April 2, 2012

America - the world's largest emerging market?

Posted in Markets · 154 comments ·

Have you noticed how expensive petrol is these days? It now costs over €100 to fill up an average family car. In Ussher’s Quay the other day, there was a tailback of cars because a petrol station decided to offer a cut-price deal on petrol.
Why is the price of fuel going up?

Lots of media coverage is focusing on the Straits of Hormuz and the sabre-rattling between Iran, America and Israel at a time when Syria burns in the background. We are told that old-fashioned supply problems can explain the price of oil. Then, last Thursday, the main oilman in Saudi Arabia told us to chill out there was loads of the stuff left and there wouldn’t be any supply problems. Of course, this is all playing out against a background where the proponents of ‘peak oil’ argue that the stuff is running out anyway.

But might there be another reason that petrol prices are so high? Is there anything else driving up the price of petrol at the pumps that could be closer to home?

The answer is yes. At the moment, the central banks of the world are responding to this mega-debt crisis and huge de-leveraging everywhere with lower and lower interest rates. Earlier this month, a report from the US Federal Reserve (www.federalreserve.gov) on the flow of funds in the US made for quite shocking reading if you are someone who worries about what central banks all around the world are doing.

The report reveals that the Fed bought 61 per cent of the net new debt the US government issued last year. Before the financial crisis, the Federal Reserve used to buy small amounts, but not the lion’s share of the US government’s debt. This is quantitative easing like we have never seen before.

One way of putting all this into context is to examine how much this is in terms of US total income. This is particularly important right now in order to ascertain whether the US recovery is real or temporary.

Net treasury debt amounts to 8.6 per cent of GDP. If 61 per cent of that figure is caused by printing money, it means that about 5.3 per cent of US economic output is now being driven by the Federal Reserve’s printing presses. This is reminiscent of Argentina in its 1980s heyday, and is extremely worrying.
The report also reveals that the US is more dependent on short-term funding than Ireland, Greece, Spain and Portugal. The average maturity of the US government’s debt was 62.8 months. That means the US has to rollover a whopping 71 per cent of its debt pile – $5.9 trillion worth – over the next five years.

Now, all this means that the US will have to keep interest rates very low, because the state simply can’t afford to raise them. This has huge ramifications for the central bank because only if it ignores inflation – which will come – can it carry on financing the government at these levels.

But it is not just the US at this carry-on. Interest rates everywhere are as near to zero as possible. The Bank of Japan, the Bank of England and the ECB are all at the same game. In China, they might be in the Year of the Dragon, but elsewhere we are in the Year of the Central Bank, during which the only action is what policy-makers are doing.

They are injecting as much liquidity as necessary to bail out the banks. Now, let’s get a handle on how much money we are talking about. Over the last three and a half years, Britain, Europe, Japan and the US have boosted their central bank balance sheets to $8.76 trillion and pumped that much new money into the banking system. This is more money than it cost to fight World War II, the first Gulf War, put a man on the moon and the entire African aid budget for the past 30 years – all put together.

The central banks have opened the discount window and taken in all sorts of collateral and in return given out this cash. Today, the balance sheet of the ECB is 30 per cent of GDP. The figure for the Federal Reserve is 17 per cent and the Bank of England 18 per cent.

This is an increase without historical precedent or parallel. Under these circumstances, we may say that the economy is “recovering”, as we have been hearing in the US, but it lacks real meaning because we are so awash with central bank cash and credit.
Now here’s the rub. One of the reasons the price of oil is going up is that the markets, buoyed up by all this money sloshing around, are buying oil. After all, why would you hold an asset that is being printed every day, like cash, when you can buy an asset which is running out, like oil? This is basic supply and demand.

Ultimately, all this free money will find its way into other assets and push up prices. This will be the return of inflation. The spike in oil is a leading indicator.

But here’s the problem. In normal times, the central banks would just take all the money out, via higher interest rates. But in the US, if the Fed stops buying US treasuries, who will take up the slack? This means that the Fed and the central government will be on a collision course because raising interest rates will cause the government’s budget to go haywire. Independent estimates suggest that an increase of 1 per cent in the average interest rate would add an extra $88 billion to the Treasury’s debt service payments in 2012 alone (www.zerohedge.com).

The financial markets know about this conflict at the heart of the US establishment. Therefore, this all reminds me of the Irish property market when, the more money that was pumped in, the more the “trapped bulls” who owned property used the new liquidity to justify the mad valuations and prices.

Yet, the more the bubble was blown up by new money, the more the crash became inevitable. When the US bond market blows, the European crisis will seem like a skirmish.
Hold on to your seats.

The New Punk Economics -Lesson 3 – is now out. See it on YouTube.

  1. taylorcr

    All this is true and there probably/most likely will be a day of reckoning at some point for the US, but the euro crisis will blow long before that happens and everyone will run to the comparative safety of treasuries, because of course they at least do have their own monetary policy and currency.

    I would rather have a devalued US$ or UK£ than have a Euro that doesn’t really exist because it isn’t really backed up by one country with one treasury.

    Tell me this, if you are say Chinese and have 1 million Euro in a bank account in Hong Kong and the euro splits apart, who is going to pay you or back up those Euros, Germany? Theres no way they will, none of the countries will accept the liability of all the euros around the world, it is most likely to simply disappear.

    No thanks, I would rather own a national currency that actually does exist and is backed by a single country with a single treasury and single central bank, the US is a mess but its better than the alternative.

    • C21living

      Why do the Chinese invest in euro?

      Because, unlike you obviously, they know the euro is here to stay.

      The only question is, which countries will be in or out.

      Estonia joined recently, Latvia and Lithuania are next.

      The PIIGS can drop out. The EZ will carry on without them.

      The Chinese know this. German bonds are still AAA and they’re in euro.

      • taylorcr

        You completely missed the point, the Chinese person I mentioned was an example, it could have been A
        Japanese person in Tokyo or an American in NY.

        In any event…

        The Chinese invest in everything, they have to, in order to manipulate their exchange rate the way they have always been doing, this is very old news, they have almost double invested in US treasuries than Euro bonds, but even if they didn’t the point is irrelevant they have to and despite the Euro some Euro bonds are safe as they are backed by the country concerned.

        Estonia, Latvia, Lithuania are all small fry and irrelevant, the important economies, Sweden, Denmark and the UK continue to stay out and always will.

        German bonds are AAA and in high demand because they are the safest in the Eurozone, if it falls apart these would be re-valued in DM which is virtually guaranteed to appreciate significantly against all the other European currencies, I’m positive the Euro will be gone within the next 5yrs and I would have no problem buying German bonds, they are a safe investment. This is distinctly different from owning a currency that isnt backed up by any one state, German bonds are backed by Germany.

        You clearly dont understand what you are commenting on.

        • C21living

          The eurozone nations will not return to 17 different currencies.

          Greece, Ireland, Iberia, even Italy (although I doubt it) may fall out of the EZ, but the ECB and the EZ will remain, even if in a smaller form, until it expands into the East of Europe, which is actually in Germany’s longer term interest.

          You can be positive all you like – countries will leave the EZ, but a currency union led by Germany, covering core Europe and expanding to the East will remain.

          Yes, it will be headed by the ECB and yes, it will be called “the eurozone”.

          I expect massive tumult in the years to come in the PIIGS countries, but as I said the EZ still has expansion plans and the idea that Europe will explode into 27 separate currencies is laughable and could only be the brainwave of somebody living in the far Western periphery of Europe who doesn’t understand that the German currency union is here to stay.

          I’d be amazed if Ireland was still in the euro in 5 years, it’d be in our better interest to leave IMHO, but the EZ will still be there. If a few PIIGS fell out it’d be more resolved to hold together than ever.

        • C21living

          BTW what do you mean when you say ‘the euro isn’t backed up by one country with a single treasury and a single central bank’?

          The fiscal compact is will lead to all of the above – the one country is Germany, obviously.

          Most EZ and indeed EU countries will ratify the Fiscal compact.

          Even if Ireland doesn’t – and I think we shouldn’t – clearly the Euro Superstate totally run and controlled by and from Germany will be born.

          It’s going to happen and it’s going to last many, many years.

          Greece will be out, Ireland is about 50/50 in my view. If we leave we’ll be pegged to Sterling, so out of the frying pan into the fire for us.

          • redriversix

            Remember Quantitative easing ?….every minute of every hour of every day.

          • C21living

            My point here is that it is delusionsal to think that the 27 EU states will go through the extremely, extremely messy process of returning to 27 separate currencies, floating against each other.

            Obviously the euro is being panic-printed, like the dollar and pound, they;re all losing value, and Europe, the British Isles and North America will be poorer than they are now, going down to join the Resterners many of whom are on the way up.

            But of course everybody knows that.

            Still, people think there can be some return to sovereignty for Ireland or Britain or some other country.

