March 8, 2012

Germany is too strong - a Yes vote just solidifies this

Posted in Irish Independent · 150 comments ·
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In the past week there have been a variety of reactions to the fiscal compact referendum. On the Yes side, we are getting the usual establishment cocktail of indignation, anger, haughtiness and scare mongering. It’s kind of pathetic the way the Yes side oscillates between apocalypse and indifference like a tired parent dealing with an irritating child.

One day it is “the sky will fall in” if we vote no. The next it’s a case of “nothing will happen, this will go ahead anyway and we will get left behind”; the inference being we don’t count so our vote is not particularly important for the bigger project.

In previous referendums the central argument was “we have to vote yes because if we don’t Europe will stop”. This time one of the central arguments on the Yes side is we have to vote Yes because Europe will just carry on regardless.

So we have to vote yes when we matter and yes when we don’t.

On the No side we also have the rather duplicitous “treaty on austerity” slogan, which seems to suggest that if we vote no there will be money aplenty for all things and the State’s budget can be in deficit for perpetuity.

It seems that we can look forward to a campaign based on half-truths from both sides.

Let us be clear about something. The fiscal compact is all about German politics. It is needed to win Ms Merkel the election. That’s it. It has no validity in modern economics. It is needed so that Ms Merkel can go to her voters and say we have tied the hands of the delinquents. Europe will then be once again safe for German industry to export to without the risk that the imbalances which Germany’s dominance causes might whiplash on the German taxpayer through a sovereign default in the weakened periphery.

In order to make sure that this doesn’t happen, Mr Sarkozy — the bridesmaid — has been leaning on the ECB to open up the monetary taps and print as much cash as is necessary to recapitalise the banks, so no one in the rich core of Europe really pays.

It has nothing to do with the economics of the euro.

The euro’s problems are centred on the wildly divergent current account deficits. These deficits will not go away because Germany has decided that Keynesian economics is dead.

The only way to make the eurozone work as a proper currency union is to force the Germans to accept eurobonds, so that we have a unified debt market. This would level the playing field because it would lead to interest rates at least being equal across the zone. But they don’t want this and every jitter in the future will cause a flood of worried cash to flee peripheral markets to Germany. Capital flows will simply reinforce Germany’s trade dominance.

We will be left with a defaulters’ charter, where money will once again move via the banks to the periphery in reasonably good times. Then when the next slump comes, money will gush back to Germany and periphery companies will default in greater numbers, irrespective of fiscal rules.

We will be left with the nonsensical situation of private sector defaults occurring in the midst of public sector stringency. The fiscal compact simply shifts the default risk from the sovereign to the private sector because it is happening at a time of mass monetary incontinence.

If you print as much money as the ECB is doing — €1trillion at the last count, and flush it into the system, it leaks out somewhere.

The crux of the eurozone’s problem, like the Gold Standard before it, is that the creditor nation is too strong and the balance of adjustment always falls on the debtor country, making it weaker. In the 1930s, the US was the creditor nation. Today that country is Germany.

The weaknesses between Germany and the rest are deeply structural. Italy will never be Germany nor will Spain or Portugal and frankly most Spanish, Portuguese and Italian people don’t want to be German.

Germany is just too strong for the competition in Europe. Even France, the country that most thinks of itself as Germany’s equal, is way off the pace. France’s trade deficit reached an all-time high last year — amounting to about €69.6bn — raising serious questions about French competitiveness. According to the French treasury, France’s share of global trade fell from 7.8pc in 2003 to 6.2pc in the final quarter of 2011. France is gradually losing its vitality and presence in global export markets. French imports climbed 11.7pc last year, while exports slumped.

So the eurozone isn’t even a two-horse race. It’s a walkover for Germany.

One way of visualising the economic problems of the eurozone is to compare it to the SPL — the Scottish Premier League — where Germany, traditionally known as the Hun, is Celtic.

Celtic are 21 points ahead. The league is a bit of a joke because the top team is just too strong. The second strongest, Rangers, had to do unnatural acts to keep up.

A bit like Rangers trying to keep up with Celtic, France is just way off the pace, spending money it doesn’t have to try to pretend it is still in the game.

As for the rest, we languish miles behind. We simply can’t compete. And the longer the SPL goes on with Celtic so utterly dominant the more of a Mickey Mouse league it will become.

Similarly the eurozone will just reinforce German domin-ance and guarantee recessions and defaults in the periphery.

Now think of the fiscal compact.

In footballing terms it is the equivalent of docking points from the weakest teams for being weak. Given that the economic weaknesses are structural, these weaknesses will just re-emerge time and again. Ireland is the Hibs of Europe in that case.

The thing about the eurozone now is that it guarantees defaults. But defaulting is like relegation in football. You lose a few ratings, the rates of interest go up but, like the relegated teams, the defaulting country doesn’t stop being an economy, it just competes more muscularly for capital at its own level.

Once relegation happens, the process of promotion starts again and away we go.

Without a Europe of different currencies and different economies, the different national economic structures will cause more and more dislocation. The alternative — a German dominated eurozone — is just the SPL with Celtic winning everything.

This is what we are being asked to vote on.


  1. NeilW

    “On the No side we also have the rather duplicitous “treaty on austerity” slogan, which seems to suggest that if we vote no there will be money aplenty for all things and the State’s budget can be in deficit for perpetuity.”

    Ireland would have to leave the Euro and recover its monetary sovereignty to do that. Then you could offset non-government saving as much as required to maintain Full Employment and Price Stability – as Modern Monetary Theory demonstrates.

    But it means learning to trust (and control) your own politicians rather than hoping that the European ones are somehow better.

    As you can see: they are not.

    • coldblow

      I first came across ref to MMT a couple of days ago here:

      http://michael-hudson.com/2012/02/mmt-theory-as-an-ecb-alternative/

      I understand James Galbraith is a leading light.

    • happyboy

      The compact is defunct even before it is passed. Spain have given the 2 fingers to Merkozy. Premier Rajoy has refused point blank to comply with the austerity demands of the EU. He intends to ignore the EU deficit target of 4.4 % for this year and settle for his own target of 5.8% of DGP instead

      “There comes a point when a democracy can no longer sacrifice its citizens to please reactionary ideologues determined to impost 1930’s scorched earth policies” he said

      When Francois Hollande becomes President, he will rip this treaty up. We can then get some sensible economic policies

      • bonbon

        Rajoy refused to plunge the knife fully in with a mafia gun to his head. That’s the way it happened.

        Holland says a lot, even Glass-Steagall split banking, BUT wants to “balance the budget” even with bailouts! Impossible. The only French candidate who really speaks out and pulls no punches is Cheminade.

        Hudson was on M.Keiser this week and seems to hit the Chicago School really hard. If he bases his MMT on Article 1, Section 8 of the US Constitution, the Credit Clause, he is on the right track to Hamiltonian Banking.

      • Juanjo R

        I can’t find this quote in spanish on the internet – actually it dosen’t sound like Spanish at all to me.

        I only found an exactly identical post on another Irish internet comment page.It this you too Patrick?

        As far as I can see Rajoy has been pretty happy to apply austerity, perhaps he is just allowing for the deflationary spiral to take hold in adjusting his figure. There is no 2 finger gesture that I can see…

        • bonbon

          On Rajoy :

          Spain’s current deficit is estimated at 8.5% of GDP, and the Rajoy government is saying it will knock almost $36 billion off the deficit this year, by cutting costs and raising taxes. The federal government will cut its deficit by 20%, while the autonomous provinces, which are responsible for most social services, health and education included, are being told they have to cut their budget deficits by fully one-half. Some 5,000 city, provincial, and federal agencies and companies, including basic services such as water and urban transport, are said to be on the government’s list for privatization.

          Imposing such radical austerity upon a country which already admits to 23.3% official unemployment, higher than that of devastated Greece, and increasing at an accelerating rate, has triggered the kind of self-feeding implosion underway in Greece. Nearly 300,000 people have lost their jobs since Rajoy assumed office only last Dec. 21, and cabinet ministers projected this Friday that under their plans, another 630,000 people will be thrown out of work by the end of the year, bringing the national total to over six million unemployed, in a nation of 46 million. Half the youth are counted among the unemployed, and, as in the United States, official unemployed statistics do not include the part-time and those who have given up looking for work.

  2. Lius

    We should implement a 10 year exile system and impound all funds/assests of all TD’s in the last Government, plus all senior Civil Servants at that time, plus all senior Bankers and market Traders, plus all Developers, plus all Estate Agents, Plus all Auditors & Legal Advisors of the failed Banks and Developers. We might have to include Architects and Consultants too if the Priory Hall syndrome gets any worse.

    This would give them a ‘Taste’ of what they have done to the reak Irish Citizens and allow some fresh blood into the system.

  3. perhaps Rangers going into administration this week is a sign of things to come for the French economy given the parallel you drew with the SPL

  4. bonbon

    I am a bit perplexed by the reference to Keynesian economics. AFAIK Keynes proposed a “Bancor” world currency at the Bretton Woods conference. Luckily we did not get that, but the BRIC “basket of currencies” and the Euro itself seem to base themselves on the Bancor.
    A world currency would have even crazier imbalances than the Euro test-case, bringing global austerity enforced by a world government, which I believe Keynes did understand. The IMF and WB were set up to counter this, but seem now to play a “governance” role.

