April 16, 2012

Time for Ireland's New Deal

Posted in Sunday Business Post · 303 comments ·
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Have you ever gone to a gig so ridiculously funny that you can’t actually communicate with the person beside you? You are reduced to grimacing; words just can’t come out, tears and snorts, yes, but words, no. When I finally pulled myself together at Tommy Tiernan’s latest show in Vicar Street, it struck me that Tommy might not realise this, but he has a lot in common with mainstream economic thought.

Tommy Tiernan, Franklin D Roosevelt and the IMF have something in common: they all want the small homeowners to get debt relief of some sort.

Tiernan’s brilliant take on the present debt crisis can be seen on YouTube. It’s a pretty blunt form of permanent debt repudiation but, that said, it is not a million miles away from what the IMF suggested last week.

The IMF call for exploration of debt forgiveness for the average indebted household revealed that the IMF is miles ahead of the ECB. It may be time to begin the process of dealing with the IMF on its own, if that is possible.

The IMF, after all, has been dealing with bankrupt countries for decades, it has seen all this before and it is now helping the Icelandic government to implement debt relief. The results in Iceland are promising.

The IMF deal in Iceland is part of an established tradition in economic history. Debt relief after a credit boom is not radical; it is mainstream. What is in fact radical is the ECB position that debtors uniquely shoulder the burden, rather than creditors and debtors together.

It is interesting in this crisis how the radical has become mainstream and the mainstream is labelled radical.

At the height of the Great Depression, the great President Roosevelt, in his message to Congress, stated that it was his objective to “relieve the small home owner of the burden of excessive interest and principal payments incurred during the period of higher values and higher earning power”.

In the summer of 1933, he embarked on a most comprehensive programme of debt relief by setting up the Home Owners Loan Corporation (HOLC) to buy mortgages from banks. The government exchanged bonds for these mortgages. It then restructured the mortgages, writing off significant amounts of principal. In all, one million US mortgages – or one in five of all mortgages – were restructured.

Starting in 1933, the HOLC bought up mortgages and then it waited and, over time, as US conditions improved, it sold the mortgages back to the banks because they were now performing. As they got back on track, Americans who would have been kicked out of their houses, paid back their mortgages and the HOLC was eventually wound down in 1951.
The main reason to intervene to give debt relief to homes which have far too much debt and far too much negative equity is that it helps the economy to recover. Last week’s IMF study revealed what we all knew in our guts, which is: if you have too much debt, the economy won’t recover and the recession will go on and on and on.

The IMF study, which looks at episodes where other countries have got into a similar mess, shows that, in all cases, the two most significant elements that drag recovery is the debt-to-income ratio and the fall in asset prices. So we can see that the crisis is not the cause of our problems, but the consequence.

Ultimately, the more debt there is the faster the fall in house prices. This contracts demand, income and employment, and then defaults start.

Our debt-to-income ratio is among the most delinquent in the world at more than 100 per cent.

This means that, when things start to tighten, there is far too much debt to pay. Debt of more than 100 per cent means that the growth of the economy has to be at least as much as the prevailing interest rates, otherwise the debt ratio explodes. AIB’s website tells me that a personal loan would cost me 9 per cent APR (that seems very expensive). So with debts at 100 per cent of GDP and the economy actually shrinking over the last two quarters, the debt burden is not payable. The IMF found also that the fall in house prices makes us feel much less wealthy, and this has an impact on the willingness to consume.

Real house prices in Ireland have fallen faster and farther than anywhere else. Contrast the fall in Irish houses prices with that of Iceland and you can see that the introduction of debt relief in Iceland has cushioned the fall in house prices.

What is the upshot of all this? If there is no relief, arrears and defaults will simply rocket up of their own accord. The rate of default is now accelerating faster in Ireland than anywhere else in the world.

This column has argued for debt relief for years now.

Normally, the reaction of people who don’t have debt is to argue that it’s not fair if others are bailed out. That is the moral hazard argument. I am more concerned about real hazard than moral hazard, and real hazard is chaotic default all around the country by thousands of people.

This is what will happen if we don’t have debt relief.

But the question is: who pays?

This is where there is light at the end of the tunnel. But in order for a clean and relatively cheap programme of debt relief to be set up, we’d have to get the Central Bank to create the money. Can we do this? Surely we can’t?

Yes, we can. In fact, that’s what the entire promissory note palaver is all about. The dirty little secret that the ECB doesn’t want to share with us is that the eurozone is actually out of control. Because of something called “emergency lending assistance’, each country can print what it wants.

So the government here issued a promise – the promissory note for Anglo. It gave that to the Irish Central Bank. The bank gave it cash. Where did the cash come from? They made it up. They just printed it. The government then owes the Central Bank. For details on this, see this excellent occasional blog.

If this can be done for Anglo, why not for people’s mortgages?

Why not create a big promissory note to cover half the cost of debt relief? Let the banks own a share in the house, so they have equity. But it wouldn’t be the banks that own it really, it would be the state because we own the banks. Make the promissory note for 30 years.
In that ensuing 30 years, the price of houses rises eventually.

The punters sell the houses, the equity goes to the banks which owe the money to the government, which owes the money to the Central Bank.

Would the ECB allow this? If you did it, what could this institution actually do? Nothing. That’s the big lie. There is nothing it could or would do.

Maybe Tommy Tiernan was right after all.


  1. Adam Byrne

    subscribe.

  2. Grey Fox

    The same argument was used in the Tax amnesty in 1980′s those who did not own taxes said it was not fair, this argument will always exist and the people who do not have a mortgage are correct as are the people buried in debt so in short two rights can only make a right! Whats the holdup! The dogs in the streets know Debt forgiveness is the correct thing to, it is only the Bankers who are pulling the strings of our Public Trustee Puppets who are stopping implementation.
    No problems with IBRC writing off 100 million to push through the sale of Siteserv to Denis O Brien or 29 million to push through the sale of Champion Sports to a foreign Corporation.Sick to my back teeth of the double standards! Wake up Ireland

  3. gizzy

    Debt can only be cleared by repayment, realisation of security or write down and write off. There are no other ways. Any other legal actions are about punishing the borrower not about repayment.

    We know clearly in a lot of cases repayment capacity is not there. We know security values have bombed.

    It only leaves writedown and write off

    But whiie the regulators, banks and legal profession continue to try and shut the door after the horse has left the country, we will engage in thousands of frivolous legal actions to obtain judgements against people who have nothing left, continue to write down debt for overseas buyers of businesses while not offering the same to the current owners (they have to be punished)and continue to drive property prices to below cost selling excluding any land values.

    Put a stop to all that nonsense and get real about write downs.

  4. Grey Fox

    Interest = Usury = Wrong
    Banking is a service industry, charge for the service provided, ie. setting up the loan.
    Nationalise the Banks
    Create the money as its needed, retire it as its being paid off, NO INTEREST!
    Just think about it!
    Just think about all the other things which could occupy our minds if we were not pre-occupied with INTEREST REPAYMENTS!

    • Excellent comment

      The money changers need to be chased out of the temple.
      There is no need whatsoever to have such a thing as Usury

      Interest paid on imaginary money typed into a computer terminal is the ultimate deception

      Interest free greenbacks my friend

  5. Grey Fox

    No need for Debt Forgiveness as no Debt (Death) spiral exists.
    Borrowing Principle to repay Principle + Intetest, ad infinitum = Debt Spiral

  6. Grey Fox

    apologies for spelling, fingers moving faster than brain, brain speed slowing down everyday, old age! LOL

  7. MICKEYG

    All for debt forgiveness as long as the asset is not retained. If a person can no longer afford to live in their house then fine, write off the debt and give the house back. People can then buy the house that they can afford and property prices will reach their natural level. The idea of a person borrowed up to the hilt in a large house (that others realized they could not afford) getting debt relief and also being allowed stay in the house is plainly wrong. Another exmaple of Capitalism not being allowed to work.

    • Grey Fox

      We could all afford the house we bought the day we bought it! Otherwise the Bank would not have loaned us the money Surely?

      • MICKEYG

        The problem is some can’t now. Their circumstances may have changed or they were initially able to borrow far too much. Regardless, the end result is the same. They cannot afford to pay so help them out and write off the debt but on the other side they need to give up the asset.

        • Grey Fox

          And who changed the circumstances? not the borrower, the Banks with there irresponsible lending!!!!!!!

          • MICKEYG

            Poor little borrower did not know what they were doing. Give me a break. If the market hadn’t moved they would not be repaying any of the capital gains they had made.
            My proposal will still let them off some of the bad decisions they made. Take an exmaple. Borrowed 450,000 to buy a 500,000 house. House is now worth 200,000 but outstanding mortgage is 350,000. Borrower can no longer service mortgage (as opposed to will not service mortgage). The proposal will write off the 350,000 debt as long as the borrower gives back the 200,000 house. The bororower is still let off by 150,000. Not a bad deal if you can get it. I certainly wont becuase I was stupidly a prudent borrower.

          • C21living

            Irish Times today, Mon 16 April 2012:

            ‘Up to 47% of [Irish] Adults have less than €100 a month after bills’

            http://www.irishtimes.com/newspaper/frontpage/2012/0416/1224314764193.html

            Look, this is a really delicate, personal subject. Really… but….

            …we are paid a lot more in Ireland than in other EZ countries. That’s just a fact.

            This situation above is due only, exclusively, to overborrowing by Irish people.

            Yes, banks ‘lent recklessly’. But people borrowed recklessly.

            The reason HALF (!!) of the adult population have only a paltry €100 to spend per month is down to foolish borrowing.

            Considering how hig salaries are in Ireland in comparison to France, Spain, Portugal, Italy, Slovenia, Estonia and other EZ countries, we have to have a national conversation about personal debt.

            But those in debt start huffing and puffing because they might have to lose their houses, cars, etc. due to their personal debt and the new bankruptcy laws coming in.

            It’s reminds me of when Willy Wonka speaks to Charlie at the end of the visit to the Chocolate factory ‘You’ve lost Charlie, you’ve lost!’ Then he turns to the father ‘Good Day Sir!’

            Those in massive debt have lost – they can’t keep all their assets, or rather if they persist in denial that they’ve blown it, they’ll be left with a meagre €100/month when they are amongst the highest paid in the EZ.

            This is just ridiculous. Time for folks to fess up, go bankrupt under the new bankruptcy laws, get discharged after 3 years (just 36 months) and start again with a clean slate.

            It simply can’t and won’t end any other way.

      • Grey Fox

        Maybe you mean give back the house and give back all the payments made by the mortgagor to the bank, and then the state is returned to as it was before the contract = true debt forgiveness, then the mortgagor can repurchase the home at the current value, is that what you mean?
        Otherwise you are saying that it should be win win for the Bank and lose lose for the joe soap, surely you don’t mean that?

        • MICKEYG

          How so? The bank just lost 150,000. The borrowers mortgage payments to date have given them a roof over their head – rent.

      • C21living

        No!

        Both the lender and the borrower were delusional.

        We all admit the banks lent irresponsibly. We must all now admit that many people borrowed recklessly.

      • No. The banks thought they were invincible.
        No. People could not afford the houses they bought.
        It was all a sick joke

        The banks lent to people knowing full well that the chances of people successfully paying off obscene mortgages are extremely slim. Not many people manage to pay off a mortgage. This is the real dirty secret

        They lend the money and wait for the mugs to default.
        The banker always wins. Once the mug defaults the bank then owns the house and the mug provides then with a permanent source of income. Income from thin air!

        Nice work if you can get it

        The creature from Jekyll Island always wins

    • Cassandra

      Could not agree more:
      If I were to tell you that I bought shares in a company in 2004 and was forced to sell them at a loss in 2008 and that I am now looking for the government to reimburse me some or all of the loss with other peoples’ money. What would you think? Does that sound ludicrous to you?
      You are not asked to pay for the upkeep of your neighbour’s car let alone buy him a new one when he wants to change it?

      The purchase of an asset has two motivations: 1) to use it, e.g. a car or a house or 2) to invest in the asset and seek a return on that investment. In both cases, before you proceed with the purchase, you need to do a lot of homework. For example, you need to ascertain the appropriate valuation of the asset based on numerous factors not least being the context of the current price based on historical values. Asset values can fall as well as rise. Also you must consider the risks associated with the purchase, e.g. if purchasing the asset can only be achieved by borrowing money and going into debt, then an equally important assessment needs to be made on the ability to service that debt until the asset is disposed of. This should be a relatively straight forward question: is my income stream sufficient to cover payment of the debt, and is the source of my income sustainable and secure over the short, medium and long term. Is the cost of servicing the debt influenced by other factors, if so what are they?

      So, considering all of this, tell me how is it morally right for another individual to be held accountable for bad decisioning when buying an asset in the form of property ?
      How is it morally just and even legally allowable for one person to lose money on the purchase of property and have another party cover the loss, when that party was in no way shape or form responsible for the original decision. I say let people be damned by their decision making and suffer the consequence. Otherwise I want all my share losses recouped, in fact I want the following paid for that I couldn’t afford because I was paying down my mortgage with my savings: three BMW’s, the life-long subscription to Sky, two sun holidays per year, top of the range flat screen TV with surround sound and amplifier, a dog and a cat for the kids ……….

      • tubdoc

        Such bunkem. Moral Hazard is the excuse the bankers
        throw up to try and keep their personal customers over a barrel.
        That company that you bought those shares in can go to
        their bank if they are in difficulty and look to renegotiate their loan commitments. Do the banks
        scream about moral hazard then?
        Morals should not be used in the conversation. Its business pure and simple.

    • Sensible

      Moral hazard is very real – it is what holds people in check. All systems require “checks and balances”. The failure of the Banking Regulators in doing their job (for which they were well-paid) does not excuse the borrowers for their recklessness in taking loans (mortgages) that they could not repay.
      Two wrongs does not make a right.

  8. gizzy

    @MickeyG Again some citizens have more trouble with the write off to another citizen than to large unknown investors.

    So write off debt remove asset or as some strange people call it home and what happens than state rehouses thousands of people ??

    • MICKEYG

      Yes. There is plenty of property there. We have been doing it for years with council houses so we just need to expand it for these extra peoeple. These borrowers need to realize that they made a very poor decision and will need to accept the consequences.
      Dont give me this home asset argument. We have treated the property market like every other market when it was booming but now that it is not we say “ah sure its a home, not an asset”. Not a runner.

      • C21living

        @MickeyG

        I trust you are familiar with the Personal Insovency Act of the Oireachtas which comes into force in late 2012?

        At the moment a bankrupt is not discharged for 12 years – it’s like Charles Dickens.

        But as of later this year, a bankrupt will be discharged in 3 years.

        So the example you gave above, of going bankrupt when you owe €350K having the bank repossess a house valued at €200K, under the new laws you’d be classified as a bankrupt for only 36 months, after which you’d start again with a clean slate at the Irish Credit Bureau, the burden of the €350K debt gone forever.

        A person could then save the deposit for a new house, perhaps even the same house, at the current market rate which is much cheaper.

        This seems like the best solution to get people out of debt.

        But wait until you see the reaction from people on here who think they should be allowed to keep their house and avoid bankruptcy, when in every other state in the Western world they’d be bankrupt, no ifs, buts or maybes.

        Going bankrupt if you owe €350K on a €200K house is not a problem, it’s a fantastic solution to get rid of the burden of the debt. Of course, you lose the house too, but so what? Losing the €350K debt is the priority, surely.