            Not in a world of the UN, World Bank, IMF, global integrated financial system there just is no going back to sovereignty.

            If Ireland leaves the euro we’ll be pegged to Sterling.

            Local currencies are a much better idea for relocalising our economy. Kilkenny has its own currency, for instance.

      • Tony Brogan

        The Chinese are now the worlds lagest producer of gold. Not one ounce leaves the country being purchased by the government.
        China also imports a large amout of gold for both private and government purchase.
        The Chinese people are now some of the largest saers in gold per capita. All in preparation to have the remnimbi be the world’s next trading currency.


        Best Regards

    • Tony Brogan

      There is no point in savings in any fiat currency as all are involved in competative devaluations one against the other. sort of like trying to buy the best apple in a barrel of rotton apples.

  2. Alan42

    The secret is ‘ house prices ‘


    From the article

    “Low or negative equity creates additional problems for households,” Bernanke said. “It reduces financial flexibility: Homeowners who are underwater on their mortgages cannot tap home equity to pay for emergency health expenses or their children’s college educations.”

    I am by no means a economist but Ben’s plan seems to be to reinflate house prices and get people spending again .

    I have never understood people releasing equity in their homes . Is the who idea of paying off a mortgage , is that one day you will own the house . Ben wants people to live their entir lives in perpetual debt .

    • redriversix

      Hi Alan42

      E.U unemployment at 10.8%….not good..with unemployment this high e.u plans must be not be working [no shit !]

      PTSB sets 1.8 billion aside for losses !

      Bernanke and the rest of the mob DO want people in debt always, as this is the 21st Century version of slavery.promote fear,cut wages and rights,so you just earn enough to get by and at least pay interest on loans so we can keep feeding the bloated monster and fear rescinds our right to question………

      EU or U.S,who financially explodes first is not relevant,its how we try and protect ourselves as people.The fact is they are going to blow,just when really.

      Have a great day


  3. transitionman

    “this is all playing out against a background where the proponents of ‘peak oil’ argue that the stuff is running out anyway.”
    I would like to direct readers to Our Finite World blog for analysis on how flat line world oil supply charts are viewed as a greater factor than speculation in oil prices.
    My own view is this bond bubble will burst in US and Europe. For most inflation or deflation will not matter it will be difficult to afford basic food and energy. Our psychological dependance on powerless central Irish government will be the greatest challenge.
    Not so sure how powerless the puppet masters will be to citizens not paying our taxes or debts in the future. People or banks? Shock Doctrine for Europe read the following

    • C21living

      +1 dependence on powerless Irish government.

      • Adam Byrne

        Luckily enough, one minor advantage we have is being an island with fertile land and fish in the surrounding seas. That may get us by for a while before we are overrun. I wouldn’t like to live in Central Europe or the US though. I lived in Hungary for 5 years and had a great time but wouldn’t live there again in a fit. The people are demented with fear of being invaded from all sides and that doesn’t just apply to the Hungarians, but all their neighbours too. I’ll be on a smaller island in the Caribbean by the time it all kicks off.

  4. aaronk

    David this 61% of debt purchased by the Fed costs the treasury virtually nothing due to the tenacity of a Congressman of great foresight called Wright Patman. They just collect a nominal handling fee and refund interest to the Treasury. He was on the trail of the Fed in Jacksonian style and forced this out of them in the 60s. US currently exporting 480k barrels of refined petroleum per day formerly a long term importer. OPEC finished futures market and insiders now driving the price. Massive discoveries of oil in Eastern Med, off Cameroun & Stans. World floating on oil , with demand severely reduced. Gordon Duff on Veteranstoday.com has tracked this for some time.

    • Juanjo R

      You are becoming famous David!

      You are being targeted here, in the post above, by US based climate deniers and right wing nuts…if you want a good laugh check out the Veterans website this poster recommends!

      Here is a fact – US Oil exports vs imports stand at MINUS 8 million barrels a day (CIA World Factbook);

      Oil exports
      1.92 million bbl/day (2009 est.)
      country comparison to the world: 11

      Oil – imports:
      10.27 million bbl/day (2009 est.)
      country comparison to the world: 1

      Full link; https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

      The terrible thing that this poster above is most likely part of a campaign promoting climate change denial which is working to some extent.

      Naomi Klein wrote about it last november at the following link ( its a long article ). http://www.thenation.com/article/164497/capitalism-vs-climate

    • Adam Byrne

      I suspect the real truth is somewhere in the middle. There are nuts on both sides (not referring to anyone here – I don’t get into flaming).

      Some of the climate change people go way over the top with their claims and statistics and, as we all know, have even stooped to falsifying evidence.

      Meanwhile, there are some real lunatics on the other side too who would burn down the Amazon for a dollar if they got half a chance.

      Oil is not going to run out tomorrow but it’s not going to last forever either. We need better solutions now.

      I preferred it when they used to speak about stopping pollution, instead of ‘global warming’ and ‘climate change’ (phrases which are denigrated by association now).

      If every individual and organization kept, or was compelled to keep their own little patch of Earth clean, we’d have none of these problems. In addition we should be immediately engender a bias towards bringing in other ways of powering our world, extra-fossil fuels, as previously mentioned.

      • Tony Brogan

        Hi Adam

        Yes polution is the issue. contamination by chemicals and plastics. herbicides, pesticides etc all cancerous poisons

        all the best

      • EMMETTOR

        Yes, for example, childhood asthma, one of the developed world’s fastest growing diseases, shadows car use almost exactly. But pollution is not the only effect, the Polar icecaps ARE melting. I’ve watched the Anti Climate Change Brigade move from a laughing stock to a respectable viewpoint by the application of huge amounts of big petrol dollars. It’s still a pig in lipstick, if you look closely enough.

        • Adam Byrne

          I agree (see comment about burning down the Amazon for a dollar), but the tree-huggers of this world do themselves no favours either with their various methods of activity which are at times sensationalist, contradictory, hypocritical and downright dishonest.

      • 33square

        “I preferred it when they used to speak about stopping pollution, instead of ‘global warming’ and ‘climate change’ (phrases which are denigrated by association now).”

        no need to solve the cause of a problem when you have a band-aid to treat the symptoms: http://www.springerlink.com/content/t1vn75m458373h63/fulltext.pdf

        • 33square

          “To compensate for a doubling of CO2, which causes a greenhouse warming of 4 W/m2, the required continuous stratospheric sulfate loading would be a sizeable 5.3 Tg S, producing an optical depth of about 0.04. The Rayleigh scattering optical depth at 0.5 µm is about 0.13, so that some whitening on the sky, but also colorful sunsets and sunrises would occur. It should be noted, however, that considerable whitening of the sky is already occurring as a result of current air pollution in the continental boundary layer.”

          “Researchers at the Lawrence Livermore Laboratory are so far the only ones who have modelled the stratospheric albedo modification scheme. In a first study, Govindasamy and Caldeira (2000) simulated this by reducing the solar luminosity by 1.8%, to balance future climate warming by a doubling of CO2.”

          “If sizeable reductions in greenhouse gas emissions will not happen and temperatures rise rapidly, then climatic engineering, such as presented here, is the only option available to rapidly reduce temperature rises and counteract other climatic effects. Such a modification could also be stopped on short notice, if undesirable and unforeseen side effects become apparent, which would allow the atmosphere to return to its prior state within a few years. There is, therefore, a strong need to estimate negative, as well as positive, side effects of the proposed stratospheric modification schemes. If positive effects are greater than the negative effects, serious consideration should be given to the albedo modification scheme.”

  5. redriversix

    If Oil is a fossil fuel

    and fossils turn in to fuel

    and nature is always creating fossils

    when do fossils decide not to turn in to fuel ? and is it a democratic process ?

    • cooldude

      Interesting point RR6 on whether or not oil is a fossil fuel. Watch this interesting video and let me know what you think.

      • redriversix

        Hey Cooldude

        great video , although it suits me as I believe Oil running out is the stuff of nonsense.Even if we still call it fossil fuel that makes it even more ludicrous.

        The reason why O.P.E.C is a legal cartel controlling prices and production is that if they provided a proper and stable flow of oil that is clearly available,the profits would not be big enough for the greedy S.O.Bs

        The big Oil Companies do not want 10 dollar a barrel oil , that’s for sure.

        IN Libya today,It costs 0.89cents a barrel to take it outta the ground !

        Cheers Cooldude


        • C21living

          Is OPEC responsible for the peaking of oil production in the US in 1970.

          Production of oil has been in decline in the US since 1970.

          Why would the US willingly decline its oil production when its such a massive consumer of oil? Why would it make itself dependent on others for energy? Because the US, as an oil producing province, has passed peak oil.

          That peak of production is known as ‘Hubbert’s Peak’.

          The chief denier of peak oil is Lyndon La Rouche, and I know for a fact you get your peak oil denying from LaRouchePac.


