March 14, 2012

Germany cruises as Spain sits in a heap - it can't last

Posted in Irish Independent · 181 comments ·

Few indicators could have underscored the inconsistency at the heart of the eurozone than figures yesterday showing Germany’s investor confidence at a 21-month high, while Spain, wracked by 22pc unemployment, gives the EU the two fingers on the fiscal compact.

Here we have Europe’s biggest economy, Germany, cruising ahead and bathed in lots of free capital from the ECB; while Spain, the world’s 12th richest country is in a heap. It is impossible to see how a currency union between such large countries going in such opposite directions can last.

The reason for the difference is that Germany and German investors have benefitted enormously from being a creditor nation over the past 10 years, while Spain — a large version of Ireland — has had a similar property slump and its banks are now bust and all the free money in the world from the ECB isn’t going to make it any better soon. As the wonderfully prescient John Mauldin in his financial newsletter ( said this week, Spain’s GDP of $1.4trn (€1.07trn), somewhat surprisingly perhaps, puts it just behind oil-rich Russia and Canada and people-rich India.

Spain is a big country. Spain matters. Spain does indeed matter and this is why the move by the Spanish government yesterday to tell the Merkozy where to go is an interesting development.

The new Spanish prime minster, Mariano Rajouy, signed the fiscal compact, flew back to Madrid and then promptly rejected the first obligation of the fiscal compact which compelled him to rapidly reduce his budget deficit. The Spaniard realised that with the country in difficulty, too much budget retrenchment would tip it over.

Like Ireland, the major issue is not just the public debt, but the private sector debt which stands at a staggering 227pc of GDP and, according to McKinsey (a report we quoted here in this column a few weeks back), Spanish corporations hold twice as much debt relative to their output as US companies and, in comparison to Germany, that number goes up to six times.

So Spain, much more than Greece, is a big Mediterranean version of Ireland with huge, private debt. We would be wise to watch what the Spaniards do next. It is clear that the Greek deal of last Friday will no more ring-fence Europe’s debt crisis than the last bailouts. What it has done is bought a little time for the EU.

Spain is choosing to use that time to loosen the noose around its neck. It also realises that there is very little the EU can do and with two votes coming up — a presidential one in France and the Irish referendum — anything can happen.

The Germans on the other hand are hoping that they have done just enough to quarantine Greece and make Europe safe for German companies to export to without the trouble of yet more defaults on the periphery. What Germany fails to understand is its huge trade and current account surplus with the rest of Europe is as much a problem as Spanish or Irish debt.

To solve the problem, the ECB is now printing buckets of money to pump into the EU economy. The authorities seem to think that this will calm everything down and make the euro look like a sensible currency. Even yesterday, the former Portuguese communist Manuel Barroso was reported here in the Irish Independent as calling for “an end to the constant drama” about the single currency and he went on to say, wait for it, yes that the EU “may be turning a corner” towards “stability and growth”.

Poor Mr Barroso still has an unwavering communist’s grasp of economics and finance. Crises — if they have a fundamental source in economic imbalances, debt or financial conundrums — can’t just be willed away.

IN fact as I listen to Mr Barroso and unfortunately to Michael Noonan’s wide-ranging interview the other night when he kept alluding to “stability”, I can’t but think they are going through the four-stage cycle that many politicians go through after a crisis. This four-stage cycle was described this week by another of the best financial newsletters out of the US,

It contends that in Europe and America the political elite is going through the same four stages that were seen in Japan in the 1990s and into the early 2000s after its massive debt induced slump. The four stages are: response, improvement, complacency and repeat.

The first stage is the response stage. When any crisis reaches a panic stage, authorities will typically react (and overreact) creating an overwhelming response to the crisis. This usually includes lots of cash and some immediate legislative relief. This is what the ECB is doing by printing money.

The next stage is improvement. The response throws enough money at the problem so that symptoms are temporarily relieved. The improvement is not structural, but rather is driven by a trip of excess liquidity. It feels good but it is financially mind-altering. Witness the fall in bond yields of countries that have no money.

The temporary patchwork repair creates a false sense of accomplishment. This is the stability stage which Mr Noonan was speaking about the other night in that interview. The improvements feel good, the data improves, markets rally. This leads to a sense of complacency amongst all parties (government, private sector, banks, consumers and so on).

With few of the structural problems fixed, the excess liquidity eventually flows to the same sources of the original crisis to liquid assets such as government bonds, via the banks, setting the stage for the next crisis. Looking at the Spanish response yesterday and the fact that we have yet to deal with our massive debt overhang, it looks like these four stages are playing out here.

  1. Very lucid and informative article which makes one ask why bother having a single currency. It is not working.

  2. tubdoc

    This time is different..

    • Adam Byrne

      We all partied

      • We are all going to party again!
        We always knew the developers would not go away.
        I and many others predicted this, the day NAMA was created.
        To his credit (or maybe for a necessary PR exercise at the time?) the deceased Minister for Finance Brian Lenehan assured us that the perpetual circle of cronyism would be broken.
        So now the NAMA boss hints in today’s newspapers, that the same banks who lent too much money to their developer pals, and then went bankrupt-but were not allowed to go bankrupt- and were then reinforced with taxes, from the blood, poverty, and a thousand cuts imposed on innocent citizens, (plus of course IMF and EU funds)-
        the same banks are now poised to repeat the whole exercise all over again.!
        Presumably the developers will get dollops of debt forgiveness,new deeds to their property empires, and of course new loans.! (or an extension on the NAMA deep frozen ones, which they could not pay back!).
        Presumably,they can roll over the repayments and interest,indefinitely, thereby enabling them to sit on their re purchased assets like chickens on new golden eggs.
        A preponderance of once unsold and unsaleable, properties can be drip fed on to the market at levels which ensure a tidy profit for all.
        Problem solved..a new property cartel-financed by the old reliable bankers.
        “All you Seanies come back all is forgiven!. Exiled developers, return to the fertile fields of Erin.!”
        One bedroom apartments-now considered unsellable-may even become much sought after as prices rise.
        The economy will take off like a Noonan rocket!
        The property Ponzi bubble, stemmed from a boom in the economy;a boom in demand; and a stranglehold on development land-all of which was in the hands of the big (now semi-bankrupt) developers
        Properties were drip fed on to the market,until rising prices resulted in an orgy of demand and speculation by “buy to let” investors.
        Properties will again be drip fed on to the same market,and the banks will wait long and patiently until their pals manage to regain the same stranglehold on the market as heretofore.!
        This is an excellent idea.It means that the same old faces (the developer ones),or their offspring ,if they have passed away-can keep the same old circus on the road.
        Did we ever believe that they would go away-no,no more than we believe that new political parties that govern for the people and not the Golden Circles, can somehow emerge into the light of day.
        Some things never change in a God-forsaken land called Erin.

  3. Big Picture CLock

    I would like to imagine the clock hands on this new time machine showing each of the four stages of experience as spoken in this great article .

    Of course we need to calculate the length of a new economic hour and how many there are in a ‘stage movement’. Then how long does a stage take to complete to the next . Exactly where are we …..and this stage the time machine will begin to make sense ….and just maybe ……only just maybe ….does it give us time to …grab our cash and run.

  4. This article reminds me of a watchmaker at work. Except he is skilled with ‘the hands’ and I am not.

  5. This four-stage cycle was described this week by another of the best financial newsletters out of the US,


    what link did you have on mind?

  6. Tony Brogan

    Hello David
    It takes a brave man to put up opinion on a regular basis to be disected, disparaged, reviewed, reviled, praised and applauded.
    Perhaps it is the latter keeps you going rather than the former! There has to be another motive and that of promoting the common good of the community.

    Your current essay seems to suggest that a common currency will not work imposed as it is on a large area od disparate peoples from differing cultures and economies.

    But what is the solution David?. do you have one? Should the Euro be disbanded, should all nations revert to national currencies. Is there an international currency that will work? What is the root cause of the current indebtedness. An indebtedness of all peoples in varying degrees.

    One solution being tried is the incessent production of paper money via the printing press and the more insideous process of money created by additional digits appearing on a computer. As this money, however supplied, is a source of additional debt it is as you point out just adding to the problem. The debts are so huge as to be unpayable. De facto default is occuring on the one hand while the other is loaded even higher.

    how and why did this debt accrue in the first place. Why are our politicians determined to add ever more levels of debt in the belief it will solve the problem.

    We must go to the root of the problem and stop offering placebos to a very sick patient. Why is the patient sick. Why are all countries sick. Why are we all in debt.

    could it be because the system was designed to do just that. could it be that we are in debt by design and not happenstance. If so who wants us indebted and why. What happens when we are indebted.

    In past times the debtor became the servant of the creditor. Why would that not be true today also. It makes perfect sense that if one wants to rule the world then one gets in control on the monetary systems of the world. Then once in control, create a system where as the creditor you indebt the rest.

    So what has happened over the last 200 plus years or so. The development of the central banking system is what has happened. From the formation of the Bank of England in the late 1600′s to the imposition of a central bank on the people of libya in 2011 we see that almost all nations are ruled by monetary policies of the national central banks, connected to the cenral banks central bank, the Bank of Intrnational settlements ((BIS) and the International Monetary fund.

    What is the commonality of the central banking system. They all Issue currency to the National treasury as a loan in exchange for goverment bonds. Where does the Central bank get the money from to loan. Initially the first central banks were private shareholders who provided capital to fund the bank. Ever since as the system of fractional reserve banking was honed and developed such money is produced out of thin air.Central Banks are constantly adding to the money supply and to the national debt.

    As any increase in the money supply induces inflation. All goods take more currency to purchase. Who benefits from this constant money supply. The major beneficiaries are the first recipients of the extra money. They can spend it into the economy at par before the devaluation of the balance of the currency already in circulation. Who loses. The people who receive no extra currency but who find goods and services more expensive. These are the savers and the working person at the bottom of the pile. Savers find themselves robbed of purchasing power while the workers standard of living drops as his/hers hour of labour buys less and less.

    Who received the money first. At this point it is the bankers and friends and connected corporations.

    The rich get richer and the poor get poorer and the savers are fooled. This is the direct result of the current central banking system.

    Central banks also institutionalize money whereas in past times money was purely private property and not the preserve of the government or central bank.

    So it would seem that the first thing to do to help the people is to close the central banks and return the issuance of money to the government directly and make it the authority of the treasury. Treasury can issue currency quite as well as the central bank and without the debt incurred and without the interest on the national debt.

    but we still have the problem of the issuance of paper money backed by nothing but the will of the people to treat it as money. Government can still spend money willie-nillie which is still inflationary and detrimental to savers and the working poor. It would still encourage people to ask for credet to buy those things unaffordable today that require savings otherwise.

    We must revert to a monetary system that is non inflationary, that encourages savings, ecourages frugality, and does not require debt.Savings ar ethe bedrock of a sound economy. it is the accrual of savings that are used for investment in the now and future.
    An examination of how money works when working properly shows that it is not a requirement for a thriving economy to have an expanding money supply. In order for this to be so the money used must be a commodity in its own right and not a paper substitute.

    People through the ages have settled on gold, silver and copper. Gold and silver are the monetary metals of choice. Because of its relative rarity, Ease of division, universal acceptance, store of value, indestructability and use as a medium of exchange gold became money. silver also for day to day transactions, and copper as loose change. This is known as a sound money system, or honest money. That is uncorrupted money. (Corrupted money being induced has become a problem for all peoples.)

    The question is?? how is honest money introduced into the economy today without a collapse of the current system? Not easily as it requires a strong demand from the people themselves, and a strong political leadership. The alternative is that the collapse will occur as the current debt system implodes.

    The latter is more likely as there are few politicians who understand the current monetary system and fewer who know what to do about it. Those who have tried or indicated a willingness to try have been executed od assinated. this is a strong statement but is seemingly the truth or close to it. At least the correlations point in that directions. Who do you know who is willing to be sacrificed on a point of principle on behalf of a people who do not understand why.