        • MICKEYG

          +1. This solution great in that it frees people from excessive debt and gives them a chance to get back on their feet.
          Some posters on here seem to think they should get that but also keep what they bought recklessly.

          • Chrysalis

            Mickey,
            You were obviously lucky enough to have bought earlier than we did, as evidenced by the bank contacting you to release the equity in your home. I didn’t release any equity, just unlucky enough to be in need of a house to live in with my new wife in the hope of raising a family, a basic right surely for any productive member of society, at a time when the prices were shockingly high. Not everyone is looking to have their cake and eat it. I agree that if you don’t keep up repayments you may lose the house but that is not the case at present. You can surrender the house but are liable for the remainder of the outstanding balance after resale. The high horse you are on is hiding from sight the across the board debt forgiveness for non citizens already highlighted on this blog by others, Nama etc. As for the incoming legislation, What am I to do for the three years of insolvency, let my family starve?

          • 33square

            @ Chrysalis: ever hear of renting?

          • C21living

            @Chrysalis

            I’m 38 and I have rented all my adult life.

            Am I one of the ‘lucky ones’?

  9. Grey Fox

    MickeyG,
    You are absolutely right in using the term ” Poor Little Borrower”, people were hoodwinked, the Banks, the Media, the Government all bar none, shouted from the rooftops “Get on the Property ladder at all costs”. I am delighted that you were a prudent borrower and I certainly would not call you stupid for that reason.
    But, the predominant word in “Debt Forgiveness” is FORGIVENESS! and nowhere in any dictionary is this word connected to Homeless, Psychological damage, family breakdown etc.. people who are not in a position to need debt forgiveness will always reject the argument, that is a natural human reaction, somebody getting something I am not, but we are way past petty arguments like that, the greed of bankers is indescribable using the english language, the dirty tricks and downright fraud perpetuated is indefensible and the collaboration of our public trustees is treasonable so it is an all round disaster of gargantuan proportions and as such very easy to lose sight of the human cost. If capitalism is exemplified by the capitalist being the only winner, and the consumer being always subservient and below the capitalist then we are truly lost.

    • MICKEYG

      Fully agree with bankers, developers, government etc – I can’t belioeve they have not suffered considerably. That does not mean we can excuse borrowers.
      Where do you get “Homeless, Psychological damage, family breakdown etc.. ” from. All these people can either buy a new house (in a lower priced market) or use local government housing (like many other people do). Are you saying thay are too good for that?

      The argument is also not petty and it is wrong of you to suggest that. I am tired of paying for other peoples mistakes (but am willing to forgive then some debt – 150,000 in my example) just as long as they do not continue to benefit from an asset that they clearly cannot afford. If you think my argument is petty then maybe we should go the whole way and adopt a communist society where we all get the same thing regardless of effort, ability or our decisions.

      • Chrysalis

        What are you suggesting they do for the intervening TEN years while on the waiting list for local authority housing Mickey?
        You also seem to be forgetting that the majority of those in trouble were young families who simply wanted a family home.

        • Chrysalis

          I would jump at the chance to hand back the keys to the house we bought, in a locality where we didn’t know a soul, bought purely and simply so we could start to raise a family. You mention you would be “willing to forgive some debt”. How lucky for me…….
          Get off your high horse man.

          • MICKEYG

            Yes, it is lucky for you that there is a mechanism to rid you of the consequences of YOUR decisions.
            High horse, what high horse. I have not done well out of this – I still have my small house and no means of upgrading. I will still be left with my omortage after this – you will get some of your debt forgiven and keep the house you cant afford. I think you need to get off your high horse and accept your part in this.
            10 year waitng list? Easily solved with the amount of empty houses around. Problem is that these houses are not being released to the market as people do not want house prices to fall (the only item in our economy where lower prices are seen as a bad thing). Imagine if the government propped up the used car market.

          • 33square

            Sorry Chrysalis, but you bought a house “in a locality where we didn’t know a soul, bought purely and simply so we could start to raise a family”?

            did you intend on living there for the rest of your life? if no, why did you buy it? did you see the house as an investment? (an asset that you could dispose of readily when you were done starting your family, turning a profit perhaps in the process perhaps?).

            if you did intend on living there for the rest of your life, why are you complaining about where you bought. you bought there, you chose that location for your family. caveat emptor!

          • Chrysalis

            33,
            I rented for years, hindsight is a great thing…
            When we bought, we had spent a year trying to buy only to be trumped time and again.
            I didn’t intend to do either of the options you mentioned. I just bought a house, I didnt really choose that location , it was all i could afford. The prevailing attitude at the time was BUY BUY BUY before its TOO LATE. We fell for it, hook line and sinker. It’s all very well for you to sit there behind a screen, shouting Caveat emptor but we weren’t all as savvy as you obviously were.

          • redriversix

            33 Square.
            caveat emptor..?…..unless criminal Banks get bailed out.Citizens are entitled to more help than Faceless Corporations

            People did their best and failed.Banks did their worst and got Bailed..!!!

            Impose austerity on them now

            RR6
            [ renting ]

          • 33square

            “caveat emptor..?…..unless criminal Banks get bailed out.Citizens are entitled to more help than Faceless Corporations

            People did their best and failed.Banks did their worst and got Bailed..!!!”

            not all people did their best, that’s the point. some profited by “flipping” houses. Some may now also profit from debt forgiveness.

            i agree in principle with debt forgiveness, but only as long as people don’t stand to profit from said forgiveness… how can that be achieved? perhaps it is possible for people to keep their “homes” with the caveat that if they sell them at a later stage, any proceeds above an agreed value are returned to the government (not the banks, though the distinction is now blurry), or somewhere else?

            @Chrysalis: prevailing attitude/wisdom is in the majority of cases a misnomer, how many times do we need to be taught that lesson?. prevailing wisdom, for example, says that the twin towers fell at freefall speed due to fire and building 7 just fell in all the commotion of the unfolding events. comforting beliefs no doubt, but ignorant of reality. conventional wisdom believed the earth was flat and witches should burn at the stake. ignore convention because 9 times out of 10, you are being lead down the garden path by entities that don’t have your best interests at heart (mass delusion)!

            I do feel for your situation, and the plight of everyone else in similar circumstances, but surely you agree that gaining from debt forgiveness is equally as unfair to everyone as the skank of Ireland that has been taking place to date? I wasn’t too smart to buy a home, i was, and remain, too poor to do so, despite being well employed the whole time. it would add insult to injury for people to gain from debt forgiveness, from the point of view of those who didn’t get involved in the boom (regardless of their reasons)

          • redriversix

            Afternoon 33Square..

            I should explain my way of doing things better and not presume anything.

            1/ If someone runs in to financial difficulties,they need to contact all their creditors asap.

            2/ They must undertake a tough household budget including EVERYTHING that they spend and may need [future medical etc ]

            3/ They must do a inventory of what they have in their home/house and decide what can/must be sold.

            4/ They must talk / communicate with their partners/Husband or wife and explain everything,no matter how trivial.

            5/Cancel all dds and standing orders were possible and take direct control of your finances were possible.

            6/In order to seek assistance, you must be able to PROVE you have done all in your power to address the crisis.This may include sworn documentation from a solicitor.

            7/You must start a dairy and log every phone call,letter name and position of every creditor/person you speak too,even if their is no answer record that you called.If you are too stressed for phone-calls write and request that creditors only contact you by post,this is also better for record-keeping.

            8/ Seek employment,stay fit,quit drinking if possible because you will need all your wits about you.

            9/Reconnect with your family and perhaps your partner,it is very easy to isolate yourself.Talk,talk,talk,graveyards are full of people who couldn’t talk.That is not a judgement of people, it is my experience.

            10/ forget about the mistakes you made,shit happens,do the best you can,one day at a time,if you cant make a decision,make a decision not to make one today !.
            If you are doing the best you can and can show evidence of same you have NOTHING to worry about.

            11/ Put yourself first and your family,if you follow these suggestions,you are using the tools that are available to all of us.Contact M.A.B.S or http://www.citizensinformation.ie for advice or further information.

            12/ Do the best you can,one day at a time.yesterday is history,tomorrows a mystery.today is reality.

            13/Get a doctor to check you out and make sure you know where you stand psychically, emotionally,and mentally at least once a week.Business stock-take products,People need to stock-take their homes and themselves regularly..!

            14/ Once you have sought advice and followed these suggestions,Forget about it and let things go and move on with the rest of your life,its not easy,I know…but you can move on,nothing lasts forever,good or bad.

            So you see 33square,if someone is trying to dodge paying a debt and are not in “trouble”they will be found out……

            Best of luck and I wish you all well.

            RR6
            Debt Survivor

          • Chrysalis

            33
            I am not looking to profit from debt forgiveness,
            I never flipped a house,
            I never released equity in a house.
            I also think that the reason we pay interest is so the lender can then pay for insurance for the loans that go bad.
            My situation is not black and white, I doubt very much that I differ from the majority of distressed loans.

    • Phoshus

      Well said Grey Fox.
      I am an Irishman and proud to be Irish. I believe the people of Ireland have been let down by their public representives and the vested interest groups within the state. The human cost of this is all around me, and anyone else who has the compassion to look at their neighbours will see this. The rate of suicide is so sad. Sad for all the family and friends of a real person who just could not deal with life in Ireland anymore. “We should be bailing out the people not the banks.” The Irish people deserve support because they are dying every day trying to cope with what bankers (money DEALERS)have conned them into. Forgiveness and compassion is needed, now.

      • C21living

        There will be support in place for Irish people in a few months.

        They declare themselves bankrupt and their debt is wiped away in an instant.

        The re-emerge debt free.

  10. gizzy

    As a true capitalist Mickey can I ask have you ever employed anybody. Have you ever borrowed to grown yoiur business and create more jobs. Would you do so now.

    Do you think capitalism which at its core is meant to be about wealth and job creation is about taking a hard line with ‘poor little borrowers’ while big investors and lends get bailed out bu the same poor little borrower and his friends and relatives.

    • MICKEYG

      Where is my hard line? I just let someone walk away from 150,000 of debt.

    • “Have you ever borrowed to grow your business and create more jobs”

      Note I corrected your spelling mistakes Gizzy.

      Many self employed people have put up similar points in the years I have been visiting this blog

      It amazes me how many self employed people can’t even spell and do not have a handle on basic grammar

      Truth is some of them are pretty thick.

  11. StephenKenny

    As far as I’m concerned, the most telling statement in this article is:

    “The IMF found also that the fall in house prices makes us feel much less wealthy, and this has an impact on the willingness to consume”.

    At the moment, the western world’s governments are desperately spending all our tomorrows trying to maintain this propensity to consume less when houe prices fall. In my view, until this is changed, the problem of the outstanding debt is of secondary importance. Income, not capital, is should be the key to higher consumption.

    (For the pedants, I suggest that the degree of ‘impact’ is high – very high).

  12. Grey Fox

    All I am hearing here is money, asset, money, asset, jeez people this is much bigger than money, to the detractors of debt forgiveness I say, when you have raised a family in a “home” it is not a house or and asset it is a HOME! filled with memories, christenings, birthdays, christmas, births, deaths, communions, confirmations, exam results good news, bad news etc… between my last home and the one I live in now (since 2001) I have raised four children and all my memories and theirs are in this home, and I am expected to simply regard this home as an asset, walk away and wait three years and start again! all because Banks went out of control, destroyed the economy, cost jobs and the resultant ability of ordinary people to repay debt, with the agreement and encouragement of the Bertie Aherns of this world. Tell me I am wrong to not accept this! explain it to me in an argument which does not center on money, a piece of paper which is printed from thin air into circulation and out of circulation by private, for profit corporations whose only goal is to control populations for their own gain. Explain it to me! because when you back a man into a corner and leave him with nothing, he has nothing to lose and that my friends is when he comes out fighting with no regard for his own preservation.
    Someone explain this to me, or will this be just another unanswered comment, I don’t think anybody can explain it to me because there is no justification on earth for destroying people’s lives in the name of money although it happens every day!
    MickeyG, advocating, walk away, wait three years and start again, home is an asset and all that stuff is ok when you are in your position as a “Prudent Borrower” but the true mark of a compassionate human being is to be able to make comments which show compassion and understanding and not the party line of how things should progress according to the Gospel of the ECB or the Government.
    The Insolvency Legislation is a solution for the Banks and only the Banks, it allows them show “clean hands” to their hedge fund investors and pension fund investors when their MBS’s come tumbling down around their ears. In my humble and honest opinion.

    • C21living

      So when you’re house value goes up, all the home equity is yours to spend, thanks very much.

      But when your house value goes down, you get a bailout from other people, because your ‘home’ is full of memories, etc.

      So the equity is yours and yours alone on the way up, but you get a bailout from your fellow citizens on the way down to prevent you from suffering the indignity and shame of having made a dog’s dinner of your personal finances.

      Nice philosophy!

      • Grey Fox

        I am not concerned in the least about my homes value, I intended to live here for the rest of my life!
        Value irrelevant!
        I am not getting any bailout!
        I am paying to bailout the bastards who caused this mess!
        The same bastards are the ones who made a dogs dinner of my personal finances and will continue to do so more and more if we the people do not call a halt to it.
        Mickey, it appears you have done well and I am happy that you have avoided the pitfalls many, many Irish people fell into, but don’t sit too pretty, big Phil Hogan is coming for you just the same as all the rest of us!

        • C21living

          We need a property tax.

          We need water rates.

          We need to essentially copy the tax base systems of every modern European country.

          What we don’t need is bankrupt rednecks with pitchforks huffing and puffing about not wanting to pay this and that.

          Hogan is winning anyway. The other side is a disorganized farce.

          • bonbon

            True Blue-shirt all the way.

            In the rest of the EU that’s Brown-shirt.

            Amazing how quick the white collar shirt is switched!

      • gizzy

        so people who lost their jobs due to economic mismanagement sre really only after making a dog’s dinner of their personal finances

        Nice Philosophy

      • redriversix

        Good enough for Banks,good enough for citizens,they and their Government cronies set the precedent,My family and I will do everything we can to follow that precedent.Who am I to argue with Government.!!!!

        People are worth more than Corporations

        Failed Banks get bailed out and keep failing and keep getting bailed out and their C.E.Os get richer,but I fail,who bails..no-one… fine……..I impose my own austerity.My family is worth far more than some Bank-bailing merry go-round that never ends…Fcuk em and the horse they rode in on.

        Bail yourself out,stop paying debt.good enough for Banks,good enough for me.

        RR6
        debt survivor
        X capitalist
        Promoter of REAL democracy

    • MICKEYG

      I live in a house that is far too small for my family. The banks came to me and told me I was “underborrowed” and I could “afford” a bigger house in a nicer area. I said NO. I made a call because I felt houses were too over priced. I am still in that small house and my kids have very little space because of that call and spend a large amount of time in cars because of that call. I still can’t move as my take home has been decimated. No one showed me any compassion nor did I expect or deserve any.

      I watched on as others said YES. Now I have to feel sorry for them and say “worry not, keep the house and loose the debt”. My compassion is outlined in the bankruptcy laws that will allow you walk away from debt YOU freely signed up to in 36 months. I wish someone would give me 150,000 to help me change my house.

      Does that explain it to you?

      • hibernian56

        Then there is the likes of me. A small business owner who employed 7 people at the hight of it. I never bought my own house because I also thought them over priced. I thought I would build one instead.