          • aaronk

            C21 living. Delusional you say. Please clarify which assertion permits you to make this diagnosis.

          • C21living


            Two delusions.

            1. You say ‘Massive discoveries of oil in Eastern Med, off Cameroun & Stans. World floating on oil’.

            Fact – world oil discoveries peaked in the mid1960s and recent finds are tiny relative to earlier finds, for the obvious reason that the world has been comprehensively mapped except the arctic and antarctic poles. Recent discoveries will generate a lot of money and some oil but with world oil consumption at over 80 million barrels/day and growing will not prevent peak oil, will only put it off a year or two.

            2. You say ‘world floating on oil’. Nonsense – I worked in oil and gas in the middle east for years. See graph of world oil discoveries and production.

            Obviously demand is temporarily down with the economic crash but the price today for Brent is $125/barrel. Because of supply constraints, in other words, not enough oil being produced for the level of demand.


            DMcW remarks about central bank liquidity just exacerbates the underlying problem, there isn’t enough oil produced for the collosal demand.


          • redriversix

            Sorry C21

            I do not get anything from Larouche.pac


        • EMMETTOR

          You’re right RR6, oil will never run out, it’s infinite. With all due respect this thread contains some of the most idiotic gibberish I’ve ever read on this blog and I’ve read some….etc, etc

          • redriversix

            Morning EMMETTOR

            You believe in your research and I believe in mine……….does not mean its idiotic. either your opinion or mine.

            Best RR6

        • tonym112

          RR6, you’re right, there will always be oil.

          But the cost of extracting it will increase to the extent that it will no longer be economic to use as an energy source. Then what will we use?

      • ps200306

        cooldude, whenever I see a paragraph starting with “Common sense tells us that…” (as in your link) it’s usually a sign that the writer has no idea of the science involved. That’s most certainly the case in this instance — the whole tenet of the article and video is bunkum. Abiotic oil is a fairy tale propagated by the lunatic fringe.

      • Tony Brogan

        Hi Cooldude

        I have heard of this before but been unable to find any evidence that abiotic oil is in fact formed.

        I tried to find out how deep in the earth fossels are found but no luck with that either,
        I did find a report that suggest that fossels would be destroyed as sedimentaty rock is converted to Meta morphic rock through pressure and heat.That is at about 12-16 KM down or about 40-50,000 feet. According to the video oil is drilled and found at 35000 plus feet??
        Deepwater horizon the BP well that blew in the gulf was thedeepest at 35000 ft below sea bed. About the limit of metamorphic rock???
        i have no correlatio betweem that and oil.
        Best regards

        • cooldude

          Hi Tony and RR6

          I have no firm views on this either way. I am a natural skeptic of everything that is “the mainstream consensus” particularly when it comes to issues critical to my own life such as our flawed currency system and our equally flawed health (should be relabeled sickness) system both of are deeply damaging to leading a happy and rewarding life on this planet. I think I will stick to posting on areas I have some good insight into from now on. Thanks for your opinions on this subject.

          • Tony Brogan

            Hi Cooldude
            With all the bs flying around it is hard to know what it is you actually know about.

            Keep up your excellent postings. It is good for debate to find the truth.


  6. Adam Byrne


    • hibernian56

      I swear thats the third or fourth time you have made the same post.
      Are you trying to tell us all you have subscribed?

      • Adam Byrne

        No, I have explained this many times before. I only do it once a thread and the webmaster knows full well why I do it, we have corresponded about it and he can’t fix it. If he’s happy about it then so am I.

  7. cooldude

    David I watched your new video and then read this article. In your video you say that interest rates will rise and in the article you point out the fact that the US Fed cannot afford to raise interest rates as the debt repayments are now so large that a significant rise in rates would make even the interest payments unpayable never mind actually paying back some of this debt. In my view you are correct in the article as we are now at a worldwide debt saturation level where there is no intention of ever paying back any of this debt it is just added to in order to keep the whole rotten system ticking along for another little while. What we are actually witnessing is the last stages in this latest attempt at a worldwide unbacked paper money system which is now coming to it’s natural end. This should be no great surprise to any student of monetary history as these attempts at unbacked paper money have ALWAYS failed before and this latest attempt is now entering it’s critical stage. The average lifespan of this type of money system is around 40 years before you get the monetization of debt and the subsequent inevitable collapse of the currency. Our present system began in August 1971 when Nixon broke the last link to gold and just let all these currencies float against each other without anything thing to anchor them and give them stability. Hence the inevitable huge rise in the supply of these unbacked currencies over the last 41 years. This has always been the case with these type of money systems from the early efforts in China to the famous European attempts in France and Germany. The collapse of the present system is now well underway and all this debt will simply be defaulted on in a currency collapse. The only protection for us as individuals if through hard assets. Oil as you mention is a good one but more practical ones are gold and particularly silver which is very cheap at the moment from a historical ratio point of view. Anyone interested in studying this important issue should check out http://www.papermoneycollapse.com where there are some good articles by Detlev Schlecter examining these very issues.

    • redriversix

      Some commentators suggest that their is some kind or some form of backing of currencies with gold,may be it was of balance sheet or something,cannot remember.? Anybody else hear of this ?

      Max Keiser reported recently that several Central Banks had bought 3 physical tonnes of gold over the last couple of weeks.


      • hibernian56

        Thats dangerous talk redriversix..

        Prior to the invasion of Libya (or was it a humanitarian mission? I’m confused), several countries mostly oil producers had made moves to use gold and not the dollar / euro for oil purchases.

        Al-Qadhafi of Libya and Hugo Chavez were the main instigators of the movement, this is contrary to IMF rules, where even the Swiss franc is not linked to gold anymore.

        Chavez is trying to get his gold out of England (if its all still there), supposedly 211 tonnes of it. He is right too, look what the “good guys” did to Libya, during the “uprising” it had all of its assets frozen including its physical gold reserve in held mainly in the bank of England, I’m sure a large chunk of which will be unaccounted for or replaced with digital promissory notes.

        Wouldn’t it be terrible if the Libyan finance minister et-al died in the revolution, who would have a true record of Libya’s assets? It’s a pity the Libyan’s were foolish enough to put a command and control unit into the finance ministry, it was heavily bombed the as one of the first legitimate targets, probably destroying a lot of records as collateral damage.

        Pity. The accountants in the Bank of England won’t be happy.

        Some have even suggested that Libya was toppled as a pretext to use THEIR gold to pay Venezuela, but I’m sure thats just a conspiracy theory.

        • redriversix

          Chavez has 99 Tonnes of gold in the Bank of England which he has asked to be returned,He also has 220 tonnes of gold in New York and cannot seem to have that returned despite continued requests.

          Due to the instability [ civil war ] in Libya,N.A.T.O has taken [retaken] control of the oil fields.Their are 12,000 U.S Marines on stand-by in Malta should they be needed for a “police action” to restore order…………whatever that means ?

          Obama set up “AFRI-COM” to offer security and resources to African Countries in return for favorable terms for U.S Companies to invest in infrastructural modernization for developing Natural resources economically.

          Libya did not sign up………

          13/1/12 Russia and Iran sign a new agreement to trade their goods in Rials and rubles instead of dollars as was the norm for many years.

          “and you think we have problems”?

          Wether anyone is aware of this or not is irrelevant.The important thing is that people need to put themselves and their families first above all else……Do a budget,put yourselves first,slash all Bank debt to 10% of previous figure’s and set aside money for yourselves.Cannot ask for help if we can’t learn to respect and help ourselves first.

          Take care & Good night
          Debt Survivor

          • “Chavez has 99 Tonnes of gold in the Bank of England which he has asked to be returned,He also has 220 tonnes of gold in New York and cannot seem to have that returned despite continued requests”

            Maybe they don’t have the gold

          • hibernian56

            Too right. Some of the scenes I saw from Libya were gut wrenching. Its all about the resources.

            At least Bertie has no change of getting his grubby little hands on our forestry, I’m sure its only a matter of time before the International Forestry Fund give him the bullet. I wrote to them last week enclosing some passages from the Mahon con. Can’t wait for the reply, I really hope its from him ;-)

            To take a leaf out of Bertie’s book, I dusted off the old cash box a few months ago, and try to buy a few extra tins of food & pasta etc. every time we shop. Cash is king. Credit is refused.

            I am also trying to limit deposits to the bank, only two direct debits now. I refuse to play their game anymore.

            Everyone take care.

          • Adam Byrne

            Good move writing to the International Forestry Fund. Well done.

          • 33square

            “Maybe they don’t have the gold”

            Maybe they have gold plated tungsten

      • Tony Brogan

        Hi RR6

        Just for you
        A report on gold and the pending backing of gold for the new currencies finanaced by QE to the Nth. (Infinity)
        By non other than Jin Sinclair—Mr Gold



        • redriversix

          Morning Tony

          Thank you

          I was sure I was not crazy,Thanks for insuring my sanity one more day !knew I heard it before……..