    Therefore the people must be educated and then a leader will appear.There seem to have been 3 presidents cuaght a bullet in the US after indicating they wanted the money system out of the hands of bankers and returned to government. Garfield, Lincoln, and Kennedy. Then Kennedy the second about to win the nomination and Reagan who did not die.
    Recently we have Saddam who proposed selling oil in Euros and not US dollars, Ghadaffi who proposed a Pan African gold currency for Africa to trade with each other. (The first act of the transitory government, months before the downfall of Ghadaffi was to install a central bank. And what happened to the Libyan 130 tonnes of gold??!!) The record is clear. Do not oppose the Central Banking system or you will die.
    Does anyone really think that the Iranians are crazy enough to use a nuclear bomb. That is what North Korea is supposed to do. Have they. Iran also proposes to trade in other than US dollar reserve currency. It wanted to trade in Euros, and now, because of sactions is actually trading in local currencies with china, and Gold as money with India.Iran will have to go. BUT Iran is supported by China and russia!!

    What can we do. What can Ireland and other countries do. First choice is to continue the advance to economic slavery and one world government where mankind will be an indentured servitude monetary slave. (Remember the line “16 ton and what do ya get, another day older and deeper in debt….

    I owe my soul to the company store.)

    i suggest we demand that treasury monetise a one ounce silver coin as legal tender. This coin will contain one troy ounce of silver alloyed with copper to form sterling siver of 92.5% pure silver (to give the required durability for wear and tear of pocket change).
    The monetary value will be set by treasury at a minimum of 20% above the world price as set by the London Bullion Exchange at close of business each Friday. This monetary value will be rounded up to the nearest multiple of 5. The coin will have no stamped value on it, just the weight of silver and the purity of the silver. This coin will be issued by the Irish Mint and dispersed through the post office to the far courners of the country where it can be exchanged for paper currency.

    This monetary value can never diminish and as such will act just like a paper note, but the value can increase when the world price of silver rises.

    For example, as I write, the current price of silver is E24.68. Plus 20% margin which is plus E4.936=E29.616. A rounding up to the nearest multple of 5 = E30.00 as the monetary value.(this is the value you would pay to get one or exchange for good and services.)
    As inflation is a given there is a chance that there will be a steadt if volatile rise in the value of goods including gold and silver.
    If set today the monetary value of the one ounce silver coin would be E30. Over the next 6 months we could see the value of silver rise another 15% or so.
    This would be a price on the world market of E28.38.
    Plus the 20% (the markup is to cover minting and distribution costs to the government and leave a little bit of profit for the treasury which is called seigniorage)=E34.0584. This is in turn rounded up to the nearest multiple of 5 or E35.00 as the new monetary value. This is how the silver coin will protect your savings from inflation.

    If you had a choice would you rather save with paper money that may pay interest which is in turn taxed,and is subject to inflation, or in a silver coin that can never drop in value and that protects from inflation.

    If the euro system prohibits the issuance of silver or gold coins then it is another reason to opt for your own currency and recover Irelands sovereignty.

    These silver coins can be supplied in unlimited amounts to satisfy the demand from the Irish people, at no cost to the Irish government. This is because the government mint will be able to secure silver bullion from international sources at the world spot price and after refinary and minting costs show a profit through the seigniorage as decribed.

    There would be grate demand for these coins and the instructions to the mint would be to supply coins until demand was met. demand would be sated when there is not a further premium demanded in the market place for these coins.

    At the same time the function of government would be examined and reduced by the will of the people to its essential functions where all subsidies will be eliminated. Regulatation will be examined and enforced or abandoned.

    As money supplied by central banks would be eliminated so would a large part of the national debt and the interest thereon. Odious debt would be cancelled and other debt replaced by Irish currency.
    There will be a period of adjustment but once the world realized that Ireland was using commodity money the currency would regain strength and Ireland its prosperity.

    how do we transfer

    • Adam Byrne

      Good post, interesting suggestions. Thanks.

      • Tony Brogan

        Thanks Adam
        I get a little tired of all the avatars making arument over silly details. WWhere is the thought and the discussion on solutions and the causes to the problems.
        Take care

        • Poaching Thoughts

          How do we transfer ?

          That is a Mint of a question that Irish Politics cannot deliver under the current leaderless administration of ex primary teachers whoes only known doctrine is listen to the school inspector Oli Rehn .

          Oli prefers to talk sense in sauna baths cause he knows those around him ( uncovered ) are also devoid of laptops and recording devices . Enda et al will never remove their socks because they are embarrassed by the smell they give off and they simply think anymore .

          • should read : simply cannot think anymore’.

          • Tony Brogan

            Hello John

            We must go to the marginal parties who are out of the mainstream looking for an issue to gain them prominance. Politics makes strange bedfellows, as is said.
            i am currently in Canada but during my last trip to Ireland I noted Sinn Fein receptive to monetary change. Perhaps an approach would yield results.

            if adopted by a marginal party and seeming to gain the support of the people then it becomes adoptable by thje adaptable and so the ides goes mainstream.

    • coldblow

      Hi Tony

      “So what has happened over the last 200 plus years or so. The development of the central banking system is what has happened.”

      Could this be rephrased as follows:

      “So what has happened over the last 200 years or so? The development of free-trade, industrialisation, globalization, science, secularism, transport, agriculture, medicine, wars, revolutions, huge political and cultural upheavals, consumerism and a whole load of other stuff, all interacting, including as part of the mix (a tiny part all things considered and on balance less a threat to civilization than one of the desperate defences adopted by societies in the face of the massive, hugely disproportionate, economic and social dislocation resulting directly from operating the revolutionary, utopian, dangerously unstable and wildly oscillating new free trade/ gold standard system which threatened to overwhelm and destroy both itself and the rest of the world)and impossible to understand except when viewed against this historical background, central banking.”?

      • Tony Brogan

        I have no idea what you have said. Please be explicit then questions can be addressed

        • coldblow

          Just high spirits, Tony. The point was that the idea of central banking, alone, does not explain much of the history of the last 2 centuries. Also, that central banking per se is not necessarily bad. I would however argue that private banks have almost certainly been much more of a curse than a blessing.

          • Tony Brogan

            Hi Coldblow-warm thoughts!
            No there are a lot of events that occurred and the greatest growth of industry and technology ever seen. Most live today in a luxury of goods and accomodation unimagined just 300 years ago.
            As far as banking is concerned.
            All private banks rerceive their funding and policy through central banks. Private banks issue most of the money through fractional reserves. All money today is issued as a loan into debt and the interest on the loans compounds to the point there is little capital left if the interest is paid.
            We can not tackle all things.We must look to the root cause of the illness and not treat just the symptoms.

            Because of artifical low interest rates, people are induced to spend and not save. Governments urge consumption to stimulate the economy. how can pure consumption do anything without production.

            My original presentation was to introduce a means of saving. monetise a silver coin. Give the people something to save. The method is explained above. It is a simple proceedure. This I must stick to or the side issues will overwhelm the original idea. It alone will be hard to get implemented if people do not understand.

            People must protect themselves when the system is scewed against them. As a start, save in silver and accumulate. when the system goes down as it will then siver will not only retain its inherant value but go to where it should be already without the price supression of the paper market shorts.

            i expect silver to be multipes of its current valuation against all fiat currencies and also gain against gold. Gold is the standard. The Yard stick. It too will be released to its true standing when the paper system implodes.

            When one finds out that powerful banking interest funded both sides of the Napoleonic wars.
            That Lenin was funded with gold given him, and then allowed to travel accross the world to fund the Bolshevik revolution and the Navy rebellion.
            That both france and england went from sound money to paper money to PRINT enough to pay for their war efforts.
            That the second world wars were funded the same way.
            That printed fiat paper still had a promise to pay until 1971 but the amount of paper promises overwhelmed the amout of specie avilable.
            That going off the gold guarantee by Nixon was a default of the US dollar.
            That since then there has been nothing but paper money which now is overwhelming the world and we are all bankrupt.

            I think it might be correct to say that the biggest problem is the banking system. It is not the money of commodity that is the root cause, it is the production of paper money to excess.Or the use of paper money backed by nothing, period.

            We can not trust a politician to do the right thing, but rather promise the people the moon. The people accept these promises.So it is the fault of the people too, we all demand what we are not due. governments provide benefits that are unaffordable. Money must be borrowed. central banks oblige.

            The people must be educated as to what is going on and why. Any individual politician in the last 150 years who has tried on his own has died. The people did not understand why.
            If the people understood they would rise up and demand the elimination od central banks and the printing of paper money. commodity money does not allow this expansion of credit. Honest money will not allow the huge deficits. Honest money makes one live within ones means. When the people rise up with a common purpose and an understanding of the current debt system then change for the better will occur.

            Most economic teaching these days wants more interference in the economy by government. this is by design. The money masters educate us to their will . They get the finest and brightest minds to accept this propaganda which they then teach in the universities and colleges as dogma not to be challenged. Anyone with a diffierent opinion is labeled as right wing, radical, unbalanced, uncaring etc, or then ignored and sidelined. Academics lose funding, corporations will not hire and politicians are rewarded such as Tony Blair given a 0ne million dollar a year stipend by JP Morgan as an “advisor”.

            When all is said and done it would seem that the central banking system is the root of all the evil.

            It needs to be destroyed before it consumes us all.

      • Tony Brogan

        Reference to a “new” free trade/gold standard.

        Free trade happened before there were states, and gold has been used for thousands of years as a medium of exchange.
        Central banks within the nations set up by bankers to control the nations’ money is the new paradyme.
        Release the money back to the people as freed property, to return personal freedom.
        Eliminate the central banks and regain sovereighty.
        They will fight you for it, it is so important to them they will kill you to retain the power it brings them.
        All else is fluff and distraction

        • juniorjb

          You’re using an argument that relies on a kind of naturalistic fallacy. There were also lots of other things before states, including slavery and war. We are not usually persauded of their desirability on the basis of their age.

          • Tony Brogan

            Nothing to do with age or slavery.
            If you have a point to make about what I have said and proposed stick to the subject. The only slavery I have mantioned is debt servitude. If you disagree with the premise of honest money, say what you disagree with and then lets have your suggestions to ease or eliminate the current corruption and financial problems.

            All else is fluff and distraction

          • juniorjb

            Of course it has nothing to do with slavery. My point is that when you say “Free trade happened before there were states, and gold has been used for thousands of years as a medium of exchange” you seem to be suggesting that the existence of these things prior to states is some kind of endorsement of them. I mention slavery and war simply as illustrations that you can use the same argument in the same way for other things that you wouldn’t endorse, therefore the argument is not valid. So I am sticking to the point that you have made, even if only a small one.

          • Tony Brogan

            Once upon a time there was free trade and gold was money. silver too. It was a long time ago. Life was good. There were few large countries and no central banks. People traveled freely without passports.

            If you are a good little boy and go to sleep now I will continue the story tomorrow. Night Night.

            all else is fluff and distraction

          • juniorjb

            What’s your problem Tony? I responded to a specific point you made, clearly and patiently and I offered a clear logical statement.

          • juniorjb

            Do you have any capacity to tackle an actual argument, or do you intend to bluff your way through with a bit of bullying?

          • juniorjb

            So, Tony, “all else is fluff and distraction”? You intone that portentously by way of reply, as if we are supposed to genuflect and bless ourselves, yea we shall not deviate from the Gospel according to Tony, Tony that knoweth all! I was just thinking to myself, what this site really needs is a crank, preferably a rude, self-important, pretentious one. There is a theory of the stages of intellectual developement experienced by undergraduates – initially they want black and white answers. Frustrated when they are not offered these, they enter another two stages in which first they assume there are in fact clear answers, the tutor just doesn’t know them, then that “the authorities” do in fact know these answers, “they” just don’t want you to know what they are and have conspired to hide the truth. When they finally cop on, they recognise that there are other viewpoints that emphasize different facts, methods and values and so there tend to be different answers, you just need to sift through them critically.
            You could start by checking out the naturalistic fallacy, described as such by G. E. Moore, but harking back to David Hume. Then I would suggest that your anthropological knowledge be extended beyond some TV show you saw the other night before you get stroppy about that too.

        • coldblow


          How do you know there was free trade as such? The classical economists had this idea of man, existiing in a state of nature (itself a utopian idea), whose first instinct was to trade freely. Then the idea has been used to support outlandish notions of what motivates the individual (the wha’?) economically which no doubt resulted in the current BS orthodoxy.
          Where is the evidence for this? It seems to go contrary to all historical, anthropological and any other kind of understanding.

