February 29, 2012

If the EU wants our agreement, the ECB must help our banks

Posted in Irish Independent · 170 comments ·

THE European Central Bank (ECB) will ultimately have to take over the mortgage book of the big banks. Or at least that is what will have to happen for this country and our economy to begin the process of a normal recovery.

It mightn’t be a bad idea to make ratification of the new fiscal compact deal contingent on the ECB taking the mortgage book from the banks. Never mind your promissory notes, the real volcano building under the finances of this fragile State of ours is the deeply underwater mortgage books of the big banks — Bank of Ireland, AIB and Irish Permanent.

A possible way out is to hand this problem to the ECB in the same way as the Greeks handed their government debt problem to the ECB last week and the ECB took the loss. Be in no doubt the Portuguese will be next in the queue, so while we are waiting for our turn we might as well figure out our demand and our price.

And given that there will be lots of behind-the-scenes negotiations in the next few months, this might be one of our demands in the horse-trading.

The latest figures from the banks and the property market reinforce the centrality of a mortgage solution and if the ECB doesn’t take over the mortgage book of the banks, we will have another major banking crisis through the avenue of mass mortgage default.

Many, many years ago this column warned of a generation in negative equity. Now it is a reality and one day these people will wake up and decide not to bother with the whole thing.

Yesterday we had figures confirming that house price falls are accelerating. We’ve now experienced 22 consecutive quarters of price falls. This is moving into world record territory for uninterrupted price slumps. A few weeks ago, this column wrote that if we followed the Japanese experience we’d see price falls ending next year, but there is no sign that we are following Japan. After all, Japan reacted to the economic slump of the 1990s by hugely expanding government spending; we are doing the opposite. The fiscal compact is a silly idea and will make the adjustment harder because without fully flexible wages, slashing government expenditure now just punctures demand and makes unemployment higher.

So without this direct support to demand, the economy will be more dependent on the banks to extend loans. But here’s the thing, the banking picture is getting worse not better in Ireland.

Last week we got a snapshot of what the country actually looks like in Bank of Ireland’s latest report. It shows us that 55pc of Bank of Ireland’s total mortgage book is now in negative equity. It also shows that 69pc of buy-to-let mortgages are in negative equity. €15.3bn out of total mortgage lending of €28.8bn is now underwater.

Obviously this is getting worse as shown by the figures from the CSO regarding house prices. This means that arrears, negative equity and ultimately defaults will get more and more common.

But has Bank of Ireland provided for this? Well this is where we find the real shock in the report. Bank of Ireland has only set aside €1bn to cover the potential losses on the €15bn that the negative equity figure suggests could happen.

But why have they only set aside such a small amount of capital for an event, which is practically guaranteed to happen?

The answer is that they have no money.

Here’s what is happening in the property market in Ireland. No Irish banks are moving against mortgage owners who are in arrears. Only the foreign owned banks are doing that at the moment. The spin is that this is because the banks are government-owned and can’t be seen to be moving against citizens. This may be true and hopefully it is in the very many atrociously difficult cases that are out there.

But what if the reason they aren’t foreclosing on mortgages is because they can’t afford to? To foreclose a mortgage, a bank needs to have a capital buffer to finance the difference between the loan and the new price they could sell the house for. But it can only generate this buffer sustainably from its margins, its on-going profits.

But here’s the rub. The banks in Ireland are caught between the rock of 400,000 tracker mortgages and the hard place of a deposit war.

In the next five years the Irish banks need to get their loans-to-deposit ratios down to 100pc. The average figure for the big ones is now around 140pc. This means that they will either have to make fewer loans or raise more deposits over the next few years.

BUT with the tracker rates being so low, we are in a situation where the banks are now trying to attract in deposits by offering interest rates that are higher than tracker rates. So they are paying more to get money in than they are being paid on the loans they have made. This means that their cost of capital is higher than their return on that capital. Even a Leaving Cert economics student can understand that that is how you go bust.

So the circularity of the argument is the banks aren’t foreclosing on mortgages because they can’t afford to, which means that the housing market won’t drop quickly but prices will continue to grind down relentlessly quarter by quarter.

This makes arrears and defaults all the more likely, against which the banks do not have sufficient capital to protect themselves.

They are snookered either way.

They can’t foreclose because they can’t afford to; but they also can’t afford not to foreclose.

The problem is simply too big for the domestic banks. The ECB will have to take the mortgage book in order to ensure that Ireland doesn’t suffer from a slow, mass default.

Ireland needs a Sugar Daddy to take one for the team. If the Germans and French want their fiscal compact, they’ve got to pay for it. Putting the mortgage issue firmly on the table mightn’t be a bad opener.

  1. Adam Byrne

    hope this subscription function works…

    • Adam Byrne

      Still not working webmaster, I am supposed to be subscribed to the emails, which makes it a lot easier for me to read the comments as they are posted, than having to come on there to this labyrinthe.

      But I’m not getting the mails.

      Please fix it. Thanks,


  2. Banana Day

    I propose all mortgage holders bring a banana to the closest bank in their neighborhood and embrace the management .

    All parties are locked up however the mortgage holders can vote their way out.

  3. Good evening David,

    how would you include the Euro 1 Trillion ECB flood in your article, if at all?


    • fwiw, in my opinion the 1 tn does not solve any of the underlying problems at all, on the contrary, it is another method to allow protracted default of insolvent banks, besides, it increased risk appetite for junk papers, and it would seem as of this already has started.

  4. Peter Atkinson

    The brilliant news today that the live register is down over 1800 the lowest since 2010. Joans new jobbie initiative. no its joan and her stazi herding the neediest of this country into the poverty gas chambers. let nobody be conned that any of these facile job initiatives are actually yielding results. no its just a propaganda exercise in which she stands up in the dail and waffles on in her innate monotone like margaret thatcher did when a “major victory” was won in the falklands war. We all know how important those victories were. joans goose green so to speak. totally irrelevant yet the attrition rate was horrendous.

    • Deco

      The live register statistic might have a lot to do with the quantities of Irish people in Western Australia, and in other locations chasing whatever jobs they can find, rather that waiting around for the Irish establishment to fix a problem taht they officially declared would never happen again, not that long ago.

      But I doubt that there will be an acknowledgement by the state concerning this…

  5. Elpenor Dignam

    David this is no longer an economic matter it’s a political one and I for one will be rejecting this treaty irrespective of what sweeteners are on the table. The globalists made their bed now let them lie in it.