          • Tony Brogan

            RR6 there are times when we doubt our knowledge. never doubt your sanity.

            Happy day, you are returned to us of sound mind.


      • Tony Brogan

        Central banks have bought 100′s of tonnes of gold. Just not our bought and paidfor western politicians Russia, China, Korea, Vietnam, Turkey, India, and others. All the gold is goind from West to east so we already know who the next world rulers are.

        go to http://www.GATA.org and search their archives. They have 12 years woth of actual data and snippets of reports and statements

  8. wills

    A large % of this newly invented out of thin air currency will be digits into the criminal banking system databanks.

    So cash currency irrigation perhaps will be lower than what the figures denote.

    Also, there is a geo-political school of thought which insists that the price of oil is controlled by the embedded controllers running the stock exchanges front running the markets with super cooper computers under instruction from underground criminal corporate networks playing monopoly with vulnerable countries and their resources.

  9. Mark Walsh

    An email I have today sent to circa 50 close friends and relatives.
    Thoughts on the omission of ‘legal tender’ ‘promise to pay the bearer of’ on Euro notes?
    Keep up your stellar work.

    David McWilliams (much maligned by the ever incorrect Irish establishment and Irish mainstream media) has connected the dots in his latest Sunday Business Post article http://www.davidmcwilliams.ie/2012/04/02/america-the-worlds-largest-emerging-market

    McWilliams’ ‘hold on to your seats’ summation is very apt.

    In addition, his excellent video series Punk Economics-(Lesson 3) http://www.davidmcwilliams.ie/2012/03/30/punk-economics-lesson-3 clearly illustrates how central banks and technocrats are pulling the wool over the eyes of people.

    Simply put, when more and more money is printed to save insolvent banks, the value and purchasing power of paper money is trashed. The outcome is inflation and possible hyperinflation.

    Traditionally inflation is countered by increasing interest rates. However, the creators of the Ponzi scheme cannot afford to increase rates as this will ‘bomb’ the already hyper-leveraged system, not to mention bring about wholesale household/government debt default.

    Examine a €5,€10,€20 or €50 note in your wallet or purse. If you locate the words ‘Legal Tender’ and or the ‘promise to pay the bearer on demand the sum of’, I will match it.

    For those enjoying the latest stock market rally, caveat emptor, let the buyer beware.

    The reason stock market indices are rising is due to bank/government bailouts, quantitative easing, money printing…..call it what you wish, it’s six of one, half a dozen of another. The rally is akin to pouring fuel (quantitative easing-money printing) on to the fire (stock markets) in order the keep the fire alive. The effect intilally is both spectacular and transfixing, but purely temporary.

    Highest level corporate executive remuneration/bonus structure is directly aligned to the money supply (not the CPI) and therefore are sheltered from, and have zero opposition to, imminent inflation spikes. They’re all-set, good-to-go. They want quantitative easing. They need to see their stock soar for bonus and career purposes.

    (btw- when this madness ceases and interest rates have to be increased watch the Dow-Jones, S&P 500, NASDAQ et al go through the floor)

    Central banks, governments, global corporations and the political establishment are running a rigged system of their own design. Unfortunately their design has one fatal flaw. It’s a time-bomb. All money is debt. It’s created from thin air with interest attaching and more of it has to be created to pay off the infant interest. There is no end to it. The only solution is to create more of it. More money, more debt

    This is about as sensible as paying down a credit card with yet another new credit card, sheer lunacy.

    If you are within the highest levels of banking/corporate circles you will most likely be spared (though these types of people tend to be cannibals & sociopaths in nature).

    If you’re on the outside looking in……good luck with that cash/stock project.

    • redriversix

      +1 Mark

      Cannibals like spineless people !


      ++1 Mark

    • Tony Brogan

      That pretty well nails it down Mark

    • Mark Walsh

      Thank you RR6, EMMETTOR & Tony. Any thoughts, comments or opinions on the lack of ‘legal tender’ or ‘promise to pay the bearer of’ on any Euro note?

      One ‘explanation’ might be circa 17 different languages within the EZ but that doesn’t hold water with me.

      From my perspective the Euro note is a ‘first cousin’ of the cash used in the Monopoly board-game.

      This might read or sound like I’m being pedantic, however this glaring omission raises trillions of ‘red flags’, further augmenting my beliefs that we are dealing with a highly sophisticated Ponzi scheme.

      • cooldude

        Interesting comments Mark but it is not just the Euro it is all unbacked paper money systems that are in trouble. The only note worth owning would be one which promises to pay the bearer a fixed amount of a finite commodity that is inherently valuable. That is the only type of paper money that holds its value over time. In colonial America they had successful money systems where the bearer was entitled to a fixed amount of tobacco. The paper must entitle the bearer to something otherwise it just turns into a giant ponzi scheme which is abused by the politicians.
        Our present system is fundamentally flawed and has totally failed to act as a store of value. It is now entering its final stages and due to the fact that these currencies can be made at essentially no cost they will be printed and digitally created into oblivion. This is never discussed in the mainstream media because once people realize this ugly secret about our modern currency system there will be a rush to exchange these notes for hard assets which have a proven track record of being a store of value. This is the real reason that central bankers HATE gold and silver and constantly deride them at every opportunity. They know these assets are in direct competition with their “funny money” ponzi scheme. The only protection from this ponzi scheme is to exchange your paper money for items of real value such as gold, silver, copper, land, oil etc.

        • Mark Walsh

          Cooldude, totally with you on the whole fiat currency scam.

          Have written two educational papers “All Money Is Debt – Cash Is Not King” and “The Money Supply” for friends and family highlighting the lie that is unsound money.

          No matter how much I apprise, and all in layman terms, I’m deemed the ‘doomsday’ or ‘grim reaper’ guy.

          It beggars belief that successful, intelligent people just don’t get it or choose to blow it off and label me as a cynic.

          If ever there is a time to be a cynic, this is it.

          Feb 2006 I was on a vacation home from my work (Gov Consulting Firm) in Washington DC and advised each and every one of my friends, acquaintances to sell all property holdings as it was an enormous bubble.

          Then,just as now,I was publicly ridiculed and told to take my Irish ass back to DC and stop talking down the spectacular success that was Ireland.

          I posed one question- “Explain to me why a three-bed semi in Limerick City (where I’m from) is three times more expensive than a similar property on Capitol Hill (my US home), Washington DC?”

          Ans: “It just is. Now fuck off back to DC and stop talking shite.”

          In some respects I can’t wait for the whole thing to implode and watch their jaws drop.

          Oh well, they were warned.

          • Tony Brogan

            Hi Mark/Cooldude

            Ditto that as family and friends rolled their eyes when I suggested a property collapse in 2006. any one who sold out and went to PM’s is 2-3 times better off than they were and 4 times better than they are if they kept the real estate.

            Meanwhile, I go out for another bike ride on a sunny breezy spring day.


          • Mark Walsh

            Thanks Tony,

            It’s good to know that I’m not the only one that was/is being wrongly ridiculed.

            I have apprised re PM’s, to dump as much cash as possible into PM’s, but to no avail.

            I might as well be talking to the wall.

            Bring on the Greatest Ponzi Scheme Crash ever and cleanse the entire system once and for all time.

          • cooldude

            Hi Mark, you are doing your best which is all any of us can do. The 50 people you sent your mail to are very lucky to have you as a friend and family member. I only try to inform people who show some sort of interest in why we are in the mess we are in. If they show interest I usually send them a piece by Jim Sinclair or James Turk and see how that goes. Everyone has been brainwashed by the media and our education system into having “faith” in this flawed money system. I was the exact same myself so I know exactly the mind set and how difficult it is to see through all the bs. Keep up your good work. Your friends and family will thank you one day.

      • Tony Brogan

        Hi Mark

        Canadian currency has “This is legal tender” it is the only thing authorized by government payable on a debt including taxes.
        UK note I had was a 5 pound note.
        It said that it promised to pay bearer on demand 5 pounds.
        What of, it did not say. Another 5 pound note, or 5 pounds of BS.
        We have been had by the international banking cartel who form central banks in every nation to run the monetary changes they want to engineer the booms and busts and seize the peoples capital in the process.
        It is coordinated by the BIS in Basle, and the IMF as they rape and pillage country after country.
        now it is the whole world.Any threat to the monetary system from a country and it will be invaded by Uncle Sam.
        With 80 million people of Irish decent in North America it may be difficult for the US to muster the will to have Ireland invaded.so we shall form our own currency based on honest commodity money and no fractional reserve banking with the only notes allowed fully redeamable for full weight in gold or silver.
        Unless Ireland has the courage to get the hell out of the EURO currency it is doomed. It will be just as doomed afiliating with another currency such as the pound.
        Like any Irish Immigrant in a strange Land Ireland needs to stand on its own two feet and be a survivor and successful.
        i arrived in Canada with a trunk and $7 in my pocket, and the name of a stranger who said to call him if I ever arrived in Ft Nelson.
        I did arrive at 2pm on a grey day and steady snow with a -20 deg F.
        I took a job as a cap driver in a week and never looked back. even if I went bust a couple of times.