          Re free trade and travelling without passports, I mentioned the other day that Erasmus was stopped at the Channel ports on his way back to the Continent in 1500 and forced to hand over all of his money, bar £2, as Henry VII’s govt had recently resurrected a law dating back some centuries whereby gold etc could not be taken out of England (only English goods – it was to protect local industry). Erasmus had been advised by his good friend, Thomas More (author of Utopia), who had made a blunder.

          I agree that banks are a menace and we will get nowhere until they are chopped down to size and put in their place. As Hudson argues (I think) we don’t have state-planned economies these days, but banker-planned ones. But my overall point is that there is no evidence that returning to a free trade gold standard world economy will solve anything – the opposite it would seem.

          • Tony Brogan

            There is some evidence. I watched a program last week that says that what is believed to be talley sticks made on bone have been discovered and dated to 25-35000 years old. Seems Neanerthal man was keeping accounts of who owed what to whom.
            I suspect money came later but barter and trade stated at an early age. gold would be first used as ornament and then wealth as placer gold would be available from silt and gravel beds and is easily moulded and shaped.
            The Bible reports that Abraham was rich in shekels and kine. That is he had lots of cattle and silver. A shekel was a fixed weight of silver. Abraham was on the move out or UR (as I recall) and was able to take his wealth with him. both cattle and silver being universally recognised

            Please see my above reply for the balance.

    • Great post Tony

      “Give a man a gun and he can rob a bank …
      Give a man a bank and he can rob the world”


    • SOMK

      Sorry Tony, but this is just waffle. Your writing indicates that you’ve done a bit of reading, happened across the “let’s go back to the gold standard argument” and then pinned your flag to that territory. I don’t buy for a second that things were “good” pre-gold coinage. It’s apples and oranges, crashes, boom and bust, exploitation happened before the central banks too. The problems that caused the current crisis are mostly to do with bad regulation, credit imbalances, sheer incompetence, inequality, social, political and intellectual stagnation and cowardice. Gold or silver coinage would eliminate none of these.

      Stuff like this doesn’t help anyone’s understanding, people cling to ideas like rotten bits of wood after a ship wreck, they drink the sea water (ie. read the internet), go mad and think they’re sailing on an intellectual galleon. They comment on pieces like this with their magic bullet solution in hand, or get up at meetings/conferences and instead of asking questions, explain to the expert panel (who everyone else has come to listen to) that it is THEY who don’t understand, because ultimately, we all like a bit of attention. Your replies to people below has shown that you get a bit tetchy with anyone who dares criticise your awesome wisdom and knowledge, but also shows that you are uncomfortable outside of your comfort zone and don’t really know what you’re on about (have you read Adam Smith, Marx, Keyenes, or Hayek for example? I doubt it).

      I’m probably coming across as unduly harsh here, but it frustrates me when I waste my time reading material which took probably not much more time to write than it did to read. What exactly does your point have to do with the issue of Spain’s reaction to the fiscal compact? You could say “it has everything to do with it,” but you could just as easily argue that the electro-magnetic force “has everything to do with it” because without that Spain would sink into the centre of the earth!

      Finally if you must post such long comments consider having a bit of manners, if you have the time to write such long posts you should take a little more time to edit them down. Churchill once said something along the lines of “I apologise for the length of my speech I didn’t have enough time to make it shorter.” And do at least try and stick to the topic.


      • SOMK

        “I don’t buy for a second that things were “good” pre-gold coinage.” shouldn’t be there obviously

      • Colin


        I tend to agree with what you said here.

        But for me, nothing informs one better than simple observations of others who have lost the run of themselves. You don’t need to have read Marx, to see people queueing overnight in the cold and the rain outside Apple shops to be first to get their hands on the latest i-thingy.

        It was the same about 7 years ago, people queueing in Ireland overnight outside estate agents to buy off the plans an overpriced shoebox of a property.

        And those who think the Chinese have it all sussed and will dominate the world, well, in my opinion they haven’t a hope in hell. Here in London, which has a large student Chinese population, they are all kitted out in designer this and designer that, have all the latest i-thingies, attend the most expensive colleges for that ‘snobbery’ effect, attend expensive premier league and champions league football matches (front row seats in the main if not executive boxes), eat in fancy restaurants etc…..

        If you want to observe the madness of the herd, stand out from it, its free, better than HD, and Dolby Surround sound, and marvel at the madness of it all.

  7. Tony Brogan

    Stress test?

    To all; the Fed released the “stress test” 2 days early because JP Morgan raised their dividend and announced a ahare buyback 1 hour after the FOMC realease today. Gee, did JP Morgan make this announcement after the Fed meeting because the Fed had nothing bullish (nothing of substance) to say? So let me get this straight, the “stress test” is assuming a 13% unemployment rate, a 50% drop in stock prices and a further 20% drop in real estate prices? …and the banks would have no problems? First off, 13% unemployment? What number is this? Is it the U-6 number? Nope, can’t be that one because it’s already close to 17%. Is it the REAL unemployment number as calculated by John Williams? Nope again, this number is over 20%. It must be the “make believe” number that is reported each month that has recently cratered to 8.3% because the economy is humming along so nicely!

    Next is a real head scratcher, the banks are “so well capitalized” that they can pay…I mean raise…dividends and buy stock back? Didn’t they just recently pass the halfway mark in paying back TARP…with funds received from other federal programs? Have they started marking anything…anywhere…to the real market? Does this new test assume that these banks can RAISE the value of toxic, non performing and dead assets to some fantasyland level ABOVE par? Does anyone realize what type of decline in value of assets held would wipe out an entity that is leveraged 20 or 25 to 1? Maybe the answer is 4 or 5 %? And while I am at it, how much “leverage” does the Fed itself have on their balance sheet? Does………over 30 to 1 sound familiar?

    Does anyone believe that we would still even HAVE a banking system, coincident with a fairy tale 13% unemployment rate (which means a real number at +-30%), a halving of the stock market (where all savers have been forced into) and another 20% drop in real estate (another 3 million families on the streets)? What sort of “policy response” would we get from this? QE 4, 5 and 6? With a total size of how much? $10 maybe 15 Trillion? The federal deficit would be how high? $3 Trillion+ per year? 20% of a shrunken $12 Trillion economy? And WOW, can you imagine the employment opportunities in the “food stamp” department? Instead of servicing 15% of the population, they could help at least 1 in 3!

    I’m sorry, I must do it again and call bullshit! Why didn’t they skip all of this foolishness, why didn’t the Fed just do a stress test on itself, The Treasury, Social Security, food stamps, unemployment etc. etc. etc.. Under these assumptions (while banks ARE marking their past follies to market), EVERYTHING would be broke, er (broker? More broke? Totally and exponentially broke?). Do you see? The system IS broke NOW and has been since early 2009, yet we are being told that should we go through it again, only worse, everything is “still good”? Ah ha! I get it now, if you’re going to lie, “lie big, lie often and just keep lying”!

    So, to sum it all up, Greece just defaulted and because there were only $3.7 Billion of CDS (lie), everything is good, and even if it’s not, according to these tests, it’s still good so there is not now and will not be any reasons in the future to own Gold. This, you do understand is what they are telling you today? They are telling you that you should sell your Gold (which actually IS money) and place your funds (and trust) in a banking sector that is levered between 20 and 25 to one, the central bank to this system is levered over 30 to one (with many “sub prime” assets on their books) and the Treasury itself has total funded and unfunded obligations somewhere in the 600%-700% neighborhood in relation to total GDP. What could possibly go wrong? I for one feel much much better after these test results, I was beginning to get worried but I guess it was a false alarm. Regards, Bill H.

    The above was written yesterday afternoon with Gold “down” $30, fast forward to this morning and we see another $30 drop. Things must really be bad behind the scenes for this to be happening! The message…banks good…Gold bad. This message is being broadcast by our “masters” for the benefit of the unsuspecting masses. We just witnessed the first “western” sovereign default in over 60 years, several major U.S. cities have either “deferred” interest payments (read default) or are actually declaring bankruptcy (not to mention the state of the state of Illinois and others), yet Gold is being “sold”. May I put this in perspective for? Gold, is THE only money (other than Silver) that cannot default. Every paper currency on the planet is fiat and based upon the confidence that the issuer’s debt will be repaid. Not only CAN they default, the current levels of sovereign debt ratios everywhere say that more defaults are certain. In fact, were the views of 30-40 years ago being used today, the entire world would already have been judged to be in default.

    So the reaction? SELL! SELL the only money that cannot and will not ever default! I assure you that real, physical, “hold in your hand” Gold, is not being sold today. These are paper trades being used to “make” the price. At the margin, real, physical, Gold, is being gobbled up from China, India, Russia, Brazil, “smart money” and even by us peons. The current and quite laughable “reduction in price” is entirely for “perception”, they hope, yours!. The flip side? While some may be fooled, others will be buying and buying big! These takedowns may piss you off and postpone the day of reckoning short term, the problem is that the lower price will also entice buyers who want the real deal and want it delivered. These artificial takedowns actually accelerate the demand for real supply to be dishoarded and thus accelerate the day when supply runs out. Know this and do not fret nor fear, hold on to what you have or buy more if you can, reality and truth can only be postponed, never cancelled! Regards, Bill H.

    • Tony Brogan

      Above commentary was posted in the fine web site

      If europe has a problem do not forget the US has a bigger one as they have further to fall.
      It gives a wider perspective of opinion.

      One a personal basis to protect yourself from the coming hyperinflationary depression buy silver and gold bullion. Do not buy paper promises they are not worth the paper they are written on. Much like our bank notes

  8. Adam Byrne


  9. mishco

    OK, Tony, your message is clear: buy gold. Indeed I have. But doesn’t the problem go back further than the formation of the Bank of England? “This Time is Different” tells us the cycle of credit-induced bust and boom goes back a good deal further, to days when gold was king.

    I’ve bought gold out of fear for the future, but really I can’t see it working in any system which allows for credit – if I am owed Golden Punts I still can’t buy my crust of bread with the IOU.

    Nor can I see how I really benefit from holding gold in the long run when it is priced everywhere in dollars, as I have no confidence in a currency based on the mother of all deficits. I guess I can trade gold directly for my crust of bread when the chips are down. So still I buy it. But I do feel like the Dutch boy with his thumb in the dyke!

    • Tony Brogan

      HHi Mishco

      My commentary was just wiped out as my computer went off line as I pressed the upload button. This site does not save the written responses that are not yet posted
      I’ll try again

    • Tony Brogan

      My message goes beyond buy gold.
      I am an individual who is not a trained economist. for decades I could not follow the reasoning of the main stream press commentaries and the analyses of the economists
      About nine of 10 years ago a man walked into my office late at night, abot 10.30 pm where I was doing some planning for the next day. he stayed 3 hours and at last I had a glimmer. He explained what he was doing and why and it resulted in my reading various web sites 30 hours a week. Bit by bit it seaped in and piece by piece the gaps filled and I began to understand.

      The credit cycle of boom and bust is the direct result of the fractional reserve banking system. a deposit is made to a bank and the bank firstly lends out what is not his but also lends out 5, 10, 20 50 times the amount of the deposit. This of course rapidly expands the “money supply” (currency) which devalues the buying power of the currency in existance and so is the causer of inflation. There would be no inflation and no boom and bust without this.
      The practice in any other area would be criminal fraud and here it is legal fraud because fraud it is that has been legislatated to be legal. babkers can play this like a fish on a line, easing credit and then tightening it, boom and bust.

      Fractional banking must be banned. fraud is not allowed by society why here?

      An economy does not need an expanding money supply to have a vibrant expanding economy and one which by its nature is mildly deflationary as goods and services become cheaper through efficiencies.

      Money is essentially a commodity. Unlike fiat paper money which is not. Originally commodities were traded back and forth in a system of bartering that seems to be neolithic in origins. One or two commodities exhibited characteristics the others did not possess. Some had atributes the others did not have but some had the following that made them useful as a store of wealth, and a means of exchange.

      Portability for high value in small amounts, readily exactly divisible, Readily recognisible, Consistant in quality, durable, and indistructable. Gold and silver have intrinsic value as they have to be worked for to be produced out of the ground.

      Gold was the natural choice in the majority of places with silver for day to day transactions and copper for spare change.