        The years passed and I watched my hard earned (70 Hours a week) savings disappear as I pumped them back into the business to try to keep things going. I just fell into the redundancy trap, whereby if you keep an employee on longer than you should you end up with a double whammy of paying extra redundancy on top of the salary you already couldn’t afford.

        No hard feelings, lesson learned, move on.

        Anyway, nine years later, I’m older, I hope wiser, and certainly poorer, essentially back to square one, the day I graduated from university. But this time there is no economy to start over again. I am honestly thinking of leaving for Dubai etc.

        The point I’m making is this, although I don’t have a house and therefore won’t benefit from debt forgiveness, I would not begrudge anyone who does.

        I realise that “mortgage debt” is a condition of the mind. The money owed did not and will not ever exist UNLESS it is paid back. On signing the mortgage agreement you have effectively agreed to a monetary valuation of the “asset”, your home, based on what you have been told by trusted “professionals”. It is all fictitious.

        Nobody losses in debt forgiveness except those who seek to profit from this great con. The money did not exist in the first place. The interest has been created from thin air. The capital is a consensus agreement of the valuation of the asset, again no real money changes hands in the mortgage transaction.

        This is how fractional banking works, no real assets, no real money. You deposit €100, they leverage this to €10,000. Its all based on the precarious notion that everyone won’t call in their deposit at the same time.

        The value on these housing “assets” is only down to perception, based on milking mans greed by means of the tried and tested “get rich quick scheme”. Seriously, I know the cost of building a shoe box, I have seen the methods used. I am aware of the sub-standard materials and labour used.

        (15 years from now will be a very interesting time in Ireland when half of these shoe boxes begin to deteriorate due to the commercial fit-out methods used instead of more resilient domestic housing materials. But thats a matter for another day. Priory Hall is only the tip of the Iceberg. The RIAI (A privately owned company) has blood on its hands and yet it has been mandated as the official protector of Architectural design quality.)

        We are no longer a Banana Republic, we are a Ponzi Republic.

        • Grey Fox

          The ingredients of future Tribunals are in the mixing bowl, and the barristers are rubbing their grubby little hands together with glee.

    • Phoshus

      Total agreement from me Grey Fox. The speculators who looked on a house as an investment should be reaping the losses of this investment. The people who bought a home should be looked after. The blurring of the difference between a house and a home is a national scandal.

  13. hibernian56

    Speaking of taking inspiration from comedy, last week I was driving home after a long grueling meeting where yet again I was promised I would be paid “”next week”. I had about €55 in my pocket for the weekend, reserve light on the fuel gauge, shag all in the fridge and bills to be paid. The usual.

    I turned on the radio for some escapism only to bump into the news.

    Our “Government” had announced a €150m Small Business Loan scheme. €150m I thought, for fu** sake, that’s €15,000 each for 10,000 business, on successful application. BUT, then there’s the cost and bureaucracy associated with operating the scheme, which I’m sure will take forever. What’s the minimum wage? Meanwhile, more layoff’s, more Judgements, more emigration.

    Put this into context with the ALREADY €350,000,000 paid by the EIB to AIB, BOI & UB in 2009 for the same purposes that just disappeared, no questions asked. Crooks, protected by a system designed by crooks for crooks.

    Anyway the next news item. “AIB has repaid € 1.5 billion to unsecured bondholders…”

    I nearly crashed the car. It put EVERYTHING into perspective. Our “Governement” have no interest in our economy, only securing their individual pension entitlements and perhaps a membership to some elite EU board at a later date.

    Think about it. €150,000,000 to make new jobs (which will just result in some small business limping on for another few months). €1,500,000,000 paid to some nameless foreign entities. Where do the loyalties lay?

    These Assholes don’t get it. The two most senior positions in this country are occupied by secondary school teachers, each paid in excess of €200,000 per year. BUT, the real issue is the hordes of faceless Mandarins lurking in the background on mind boggling salaries, perks who run the various departments and hence the country for THEIR interests.

    There is no accountability and very, very, very little hope.

    http://www.djei.ie/press/2012/20120412a.htm
    http://www.irishtimes.com/newspaper/finance/2012/0412/1224314639638.html
    http://www.een-ireland.ie/eei/news/index.asp?newsid=62

    • Bamboo

      hibernian56
      A government (any government) say these things and make promises simply to keep us quite, give us some hope, keep us entertained, etc. Especially these types of promises as it simply can’t be traced of the validity of the information. The only thing that can be traced is the source of the information. What happens after that is a mystery.
      Same is true with the bigger private sector businesses like Eircom or banks. Whatever they promise can’t be traced anymore. As an example with Eircom. How many of us had a to call Eircom and you get all sort of answers from your queries that are picked from the sky? Whatever answer you get can be true or not true, depending on the weather at the time or the mood of the agent you have on the phone.

  14. Grey Fox

    Hear Hear…….

  15. Phoshus

    Hear Hear, again. Maybe, just maybe more people are copping on to what is going on.

  16. bankstershill

    David,

    I bit confused here. Tell me, or anyone else for that matter, where I’m going wrong . Is the policy that you’re describing not what NAMA does already?. From what I understand the way NAMA is structured is the government, through NAMA, issued 10 yr. bonds to the banks in exchange for non-performing loans with a 30% discount. The banks in turn used these bonds as collateral to obtain newly printed cash from the ECB which was then promptly funnelled to their unsecured creditors, leaving us, the tax payers, to guarantee the NAMA bonds. I should also mention that it was necessary to transfer a portion of performing loans to NAMA in order to generate the revenue streams which represented the bonds’ interest payments. The problem with NAMA, as everyone knows, is that it was completely unnecessary. It was just a bit of shell gaming, at our expense, to pay of unsecured creditors. What should have happened is that from the start, our insolvent banking system be placed in plain old receivership in which only deposits of 100 k or less would have been guaranteed, and with the unsecured creditors being forced to accept equity in our newly cleaned up banking system. This is something you have described David in previous articles.
    I would like to think David that your proposal would also involve first placing the banks in receivship as this would be a necessary prerequisite to prevent taxpayers being forced to guarantee overvalued bonds to the benefit of unsecured foreign creditors. In reference to your article this is what the FDR administration did in conjunction with the HOLC, that is it put the entire US banking system through chapter 11 bankruptcy reorganization, (what we call approximately call receivership). In addition, and which was crucial to make the changes work, the US financial system was placed under new regulation, popularly known as Glass-Steagall, in which its functions where strictly separated. That is, there was a strict separation imposed between the insurance business, commercial banking and investment banking. An institution had to choose the type of business it wanted to be, it couldn’t engage in more than one. This had the advantage of preventing the newly cleaned up commercial banks from speculating with the liquidity they received from the HOLC. Consequently they could only make commercial loans to those parts of the economy which were physically productive, otherwise without the Glass-Steagall regulation, they would have been free to engage in unbridled speculation with the newly created HOLC funds which would only have resulted in destructive hyperinflation. Investment banks could still speculate all they wanted if they chose to continue in that role, but they could only do so with their own capital, there was no central bank discount windows are access to personal deposits of ordinary folks to gamble in the casino economy.
    My point being, our banks as they currently lack any similar type of regulation, would continue to speculate on the commodity markets and play the carry trade game with any newly created central bank money. We first need regulation reflecting the principles of strict separations as expressed in the Glass Steagall legislation, before we can create credit, if we wish that the issuance of that credit to reach the physically productive part of the economy. Otherwise the effect of creating money will be destructive hyperinflation, as we are currently seeing play out with the ECB trillion dollar bailout.

    • bonbon

      I am wondering why DMcW did mention FDR, 1933, and failed to mention the bank-splitting legislation, the pre-requisite for the New Deal (title of the thread after all).
      This has been spelled out repeatedly here. I guess that economists will claim that FDR’s action was not economics rather politics – this is Kant splitting hairs, at it again, caused by failure to study List’s American System of Political Economy, the inspiration for Arthur Griffith and Bismarck who are not generally considered economists.

      The Austrian school of course are explicit about this – no legislation as per Glass-Steagall “can be allowed in a free market” – a rather non liberal POV?

      • bankstershill

        I did not want to say as much but I know where you
        are coming from. Could DMcW be doing a bit of gate keeping here?.

        BTW, I would mention the Careys; Mathew and Henry, among your list of competent ecomonmists you mentioned there and especially in relation to their contribution to the American System.

    • Bankerstill,

      You are right, spot on. The problem with the 1000 word article is that you can’t always flesh ideas out properly and the articles sometimes serve just to sign post ideas and approaches.

      Best
      David

  17. MICKEYG

    OK, I’m done here as people are obviously not reading what I am saying fully. Here is my summary;
    people chose to buy a house at a given price. They were not forced to buy and could have rented if they wanted to. It was THEIR decision, tehy were grown up adults.
    They now unfortunately find themselves in financial dfficulties and are looking to have their debts forgiven by some percenetage. I am OK with thsi as long as they do not continue to benefir from the assets tehy bought with thsi debt. My view is that the debt should be fully written off (via bankruptcy) as long as they surrender the asset as well. I think this is fair (they are allowed to not repay money they borrowed) and get to start again in 3 years time. They can then look for alternative housing based on their current means (like everyone else).

    Somehow I am on a high horse, and am lucky (again, read my posts) and am a bad boy capitalist. Folks, youa re adults, acept your fault in this, be glad that bankruptcy will absolve you of some of your debt so you can start again. I will continue on and live with my decisions as I am an adult too.

    • bankstershill

      THE BANKS TAKE EQUITY IN THE HOME AFTER THE WRITE DOWN, SO IT FOLLOWS THAT THE OCCUPIER DOES NOT GET TO KEEP ALL THE ASSET. CAN YOU UNSTERSTAND THAT!!

    • Bamboo

      “They were not forced to buy and could have rented if they wanted to.”
      This is not fully true. The government made sure that renting is the last option on the list.
      The first (and only) option is to buy, preferably outside the established areas, somewhere on a field, or a swamp, where there is no public transport and/ or other amenities. The gov then made you believe, once you bought a place, you’re sorted and high and dry.

      • C21living

        You gullible idiot!

        I still rent and I’m 38. In Ballbridge, FYI, and it costs me €500/month.

        “The goverment made you believe”….in the magic equity money tree fairies?

        • Bamboo

          who is the gullible idiot C21?

          • C21living

            You are Bamboo – yes YOU – for believing the government for anything at all! Least of all that buying an overpriced house would ensure you were high and dry!!

            Would you believe the goverment about anything now? I doubt it.

            But you believed them then. Well then, you were a gullible idiot, we’re you?

            Will you even admit it, or are you too touchy?

          • Bamboo

            C21living,

            I wish I were as smart and intelligent as you are.

            FYI: I bought my house in 1990 and paid off my mortgage in early 2000. In those days, you could pay off a mortgage in a relatively short period so I was lucky. It is only later that banks decided to squeeze more out of the mortgage holders by extending the payments terms to 15, 25, 30 and even 40 years so that you need a generation to pay it off.
            If I saw a chance to upgrade, I would definitely have done so. But somehow, I knew that my income was insufficient to start a mortgage again as seen as I have a family with three kids. If I believed the bankers, media and gov at the time then I would’ve taken out a new mortgage and would have also encouraged my children to take out a mortgage. But purely through luck I didn’t believe a word of what is said and still don’t. So none of my kids (now in their late 20′s and early 30′s) have a mortgage and me, I am mortgage free since 2000.
            At the time, the pattern in a person/family life is that you take out a mortgage and after a period, you can have mortgage free live. This system has worked for many families and generations. But no bank likes the idea of people with no debts. Neither does the government. Banks even made parents feel guilty for not helping out their offspring to get on the property ladder. So they advertise on national TV how cruel parents are for not helping out. All with the approval of the government.
            Now there is no money to be squeezed out of mortgage households anymore, the next step is for banks and government to encourage us all to start our own business and take out a loan for the business so that we can all be the next Mark Zuckerberg.
            My point is that I am lucky not to fall for the lies of the banks and government. Many young families had no other option then to take out a mortgage. A roof over you head is a basic requirement for any family. With or without kids. The house becomes a home and after a period it becomes your centre of the universe.

            C21living, you are a true intelligent and smart person for seeing all this and have a rent of only €500 a month in Ballbridge. I wish we all have your brains and live happily ever after.

          • C21living

            When you say ‘the government made you believe’…

            …this is the most childish crap it is possible to write.

            Everyone who ‘believes’ anything anyone else says can live with the consequences.

          • Bamboo

            What age are you C21living?

          • Peter Atkinson

            Bamboo don’t rise to the bait.No doubt you are corresponding with someone I reckon, judging by their handle, is circa 21 years of age and clearly knows everything there is to know.All you end up doing is revealing a lot of personal stuff to bear out your argument while casting your pearls among swine.Leave it be.Those who matter here know exactly what you are saying.

          • Bamboo

            Peter Atkinson, you’re right.
            I’ll check this blog next year again.
            Best Regards to you all.

  18. redriversix

    Afternoon all

    Cancel all debt NOW including your own rich,poor,struggling,whatever.This is a criminal financial system and a puppet Government.We need to take back our power and realize we have a right to our OWN Government.

    Ireland is Bankrupt and poorly ran and managed.
    People are worth more than faceless Corporations so people come FIRST.

    Banks lied,cheated and yet get bailed out for failure while men and women around the Country have to fend for themselves.NO MORE.

    Banks and Bankers continue to get rewarded for failure.WHY ?

    Do a budget,put your family first,slash your Bank debts to 10% of payments,contact MABS for budget advice. also http://www.citizensinformation.ie

    The Bank bailout came too late for me as I had already ruined myself by honoring several million in debts to my Banks.Don’t do what I did,put your family first.Take positive steps to protect your future and your children’s.

    Today I have nothing but we are happy and not victims.This has nothing to do with right or wrong or moral hazard,it has to do with corrupt Banks and politicians.Ireland ,Europe,the U.S are bankrupt and getting deeper in debt every day by promoting failed policies.Austerity and trying to solve debt with more debt cannot work,never has,never will.

    This is why we,you and I need to put ourselves first.We do not need permission,………..scrap fear,stress and anxiety.Know your worth and stand up for ourselves and our families.This Country has a lot of resources and can be strong if managed properly.Until that day,protect yourself

    I and my family are proof that their is “Life after Debt”

    We have practical experience,not theory.
    I will be voting no to the fiscal treaty whether it counts or not as I believe it is of no value to us as a Nation and we will be fine,should the referendum be defeated.
    Roll on the German and French elections…..
    Is their a media blackout on developments in Greece.?

    Losers sell fear to get their way,I am not buying………

    I wish you all well and Thank David for this article and the comedy because we need to laugh a lot more.

    Today is the start of the rest of your life,what are you going to do to better it..?
    Keep things simple,question everything

    Have a great day

    RR6
    debt survivor.

    • Grey Fox

      Well said as always RR6

    • KTMDave

      Well said RR6. At the end of the day it’s about people, not money.

    • +1 RR6

      Commenting on this paper here:

      http://www.bis.org/speeches/sp120321.htm

      There are only very few historic cases where such extreme sovereign debt situations were solved without 1. War or 2. Revolution.