  5. bonbon

    As DMcW points out the glaring imbalances underlying the Euro will not be fixed by the Compact. This glaring obvious “error” comes up in many threads here. What if it is fully understood the Euro is merely a tool as apparently Keynes understood the Bancor to be?
    Here is what the tool is for, Italy :

    The Oligarchy Plans To “Perpetuate” the Monti Government and the Suspension of Democracy in Italy

    The internet daily {Affari Italiani} has published leaks about plans to perpetuate the Monti government beyond the 2013 deadline, if necessary by postponing general elections. Another option is to launch cabinet strongman and Inter-Alpha De Benedetti agent Corrado Passera as candidate for a post-electoral coalition leader and Monti as Italian President, when Giorgio Napolitano’s term expires in May 2013.

    The idea of suspending general elections is so outrageous that it has prompted reactions from both Lega Nord members and usually pro-British constitutionalists such as Gustavo Zagrebelsky. Asked about the perspective for Monti to stay on as Prime Minister beyond 2013, Lega leader Umberto Bossi said that if he does that, “Monti risks his life. He will be eliminated.”

    Eventually, Bossi backtracked, saying that he meant that Monti will be politically eliminated. In this context, a scandal has hit a prominent Lega Nord member, Lombardy Regional Council President Davide Boni, who is being investigated for bribery. “We are being hit because we sing out of the choir,” Bossi commented.

    Not accidentally, the media campaign against the alleged corruption in the Lega is being led by Berlusconi’s daily {Il Giornale}. Since Berlusconi began supporting the Monti government, the Lega has broken its alliance with Berlusconi’s PDL party. PDL Secretary General Angelino Alfano, a wooden dummy for Berlusconi, said yesterday that “the alliance is finished.”

    ——
    As if the ESM Compact was not a suspension of constitionality enough! Now I wonder what FG think of this. President Michael D. robustly defended our constitution at the LSE, forcing the hand of Kenny.

    Why is it that we have to remind the Taoiseach what he swore to defend?

    • I am out of the country but I am glad that my fellow Irishmen had the wisdom to vote for Michael D. He is the little terrier that will keep nipping at the legs of the cows to keep them moving in the right direction.

      • Rory

        Delighted with Mickey (3)D. Didn’t know he had it in him to force their hand. Wouldn’t surprise me if they suspended democracy in italy, they have done it twice here. Let’s all keep voting no just to see what they do. A third vote? A fourth? Who knows?

  6. Tony Brogan

    David, I find it hard to follow all your arguments but the gist seems to be that Ireland needs to regain it’s sovereignty and to do so needs its own currency.

    I am concerned with your denegration of the gold standard.
    “The crux of the eurozone’s problem, like the Gold Standard before it, is that the creditor nation is too strong and the balance of adjustment always falls on the debtor country, making it weaker. In the 1930s, the US was the creditor nation. Today that country is Germany.”
    In the period stated “in the 1930′s” there was not a true gold standard. Only a quasi non workable fix of the currencies to gold.
    A true gold standard is when everything including all currencies float in value against a measure of gold. Usually one troy ounce. In the thirties gold was fixed at about $22 US an ounce and so was in an unworkable situation as gold was asked to be as $22 dollrs is. If gold is the yard stick aginst which all other things is measured then the US dollar should have been left to float. As it was the inflation in the dollar distorted the trade and eventually Rooseveld devalued the dollar to 35 an ounce. That fix created more distortion as inflation ate away at the value of a dollar and all other currencies as well and so in 1972 the system was abandoned. within 10 years gold hit 860 US per ounce.
    Now it is over 1700.

    This level just exposes the inherent inflation baked into our current system which is the real problem throughout the world. Central banks print money without restriction. Without massive central bank interference the price of gold would be many times higher. The next collapse will be the complete failure of the world monetary system of unbacked fiat currencies and the fiat value of gold will be multiples higher.
    Zimbabwe recently saw the gold price in trillions of dollars. With hyperinflationary depression on its way that could happen here too.

    a true gold standard would not let this happen. Unlimited printing of currency could not happen. Trade balances would be settled in gold. Imbalances would adjust through local currencies. There would be little boom or bust. It worked briefly from 1870 -1912 but was then abandoned to print currency for the first world war.

    The fact that you cast aspersions on the gold standard when it was not in fact a proper standard misinforms your readers and does not do justice to you.
    please study what a gold standard really is before further comment.

    • bonbon

      Many here have looked at the British Gold Standard history, and slugged it out in previous threads. The Austrian School proposes this British ideal.

      The best way to look at this is the history of National Banking starting with Alexander Hamilton, the US Constitution Credit Clause, and why Hamilton decided this was the way to break with the British Empire’s monetarism. Repeatedly this has been reactivated, for example by FDR Reconstruction, Lincolns Reconstruction, JFK’s projects. Repeatedly it has been literally shot down.

      I strongly urge a reading of this redacted history of banking before the British monetarism collapses.

  7. cutehoor

    I agree with pretty much everything you say.
    If it’s such a zero sum game – why does matter if we vote yes or no?

    Ultimately will the euro blow or survive regardless of our vote? When required the rule book can be re-written. Isnt it just an election sop to the France & Germany thats not worth the paper its written on?

  8. Adam Byrne

    subscribe (in hope).

    • bonbon

      I’m getting the email summaries for the last few days.

      I discoveredin 2011 my provider was blocking some emails, maybe a filter on steroids. I changed to a different one with another email address.

      But I only began getting the DMcW emails after you kicked up a ruckus!

  9. wills

    Interesting analysis IMO.

    The conclusion amounting to that one currency for Europe is an economic illusion if we are to have an economic system close to a free enterprise system reaching down to the man in the street.

    But the thing is the Euro project is an extension of an Insider class running an oligarchy / old type feudal system going back 100′s of years.

    And the Euro is working in an incredible way for europe elites. So much so that it is in the running to be the world reserve currency.

    • bonbon

      A reserve currency bailed out by the FED. Strange. Have a look here at the FED numbers posted for weeks.

      • wills

        Fair point.

        But,…

        The Fed bailed out the banks NOT the Euro.

        Secondly, the USA sold toxic product into European banking system.

        Thirdly, Goldman Sachs engaged in fraud to open way for Greece entry into Euro.

        A lot of hidden narratives at play.

        • bonbon

          All correct, so the FED is up to its ears in the mess, never mind the US rescue of AIG etc…
          And FOIA got a lot of this $29 trillion rescue into the public eye, so it is not so hidden.
          The entire CDS and derivative dump is hidden, but more and more data appears. The wording of the CDS is beyond belief, beyond even Heidegger or Russels’s recipe’s.

  10. Reality Check

    Can’t wait for Coldblow’s rebuttal!

  11. Stiofan

    I agree that “The only way to make the eurozone work as a proper currency union is to force the Germans to accept eurobonds, so that we have a unified debt market.” I think this is “circling the wagons” as a defensive measure against attacks by the US bond markets. Yes, Ireland’s wounds are self-inflicted (Lenny and Biffo inflicted actually) but the real crisis in the EMU zone is short selling attacks upon national debt in southern Europe. I say “US bond traders out of the EU”. A unified debt market would be managed from Frankfurt, not New York. US troops would finally leave Europe 67 years after WWII ended. Eurobonds are not so much an economic measure as a military response. This is currency war after all, and the US opposes the world, rather than merely Celtic versus Rangers.

    • bonbon

      I can imagine Enda forcing Eurobonds! I suppose he has Geithner as fullback, but as full forward I expect a home goal!

      This is the funniest game of football I have ever seen!

    • happyboy

      Germany will never agree to eurobonds

      They do not want to lose their AAA credit rating

      • artisson

        Never say never.

        • happyboy

          Germany will only agree to eurobonds if they are allowed very strict contol of countries national budgets

          The electorates of member countries would never accept that level of interference in their internal affairs. It would be too much of a loss of sovereignty

          • artisson

            Strict control and loss of sovereignty are already provided for by the fiscal compact. Why do you think we’re doing this? Its a preparation for eurobonds. Germany could probably keep selling AAA-rated Bunds in parallel to eurobonds. So, never say never.

          • bonbon

            Enda’s doing what exactly? Betting on a coup in Germany? That’s what it would take. There is a move for a referendum on the Euro in Germany – let German citizens get one chance to vote and see what happens. Or would democratic Enda rather neither a Compact vote not a German vote?

            He was preempted on the former. Maybe Enda hired the wrong clairvoyant?

  12. Reality Check

    @Tony Brogan excellent.
    David you seem to be saying (like John Mauldin) that the Euro operates (or used to before LTRO) as a sort of Gold standard.
    IMO this is preferable to the Punt because as John mauldin says “I don’t trust the B**t**ds”.
    Inflation etc would go through the roof. The Euro is better than a Gombeen currency.

    • bonbon

      The Euro will cost 2.4 trillion, in the next few months, reported by Lombard Street Research – it’s all over the media and internet.

      Where will that come from?

      The Euro was touted as a “B.R.I.C” standard, A Goldman Sachs project just like the Euro, until Medvedev fired Kudrin publicly.

      Now that the FED is bailing out Euro banks (Geithner is after all Goldman Sachs), there is not yet a word invented for this.

  13. Reality Check

    And I don’t want the purchasing power of a “Betie note”.