  6. straboe1

    I do not believe that we should permanently sell our independence, because that is surely what we are doing. The Act of Union in 1800 was bought by the British, we all know the consequence of that disaster. During the worst period of our history, namely the famine, the British sat on their hands and let our people starve to death. Can we never learn from history. We are heading in the same direction now. We have been forced through bad governance into ceding our economic independence to the Troika. This was to be only for a number of years. Are we now going to agree to this for ever? The British treated use badly, it is obvious that the powers in Europe will treat us as badly as the British did. Look at how they treated us in relation to the debts of Anglo Irish Bank, they insisted it was our citizens who would pay it, even though we had no responsibility for their debts. Irish schoolchildren suffer, Irish patients suffer, Irish jobs vanish, we all owe a fortune. this is notas bad as the British did during the famine, but we are still being treated very badly. Is this what we want to sell our independence for, to be treated badly by those who rule in Europe? I remember being told at school that the only thing we learn from history is that we don’t learn from history. Let’s hope we don’t make the same mistake this time, Iceland has more respect for their independence than we seem to, and as a result they are doing a lot better than we are, despite our European friends. Brendan.

    • rebean

      The British look like Christ compared to these people in Europe. The Germans havent changed that much in 60 years. Wake up for Gods sake they still want to run Europe. They have no mercy. Why are the Brits not voting on the Goddamn treaty. We should be allowed opt out. Cant believe OCuiv hasnt the bottle fot the vote. He s on the same side as the British. Christ if you live long enough youll see it all

      • bonbon

        Open both eyes and see the British running Germany as usual. The previous thread was after all about that.

        No German citizen was ever asked about a single treaty, never mind a vote. They were forced to dump the DM for this poisonous Euro-corpse. And now forced to commit suicide to bail out the banks.

        Now who is running this show? SF has no doubt.

  7. molly66

    I hope this shower of misfits who are running the country look at your opening statement and somebody gets a branding iron and brands it into the governments heads.I was on last week about my 83 year old mother who was sent home after 9 hours in the A and E by the way the lourdes hospital now has 2 A and Es ,the HSE sent a sick woman home when her doctor clearly express in a 2page letter to the A and E that my mother should be an in patient ( with a chest infection,kidney in fection / pneumonia and to be put on a drip for 3/4 days and have further investigation for other on going problems .I contacted the HSE by email and the response I got two days later floored me would I like to take part in a survey well HSE stick your survey where the sun won’t shine,if I had brought her to the beacon ,the Mather private would they have sent her home I don’t think so ,so I should have brought her to the beacon and when the bill came pass it on to the HSE who have clearly failed my 83 year old mother ,sorry for the rant.

    • Juanjo R

      You are fully justified. The government is making regular consisent choices to use the peoples’ resources to prop up bust banks not not to help the people, as it should be. This an example of the price innocent people are paying.

      Best wishes for your mom!


      Molly, the one thing wrong with your rant is that you apologise for it and that’s typically Irish. Don’t be sorry for feeling the way you do, how could you feel otherwise? Instead, feel angry, hold on to that anger, it’s justified. “Anger is an energy”

  8. Lyndon Jones

    I cant see the ECB becoming a mortgage broker , can anyone else ? No they wont .
    The 140% mentioned of loans to deposits is not that bad and the mortgage book comprises of mortgages averaging 150k which on average is not that bad . There are extreme cases which make it look worse than it really is i.e mortgages between 2004 – 2008 .
    It makes sense to me to weed out the troubled mortgages from the manageable ones , maybe a NAMA for these mortgages .
    A real issue is all the buy to let mortgages these mortgage holders should not be lumped in with owner occupiers .
    All in all I can see the logic for dealing with mortgage books on a case by case basis .
    No need to panic on this front.

  9. Eireannach

    This is the best article I think I’ve ever read by DMcW.

    This is why I keep reading his articles. He’s not an ideological eurosceptic. He knows the deal and he’s not saying ‘vote no in the referendum!’.

    He’s smarter than that.

    • Adam Byrne

      I was thinking the same thing myself Eirennach and then I saw your comment. It’s not even my particular area of interest but the subject matter is explained with exceptional clarity.

    • Malcolm McClure

      Eirennach: I completely agree. In this article David has drilled through all the blather and subterfuge and reached a balanced analysis of exactly what the constraints on the housing market are today. I am going to re-read it a few times and hopefully learn something of lasting value.

      • straboe1

        We all have to learn from history, a small peripheral state with very little real influence will be gobbled up by the major powers of Europe. The little bit of a society that we have left at present will be destroyed by the power hungry entities using the EU to control everything.

  10. goldbug






  11. John LK

    There are no “bail outs” – Just Loans.
    ECB generating 1% fixed interest for 3 years to float banks.
    Charging 5% plus to tax payers of Ireland to finance this.

    The Supranos could learn from these mobsters.

    Referendum – do we want more debt ? NO

  12. molly66

    David Joan burton said on the pat kenny show that 150000 had gone of the dole,in the last 12 months ,how many of these people have left Ireland ,this figure is waffle and Joan is cooking the figures to make the government look good,well I have news for you Joan the Irish people don’t believe your spin and waffle .

    • Molly 66, Joan is right in my case. I took myself off to Singapore and I can now pay my mortgage.
      Ireland has a lot to learn from Singapore and start making use of its abundant resources.

  13. tony_murphy

    Who is paying you to write this stuff? the media bought and paid for by the globalise elite banisters and corporations?

    What have you got to say about the ESM David?


    The EU, ECB, IMF, Central Bankers etc should be kicked out of the country, no deals done with the crooks

  14. You make more sense than most commentators, David, but even you’re guilty of some strange statements. I was only four paragraphs into this article and was forced to shake my head in despair when I read you talking about Irish “demands in the horse-trading”.

    Any half-awake observer of European politics during the past few years can clearly see that both the previous government and the one we’ve got now are making no “demands” of Europe. We have meekly accepted every single diktat to have emerged from the EU and show absolutely no sign of changing tack.

    And I say that as someone who has been essentially pro-European for most of my life. Unfortunately, the original spirit of the European project has been hijacked by vested interests in the financial sector and it no longer has the needs of the people at heart.

    A ‘Yes’ vote in this referendum is no more and no less than an endorsement of Fine Gael / Fianna Fáil European policy. A policy of meek acquiescence, of placing the interests of European financial institutions above the interests of Irish citizens. A policy that is not working and which has to come to an end.

    Whatever the drawbacks of a ‘No’ vote may be (and I accept there may well be many), we need to categorically reject our current European trajectory. And the present government offers no other way of doing this beyond that ‘No’ vote.

    If we had a strong leadership willing to stand up for the Irish people on the European stage, it might make sense to vote ‘Yes’ and seek to influence the process from within. But we don’t. So we shouldn’t.

    • Adam Byrne

      I’ll be voting NO as well but the ignorant majority in this country will probably just about pass the YES vote.

    • barryflanagan

      I have to agree. Whatever the consequences of a No vote, I could not at this point bring myself to voting Yes.