      One example was the U.S. after The Great Depression and WWII, and it has become known as the time of “financial repression” (Shaw- Financial Deepening in Economic Development , McKinnon – Money and Capital in Economic Development ) Here the Investors were burdened by law to purchase unprofitable sovereign debts. However, the main reason that financial repression policies were successful was a strong economic growth happening at the same time, and this was the case in the post WWII U.S.A. The industry was busy and Bretton Woods enabled credit flow. As a result, the debt to GDP ratio fell from 120% in 1945 to to around 50% within in 10 years. However Inflation was wiping out income and savings at the same time in the years 1946-1949, after that time the worst was over.

      Such policy in our days remains the exclusive tool of those who already are the winners of this crisis, this global heist, Germany, Netherlands, Austria, and France. The rest of Europe does not have this option for obvious reasons. Purchasing power will rapidly decrease in European peripheries.

      Today, there is no scenario on the table that would allow for High Interest rate countries, to ease their debt burden, and the years of ideologically motivated, and enforced by unelected technocrats Austerity programs have worsened the situation considerably. The public in these countries is waking up to the big lie of austerity to be the solution to this crisis, this crisis which is nothing but a balance sheet recession.

      These are the essential ingredients that social catastrophes are made from, and this is not a question of “if” anymore, but “when” instead.

      • redriversix

        Evening Georg R

        How are you ? ,I agree with your post and your conclusion is correct,history teaches us that it is times of great economic upheaval,a social catastrophe or a large military conflagration is only a question of when………….
        How is the photography going..?

        Talk to you soon

        Take care
        RR6

      • You are getting nearer to the truth Georg.
        Thank god some people on here are watching and learning.
        Learning is the keyword here.

        Trouble is most people can’t handle the truth.
        They’d rather read the Indo and watch the footie.

        • Or Tommy bloody Tiernan.
          Idiots.

        • His work makes an interesting read, and I share his views on the forced substitution of democratically elected representatives by “experts”, technocrats that represent the market makers market players and their vested interest groups.

          IMHO Streeck correctly criticizes the expertise of these technocrats, as they draw only from their power circles and networking with the same.

          I would go further and call the democracy oppressors under orders of the financial Taliban.

          Wolfgang Streeck is Director at Max Planck Institute for the Study of Societies, Cologne, and Professor of Sociology, Faculty of Economics and Social Science, University of Köln

          http://www.mpifg.de/people/ws/forschung_en.asp

        • redriversix

          well said pauldiv

  19. molly66

    Well said RR6
    Look if david projected where we will be in 4/5 years from now with the present government,
    We would be out on the streets in force now,because we would be starving poor without a pot to piss in.

    • He is more than capable of such a prediction but he dare not speak of it. His paymasters would would have a hairy fit and die baldy

      • Tony Brogan

        This is something I have been pondering for a while.
        If the press is owned by the paymasters, the same interests as the mega corporations and the mega banks then they will call the editorial content and the nature of the reporting.
        If the reporters can’t get the truth published then they are frustated in the fulfillement of their job.
        if a reporter knows that the papers are thus corrupted by self interest and they continue to draw a salary by writing innocuous reports then the reporter is corrupted.
        If the reporter says I am just doing my job the best I can and I need the money, is the reporter lacking in integrity.
        If we know the reporter lacks integrity why do we give credence to anything the the reporter says.

        This attitude is endemic throughout society. most are corrupted by the system. And we wonder why we have bad planning. We wonder why we have incompetent politicians.

        Corruption is really decay. The smell of putrifaction is in the air. It is all around us.

        that is why there is no suggestion of a fix to the problem. The reporters are as corrupted as the rest.
        Too afraid to speak out. Afraid of what the future holds but more afraid to take action.

        I am beginning to think this blog is a dissipation of energy better spent elsewhere, where effort may be made to get a solution debated and then enacted.

        There are some fine folks on the blog but too much sniping and carping, to many snide remarks. This is serious business. your country, your families and you are going down, flushed.
        Swallowed by the monied elites to debt servitude slavery. The shame is you could do something about it but you dare not take the risk.

  20. C21living

    Grey Fox
    RR6
    banksterhill
    Bamboo
    Phoshus
    Hibernian66

    The Irish spent money like tap water during the boom.

    Now that most of the Irish public is in debt, you start watching YouTube videos by G Edward Griffin and Bill Still about fractional reserve banking, fiat currency and the fact that credit money “doesn’t exist”.

    When the Irish were spending it, it existed.

    But now that the Irish owe the money back, it “doesn’t exist”.

    Nice philosophy!

    Phil Hogan will win in his household charge battle, after a long campaign.

    The water rates battle will be won by the government.

    The Croke Park Agreement will be scrapped and austerity will visit the public sector.

    There will be some deal done RE: Irish bank bondholders, just enough to keep Ireland in the EZ and keep the long term austerity drive in Ireland going.

    The ‘NO’! campaign to the household charge/septic tank/water rates/fiscal compact has no long term strategy for the country. It’s full of side-show Bob types like Ming Flanagan and his “it’s our turf” campaign, even though turf cutters have been materially compensated for ackowledging the designation of some turf banks as EU National Heritage Sites or Special Areas of Conservation.

    You probably don’t like Ireland in the EU, what with the banker bailout and all.

    The next battle, the fiscal compact, will be a victory for the No campaign.

    Then the hard-core draconian austerity will begin. Big time.

    The IMF talk of debt forgiveness is just to keep this whole ‘Ireland in Core EZ’ strategy going, by offering sweeties to the bankrupt kiddies to get them to vote Yes to the fiscal compact.

    But the Irish will vote no, as the household charge indicates, and then it’ll be no more Mr Nice Guy.

    Then you’ll all find out what the new bankruptcy law is about.

    • hibernian56

      C21,

      Hold on there sunshine, I never bought a house, I don’t (didn’t) believe in the Equity Fairies. I always had a grasp of real economics, who is Ed Griffin? I must check him out this weekend.

      Anyway, is it any harm if people educate themselves now? I know it’s too late for most of them, but perhaps they can impart some wisdom to their kids.

      Water meters etc are only a mechanism to privatise infrastructure so that (foreign) corporations can profit from them. It has NOTHING to do with saving water, which is ironic given I just got pissed on here in not so sunny Cork.

      Just look at refuse collection, was that about saving the planet?

      • C21living

        Well then, just oppose it.

        Oppose the water meters, household charge, etc. even though it’s standard elsewhere in Europe.

        Oppose France when it pushes to change our Corp. Tax rate again, which it inevitably will, at some point.

        But don’t expect me to take opposers seriously.

        I don’t see their strategy for the country, unless ‘I’m not paying dat f**king tax to dem w*nk*rs in Dublin’ over a pint in a pub can be called a ‘strategy’.

  21. Bamboo

    Apologies, Slightly off topic.

    Water meters….

    The Taoiseach said householders would definitely have to pay for the meters but not the cost of installing them.
    So the meters cost is €300 a pop. With more than 2 000 000 houses in the country, the manufacturer will make more €600 000 000 for this exercise.

    Is it the case that you can buy a water meter on eBay for less than €300 and get it installed for free? I’d open a shop selling only water meters. I definitely try and get only 1% of this business which gives me a tidy little sum.
    I can see Aldi or Lidl selling water meters next week.

  22. paddythepig

    MickeyG and C21living, I salute you both for bringing a well needed dose of reality to this site. You are the voice of the quiet, prudent, law-abiding citizens of Ireland. I support you 100%. You are rightly outing the inconsistencies, hysteria and outright selfishness of many of the posters here. Keep up your good work.

  23. gizzy

    C21 You miss the point that economies and states should not fe run by threats that are used to maintain a flawed status quo. I believe you choose where you live and I chose to come back to Ireland a few years back. I thought it was a modern fair capitalist country. But it is not now. It socialises large debts, bails out bad investments by the mega rich i.e socialism. On the other hand it preaches pure capitalism at the rest of society.

    And then if people and the Irish people have behaved incredibly benignly even dare to suggest staning up for themselevs we get ‘it’ll be no more mr nice guy’
    The problem and you don’t see it is a lot of people have not seen Mr nice guy in a long time.

    • C21living

      @Gizzy

      Of course I see that a lot of people have not been Mr Nice Guy, they never have!!

      That’s why I don’t have a mortgage from the boom – I was a ‘doom-monger’. I was laughed at by whole groups of people who said I was nuts, and maybe had some personal problems, for suggesting that they were talking risks borrowing so much money, that even if the majority of the population are behaving the same way, the minority who control the banks would still find a way to call in all these debts and inpoverish the people after a moment of prosperity.

      It’s like offering cheese to catch a mouse. You lose the cheese, but you catch the mouse. The banks lent all this money to the public, but have now caught them in a trap and can introduce new laws to Ireland that maybe the people don’t like but can’t resist because they’re caught in a debt-trap.

      It was obvious to me, but people thought I was paranoid.

      I’d respond ‘but how can the banks be giving money to you to make YOU rich, there must be a hidden strategy. No business sets out to make other people rich, this is obvious. So there must be a master plan’.

      I was right, but I suffered ridicule from the same people who want me, PaddythePig and MickeyG to bail them out now so they can avoid the indignity of entering bankruptcy proceedings, a process by the way which will free them from all of their debt burden, but at the price of losing their assets.

      Apparently many people aren’t happy with that outcome – they want debt forgiveness to allow them to stay in their homes. If the economy worsens, we’ll probably be forced to give them ‘a second bailout’ to ensure, if you don’t mind, that they get to stay in the houses they borrowed too much money for.

      Anyway, as I said above, none of it matters because the Irish public will vote NO to the fiscal compact, and then the REAL battle will begin between Ireland’s creditors and debtors.

      I’m just warning the public again – and being ridiculed again!! – that a NO vote in the coming referendum will mean no IMF debt forgiveness scheme, because that will be the opportunity the elites need to accelerate the austerity strategy.

      The debtors are not holding a good hard. One Ace up the sleeve of the creditors and the debtors are a busted flush.

      The debtors are going to vote NO to the fiscal compact, and walk into another banker trap!

      • C21living

        a good hand

      • Grey Fox

        C21, Things are what they are, that doesn’t mean we have to accept them, we live in a Sovereign Democratic Republic, you seem to have accepted this is not the case and never will be, that the Banks are entitled to our money, our homes without being held responsible for their actions, people, me included are more outspoken because we have fallen into their trap, but now we are educating ourselves! and looking into the financial three card trick and I for one don’t like what I see, I knew nothing about securitisation before 2008 know I know it inside and out and it stinks to high heaven, I was not concerned with bondholders until they managed to convince our puppet leaders to put us on the hook for 47 billion for Anglo while the perpetrators walk away scot free, I WILL NOT ACCEPT THE FUTURE – INDENTURED SERVITUDE the banks have planned for me, nor will I walk away from what I have worked all my life for, I will fight these bastards to my last breath! I only, sincerely hope you are not dragged down off your high moral ground by the same disgusting people you are defending now, so you go and vote YES to the treaty and hide, scared of the repercussions of a no vote because the opposite of a no vote in my mind is a hell of a lot worse than any threat a so called trustee of the Irish people can make, scare tactics don’t work, if a yes vote is so great why is it so hard to get Irish People to understand the benefits?? I’ll tell you why… because the track record of the Irish Government and Europe is abysmal, the only thing either of them are good at is Austerity and boy do they excel at that. When they can’t cut anymore, when there is nothing left to take, what will they do then? yes! you guessed it…write off the debt!

        • C21living

          The banks have to be held responsible for their actions.

          And the borrowers will have to fall on their swords.

          Look, all this IMF talk of a debt restructuring scheme is just talk before the fiscal compact referendum.

          The new Personal Insolvency Laws will be law by the end of July.

          Read about the Personal Insolvency Laws and see what is coming down the line at us. Don’t believe any IMF happy talk before a referendum and then think, at 2 minutes to midnight, your arse is going to be hauled out of the fire.

          We are now living with the end outworkings of the totally reckless carry on of the Celtic Tiger years.

          The chips will fall as they fall.

          I think, as not having a dog in this fight, that the debtors are holding a very weak hand indeed, even if they club together on the DMcW blog for moral support.

          The personal debts are too high.

          The new bankruptcy laws will be in place in a few months.

          Join the dots.

        • C21living

          Do you reckon you’ll get less austerity if you vote No?

          Well then, vote No.

          I’m past caring.

          Just vote No.

          But you ain’t seen austerity yet.

    • redriversix

      Gizzy,do not waste your breath on those you mention..

      although it is hard to read,I respect their opinion,but not them,I am still trying to practice compassion and understanding,not easy !!!!

      We do not need new bankruptcy laws,we do not need any new legislation to do whats right.take care of you and your family first…..

      You and I and many here contributed to our economy in good times and bad,created employment,paid out taxes and honored our dealings with Banks.We got screwed,Banks got bailed.

      Our REAL stories and experience count here….,not some two-bit theory from armchair warriors.

      Are you in need of debt-forgiveness ? so was I…….I forgave myself and my family and I now forgive you and anyone who NEEDS it.

      Wish you well Gizzy

      Best
      RR6

  24. John LK

    Surely it was the banking system that “spent money like tap water”. The flood of money originated with the banks. Would the banks have been more careful if there was only non recourse loans available?. ie – if everyone who could subsequently not afford to pay, simply handed the Keys back to the bank then the banks would be a lot more careful in doing the investment homework before turning on the money tap.

    The following would be capitalism – ?

    1. Banks do not get bailed out if they fail
    2. Only non recourse loans for homes
    3. A healthy competition between private and state banks is the goal

    We need to re organise the system in Ireland – Europe is not going to do it for us.

    We have no hope of a functioning bank system in the near future by following current Irish government policies – or should I say ecb policies as it looks like Ireland has no government or policies.

    We are on a cul de sac road and I hope we find room to turn before we hit the end.

    • C21living

      No John,

      The banks lent the money to build up the amount of debt owed to them.

      For the bank, all those debts are “assets”.

      Bankers are awarded bonuses for lending money like tapwater.

      It’s the Irish public who then spent the money like tapwater.

    • C21living

      @DC

      Michael Hudson is one of my favourite economic commentators, maybe my very favourite. Him and Patrick Young from Belfast who appears on Russia Today from time to time.

      Hudson is an extremely articulate advocate of a Marxist reading of the financial oligarchies class war against the public.

      In fact, DC, I’m so totally and utterly aware of all of this, that I didn’t borrow from the banks to buy overpriced property because, exactly like Hudson, I say it as a financial oligarchy conspiracy.

      Now, we will have new bankruptcy laws in Ireland soon. The possibility is emerging to get out of debt completely, albeit whilst losing one’s house that has cost so much for so many years to try and buy.

      But what’s this? What’s this?

      We have Irish people on this blog who wouldn’t give a flying f**k about Michael Hudson when they were off at the World Cup or on holidays in Spain, now taking an interest in him so they can cling onto their homes.

      I’m having none of it! People who walked into the bankers trap need to be burned so they’ll take an interest in what Michael Hudsons and Patrick Youngs of this world say in future.

      If we have a mortgage bailout for home owners, we’ll need a second mortgage bailout in a few years as the economy worsens, then a buy-to-let landlord bailout because they ‘weren’t told’ they’d lose money on property investment and on and on and on.

      Bailing out the banks is a criminal act by a financial oligarchy.

      Bailing out home owners is a criminal act by a different selfish vested interest group, overstretched homeowners.

      • redriversix

        This Country will need a second or third bailout anyway as this is a World-wide problem……….