  14. ict

    David,

    Any chance you would consider taking an active role in the NO campaign in the referendum?
    (I was disappointed, but respected your decision not to get involved in the 2011 general election, Who in their right minds would want to join the culture of that lot in Leinster house, a lesson George Lee learned the hard way).

    The reason I ask is that I have some disquiet at the narrative that seems to be emerging that the No side are just a bunch of De Valera type, 1950s small nation sovereignty fantasists (a sort of maidens at the cross roads meets UKIP). The Eamonn O cuiv saga has served to underlie this view. Any coherent criticism of the proposal, on big picture economic grounds seems sadly lacking in the main stream media, so far at least.

    • bonbon

      Waiting for the “mainstream media”? You expect IT to help? Amazing the clinging belief in an extinct system.

      As for “emerging narrative” – what ever happened to thinking? Expecting truth to “spontaneously” emerge from widespread popular opinion of “practical people” is how we go to this point!

      • coldblow

        “Whatever happened to thinking?”

        In Ireland? There is no recent history of it. Desmond Fennell has been banging on that drum for decades (for instance, why memebership of Aosdána was reserved to writers of fiction rather than constructive thinking) but nobody ever listens as it doesn’t fit into the narrative.

        We only do narratives.

        • coldblow

          “‘Irish writer’ normally means a writer of fiction. Ireland loves fiction. An Irish writer who engages his mind creatively is a rarity, and most of the few who do so emigrate or die frustrated. Uniquely in Europe, Irish magazine shops do not offer a home-produced magazine of ideas.”

          My local newsagent has six magazines about tractors, two on Liverpool FC and the usual range of hobbies.

          http://www.desmondfennell.com/

        • coldblow

          Speaking of narratives:

          “”Am I correct that you were scheduled to meet with the curator of the Louvre this evening?”

          Langdon felt a sudden surge of uneasiness. He and the revered (sic) curator Jacques Sauniere had been slated to meet for drinks after Langdon’s lecture tonight, but Sauniere had never shown up. “Yes. How did you know that?”

          “We found your name in his daily planner.”

          “I trust nothing is wrong?”

          The agent gave a dire sigh and slid a Polaroid snapshot through the narrow opening in the door.

          When Langdon saw the photo, his entire body went rigid.”

          A dire sigh?

        • bonbon

          We elected a President where ideas were the campaign issue. Listening to his London School of Economics talk 2 weeks ago which preempted Enda, the power of ideas hits home. Of course host Peter Sutherland and co. would rather that the masses never heard of an idea – better football and fiction to keep them contented.

  15. Grey Fox

    Look Folks,
    The game is up, you can have all the Fiscal Compacts and Lisbon Treaties, and referendum in the world, heaping debt on debt is a one way street, printing more money to pay more debt is a “death spiral”.
    Debt forgivness is the only answer and will always be the only answer, there is no digging our way outta this hole.
    Kenny and his troupe are just puppets at this point and they serve nobody but their ECB,IMF masters, they have no mandate no from the Sovereign Irish Citizens any more and there is only one way they will get a mandate back and thats to “hit the reset button”.

    • bonbon

      Give them a resounding NO to end their game. There is life after the Euro-federalist dark age!

    • redriversix

      That’s it ……….Grey Fox

      Your post is all their is to it.nothing else..its that simple.
      All the media print,Economists say and Ministers waffle is exactly that …….waffle

      Reset button needs to be hit.Pronto
      cannot solve debt with more debt, never have never will..David is right about Germany though……..Fatherland just wants to make sure it is the strongest in Europe to be in a better position to do the majority of their business in Russia and the East.

      While the rest of Europe pays ground rent to Germany.

      Simples

      Best
      RR6

  16. Reality Check

    “Bertie Punt”

  17. Goose Wild Mk1

    Going slightly off topic:
    Below please find a link to a Bloomberg article reference the Greek situation.
    http://www.bloomberg.com/news/print/2012-03-06/goldman-secret-greece-loan-shows-two-sinners-as-client-unravels.html
    Mention is made in comments above re ‘Goldman Sachs’ this article confirms to me anyway that this entire scenario has some aspects which were engineered, gladly assisted by incompetent politicians.
    The secret and rushed meetings and decisions surrounding the Anglo debacle echo.
    I have left Ireland, but the likely future for that place and those who remain saddens me.
    I was angry and disillusioned, and my last vote cast in Ireland was with a boarding pass in T2………..

  18. michaelcoughlan

    Hi,

    “This is what we are being asked to vote on”

    Assuming this point is correct if we vote yes Germany gets everything. Assuming we vote no we get tossed out of the Euro David, savers get their savings converted to a new Irish currency which will collapse in value, import costs will skyrocket, mortgage repayment costs will go through the roof and cause the collapse of BOI and AIB and what have you to say other than what you say to all your clients around the world? I can tell you David more of stating the obvious.

    In this article you don’t offer any analysis as to what we should prepare for if we have the courage to vote no. Forcing Eurobonds on Germany is one thing but making Germany put manners on the scumbags in their banks is another. There isn’t a snowballs chance in hell that Gunther and his Frauline will vote for an arrangement where Gunther and all the other Volks will allow their fatherland to be landed with the responsibility for delinquent countries. So please remember when offering economic analysis to ground it in a decent understanding of the real politicks at play.

    Ireland is recording a trade surplus with the rest of the world. If we get an independent bank lending into our domestic economy established before we get tossed out of the Euro using the price of establishing this new bank as a price for a yes vote then new capital will flood in as we will immediately be paying our way. It is a mathematical certainty that we will default unless the printing presses are going full tilt which will only drive the price of assets through the roof (petrol, grain, beef) so forcing Germany to accept Eurobonds is neither here nor there because we still will be landed with the cost of paying for our own reckless banks which is austerity decade after decade after decade.

    This article is more useless than tits on a bull.

    • bonbon

      Not a single German voter had the chance on any treaty, never mind if the banks and rating agencies force Eurobonds with the help of the elected gang. Ruling after ruling by the German Constitutional Court and the ousting of 2 German presidents in 3 years should alert one to the situation. Holland with France rejected the idea of a EU State, the basis for Eurobonds. Trying to force a state with this Compact cannot work. It is like trying to approach a circle (State) by adding more and more vertices (laws and treaties) – you never get there. Merkel does not understand this, nor any of the political gang.

    • taylorcr

      Heres a link to the only research I have seen on the euro breakup, or leaving the euro thats backed up by hard facts and historical precedents, gives you an exact blueprint on how to do it.

      http://www.scribd.com/fullscreen/81942527?access_key=key-haj7c3qltzkyklsibr9

      • michaelcoughlan

        thank you taylorcr for this link. Its a pity the zombies in the Dail can’t seem to follow advice of this nature.

  19. Lord Jimbo

    Reportedly 1 million more unemployed in France since Sarkozy took office in 2007, serious issues at the heart of the French economy which are touched on in the article, I would really like to see that topic developed as too much focus has been on the extremely strong like Germany and the extremely weak like Ireland, Greece, Spain etc.

    Any comment or an article on France from David McWilliams would be most welcome.

    • Brennt Paris

      It is interesting you raise this matter . This brings me to General Dietrich von Choltizt who refused the orders of Hitler to burn Paris at the time of final withdrawal .This event became known as The Battle of Paris .

      During Cholditz’s subsequent captivity he said :

      ‘If for the first time I had disobeyed, it was because I knew that Hitler was insane’ .

      It must be understood this same general had destroyed Rotterdam and Sevastapol .

      So why did he save Paris and why was Paris saved before also during the WW1 .

      Who will be the next general of ( ECB/ IMF / EU ) who will disobey Merkel ?
      What will be the consequences ?

      On the home front who will carry out a putz on the current Irish Administration ?

      • bonbon

        I wonder was that after von Stauffenberg almost stopped the war? The recent movie “Operation Valkyrie” does get close. After the betrayal, the kill rate went up 10 times in the remaining months. Whoever betrayed is responsible for this (Churchill’s Diaries published in 1998 by the Guardian point to his personal involvement in this).
        After all Norman Montague of the BofE and even the King supported, as well as Wall Street put Hitler in power. And Sir Oswald Mosley published the EU Federalist blueprint. The Euro is based on Keynes’s Bancor.

        All of this is indeed missing in the usual analyses.

        • Lord Jimbo

          14 assasination attempts on Hitler from what I know, there may be more, the Munich hall one carried out by Georg Elser came very close and early on. The Generals should have stopped Hitler much early on but didn’t, 1944 was very late in the game. Hitler paid out serious Reichmarks to some of them for their support, but no doubt other tactics were used as well like threatening their families, they do seem to have been drunk on the success of the early campaigns, while Rommel was like a child in the film footage of him being presented with awared by Hitler, for me they were all out of their little minds. Time caught up with them all eventually but not before the damage was done unfortunately.

          • bonbon

            After Churchill broke with his fellow Hitler supporters – Halifax and Beaverbrook, it seems he betrayed von Stauffenberg. That General made a fatal error of trusting the British who they would have met in an armistice. Churchill wrote in his diaires “he wanted the total destruction of the German nation, not a treaty with generals”. He almost got his wish.

          • Lord Jimbo

            @ bonbon, Von Stauffenberg was a Colonel not a General. Churchill had said on a few occasions the war was against the Nazis party not the German people, whom he knew did not all support Hitler, not by a long way. The allies sought the unconditional surrender of Germany.