        Ireland is cast upon a foreign shore, destitute, and broke. Have confidence in your own ability and you will continue to make your mark in the world.

        BYW you are correct. We are dealing with a banking cartel, a monopoly, so all fiat money is correctly termed monopoly money!!

        All the best

        • Mark Walsh

          Hey Tony & Cooldude, your personal responses and support are very much appreciated.


          I inspected a friend’s Sterling £5 note recently and you’re correct it does say ‘promise to pay’ etc, but that prompted the question ’5 pounds of what?’ so that was moot.

          At least the Canadian currency confirms it’s legal tender, which is somewhat comforting, but once again what can it be exchanged for?

          In relation to Ireland and EZ, we are aping 2002 Argentina wedding ourselves to a super strong currency.

          We profess to be an open and export driven economy. Only a raving lunatic would select one of the world’s strongest currencies to sell our products abroad. For example, Kerrygold butter (which I adore) is $7 on US supermarket shelves, insane.

          When the ship is sinking do reach for a lead lifebuoy?

          We need a sound currency. Our own sound currency. I defer to your recent posting, a very well thought out and practical solution.


          I, like you, had that Edison Moment a few years ago and thankfully it won’t switch off. This is a good thing but has its downsides as I strive to see the bulb glow in others.

          Sometimes you see a flicker or two before the person’s trip-switch kicks in, a natural brainwashing reaction.

          I have come to the conclusion that people think the truth too fantastic; that central, commercial and investment bankers are not wolves in sheep’s clothing. Little do they know or understand they are those animals. Just because these wolves have two legs, dress and speak well, are pillars of society does not mean they are not wolves, rabid wolves.

          I too closely follow Jim Sinclair and James Turk but have found Jim Rickards, of ‘Currency Wars’ fame, to be the single best authority and deliverer of the overall message. His calm, logical disposition combined with enormous content is compelling.

          In my opinion David McWilliams should bring this discussion to the fore but I understand why David would be reluctant to do so.

          The mainstream media and the establishment would have a field-day and turn on the full-scale ridicule taps.

          That said, David has dealt with those taps in the past and has been totally vindicated after years of victimization.

          This prompts the question- why the full-on, in unison, battering by media, politicians, bankers, civil servants and hired-gun economists?

          The answer is obvious to me. These aforementioned groups are hiding the truth in plain sight. If truth is hidden in plain sight people will neither search nor research.

          “The status quo will do us nicely, thank you very much. Stop poking your nose into ‘our thing’. Now f**k off back to DC.”


          • Tony Brogan

            Not much to add to that. As Cooldude says keep plugging away and it is one person at a time.
            I told two people who told two people. There will be exponential growth in knowledge. you are an inner cog in a large machine. Keep turning.

            David Mac williams knows the truth. He will come out of the closet one day. we will call it the outing of David.

    • redriversix

      Excellent report Goldbug

      Saw A similar one last week.

      Back in the early seventies it is alleged that America did a deal with Saudi Arabia that if the Saudis supported [ purchased ] their tea bills, the U.S would import more Oil from them and produce less of its own……..Changing times now.


  10. Grey Fox

    +1 Continuously borrowing principle to repay principle + interest it terminal!

  11. molly66

    Is America saving it’s own il
    Is America capable of bring down Europe
    Is the euro worth the paper it’s printed on.

    • redriversix

      Joe Kennedy when ambassador to England during the War , I believe , coined the term isolationism.He did not want the U.S involved in a European War.

      I believe America wants,and is heading toward being self-sustaining.Perhaps its a long term goal.

      My belief is that their will be a major conflict prior to that happening.

      Glad to be wrong if I am,but history tells us many things…………..


      • molly66

        Yes I agree but I always got the feeling that the Americans where taking way less oil out of the ground then they could,saving there own oil and using other countries oil ,I think the oil is still very cheep at the pump in the us compared to what we pay and I know they pay less tax .this fool kenny who should go back to school and stop selling us down the river.

  12. Adam Byrne

    “The average maturity of the US government’s debt was 62.8 months. That means the US has to rollover a whopping 71 per cent of its debt pile — $5.9 trillion worth — over the next five years.”

    Can you tell me how the 71 per cent is calculated here David (or anyone)?



  13. David,

    could you please post a direct link to the FED report?


  14. C21living

    I’m largely persuaded that we are at Peak Oil and we can no longer get any ‘return on investment’ on increases in natural resource extraction.

    We will collapse to a lower level of societal complexity, meaning we will return to more regionalised economies. This will occur over the next few decades.

    Central bank currencies overprinting just exacerbates this larger developments.

    Joseph Tainter, author of “the Collapse of Complex Societies” explains to Jim Puplava of Financial Sense News Hour:


  15. fwiw,

    I agree strongly with David here, what we are up to is massive, it could easily mean the collapse of the entire transatlantic financial system.

    Lehman brothers was a storm in a water glass against that scenario, and this is the mother load of all storms.

    When…not if!

  16. Tony Brogan

    you have a good handle on the next 3rd world nation
    Base comments
    Oil prices are going up or appear to be because fiat currencies are decling in value and oil is sold based on the US dollar pricing around the world.
    The valuation of the us currency foisted on the world is the basket of currencies of the US major trading partners. As all are also devaluing their currency it is like trying to see which boat is floating higher than the others as the tide goes out. They are all sinking.
    The oil price is a lot more stable against the price of real money ie gold

    “As we know, the price of oil has risen steeply. We pay more dollars for the same amount of oil. Those who purchase in Euros also pay more, though not as much as we pay in dollars. But if you compare the spot prices of oil to gold, there has been almost no increase , in fact quite steady


    You talk of the central banks lowering interest rates. They can only do so by increasing the money supply. It is the increase in the money supply that is inevitable inflationary. Not the rate of interest per se.

    The Fed bought 61% of the latest issuance of bonds.
    This is direct monetization of the debt by the federeral Reserve. They print the money to give to the government. The government issues a bond which no-one else will buy, and the federal reserve then prints money again to purchase the bond again.Thst keeps the interest rates down as the demand is pretended.
    Those who tout ecomomic recovery do so by calculating the GDP which is bolstered by all the extra cash put in to circulation. (admittedly the banks are hanging on to most of the extra printed dollars to bolster bank reserves, but some does escape to circulate)so the GDP can easily increase while economic activity slows. Welcome to an inflationary depression or Stagflation.

    The bond market is the latest and greatest bubble formed yet. When long term interest rates rise which will be when the only buyer left is the government or the Fed then the value of bonds will plummet to single percentages of current value.

    The dow jones is elevated by the injection of capital by governments vis The working Group on Financial Markets. aka The Plunge Protection Team. There are fewer and fewr real buyers of stocks as noted by the light trading volumes as the market rises and the larger volumes as it retracts.


    Also go to http://www.gata.org and search archives for PPT.

    Best regards

    • Deco

      The Plunge Protection Team are really just a Ponzi-Scheme Protection Team.

      Their objective is to prevent the Ponzi schemes, unravelling by releasing liquidity into the hole revealed after a bubble bursts.

      The ECB thinks that it is a Plunge Protection scheme by means of a confidence game that relies the Irish taxpayer to stick their body on the line.

      And we can see that Ireland’s elite is subordinate to the power structure of the EU, as evidenced by the repeated tendency to sacrifice the Irish taxpayer for the sake of propping up the EU’s confidence gain.

      However, we are beyond the point of return. Confidence games are not going to work. It is much worse than that. But the idiots running Europe, with the spoiled brat revolution mentality, are loaded up with assumptions of their own arrogance.

      Don’t count on their arrogance to be of any use, as each of you has to plan for your family and community.

      • Tony Brogan

        Yes, look after yourself first, then help others.
        If the big collapse wipes us all out we will be sharing a living room in a bording house along with 5 other families, while the rest of the housinf sits vacant!!!
        Should be good for lots of story telling and a little light banter.
        When one views the u-tube clips of Nigel Farage in the EU parliament one can see the arrogant smirks of the leaders of europe.
        Ireland needs to get the hell out of the Euro. Cast off all european legislation foisted on it by brussels bureaucrats, and opt for Home Rule

  17. Good stuff David. Sobering reading

    What if the Saudi’s are bullshitting about their oil capacity and the FED does not have all the gold it claims it has? They just make it up as they go along

    Think about it – the FED is a private cartel of bankers and no-one knows who the real owners are. It is never audited so how can anyone possibly believe a word they say?