        • C21living

          Well it isn’t going to get any more bailouts is it? Because the RR6s of Ireland are going to vote NO to the fiscal compact.

          Then it’ll be ‘New Bankruptcy Law’ time.

          • redriversix

            If government steps away from failed policies and runs itself and its departments more efficiently and promotes our Country better,we will not need any more bail-outs.If they continue these present policies and “we” vote no,we will still get “bail-out funds when required…. doesn’t make sense ?,but neither does Europe,IMF or ECB
            This is a rich Country with plenty of resources ran poorly for years by unqualified people.

            We do not need new bankruptcy laws,all the tools to help people are already available,they just have to pick them up.

          • C21living

            “We do not need new bankruptcy laws”.

            That line just proves you are deluded!

            We HAVE new bankruptcy laws.

            It’s too late my friend.

            We HAVE NEW BANKRUPTCY LAWS.

            Is it any wonder you went bankrupt, you’re delusional, you talk about the way you’d like it be or you think it should be rather than the way it is.

            It’s like you’ve teed off into the rough, but you ‘don’t agree’ because you feel you ‘should be’ on the fairway. Or ‘we don’t need to be’ in the rough.

            You’re in the rough. You need to get back on the fairway. This is not the same thing as being on the fairway. You’re playing catch up because of a crap tee off. Deal with it!

          • redriversix

            C21

            Even if their is new bankruptcy laws,still didn’t need them…….and I never went bankrupt.my business collapsed because I made mistakes,I liquidated everything we had to honor my debts,I still owe 7/800,000.00 euro but I have nothing left to give.
            Please point out were I said I was a bankrupt.I am a survivor.

            I took the good with bad and knew the risks,but I guess Banks are exempt from that.

          • C21living

            @RR6

            The banks have to be brought to justice.

            I’m totally and utterly against bank bailouts.

            But offering the public a bailout because the bank got a bailout is beyond a joke, it’s a total disorganized farce.

            Anyway, it won’t happen, it’s just a PR stunt by the IMF before the fiscal compact vote to get more suckers to be suckers yet one more time and vote YES.

            But they won’t, they’ll vote NO.

            Then the austerity knife will sink in deep.

    • redriversix

      Hey DC.

      How are you ? although I try and “let go” I find it difficult….C21Living & Co wouldn’t know sh1t from sugar.

      Help those,who ask for help.Pray for those who don’t think they need anybody.

      Enjoy your evening

      RR6

      • C21living

        @RedRiverSix

        You just go right ahead and vote NO to the fiscal compact, watch how the Troika witholds a second bailout for Ireland, and just watch the total bloodbath of austerity.

        You said it yourself, you’re an ex-bankrupt.

        Should we all follow the RR6 model?

        “Family first” is your catch-phrase. How about “look before you lend”?

        • redriversix

          You are a serious piece of work C21.

          I and whoever will vote NO and your damn right its family’s first and their is already a austerity bloodbath………

          “look before you lend”should apply to Banks,but they didn’t have to as no matter how they fuck up,they still get rewarded.

          And you should follow my model,well…not you.seems you never made a mistake in your life.

          Point out were I said I was a bankrupt..?

          • C21living

            So you weren’t bankrupt then. Fine.

            That’s why you say the new bankruptcy laws won’t apply to you, understood.

            But my goodness me, they most certainly WILL apply to all your struggling financial mismanagment buddies on this site.

            There will be no white knight who’ll appear on the hill and save their arses at this stage.

            It’s the IMF talking. don’t be so naive, for heaven’s sake!

            It’s a load of PR crap to get the public to vote YES in the fiscal compact referendum.

            But the public will vote NO.

            Then the new bankruptcy laws will come into play, because there’ll be no more bailouts for anyone and an almighty war between creditors and debtors.

            With the new bankruptcy laws in place, the moritorium on foreclosures will end.

            That’s the point of the new bankruptct laws, to allow foreclosure but give people a fair chance to start again.

            Now, this is standard procedure in all other EU countries, including the UK.

            It’ll be standard procedure here by end 2012.

            Get ready for culture shock as folk realise the Celtic Tiger game is now up.

            If you’re bankrupt, you lose the house and the outstanding debt.

            That’s where this whole sorry mess will end.

        • grougho

          folks, from reading me thinks c21 is just a red rag. best left to rant on their own and we shall continue the chat. all the best.

          • C21living

            Yeah,

            Calling all Walter Mitties! Let’s get back to planning how to stop the Troika take-over of Ireland from our DMcW blogroll command centre!

          • redriversix

            Damn right Groucho

            My mistake……..every day is a school day !

            RR6

  25. wills

    Folks,

    Debt relief is simply deleting numbers on a computer screen sitting on a bankers desk in an office.

    I agree with D’s analysis overall.

    But, how ’bout a faster, quicker more scintillating solution….

    The 30 billion govt claw back from taxpayers how about instead of passing it to Central Bank to burn into pile of ash how about giving it to every household in ireland.

    In fact, how about instead of debt relief for those in debt, how about printing it and giving it in cash instead of relief to everyone so as those who avoided debt will be rewarded too instead of being penalized for prudence.

  26. redriversix

    I never said that the new bankruptcy laws won’t apply to me.I said we don’t need them,the tools to help people are already their……………

    I or any of my financial mismanagement buddies on this site as you call them never,looked,wanted or sought a white knight to save our asses,we are all grown up and understood to take the good with
    the bad and understood our responsibilities ………….then along came the Bank bail-out………..Forget about it C21,I will send you a box of crayons…… figure it out for yourself,do some more research and learn some humility………….

    I wish you and yours well

    RR6

  27. Grey Fox

    Put 200,000 people thru bankruptcy, no even less say 100,000 people and what we think is bad now will seem like a walk in the park, have you, C21 though of the social consequences? Whats the point of bankruptcy, the bank doesn’t get anything anyway, apart from a house it can’t sell and the state has the additional burden of rehousing the 100,000 people (no sorry, possibly 300,000 people as only one person presumably will be declared Bankrupt in each family, or maybe the plan is to bankrupt both parents, just in case they get any notions about getting on with their lives), the whole system is rotten to the core, and it is the bottom rung of the ladder who always pays, well I think that Irish people are pretty close to the end of their tether. Our Government is in denial, how dare citizens come down to the Labour party conference and protest, get a life etc…
    WAKE UP IRELAND

    • C21living

      What’s the point of bankruptcy?

      Well then, what’s the point of the new bankruptcy laws?

      Am I correct, are new Personal Insolvency Laws coming into law this summer?

      Or am I living in la-la land and really everthing is fine and nobody goes bankrupt and we all live happily ever after, get married and live in a nice big house?

    • C21living

      You know, you’re the kind of guy who typically thinks ‘the government wouldn’t have the balls to collect the household charge, the septic tanks, the water meters, the new bankruptcy laws, etc. etc’.

      The people who believe that also believe that the debtors hold the power in the eurozone crisis, and if we don’t ratify the fiscal compact ‘they’ll bail us out anyway’.

      Also, the Irish public will bail out struggling home owners because ‘the public wouldn’t like to live with the social consequences’ of people who are ALREADY BANKRUPT being formally declared, in legal proceedings, bankrupt.

      You just don’t believe it all.

      Well – the household charge will be fully paid up, in the end. Phil Hogan is sending in the Revenue – the taxdodging farmers will fess up before they get audited.

      The water metering is going to be impossible to stop. After all, it’s normal everywhere else.

      The bankruptcty laws are very real. Folks can get out of debt at last, but at a price. No they won’t be homeless, they can rent like the rest of the population already does.

      Now I want to burn the bank bondholders, but that does not mean I want to save cry-babies who overborrowed in the boom.

      These are two very different matters, but many posters on this site want to conflate the two, to save their own personally indebted arses.

      You lot are not patriots, you’re just clinging to what you have as it all falls apart. You don’t even have the dignity to let go and rise like a phoenix again.

  28. dwalsh

    I know I am off topic, but I want to express this here.

    From the Sunday Independent April 15 2012

    “THE Minister for Education Ruairi Quinn has warned that the absence of any consequences for those against whom findings have been made by tribunals could affect the good name of the country.

    He said that potential foreign buyers of State assets earmarked to be sold will look at Ireland and say: “These adverse findings, and they’ve had no consequence!”

    I support the rule of law…but there is a much darker issue here.

    It is beyond belief how appalling his tirade is.

    Read and weep for yourself; if you haven’t already.

    http://www.independent.ie/national-news/act-now-on-tribunal-findings-say-labour-3081245.html

    On the basis of this statement I no longer recognise Ruairi Quinn as an Irishman. I don’t know what he is. Some class of a corporate globalist gombeen man, by the looks of it. Telling us to be good boys and girls so the nice men from abroad will like us and come and buy our country.

    We are no more than a handful of generations away from absentee landlords and capricious rule from Westminster and this gombeen is telling us we must spruce up and keep our noses clean so the asset strippers from abroad wont have a bad opinion of us.

    As if the predatory asset strippers give a toss about any of us; or have any respect for our laws. As far as they are concerned Irish law is an irrelevance.

    Investor rights are the law; Capital is the law.

    Our brief sojourn as a nation state is drawing to a close; one way or another. I support the road towards a democratic union of European nations; and beyond that of all nations. I oppose corporate neo-feudalism; and that is where we are headed under the misleadership of our Irish and European and global political elites.

    • bonbon

      Who’s the gombeen now, leading us straight back to the British Empire, too fogged to see what you are saying.

      Clear the fog! You call the EU democratic, what utter total rubbish. Have you any idea what is happening?

      Funny thing is Monti, Draghi and Papademos never mind Enda, all agree with you!

      • dwalsh

        I never said the EU is democratic.
        I said “I support the road towards a democratic union of European nations”. You must have missed the “road towards bit”.

    • “Some class of a corporate globalist gombeen man”

      They all are.

      Glad to see someone is awake

  29. cooldude

    Well C21 you really are making lots of friends today. Before you try and label me another crybaby I will make clear that my mortgage was very luckily paid off a number of years ago. That does not give me the right to label young couples crybabies who are stuck in this negative equity trap that was 90% a creation of the banks, the politicians, the media property circus and most of all the ridiculously low interest rates that were imposed on Ireland from the ECB from 2000-2005 after we joined the Euro. Near zero interest rates are a speciality of the elite western bankers to lure people into asset bubbles. They punish savers and encourage people to take on risk. It is all very well being high and mighty after the event but the fact is there was constant pressure from the media to convince young people that they had to get on the property ladder. Ok there was the occasional sane voice like David but there was a coordinated campaign to make buying a house the correct thing for any young couple to do. This creation of asset bubbles is very much a part of the central banking and the fractional reserve criminal banking system which is 100% the cause of our current problems. Of course there is such a thing as personal responsibility but ordinary young couples were just trying to follow the prescribed wisdom of the day which was that renting was “money down the drain” and that they should get on the “property ladder”. Ok they were sold a pup but they had no idea of how fraudulent the whole property and banking system was. I agree fully with David, Greyfox, RR6 and all the other posters who are looking for a humane solution to this problem that was a product of our corrupt western banking system. If we lose our humanity we have nothing. Also I will definitely be voting NO in the upcoming referendum because the people who recklessly lent to our greedy banks need to suffer for the stupidity of their lending. All this promissory note debt should be defaulted on as it is in not in any way whatever the debt of the ordinary citizens of this state.

    • C21living

      Cooldude,

      So I’m high and mighty, then?

      Because I don’t want to put any pennies in the poor box of the first time buyers.

      Why don’t they just avail of the new bankruptcy laws and end their misery and everyone elses? They can get out of all debt in an instant. No need for pennies in poorboxes.

      I’m on here to argue on behalf of those who feel that people facing bankruptcy should avail of the new bankruptcy laws which will be Irish law before the end of 2012.

      • Go bankrupt and recover. Simple. Their duty is to feed their families first and foremost. Screw the mortgage, water charges et al

        Least they are learning the facts of life and being forced to waken the hell up. Pity they were not around wise heads and swallowed the bullshit. Not much sympathy from many quarters. Maybe now they will learn to put real value on things that actually matter.

        Nothing wrong with renting at all.

        I am older than you and rent and always will

    • C21living

      Oh BTW Cooldude,

      If your ‘woe is me’ first time buyers were making a lot of unearned property equity, would they put any money in my poorbox?

      Yours,

      A poor unfortunate 38-yr-old “still renting”

  30. tony_murphy

    Dirty little secret – The ECB magic the money out of thin air. Hand it to the stupid politicians and enslave a nation paying tax so as to pay interest to the elitist globalist banksters on “money” they created out of thin air at no cost to them!!! Wake up people….

    Rotten!

  31. Harper66

    The answer to avoid this ever happening again is by introducing nonrecourse mortages-buyer and lender beware!

    But alas no! as with everything done by this government and the previous the intention is to maintain the staus quo by any means possible.

    • Bamboo

      Harper66, I think it will happen again and again. Part of human society is to learn from the past. What humans will learn then is to do it again only with a different format and worse. This whole fiasco with banks and big corporates will be implemented again in next generations and in in different parts of the world. We’ve learnt from the past that we should never again have slavery. In fact slavery is worse than ever in the world. We should never have a holocaust, in fact it is still happening in slightly different formats. The west have abolished child labour. In fact child labour is rampant in the non western world as is worse than ever.

      • Child poverty is rampant in Ireland and on the streets of British cities. The Guardian has plenty of sources on the subject

        World poverty is worse than ever despite the Zionist IMF. WHO and World Bank.

  32. tony_murphy

    David,

    Do you think it’s acceptable to pay interest on money created out of thin air? Who is the interest going to be paid to? who benefits?

    Do people not see through what you are saying..

    The dirty little secret, which is so obvious, yet most people don’t see it.. i blame the TV, people are in a trance or something

    NO TO BIG GOVERNMENT, NO TO MONEY CREATED OUT OF THIN AIR. NO TO SERFDOM

  33. StephenKenny

    I wonder whether the increasingly acrimonious mood on this board is representative of any broader mood?

    Just a short point on this question of “money from thin air”. The difficulty is that money that is borrowed, whatever it’s source, is spent by the borrower. Were it just borrowed from a bank and then hidden under a bed, and no one told (otherwise it might be collateral), then it could be taken back by the bank, burned, and no harm done.

    Once it’s been spent, the borrower owes it to the lender, and it’s out there working it’s way through the consumption chain. Once out, it’s hard to get back – since to get it back, someone has to lose it, by definition.

    This is the problem that seems to have been shown to exist in modern economics, in that it considers consumer borrowing (in fact, bank borrowing broadly) to be irrelevant. Like Newtonian physics was fine at low velocities, modern economic theory seems to have been fine in the relatively low debt growth, low consumption, economies of the inter-war, and cold war, years.

    So almost everyone (to those who didn’t, I’m not referring to you) borrowed themselves into the middle of next century, and spent the money. They didn’t stash it away, they spent it. So defaulting will simply mean that someone else will, if you think about it, lose out, or, if it’s socialised, it will act like printed money – push inflation. This is generally fine at the individual level – I default and it works out as €0.0000001 per head in the EZ. When millions start to default, it could start to do real damage.

    Add to that the issue of leverage on the assets that are made up of the debts that are about to be defaulted on, and the inevitable default is going to make things interesting, and is also really going to hurt a lot of people, both in the public sector, and pensioners.

    So we can argue all we like, but although a default will enable things to ‘get going again’, it will significantly lower the level from which we will have to get going.