    • Eireannach

      It’ll be NO by a substantial margin – 65% NO, 35% YES.

      Not only will it be a NO, but the spirit of rebellion gather pace. The household charge will remain undersubscribed, and those who don’t sign up will get away with it.

      I say this as a broadly pro-Europe person who considers a property tax normal, as in all other European countries except Ireland and Malta.

      But people have no money, they are bailing out bank, they’ve had enough of it, it’ll be NO in the referendum by a solid majority and the household charge will descend into farce. Those who don’t subscribe will end up laughing at those who do subscribe.

  15. johnniekelly81

    firstly I’m not an economist but I do have an insight into what is going on in Iur banks. I’d like to understand more about the economics behind the situation and so Im not disagreeing for the sake of it.

    Couple of observations on the above article:

    1) the point isn’t about negative equity rather its about affordability. negative equity doesn’t matter unless you’re going to sell, or unless you need to sell. only if you crystallize the loss does it become an actual loss and burden on the mortgage holder.

    2) there is no evidence to suggest that just because the mortgage holder is in negative equity that they will no longer pay the mortgage. you can therefore have fully performing loans which are backed by property in negative equity. this is consistent with experience in the uk market, and to date from evidence in the irish market.

    3) banks can only provide for mortgages which are not performing. therefore it is wrong to compare the €1bn of provisions quoted above against the full amount of negative equity in the banks mortgage books. the correct comparison is to compare the provisions against the non performing loans. banks do not provide based on negative equity but on incurred loss. Also under Basel rules Banks capital is calculated based on expected losses not on negative equity.

    4) to say that the banks have no money isnt quite right. They are still profitable before loan losses, and the system is profitable before loan losses. You are quite right the profitability of irish banks depends on their ability to re price and thereby improving their margins. however the way to look at this is in terms of fixed rate lending, variable lending and trackers. the banks still making healthy margin on both fixed and variable lending. on the trackers they are making margin based off ecb lending. historically banks funding would’ve been about 50bps. even now banks can fund trackers at 1% from the ecb and charge a minimum margin of 1.75 per cent, thus making a margin of 75bps.

    5) on their deposits these are of course much higher than they were. however when looking at the cost of funding it is important to remember that the back book is priced off historic low rates and so it is important to look at the marginal cost of funding, not the absolute cost. banks will overtime reduce their funding costs by exiting ELG and using LTRO. The LTRO should help reduce deposit costs as it will alleviate stress in funding requirments. more readily available funding will allow the banks reduced deposit costs.

    6) To say that the banks do not have sufficient capital is not right, at this point. the PCAR assessment last march capitalised the banks to withstand a severe case in terms of mortgage arrears. while the current situation is worse than the base case, it is not worse than the stress scenario. the banks therefore have the capital to withstand the stress scenario. if you look again at the bank of ireland accounts you will see the large amount of cash they have on deposit. this is effectively as a result of their capital raise.

    7) Re the loan to deposit ratio – you have incorrectly assumed a loan to deposit ratio of 100 percent. the actual target is circa 120 to 125%. the banks will achieve this in 2 ways. firstly through deleveraging (of which NAMA has played a part), natural redemptions and exiting of certain lines of business. again as bank of ireland have demonstrated in their annual report, they have deleveraged nearly €8bn in 2011. this is a similar story in AIB and shows how the Irish banks were ahead of their european counterparts.

    it is not a question then of whether the Banks could foreclose (as they clearly can) but rather why arent they?

    We / ireland has no history of foreclosure and our history of the evictions in the past mean that banks are less willing to choose this as an option. Politically and through the regulator there is a desire to avoid foreclosure at all costs. this is consistent with the keane report and public policy to date. this might be a separate point for the debate.

    some argue that foreclosures would put a bottom in the market, is that what you were getting at? If you’re trying to preserve value why would you off load lots of assets into a depressed market, at firesale prices? foreclosure would also mean evicting families and others from homes. just think of the social costs and consequences for social welfare state like ours!

    finally your assertion that arrears will increase in line with negative equity does not hold. the driver of arrears in mortgage books is unemployment and affordability. the other driver as seen in in august is speculation as to public policy initiatives. we should all be very responsible when making or suggesting alternatives. I’m not saying this should stifle debate, but it should be balanced and realistic.

    I think your article does have a point in the help of the ecb is needed and maybe needed for a long time into the future. however it is already helping through funding to irish banks at cheap rates, and banks can still make some margin on their tracker books if fully funded through ECB@ 1%.

    also in relation to your general point that Ireland should default, this article seems to contradict that view. I struggle to see how you can advocate default on 1 hand an exit from the euro while at the same time suggesting that we need the ECB as a Sugar Daddy.


    • gizzy


      Given their cost bases that were supported by large loan books that will no longer exist, given that they had to sell the best part of theirt books, given the need to deleverage which can only occur through sales of the best part of their books or right off of the worst parts given the funding cost whereby deposits are costing them more than trackers given they now operate almost solely in a ruined economy your analysis of strength is flawed.

      Negative equity in itself you are right does not lead to write offs or loan losses negative equity in an economy with high unemployment, wage cuts increased taxes means losses when the security realisable does not cover the exposure.

    • Colin

      “We / ireland has no history of foreclosure and our history of the evictions in the past mean that banks are less willing to choose this as an option”

      Absolute horse manure, sorry, the banks don’t want to foreclose because they do not want to allow property prices fall to reach the natural low point. The market is being interfered with, with NAMA, and with lack of foreclosures. Banks do not want to face the music. They are living in denial. We all know if all these houses and apartments were foreclosed, there’d be more supply in an extremely weak demand driven market, thus the prices would fall further faster as no buyers can be found for love nor money.

      You sound like one of those guys 10 years ago who credited the so called ‘Irish Economic Miracle’ to Social Partnership, more horse manure by the way.

  16. Harper66

    This certainly explains some of the reluctance of banks to speed up the foreclosure process –

    “They (the commercial banks) are allowed to accrue interest on non-performing mortgages until the actual foreclosure takes place, which on average takes about 16 months. All the phantom interest that is not actually collected is booked as income until the actual act of foreclosure. As a resullt, many bank financial statements actually look much better than they actually are. At foreclosure all the phantom income comes off the books of the banks. This certainly explains some of the reluctance of banks to speed up the foreclosure process.”


  17. wills

    The mortgage lending is an illusion.

    The banks do not lend.


    Joe bloggs goes into bank.

    Asks for loan to buy house.

    Bank keeps from telling Mr. Bloggs that the bank is actually – technically *making a debt* on behalf of Mr. bloggs, for Mr.bloggs.

    The debt belongs to Mr. Bloggs.