            As for the plotters, the failure to assassinate Hitler was one thing, the wider failure to get the kind of support needed, especially militarily doomed the operation. The Gestapo, SS, leading Nazi party figures all needed to be contained but the plotters were unable to do so and events turned against them pretty quickly.

            Some of the Generals may have thought the death of Hitler might have brought the war to a faster end, I doubt it, Himmler, Goebbels, Goering and others were ready and willing to fill the void. No doubt that the Nazi leadership were deluded as indicated by Himmler’s line to Speer about whether he should give Eisenhower the Nazi salute or a straight military one when they met. Very surreal. Some thought they could convince the allies to join with them in a struggle with the Soviets, and expected their crimes against the Jews and others would be over-looked. All as mad as the war itself. The allies wisely decided to rebuild West Germany, and the German people were equally pragmatic, adapted to the new situation and worked to quickly win over those who then governed their lands, interesting period in history.

            Just think Germanny today needs to show a bit more understanding to countries in financial difficulty, they have been there themselves and for a lot worse reasons.

          • bonbon

            Many are aware of Churchill’s “Operation Unthinkable” to start WWIII immediately using the defeated Wehrmacht against the Soviet. He proposed the United States of Europe months before Mosley, for this purpose. Are we seeing a repeat of this murderous insanity now? The EU did not congratulate Putin, although NATO just did. Whatever Churchill represented did not die with him.

    • bonbon

      Only 1 Presidential Candidate confronts reality in France – Jacques Cheminade issued a statement, which is being leafletted in 100,000 copies throughout France as of March 7, under the headline

      “My Campaign Confronts Collective Anaesthesia.”

      This in contrast to the common denominator of Holland,Bayrou,Sarkozy who want to “balance the budget” (almost an echo of the GOP’ers) even with bailouts! Even Holland who wants a banking separation will not put the pieces under different roofs. There is also a “let them eat biofuels” attitude to food production.

      • LongGone

        A valid point. Her obligation is to the citizen but she is acting on behalf of the banks. The average Joe on the street here in DE has also finally realized this and at last there is more critical thinking going with regards to the PIIGS i.e. that perhaps it is not simply German tax payers money being spent to save the delinquent Greeks and Irish.

        Following the blogs and comments in the media here in it would be fair to say that the German public is(or at least was up until early 2011) about 3-6 months behind the curve in terms of realizing who is really saving whom.

        That is why David McW was right when he said last year that Ireland had the opportunity to go a different route (e.g. Debt for equity swap and/or burning the bond holders) an show Europe a way out of this mess. Instead we followed the lead of politician who was playing to a public who were months behind in their understanding of the actual crises itself.

        So many missed opportunities.

        • LongGone

          Hmm actually meant to answer your reply to my comment below.

        • bonbon

          The disgusting PIIGS term was coined in the City. But ask anyone about the DM (well away from listeners) or simply pose the question of why dump the most successful currency in history for a Schlappe Lappe and you might get a surprise.
          It was done to corset Germany after the Wende – reunification. That’s the horrible “secret”.

      • redriversix

        Their is no way on Gods green Earth was Churchill a supporter of Hitler.That is crazy BonBon.I have an open mind and do a lot of research as “WAR” is my thing and I have never come across anything remotely connected to validate your opinion.

        This is the only reply to your claim as any more typing would be mute……

        Best

        • bonbon

          Churchill, Halifax and Beaverbrook were full supporters. Only when Churchill saw the threat to England he went screaming for help to FDR. I’ll get the relevant links. But Churchill’s diaries are a good place to start. Or the Mussolini project.

          • redriversix

            Please get the links,Bonbon

            Thank you

          • Lord Jimbo

            There were supporters of Nazism in the British establishment, but Churchill was not one of them.

            Churchill did many crazy things in his time, but he didn’t back fascism, he recognised it for the terror it was. Churchill was an early critic of Hitler, especially in the early 1930s when it was not fashionable to do so, indeed, in his speeches in the House of Commons MPs would often throw their eyes up to heaven thinking ‘here goes Churchill again’. But he was proven right and for that her earned his place back at the Cabinet table after years in the political widerness.

            In 1940 after the crushing of France, the evacuation of Dunkirk and Britain on her knees, Churchill’s greatest moment to my mind came when he faced down Halifax and others who wanted to open negotiations with Hitler, in possibly one of the most tense moments in modern British history Churchill addressed his cabinet:

            “I have thought carefully in these last days whether it was part of my duty to consider entering into negotiations with That Man [Hitler]. But it was idle to think that, if we tried to make peace now, we should get better terms than if we fought it out. The Germans would demand our — that would be called disarmament — our naval bases, and much else. We should become a slave state, though a British Government which would be Hitler’s puppet would be set up — under Mosley or some such person. And where should we be at the end of all that? On the other side we have immense reserves and advantages. And I am convinced that every one of you would rise up and tear me down from my place if I were for one moment to contemplate parley or surrender. If this long island story of ours is to end at last, let it end only when each one of us lies choking in his own blood upon the ground.”

            Churchill received a standing ovation, there was no more talk of surrender.

            1940 British Cabinet Crisis
            http://en.wikipedia.org/wiki/May_1940_War_Cabinet_Crisis

          • bonbon

            Numerous quotes of Churchill praising Mussolini, if he was Italian he’d be fascist, that England should find her Hitler if in dire straits. All of this is well documented. Even the Guardian published Mussolini’s MI5 career. On top of that months before Mosley blueprinted a federal Europe, Churchill proposed the United States of Europe. Sure Churchill proceeded to destroy Germany afterwards.
            I notice many clinging to the Churchill-Mosley “U.S.E” – look at the result!

  20. LongGone

    Have to fully agree with this. Living in Germany, it is perhaps easier to remember the simple facts that David pointed out here. Merkel, who is leading the Euro rescue, has a (constitutional) responsibility to German citizens. Not to the Irish, Greeks or whoever else.

    All treaties and negotiations should be approached with this in mind. This simple fact has been underlined when she has overstepped her mandate and been slapped on the writs by the Bundesgericht/High Court in Karlsruhe a couple of times for not consulting the parliament for a vote of some of the “rescue packages”. So these treaties are structured in a way to satisfy her coalition partners and the opposition to some degree.

    The scaremongering on the Yes and the No side does not do the Irish people any justice. What I would dearly love to see is a vision for the future of Ireland by both camps (lets say even just for the next 5-10 years) – setting out why it would be good for Ireland to Vote Yes or No rather than why it would be a disaster to vote the other way.

    I can’t imagine a family in negative equity struggling to pay the bills and keep a roof over their heads being motivated to vote Yes by being scolded that their situation will only get worse if they don’t do what their told – and lets not forget Ireland reputation which is always on the line here. The fire of the frying pan is a lazy argument (at least in the medium term.)

    People need an outlook and something to fight for. Put a case together and give the people something to chew on. Then let them vote on it and work toward that vision – Yes or No.

    Its positive to see that people here are at least giving it some thought. Maybe some of it will filter through – bottom up so to say.

    Rgrds,

    LongGone

    • bonbon

      Merkel and co. are behaving like they have only a responsibility to the German banks. Her committee of 9 based on Obama’s Supercommittee got firmly slapped last week for usurping constitutional powers in secret.

      The very fact we have to remind elected sworn-in politicians of their duties shows there is something very wrong with the EU. Looking at Mosley’s blueprint should not surprise us then.

  21. Dorothy Jones

    Punk Economics headlines in an entry on the Irish Economy Blog today 120308, video[s] cited by Philip Lane as an ‘excellent example’. :):):)
    Also plent of recent Target 2 stuff, Germany’s iceberg, there from 5 and 7 March. Hans Werner-Sinn’s pet favourite theme. Now that thing is a BIG BIG liability. Good old time-bomb iceberg there from a DD so fond of playing Schoolmistress to EU bad-boys who’ve been bold in the playground….
    Maybe the Grande Dame will get along fine with GR new Finance Minister of today? Papademos has appointed 53 year Anna Diamantopoulou who is a qualified engineer.
    They might do a bit of a Scnaps and Ouzo together….

    • bonbon

      Merkel is apparently a qualified Physicist. And after the von und zu Guttenberg affair, I’m afraid these problems are systemic.
      Papademos of Goldman-Sachs with buddies Monti and Draghi are not likely to change.

      We have the usual scare tactics on the vote, but also a new one – mesmerizing perfected by Heidegger. Occult finance must mesmerize – it has no reason.

      • Dorothy Jones

        Angela Merkel has a doctorate in physical chemistry.
        …..but….Merkel playing a modern day Scheherazade as part of ‘mesmerising tactics’….eh, no methinks….or did you mean Carla??:):)

        • bonbon

          I mean the financial community…

        • bonbon

          Merkel with a PhD, shut down nuclear power based on hysteria, exactly like a wessie – she has really adapted and become a ’68er! She beat the Greens to it!
          The CDU destroyed their own entire work of building up modern power!

      • LongGone

        Guttenberg is a shaper and a bluffer and he was found out. Merkel on the other hand is the real deal in my opinion – she is not interested in winning any popularity contests or looking good. She grew up in the east and she can delay gratification. She will stay her course and trying to change her mind would be the equivalent to boxing and iceberg.

        Gutenberg is now working in a role for the EU promoting freedom in the Interne by the way – a role he can have no credibility in if only due to the fact that he vehemently denied the work of the wiki activists who set up a site to collectively study and uncover his plagiarisms.