      As gold is money let us consider a fixed supply in an economy. As the demand for money increases it goes out of circulation and is saved. As busines continues the rest of the gold left in circulation must do the job as a means od exchange and so less money is allocated against the goos and services and so less gold is need to obtain them. In other word the same amout buys more goods. or the value of the money increrases. this causes some of the savers to look at the opportunity cost of holding the gold and thet decide to purchase.
      This puts money back into circulation and raised the price of the goods. So the value of money drops. With unlimited numbers of people making these decisions there is always just enough money in circulation. with inovations in production goods get cheaper over time and so their are more goods and services in the economy and everyone is better off.
      any addition to the money supply induced in to the economy addsa distortion that has an unexpected result. Thus the addition of new money disrupts the economy and benefits only the holder and owner of the new money to every one else’s expence.

      people buy gold because they do not trust the fiat paper money to hold its value. They are correct.
      I do not see it as a thumb in the dyke but as a wall being built around your wealth and assets to protect you from the ravages of inflation

      Every ounce bought is a brick torn out of the castle wall of the bankers castle of oppression.

      Bankers hate gold because it is universal money. goods and services can be bought using gold anywhere in the world. It is money everywhere and anywhere.A canadian Maple leaf .999 pure will sell for goods anywhere in the world. Not so canadian fiat currency

      Bankers HATE gold as it rings the death knell on their ponzi scheme.

      • michaelcoughlan

        hi Tony,

        As far I know when you introduce a good currency a bad currency like the euro will drive the good currency out of circulation because the citzens will hoard the silver coins. I agree with gold but their is manupilation for political purposses of gold so you would need to be very careful.

        • Tony Brogan

          Hello Michael

          You are absolutely correct.
          The idea is to have the silver coin issued along side the fiat currency. This does not disrupt the current system.
          Issue the silver coins and yes they will be saved. The people are desperate to have a method of saving not subject to inflation. The demand for the coins will be huge. In North America the minting of Silver Maple Leafs and Silver Eagles out paces the new mined supply of silver annually. Think of that. North America already has a silver current account deficit.And these coins are not monetized. The silver Maple Leaf hs $5 stamped on it when it is worth 35 on the market.
          The production of a Euro or Irish silver one ounce coin will be devoured in a similar fashion.
          not until savings needs are satisfied will the coins begin to circulate.

          The silver coins will circulate because the mandated monetary value of the coin is guaranteed to always be 20% higher than the spot world price for silver.
          The monetary value of the coin will only rise with inflation and can never fall. It must be issued with those guarantees. Because of this it will only be spent in the local monetary system but unlike bank notes will have an intrinsic value which will be recognised around the world. The coin can not be devalued, ( a bank note’s intrinsic value is zero), below its intrinsic value which is the world price for silver. It’s melt value.
          Only if the coin has a fixed monetary value stamped upon it will it go out of circulation as the value of the silver in the coin exceeds the monetary value.

          There will be no stamped value on the coin, just the weight and purity of the silver. Once the savings are saturated and the coin moves in to circulation will people start pricing goods by how many ounces of silver. Like, How many ounces did you spend to buy the car.
          At some point when the premiums are eliminated in the open market, for these coins, the coin will circulate.

          Savings in an economy are the bedrock of prosperity. Savings mean people do not spend. The part of the economy producing the consumables will slow and release the resouces that are chanelled in to research and development. Research and development is funded by savings. The research and development create new products and efficiencies that tempt people to spend and the savings thus are moved back into circulation and the improved economy benefits all.
          Our current debt based economy creates distortions that send false messages to the buyers and sellers and so we have goods produced that there is not a real demand for. People spend as they are deluded by the lower interest rates into thinking the economy is better than it is. The induced inflation causes people to further indebt themselves to buy today what they should not buy until tomorrow if at all.

          You are correct about the gold manipulation but is is a suppression of the gold price to discredit it as an asset and money. Gold is the Achilles heal of the bankers. All smart money is accumulating gold including the the money powers behind the banks. Only western countries have rid themselves of the gold. More countries are accumulating than not. The quoted price mechanism is on the paper market. there is only onr ounce of physical gold available for every 50-100 ounces sold. It is a fractional reserve system. Every physical ounce bought and held in hand puts the squeeze on the system. There is a shortage of physical gold and the rest is another paper ponzi scheme which at some point will collapse.TThen the price of bullion will soar. Middle east counties are buying bullion, russia, china, Vietnam, India, Iran , Turkey etc are all accunulating.

          gold is for the long haul, and you should buy on the dips or ust as you can afford to.buying a little now and then will provide and average buying price that will level out. I have not worried about that. I bought when I could and paid the premiums. My last was before christmas. The latest downdraft is still above that but I have not yet covered all the premiums paid. It is the best performing asset of the last 40 years so where is the risk. Be not afraid of gold and silver as they will protect your old age.

  10. mishco

    Edward Hugh’s Facebook page makes interesting reading about Spain. On Tuesday he wrote:

    “Possibly Spain is now where Greece was at the start of 2010 – locked in the vice, and depending on ECB funding for life support. Get ready for a bumpy ride.”

  11. Grey Fox

    Tony Brogan, you make a lot, i’ll say it twice!, a lot of sense!

    • Tony Brogan

      Hi Grey Fox
      Thank you. It is with much anxiety that I post at all. I worry that what I think misses some vital information. More recently I have grown more confident and so now express myself as clearly as I can.
      My greatest concern is the endless rhetoric that offers no solutions. So I put up mine gleaned from endless reading and observations and hope others will join in and evaluate the pros and cons. BUT
      as in every endeavour there has to be an action plan.
      Who will join forces to form an accociation or institute to further our goals of self suffiency and return of sovereignty.
      A small number of people can have a large effect.
      What about a presentation to the MacGill summer school in Glenties. There has to be something we can do. I can get a raft of good speakers. I must contact them.
      Well David, Will you join us?

      • broad way

        Interesting, Tony, all your posts. You obviously have an in-depth economic expertise. I wonder what your background is? What websites did you get your education from? So Ok banks are bad. But can we not fix them, rather than reverting to the old system of real money? Say, you were in charge of ECB – could you not fix it then? Are banks just innately corrupt and unfixable? Surely it is more practical to have banknotes in your pocket than heavy metal. Could plastic money be used if we had silver as currency?
        If sensible governments took control of legal tender, would it not become manageable then? Or is paper too conducive to corruption and abuse?
        Lastly, if you buy gold now at such a high rate, will you not lose, as it may fall in value? I have always been saving, in euros mostly, I am worried it can all de-valuate, but will I not lose more, if I buy gold at this stage?
        It makes a lot of sense what you say, to me – an economic ignorant. Why do not you institutionalize yoursef? Set up a dedicated facebook account. I will be very happy to like you and popularise your ideas. soon you can gain significant followership and perhaps take things to a new level. Best of luck, AB

      • bankstershill


        Mainstream misconceptions and ignorance among the public in regard to the science and proper function of an effective credit system are at the root of the present crisis. For your efforts in explaining these issues as demonstrated by these very informative and pragmatic posts, I applaud you.

        Every body take heed of what Tony is trying to say if you wish to overt a self imposed doom.

        Also along with the ideas Tony has been espousing, I would be derelict in my duties as a citizen if I did’nt promote the writings of one Lyndon Larouche at, who along with Tony, in my mind at least, makes impeccable sense in the solutions he has proposed to the present crisis.

        Fools wake up and listen to the likes of Tony and Larouche. The Emperor’s naked.

      • Hi Tony

        Weclome to the website. Re good speakers you might come to this year in November. Thanks for the posts.



        • Tony Brogan

          Hello David

          It is nice to hear from you directly. Next time I am in town I would love a chat for your point of view on my main thread of sound money.
          My contact is if I can buy you a beer or a coffee.

          Re kilkemomics, I had a look at the list of the 32 speakers for 2011. Some I am familiar with and others not.Sounds like quite the week.
          However there is work to be done and we need solutions and ideas to solve the problems.Then actions. Do you have a source of groups of people or individuals who can get something done.
          Last year I spent a day at Glenties, in total frustration. Speakers spoke and pronoted the party line. What was supposed to be a debate was merely a lecture on how good it was for us to pay our taxes and stay in the euro. Nobody from the public was allowed comment.
          Is there debate at kilkenomics, are there solutions provided for the current morass?

          Many thanks
          Good health


  12. bonbon

    The Great “Success” of EU Policy in Germany

    As is always preached, the euro had great advantages for Germany’s economy. If that is so, why do we have the following situation, as reported in a study by the Institute for Work and Skills and Training (IAQ) of the University Duisburg-Essen?

    In Germany, almost 8 million people, more than 23% of all employed, have an income below EU9.15/hour gross. This is defined as “low-wage level limit,” or two thirds of the mean wage. From this gross amount, taxes, social security, etc. are deducted. Included in the 8 million are pupils, students, and pensioners, who have to earn extra money, about 500,000 people.

    But in reality, the median low-wage income is much lower: in the western states of Germany, people in this sector earned EU6.68, in the east, EU6.52. Some 2.5 million hourly employees are earning less than EU6/hour and almost 1.4 million do not even earn EU5. Almost half of these low-wage earners work full time. Some 800,000 fulltime employees earn less than EU6. The biggest increase of low-wage earners took place in the western German states, where the figures jumped in the last 15 years by 68% (!), in the East by 3%.

    And of course, since we need more of that, the German cabinet today okayed the ESM, for which Germany guarantees EU190 billion… This goes along with the “fiscal pact,” which will impose even more horrific austerity and “reforms” on EU countries, including in Germany itself.

    • Tony Brogan

      Maybe it is because West Germany had to assume the East and has spent a generation trying to teach them how to work for a living. It takes a while to elevate a standard of living starting from near zero and especially when the new citizens thought that the government would pay for everything. Perhaps it was that Germany had its own version of a mini c
      China within its border and that kept the labour costs down and it was as you suggest nothing to do with the Euro.
      not my area those are my could be’s??

      • bonbon

        These typical “explanations” miss the mark, as usual monetarists always do. 1990 saw re-unification and the huge challenge of Reconstruction, Germany being the worlds leader after building up the BRD from the rubble heap of 1945. Plans were laid out to build a reconstruction “bridge” to Poland, the Comecon, and in doing this the DDR would recover. Financing was arranged by Deutsche Bank chief Herrhausen, who was on his way to New york to present this huge project when a military landmine in his driveway exploded under his auto. He was Kohl’s best friend. Kohl duly signed onto the Euro project – he knew he was on the list. Then Treuhand chief Rohweder was shot from long range as he dealt with the economic plan. Result ? DBank a huge casino now, the Euro, and massive wage suppression, no reconstruction. Mitterand/Maggie/Conor Cruise raged that Germany with 82 million and booming reconstructon just had to be stopped. Ireland played along with this and now pays a high price for British geopolitics “balance of power” games, yet again.
        And the ESM/Lisbon/Nice/Maastricht “treaties” were never allowed a vote in Germany. This is untenable.

  13. cooldude

    David very interesting article with some great comments. It is blatantly obvious to anyone without a vested interest that this monetary experiment known as the Euro has been and is a complete and utter failure. But still they continue to push and push even though it is clear it is benefitting no country and causing all sorts of problems in the periphery. There has to be some bigger agenda and it is probably being used as a precursor to a global currency which is the banksters ultimate wet dream. Complete control of the global currency supply would give them complete power and this is their ultimate goal. Out of chaos-order is their motto and they are sure doing a good job at creating chaos. Here is a very good article about how these guys operate and what they hope to achieve. I think at this stage most people have realized that these issues are extremely real and have nothing to do with so called “conspiracy theories”.

    • bonbon

      The Euro was a dry run for Keynes’s “Bancor” world currency, which he said would only work with world government. He neglected to name that “Empire”.

      FDR blocked this at Bretton-Woods which Nixon killed in 1971.

    • Brilliant article and video. however I’m slightly confused, maybe you can help;

      1. They mention the “central bank”…are they referring to the irish central bank or the ECB who created this 30billion euro?

      2. Who did the irish government issue the promisory notes to?

      3. Who are charging the interest?



      • …By the end of 2010, Anglo owed €16.9 billion in Eurosystem borrowings and had €28.1 billion in ELA debts to the Central Bank of Ireland….

      • CitizenWhy

        1. Ireland does not have a central bank. Being in the EuroZone means a country does not have its own currency, and therefore does not have a central bank with a mission to manage the country’s money supply and combat either inflation or deflation.

        The UK has central bank. Iceland and Sweden and other non-members of the EuroZone have their own central banks.