    I would also argue, as I did above, that what is going to happen is that a lot of people are going to pile back into property, because it is seen as the root to consumption growth, and therefore economic growth. In my view this is a terrible mistake, and we will find a much deeper canyon on the far side.

    OK, it wasn’t such a short point.

    • dwalsh

      The levels of acrimony on this board have risen alarmingly since I was last here. It use to be that people would debate and discuss; now ad hominem insults and even threats of physical violence litter the board. Shame. The wrong crowd seems to have gotten in. Bad apples etc.

      • Harper66

        +1.

        It is almost as if there is a concerted effort to stifle the debate and discussion.

      • redriversix

        Sorry Dwalsh

        Sometimes I just get so angry.But you are right.maybe people are generally getting more annoyed ?

        It is frustration on my part although I try and practice my humility,compassion and understanding,sometimes it is difficult.
        Every day is a school day !

        Nice to see you back,have a great evening

        RR6

        • dwalsh

          Hi redriversix :)
          I certainly did not have you in mind when I wrote my comment; on the contrary. There is a difference between getting angry and the kind of thing I mean. I think anger is inevitable in all of us given the apalling spectacle we have to observe unfolding here and in the world generally.

      • C21living

        DWalsh

        The problem with this board, and our country, is that the debtors of the Celtic Tiger era won’t just show their cards, their busted flush, admit ‘I’m bankrupt’, file for bankruptcy, become an undischarged bankrupt, 3 years later become a discharged bankrupt, and get back in the game debt-free.

        They_just_won’t_admit_that_the_game_is_UP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

        The country could start again if these people didn’t hold it back by clinging on.

        Also, notice how like in Spain they’re always that bit older, in their 40s or more.

        Bankruptcy is shame to them and they will rant and rave and deny on and on, week after week, as the curtain continues to fall on their era.

        All the problems in Ireland are legacy issues,

        The Ireland of today is the result of decisions made in previous years.

        The Ireland of tomorrow will be the result of decisions made today.

        As a younger man, I believe as a nation we have to force bankruptcy to end the debt legacy of yesterday.

        But just listen to the howls of denial and the ad hominem attacks against me for asking people to draw a line under their huge personal indebtedness by availing of the new bankruptcy laws.

        I warned them not to borrow in the Celtic Tiger, they ignored me or laughed at me. Now I’m constructively suggesting they get out of debt by going bankrupt, and they wince and howl and lash out.

        Is it any wonder the country is stuck in a rut? Nobody has the balls to make decisive decisions, they all want to saved from bankruptcy, even though it’s already far too late. It’s like the household charge fiasco – it’s a farce and an embarrassement to bear witness to their lack of a sense of responsibility for their actions.

    • Harper66

      Excellent post.

      “I would also argue, as I did above, that what is going to happen is that a lot of people are going to pile back into property…”

      It seems the German people are looking for a safe haven for their cash and are looking to property!

      “Residential property prices in German cities rose by 5.5 percent last year — nothing to write home about in many countries, but almost a bubble by normally depressed German standards.”
      http://blogs.reuters.com/eva-kuehnen/?st=article

      Another major headache for Irish home owners is of course the growing pressure from Germany to increase interest rates. This really would blow the whole thing apart. Another lesson as if it were needed of the incompatibility of the Euro zone.

      Oh! if only we had a statesman in this country instead of Inda he could have stood up to the crowd in Davos and told them that Germanys need for low interest rates when the rest of the EZ needed rising rates was major contributing factor to this mess and that likewise Germany need to raise rates will be final the final nail in the coffin for the EZ.

      Instead we got “Irish people went mad” and a pat on the head from Sarkozy.

  34. The IMF are a great bunch of lads.
    Re-read the works of Naomi Klein you sap.

    Debt forgiveness is a smokescreen to soften the humiliation of future water privatisation and further austerity budgets. It is all a sick joke and as usual you don’t venture anywhere near the real truth

    Get the mugs to pay for the water meters and the government will pay for the installation costs (out of the pension reserve fund) and then sell off the water infrastructure to vultures who will screw you for life

    First rule of life – never believe a word the government says.
    Second rule of life – never believe the mainstream media.

    All you have done here is get the little people fighting among themselves.

    Where is oor Colin when you need him?

    • Bamboo

      I agree, water privatization is inevitable. Who will own our water?
      First of all it will be a European group for a period and soon to be owned by China.

      Why do you think that China’s Xi Jinping visited Ireland?
      First of all China needs quality food products for their rich elites. They also need enormous amounts of food to feed the rest of their population.

      Ireland will supply these products to China and soon it will be a straightforward Tesco type process after that. That leaves no option for Ireland then only produce for the Chinese market and if we dare to sell to other economies then China will stop this import. Read Tesco.
      Next step: China sends their workforce and knowledge to work in Ireland.
      Next Step: China buys our land.
      Next: We leave our Irish stew as is and we all eat Peking duck.

      • “Why do you think that China’s Xi Jinping visited Ireland?”

        I am not stupid. I know. I noticed that no-one else has latched onto this disgraceful possibility. They Irish will sell their own grandmothers to anyone who is providing cash. They are incurable and have no principles

        DMW and many of his posters have often touted the idea of doing business with the Chinese Government in the past and I say that that they have no self respect and are will stoop to any depths to save themselves. I say never. To hell with China.

        It just shows how desperate things have become and the levels people will stoop to

        Sorry to be terribly blunt chas but to hell with China.
        They will never be my ‘Chinas’

    • cooldude

      I agree Pauldiv the IMF are part of the problem not part of the solution. The IMF, the BIS and the World Bank are part of an unholy trinity who represent the interests of the elite banking families. They are the .001% who profit from all the interest that is being paid to this endless supply of debt. Their goal is to spread central banking and the sole use of unbacked paper money throughout the globe. When they offer you a loan watch out bigtime. All they want is to strip the country of it’s assets which are then bought by the large corporations which are also tied up with the large banks. A proper nest of vipers whose main goal is a one world currency and through it total economic control. Anyone who thinks this is anyway a conspiracy plot needs to wake up and stop watching Primetime and look at how sucessfull these guys have been with their plans. A massive wake up is needed and it is never too late to start real education on what is really going on on this planet. Only by understanding what is actually happening can we survive and thrive. If you are in any doubt about how the IMF actually operate listen to the interview with John Perkins which Goldbug posted on this site on the article before last. That is the real IMF and how they operate. Here is a good article about their use of “austerity” to scare people
      http://www.thedailybell.com/3798/IMF-Exploits-Euro-Crisis-to-Create-Global-Money-Power

      • Great post

        “A massive wake up is needed”

        It is already happening and it is happening all across the globe. Keep your faith because you are on the ball. The ones in power are losing the plot and their insanity is becoming more apparent by the day. They are shitting themselves because they know they have been caught with their pants down. They know that we the people far outnumber them

        Still the Irish media and DMW are talking crap and doing the people more harm than good. As Quality Managers would say they are no longer fit for the purpose they pretend to serve

        We need to trust our instincts and educate ourselves and our nearest and dearest. Only then can we come together and free ourselves from this Zionist nightmare. If we are to swallow the Capitalist ideals of DMW and some of his followers then we have no chance. We are a collective society and not a collection of individuals hell bent on making money at the expense of everyone else

        That is the ultimate in selfishness and DMW and the Irish media are all self confessed capitalists. We need to cut these people off at the neck and stop their insanity from derailing us all onto the path of self destruction. They are very dangerous people and need to be called to account

        We need to meet half way or else we are all doomed.

        We will have permanent debt and permanent war and a poisoned planet if we continue to focus on individual finances (like most of the selfish and childish comments below this article ) while the world becomes more drowned in a toxic sea of depleted uranium and all the toxic crap they are using in our foods

        It is time we forgot about selfish capitalism and started to realise that we really are all in this shit together and need to reach consensus

        This is why those who are proud to call themselves ‘capitalist’ do not have the slightest clue what they are talking about

        • Tony Brogan

          “It is time we forgot about selfish capitalism and started to realise that we really are all in this shit together and need to reach consensus”"

          We have corporatism, embedded with banksterism, allied with politicism closely allined with Neo Fascism!!

          Capitalism is wrongly blamed as it is seldom in existance today. there are no free markets.!!

      • Tony Brogan

        Good post and nicely said.

    • Colin

      I’m busy at work Pauldiv. But I’m reading when I get a chance, even your posts, but leaving out long winded ones.

      So you need me now? Sorry Pauldiv, I’m not here for you.

      I am for debt forgiveness. David convinced me of it over 1 year ago. I have a heart, but it’s not a bleeding heart like yours and the rest of your fellow travellers.

      c21living is being targetted here unfairly. He/she makes some very good points, but many of his/her critics have closed minds. It’s a pity, but, there you go.

  35. redriversix

    Evening Pauldiv

    Hope you had a great day.

    Please don’t go looking for Colin,we already have Mr C21Living……..

    RR6

  36. george

    What do we have at the moment? A lot of people fighting against each other, and very demoralised. An internal market that is totally depress, with high unemployment, and a horrible social crisis. And that feeling that whatever is being done by the Government, is too little and too late. And it has no real positive effect in the economy, or in social cohesion. They keep thinking that by robbing Paul to pay Peter, we can get anywhere.
    .
    The FG and Labour Government has done the same mistake than the previous FF and Greens, they have put the cart before the horses, and isn’t going anywhere. This economy is very expensive, and inefficient, and we have to make it cheaper and more competitive. We all know that salaries and pensions have to come down, and council rates for businesses, and then as a consequence of it, rents and professional fess, so we can buy and sell products and services cheaper than now. It’s as simple as making a cake, but if you first break an egg and put it in the bowl, and then you add the flour and the sugar, the mixture will be a disaster.
    .
    So first, any Government with a bit o commonsense will have to give something to the people, before they can ask something from the people. They should restructure and forgive part of the debt, so then could be expected that when they ask from the people for a reduction of salaries and pensions, for the common good of the economy and society, it could be implemented.

    You give something by removing the unfair burden people has to carry, and put the People before the Banks; and you get something by an increase in economic activity and a healthy social cohesion.

  37. george

    ***robbing Peter to pay Paul

    • C21living

      Interesting idea George,

      If the IMF offer details of a workable a debt forgiveness scheme, will the public vote YES to the fiscal compact?

      Will the public sector unions agree to a ‘benchmarking’ social partnership on the way down, decreasing salaries and pensions year on year as the cost of living (house prices, rents) contract?

      Based on what we’ve seen so far, with the household charge and septic tank fiascos, it seems unlikely.

      Even if Ireland got a write-down of the promissory notes, a substantial one of 50% say, there are huge numbers who’d oppose the household charge, salary decreases due to their personal financial situations (i.e. they owe so much money from the Celtic Tiger era).

      The solution they want is for their debt from the Celtic Tiger era to be written off and to be allowed keep their houses, cars, etc. In other words, to not suffer on the way down.

      So, your idea seems unlikely to succeed in Ireland, due to the shocking levels of personal debt. People just won’t take salary decreases to increase competitivity, because as they insist ‘they can’t afford to’.

      This even though later this year they could file for bankruptcy and reset at zero debt, but they refuse to do so, because in their eyes that would mean ‘defeat’, when in fact it means debt-free return to competitiveness.

      • george

        The only people that probably will vote no, are the ones that have a vested interest in keeping themselves, up on top or near the top of the Pyramid. It could be that even some Public Sector Unions will vote no, but the Farmers will vote yes and most of the low Middle Class will vote yes, and the medium size Business Class will vote yes…or so I think.
        .
        I don’t think why we have to pull out of the euro, when within it, and doing things that will take courage and imagination, we could achieve almost instant recovery. And now thanks to the people of Argentina that fought against the IMF, and made in the long run, the Organization change its arrogant approach to economic crisis, we have the IMF and even the big American Corporations in our side.
        Because who wouldn’t like a cheaper economy, and a more cohesive society to do business with, when we all know that a demoralised population that is on the brink of chaos, cannot keep functioning properly for very long?
        .
        Apart from it the Government should stop showing us documents the People didn’t ask them, or any other Government to sign, and go back to the EU and the ECB and relieve the Country from a debt that is exclusively Bank debt, and not ours or National debt. Of course that takes courage, real patriotism, and imagination? Is there anything of it in this administration?
        .
        Without debt restructuring/forgiveness, and a cheaper economy we are going nowhere.

        • C21living

          There are close to 100,000 mortgages now 3 months in arrears.

          Suppose we gave them €200,000 each to amortize the debt.

          That’d be €20bn. That’d destroy the country and ruin the lives of future generations forced to pay that debt off.

          For what? To keep people in their homes that made extremely foolish decisions, against the advice of friends and families.

          Suppose we don’t bail them out – then they’ll go bankrupt, and the €20bn loss will be on the banks’ balance sheets. They’ll never be able to cover that hole. They will sink and we can let them sink.

          The only way to resolve this is to end all the contracts through the formal procedure of bankruptcy. This will ‘free’ the mortgage holders of debt – nobody will ever be able to send them a threatening letter again.

          This is the only way to end the crisis and get the debt off the backs of the public.

  38. dwalsh

    “Tommy might not realise this, but he has a lot in common with mainstream economic thought.”

    I hope not. Tommy is funny…but although mainstream economic thought may be a laugh; it isn’t funny.

    Mainstream economic thought isn’t right either. It’s as wrong today as it was back in the early noughties.

  39. dwalsh

    C21living

    I don’t know about individual bankruptcy. That’s a matter for individuals to decide for themselves. I don’t think taking that road would be quite as simple as you suggest; it would almost certainly have consequences that would extend beyond three years. I can understand people being unwilling to take that extreme choice.

    Most people in negative equity and mortgage arrears in Ireland are not speculators or ‘Celtic Tigers’. They are ordinary working people who found themselves with very few options. We all remember the intense media propaganda about getting on the ladder before it’s too late; and the intense media and political propaganda that the escalating property market was good for the economy.

    I would not locate the problem in individual indebtedness. The national and global problem cannot be solved at that level; although private debt relief and/or restructuring will have to be part of any real solution.

    I would trace the problem upstream; to our bankrupt financial system; which is enmeshed in the bankrupt european financial system; and through the ECB with London and Washington etc. All bankrupt. A tangled global web of bankrupt financial institutions.

    I would say the problem is a financial problem, not an economic problem. The Irish economy is relatively strong and vibrant in spite of the financial crisis; as is most of Europe. The problem is the bankruptcy of the financial system; and as it sinks it is dragging the physical or real economy down with it. Dragging all of us down with it.

    This is the inevitable result of the liberalisation and deregulation of financial markets. Liberalisation and deregulation led to a credit bubble; which led to distortions in the real economy; dot-com and commodity and property bubbles etc.

    In 2008 the astronomically leveraged financial bubble burst and began to collapse; and that collapse is continuing to this day; only stalled by bailouts and low interests loans that enable the banks and financial institutions to roll-over their off-balance sheet speculative losses (derivatives); and to off-set reduced revenues from the credit markets, such as mortgages.

    The financial markets have become casinos. The institutional losses and the private profits are astronomical. Today the real economy (tax payers) is shoring-up the institutional losses; and the bankers and speculators are converting their paper profits into hard assets; some of which used to be our national assets.

    • Tony Brogan

      Pretty good understanding there Dwalsh

    • C21living

      @DWalsh

      What if there’s no choice, because you ARE bankrupt, with debts of, say €400K on a house worth €200K and falling?