        • Dorothy Jones

          @ Longgone
          Maybe have a look at the front page of Handelsblatt online [free]? It has a countdown clock for the Greek deal deadline of this evening. Accompanying article with the role of David Benton set out and lots of facts with possible outcomes. 5 and a bit hours to go…..

          • LongGone

            Thanks for the tip Dorothy. Indeed this is also a way to deal with the “Krise” – as a form of “Unterhaltung” or Sport.

            I have just got out the popcorn and am going to watch the countdown now till Greece explodes. Its like a road accident – you know you shouldn’t look but you cannot help yourself in the end.

            (Just a bit of black humor of course – not to be taken literllay!)

          • bonbon

            This is destroying Greece, but a bit of Schadenfreude as the banks go through hell is allowed!

  22. artisson

    Hi David, nice football comparison! I wanted to point out that, like most commentators, you are looking at the various elements of eurozone crisis management as isolated pieces of a puzzle, rather than as a cohesive plan. Yes indeed, it’s no surprise that a cohesive plan is most definitely being put into action at this very late stage in the game. Look at it chronologically: The German’s have said there will be no eurobonds without fiscal union. So we are following a road map to eurobonds, and in the meantime, the ECB, despite lacking any official mandate for its actions, will buy bonds to support states and print money to support banks, to the precise amount required to keep the markets calm and the system ticking over. No more and no less.
    Don’t you think that Keynesian economics, rather than being dead, might just be resting until European states are no longered smothering in debt?

    Cheers,

  23. bonbon

    The Dail suspended Doherty for requesting scrutiny of Moran who operated ZCM.
    Doherty was about to bring FoI legislation on NAMA to the floor. Are we seeing a Greek repeat?

    http://www.sinnfein.ie/contents/22741

  24. CitizenWhy

    There’s the Iceland model. Repudiate debts. Stay out of Eurozone. Has worked very well.

    There’s the Swedish model (on banks). Nationalize the banks in the normal way, that is, take them into bankruptcy, automatically disowning their debts; run them publicly, with great prudence and disciple; straighten them out and get the right execs to run them; re-privatize them, paying off a percentage of what is owed to the bank debt-holders.

    There’s the Canadian model: a small number of big private banks well regulated and run by execs culturally averse to great risk, leading them to withdraw from the New York-London financial gambling casinos called “free market” banks by neo-liberal/laissez-faire propagandaists blithely ignoring empirical reality. US bank reform weak and unable to address gambling problem. London never pretended to address gambling problem.

    There’s the Irish Borrowing/Lending/Bubble model: Allowing huge inflows of capital, far beyond the needs or capacities of the Irish economy, which inevitable leads to a bubble, especially in bank-fueled, debt-fueled real estate. A bubble leads to a crash, huge and unsustainable debt (not enough income to pay the debt).

    Yet there is no talk in Ireland or Europe of restricting capital inflows to countries. Brazil, rejecting the perpetual debt “solutions” of the IMF, restricts capital inflows.

    There’s the Irish Tiger Model: new business development, attracting foreign companies, increase in domestic spending within the non-bank, non-real estate economy, and increase in exports (largely by foreign companies operating in Ireland) Unfortunately the Tiger is identified with the Lending Bubble, even though the two are separate.

    The current government is convinced it is slowly rebuilding the Tiger model while squirming to get out of debt. But its efforts to get out of debt keep the country in perpetual recession. Yet the government has a unique advantage: emigration; so it is not much concerned with the recession. It is more concerned with gaining the confidence of foreign investors. This requires pleasing Germany, however right or wrong Germany may be.

    The government, and most Irish, are convinced that staying in the EU, at any cost, is necessary to restoring a better economy. This requires doing whatever Germany wants.

    Nothing new ever seems to happen in this story.

    • bonbon

      Missing in the list is the US Hamiltonian model, the only model that resulted in real progress, shot down literally a number of times.

      Did you have a chance to look up the work of Canadian Prime Minister Diefenbacker? I wonder what financial model he proposed for the Arctic development?

    • LongGone

      As Tim Geithner always said – Plan beats no plan – the government have no plan and are waiting for others to come with one i.e. an EU plan. As you point out this will most likely be or already is a German plan. As it should be – Merkel should not be blamed for representing her own countries interests – however Ireland should not make the mistake of believing that those interests are shared.

      It’s seems a number of the plans you pointed out could be a good starting point and adapted to Ireland as required. Why is Ireland so determined not to take a lead here?

      • Donal M

        Hi LongGone, that is the real question I just cannot understand about Ireland/Irish mentality:

        “Why is Ireland so determined not to take a lead here?”…”the government has no plan and are waiting for others to come with one i.e. an EU plan”

        I’m gone 2 years myself, and I am ashamed to admit I’m Irish, in every country I’ve been to over the past 2 years, that question is asked of me: What are you doing, what’s your plan Ireland?

        I have to admit: we have no politicians with expertise in anything on ANY side of the house.

        Just nepotistic Culchies and Dub cutehoors. Either waiting for their go on the ride called government, or actually now on the ride with idiot contentment and a look on their faces of: look at me mammy…I’m the big boy in charge now!

        We NEED a new political party in Ireland…consisting of experts, professionals, leaders, people who know their fields and know how to build strategy through informed balanced decisions. And are then DECISIVE. As with Google’s hiring policy: Only people with firsts in their primary degrees need apply.

        The days of Irelands “GAA” way of doing things has to end, e.g. “he’s a handy corner forward, we should look after him”…”talk to the bank manager, get him in there”. Excellence is not too much to require from the most important jobs in the country i.e. those who run the place….as with Mrs. Merkel, she’s doing her job very effectively given the cards she’s probably holding.

        • artisson

          Well said, and wasn’t this the lesson we needed to learn from the celtic crash. It is already being forgotten amidst the clamour of debate around economic details. We shouln’t have trusted the bastards, and now we cant remember which bastards we shouldnt have trusted.
          The journalists talked alot about it, but is there anyone pursuing this matter of the need for political reform? I’d like to know, because they would have my dedicated support.

        • bonbon

          A slight problem – The Nobel Prize “experts” Black, Scholes, Merton invented the infamous “formula” to extract wealth from a stone, and almost destroyed the financial system in 1998. That’s just one example. Perhaps Sir Alan Greenspan is another expert, pray tell?
          FG just appointed a hedge fund expert to the finance ministry – impeccable credentials, that SF dared question. SF got suspended for that.

          • Donal M

            Hmmm…I see what your saying.

            Isn’t there an honest John left in the world? I suspect that being crafty is a virtue of the pathological mindset, but not of the honest one.

            Have you heard of the Guardian reporter Jon Ronson? He is lately involved in testing C.E.O’s and MD’s for signs of Psycho-pathology: his findings are speculative but suggest that 1 in 5 of those in high ranking positions are technically, …clinically insane!

            There’s some grub for the noggin!

          • bonbon

            To see the pathology of those 3 Nobel “experts” means identifying a mental disease called reductionism, not found in Lancet, but pervasive in the sciences. That springs from the insane belief that knowledge springs from the senses. Our biological senses are imperfect so how could that be true? This leads to kinetic “snooker” thinking for all processes and very quickly to that “formula” for example. Run an economy based on a variant of this and the results are guaranteed. The Austrian School is an extreme example.

  25. Philip

    Remembering the 1980s…and all the gloom and doom, Thatcher etc we had then. No one predicted the mid 90s. NO ONE – except some taxi drivers, dustbinmen and a few businessmen.

    Now we are in the miserable teenys of the 21st Century. All gloom and doom. Same old nonsense really except a few people I see chiselling away in companies making it happen.

    People have short memories. Only a short time ago, Germany was a basket case and now…it is too big. Oh dear! As for the Euro…it looks like one great big cockup and it will either win or loose.

    David’s commentary a weather forecast – do not read too much into it. Take the good bits. Advice to all… Get Optimistic…If there is hype one way or the other….the chances are it is. The attraction of whinging is all too real and highlighting the all too negative scenarios is like rubber necking at a road traffic accident. Stop listening to garbage news and negative commentary that really does not affect you day to day – and add 10 years to you life.

    • LongGone

      The 80s to the mid 90s covered the crucial period of productivity for many young people where they were not able to build a better standard of living for themselves. It actually happend and was not a whinge festival that people imagined.

      We don’t want a repeat now.

      A short time ago (early 2000s) Germany was not a basket case. It had relatively high unemployment but was not near default or did not look anything like Greece.

      Davids commentary predicted for many years this particular crises and the potential of a generation lost to unemployment. Track record counts. Some weathermen are better than others.

      Ahh and the old call for optimism regardless of the signals. Do you out in a snow storm dressed in a t-shirt and shorts just to prove your are optimistic?