    Making the debt for Mr.Bloggs costs the banks nothing except for overheads n wages etc.

    So the *mortgage* Mr. Bloggs now owns thinking the bank gave him a pile of cash from the vault in bank is in fact a debt made for him the bank then charges him for the bother. This would be the interests.

    The mortgage the banks have literally made on the spot for Bloggs is a win-win for the banks and a loose-loose for Mr. Bloggs.

    Right here is the illusion at the center of ALL of this david scribes on and it is a hall of mirrors illusion hiding what the banking system actually is.

    A license to make debt on behalf of another person and cream off a fee for literally doing nothing except make a debt.

    • 33square

      “Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed.”

  18. wills

    Now what the banks then do is they use this service they are licensed to provide, which is to make a debt for a person who walks in off the street for a loan (debt), use it to go into the property business themselves.

    This is precisely what the banks did here over the last 15 years and working with property syndicates with equity of 15 % the banks literally made tens of billions out of thin air to go buy property in UK, Europe and USA.

    Now this is the crux of the property bubble – the criminal banking system got in on the action and went bezerk in the full knowledge that the government would bail the system out after they looted the ability to *make debts*.

    Remember the biggest investor in property was the banks.


    We the taxpayer and PAYING for this now.

    And the very same banks are positioning themselves to go do it ALL over again.

  19. wills

    THIS is what WE all must be blowing the whistle on in my opinion as humble as I try to maintain it!

  20. rebean

    I feel I am living in Groundhog day economically. Vote for this and you will all have more jobs. Vote for that and you will all have a better life. Vote for this and Europe will give you a load of money on loan which you will have to pay back etc etc etc. I think we should all vote no and lets see what concessions we can get. Its all just a big con. The only people that want this are those on the big salaries on borrowed money. The rest of us are just surviving. We still need to close the deficit this will focus the mind.

  21. mediator

    David it seems to me from reading this article that you still don’t get the big picture. This is not about mortgage debt or any other, it’s about control. The fiscal compact has been called an act of war by a former Italian finance minister. I think you’ve been asleep for the past 4 years if you think that this is just an opportunity for more horse trading…

    • bonbon

      Tremonti in his new book Emergency Exit. He also calls it “white fascism”.

      It is an act of war. War is 90% cultural, and here Ireland has a great role to play with Republican history dealing with this. President Higgins at LSE, very well worth listening to, brought the cultural aspect in economics to the table.

  22. Alan42

    I can’t see how there will be ‘ horse trading ‘ I don’t even live in Ireland and from what I have read in the media so far , it will be a Yes vote .

    People are afraid and are just worn out from the disaster that is the Irish meltdown .

    The time for ‘ Horse trading ‘ was just before the IMF came in . It is just too late as Ireland holds no cards.

    Germany runs Europe and these guys like austerity . They firmly believe that if the reat of Europe was like them , then there would be no problem .

    Ireland is now at the start of a long process of either flat or little growth . The EU will force the Irish to bring their Corporation Tax rate into line with the rest of the Eand along with lashings of austerity life in Ireland will be pretty grim for a long time .

    At the end of the day the rest of the EU will not care as Ireland is just a small state in the group and can starve . Look at what they done to Greece .

    Enda , Phil Hogan , Micheal Martin or Eamon Gilmore will not upset the apple cart as they are still getting paid and maintaining their lifestyle . They are not business people or horse traders but rather a bunch long serving Public Servants who have no idea how business works .

    • rebean

      Yes correct This is what will happen, The Govt have no interest in the future of the country only their next four years . Keep the show on the road at all costs. Donrt bite the bullet and keep borrowing money from the ECB.

  23. Alan42

    The crisis is also a gift from heaven for the Germans as it fast tracks central control , ie , one European government .

    I have never understood people who get all hot and bothered about European integration and about how important it is to vote NO in Referendums .

    The whole idea of the EU from day one has been a single European government with the Germans in control . ireland thought it was getting a great deal because every new road had a sign on it saying ‘ paid for by the EU ‘ I remember people laughing and thinking that it was great they we were getting all these new roads at the German taxpayers expense .

    Boys and Girls , it is time to pay the piper . The ECB is no more likely to take over the irish banks mortgage books than I am .

    • Harper66

      I think we are already paying the piper. WE have been bailing our their banks since 2008.

    • bonbon

      Watch the German media, admittedly more uniform than the Irish bent over journalism. Merkel got a double whammy in 1 day, with Ireland, and the Court ruling.

      Why do you think the FT hounded President Wulff from office, 2nd president in 3 years?

      Now ask who runs the EU?

  24. Alan42

    Is it to late for Ireland to do a Iceland and tell the Germans and the ECB / IMF where to go ?

    • rebean

      I dont think the Irish people really have the bottle for a default. They dont want the uncertainty. we will of course eventually default . By all accounts we cannot pay back all the debt I reckon Sinn Fein would not pay any more bondholders then they have the experience of tough negotiation behind them. They will have a bigger say after the next election. Its ironic to think that their stance on Europe mirrors the British one.

      • bonbon

        The SF stance may mirror what Cameron says publicly. Do not be fooled. The Financial System itself centers on the City, and they know it is finished. SF knows it is finished. Expect the same reaction? I say not.

        Britain is now going for full conflict with Russia and China, and you can guess what that means, and who has his finger on the red button.

  25. Amazonian Economics

    I listened to an Adventurer in the Amazon who when comparing tools and equipment of the local tribes said on one of his programmes that the basic technology used in the modern world today to survive in the forests are ‘the same but different ‘.

    I think if we want to get out of this conundrum we need to believe in ourselves .

    We can do it if we have the will to do it . Where there is a will there is a way.

  26. Genetic Fusion

    The Celts are a tribe made up from both the Sumerians and the Scythians .

    If we remain in the EU under the tutelage of the Germans a new tribe on this island will fuse in the future generation and might be called the ‘Wankers’.

  27. redriversix

    ECB has now lent over I trillion to insolvent Banks in just 8 months.

    Same Banks are not supporting Business or people.

    If No vote wins we are still full members of EU.

    2 non-elected leaders in Greece and Italy
    [ Goldman Sachs men ]

    Unemployed and underemployed being made out to be social outcasts and criminals.

    Our Government spewing the usual puke about a yes vote is for jobs,investment,money,economic growth..none of it true.

    Vote No and I think it may rattle Europe

    French Elections in May,Sarkozy could very well lose.

    Austerity Riots in Greece,France,Spain Belgium and Hungary yesterday to name but a few.

    Germany “offers” to send 160 tax inspectors to Greece to “help” them..Local.de

    Britain offers to send Food, Medicine and security Assistance to Somalia in return for access to their Oil and uranium deposits.

    I think [hope] the NO vote will win.