    When the FED speaks the world holds it’s breath as if listening to the word of god. Especially lazy commentators in the make believe world of main stream media who do the public a huge disservice

    I’ll say it again. America is screwed and so is the worthless Wall St paper ponzi scheme. Internally America is on the road to hellish fascism and any talk of recovery is mindless

    Americans are becoming poorer with each passing year while the psychopathic hawks in the Pentagon are intent on increasing the defence budget by trillions over the next decade if that ignorant redneck Romney gets his hands on power

    How are they going to pay for it?

    • Adam Byrne

      Obama is not a jot better than Romney Pauldiv.

      Mind you, I’m stating the bleedin’ obvious. We all know politics in the US (and most countries) is a complete sham.

      • “Obama is not a jot better than Romney Pauldiv”

        You are preaching to the converted Adam

        Obama is many things but most of all he is a banker’s man and a Zionist puppet. Romney (a billionaire) is the same but he is using populist language to appeal to the basest prejudices of redneck and racist elements within the Republican Party

        He is crude whereas Obama is more refined in his choice of wording that’s all and that is why Obama will win the election. Even Americans are terrified of Romney and rightly so

        You are spot on about US politics being a sham. Irish politics is an even bigger sham


      +1 Paul. It’s just hard to know if we are really at a turning point in our civilisation, which is what the collapse of the World Ponzi Scheme will mean or if Fantasy Capitalism can prove to be as infinitely elastic (in all senses) as it has been before. We need to keep our civilisation afloat, while de-leveraging from the Ponzi madhouse of World Finance. Not sure if we can throw out the bathwater…

    • cooldude

      Hi Pauldiv

      You might be interested in the below link. It gives the make up of the original founders of the Fed plus some info on their backgrond. Further down the article is an excellent interview with John Perkins the author of Confessions of an Economic Hitman. Also there is a report from former congressman Alan Grayson on the audit they forced the Fed to do in 2009 where it was revealed that the Fed had issued $16 trillion in zero % interest loans to banks around the world in 2008 without informing anybody of this action.


    You are going to love this one, the chaps at finance watch had made this cartoon, not as fancy as davids slick cartoonist, but well… not bad… not bad at all


  19. Adam Byrne

    We have to go into space: there are enough resources there to last forever. That, and nuclear power are the ONLY answers.

      • Adam Byrne

        Nope, on neither count.

        • EMMETTOR

          Sorry, Adam, we are never gonna make it into space. This is probably Good News for space.

          • Adam Byrne

            I believe we will, not in our lifetimes though.

            Space is big enough to accommodate us.

          • Morning Emmetor,

            if someone would have told you 1930 that in 40 years we are launching two spacecrafts designed to permanently transmit data back to earth, and that around 2027 they will leave our solar system and enter interstellar space, I would understand your skepticism too.


          • Correction: 2017 not 2027….


            One of the greatest achievements of human kind

          • C21living

            Well Georg, tell us what happened to Corcorde?

            We’renow back using the old Boeing 737 junk.

            History is not simply a progress – history is littered with civilizations that rose and then declined again.

            We will not be building Moon bases or Mars bases at a time when the US government is so broke.

          • Adam Byrne

            The general trend is forward C21living. If they wanted to rebuild Concorde tomrrow they could. They haven’t lost the plans.

        • Hi c21L

          well, to me personally, it is a message of HOPE. That’s why I said it, and also to remind Emmetor that we will, hopefully, enter interstellar space very soon for the first time. If I am still around on this day, I will open an expensive bottle or two, and if weather permits, sit outside all night, to quietly celebrate the good things we can do, the amazing things we can achieve if we put our brains together.

          • Adam Byrne

            I’ll join in a toast with you for that one Georg.

          • It is just a coincidence Adam, a stamp on a piece of paper, telling someone I would be german, it has no meaning for me, it never did.

          • Adam Byrne

            I’m exactly the same Georg.

            I couldn’t care less about nationality – another scam to divide and conquer people. It was purely a geographical or metaphorical reference to Germany (a place my brother lives, with nice people and where I love to visit) .

            Naturally, people sometimes have an affinity to the locale in which they were born / raised but people are people everywhere, the most important thing is to respect different (valid) cultures no matter where you travel.

            You may remember my comment on this forum a couple of months ago – it’s one I am proud of and will always remember from now on:

            “Borders are fake constructs to control and discriminate against people”.

            I stand by that, and try to live my life in a manner that illustrates it on a daily basis.

          • Adam Byrne

            Passports my ass!

          • “Borders are fake constructs to control and discriminate against people

            In deed Adam!

            As far as my identity is concerned:

            3rd planet solar system

          • Adam Byrne

            Yeah but when you bump into an Alien you’ll have to adjust that Georg., to:

            Human, Galaxy Quadrant (whatever number).

            We don’t even discriminate against off-worlders on here, haha.

    • redriversix

      I do not have a problem with Nuclear power Adam , as long as the Stations are not built by accountants.


      • Adam Byrne

        Nothing should be built by accountants.

      • Funny to think, back in march 2011, I was banned form a forum to have said this:

        The below words are nothing but withering scorn in the light of the TEPCO events of the past 10 years to date and they should face charges in deed, for crimes against humanity!

        I would not be astonished if this document is taken offline sooner or later.


        I was a member of this forum since 2007

        • nuclear power does not belong into the hands of profit making entities

          • I believe that this is a global responsibility to be taken on board, not for profit companies, not single states, but global responsibility instead.

            The germans, turning their back on nuclear power for political reasons, diligently continue to sell the technology to other countries, a hypocrisy and ignorance that defies belief.

          • Adam Byrne

            Pure idiocy on the part of your countrymen Georg.

          • Juanjo R

            Yeah – I agree. I mean look at the quality work the communist Soviet Union did at Chernobyl!

            More of this!

      • Deco

        The Irish concept of management is not mature enough, is not honest enough, and is not diligent enough, to make Nuclear Power a feasible option in Ireland.

        Basically, just look at how all the other quango directorships are dished out. Do you Bord Nuclear Eireann to have clowns like Bill Cullen, David Begg, or members of Bertie’s Drumcondra mafia in charge ?

        Because this is what we got in the case of FAS, CIE, The DAA, The Central Bank of Ireland, the Financial Regulator, etc…

        We do not have the authority culture that is fit for the purpose !!!!

  20. Deco

    The fact is that there is now competition for oil, on a scale that never existed until now.

    We in Ireland are not efficient at our utilization of energy. We have a rail transport system that consists of three systems joined in a hodge-podge manner.

    Freight transport is an absolute disaster.

    And at the centre of it all, being accomodated to the detriment of the wider community, we have a super quango called CIE. It is a management disaster, having being used by countless politicians as a retirement home for pals, seeking comfortable directorships. And it has been getting sweet treatment by politicians buying votes with other people’s money.

    Ireland needs to respond to the crisis by doing something serious about the quagmire that is Irish Rail.

    But I think we can expect dithering instead.

    In fact, I think we can expect the US to get it’s act together on rail transportation before we do. They are already getting their act together with respect to freight transport.

    The solution, as I see it, is increased competition in the freight transport sector, and the reopening of the freight line between Rosslare and Waterford city.

  21. Philip

    WIth such high oil prices, I am still amazed that the BRICS continue to present a viable proposition for durables and other physical commodities against what could be made locally. Input costs must be ricketing as QE starts to dominate and still no one is buying because they are scared. Not sure if we are factoring in the full ramifications for the speed with which things are starting to slow down.

    For me, the sooner Oil Peak becomes an insurmountable reality, the better – even if they put a ban on the stuff for burning (do not care how much of the stuff is lying around).

    Here’s a thought… 15% efficiency for internal combustion versus 90% for an EV implies 6 fold drop on use of external sources for the same amount of work – meaning 8c a km becomes more like 1.5c – exactly what part of no-brainer do people not understand. Put another way, while our work requirement is higher (needed for growth), our burn rate does not have to be as high – a 100% increase in growth could ideally turn into a nice counter intuitive 70% consumption drop. We are just plain inefficient and stupid and greedy.

    The world will keep turning the the birds and the bees will keep doing their thing and not loose a femtosecond of sleep over our incompetence.

    • Adam Byrne

      What’s an EV?

    • Tony Brogan

      EV’s may be efficient but one must also calculate into the cost the use of resouces to buld the car and then the energy used to provide the elctricity . Is it Coal, natural gas or oil, Nuclear. Solar??


  22. Reality Check

    Electric vehicle?