      Here is a joke for you: what’s the difference between an optimist and a realist? The realist is the one with all the facts ;)

    • Grey Fox

      VERY HARD TO BE POSITIVE AFTER RECEIVING A WEEKS WAGES AND SITTING DOWN TO DIVIDE IT UP BETWEEN THE CREDITORS HOPING TO HAVE ENOUGH LEFT FOR FOOD, NO HEAT SINCE CHRISTMAS, CAN’T REMEMBER THE LAST SOCIAL OUTING OR EVEN A PINT OR A GLASS OF WINE, NO LUXURIES, NONE, NADA, ZIP SO YOU WILL HAVE ONE HELL OF A TIME TRYING TO CONVINCE ME TO CHEER UP AND LOOK ON THE BRIGHT SIDE AND THIS IS THE REALITY A HUGE PROPORTION OF THE POPULATION DEAL WITH WEEK IN AND WEEK OUT AND I AM ONE OF THE “LUCKY” ONES I HAVE A JOB, NO MATTER THAT IT PAYS PEANUTS.
      THE “garbage news and negative commentary ” IS REALITY FOR ME, AS FOR ADDING YEARS TO MY, THAT HAS JUST A LITTLE LESS OF A POSSIBILITY AS SHERGAR HAS OF SHOWING UP AT CHELTENHAM THIS YEAR.

      • redriversix

        Pay your Family First Greyfox..not creditors……if your doing the best you can,you have nothing to worry about.

        I speak with practical experience …….not theory

        Every day is a good day,just some days are better than others,remember success has many parents but failure is an orphan.

        Keep the faith,I know what your talking about,I lost Millions and Like a fool I went around putting Banks ahead of my family.Your responsibility is to yourself first and then your family,you cannot take care of your family if you cannot take care of yourself.

        Today is the start of the rest of your life…………

        Stay strong and stay safe

        RR6

    • redriversix

      Morning Philip

      Knowing that your ship is sinking allows you to make decisions to put your self and your family in a lifeboat,which gives you a good chance to start again,if not then a chance to save your family so that they may have a chance.

      This is positive action based on negative information.

      Both positive and negative news is power and educates one self to deal with the good and the bad and to make decisions that are able to assist us in our natural desire for self preservation.

      What is happening today is a negative,a lie,a sham.Countries,People and small business being sacrificed to bail out criminal Banks,We all know that you cannot solve debt problems with more debt.No matter how fancy the package is wrapped ,it simply does not work.

      Our Government is mind boggling stupid on their insistence to follow this path of destruction and austerity when every “plan” put out by Europe to “save”us has failed and they continue to kick,tow,push ,haul the can down the road.

      I am very positive,but live in a negative environment because I do not believe the rescue / business plan being forced upon us is real and over the last 3 years,I and many like me and you have been proved right over and over again.!!!

      The only solution is a complete cancellation of all debt and start over,their will be pain,but at least we could see a light at the end of the tunnel and it will be daylight….instead of a EU debt-laden freight Train…………

      Have a great day

      RR6

  26. stiofanc02

    If you take the last sentence in David’s article,
    “This is what we are being asked to vote on.”
    And then rearrange the letters you get,
    “His was a tweet binge.
    Troika hes voted no”
    Yeah yeah its a stretch, but he,y Ive been sober for nearly 62 hours! Okay 50, but who’s counting?

  27. bonbon

    Lots of bloggers complaining there is no plan. The truth is they will not see the value of a plan if it landed on them, due to Tiger rose-glasses they have not tossed aside.

    There is a massive economic recovery plan, involving the entire Arctic region, the Eurasian Landbridge extending and linking into the New world via Bering.
    On top of that we need now 6000GW of power.

    Shipping via the Arctic involves Ireland.

    None of this has a mention of mesmerizing occult monetary theory of the bygone dark age – the 4th successive Empire now almost over.

    So if we put forward a clear huge projecc – the only problem is the rose-classes. Toss them!

    • transitionman

      Bonbon you dismiss Peak Oil and end of economic growth. When the banking system crashes you still think the finance for this mega project will happen?
      Here is a submission that could have legs in a post default punt nua Ireland. http://www.feasta.org/2012/03/01/new-feasta-submission-on-sustainable-development-in-ireland/

    • bonbon

      Limits to Growth is a hoax. The 2.4 trillion to be pumped this year alone into the banking corpse would fund all this and more. After we Glass-Steagall the morbid banking dino, credit will not be a problem.

      Energy and energy flux density requirements mean a transition to fusion. The use of fire, unique to the human species, is a whole subject in itself.

      • transitionman

        “After we Glass-Steagall the morbid banking dino, credit will not be a problem”
        So you and your followers will beat the bankers when the governments are at their beckoning? You should look at Punk Economics2 Video to quote The host “what is important is not complicated and what is complicated is never important”.

        • bonbon

          But what is important is extremely difficult to do. I like JFK’s famous quote – we go to the moon not because it is easy, but because it is difficult.
          This may be missing from a lot of economics today.

          FDR beat the bankers, legally and constitutionally. Believe me Wall Street never forgot that. JP Morgan trembled before camera’s. Only then could FDR activate the US Credit clause, as JFK did later. Hamiltonian banking is the way to go!

        • bonbon

          I think that “complicated” reference is from video1. The Austrian School (Ron Paul etc) like to mesmerize with “complexity” and “spontaneous order”, and I think DMcW refers obliquely to that.

          What is important is the difference between a constitutional credit system v. a British monetarist tyranny.

          What DMcW does imply in both video’s there are financial punks terrorizing the entire world right now.

  28. cooldude

    David I intend to vote no in this referendum whenever it occurs. The reason I am doing this is because it is the first time we have been given a vote on the bank bailout. In the general election we had the Fine Gaelers telling us clearly that “not one red cent” would be paid to unsecured bondholders unless they faced a severe haircut. This has turned out to be another pack of lies and we now have these same smug conmen trying to pretend that these debts are actually national debts and it is somehow our duty to pay them. It is in our bollo—x. These guys have been totally manipulated by the Euro technocrats and have no mandate for their treacherous behavour. This is the first time that we, the Irish people, have been given a chance to vote clearly on the direction Europe is heading. We need to follow the example of Iceland and tell the banking mafia syndicate to sod off and to pay the price for their reckless greedy lending. I am under no illusions that deficits will have to eliminated and this can be done once we get these fraudulent bank debts off our backs. We need to vote NO, default on all fraudulent debts, print our own currency including a choice for people to use precious metals if they so desire, reduce our corporation tax to 5% to keep the multinationals sweet, abolish all government quangos, bring in a zero tax rate for 3-5 tears for all new businesses including income tax and try to stop this exodus of our young people that is a blight on this country. The yes camp are trying to use fear as their main tactic. We need to stand up as a people and reclaim our sovereignty. If not we will become debt serfs for the banking elites and offer no hope to our youth.

  29. Crystal

    Ditto- hear,hear!! Fantastic posts today, a bit of the old fighting Irish spirit has returned!! You must all be weaning off the Fluoride (fluorosicilic acid poison)! I had my water filters installed today-a general filter-chlorine etc, plus the fluoride filter, will save a me fortune as have been buying glass bottled spring water for the last 4 months, the supermarket can’t keep up with demand and the plumber said filter business is brisk. Lets join the 98% and make Europe almost 100% fluoride free!

    • cooldude

      Thanks Crystal. I had a filter installed 5 years ago which helps keep my brain functioning properly. I am also a member of the Weston A Price Foundation on nutrition and eat local organic food as much as possible. You are right health is crucial and I take full responsability for all aspects of my health including financial. That is why I keep my savings outside the insolvent banking system and away from the rapidly depreciating paper currencies. We need a Nigel Farage in this country to stand up to these technocrats.

  30. redriversix

    Morning David.
    Would you consider emailing every T.D in Leinster house your Punk economics lesson 2 as I found it simple and excellent in its content.?

    Or I would gladly do it for you, if allowed.

    Did you know that JP MORGAN CHASE sits on the deciding committee of international swaps and dirivetives association [I.S.D.A] who decided whether or not Greeks new debt/bond deal was a default or not,obviously they decided it wasn’t……….!!!!!..How convenient,

    Best
    RR6

    • bonbon

      M.Keiser had a very funny session on that the other day. We are dealing with the same people FDR put on the dock in 1933 with Glass-Steagall and the Pecora Commission. The sheer criminality is the same!

  31. paddythepig

    This is a defeatist article.

    The minnow can defeat the whale.

    The last Scottish football club to lift silverware in Europe was Aberdeen, when they won the European Cup Winners Cup in 1983. In the same period in the mid 80s, they won the Scottish Cup, 2 League Championships and the UEFA Super Cup. This was under the stewardship of one Alex Ferguson, who if he hadn’t gone to Man U, would have continued to hand the Old Firm their asses on a plate. He didn’t buy into defeatism, he took what he had, and he made the best of it. He did the same at Man U, which was a serial under-achiever prior to his arrival.

    Economies are the same. You have to make the best of what you have. Ireland, and the peripheral nations, aren’t even close to doing this. This is the real problem.

    • There are currently 7 Scottish managers in the English premier league and they all come from Glasgow or within a 10 mile radius. Add Stein and Busby to the numbers and this tells is something. We have to ask what is it they are putting in the water over there

  32. SLICKMICK

    Why is Crumlin children’s hospital begging for money ? Even in Texas (where I lived for 2 yrs )things were never this bad . Welfare state for business, capitalism for the rest.

    • bonbon

      If you think that is bad, have a look at what the Troika is doing to Greece, the state of their hospitals. That is what the compact will do to Ireland, make no mistake about it. Bailouts for banks matched by austerity for the people- meaning healhcare is smashed.

      At Nürnberg, the signers of the T4 document removing healthcare from selected categories of ill, got their just punishment – they should have and could have known what their economic policy meant.

