said.
            I wont have any more comments to make.
            I wish you well.

          • dwalsh


            I never implied you lacked education or intelligence.

            No matter what I say you misunderstand and contradict.

          • dwalsh

            @ Malcolm McClure

            “What alternative do you propose?”

            All my posts explain my position on economics and civilisation piece meal. I could not respond to your question other than to direct you to them. But I can tell you this: you wont agree with me.

            re your position on the planet – you are either uninformed or missinformed; I’m not sure which. But I know your are mistaken. But again I know you would never see or agree with my perception or position.

            We represent different kinds of mind. It is one of the things I like most about this blog. I get to encounter intelligent and articulate minds such as yours which are radically different to mine.

            All the best

  44. So you think the ECB (RIP 2013) was bad news? Signs of ECONOMIC TOTALITARIANISM – The European Stability Mechanism, ESM

    While the German parliament votes on the ESFS on Thursday, here, the ESM shall be subject of sticking some red flags into it.

    ARTICLE 8 – Authorised capital stock

    The authorised capital stock shall be EUR 700 000 million.

    hmmm, ok, I get that.

    ARTICLE 9 – Capital calls

    ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them by the Managing Director pursuant to this paragraph, such demand to be paid within seven days of receipt.



    But wait, it gets even better….

    ARTICLE 10 – Changes in authorised capital stock

    The Board of Governors…may decide to change the authorised capital stock and amend Article 8 and Annex II accordingly.

    Now that comes in very handy, doesn’t it? Let;s start with 700 billion, we can change that any time we see fit. Right! Article 9 means that we are unconditionally and irrevocably required to cough up. Great stuff!

    That’s not all, now here are the real cherries on the cake:

    ARTICLE 27 – Legal status, privileges and immunities

    The ESM shall have full legal personality;

    The ESM, its property, funding and assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process except to the extent that the ESM expressly waives its immunity for the purpose of any proceedings or by the terms of any contract, including the documentation of the funding instruments.

    Want some more?

    4. The property, funding and assets of the ESM shall, wherever located and by whomsoever held, be immune from search, requisition, confiscation, expropriation or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action.
    5. The archives of the ESM and all documents belonging to the ESM or held by it, shall be inviolable.

    Now, how is that for starters? A EU Institution that can not be legally challenged by executive, administrative or legislative action is totalitarian. No government can take them to court, no legal action can be taken, nothing can be confiscated.

    This is per definitionem a totalitarian institution they are trying to establish.

    So what about the people running the show?

    ARTICLE 30 Immunities of persons

    In the interest of the ESM, the Chairperson of the Board of Governors, Governors, alternate Governors, Directors, alternate Directors, as well as the Managing Director and other staff members shall be immune from legal proceedings with respect to acts performed by them in their official capacity and shall enjoy inviolability in respect of their official papers and documents.

    Oh really? I guess this is the Anglo Irish Bank executives wet dream, 100% legal, executive and administrative immunity for staff, assets and all paperwork produced.

    A new EU institution that we are legally bound to transfer wealth to within seven days of their notice, they can indict us, but not the other way around. EU’s wealth in a single EU Institution that is unelected.

    ….Sieg Heil!



    • Malcolm McClure

      Georg: If the rest of the ESM Charter is similar to the excerpts you have helpfully provided, it is the scariest development yet in this whole sorry saga.

      Who are these people and what evidence have they provided that they are trustworthy?

      I demand that they publish a complete cv for every Man Jack of them, complete with a list of their family investments, charitable donations and personal involvement in legal proceedings over the past 10 years.

    • Georg, great post, thx for link, amazing stuff,

      The property, funding and assets of the ESM shall, wherever located and by whomsoever held, be immune from search

      My eyes are deceiving me, it doesn’t say immune from search

      No Michael Moore’s then trawling the collateral and assets of the ESM to see what assets and collateral they actually have.

      Sieg Heil indeed!!

  45. Chris16

    @Deco, you say you would need to own property in Germany to open an account over there? I have heard plenty of stories of Irish residents successfully opening accounts in Germany without German addresses.

    A more important question would be, is it a waste of time doing this? In the event of the collapse of the Euro would it not be best to have your money in Deutsche Marks as it would be a strong currency. Or are people saying there is a fairly strong chance that all European bangs are just going to collapse, taking all savings with them.

    I have a close relative living in Dubai. Would I be best to ask them to put my savings away in an account over there?

    • Chris16

      For “European bangs” read “European banks”! Even if they are all going to go bang! :)

    • Chris16

      So Dubai is potentially on the verge of a very similar debt crisis?

      I do not work in the financial industry, nor did I study finance or economics in university. I would be interested to hear what economics experts who had a fair idea this was coming (there seems to be a few of you posting here) have done or are doing to protect their savings/assets??

    • coldblow

      Chris, if you asked the bank to open you an account in DMk they would probably look at you the same way as if you’d asked for Punt Nua (or Lira, Francs etc).

      • Chris16

        I’m not suggesting you ask to open an account now in DMk! I’m saying you open an account in Germany (obviously in Euro) and in the event of the Euro breaking up, you funds would be converted to the new DMk.

        Is that not correct?

        • coldblow

          Yes, you are right, I misread you. I don’t think anyone can answer your questions. I mean, a financial expert could give an opinion but how much credibility do they have? By the way, how did these people open an account in Germany without residence? I saw something on-line some time ago about how you can circumvent this but it sounded dodgy. If Germany decides to break away they are bound to have plenty of people looking for a safe haven there for their cash and it wouldn’t surprise me if they introduced procedures to penalize such behaviour.

          I’m just sitting tight. I might change my mind, according to my instincts, but for now I’m taking a philosophical view.

  46. CitizenWhy

    Short take on book by Michael Lewis on EU crisis. He was the first writer on how Wall Street cheated its way to enormous wealth.

    According to the New York Times book review, the new book “makes topics like European sovereign debt, the International Monetary Fund and the European Central Bank not only comprehensible but also fascinating – even, or especially, to readers, who rarely open the business pages or watch CNBC.”

    • his article on Ireland was at least as insightful as some of the best local commentators DMcW included, the fact that Germans banking recklessness was never adequately reported in Ireland exposes the international limitation of the Irish media. Ironically Vanity Fair was never really understood here as it is constantly place in the Womens Interest section beside the celebrity fodder, it is a strange beast that celebrates wealth and proposed glamour but also does some of the best investigative journalism

    • CitizenWhy

      Forgot to mention the name of Lewis’s book, due out in October: Boomerang.

      Thanks, Business Lunch, for the link to Lewis’s take on Ireland. It mildly evokes Jonathan Swift.

    • coldblow

      Did you read his famous article (from 18 months ago or so) about Greece? People were raving about it. I still haven’t made up my mind about it. It’s very good about tax evasion and has lots of hearsay evidence to back it up (nothing wrong with tht per se). Then he, and the narrative, heads off into some monastery and it all fizzles out. But, just taking the first part, about the economy and the corruption, I wonder is it a fair assessment?

      • The Monastery story was about how an Order of Monks leveraged low value land into a billion dollar international property investment company

        • coldblow

          Yes, but that would be an exception to the general pattern in Greece and more typical of Ireland, or am I wrong? I wonder if the main part of the story played much of a role in demonizing Greece and whether it had any influence in what happened since. that might be pushing it. I think the German tabloids were onto this before Lewis’ article.

          Newsnight on BBC2 were very worried last night about a social breakdown there. (Mind you, when a scientist spoke on it a few years ago about the rise in cases of BSE and talked of it as the start of a classic distribution curve that scared the sh*t out of me too.)

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