      Look into the new bankruptcy laws – discharged after 3 years, no ifs and buts.

      This is hard for Irish people to understand because hitherto it’s been 12 years before discharge.

      As usual, the Irish are slow to grasp the significance of changes that are happening in their own country.

      It’s like the auld codgers who stupidly, into their pints, surmise that ‘Ireland never changes’ even though EU directives and legislation is rushing into the country at a mile a minute. They wake up one morning to discover they can’t cut turf at such and such a turf bank because the money they received from the EU wasn’t a grant, it was compensation to stop turf cutting due to an NHA or SAC designation. They then get indignant and up in arms! Yet, still in their dosy auld codger brains, Ireland never changes.

      Or remember the old canard about how the smoking ban will ‘never work’, so much for that theory.

      I’m telling you all – in a few months, bankruptcy is only for 36 monthsm and the moritorium on foreclosures will end, and if you’re totally underwater on your mortgage, it’s game set and match. But the good news is you lose ALL the debt.

    • redriversix

      +1
      Agreed,DWalsh

      well put

      RR6

  40. Tony Brogan

    David
    Yet another contentious writing that succeeded in getting the the bloggers at each others throats.
    People should be treated humaimely or they should bear the consequences.
    I have hesitated to get involved as toes are bound to be trodden on.

    “Tiernan’s brilliant take on the present debt crisis can be seen on YouTube. It’s a pretty blunt form of permanent debt repudiation”

    Nothing of the sort. Tiernan mentioned nothing about repudiation. He was full of scorn and mockery. He left a hanging question as to whom the money was owed to. no mention of people, just states and the state they were in. Ireland not Irish, England, not English, amerca not Americans.
    \
    I guess we all see and hear what we want to see and hear, and not what is actually being said or viewed.

    It is an axiom of economics that if something is subsidized there becomes more of it.

    There are no free markets, only central planning. Planning no by politicians but by bankers. Never wondered why they operate central banks.

    Bankers need loans issued to make money. Bankers have talked politicians into legalizing fraud and theft.
    It is called fractional reserve banking. As mentioned by others above, it allows the creation of currency out of thin air which is loaned into existance at interest.

    initially the interest rates are substantial but as time passes the rates reduce as peoples ability to repay is compromised.

    Returns to the bankers fall.
    interest rates must be lowered and so the cost of the debt is subsidized by the lower returns to the banks.
    debt repayment gets more and mote difficult until people can no longer pay. banks now seize the physical assets of the people.

    do not think this is accidental. It is a thoughtful well executed plan to have the people indentured seritudinal financial slaves.

    What to do about it. Firstly prople have to be willing to be not indebted. They must resist the lure of the advertisers to buy today with credit what they would have to wait to tomorrow. People are mo longer anything but consumers. They must learn to live within their means.

    The same people who declare we must save the resouces of the world because they are finite, are the ones who disipate their own resouces by having to pay endless debt payments of never ending interest accumulation.

    The first thing to do if indebted is to get out of debt. If unable to pay, get counceling and if nescessary go bankrupt or organize an orderly payment of debt that gets you out without bankruptcy.

    The second thing is to get rid of the system that inpoverishes the people and is debt based.

    We deal at present with a fraudulent banking system that deals dishonestly with the people by use of dishonest money.
    We need to return as Cooldude suggests to a system of honest money. If we do not it will be one banking, financial, crisis after another.

    We cannot repudiate all the personal debt as that is a form of subsidy that will create an endless cycle of indebted people looking for a bailout. Individuals must, as c21living says, take responsibility for their own actions.

    We can repudiate all onerous debt described as private debt foisted on to the taxpayer. Which debt provided no benefit to the people. That means all the debt of the broke banks (Private business) assumed by the state is cancelled. That would reduce the national debt to manageable amounts by itself.

    Then close the central bank and never borrow another penny from a central bank. The state, like the people, must live within its means.

    Then issue a national currency from treasury with no interest that is earned into existence. I believe they did this in Calefornia when the state ran short of money http://www.pbs.org/newshour/businessdesk/2009/07/is-california-printing-its-own.html

    Then monetize silver coin in specific weight and fineness issued through the post office. This can be issued in unlimited amounts, subject only to the availability of silver, at no cost to the country. I have explained how in previous postings.
    national debt is frozen at current levels and then reduced. . Interest is low. Borrowing is low. not many will be able to afford trips abroad but peace and civility will be restored to the communities.

    A return to “honest ” money, commodity money is required.

    Fraudulent money leads to curruption so endemic that the finest minds are corrupted without realizing.It destroys societies as we are seeing right within this blog

    • cooldude

      Excellent post Tony. Unbacked paper money is always abused and debased to benefit the issuers of the money. This is the elite bankers who have corrupted the weak politicians and have got themselves in a position of total power through their central banking network where they now control all the world’s currencies. Unless the people in each country take this power back off these bankers these problems will just get worse. Let the people have a choice what type of money they want to use. Let silver and gold be used alongside this rapidly depreciating paper and let the people decide for themselves which type of money they want to use. One which is being constantly and deliberately debased or one which has held it’s value against all other assets for five thousand years.? I know which one I would choose and have already chosen to put most of my savings in to. This is the crux of the problem because if people are given a choice to stop using the banker’s toilet paper it will take their enormous power off them. That is the real reason they hate gold and silver so much. The only bubble going on here is the bubble in their giant ponzi scheme of unbacked paper money which no longer even states it is legal tender on it. We have to wake up and educate ourselves about monetary history and how these type of money systems ALWAYS produce the same results. That is debt saturation and the eventual destruction of the currency in an event of extreme inflation. This does not bother the bankers because by this stage they will have robbed all the hard assets from the people and they will just start another paper ponzi scheme.

  41. bonbon

    Krugman Endorses Exit from Euro

    April 16 (EIRNS)–In one of his rare moments of lucidity, Paul Krugman titles his Sunday comment, yesterday, “Europe’s Economic Suicide.” After noting the heartbreaking stories of “suicides by economic crisis,” he says it’s not just individuals, but the whole continent which is on the edge. You would have thought they would have learned from the failure late last fall, he says, “but they didn’t,” and rather “doubled down” on the same program. After describing some of the details of the Spanish crisis, he says the prescription of further austerity “is just insane.”

    Just as in the 1930s, when a successful recovery was begun with an exit from the gold standard, “the equivalent move now would be exit from the euro, and restoration of national currencies.” Anticipating the reader’s (bankers) reaction, he continues: “You may say that this is inconceivable, and it would indeed be a hugely disruptive event both economically and politically. But continuing on the present course, imposing ever-harsher austerity on countries that are already suffering Depression-era unemployment, is what’s truly inconceivable.”
    Without changes, he says, “its hard to avoid a sense of
    despair,” however, the “inflexible” bankers seem determined “to
    drive their economy — and their society — off a cliff. And the
    whole world will pay the price.”

    • C21living

      Start local currencies first, before leaving the euro, or in tandem with it.

      Kilkenny already has its own currency, for example.

  42. redriversix

    Water meters to cost 40 euro a month for twenty years….. excluding charges

    “they can pry it from my cold dead hands”!

    Argentian president “takes back” Oil from Spanish company Repsol

    We should do likewise………

    “do not pray for easier lives,pray to be stronger men”.JFK

  43. Morning,

    I pointed already to Wolfgang Streeck in a reply to Pauldiv above.

    Dr. Dr. h.c. Streek is MD at Max Planck Institute for the Study of Societies, Cologne, and Professor of Sociology, Faculty of Economics and Social Science, University of Köln.

    He is also chief Editor of Oxford Journal SER, http://ser.oxfordjournals.org/

    Democratic Capitalism and Its Contradictions

    http://www.mpifg.de/pu/mpifg_dp/dp11-15.pdf

    • It also can — and indeed I believe it must — point out the drama of democratic states being turned into debt collecting agencies on behalf of a global oligarchy of investors compared to which C. Wright Mills’ “power elite” (1956) must appear like a shining example of liberal pluralism. More than ever, economic power seems today to have become political power while citizens appear to be almost entirely stripped of their democratic defenses and their capacity to impress on the po- litical economy interests and demands incommensurable with those of capital owners.

  44. Good Morning,

    Hope all is well. Can we chill out a bit on the insults flying around?

    Best

    David

    • C21living

      David,

      We’re in the end game RE: Celtic Tiger era personal insolvency.

      The personally indebted Ireland of today is the result of the behaviour of yesterday.

      The Ireland of tomorrow will be the result of the actions and behaviours of today.

      We must call time on the mountain of personal debt in the country.

      The process for doing this is personal bankruptcy.

      To suggest there’ll be dig-outs or bankruptcy ‘opt outs’ is nonsense talk of an over40s man.

      You have said it many times there’ll be a generational conflict.

      You better believe it David and FYI talk of debt forgiveness puts you in the older camp.

    • All is chilled here brother David

      We are all pacified and numbed friend

      Maybe it is all those drugs they put in the water.
      Or could it be all the depleted uranium swirling around the planet?

      Or could it be all those nasty electro-magnetic waves and toxins the capitalists put in our food and our plastic food wrappings?

      Sure it’s just the way they want us right?

      Still it’s just a bit of craic just like on top gear right?

  45. gizzy

    There is a complete clash between those who realise the current systems of goverment , banking and commerce are fundamentally broken down with way too much imbalance in favour of those on the inside. I firmly hold this view.

    Then there are those who see compliance with the status quo as the only way. This is despite the fact that the current system has thrown up major financial crisis, recessions and depression, huge unemployment, transfer of wealth fom citizen to corporate, social unrest, huge incease in suicides, emigration , personal wealth and well being deterioration, protectionism of the worst kind at government and civil service level. Apart fron that it works a treat.

    Every clear out must start with an event. Is it the no vote. If the government ministers and senior civil servants lost their salaries and pensions maybe they would work harder to find solutions for the greater good.

    Because if we focus on the greater good we could actually solve this mess. I would rather have enough in a balanced society than have lots in unfair one. I have lived by that through the good times and will continue to do so. Call it whatever ism you want.

  46. wills

    Michael Hudson on *Debt Restructuring* using historical law.

    *Fradulent Conveyance law*.

    http://www.nakedcapitalism.com/2012/04/michael-hudson.html

    Well worth a look.

    An excellent legal remedy favoring the debtor who is being loan sharked by a English Sharpee loan shark from City of London trying to grab assets.

    • C21living

      Wills,

      I love Michael Hudson. Like you, he’s a theorist who explores the way the FIRE side of the economy (Finance Insurance, Real Estate) has hijacked the rest of the economy and is creating an architecture of debt peonage.

      But there’s a flaw in his analysis, and yours. Or rather, there is a side to the equation neither of you focus on.

      That is – why does the public accept the bankers’ loans? Why do the public go into debt in the first place?

      The public are not pawns Wills. They are not animals, or robots, or chess pieces in a game of chess. They are people making decisions about what to do. So why do they allow themselves to get into so much debt?

      The answer is because, like the bankers, they are selfish and they want the money to advance their interests, realise projects, buy cars, houses, start businesses and the rest of it. They borrow money to finance their plans. The banks lend the money to finance their plans.

      If you suggest the banks are evil, but the people are good, then you will not convince me, and many other people will not be convinced. We have experience of the world, and our experience tells us that BOTH the banker-lenders AND the public-borrowers are pursuing their self-interest.

      That’s why I’m against bailing out the banks AND I’m against bailing out the overstretched public.

      Just because we have created the moral hazard of bailing out the banks absolutely DOES NOT mean we should add to that the moral hazard of bailing out the public.

      I wouldn’t disagree with some write-down of Celtic Tiger era personal debt, but many of the commentators on this site who shout about their entitlement to a debt writedown because the bankers got a writedown are every bit as selfish as the bankers.

      They are indistinguishable from each other in their recklessness, their squandering and their sense of entitlement, that they are important for society so should be given money by other members of society.

      At least people on the dole have no jobs. These people – bankers AND overstreched public – have no sense of responsibility for their actions.

      • C21Living

        I think there would be few who wouldn’t agrre with that balanced post. But the people need protection too.

        Best
        David

        • Dorothy Jones

          There are plenty of cases of ‘negligent mis-statement’ re. banks handing out loans. There is a fair bit of precedent in Irish case law; I often wonder why it hasn’t been tested in the Courts more. But, in fairness, New Beginnings are in the process of bringing test cases forward. It’ll be interesting to see the decisions on these.

        • C21living

          David,

          We have generous social welfare and pensions payments in Ireland.

          Like elsewhere in Europe, the cost of this social protection is going to become onerous for the younger generation in the coming years.

          Any social protection scheme for indebted households from the Celtic Tiger era will have to keep this in mind. How much can we afford to pay off per mortgage?

          Surely the new bankruptcy laws are going to play a more central role in the outworking of all this debt than any writeoff scheme, which will only save borderline cases?

          Yet there is a total refusal by influential social commentators to address the positive aspects of the new bankruptcy legislation, the ‘New Beginnings’ of bankruptcy, so to speak. This even though the numbers facing bankruptcy are prodigious.

          The conversation needs to begin now. The public cannot be led to believe that its all under control, they’re going to be bailed out. Mention of the new bankruptcy laws in today’s IT is timely:

          http://www.irishtimes.com/newspaper/opinion/2012/0417/1224314821894.html

        • redriversix

          “They are indistinguishable from each other in their recklessness,their squandering and their sense of entitlement that they are important for society so should be given money by other members of society”

          C21Living & David Mcwilliams

          What a outrageous generalization of people in debt or in financial difficulty……..

          Most people take responsibility for their actions and try to make amends…….. to smear them with C21s post and agree with it, which WAS a thinly veiled attack on the Majority of people in difficulty is frankly grotesque….If you see my earlier post at the start of this blog,you will see a 14 point plan I and many like me have followed,no begging or scrounging mentioned………..

          David,you are well aware in your professional position of exactly how the IMF/ECB/IMF and World Bank work and their failure rate in projects around the world and here in Europe..What you know and what you can write, I understand has its limits in the General Media.

          I.e ; Irish Water set up with Bord Gais is simply another asset to be sold off to pay secured/unsecured bondholders.

          David,how can you say his post was “balanced” ?…………you my accuse me of bias and you may or may not be right,but your reply was ill-thought out and inconsiderate to many.

          Furious & disappointed in our Host
          RR6

          • Colin

            Then leave, and go to another website that satisfies your sense of balance.

          • C21living

            Look,

            My post was not a ‘thinly veiled attack’ on anyone.

            I just think the solution to the personal debt crisis is Ireland must involve the new bankruptcy laws, which are very helpful to give people a second chance in life to start again with a clean slate in life.

            You clearly disagree, you think we should give them our money to prevent this from happening. It is entirely unclear who would qualify for this debt forgiveness scheme and how much they should get. Of course, it’ll need to be enough to ensure they avoid bankruptcy, or we’ve just blown that money.

            There are 100,000 hopusehold mortgages 3 months in arrears or more.

            Suppose we give them €200K each to ‘git her done’, make sure they don’t go bankrupt.

            I make that €20bn.

            How are you going to explain that to the younger generation in the country, that despite bringing in new leniant and fair bankruptcy laws, instead we decided to give €20bn to overstretched mortgages. Many of these overstretched mortgage holders will have a huge weight lifted off their shoulders, and have much better jobs than the younger generation. They could finally go out and get that new car they’ve been hoping for, or go on that foreign holiday….