  23. Falls

    on the topic of peak oil. that is a myth. every decade has peak oil. when the US president for example, who recently stated that the US has 2% of the world oil reserves that is a play on words. he is referring to oil they are allowed to drill and he has given the lowest number of permits in history. he is not referring to known discoveries. the only peak oil is a man made one, the last us refinery to be granted permission was over 20 years ago. you have a cartel limiting production in the mid east. you have the US goverment refusing to let lands be opened up to oil. the only oil production growth in the US is private firms on private lands and its booming and the US president had the audacity last week to talk about how he is leading the charge on the keystone pipeline from canada he has stopped while standing outside the private part of the pipeline he cant stop between 2 states. how people believe this is amazing to me.

    for example…these are facts not guesses. also remember the oil industry is moving fast to increase production from older wells. most people do not know that what was classed as an expended well years ago was a well where the pressure dropped due to extraction. that normally means the well has over 60% (from memory) of its oil still present. it was not extractable at a profit in the past, technology has moved on– it is now.

    so here is a sample of US reserves (the way you and i understand the word, not the way a US president who is dropping billions in failed solar companies, the largest that failed just last week..at the cost to the US taxpayer of 2.1 billion). despite what you might think, i want solar power..but we simply do not have the technology yet…we will but in the meantime here is 230 year of supply to give us time…

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

    For Comparison:
    - 260 Billion barrels of oil are estimated in Saudi Arabia (EIA)
    - 80 Billion barrels of oil are estimated in Venezuela (EIA)

    • redriversix

      Think we are gonna need bigger barrels,

      +1 Falls


    • Juanjo R

      That is one per day – you are doing well here David.

      Notice how US centric this is? Iran, Iraq and Kuwait have large accessible proven reserves (?) but they aren’t mentioned…

      This info above is copied from http://www.e-peakoil.com/tag/plenty or from the same source.

      You would think from this post that all oil is equal and can be extracted and processed the same way at the same energy cost. Tar sands do not equal light crude oil.

      On tar sands “Making liquid fuels from oil sands requires energy for steam injection and refining. This process generates two to four times the amount of greenhouse gases per barrel of final product as the “production” of conventional oil.[5] If combustion of the final products is included, the so-called “Well to Wheels” approach, oil sands extraction, upgrade and use emits 10 to 45% more greenhouse gases than conventional crude.”

      Then theres the whole sudden huge inflation in declared oil reserves in OPEC in the 80′s 90′s, despite no significant discoveries that paralleled the quota system’s intraduction. Of course that was all honest, I’m sure.

      By the way contrary to the information given above on US the USGS says ( and the CIA );
      “Proven oil reserves in the United States are 21 billion barrels (3.3×109 m3), excluding the Strategic Petroleum Reserve.”

      On the subject of unproven reserves the figure is less than above.

      “The U.S. Department of the Interior estimates the total volume of undiscovered, technically recoverable prospective resources in all areas of the United States, including the Federal Outer Continental Shelf, the 1002 area of the Arctic National Wildlife Refuge, the National Petroleum Reserve—Alaska, and the Bakken Formation, total 134 billion barrels (21.3×109 m3) of crude oil.”


      Believe it if ya like!

    • transitionman

      Attempts to disprove peak oil that focus solely on the amount of oil available in all its forms demonstrate a fundamental, and an unfortunately common confusion between how much oil remains versus how quickly it can be produced.
      Why Peak Oil is the game changer
      Personally I cannot understand how others dont get it. Its the eureka moment for whats happening in the world we live in – Geopolitics debt money systems collapse without economic growth

    • Tony Brogan

      The Brakken oil shales also extend into Canada.
      Saskatchewan has as much oil as Alberta in unexplored oil sand deposits as well as conventional oil.
      It has one of the worlds largest supplies of uranium, The worlds largest deposit of potash, A huge wheat belt. Saskatchewan has gone from bust to boom over the last 10 years.
      Alberta oilfields are booming again. In the sailing club in North Saanich here there are a number of people working in the oil patch who take R and R here. Cost of production of tar sands oil has dropped from 50-60 dollars a barrel to less than $20 pb.
      Reclamation is looking better. Where it is over 30 years since mining the landscape is treed and with fresh water lakes etc.

      As far as Greenhouse gasses are concerned it is a non issue in stats. The gasses emitted from the tar sands are a small portion of Canadian overall. Shut down Canada completely and we account for about 2% or less of world emissions. That is not much.
      So called green house gasses are not affecting the climate any where near that suggested by the IPCC and the part of global warming affected by mankind is small enough to be of little consequence.
      So the debate on oil and climate is a non issue.

      I do not disagree that oil based products are a problem. Plastics , solvents , and myriads of other contaminants are a problem and we should centre our pollution control efforts there.

      Nobody has mentioned natural gas which as an oil substitute is good. There is a 100 year supply of that too. We do not have an energy shortage.
      We have a problem of highly manipulative controllers who are always crying that the sky is falling.
      Control and power is the name of the game.
      Megalomaniacs wanting one world government is the problem. Propaganda and manipulation are the tools.

      The answer is a free sovereign people, interacting within a sovereign state freely interacting with other free states. A diversification into small nation states will enhance democratic ideals. The internet is the worlds savior as it allows the speedy, free dissemination of information and ideas.

      Vote no to Europe and set up Irelands own money system. A sovereign people will not exist while the money system is controlled elsewhere.An independent Ireland will not prevent trade with others. Unfortunately, socialism and reliance on others has seeped into the bones of the people. The entrepreneurs have left and will continue to leave the country unless the people vote for a government that extols personal freedom.

      Hopefully the demise of the US will result in the withdrawal of military bases of around the world of some 200 in number and a retraction to the ideals of individual sovereign freedom of the individual. It will result in the loss of the power of the US dollar as the world reserve currency. The US will not disappear but hopefully retract and re-gather its fiscal and moral strength as corruption is rooted out.

      They also must return to “honest ” money to do so. The whole world should return to commodity money. Ireland is a small enough entity that it can react and adapt quickly. It can take the lead in a reversion to such a system.

  24. Juanjo R

    Right, my reply to Aaron K above was culled here.

    Out of retrospective fear or laziness, or both, I don’t know which, David McW already posted above on it. I know enough about tort David, my points were honest and backed up.

    If any of you want a good laugh go to the the site AaronK mentioned as his source;


    The guy he quoted is here;


    Go read if you care. The site is full of paranoid opinion and little or no supporting fact. The Texan abandoned nuclear plot is particularly risible, its here;

    This reflects on HIS credibility. Look at the slurs on that site. Look at the paranoia. Just take a look.

    However, it is clear that this peak oil/abiotic oil debate (which I’m very glad a lot of you well understand) has detracted from the point of David McWilliams column – about the impact of QE worldwide – so I apologise for my role in that.

    I was, in the past, concerned that after the financial crisises waned that Ireland would find itself caught badly by a very real energy crisis. I have had this concern for many, many years. But you know what, f**k that for a game of soldiers, I’m not paying any attention anymore. My interests in Ireland will be removed soon I have left already and every cent that I can take out will soon be gone. Bye bye!

    I’ll be staying away from this as of now, I have other real fish to fry. No more indulgence, I have had enough.

    • aaronk

      Your making a big effort here JJ. David writes for a paper here which has several certified loonies as contributors. Does this affect his credibility. Duff in Veteranstoday.com has plenty to say about gas prices, from a position of experience. He blames Koch brothers and futures manipulation against a backdrop of fake Israel/Iran sabre rattling, with both countries profiting from the surge. Hardly makes him a right wing nut.
      Obama yesterday pointed the finger Israel’s way too.

  25. Important read!

    If you have not heard of the National Defense Authorization Act, you could do worse to get up to speed by reading Naomi Wolf’s project syndicate article here:


  26. Economics & Accountancy LC

    The figure comes from a study commissioned by the Association of Secondary Teachers Ireland ahead of their annual Easter conference.
    The subjects most likely to be dropped are accounting, chemistry, physics and economics.

    • Tony Brogan

      And they will channel thousands in to social services as a career as that is where the demand will be and the growth in government spending and bureacracy

  27. Tony Brogan

    Hi David
    As US declines, China grows.

    golden rule.
    He who has the gold makes the rules

    Report by Jim Sinclair

    Dear Friends,

    This is why I do what I do in East Africa.

    April 2, 2012

    China has been denigrated and looked down upon for decades — by Russia, Japan, the US and much of the world. It’s strange but true, but China possesses the greatest monetary reserves of any nation in the world. China is loaded with over a trillion dollars worth of US Treasuries plus hundreds of billions of US bonds and T-bills. The problem for China is that the great majority of its reserves are in other countries’ fiat money. What to do, asks China, with all this fiat “junk money” that weekly is losing purchasing power?

    China realizes that the longer it sits with its huge pile of fiat paper, the more it loses in purchasing power, and this will continue as long as the various central banks continue to spew out fiat currency –and at present there’s nothing to suggest that the banks will do otherwise

    So China has decided to do the logical thing. It will kill two birds with one stone. China has decided to swap its hoard of fiat paper for gold. China is now the world’s leading miner of gold, and it is also the leading buyer of gold. China has decided to create a corner in gold; it will create the world’s greatest position in gold.

    Whenever there is a big quantity of gold to be sold by a central bank or the IMF, China is there as a buyer. I’ve mentioned that there appears to be a “Chinese put” under gold. Every time gold approaches 1600 or slightly below, some big buyer steps in and buys gold. Who is that big buyer? I’ve wondered. The secret — it’s China.