    • molly66

      Because the HSE is out of money,my GP is getting out of the general doctor stuff because he said that minister James Reilly is bring out free GP free one for eveybody in the show like on the late late,when this comes in the GP s won’t be able to make a good living,so my GP is thinking ahead and is gone into skin care laser treatments and he reckons that most of the doctors in our hospitals will be non nationals.most of our own doctors will prob leave emergrate,I reckon we have not seen the worst yet not by a long shot.

      • It’s all about money and prestige with many medical professionals and each time I visit my doctor I feel that I am visiting a sales rep for big pharma. You can almost see the dollar signs spinning in her mind

        If those doctors who are in it for the money decide to move into others areas then good luck to them. Maybe then we will have more people like the Chinese dentist who fixed me up and never charged a penny. For him money never entered the equation and he told me that he just wanted to help people

        • Dilly

          So true. My father is a retired doctor. He helped a few young doctors before he retired, and was shocked how the young doctors are only interested in their bank balance, and yet they cannot even perform a simple suture, they send you off to the hospital to sit for five hours or just throw pills at you.

          • molly66

            Two weeks ago my 83 year old mother who lives with me went to her GP who sent her straight to the Lourdes hospital in drogheda .we where in the M .A.U unit my mother sat in a wheel chair from 12 on till 6 ,the doctor sent her home at 9 ,my mother had a letter from her GP the letter read chest in fection kidney infection need to be admitted fed intro fluds for 3/4 days and further investigation in to weight loss. I made a complaint against the HSE .my mother is under 7 stone on thursday 8 /3 2012,I got a phone call from a doctor in the hospital bring your mother in straight away I will look after her. We arrived at 12 my mother got blood pressure ,weighted ect and was given a chair in a cold room at 7 still on the chair I Lost the plot and kiched up a fuss my mother got a trollie ,at 11 my mother was wheeled to the A and E to spend the night what a eye opener that was.the next morning I rang my mother at 9 she was crying ,I rang a fine gale td ,a news paper and the HSE I told the lady on the other end of the phone that there was no way my mother would be spending another night in the A and E and if my mother was not given a bed by 4 I would take her out and bring her to a private hosiptal and the HSE would get the bill through my solicitor ,my mother got a bed at 430 the stress I felt under was he’ll so doctor James Reilly you should be fired.

  33. bonbon

    Austerity Pact: What bribe will the government use now?

    The Irish Times reported this morning that” the Government’s campaign to reduce its banking debt is running into strong resistance within the European Central Bank.

    More than six months after Dublin first raised the matter with the ECB, the Frankfurt-based institution is pushing back heavily against persistent Irish demands for a concession to ease the cost of rescuing the former Anglo Irish Bank.” Since this had been one of the big bribing points in the governments case for a yes vote , do they have any more carrots or just sticks to bribe us with. The biggest stick left is, if we need a second bailout we wouldn’t get one if we voted no— but we have no idea when the referendum will be , and if, indeed, the ECB or the EU itself won’t have disintegrated into a hyperinflationary mess by the time the vote on the austerity treaty is finally held.

    A NO vote sounds better and better every day!

  34. Intellectual Revolution

    Celente and Ron Paul agree that politicians are all suffering from Intelligence Deficit Disorder:

    http://www.rense.com/general95/celen.html

  35. I like the footballing analogy David but football was aye corrupt and does not offer a baseline to compare the mechanics and stupidity of the EU elite and it’s corrupt monetary circus. The cool reception says so. You were probably running on empty when you penned this bhoy but I still like it because it has merit. It sounds like you and that is not a bad thing. A familiar voice moving with the times

    It plays like a rare Beatles B side you can’t stop listening to but can’t explain why you keep playing it. Do you remember the oul record players with the clunky mechanical arm rests that held the records in place? I used to stack my punk and new wave singles under the arm and clunk the play button and I can still remember the sound it made. Younger readers will not have a clue what we mean but sure what would they know? The Facebook generation god love them

    Even the best men can’t fire on all cylinders every day but since we are talking Celtic I just wanted to pen a few thoughts that will most likely not mean jack shit to anyone. There are plenty of Celtic haters in Ireland and we know they don’t matter but if they want to end up like Hibs then that is their call. It’s fine to be negative sometimes but the world loves a trier and a survivor. Remember Fergus McCann. A wee guy with a bunnett but knew how to turn a pound or two. Unassuming financial genius who appeared from the Diaspora when called upon

    In the 70s a macaroon bar cost 5 pence but now it probably costs €10 and a packet of ready salted was 2p. A pie was 10p but the pies were stone cold. Always. Maybe the Celtic board at the time were green and energy conscious huh. At least over at Castle Greyskull you were guaranteed a hot pie. Celtic park was where you learned all about about austerity. Austeriry is in our blood and we have had a forty year start. Austerity is good for you. Believe me I know. It is why Scottish football managers are the best

    Dont ask me … ask anyone who was there. I would not be surprised to learn that the instructons on supporters being served cold pies came from Father McEwan … a frightening man and not a very nice one. Rangers gave their supporters pies that were piping hot but catholic boys might take such signs of benevoelnce at face value and lose the run of themselves. The cold parkhead pies were laced with pepper and spices and in the freezing days of January afternoons they did the job and more more. We didn’t know the difference because we were used to being treated like shit. Get used to it Irish brothers

    Being Celtic is an attitude to life and not a means to an end David. You are Irish through and through but learn from the hun and just to be really Irish you want to prove that you are superior to him in the disciplines he sees as the preserve of likes of him and his ilk – prudence, forthrightness, steafastness, entreprise and ultimately humour. We outdid the hun at every turn and will continue to do so just to prove we can. How typically Irish

    Your analogy has certainly made this bhoy fire on all cylinders today and you have got me thinking. Celtic is the most successful football club in the world (in my opinion) and it is it’s Irish heritage that makes it. We were never like the Hibs and held on to our Irishness. Hibs wanted us to stop flying the tricolour in 1952 and we said no. Rangers supported us knowing that they needed us to ensure that the madness kept their coffers flowing with lucre. Who was kidding who?

    The Glasgow Irish. Embrace it. Be aware of it because you will never find a place on foreign shores that feels more like Ireland. We are intelligent and not the figure of ridicule so favoured by incurable Irish Independent conservaties. Anyway we would say that such people are more foreign to us as than the French and the Germans. A working class guy from Lisbon or Milan would be more a natural ally than some of the petty conservative Irish brothers who have about as much personality as a cold fish fish supper someone spent the night sitting on

    Football has always been controlled by the love of money and clubs with the largest supports have always been able to pay their way to the top in Britain. It used to be Italy but they discovered that money can be your downfall if it controls you and you don’t have the intellectual and emotional discipline to handle it. The ego rules and you become as corrupted as your ego demands. Take home point – always know when you are doing the thinking and when your ego is doing your thinking for you. Psychology 101

    Once corrupted on this scale you become rotten to the core and no one wants to see you win. Think Inter Milan, 1967 European Cup Final. The world hated them and their arrogance. A team of freckly skinned no hopers reminded the world of how football should be played and the world still remembers the burst of light that erupted that hot afternoon on the field at Lisbon. A great one off that reminded the world that good guys sometimes win

    It was a force of light overcoming the forces of darkness because the people remembered Pele, Puskas and Di Stefano and wanted to be back there. They brought hope but then the Cuban missile crisis shrouded the planet in darkness. The good guys played in bright strips that day and the huns were dressed in dark blue and black vertical stripes. Arrogance personified and not a coincidence I am sure. It was symbolic

    Interestingly most German league clubs today have a wage cap and sanity prevails to ensure that Bayern can’t win the Bundesliga evey year. There are regulations in place to ensure that football clubs can’t behave like Glasgow Rangers and Leeds United where to win is more important than impending financial meltdown. The German’s can teach us something for sure but when it comes to football I believe our style is superior. Think Baxter playing keepie uppy against the huns at at Wembley in 67. McCalliog backheels to Law and Law backheels to Baxter. Baxter moves up the wing keeping the ball up five times with socks rolled to the ankles

    German superiority is a myth. Jim Baxter and Jinky Johnstone would have left Beckenbauer et al for dead. The difference can be summed in on one word – attitude

    It was attitude that made Celtic give Real Mardid an absolute doing in the Bernabau in the summer of 67. It’s on YouTube if anyone is interested in seeing the first forein team to win there in 40 years. Attitude is everything in this life

    • Bonus read

      You are a Leeds Utd fan David.
      Here is a cracking two part article about the 1970 European Cup semi final between Celtic and the team who were England’s force of darkness. Once again we see good triumph over evil

      http://www.mightyleeds.co.uk/matches/19700401.htm

      • Donal M

        Hi Pauldiv,

        I am new to this blog and have spent the past few days pouring over
        it. I notice that you see yourself as the arbiter of “good taste”
        here. Well you are. But only to yourself and those who holds your view
        on what makes a good metaphor.

        I for one found David’s football metaphor very useful. For I am no
        economics maestro. You condescend to David as though you were his
        Editor and exasperated at his wilfulness, I suspect you are not paid
        to give your opinion on anything though.

        I only got two paragraphs into your latest diatribe though, because it
        just was not interesting. David on the other hand…is. Whether he is
        right or wrong, your constant critique is merely your own opinion, of
        how you would write the same article…as I said, I could only suffer
        two of your paragraphs.