    • bonbon

      It’s already rattled the EU cage. Focus on where the problem is – the Inter-Alpha British-run banking system.
      Remember a loud NO vote will be heard in the City, and Privy Council. Watch Cameron then.

      I think SF knows exactly what we are dealing with – the most obscene monetarist parasite demanding more austerity, the British Empire.

      After all the Fiscal Compact is already dead!

      • rebean

        I thought Britain was excluded or has excluded itself from the vote on this Fiscal compact. Are you saying that they dont want a vote because they are afraid of the outcome? That a no vote will cause a loss of investment in the city?

        • bonbon

          Britain excluded itself from the Euro, and still runs it. As Maggie said it is for the continent (or Germany). So an Euro collapse is an existential threat to the City. Excluding the Compact is irrelevant, as long as the others strangle themselves with it. They want us all to bail out their Inter-Alpha banking group!

  28. johnniekelly81

    Gizzy, I didnt mean to give the impression of strength at all. Current configuration of our banking system is not sustainable. However, the main points in this article are factually inaccurate. The theme may have some merit to it. Doubtful. Also completely at odds with a default strategy.

  29. Grey Fox

    David, passing our mortgage books to the ECB… will that not acelerate the level of repossessions? you say the banks cannot afford to repossess at moment the ECB may not be constrained by this issue.
    I am not saying that repossession should or should not happen thats a different arguement on all different levels, moral, equitable etc..

  30. bonbon

    If Merkozy want the Fiscal Compact, Eire must vote for it. Every yes vote means more austerity and misery.

    Instead of begging for a sugar-daddy to rescue banks to get a yes vote, I suggest instead let each country deal with its banks as they see fit along Glass-Steagall lines, and the Inter-Alpha banking group becomes the City’s exclusive excruciating problem – they deserve it.

    We have a minor problem compared to that. I expect details so far hidden to become very public then. FG/LP are trying to rescue foreign banks, selling Irish assets.

    We will find the word for that in due course.

  31. cooldude

    The ECB has “lent” over 1 trillion in just three months. This money did not exist and has been digitally created from fresh air to keep the european banking system afloat. These banks then use this 1% cheap money to buy sovereign bonds at 4-6% and keep the whole ponzi ticking over. In Japan there is another bout of QE and the same in England. The US Fed created $16 trillion of 0% loans to major banks that nobody even knew about. What we are seeing is massive increases in the money supply on a worldwide basis to keep the corrupt banking system afloat. It doesn’t matter to these guys that they are destroying the value of existing currencies as the system is completely run by the central banks and the BIS. Any student of monetary history will know where this experiment of debt monetization will end. The current batch of currencies are being systematically debased and will end up being destroyed by these policies. Ireland should vote NO, then default on all fraudulently induced loans, leave the Euro which is doomed anyway, print our own currency and pay back any legitimate loans with this currency, reduce corporation tax to 5% and give Merkel the two fingers in doing so, introduce a 3-5 year 0% tax rate for all new start up businesses including all taxes to give our young people a chance to show their entrepreneurial flair, abolish every single government quango especially FAS and start becoming proud independent Irish people once again. Alongside the Punt Nua we need to introduce some sound money such as a silver crown that people can use to protect the value of their savings from the stupidity of government. We need to rise above the deliberate fear that is being spread and reclaim our sovereignty.

  32. crazy cat

    So the French parliment has voted, or shall we say the right has voted. The Socialists abstained, they are waiting for their messiah to be elected so that they can change everyting and the world will be a better place, or at least that is their reason for not voting. The green, europe ecology group, in the Senate, did not even take part in the vote. Not forgetting that the Socialist party have the majority in the Senat.

  33. Alan42


    This is the level that Ireland is at . The mortgage book ? They are still trying to do a deal on money that we actully owe ourselves .

  34. michaelcoughlan

    Is it not possible that a new state owned bank or a privately owned one with a mandate be established to lend into the irish economy? If this all keeps going there will be nothing left here in Ireland by the end of the year!

    • rebean

      Its not only the lack of lending thats crippling the country . We also have massive price increases, petrol, food and everything else. These are the issues that should be addressed. Would it be so hard for the Government to push electrtic cars into the market. A rechrging station every 50 miles powered by windfarms along national roads. They dont want to lose the taxes on the fuel. We would be far better off closing the deficit to 10 billion and going it alone. Have you noticed Germany want all our renewables in return to be allowed to borrow more money. I say give them the two fingers and go with what we have ,give nothing away. Tell them we are not paying anything back. Time to stand on our own two feet.

    • bonbon

      Of course, a National Bank issuing credit along constitutional lines is the basis for science-driven political economy as opposed to unaccountable private central banking printing money for a casino.

      Alexander Hamilton pioneered US national banking after the independence war debt became the major issue. Hamiltonian banking will only work if Glass-Steagall FIRST splits up the ruined banking rubble.

  35. Philip

    I want to see an analysis of what really could happen if a NO vote was passed. We need a proper thought experiment on this.

    This article suggests a YES if… something about pulling the mortgage risk out of banks. But would it really allow the banks to lend to companies? I thought the ECB bailout was originally supposed to fix this. Might the banks find that they are now in 100% Euro Ownership and we might see a rather more agressive legislature doing a proper job on evictions? What about the bondholders/ gambling debts etc…how are they accomodated?

    What about the government borrowing requirement? The country is already on it’s knees, can it really negotiate such a deal?

    I have lived many years in Europe and been in every country over the last 20 years or so. You know what? There is no such thing as “European” and people are getting fearful. The whole palzy walzy juste retour nonsense is starting to harden into raw quid pro quo. The coming French elections might bring things to a boil long before we get a chance to be seen doing anything radical.

    • bonbon

      So much for the EU bringing “peace in our time” – Chamberlain all over again. Destroying nation-states is inherently a regression to a pre-industrial and feudal population density – just look at Athens to see what that means.

      A Yes means Athens Dublin style. A no transfers that chaos to private banks centered in the City.

      No is better.

  36. mcsean2163

    Don’t agree with the negativity of the article.

    Ireland inc. is experiencing green shoots at the moment, paypal/jilly pharma.

    International companies are contiuing to locate here and Ireland is seen in a more positive light.

    Canada is offering workers jobs and the live register has dropped slightly.