    This month, the Hong Kong Census and Statistics Dept. reported that China imported 102,7789 kilograms of gold from Hong Kong in November, an increase over October’s 86,299 kilos. For unknown reasons Beijing does not release its gold trading figures.

    Analysts believe that China bought as much as 490 tons of gold in 2011, almost double the estimated amount in 2010.

    In effect, China with its towering mountain of fiat paper wants to build a corner on gold. And they are in a position to do it. China has urged its people to buy gold. Gold can come into China but not one ounce of gold is allowed to leave China. Every ounce of gold that is mined in China must, by law, be sold to the government of China.

    Finally, when China owns more gold than any other nation, China will set the price of gold. China will also back its own yuan with gold. But at what price gold? China will set the price for gold, moving the daily fix price from London to Beijing.

    Thus, as the gold-backed yuan becomes more popular and more accepted, the “new” gold-backed yuan will gradually become the new world reserve currency. When this happens, it will be a disaster for the US. The dollar will lose its status as the world’s reserve currency, and the US will no longer be able to print its own reserve money that is accepted around the world as payment for US debts.

    If the Fed sees this picture, they will have no answer but to stop printing. If or when that happens, the bear market that started in 2007 will continue and stocks and bonds will collapse as interest rates rise.

    Thus gold, so violently hated by the central banks, will be the item that will kill the great world fiat paper experiment. And China, with a virtual corner on the gold market, will own the world’s reserve currency.

    Note: I expect China to not only accumulate gold above the ground, I expect China to accumulate gold in the ground. Thus we have seen China buy gold mines and parts of gold mines. China is also interested in investing in vast territories (which contain gold) in Africa. Over time, China intends to control the gold market and the price of gold. Only then will China emerge as the recognized world leader.

    The “golden rule.” He who owns the gold makes the rules. Go through history and you’ll note that the nation which owns the most gold is the dominant nation in the world, be it Holland, Spain, Britain or the US. By the end of WWII, the US owned the world’s greatest hoard of gold. When deGaulle of France insisted that the US pay its debts in gold, Nixon slammed the gold window.

    Question — if gold is the barbaric relic that the Fed claims, why did the US refuse to give up any more of its gold in 1970? Also, with its current great collection of gold, why does the US insist that its gold is only worth 44.20 an ounce?

    From Google — “Central banks are quietly accumulating gold, declared purchases of 206 tons through September 2011.”

    “One of the most important sources of demand continues to be central bank demand.”

    Russell comment — I think within the next two or three years, it will be impossible to buy gold, except at black market prices

    For a great resource and commentary site go to http://www.jsmineset.com

    Best regards

  28. molly66

    The forgotten Irish we elect the government to look after us,on the news Ireland is meeting it’s targets but at what cost to the Ireland we use to know,the whole fabric of Ireland is being torn to shreds.
    The section of society that’s doing ok against the section thats being thorn to bits and they say there’s more to come,there has to be some way to fight this.
    Yes in the past I like a lot of others earned good money but I was a spender and pumped the money back into this country,that seams to be a sad memory now and the sad part in all this it does not need to be like this .I did not gamble on the property Market nor was I greedy but the people who where and are seem to have got away scot free.

  29. Tony Brogan

    61% monetization of us bonds = insolvency =bankrupt but for QEnth

    From today
    Midas du Metropole

    And our Bill H lays out the big picture re the Fed and then what is coming for gold…

    Define “quality”.

    To all; I was writing a piece yesterday afternoon and noticed the “waterfall action” after the FOMC minutes were released. The piece was a revisiting to what I wrote back at the end of Feb. when the weekly MACD’s were setup to “crossover” (in the shares) to the upside. In fact, yesterday we were again setup for a crossover. This crossover was for the daily MACD’s and thus not quite as important as the weeklies but important nevertheless. Even before yesterday’s (and again today) attack, the sentiments was very poor and negativity abounded with PM investors (even I was frustrated yesterday which is a much more rare event than it used to be, maybe I’ve become calloused?). Mentality, sentiment and hopefully momentum is washed (washing) out with even long term bulls “bashing and bailing”, that, to me at least, is a very good sign and one that at least should lead to an intermediate if not a long term bottom taking place.

    Of course, Gold was down because the Fed “believes (wants the sheeple to believe) that the economy isn’t so bad which means no more QE…to which I must call a very giant bullshit on! Oh yes, the Fed will not further “quantitative ease”, does…buying…61% of all U.S. Treasury paper issued in 2011 count as “quantitative” enough? Over $1 Trillion…is that “easy” enough? …Oh yes, just one more question, does anyone believe that the amount necessary to “fund” the governments operations will go down in 2012…or ANY year in the future? OK, so this is not “QE”, it is outright MONETIZING, merely semantics.

    Let me put this in perspective for you, if the Fed didn’t step up to the plate and purchase the “un bought” Treasury bonds, it would be seen as a failed auction. A failed auction by the U.S. Treasury? It can’t happen, it has never happened, …and as long as the Federal Reserve is around, it will never happen you say? Uh, wait just one minute, it has already happened MANY times in the past. In fact, as evidenced by the 61% of all Treasury issues being bought up by the Fed last year, the entire “auction” process failed ALL year long…to the tune of 61%! What I am saying is this, if the Fed did not participate and buy up what investors don’t (can’t) buy, that single day would mark a :publicly failed auction and the charade of solvency would end.

    Do you understand what this would mean? Panic. Yes, panic everywhere, in every market, in every country on the planet (maybe even on Mars). Everything paper would be a total collapsed heap of no value within a week’s time. The Fed cannot back away EVER from buying Treasuries at an ever increasing pace. They also cannot EVER raise interest rates because that action would merely increase the amount that the Treasury needs to borrow (to pay the interest) and accelerate what the Fed would need to buy. No. the Fed can never, ever EVER stop easing, buying unsold Treasury bonds nor raise interest rates, EVER! Anyone with any sense of logic at all understands this, anyone who sells their physical metal or mining shares because they are afraid that the Fed will stop “QE” is…well… not thinking it all the way through.

    If you understand the above logic then you understand that what (anything and everything) the Fed says does not matter. They can lie, spin or “massage” however they like (they could tell the truth but that would only speed the panic), it will not change the situation that they (we) are in. QE, or whatever they want to call it, they cannot stop. Not only can they not stop, they MUST increase their lunacy exponentially as more and more is needed to just stay in place. Folks, the existing debt is not going to go away (except through it being devalued away), debt service will continually increase and at some point interest rates will go up. The Fed has only one policy response left, jawboning. They are driving a car that will crash if they step on the brake, turn the steering wheel or even lift their foot off of the pedal.

    That said and assuming that one understands that the life boats are the precious metals, let’s see what happens over the next few days and whether we can take the first “baby steps” and get the daily buy signal, then watch and see if we get the weekly signal in another 2-4 weeks and the party might get started. Generally speaking, you want to buy things when they are out of favor and undervalued, the mining shares are both, in relation to the metals themselves. The upside is that when the real party gets started, the mining shares are the ones that will be dancing naked on the tables with lampshades over their heads! As Richard Russell has always said, “there is no fever like a Gold fever”, I would add that the shares, once they come into favor (and they will again) will make the “party like it’s 1999″ internet craze look like a bunch of grandmothers sipping wine at a knitting party! Regards, Bill H.

    P.S. the market just opened and the CNBC talking boneheads are Gold bashing again. How funny, one says that “Gold is down because of the flight to quality” and another (Bob Pisani) is saying that “Gold is down because the U.S. is so strong”. …Yes, so strong that the central bank must fund 61% of all borrowing needs because citizens, foreigners and even foreign central banks either don’t want to buy or actually don’t even have enough capital to do so. Insolvent is more like it. As for “quality”, I can define it for you. .999 fine!

  30. tonym112

    Regarding the confusion of what peak oil means – here’s an article from the financial times about the cost of oil production. Whilst here will always be oil, it will just cost too much.

  31. tonym112

    And here’s another
    I wonder if the resource wars which are already taking pace are partly due to the collapsing financial system, and when the game of monopoly is over whoever has a reliable source of energy will have currency

  32. [...] David McWilliams (AE) is a brilliant Irish economist. He tried his best to warn his country & the world to watch out for the debt bubble. In the following essay he makes it clear that the money printing in the U.S. puts it in fine company among emerging markets. The Fed bought 61% of new debt issued last year. Treasury Bond issuance represented 8.6 per cent of GDP. “If 61 per cent of that figure is caused by printing money, it means that about 5.3 per cent of U.S. economic output is now being driven by the Federal Reserve’s printing presses. This is reminiscent of Argentina in its 1980s heyday ..” LINK HERE to the essay [...]

You must log in to post a comment.
× Hide comments