        2. The Irish government guaranteed repayment to the privately owned EU and UK banks that had made huge loans to the privately owned Irish banks. Unprecedented. The Irish government did this on its own, but since then it has been ordered to continue paying these debts by the IMF, the ECB and the German government. Otherwise these IMF and the ECB would not lend the Irish government any money. The Irish government needs this money for two reasons: … A. To continue operating. Current tax revenues cannot cover expenditures. … 2. Paying interest and principle of the debts of the once privately owned Irish banks plus its sovereign debt (that is, debt accumulated by direct government borrowing). The Irish government is creating new debt to pay old debt plus current and new debt.

        3. The lenders to the Irish government – the IMF and the ECB – are charging the interest on the loans they have made and are continuing to the Irish government. The Irish government is also paying interest to the various privately German, UK and other banks that had made loans to the Irish privately owned banks.


  14. michaelcoughlan

    “What Germany fails to understand is its huge trade and current account surplus with the rest of Europe is as much a problem as Spanish or Irish debt”

    There is a fundamental difference between the German state and the collective number of individual companies and citizens living in Germany. Ordinary Germans can see clearly. It is the fatherland after all David and you always do what you are told by your father even if means trying to take over the whole of Europe again, and again, and again, and again… This article is more of the same from you.

    If you remember in a recent reply I suggested you, Gurdgiev, and Kelly form a troika of your own and demand from the Europeans a new bank be established in Ireland to supply lending to the domestic economy here considering the two zombies that we have to contend with?

    Guess who managed to pick up on that point? Not because they read my response mind you but because when you have a self-serving ape in charge of a bank you can always be sure he will lend when he needs to lend to save his own backside. (You hardly think he would put the customer first do you) Why the two zombies of course!

    Talk about a last ditch effort to stop themselves from drowning in a morass of their own incompetence 7 figure salaries notwithstanding. The only thing that will save us now is mass default and the sooner the better.


    In line with Tony’s post you have my sincere respect and gratitude for the immense courage you display for putting your opinions up here every week and at no stage has any of the administrators attempted to block more robust posters from the site.

  15. Spain on collision course with Brussels over budget deficit targets. The Netherlands and not happy either.

  16. gizzy

    In business your current actions will normally lead to your financial results in two years.

    I imagine it is the same for States. Two years ago a number of likeminded people contacted the then Fianna Fail Government and stessed Nama was not the answer and there were other alternatives, The scope of the problem was greater than Sweeden by a long way and that the banks here were effectively the bad Banks so set up a new bank and ring fence the existing ones.But by then they had received Peter Bacon’s report which regurgitated an ECB report on how to deal with these type of crisis.

    We were never told no just really ignored and dealt with as if they had all the answers.

    Fine Gael and Labour both had new Banks in their original manifestos but then overnight AIB and BoI became Pillar Banks so no need for newbank.

    The Austerity that started two years ago is now hitting hard on the domestic front. We have 12.4 bn in cuts to go unless they have the growth numbers wrong.Most people I talk to do not undersatand that that will be 12.4 bn annually and think they are one off adjustments.

    So how will all that look in two years?

    Can’t you see it now staged tough negotiation between Noonan and the Troika before they give us some us a small bone just before the referendum.

    Even Blommberg screen today had byline Greek Bailout transferring risk from Banks to taxpayers.

  17. redriversix

    Bank of Ireland CEO Richie Boucher was paid €831,000 euro last year and according to BOI the same amount the year before {2010] ………..

    “well done,Richie way to do such a great job running that Company”thought your pay-cap was 500K ?”

    I am not angry about this,……….okay I am Fucking Furious and like all fighting Irish I will ring Joe Duffy and jolly well complain !!!!!!!

    Could this fucking Country of my Birth get any worse…?

    • cooldude

      This is the same Richie Boucher that rang Sean Dunne in 2005 to try and loan him the funds for The Berkley. Luckily for BOI Dunner went elsewhere for his loan but all the major banks were competing to lend to this reckless moron on land that was not even zoned for development. It’s no wonder they are all broke and it is entirely down to their own stupidity and listening to clowns like Dan Mc Laughlin instead of sane people like David and Morgan Kelly. This Boucher guy should have been thrown out years ago but we still have the same little cozy cartel running this place. Vote NO to all these chancers and lets default on all this fraudulent debt and start again from scratch.

      • gizzy

        Ulster Bank approved that loan over a weekend for fear of losing the business and then syndicated lots of it out to other Banks like Accbank who’s owner Rabobank approved the loan in Utrecht.

    • gizzy


      I’d do it for a lot less. If you make a balls of it the State bails you out and if you make a complete balls of it Europe bails you out. Then you get a lump sum and pension. Almost as good a deal as managing Chelsea.

      • redriversix

        Morning Gizzy

        How are you getting on ?

        If you can,try and make the Hampton Hotel in Donnybrook on March 24 between 11.30 and 15.30.It would be great to meet you and anyone else who would like to come.

        Your talents would be wasted Managing Chelsea,Newcastle might be a good bet though !

        Take care of your family first and have a great Patricks Day.


    • Deco

      Boucher does not need a reward. Boucher was head of the Irl division of BoI in the high binge years. The last thing we, as taxpayers should do is promote an incompetent clown like that. Even worse if we actually reward him.

      Fool me twice, shame on me – explains this scenario.

      • Keep it simple…. Boucher is a piece of shit!

        • redriversix

          Morning Georg

          Apparently Boucher Sh1t doesn’t smell as he can obviously do no wrong.

          Keep it simple……never a truer word said Georg.
          Run a bank in to the ground….get a bail out………
          Government “imposes” pay-caps………. ignore it
          Customers get in to difficulty.?…..punish,harass,threaten them

          Stop paying / repaying this criminal institution.

          Which is more valuable a person,a family or this money-lending life sucking entity ?

          “What are you worth”?…………..

  18. Gold ‘What Standard’

    The Standard of War is upon us soon that will allow the governments win back all the Gold held under licence within their jurisdictions by nationalising it thus taking it away from private investors .

    Private gold investors can lose their claims in events of war when that national sovereign claims them under War Emergency Dictat legislated in parliament .

    Unless you are lucky to have your own safe place to hold them undocumented.And even at that will you live to see it ?

    • Tony Brogan

      Good points on gold
      Ownership of gold was illegal for a period by a US citizen within the US

      My proposal here is to monetize a silver one ounce coin as legal tender to give the people something of value to save. See above. Such a coin would not be liable for seizure.

      Any precious metal you claim ownership of should be held in hand by you in a safe place known only by those you trust! Paper promises of PM’s are that, promises that may or may not be forfilled.

  19. Deco

    If only the clowns running Ireland would read one article by David, they might realise what is going on.

    Are they stupid, or are they paid to not comprehend the flaws in the system that they are persistently praising ???

    Low interest rates sucked in Spain, and Ireland into private sector debt mountains. Now they are sucking in Finland. Even the Finns don’t have the required discipline !!

    • redriversix

      I suppose Deco,with these fuckwits on 800K a year.

      The only thing they have to read is whose life are they gonna screw up next.

      We get punished they get protected and promoted,pay rises and a smug attitude towards the masses…………..Scum

      Their time is Limited…………..

    • They know all this Deco. They can afford to ignore all reason because they or theirs have sufficient power to drive on with their plans. The trick is not to trigger general focussed revolt.
      Revolt is easily dealt with but not if it mutates into full blown revolution.
      Hence keep us all transfixed with something pathetic like the household charge whilst the real business of power is maintained.
      And I’m not talking about those involved in Politics. They are merely pawns. Somewhat powerful pawns sometimes but pawns nevertheless.
      Power is wielded by those with permanent knowledge, handed down father to son.
      That’s the way it is and won’t change.

      • EMMETTOR

        +1. The system is subtle, infinitely flexible and unstoppable in the pursuit of it’s aims. Consent will be manufactured, by whatever lies and means are necessary. There will be no revolution, except when controlled by the forces of reaction. Wealth and power will triumph. Interesting that the first strike against Iran is via the banking system, e.g. it’s exclusion from Swift. The same type of weapons that have been used in the EU’s war of control over the peoples of Europe.

  20. martino

    Thank you Tony for sharing your thoughts with us on the value of a currency of integrity-honest money. If the money isn’t honest then all economic activity is dishonest and life loses its meaning.

    I started a new job recently and the sense of deperation amongst the young, well educated employees who work hard for little reward to pay their mortgages, mortgages created from thin air, mortgages that have ensnared them for life is palpable. One said today she could simply not afford to have children-imagine that. They are all uneasy but none of them really understand why. There is no wealth creation from their work-they are debt-slaves.

    Some time ago I visited King John’s Castle in Limerick and one image from the tour stayed in my mind, and I wasn’t really sure why until now. There was a man in costume, striking coins on the mint. That image said it all, money is power.

    Ron Paul says much of the same as you Tony. I think he might well be the West’s last chance.

    • There is even more Gold in Co . Limerick ….visit Ardagh …and you will find Chalices in the fields.

    • Tony Brogan

      Hi Martino
      I find it difficult not to be sidetracked. So I will stick to my subject.
      Honest money and silver.
      The transfer to the Fereral Reserve of all the monetary policy of the US was the beginning of the modern era of central banking
      The biggest lie is the “We are here to help” suggesting that their mandate is to control inflation.
      The central banks with the connivance of the parliamentarians, create inflation. It is said the inflation is purely a monetary event. Any addition to the money supply adds to the inflation.
      All inflation creates distortions in the economy of unknown effect until after the event.
      Inflation must be eliminated. That means the money supply must be frozen. That means no more deficit budgets. That means the people must save and be encouraged to do so.
      Hence my proposal to monetize the silver one ounce coin of guaranteed weight and purity.
      One of the functions of government is to maintain standards.

      The corruption of the money and its issuance leasd to all else. Fiant money schemes have a life expectancy of about 40 years.
      We are about there for the US. All currencies are today fiat so all currencies are going down. TPTB will try to restor order with a world paper fiat currency and thereby totallt remove soereignty and usher in the universal debt slave model over the whole world.
      Silver money is freedom . Embrace it and live free.

    • Tony Brogan

      It saddens me to have and to hear about your associates. I have three kids in their mid 20′s and all are surviving one way or another. I spent years hearing how you people did not have a chance. I worked in realestate reisdential sales and the hours were an average 70 a week. I was a single wage earner and the children raised at home.

      Ron Paul is correct. He has integrity which can not be said of many. Education of the people is the thing. Talk to your friends about my proposal it is easily implimented and just needs the will of the people to twist the arm of government.
      ron Paul has a large base of support from the youth. there is hope yet.

      Like minded people must work together and form organizations Become an NGO and then put out missives to the politicians and the press.

      Are you willing to be apart of this. Who will join me in action to take back the country from the oppressor.

      • Tony Brogan

        Should be young people (too bad there is no edit feature for the contributor.)

      • redriversix

        Awaken Dublin,information Day

        Hampton Hotel
        Saturday March 24

        11.30 am—15.30pm

        Idea,s discussion,questions……

        All Welcome


      • CitizenWhy

        Ron Paul wants to eliminate all environmental regulation, and eliminate all regulation of the oil and agri-business and financial industries. Great plan for a great future.

        If you love corporations and want to let them do as they please, back Ron Paul.

        If you want only the well off to get a college education, back Ron Paul.

        If you want the same economic policies that caused the Irish famine (a laissez-faire response to the potato blight), back Ron Paul.

        • redriversix

          +1 Citizen why

          I don,t buy the “Ron Paul” I did,but after further investigation I changed My mind,Pity…I had great hope their for a while.

          I have come to the conclusion that Elections in their present format are a waste of time and can be a foregone conclusion.

          Have a great day in the land of freedom C.W,Take care

        • bonbon

          Ron Paul’s economics are straight Austrian School, with his book, a biography of the school’s founder von Mises. Today the Fabian London School of Economics owns the Austrian School so Ron Paul is simply expounding British imperial monetarism. He is right about Obama and creeping fascism, but then expound an economics that leads straight to fascism. Such is the confusion rampant today, only benefiting Empire. I suspect the Dail is also genuinely confused and simply cannot see through the Venetian smoke and mirrors.

  21. mine is a Baas lads, thanks

    • Any chape plaster going dare Bert?

    • Deco

      Hey, Bertie. Any Tips for the horses, in Cheltenham ?

      apparently Bertie is supposed to be very good at the horses…is that not right ?