    It’s possible that we may just emerge from this mess by the skin of out teeth. If the EU can throw us a bone, great, but we may just get there anyway…

  37. stiofanc02

    Ian Bailey will not be extradited to France. Our Supreme court has spoken.
    Q. How did you feel when you heard he wont be extradited to France?
    Whether or not you believe he committed murder, did you want him to be extradited and possibly tried, in France?
    This was a murder committed on Irish soil.
    Jurisdictions of Police and investigative bodies in the state are clear.
    An EU arrest warrant is far reaching.
    When voting in the next referendum you have to ask yourself, how much control do you want Germany and France to have over your life?
    I have an opinion, a very strong opinion, as to whether or not Ian Bailey killed this woman.
    And I will put it this way, I am not happy about O.J. Simpson and his “not guilty verdict”.
    I am just as unhappy about the lack of progress Gardai made in this case.
    I feel frustrated,sad and angry for her parents and if I were them he, or anyone else, would wish they were never born when I was through with them if I thought they did this to my daughter, law or no law.
    But I am glad he wont face justice in France, without being found guilty or being charged here first, for a crime committed in these 26 counties.
    Think about it. Lets see what happens in terms of a deal between now and vote time.But I am uncomfortable about what we will get out of this at this stage of the game.

    • Deco

      Regardless of this individual case, and it’s details – Ireland is a great country to commit a crime.

      And even to do wrong, whilst not breaking any legislation, just breaking the Common Law, and it’s principles – Ireland is a great country to do wrong.

      Seanie Fitz arrested around the time of the last tranche payment to the ECB for the Anglo bondholders. Purely for “optics”. Nothing to do with legal process. And it seems as if Seanie boy knows it. I bet he still is entitled to free flights with the state part owned airline for life.

      Ireland is a great country to do wrong. Even social ostracization is a non-issue, if you are from the right background – a background where contempt for the worker bees is universal.

  38. …..HITLIST!

    2011 was a bad year for Hedgefunds Folks.

    Hedgefund manager, Profit in USD 2011

    Ace of clubs is Ray Dalios, 13.8 Billion next is
    James Simmons, 2.1 bln
    Carl Icahn, 2,0 bln
    Steve Cohen, 600 Million
    David Shaw, 580 mln
    Kenneth Griffin, 400 mln
    John Arnold, 300 mln
    Bruce Kovner, 210 mln
    Paul Tuodor Jones II, 200 mln
    Israel Englander, 190 mln

    This is what the crisis looks like from this side of the river! The Sandhouse Hotel in Rossnowlagh Beach, 55 bedrooms, just sold in an auction for 650,00 Euro.

    The very same people who were causing this disaster are out there now, making one killing after the other, snapping up immense value for nothing.

    How much longer are the people going to tolerate this?

    Will 2012 be the year where the first bankers get shot on open street? Where hedgefund managers are assassinated?

    I don’t know this, but I know that suicides in Ireland are at an all time high, and I am being told stories from labor exploitation happening here right now that defy belief, but they are true stories.


      +1 or will some Greeks start giving Berlin the treatment that the Chechens gave Moscow. My deceased Father predicted this years ago but I was the one studying Economics in college and I said no, that couldn’t happen. I wish there was a third option, rather than just Yes or No in the referendum, I’d vote FOAD.

  39. wills


    Can we get one thing straight here.

    This CRISIS is not an accident.

    It is engineered.

    We are in an narrative engineered by powerful controlling forces who run the financial and banking world.

    • redriversix

      agreed +1


      Anyone who believes other than this is just a fantasist.

    • bonbon

      This “narrative” business crops up here all the time. Like we are characters in some book?


    • This CRISIS is not an accident.

      It is engineered.

      So is the response to it!

      • redriversix

        agreed Georg

        They think they have it all figured out…..hopefully people will rise up in some peaceful way and bring down their house of cards……

    • bonbon

      “Engineered” give the false impression “they” are in control. In fact they are desperate, all reason thrown out the door, to the point of going for war.

      Sheer homicidal desperation as their system finally ends after quite a long while with untold misery imposed on billions.

      This means their insane hatred of Putin could very likely lead to a pre-emptive attack after the elections.

      Just look at EC’s Lady Ashton recalling ministers from Belarus, in the middle of forming with Kazakhstan, the Eurasian Union, and subjugated Germany’s Westerwelle’s dutiful slander of Lukashenko as “dictator”, under the EU dictate. This EU action is aimed at Russia, falling in line, as Obama readies his role.

  40. StephenKenny


    your comments are interesting, but also somewhat perplexing.

    Your first three points relate to mortgages held by Irish banks, and, as in my view, are somewhat misleading. You seem to dismiss the current economic outlook – as it relates to employment, pay levels, inflation, costs of inelastic utilities, interest rates – as being irrelevant to any forward looking view mortgage default rates. In support of this view you quote the UK, which is not in the Euro so is, of all countries, a poor comparison. It is also a poor comparison because Irish consumer debt is about 300% of UK consumer debt (per GDP, etc).

    Your second set related to the health of Irish banks and are, if anything, even more misleading than the first set. The ‘profit’ of which you speak is, as you essentially say, merely a product of continual ECB largesse, so is questionable as an indicator of future performance. In fact, all the positive noises contained in your points are merely direct ECB subsidies, so are significantly misleading indicators – contrary to the flow of your points – of the health, or otherwise, of the economy, and of the banks.

    Finally, to suggest that “we should all be very responsible when making or suggesting alternatives” has not useful meaning at all.

    Finally, I agree that David can’t have it both ways on default, but the relevance and effect of the ECB only relates to economies that are structurally part of the overall Euro currency, so leaving the other would probably negate, at least after a period of rebalancing, the former.

    Whatever happens, the key is, as ever, not no much the outstanding debts as it is the structure of the economy. Debts are contracts, and contracts can be renegotiated, especially if creditors can see a bright future.

    • johnniekelly81

      Hi Stephen,

      I disagree that I am misleading. Infact I have said clearly that the two main drivers of mortgage arrears are unemployment and afforability (of which pay levels, inflation, utility bills, interest rates etc all play a part). My reference to the UK you are taking out of context. What I meant (as the para deals with negative equity) is that in the UK experience, negative equity in itself, didn’t drive arrears.
      My point on profitability is simply that the banks are profitable before credit losses. That is not misleading. You may debate how this profit is generated and whether it is sustainable?

      On responsible alternatives, I only mean to say that we shouldn’t give false hope to people struggling to pay their mortgages.

  41. piombo

    Good afternoon all,
    DMW’s baseline thesis that the ECB is the only counterparty capable of systemic solution to debt overhang is plainly true. I don’t share the view that this should be achieved through horse-trading re the Fiscal Compact referendum to be held in Ireland for the following reasons:
    1) The Fiscal Compact Treaty is an intergovernmental instrument allowing, inter alia, access to the ESM should the need arise by only those countries who have approved it. I believe the ECB is prevented from financing the ESM as it cannot finance directly governments?;
    2) The ECB is financing the Irish banks through the LTRO facility already (does anyone have the information on who and how much?);
    3) Politically, no one needs Ireland to ratify or not as only 12 out of the 17 adherents need to ratify;
    4) The only effective route would be a default by a bank who has borrowed from the ECB though a declaration of insolvency. To achieve this, the directors and auditors would need to formally declare such a state of affairs and this would require a significant dose of courage and financial negotiation skills….any takers???