            …while the youngert generation are stuck with that bill on top of the banker bailout bill.

            This is an amazingly shortsighted plan.

          • C21living

            Maybe you could start an RR6 blog called ‘where’s my bailout’ or ‘MY family first’.

          • Grey Fox

            RR6, keep the faith, you have support here, also keep in mind that there is a pattern to the responses of the likes of C21 and Colin, they all seem to end with invitations or directions to leave the site??? whats that all about?? sounds much like the attitude of Government, ” get a life” & how dare the citizens protest etc… very weak arguments in my honest opinion

          • Colin

            I said it because RR6 said he was furious and disappointed with David. David is our host. If you visited a friend’s house, and were furious and disappointed with something the host said, the logical next step is to leave your host’s house and go back home.

            Pauldiv and Georg R Baumann have insulted our host many times here, yet like a moth to a flame, keep returning to throw more dirt and violent threats around the place.

            So, that’s the reasoning behind the ‘go somewhere else’ message. Pity you needed that explained to you, but there you go.

        • Tony Brogan

          David

          It is the monetary system of debt based fiat currency that has emmeshed and pauperized the people.
          Band aid help with not solve the problem, it is a temporary fix.
          The people have demanded the goverment provide services which are unaffordable. The people voted in the politicians that enacted the policies.
          The people sucked themselves in by going for the big houses and fancy new cars and foreign holidays.
          Subsidies in the form of lower interest rates only begat more of the same. Debt relief is asking someone else to pay for the errors of others.
          Individual debt must be purged not forgiven. I do not agree with a lifetime sentence of penury. Many past generations placed themselves into indentured servitude in excess of 12 years and lived as slave labour in the carribean or americas or Australia just to get a hope for the future.
          The new bankruptcy laws or 3 years in purgatory seem about right.

          But the system must be changed
          You ignore the fumdemantal problem of the money system. you pay lip setvice to the idea of reverting to commodity money. You asked for time to consider as you are busy.
          Fair enough but when your whole premise of economic activity and solutions are based upon a fraudulent monetary system what is taking you so long to consider a remedy.

          I have been to many a doctor’s office where the symptoms are discussed but often the underlying cause is ignored. I refuse to take another pill and come back next week.

          There are enough people on this blog who agree with the proposition of, and advocate, sound money to replace the currnet system that you need to get on board and debate the solution rather than ignore it by proposing feel good plasters for the festering sore.

          Best regards
          Respectfully
          Tony

          • redriversix

            IMF directs ECB to lower interest rates tonite.They are already at 1%…!!!!

            This people will never learn..trying to solve a cheap money crisis by creating mega-cheap money half of one percent !!

            Maybe Germany can take some inflation,can we ?

      • gizzy

        In a normal balanced economy your view makes sense. But we are dealing with an economic situation that is unprecedented here.

        In a small economy a large precentage of the people underwater is going to have a lasting effect on the rest.

        We are past the point of analysing what people did wrong.

        How do we now solve it. More of the same? You might be against bailing out the Banks, but we did it and are continuing to bail out investors.

        A lot of the people on the dole are those with mortgage arrears and negative equity, a lot are self employed who invested in business and wages.

        I agree with a sentiment David expessed real hazard is a bigger concern than moral hazard and in the current mess whose moral compass does one use.

        • Johno

          Is this the ultimate ‘what came first? The chicken or the egg? ‘ question.

          Do we have bust banks because people applied and borrowed too much?

          Or do we have a host bankrupt people because the bank loaned out too much?

          For me the most important thing is we get out of this recession / depression we are in as a country. We need to get people off the dole and into sustainable work. I have no idea how this can or will be done. But I don’t think we can go back from where we came from.

          Whatever happens if its mortgage write off’s or mass bankruptcies or whatever else , we as a people have to learn from what happened. This cant be allowed to happen again.

          • Tony Brogan

            Hi Johno
            The problem is the monetary system
            It is designed to create debt.
            It is designed to as many people as possible indebted.
            It is a deliberate policy not an error
            It creates the situation that we are in. There is a huge cry for help from the government.
            The people will give up centuries old freedoms to be bailed out.
            A sovereign people become servient and the final destiny of one world government run by the banking families is a few steps closer.

            Let the banks and the people go broke. we can not afford the bailouts added to the already unpayable nation debt
            It is morally wrong and reprehensible to coerce the prudent to bail out the profligent and the misguided.
            You will have a socialist utopia where all are as equally broke as the next if you do.
            get rid of the fiat paper money system and return to honest commodity money and can the EURO.

          • PollyMolly

            When the tide goes out on consumption based economies then problems always arise. Banks should be treated with the caution of Chicago era gangsters (equally badly dressed) no friends in money or war and interested in one thing: the bottom line. Sure they employ gentle faced branch managers but again with the sole aim of increasing banking activity and they bring in the heavy guns when it goes pear shaped, dealing with landlords in the event of renting is only marginally better but not by much. Whenever you are at the ‘mercy’ of another whose motivations are profit, then sentiment tends to get checked at the door.

  47. dwalsh

    Good post Tony Brogan

    I am not sure about scrapping the central bank. I would nationalise it. But managing the currency directly from treasury would amount to the same thing. The principle is that the currency be issued and controlled by the people through their legitimate representatives; not by private bankers.

    End all private currencies. It is a scandal that the global reserve currency is essentially a private or plutocratic currency. What were they thinking?

    Also, not convinced by the principle of tying the value of the currency to a commodity. The fact is, as we are finding out today (again), it is ultimately the human wealth of the nation that underwrites a currency.

    Stacks of gold and silver in vaults is the capital of oligarchs. The primary capital of a nation is the creative and productive capacity of its people. True human wealth is measured in the quality of human lives; not in stacks of gold or in financial or monetary assets.

    If we place the value of our currency and thus our social and economic emphasis on fetishised commodities such as gold or silver, we are inevitably moving towards an oligarchical system; by which I mean a system that promotes and rewards the concentration of wealth (the fetishised commodity and its derivatives such as debt) in private hands. That’s what we have today.

    Since the people are the ultimate source of the fiat of the currency; and the people are the ultimate underwriters of the currency; that is where the value of the currency should be located.

    Generally we should place our social and political and economic emphasis where the real wealth and value is; our fellow human beings. The development of human capital is the foundation of true wealth.

    • Tony Brogan

      Goodday Dwalsh
      Thanks for your comments.
      see my resonse in CAPS below

      I am not sure about scrapping the central bank. I would nationalise it.CUT OUT THE CANCER, DO NOT LEAVE A CENTRAL BANK TO BE MANAGED BY WHOM. CANADA QUOTE, UNQUOTE NATIONALIZED THE CENTRAL BANK BUT IT STILL FUNCTIONS FOR THE BANKERS RATHER THAN THE PEOPLE. But managing the currency directly from treasury would amount to the same thing. The principle is that the currency be issued and controlled by the people through their legitimate representatives; not by private bankers. EXACTLY CORRECT.

      End all private currencies. It is a scandal that the global reserve currency is essentially a private or plutocratic currency. What were they thinking? I THINK WE EVENTUALLY END ALL STATE OWNED MONEY. FOR EXAMPLE A ONE OUNCE .9999 PURE SILVER MAPLE LEAF COIN WILL PASS FOR MONEY ANYWHERE IN THE WORLD. IT CAN BE CARRIED PERSONALLY AND CHANGED TO ANY CURRENCY AT PAR OR SPENT IN ITS PURE FORM. THAT IS PEOPLE WILL ACCEPT THE COIN DIRECTLY IN PAYMENT OF A GOOD OR SERVICE. NOT SO WITH A CANADIAN PAPER DOLLAR NOTE. IT IS ONLY ACCEPTED IN CANADA. THE SAME IS TRUE WITH THE ONE OUNCE CANADIAN MAPLE LEAF GOLD COIN. THE COINS ACT AS REAL MONEY, WHICH THEY ARE, WHEREAS THE PAPER IS FIAT CURRENCY ONLY GOOD IN THE JURISDICTION WHERE ISSUED.

      Also, not convinced by the principle of tying the value of the currency to a commodity. NO, YOU MISUNDERSTAND. OR I DID NOT EXPLAIN. THE COMMODITY MONEY IS TIED TO NOTHING. FOR INSTANCE. THE SILVER COIN TRADES AT WHATEVER VALUE IS ASSIGNED TO IT IN THE MARKET PLACE. IT DOES AT PRESENT, AS IT IS QUOTED AT THE WORLD SPOT PRICE IN ANY OR EVERY CURRENCY. THE PROPOSAL TO ISSUE THE SILVER COIN INTO CIRCULATION IS NOT TO HAVE A SET MONETARY VALUE TO A CURRENCY BUT TO FLOAT UPWARD WITH INFLATION AND SO SAVERS WILL NOT HAVE THEIR SAVINGS DEPLETED BY INFLATION. THE COIN WILL STATE THE WEIGHT IN TROY OUNCES AND THE PURITY ONLY. NO STAMPED MONETARY VALUE AS HAS BEEN DONE IN THE PAST. The fact is, as we are finding out today (again), it is ultimately the human wealth of the nation that underwrites a currency.THE ONLY THING UNDERWRITING THE PRESENT CURRENCIES IS THE WILLINGNESS OF THE PEOPLE TO CONTINUE TO USE IT. IT IS NOT UNDERWRITTEN BY THE WEALTH OF A NATION AS IT CAN BE DEBASED BY CONSTANT ISSUANCE OF MORE AND MORE CURRENCY.
      INFLATION AND DEBASEMENT OF THE CURRENCY IS ALWAYS A PURELY MONETARY EVENT AND NOT AN ECONOMIC ONE.

      Stacks of gold and silver in vaults is the capital of oligarchs. WELL IT IS BECOME THAT WAY BY DECEIT AND FRAUD. TRUE MONEY IS ALSO A STORE OF WEALTH, AS WELL AS A MEDIUM OF EXCHANGE. CHARACTERISTICS OF GOOD MONEY ARE: IT’S RELATIVE RARITY MEANING IT IS NOT EASILY ADDED TO OR IS STABLE IN SUPPLY., IT IS EASILY DIVISIBLE, IT IS READILY PORTABLE IN SMALL LOTS FOR HIGH VALUE, AND IS FUNGIBLE, OR RECOGNIZED AS MONEY BY A MAJORITY OF PEOPLES (INTERNATIONAL IN SCOPE) The primary capital of a nation is the creative and productive capacity of its people. True human wealth is measured in the quality of human lives; not in stacks of gold or in financial or monetary assets. YES THAT IS TRUE, THE ENERGY AND ENTERPRISE OF A PEOPLE WILL CREATE WEALTH.
      YES CAPITAL IS NOT MONEY AS THE TERM IS GENERALLY USED BUT IS CORRECTLY THE ASSETS OF A BUSINESS OR PEOPLES PLANT AND EQUIPMENT. THAT INCLUDES A PEOPLES EDUCATION , SKILL AND KNOWLEDGE. THE STACK OF GOLD AS YOU PUT IT ARE THE SAVINGS REQUIRED TO INVEST IN CAPITAL FOR A PRODUCTIVE PEOPLE. WE SEE THAT GOING IN TO DEBT FOR ANY REASON EVENTUALLY DRAGS US UNDER THE HEAL OF THE LENDER. THAT IS WHY SAVINGS IN AN ECONOMY ARE ESSENTIAL FOR THE GROWTH OF THE ECONOMY. SAVINGS ARE THE BED ROCK OF A PRODUCTIVE ECONOMY AND A STABLE SOCIETY. EXACTLY THE OPPOSITE OF THE DEBT BASED SYSTEM WE ARE TRAPPED WITHIN.

      If we place the value of our currency and thus our social and economic emphasis on fetishised commodities such as gold or silver, we are inevitably moving towards an oligarchical system; by which I mean a system that promotes and rewards the concentration of wealth (the fetishised commodity and its derivatives such as debt) in private hands. That’s what we have today.SORRY TO SAY YOU ARE TOTALLY WRONG HERE. WE ARE WHERE WE ARE TODAY BECAUSE WE HAVE ABANDONED GOLD AND SILVER AS MONEY. WE HAVE EMBRACED UNBACKED FIAT PAPER MONEY ISSUED AS AN INSTRUMENT OF DEBT. WE HAVE PLACED OURSELVES IN THE HANDS OF THE CENTRAL BANKS TO GREATER AND GREATER IMPOVERISHMENT. CALLING GOLD AND SILVER MONEY A FETISH SUGGESTS THAT IT IS THE LATEST FASHION RATHER THAN MANKIND’S OLDEST AND MOST SUCCESSFUL FORM OF MONEY.

      Since the people are the ultimate source of the fiat of the currency; and the people are the ultimate underwriters of the currency; that is where the value of the currency should be located. THE PROBLEM WITH FIAT CURRENCY IS THAT IT IS COMPLETELY ELASTIC. IT IS TOO EASILY ADDED TO AT THE WHIM OF A POLITICIAN. POLITICIANS LIKE FIAT CURRENCY AS THEY CAN ISSUE NEW MONEY TO PAY FOR GOODIES OFFERED TO THE ELECTORATE. THE GOVERNMENT DOES NOT NEED TO RAISE TAXES TO DO THIS. IT IS TOO GREAT A TEMPTATION. AS THIS MONEY IS BORROWED FROM THE CENTRAL BANK AT INTEREST IT ADDS TO THE NATIONAL DEBT AND INCREASES THE AMOUNT OF THE INTEREST PAYABLE IN FUTURE YEARS. BANKERS LIKE FIAT MONEY AS THEY EARN INTEREST ON MONEY CREATED FROM NOTHING. FINALLY THE ADDITION OF EXTRA CURRENCY IS INFLATIONARY WHICH PENALIZES THE FRUGAL AND THE THRIFTY SAVERS CAUSING THEM TO SPEND THEIR MONEY AND SO DEPLETING THE ECONOMY OF WHAT IS REQUIRED TO INVEST IN CAPITAL.
      A FIAT CURRENCY IS ALWAYS DEVALUED BY EXCESS PRINTING OF MORE CURRENCY AND WILL ALWAYS COLLAPSE AS IT IS AT THIS MOMENT. THE BANKERS END UP OWNING ALL THE ASSETS.

      Generally we should place our social and political and economic emphasis where the real wealth and value is; our fellow human beings. The development of human capital is the foundation of true wealth.YES YOU ARE CORRECT HERE. THE TOOL TO UTILIZE THIS CAPITAL IS COMMODITY MONEY WHICH IS TERMED HONEST MONEY FOR A REASON. IT IS NOT THE DISHONEST FRAUD THAT IS FIAT CURRENCY. GOLD AND SILVER IS THE MONEY OF AN INDEPENDENT FREE AND SOVEREIGN PEOPLE. FIAT MONEY WILL DISSIPATE THAT HUMAN CAPITAL AND EVENTUALLY DESTROY IT. COMMODITY MONEY WILL ENHANCE AND HELP DEVELOP THAT HUMAN CAPITAL TO WIDE SPREAD WEALTH DISPERSED AMONGST THE GREATEST NUMBER OF PEOPLE. THAT EVERYONE WILL BE BETTER OFF NOT THE CHOSEN FEW WHO CURRENTLY OPERATE THE FIAT MONEY DEBT SYSTEM.

      BEST REGARDS
      TONY

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