      (I don’t bet on horses, in case the money ends up with clowns like Bertie Ahern).

      • redriversix

        A wise man once said to me “if you want to lose money,back horses ,if you want to burn money buy one”..!!!!!

        Good old Bertie,talk about “the canary in the mine”.
        That yellow suit of his should have been a warning!

  22. 33square

    commit suicude

    • 33square

      commut suicide

    • coldblow

      Hi 33square

      In the light of your claim in a recent thread about David Kelly’s death not being caused by suicide, you might like to take a look at this link:

      Webster (who has since died) attributes these conspiracy theories to a deeply anchored, and unacknowledged, Christian faith which persists to this day. (As it happens, I don’t know about Christianity being the ultimate source of this phenomenon as it could just as well be SF or horror films, but probably is just part of human nature, but I don’t know.) One of the consistent symptoms is, says Webster, a belief in mysterious dark actors. Georg, with his Opus Dei fascination, obviously falls into this category, and probably a few more here.

      While I’m here:

      “One mile away,the hulking albino named Silas limped through the front gate of the luxurious residence on Rue La Bruyere. The spiked ‘cilice’ belt that he wore around his thigh cut into his flesh, and yet his soul sang with satisfaction of service to the Lord.

      ‘Pain is good.’

      …Hurrying to the dresser, he found the cell phone hidden in his bottom drawer and placed a call.

      “Yes?” a male voice answered.

      “Teacher, I have returned.”

      “Speak,” the voice commanded, sounding pleased to hear from him.

      “All four are gone. The three ‘sénéchaux’… and the ‘Grand Master’ himself.”

      There was a momentary pause, as if for prayer.

      “Then I assume you have the information?”

      “All four concurred. Independently.”

      “And you believed them?”

      “Their agreement was too great for coincidence.”

      An excited breath. “Excellent. I had feared the brotherhood’s reputation for secrecy might prevail.”

      “The prospect of death is strong motivation.”

      “So, my pupil, tell me what I must know.”

      “Hat tip” to Dan for his valuable work. But how these ‘dark actors’, these hulking, limping albinos (called ‘Silas’!) somehow remain in the background undetected is a bit of a mystery. “Teacher, I have returned”. Did Inda’s speech writer (“the swish of the soutane”) get his inspiration here?

      I give a dire sigh…

      • Colin

        Yes Coldblow,

        I’m sick of people here claiming Kelly was killed by sinister forces. Lookit lads, he was unstable, he committed suicide, he should never had taken that important top job considering he was fragile. He got a grilling at Westminster and couldn’t stand the heat.

        But we’re back to the Bolsheviks here, tell a lie a thousand times and it will become true. Also, tell a more outrageous lie and it becomes more believable.

        And another thing, just because Saddam bought weapons from the USA in the 80s, doesn’t give him a get out of jail free card to any future actions. He doesn’t get immunity – eaten bread is soon forgotten.

        I have been buying pints in my local pub for years, but that won’t stop me from getting thrown out if I go in there tomorrow night and cause mayhem.

        • gizzy

          Only Bolsheviks lie Colin???

          Your right it doesn’t excuse Saddam but does it excuse the arms companies and dealers and warmongers on any side.

          • Bolsheviks? LOL….Gee, are there many more like this challenged chap left in Ireland? So sad, really.

          • Colin


            Again you’re not paying attention, and I’m not surprised, you get everything wrong. I don’t live in Ireland any more.

          • Colin

            No. Lots of people tell lies gizzy. Lenny our late minister for finance and his father before him told lots of lies. Then there was Charlie Haughey and Bertie who even misled people about something as basic as his name, isn’t that right now Bartholomew Ahern?

        • redriversix


          for the love of God,stop talking about stuff you clearly don,t understand.It comes across as entertainment,but not in a good way.


      • NSA Is Building the Country’s Biggest Spy Center (Watch What You Say)

        • redriversix

          Good Afternoon Colin,

          Always like it when you reply and may I say you are quite correct, I am a arrogant shite,but only when dealing with clowns like who are clearly uneducated in what you are attempting to talk about.

          I know who I am and I know about War so when it comes to that subject and when I post about it I know what I am talking about,do you know who you are ?

          Learn about what you post on as you still come across as funny even when you think your being insulting…..Enjoy London and have a great day.

          Look forward to talking to you again real soon….!


        • redriversix

          Hi Georg…….

          “you always make me smile”

          Happy St Patrick’s Day !

          I would imagine “our Colin” is a I.T Warrior,the real thing would be quite a pleasant chap I would presume…. !!!!!

          Can,t figure out what ROFLMAO is but it sounds like you would need to lie down for a while after it…..!!!!

          Hope Tanka is Good


  23. straboe1

    How come I only receive this blog today at 16.30 when some people reply to it on the 14th.

  24. wills

    The article reminds me of how the reality is that the *crisis* is in fact, in mathematical fact a credit event across boundaries more than anything else.

    So the *crisis* is NOT an out of control phenomena. It is a consequence of intelligent design and this is another fact.

    So the ECB printing shed loads of euro is NOT an accident.

    The debts rung up by the criminal banking system is NOT an accident.

    The money laundering of toxic assets is NOT an accident.

    The creaming and milking of austerity on the backs of the weak, vulnerable and powerless is NOT an accident.

    The media continue to deliver the junkified news as if this *crisis* is all an Accident.

    We are living in a time when bullshit is sold as truth and truth is stashed away and thieved, pillaged and plundered into oblivion.

    • Tony Brogan


      March 16, 2012 at 4:52 pm

      The article reminds me of how the reality is that the *crisis* is in fact, in mathematical fact a credit event across boundaries more than anything else.CORRECT

      So the *crisis* is NOT an out of control phenomena. It is a consequence of intelligent design and this is another fact.CORRECT

      So the ECB printing shed loads of euro is NOT an accident.CORRECT AND THAT APPLIES TO EVERY OTHER CURRENCY TOO

      The debts rung up by the criminal banking system is NOT an accident.CORRECT

      The money laundering of toxic assets is NOT an accident.CORRECT

      The creaming and milking of austerity on the backs of the weak, vulnerable and powerless is NOT an accident.CORRECT

      The media continue to deliver the junkified news as if this *crisis* is all an Accident.CORRECT..OWNED AND PAID FOR AS A MEANS TO PROPIGATE THE PROPAGANDA

      We are living in a time when bullshit is sold as truth and truth is stashed away and thieved, pillaged and plundered into oblivion.


      • Give us guns!.The intelligentsia must die.!
        Shades of Pol Pot..?

      • redriversix

        Hey Tony,Good Morning

        What would you like to do ?

        What Wills and a lot of us,including you are posting is a true awareness of what is going on.

        The first thing I did was made sure I could look after myself and then my Family.Its a good start.Keeps you strong & Honest with myself and my Family and to clear the windows of your mind.

        Today is the start of the rest of your life,Yesterday is History,Tomorrow,s a mystery so today is our reality.

        So have a great day

  25. aodhanc

    I wouldn’t necessarily agree that Spain’s banks are bust. The two largest, Banco Santander and BBVA, are in quite good health (certainly compared to Ireland’s pathetic banks).

  26. aodhanc

    Also, Spain is far more competitive than Ireland. According to Eurostat figures, the minimum wage in Spain is EUR 748 per month, while in Ireland it’s EUR 1,462 per month (2nd highest in the EU).

    • bonbon

      It is hard to compete with Spain’s unbelievable unemployment. Perhaps you mean other EU countries should become more competitive this way?

      Charming idea, what.

  27. “Fine Gael and Labour both had new Banks in their original manifestos but then overnight AIB and BoI became Pillar Banks so no need for new bank.”
    Why? Because in a new bank situation the politicians and the public service would have woken up to a new dawn.Nobody would be paying their wages.!Not the new bank-Nobody!

    • gizzy

      It really was a case of a pr company sorting the banking mess. let’s call them pillar Banks, the new bank was pulled because the ecb had put money into the pillars and the low cost of setting upm a newbank would have shocked people when measured against what was poured into the existing.

  28. BrianC

    I enjoyed that comment/ article. Time to get back up onto the ole hobby horse. It is simple FRB does not work. There is no mass will to change. We are happy in our bubbles of deluded democracy. There is a war in progress but no one really notices.

    If of interest

    ‘Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any further obedience’.

    John Locke, 1690

    When can we have the Silver Coins or preferably the MPE?


    • BrianC


      I should have posted under Tony Brogan.

      Not that I did not enjoy David’s article which I did immensly.


      • cooldude

        Brian don’t take the piss on Tony’s very honest efforts. What people need is a rescue from this nightmare of increasing big brother control. The ability to use sound money protects the individual from the stupidity of the excesses of the current central bank system. What Tony says is already on the congress in Mexico and if passed there will be popular throughout south america. We need solutions to this debt saturation problem not just endless very clever commentaries about how stupid the ECB are behaving. Have you anything constructive to add Brian??

        • BrianC


          Maybe you have misunderstood what I am saying. If you have ever read any of my other posts I am not a supporter of fractional reserve banking. If is based upon flawed mathematics. By pursuing it we are only enslaving ourselves to poverty where we permit the select few to dictate our world. Hopefully the change will start when Andrea Rossi delivers the first LENR technology into the markets last quarter 2012 or first quarter 2013 as promised.

          Have a look at what Mike has to say on Tony is only mirroring the general theme of people for mathematically perfect economy.

          So you are not correct to say I am taking the PI55 on what Tony is promoting and advocating.


          • Tony Brogan

            Hi to you both
            Brian, thanks for your post.

            i am half way through after another hour.
            Quite fascinating and a good read for you too Brian McWilliams if you follow this thread??
            Thanks for your support Cooldude I appreciate it no end.
            As I see the mathematecal model. He disputes that inflation is created by the increase in the money supply. He suggests that prices rise because of the increase in interest payments within the economy that absorb a greater share of the pie.
            As the interest is having to be paid they is less for goods which lowers demand and so prices must fall. However the offset is that the producer beset by higher interest costs has higher expenses and so must have squeezed profit margins and therefore must ask a higher price to stay in business.
            Eventually there is what we call a hyperinflationary depression that has lower trade and higher prices.
            Extending the cycle is the issuance of more money into the economy to pay the accumulating interest which in turn adds to the interest burden and the eventual state that the total economic output is devoted 100%% to pay off the interest.
            Then there is the big bust, debt is repudiated, prices drop like a stone and we all start again at step one.
            but what misery is produced in the process. now the bankers have seizes the means of production by forclosure.The new start is from a disadvantaged position, as the wealth is accumulated to the elite bankers.

            The solution I see is to eliminate central banks. Implement sound money policy, outlaw fractional reserve banking and ban interest as usuary like the folks of old.
            I will read on with interest (ha ha )and complete the
            Essay at

            cheers to both for now

          • Tony Brogan

            Sorry David
            I meant you and not Brian. Brian is another McWilliams from my past!!

          • cooldude

            Hi Brian. I read that long piece and I don’t agree with Mike’s conclusions. He is correct in that the current currency system is breaking down. The average lifespan of an unbacked paper money system is around 40 years and we have just gone past that period with this latest attempt. It started in 1971 when Nixon got rid of the last tenuous link to gold and let all these currencies simply float against each other with no anchor to ground them. This has been tried by lots of different societies through the ages and has always finished in a total mess just like the one we are now experiencing. The interesting thing about every single one of these experiments from the various Chinese attempts to the famous French one led by John Law is that they all finished up in either of two ways. The first one is the society ditched the unbacked paper money system and reverted back to a commodity backed money system and eliminated all the debt and started again. The other result was the complete destruction of the currency which usually happened in a bout of hyperinflation. These were the only two results that ever occurred and it will be the same this time also. We either revert back to commodity backed money or the whole modern currency system will just blow up probably in some sort of an extreme inflationary event. I don’t believe any of this “this time it’s different” stuff as I have heard all that before. It was wrong about the Nasdaq bubble, wrong about the property bubble and will be wrong also about the paper currency bubble that we are now experiencing. As some wise man once said those who ignore the lessons of history are doomed to repeat them.

    • bonbon

      Looking at that web site, the best quote I see is Abraham Lincoln’s. Thomas Jefferson did not really understand Hamilton’s banking (giving us Article 1 Section 8 Credit Clause). Lincoln, FDR and JFK did.
      The site has nothing on Hamilton – strange vacuum.