        Actually I just read it now…your constant reference to “The Hun” and “Black” I know ALL about that, from the border counties myself…I think David is being too polite to tell you to shut up.

        22 grown men kicking a ball around a field: is just that. People who place negative political/quasi-religious attributes to eleven of the twenty-two men kicking a ball around a field…well, I don’t need to continue do I?

        • I hope it stays fine for you Donal

          • Donal M

            Hmmm…a pithy retort!

            Well let me say: over the past few years I have discovered I can live on about €30 per week, 1st thing to do is get out of Ireland.

            I currently live in Holland where it costs a fraction to live. E.g. 24 quality beers (Dommelsch)for €7…none of your Heineken muck. Groceries for me and my lady: €20 per week (I do the cleaning and cooking while she is at work.) It just means cutting back on imported (Irish) meat…its true, Irish beef costs a bit here, its a luxury item cos the local stuff tastes awful…and subsidising it with local vegetables from the markets which costs pennies.

            Not buying unessential crap was the hardest thing to train myself to do. I was so used to buying shite I didn’t need in a former life…with a credit card to boot!!!

            I Have lived in Australia, Vietnam and Cambodia over past few years…currently staying at my girlfriends here in Holland since Christmas before I head off again, when the breeze is right and a mocking bird cajoles me into the Frey once more.

        • You sound like a lucky man Donal,

          Enjoy Holland and best for you next travels.

          David

          • Donal M

            I thank you Sir! Any kudos on the Punk Economics videos…hope there’s more to come.

            You’ll not remember this I’m sure, but 3 years ago I spoke to you after your one-man show at Abbey Street and suggested a simplified digest of your view aimed at young people, even emailed you a couple of pages of ideas…now I’m sure I was not the only one who suggested it…so I am not looking for any sort of credit: infact, when I watched the first episode, I said aloud: wow, I couldn’t have done that…it was well beyond what I had envisaged!

            Keep it coming. I’ve been posting a link on all sorts of forums (especially German newspaper blogs!)

  36. Paul

    The less said about Leeds the better!

    D

  37. Grey Fox

    Great Article as usual, to hansel a phrase,
    “there has been much said, and too well said, so I will not occupy the time” Edward Everett Hale
    Well Done

  38. wills

    Folks,

    The entire financial – banking system design is false.

  39. Tony Brogan

    Here is an essay by Chris Powell of GATA which high lights the fact that Paper money is the basic problem of the world.
    Loss of control of monetary policy by any nation is a loss of sovereignty designed by the money masters to help us on the way to the authoritarian dictatorship of one world government.
    It points to the reality that it is necessary to return to inelastic commodity money which is essentially privately owned and thus a requirement in the pursuit of individual liberty.
    Issuance of commodity coins into circulation by the Irish mint for purchase by the citizenry will be the first step on the road to an economic recovery.
    DMacW will dissagree as he believes in the Keynes doctine of elastic paper money and state interference in the economy and thus is unable to propose a solution to the current economic problems which have been caused by the very policies he advocates.

    Le Metropole Members,

    Gold now defends not just liberty but simple reality

    Submitted by cpowell on 11:47AM ET Saturday, March 10, 2012. Section: Daily Dispatches
    2:57p ET Saturday, March 10, 2012

    Dear Friend of GATA and Gold:

    GATA can’t vouch for the data published in the latest edition of Alan M. Newman’s financial letter, Crosscurrents, which argues that financial manipulation has become the main pursuit of the United States economy, but he is far from alone in his observations. Commentary about this trend arose around 20 years ago, perhaps first in The New Republic magazine. And there is a well-established entry about it at Wikipedia, the Internet encyclopedia, here:

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

    Newman writes that dollar trading volume (presumably in U.S. markets) now is more than four times larger than the U.S. gross domestic product as well as four times larger than total stock market capitalization. “The churn continues at the most ferocious pace, making a mockery of our capital markets,” Newman writes. “The theme of investing for the future is now meaningless as high-frequency trading distorts price discovery, resulting in gross pricing inefficiencies.”

    This echoes what GATA board member Adrian Douglas, publisher of the Market Force Analysis letter (www.MarketForceAnalysis.com), often has written about the gold and silver markets particularly — that paper trading is scores of times greater the actual metal traded and, perhaps more important, scores of times greater than actual metal available for delivery.

    This means, as you’ve heard from this quarter before, that there are no markets anymore, just interventions (http://www.gata.org/node/6242), with the virtually infinite amounts of money necessary for manipulation being delivered by central banks to the monster financial houses that act as their agents both officially and openly as well as unofficially and surreptitiously.

    And yet we too may be faulted for paying such close attention to it. Yes, these manipulations supply the main cues for all asset and consumer prices, but now that “trillion” has become a commonly accepted term, the economy’s connection to reality itself is being lost. For as Zimbabwe discovered recently and as Weimar Germany discovered 90 years ago, when it comes to human affairs, “trillion” exists only in the imagination, if there. It is incomprehensible.

    The digits that flash on our computer screens every day are now mostly just the reflections of holograms concocted by machines. These machines may not yet have taken over the world in the much-feared moment of “singularity,” catapulting us all into the losing side of some Arnold Schwarzenegger movie, but as Newman notes they could turn on their masters at any time.

    You know all the old philosophical arguments in favor of gold and silver as an independent form of money — human liberty, limited government, and so forth. But an equally compelling argument now may be the defense of simple reality. In the end monetary metal in your hand is at least something. Hurl it hard enough at an arrogant central banker, a parasitic fund manager, or a sleeping market regulator and it would sting a bit. However the precious metals are to be priced, holding them as money is a way of rejecting and defying the holograms and the creators of infinite money.

    Having had plenty of horrible experience with infinite money, the American Founders knew all this and so insisted on commodity money. But their descendants lacked such experience, and so it came to seem primitive to let the money supply be determined by how much metal could be pried out of the ground each year. Indeed, it is primitive. It just has turned out that more sophisticated money becomes, perhaps inevitably, too sophisticated, and the result is far worse than primitive — predatory, corrupt, totalitarian, and unreal.

    Alan Newman’s letter, headlined “A Mockery of the Capital Markets,” is posted at the Crosscurrents Internet site here:

    http://www.cross-currents.net/charts.htm

    CHRIS POWELL, Secretary/Treasurer
    Gold Anti-Trust Action Committee Inc.

    • bonbon

      No a mention of Alexander Hamilton’s National Bank – so a very vague histrionic.

      And no mention of Derivatives- not really money and the root cause of the entire disaster.

      And no mention of Article 1 Section 8 of the US Constitution (Hamilton’s) defining a Credit system diametrically opposed to a British Monetary tyranny including the British Gold Standard so favored by Austrian School followers (incl. Ron Paul).

      • cooldude

        Wrong yet again bonbon. Ron Paul supports allowing different forms of money to compete in the market place and let the people decide which type they want to use. He makes this 100% clear and mentions it in his recent questioning of Ben Bernanke. In this he shows a 1oz silver coin to Bernanke and asks him why can’t people be allowed to use this coin as part of the monetary system. He mentions the excellent work being done by Hugo Salinas price in Mexico to introduce such a coin into the Mexican monetary system which would have no fixed value on it but would be allowed to float in value to reflect the constant debasement of paper money. Please check your facts before you make any more comments about Ron Paul who is the only anti war candidate in the American election and is a true beacon of hope in an extremely messed up world. Check out the interview here http://www.zerohedge.com/news/ron-paul-ben-bernanke-people-lose-trust-government-because-you-lie-them-about-inflation

        • bonbon

          Ron Paul’s biography of von Mises is advertised on the Austrian School website. Fact : he recently said at a convention “we are all Austrians now” even when most thought that meant Schwarzenegger’s.

          There is a conflict between such economics and the Hamiltonian US principle – read Article 1 Section 8. Best would be to directly ask the candidate in a Q&A.

          Please check why Hamilton put that Constitutional clause to counter the British and created the First National Bank.

          Other than economics, after all the theme here, Paul is correct on Obama.

  40. Apples & Garlic Market

    Protection racket for French Garlic is evident in the recent prosecution in Dublin against the biggest fruit importers in the country.

    Non EU garlic imported attach 232% duties as opposed the lowest rate for other produce at 9% and zero from within EU .That variance is an obvious attempt to protect the endangered French producers .

    Do we have such rate to protect Irish produce ?

    Legislation is written to protect the insiders and big country members in EU .

    Nevertheless it does raise the question how does China produce so much garlic for export when it normally is a food importer .I would like to an independent study carried out to compare the nutritional values of each garlic produce from both France and China . Does the austerity tax in this case recognise an inferior produce?

    • bonbon

      I see Greece has to purchase generic drugs because of the murderous austerity. I wonder what big pharma thinks of this!

      I also heard that GE took back CAT scanners which were not paying.

  41. Reality Check

    @Pauldiv really enjoyed that post. A friend who is really into Scottish football let me know that Dundee United beat Barcelona in the 1986 Uefa cup quarter final in the NOUCAMP! Amazing.
    http://www.youtube.com/watch?v=5MPGq9hJG2U

  42. Reality Check

    David please get a proper message board sorted. I’d love to get in contact with Pauldiv re Glasgow, Bonbon re Hamiltons bank and Donal re living frugally!

  43. CitizenWhy

    Whoever controls the money is the strongest and has the most votes and has a big veto power.

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