  42. redriversix

    Evidence against a Yes vote…..Lisbon 2
    and the last 3 years of spin,lies deceit,media collaboration.The crushing of our Education,poor and the unemployed,the further crushing of our health system in favour of bond holders,the collapse of wages,the beginning of 21st century slavery to wages that do not sustain a family.the sad and cruel rise in suicides,stress,fear,addiction etc.Blatant lying by politicians.Need I go on ?………..

    Put yourselves and your families first…..this is the first small opportunity to let Europe know the Fighting Irish are not gone away……

    Their has been enough fear and spin over the last three years,Don’t buy any more…….Europe does not know what it is doing…what makes us think they will find the right solution by voting yes.?…….I say VOTE NO

    • molly66

      Do you think that Germany and co will do try to do a sweet heart deal with the Irish government on our debt ,so as to make kenny and the other gombeens look good so to fool the voting Irish into the yes vote ,kenny is trying to box cleaver saying these are to different things and for him it’s twice the power factor god help us .

  43. redriversix

    Eurozone Finance Ministers delay €130 billion rescue fund to Greece.They released 93 Billion today but withheld 37 billion due to go to Greek government because of non-compliance.FT

    • bonbon

      So it is not the (supine) Greek ministers that delay, rather the EC using whatever excuse. Wait until Spain needs rescue!

  44. paddythepig

    I was out on a walk this lunchtime, and what did I see in B&Q’s carpark, except a spanking brand new 12 reg Hyundai Santa Fe, retailing at 37 grand, and on the back window a sticker saying ‘No to the Household Charge’.


    So here we have a punter who is happy to indulge himself with a spanking new SUV, and pay VAT and VRT in the process, but who has a conscientious objection to a 100 euro household tax. Amazing.

    I saw another fella get out his Range Rover with himself and the kids all decked out in the latest Barcelona, Man U jerseys, and the dogs on the street know this fella is millions down in the bank. Then again, in days gone by, he wore the county jersey, so that brings absolution in the eye of the gombeen man. And there’s the rest of us decking our kids out from Penney’s and Dunne’s, and paying our bills .. what are we like ?

    The country is full of these chancers, with their sense of entitlement, and their notions. It’s time to put the squeeze on these guys.

    • wills

      Have you also noticed the renovation bonanza going on in mature neighbourhoods on the quiet.

      Very slick, very fast operations and very very deluxe. Proper large extensions.

      What does this tell us.

      It shows there are people who are sitting sweet and those who are not.

      Insiders and outsiders.

      This is the structure the poster above is referring too.

      This hidden feudal structure of wealth is no accident.

      The insiders occupy the power centers and through their crony networks advance the wealth of society into their bank accounts in an efficient systematic way.

      The banking system and its ability to *make debt* is the instrument upon which their economic empire’s power rests.

      • redriversix

        I and maybe you and many others are suffering Willis but I for one am glad there are some not suffering.What I am going through I wouldn’t wish on my worst enemy……if people can afford new cars and house extensions, I wish them well………..

      • bonbon

        The last sentence is very good. A very few have concentrated massive apparent wealth “diffused” from the masses. These likely do not reside in Eire – after all an empire knows no national allegiance.

        Making debt – derivatives – is perfected only because of the 1972 repeal of the Bretton-Woods exchange system, and the 1999 repeal of the Glass-Steagall split-banking system. We have now $14 quadrillion ( 14 x 10**15 ) FICTITIOUS debt overhang. No plan of any kind that does not address this directly can possibly work. Any action or plan that avoids splitting the banks again is merely a bankers plan whether known or not.

    • grougho

      the household charge is another banking tax. so i really couldnt care who is opposing it. more power to them. as you said yourself conscientious objectors. we need to fill our country with them – a la iceland!

    • rebean

      It always amazes me when I see these so called rich people. Recently I was talking to a local guy that is all decked out in the right gear and drives brand new cars. He is up to his ocksters in debt and doesnt give a toss. His arrogance knows no bounds and when I told him I was working parttime for a very modest income. He had the arrogance to tell me that it was probably not really worth my while and I would be better off sitting on my arse.

    • Colin

      GUBU stories are reaching London too, heard this week there’a a businessman (translation is boom time cowboy property developer) in West Limerick, driving around in a range rover, owes the bank a fortune, yet the bank manager won’t force him to sell it as his creditors will sense that he’s going broke, and put the heat on looking for their money back. So, he gets to keep the luxury motor, because he has to save face and continue the charade. This is the mentality, this is the problem.

  45. redriversix

    Evening Paddy

    I think its perfectly fine for someone to buy themselves a Santa fe if they can afford it.Why not ?

    If someone drives a 91 Ford or a 12 Santa Fe,they have the right to object to a household tax if they so wish….

    As for Range Rovers, ditto…….except Range rovers were easy to get at one stage but very hard to keep !

    I am sure you would never Judge a book by its cover…..

    • wills

      I find the Range Rover 4 b 4 stuff hilarious.

      The very same oaf’s who proselytise global warming carbon tax are driving these gas guzzlers and going on constant holiday flying the skies.

      Tis all absurd and all proof positive of a world in which people talk the talk but ever walk the walk.

      • redriversix

        If I was to judge a book………Willis I wouldn’t think that Guy with the RR is going on too many holidays, he may have at one time,but he could be suffering too…..?…..just stuck with a Jeep that nobody wants,who know’s ?….maybe with his luck it wouldn’t even burn ?……you never know what people fear or are going through till its too late sometimes……….


      • Sorry lads for interrupting but I was going up to Mullingar last Saturday and I saw a 4×4 in a field.
        Is this a first?

      • bonbon

        I know someone with the worlds smallest 4×4, a Fiat Panda. Other models only switch in the 4×4 on demand so the only drawback is the extra weight of the shaft and differential. I would think an automatic would take more fuel %.
        Farmers now all drive quads – are these 4×4′s ? I have seen these all over the EU.

    • paddythepig

      If someone can afford something then they can buy what they like.

      But … isn’t it a bit rich that at the same time, they are objecting to paying a 100 Euro tax. If they can afford a new Santa Fe, they can afford to pay the tax. How come they had no problem paying the VRT or VAT, if they objected so much to tax?

      These people are taking the piss. Their arrogance knows no bounds.

      Their protest is a joke in my eyes.

      The same goes for Range Rover man.

      You wouldn’t have been Range Rover man yourself at one point, would you?

      • Colin

        Maybe he thinks it should be a lot more than €100. He may want to pay €1000? Maybe he thinks it is a progressive tax, and thinks €100 is Mickey Mouse territory?