      Locke’s proposed “consitution” was the model for the Confederates “life,liberty and property” clause that Lincoln defeated.

      • BrianC

        Hi to Bonbon

        No I do not believe there is any vacuum. Hamilton et al are just pieces on a chess board and note I did not say pawns. I think the issue here and now is the mathematics required to resolve the cycle of ridiculous bubbles.

        Hello to Cooldude

        Firstly I did not pen any long piece so evidently you are referring to Mike’s web site.

        Secondly you are referring to the tenet of precious metal backed currencies. Equally as bad. Control of precious metal enables control of currency.

        Ownership of means of exchange of value should reside in the people all the people and not the select few where avarice resides at the expense of healthy competition the driving force to maximise value.

        To be honest I am not really sure what you are saying save Mike Montagnes mathematically perfect economy is flawed thus wrong destined to result in destruction of the currency by hyperinflation. This is not the case which Montagnes clearly explains. But no matter others are more expert to judge than I am and as a horse brought to the water I decided to take and drink and like the taste.

  29. Paper Against the Fiscal Compact

    The Association for critical social research was established in Germany in 2004. 120 members from social sciences put their brains together and created this paper to make a clear statement against the fiscal compact:

    Democracy instead of the Fiscal Treaty! We need a different approach to tackle the crisis, and a different Europe

    Spring 2012. Merkel and Sarkozy rush from summit meeting to summit meeting, in order to save the euro. The yellow press smears the people of Greece. The struggle over a solution to the crisis is intensifying dramatically: by early 2013, an authoritarian-neoliberal alliance of business lobby groups, the financial industry, the EU Commission, the German government, and other exporting countries, hopes to rush the ‛Fiscal Treaty that has just been concluded in Brussels through the national parliaments. The Fiscal Treaty prescribes an antisocial policy of cuts, and includes penalties for countries that oppose this policy. Thus the Fiscal Treaty restricts democratic self-determination even further. It is the momentary climax of an authoritarian trend in Europe.
    We are fed up with these unsocial and antidemocratic policies, and with the racist slander campaign against the people of Greece. Instead, we should talk about the inhuman consequences of these policies. We should talk about Europe’s authoritarian turn, and low German wages as a cause of the crisis. We should talk about the untouched fortunes of the few, and the sufferings of the many. We should talk about our admiration for the resistance and solidarity among the Greek people. Let us demand what should go without saying: real democracy and a good life in dignity for everybody — in Europe and elsewhere.
    The crisis in Europe is only the tip of an iceberg. Underneath it lies a deep structural crisis of capitalism. Too much capital is chasing profits. But the returns on investment are low: there is too much competition, and wages are too low. Debt- financed growth and speculative bubbles have only delayed the outbreak of the major crisis. Now the authoritarian-neoliberal alliance is advocating a radicalized more-of-the-same: socialize losses from speculation — through permanent debt- servicing by the wage earners. They want to increase returns on investment — by means of precarious employment, cuts in wages and pensions, cutbacks of the welfare state, and privatization. The consequences are drastic, and what is happening in Greece is looming in the rest of Europe: mass unemployment, impoverishment of broad swathes of the population, collapsing health systems, increases in mental illness, and a declining life expectancy.
    Measures such as this can only be implemented by authoritarian means. Pinochet’s putsch in Chile in 1973, the IMF’ programmes in African states in the Eighties, and the transformation in eastern Europe in the early Nineties are historical forerunners of the Fiscal Treaty & Co.: “shock therapies”. Social and democratic principles that were won by struggles with many victims will be eliminated at breathless speed by the Fiscal Treaty, in order to ensure that debts are serviced and rates of profit increase. In Italy and Greece, unelected governments of technocrats are using
    truncheons, tear-gas, and water cannons to impose the cuts dictated by male- dominated groups of “experts” in Brussels, Frankfurt, and Berlin. The Fiscal Treaty and the set of edicts on “economic governance” give more and more power to bodies such as the EU Commission, the European Court of Justice, and the European Central Bank, which act beyond democratic controls. To prevent democratic decision- making contrary to neoliberal orthodoxy, the Fiscal Treaty perfidiously strengthens the dictatorship of the financial markets by fines to be paid to the EU.
    As in the Great Depression of the 1930s, chauvinist and fascist forces are gaining influence, in Hungary, Austria, Finland, and elsewhere. Blind to the lessons of history, the German government, with its uncompromising austerity policy, is making reactionary solutions to the crisis more and more likely.
    Throughout the world, people are fighting back against these policies, from the Syntagma Square in Athens, via the Tahrir Square in Cairo and the Puerta del Sol in Madrid, to Zucotti Park in New York. The movements of refugees and migrant workers across Europe’s outer frontiers are part of these struggles for a good life. These struggles must be carried out across borders and in the centres of the authoritarian-neoliberal alliance, in Paris, Brussels, Frankfurt, and Berlin. Therefore, we call on people to join in the coming protests, including the European Day of Action on March 31st, the Global Day of Action on May 12th, and the international mobilization to Frankfurt am Main on May 17th to 19th. We are relying on an alternative solution to the crisis:
    - no ratification of the Fiscal Treaty, and dropping the set of EU laws on “Economic Governance”;
    - cancelling public debts, introducing controls on capital flows, and converting banks into public service providers;
    - redistributing social wealth from the top downwards by a new tax system; - expanding the social infrastructure and starting to transform the economy with
    a programme of social and environmental investment;
    - shortening working hours;
    - democratizing politics and the economy radically at all levels;
    - ending the racist policy of Fortress Europe — residence permits and legal status for all.
    To the authoritarian-neoliberal EU of the few, we oppose a democratic, social and ecological EU of the many!
    Assoziation für kritische Gesellschaftsforschung (AkG), March 2012 /

    • This last sentence appears to be a wrong translation: Gegen die autoritär-neoliberale EU der Wenigen setzen wir ein demokratisches und sozial-ökologisches Europa der Vielen!

      it should read: We oppose the authoritarian neo liberal EU of the few, in favor of a democratic, social and ecological EU of the many

      • martino

        I don’t know Georg, one of the last points of that manifesto is about breaking down “Fortress Europe”, but surely immigration is a tool used to keep wages down. A bit of a contradiction there, no?


    Our good friend Rupert Murdoch has managed to kick current TV off the air in Italy, and now since Monday in the UK as well.

    You are not supposed to see, hear and read anything but the messages of our dear leaders.

    • redriversix

      Shit Georg..!!

      I noticed that the other night, couldn’t find it anywhere.

      Happy St Patricks Day

      • yeah, fascinating isn’t it?

        Current TV was something different, VERY different from the established media, it is still broadcasted in the US though.

        They touched subject the established propaganda media would not, sometimes in a simple and at times bluntly open way, some of the young Journalists even risking their own arse! Al Gore was a driving motivator behind all this. I am not astonished to see Murdock shot down the air to them not a sausage.

        • redriversix

          It was one of the very few T.V channels left you could watch and sometimes learn something.
          Its a real pity

          Take care

      • bonbon

        I suggest Russia Today – on satellite in English. M.Keiser is there too. Crosstalk is very good. And the inside stories on Russia are excellent.

        Now that the Arctic is opening up this is strategic.

        NATO is conducting its biggest recent live fire exercise on the Norway border near Russia, a provocation yet again. Russia is ready for war as it repeatedly states over the recent weeks. It seems Obama and EU maniacs never learn and pursue a dying moneterast empire to our doom. Russia will not submit and be shoved around.

  31. molly66

    This is a great article David sometimes you wake up and have a bad day and say I should have stayed at home,in a way we look listen and watch a train wrack in slow motion.the train wreak is Europe this compact is a joke like the euro the rules will be broken buy the big players.this government is way out of it’s depth we are not the 300 Spartans and if we where we would not have this government in the 300
    We are being made fools by Europe and kenny and co can’t see this and when there term is up it will be to late for us because we will be destroyed by Europe unless Europe crashes,Europe is now bad for us because they will strip us clean like piranha strips the meat of the bones.

  32. CitizenWhy

    A single currency works for a single economy. Despite the pretense, the EU is not a single economy. It;s just a convenience for the dominant exporters.

    • bonbon

      That was known from 1992. So why pursue it?

      NAFTA also is of the same insanity – look what it did to Mexico. So it is not just currencies that drive disaster, its a fatal physical economic ideology that wild-eyed candidates spout all over – free-trade and globalization. The EU and NAFTA “free-trade” zones have really proved something?

  33. goldbug







    • Islam forbids the charging of bank interest . How wise!

      • Tony Brogan

        Also I think the origial christian doctrine did too and also Judaism
        Listen to the elders.

      • Colin

        It also expects victims of rape to marry their rapist? Wise? Please discuss.

        • StephenKenny

          Discuss? Certainly: It’s wrong.

          Next: Forbidding the charging of interest: It’s wise.

          Next: The laws in the book of Leviticus. Discuss.

          • Colin

            1. Great, let’s hear more people like you condemn it and many other aspects worthy of condemnation in that belief system.

            2. So, what do you do with the interest you’ve accumulated? Did you return it to the bank? Did you earn interest on your communion and confirmation money? And have you ever taken out loans and demanded them to be interest free? Actions speak louder than words.

            3. I’m not advocating the introduction of the Laws of the Torah here in Ireland. Others here have and continue to advocate Sharia law. If you wish to discuss Leviticus, fine, tell me what law in particular you want to discuss, and I can answer your query, but I’m not Jewish and I’m not a theologian, but I’ll do my best.

    • Tony Brogan

      Well put gold bug
      A lot said in few words
      Central bank system has to go It is designed by purpose to enslave the peoples of the world. A single politician trying to remove the system will be assinated. The people must be educated to rise enmass to have it thrown out and destroyed. Ireland has a referendum. opportunity knocks. Fractional reserve banking must go. Interest charged and received must go.
      Spread the word. one person at a time. a small fire is esily extinguished. a little wind and it is an inferno. We have to be the wind. one person at a time. Form groups. write pamphlets , write booklets. distribute and talk. go to bloggs. have positive actions to achieve. Write to politicians with your group letterhead. put on the pressure. Email the td’s all of them. again and again.
      letters to the editors , radio stations , magazines. useing your association letterhead.
      Create the irish association for sound money. Create the association for Irish sovereignty. Create anything that look official. then lobby, lobby, and lobby again.
      bow not to the new world order. create the new Irish sovereign republic. For 800 years Ireland has been infiltrated. freedom finally gained only to give it away for a short lived illusiary pot of cash quickly spent. It took hundreds of lifetimes to get freedom and only two to give it all away without even a wimper. Take it back while you can. Ireland is an educated, creative, energetic country of bright intelligant people. It is time to be self sufficient, resiliant, and independent.” Fortune favours the bold”

      • juniorjb

        Behold, I am overburdened with my wisdom: like the bee that has gathered too much honey, I need hands outstretched to receive it.

        My message goes beyond buy gold.

        Spread the word. one person at a time. a small fire is esily extinguished. a little wind and it is an inferno.

        Listen to the elders!

        A man came unto him and showed him a path into the desert where he dwelt alone for 30 hours a week. He enjoyed his spirit and his solitude but then there was a change in his heart – one morning he rose, stepped before the sun and said “Great star, what would your happiness be were it not for those you illumine!.. I should like to bestow and distribute, until the wise among human beings once again become glad of their folly..

        How did gold assume the highest value? Only as an allegory of the highest virtue. Gold-like shines the glance of the one who bestows.

        Into your eye of late I looked, O Life: gold I saw in your night-eye glinting – my heart stood still from such delight:
        a golden-hued boat I saw glinting on noctural waters: a sinking and drinking and ever-winking golden-hued rocking-boat!

        Do you have courage, O my brothers!

        Thus Spake Tony.

        • Tony Brogan

          Hey Junior
          Keep reading, you might learn something
          It took me 9 years to get an understanding.
          Seems like it may take you a little longer.
          Of course some just don’t ever get it.
          BUT I have hope for you yet

          • juniorjb

            Get over yourself, Tony. I understand your analysis perfectly well and even agree with you on a few points. It’s you personally I have a problem with. I don’t think your arrogant, self-inflating messianic little game is going to grow on me in nine years (it took you that long? Really?) or ever. If you had a bit of manners to go with your unpleasantly inflated self-image I could see past it, but you don’t – it seems your monstrous ego won’t allow that.