        Believe it or not, some rich folks don’t have a problem paying a fair share in taxation.

        • bonbon

          Many, rich and poor, know it is not fair to bail out foreign banks with arbitrary taxes, sale of national assets. This is gross theft, daylight robbery.

      • redriversix


        I owned a Range Rover and it was great while it lasted….!

  46. Dorothy Jones

    There is a huge disconnect between media commentary re. movements and control of huge sums of money within the EU.
    It can only be understood if, to a degree, if committed to graphic form.
    Capital Magazine 01 this year has this depicted on the second last page……
    Can someone clever post the link? Please?
    I did a sketch of it today…..
    It can explain the Euro pol approach to a high infant…
    It would be funny if it was not such a huge issue

    • bonbon

      Graphics are great, but any child with wonder, will ask Why, Warum? Most adults will not do that – it has been drilled out of them at school.

      So, as DMcW repeatedly points out the vicious apparent paradoxes of this irrational finance here, why are they doing this?

      The answer is not for children, FSK 16 at least!

  47. cubabm

    Hi All,
    I came across this when researching a topic on Carl Jung the famed Swiss psychiatrist…it expressed his views on politics which I believe is actually true….

    [Jung stressed the importance of individual rights in a person's relation to the state and society. He saw that the state was treated as "a quasi-animate personality from whom everything is expected" but that this personality was "only camouflage for those individuals who know how to manipulate it", and referred to the state as a form of slavery.

    He also thought that the state "swallowed up [people's] religious forces”,and therefore that the state had “taken the place of God”–making it comparable to a religion in which “state slavery is a form of worship”.Jung observed that “stage acts of [the] state” are comparable to religious displays: “Brass bands, flags, banners, parades and monster demonstrations are no different in principle from ecclesiastical processions, cannonades and fire to scare off demons”.

    From Jung’s perspective, this replacement of God with the state in a mass society led to the dislocation of the religious drive and resulted in the same fanaticism of the church-states of the Dark Ages–wherein the more the state is ‘worshipped’, the more freedom and morality are suppressed;this ultimately leaves the individual psychically undeveloped with extreme feelings of marginalization.]

    We seem to be moving to a state (EU) form of slavery from which I believe we will never escape.

    P.S…..Oh don’t I feel marginalized!!!!!!!!!!!



    • We don’t feel maginalised . We are already gone over the cliff …high above the Atlantic Ocean deep under the huge white gloved waves foaming in their own brown froth from earlier wrecks in storm chased weather .

      What is now above the devil holes at the foot of these cliffs are remnants of what was once made by man and now made by both man and the nature of the EU Stassi Forces.Where the sun once rose in the east now occurs in the west . We have lost our senses .

    • Colin

      Traditional Socialism is a Christian heresy. It means well, it supports the poor, but unlike Christianity, it absolves people of their responsibilities. It also places equality before fairness, whereas Christianity places fairness before equality. Jesus never preached to the 5,000 on the mount ‘Let’s go to the houses of the rich and take their money so we can spend it on our poor children’.

      Contemporary Socialism aka Socialism for the rich is plain evil with not even one good intention about it.

    • bonbon

      Jung extended Freud’s concept of man as a beast, controlled by the bestial passions, to a mystical extreme. Mankind, he said, was defined by a “collective unconscious” of irrational, primeval forces, beyond the power of reason, which revealed themselves only in dreams, fantasies, delusions, etc. These “archetypal images” define the true human being.

      Now looking at Austrian School economics, pervasive, we are told that economic order will spontaneously arise in an unknowable way because of its complexity!

      Ex-Finance Minister of Italy, Tremonti, correctly identifies this as occult finance, which looks like it is worshiped not only in the ECB, Troika, but also in FG/FF/LP!

      This is not surprising as this economics has been traced to Mandeville, well documented here, the founder of the occult Irish and English Hellfire Clubs which spoiled the countryside a while back.

      • coldblow

        I would be concerned about the irrational forces that would be unleashed in a crisis. (Of course, they already seem apparent in international finance, as you say.) I don’t know how close Jung came to the truth (I suspect he did no more than break into ‘interesting’ new territory, like Freud too I suppose) but there are strange things afoot. The death of Diana Spenser jumps to mind – I was just thinking yesterday that she would have loved to have been at her own funeral, as chief mourner, all black lace and funerial-chic, her sad but beautiful eyes cast demurely downwards.
        But then again, as mentioned before, perhaps the decadent Anglo Saxon world has less to fear from the Dark Side than more buttoned up places, being accustomed to it as part of daily life. Nah, forget it, that’s nonsense.

        On a separate point, the more I consider it, the more secular modern culture reveals its roots in cheap science fiction. For example, I had only been taking the p*ss out of the conspiracy theories surrounding (“shrouding”?) the Vatican prelature known as Opus Dei but the naff truth of the matter is that Dan’s yarn lies at the source. Weird or just disappointing?

        • bonbon

          I highly recommend Steven Colbert’s Truthiness videos on youtube – hilarious. Dan Brown’s books are full of truthiness.

          Jung was not interested in truth. Neither Freud.

      • cooldude

        The school of economics that is practiced by the ECB and all central banks is the keynesian model of Lord Keynes. This dictates that whenever an economy has a “slump,” which occurs frequently when you are using unbacked paper money, stimulus must be added by government to stop the natural deleveraging that occurs in a recession. This works for a while but eventually all the new debt stops producing growth and you get a situation of “debt saturation” which is where we are exactly now. None of these LTRO or QE schemes will work. All they are accomplishing is to kick the can another little bit along the road and to keep a bunch of insolvent banks afloat. I’m afraid we have come to the endgame of this keynesian philosophy and no amount of money printing will save the situation. The next phase of this crisis will be a currency crisis and all these existing western paper currencies will either be destroyed or severely devalued. This is now mathematically inevitable as the debt levels are gone beyond any solution. The only protection we have against this is to acquire some hard assets such as gold and silver which will hold their value as these currencies are debased.

    • bonbon

      The EU is not a state, even if EC Lady Ashton is the EU “foreign minister”. I am beginning to suspect the occult there too.
      If the intention of this entire EU fiasco is to eliminate any trace of nation-state in Europe, and at the same time in Eurasia and the New World, then the EU cannot appear to be one! So we get a weird irrationality whenever EU bonds are discussed.

      The ECB is then more like the Temple of Delphi, with Oracle Draghi as the high priest. Up to now Greenspan babbled totally incomprehensibly, the high obfuscator, and a gaggle of journalists interpreted the wise utterances, exactly as at Delphi ( a bank by the way).

      Because the nation-state is being crushed, the common good is smashed. The EU has no trace of the common-good.

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