            All else is fluff and distraction?

            Give me a break, you fraud.

          • juniorjb

            Excuse the temper, BTW. I don’t get off on riling strangers, but you are asking for it. SOMK says it above much more nicely and to the point.

  34. X & Y Chronency

    Today I read the Riviera Reporter Ed No 149 and a letter sent to this magazine by a bank note currency specialist named Hugh Winston .In it he explains that the letter on the notes has only one function and that is the origin of the note and not its value .He continues to say that the letter only has a function for the ECB to be able to follow up the quality/durability print of the notes ,

    He dismisses the rumours about the Y notes and the consequences as a result of Greece defaulting / opting out of the Euro .

    He even goes as far as to say that the value of the Euro should increase on markets after any country leaving the Euro because he states the Greeks Y only represents 3% of total value of notes issued by ECB .However the new currency in Greece will be printed with its own independent value to what the market will take .

    He makes the whole process look seamless .Then he qualifies his statement by saying ‘it is all speculative until something happens’.

    The editor at the footnote replied : ‘ You might be right but I’m checking my notes for Greek ones all the time.

  35. rebean

    I read most of the articles and enjoy all the banter. I have to laugh though when I read about those IT CANNOT GO ON type statements etc etc , In fairness it seems to go on and on . Reminds me of a runaway train that just wont stop this whole European fiasco. WE had the
    Euro currency collapse that was supposed to happen by now with fund managers betting like lunatics on the demise of the currency. That threat seems to have subsided. Then we had the Greek debacle DEBT WRITEDOWN under a different name. Then the new Spanish socialist Govt decided they could not meet their obligations on fiscal adjustment and they were told no problem. The difference however with our little country is that we are too bloody small and noone gives a toss about us. They would be glad to get rid of us if they could only get their f**in money back and thats never going to happen.So the best thing we can do in this little country with our 35.5 billion economy is nuckle down and hang in there and get the 16 billion loan to balance the books so we can all enjoy whatever future is left. When it comes to the stage where the figures wont add up the lads from the ECB and Ollie will come up with another plan I hope. And I have no doubt that if you are a good economist like David McWilliams you realise that it cannot theoretically go on but it will go on until the Germans realise that they aint gettin their money back then they will try and take that oil that has just been found or maybe tax it . Theres always a tax you can collect.

    • Colin

      Slight correction there rebean, the new Spanish Government is the Popular party, who are Conservatives. The Spanish electorate gave the two fingers to the useless Socialist government there recently.

      And this new Spanish government is doing the right thing; putting its own 40 million people first, and giving Brussels the 2 fingers. It’s what we should have done.

      But the Spanish are lucky, there is no Spanish equivalent of Peter Bacon, Dan McLoughlin, Austin Hughes, Suds, Somers, Bouchier, Fingers, Soden et al given access to the National Broadcaster and interviewed by media herd instinct driving a ponzi ‘we are where we are’ agenda which protects the insiders.

      And they have a King who genuinely loves the people, who will not sell them into slavery unlike our shower of inept/corrupt elites.

      • bonbon

        Further correction – the PP is Franco’s party, the last fascist party in Europe until the 1970′s. Lucky?

        The King did act against a plot after Madrid-11 prepared in advance by a certain officer.

        • Colin

          And what was Putin up to before the Berlin Wall came down bonbon? Mooching about East Germany, sampling the sausages, bevving the beers back?

          And when can we have NATO conduct more exercises, this time close to Kalinigrad?

        • Yeah, I wrote about that not lone ago here in context of the beating up of parents and students in Valencia, and the Opus Dei in Spain.

          All these events are connected.

  36. Balloons

    Recent newspaper articles I have read mention that falling sky scrapers do not fall in an orderly way .Basically they smash to the ground. More or less what we are anticipating with the Irish Economy ‘ apres defaut de Grecque’.

    Noonan has seen the new light up Oli’s nose and now believes in rocket science .While oli looks down Noonans nose he knows its a very dark place and speaks to him in latin instead.Maybe it explains why Finish Saunas are very hygenic afterall.

    It is interesting how the mindsets in baths change and how Noonan exclaims his new mantra to the media that the Irish Economy will take off like a rocket .

    It would be my assertion that his proverb is more akin to holding a blown up balloon and loosing it and what you see is NASA Noonans Arse Shoots Away.

    I just hope the sauna is outdoor.

    • Colin

      That was in China, wasn’t it John? I wouldn’t like to have to go on site there and read a steel reinforcement drawing with all them funny chinese characters printed on them to find out what sized rebar fits where, how long it needs to be lapped and spaced out and all that jazz as its very complicated in Roman Alphabet English as it is.

      I’ve seen photos of Chinese building sites before, and they’d make a Western Safety Inspector’s blood pressure shoot off the scale.

  37. rebean

    I stand corrected there. I thought Spain had a socialist Govt. In our own little country I would embrace any govt that would start managing the place properly. We are incapable of real change here with our present Dail mongers

  38. [...] cruises as Spain sits in a heap — it can’t last Read more: Share this:TwitterFacebookLike this:LikeBe the first to like this post. [...]

  39. Juanjo R

    Looming property crash in China?

    Ordos: The biggest ghost town in China

    • Tony Brogan

      Good recipe for Ireland.
      Plus Also quit the Euro.
      Put a sovereign currency into circulation, not somebody else’s.
      Put Silver coin in circulation as it is inflation protected money.
      ban fractional reserve banking
      Let the private sector go broke.
      Out of the ashes a vibrant Ireland recovers
      Jobs for the workers instead of jobs for the boys

  40. Tony Brogan

    While we are distracted by Club Med, here is what is going down in the US. The whole western world is broke and the current financial system will not survive.

    Extracted from Midas de Metropole at

    Bill H:

    This time it really IS different?

    To all: THE most dangerous saying on Wall St. is, “this time it really is different”. But trust me, it IS. If you go back to the last great bull market in Gold in the 1970′s, you will find that it was “terminated” by Paul Volcker when he let interest rates “float”. Interest rates rose very hard and basically “cleared” the market, in other words, higher rates were needed to entice investors back into the Dollar. Without higher rates, the Dollar was going into the toilet and may well have actually collapsed and disappeared. But here we are some30+ years later and back into the same situation, the Dollar has been weak versus foreign currencies and weaker versus real goods and especially real money, Gold.

    Here is where it is “different”, the option of raising rates to attract capital does not exist and would be financial suicide if tried. The system cannot sustain higher rates as everything everywhere is levered to the max. Another “entity” that cannot afford higher rates is the U.S. Treasury itself! Every 1% rise in interest rates will equal at least an additional $150 Billion+ of interest payments. If 5-10 year rates were to rise just to 5%, the debt service would increase by $1/2 Trillion more every single year! We are nowhere even close to funding our budgets through taxes currently as the Fed is providing better than 50% of the funds. Can you imagine what another $500 Billion per year would do? Add another 35-40% to the deficit?

    What the Fed and Treasury DID want you to see over the last 2 weeks was the $120 drop in Gold (roughly 7%), what they didn’t want you to see was the 10 year Treasury go from a yield of 1.9% up to 2.3%. This amounts to a 20% rise in interest rates over a 2 week span. And please keep in mind, this has occurred while “operation twist” is in place. “Operation twist” was implemented by the Fed to keep longer term interest rates down, Clearly it has not and is not working as planned. The danger point in my opinion lays just down the road in front of us. What happens when Japan, China, Russia, Brazil etc. become outright sellers of Treasuries? What happens to all of the banks that have already committed the biggest cardinal sin of all time, namely borrowing short term and lending long term via the carry trade. This has been the age old “trap” for banks and it looks like they have fallen for it again. Never mind that this “carry trade” was offered and facilitated by Fed and Treasury policies, it is what it is and we now have a banking sector that is funded with short term credit and invested in long term assets…(soon to be seen as liabilities).

    No matter what is said or spun upon the public, there is absolutely NO chance of interest rates going up because of official policy,. I do expect rates to rise however as the market place begins an “everyone out of the water” type move. In other words, Treasuries will be sold because of fear, because of margin calls…because they HAVE TO! While it is true that at some point (with a viable currency), investors can be “enticed” back in by higher interest rates, this is currently not the case. It is not the case because long term, the Dollar is no longer “viable”. Simple math is already telling you this. Just look at the back of the envelope math above where just 3% higher interest rates will cost over $500 Billion more in debt service.

    So…why is it “different” this time?…because as much as the Fed would like you to believe that they can raise interest rates and have an exit plan for ZIRP (zero interest rate policy), they CAN’T and DON’T! They have boxed themselves in so badly that even a non savant 3rd grader could figure it out. They are check mated and it is of their own doing. They must print more and absorb any and all borrowing needs of the Treasury. It is different (for America) this time because the circumstances are “different”. “different” as in …this time we are talking about a bankrupt sovereign. In reality, “this time” is no different from any other time that a country blew up it’s currency, they are all pretty much clones or rhymes of each other. The natural laws of Mother Nature can never be changed nor legislated away, so I guess when all is said and done, this time is no different, it’s just that it’s happening to us! What was once considered impossible is now carved in stone. Regards, Bill H.

    Buy agriculural land, gold and silver.

  41. Tony Brogan

    Here is a 20 minute audio interview of James sinclair of international acclaim on matters financial and gold.
    The US has enacted “Nuclear financial war” on Iran and now threatens India with removal from the SWIFT system of wiring money settlement, effectively closing the country’s banking system.
    Well worth listening to David as the ramifications are huge worldwide.


    In the 1951 March edition of MAN, “The Royal Anthropological Institute of Great Britain and Ireland”  published a scholar article by the Archeologist Glyn E. Daniel titled ‘The chronological framework of Prehistoric Barbarian Europe.

    Etymologically, the term “Barbarian” originates from the Greek “Barbaros”, and was used to describe uncivilized people from the Persian Empire. “One not a Greek”.

    The period from 400-800 CE is taught in schools as the “Period of Migration” or “The Barbarian Invasion”, and it marked the beginning of the Early Middles Ages when Germanic tribes took control of the Western parts of the Roman Empire, and Slavic tribes of Central and Eastern Europe.

    It was around the same time that the frontiers of Islam and Christianity were established for a thousand years as well.

    This Migration Age period is still debated amongst scholars.


    Over the past 15 years, the number of people crossing borders in search of a better life has been rising steadily. At the start of the 21st Century, one in every 35 people is an international migrant. If they all lived in the same place, it would be the world’s fifth-largest country.

    x x x x 

    We live in times where the neo liberal agenda has plundered the moderate wealth of the middle class, and as a result we witness totalitarian methodologies deployed to control those who were impoverished and those who oppose to the policies forcefully applied without any democratic legitimation. This can be observed at large in the US and Europe. We do not have a functioning democracy, we live in a Plutocratic system that exploits and abuses the many to serve a few.

    Teachers are confronted with that abuse on a daily basis. They deal with the dysfunctional families, intense expressions of anger and frustration, hopelessness, rage, misguided minds, tortured souls, abandoned hearts, a youth that was betrayed, betrayed by us. 

    Can there be greater barbarity for example, than to hurt an infant? Its helplessness, its innocence, its amiableness, call forth the compassion, even of an enemy, and not to spare that tender age is regarded as the most furious effort of an enraged and cruel conqueror. What then should we imagine must be the heart of a parent who could injure that weakness which even a furious enemy is afraid to violate? Yet the exposition, that is, the murder of new-born infants, was a practice allowed of in almost all the states of Greece, even among the polite and civilized Athenians; and whenever the circumstances of the parent rendered it inconvenient to bring up the child, to abandon it to hunger, or to wild beasts, was regarded without blame or censure.

    - Adam Smith, 1759, The Theory of Moral Sentiments -

    What difference does it make?

    What difference does it make when we as a society allow a handful of fascist financial interest groups to send an entire generation into poverty while they are filling their own pockets with stolen riches? In cahoots with technocrats and mediocre civil servant souls that play the game of being a politician, and serve no one but the vested interest groups.

    To date, globally around 20 million people lost their jobs.

    The father of a friend from the US, John, he is 94 years old now, he saw with his own eyes what John Steinbeck’s “The Grapes of Wrath” depicted. The Greek Intellectual Yanis Varoufakis was right to point out Steinbeck’s realist novel to those who want to better understand what the daily life of Greek people looks like in 2012.

    A Europe of Barbarians, again!


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