April 26, 2012

Growth and monetary apartheid is a Catch-22

Posted in Banks · 155 comments ·

Financially, Spain is like Ireland but it is much, much bigger. There is little doubt that Spain will need a massive bailout. The question is, who has the money to bail out Europe’s fourth-largest economy, and when Spain topples what happens to Italy and what happens to the euro?

The European response to the fact that the market gave up on Spain and Italy last November was to unveil the largest “cash-for-trash” scheme Europe has ever seen. The ECB, which isn’t allowed to buy government debt directly, lent close to €1 trillion to the banks and they in turn lent this on to the governments.

So we have bust banks lending to bust governments and we are calling it success. For a few months, as expectations of growth sprang eternal, bond yields fell because there was this gush of liquidity coming from the central bank. But many sceptical investors sold into this liquidity, using the “fake” demand driven by the ECB as an opportunity not to buy, but to sell.

Why would they do this?

Because they looked under the bonnet and saw a massive problem about to blow up in the ECB’s highly leveraged face.

Spain is a ticking time-bomb.

Like Ireland, because there was so much credit about in its boom, it appeared to run a tight fiscal shop. Exactly like us, the Spaniards suffered the credit-induced property boom. This acts as ‘financial botox — it makes everything look fitter and healthier than it is. It’s the economic equivalent of a 20-year-old face on a 50-year-old skull.

Spain’s banks, like ours, bathed themselves in toxic debt. Just to put this in context, the Spanish banks’ book values (assets minus liabilities) have risen eightfold since 1998. That is 80pc more than US banks and twice the growth for the rest of the eurozone.

Now we have the usual story playing out. The extent of the boom presages the extent of the bust. What is borrowed will be defaulted on and the cycle goes on. We know all this from the bitter experience of many thousands of Irish “investors” who have seen the values of their dream homes around Malaga collapse. The Spanish property market continues to tank. Like the Irish banks, non-performing loans are up to an 18-year high of 8.2pc. This will continue shooting upwards.

Unemployment is at 25pc and one in every two young people is out of work. The government is offering nothing but budget cuts.

It is interesting to note that every time the Spanish government says it will respond to the crisis with more austerity, money flows out of Spain not into Spain as the government expects. The conclusion has to be every time the Spanish elite tries to gain credibility by promising to be tougher than everyone else, the very credibility they crave is chipped away at.

In Madrid, we have also seen violent demonstrations, which look likely to re-ignite. The stock market is tanking and, of course, despite all the official assistance, bond yields are rising again.

Even if things all around Europe were stable, Spain would have difficulty keeping the show on the road. But things in Europe have taken a dramatic, but not unexpected turn; which is a turn for the better or worse, depending on your view of the world.

In France, it looks like Socialist Francois Hollande will be the new president of France unless Nicolas Sarkozy can turn things about. This is not out of the question, but the balance of probability must point to a Socialist president.

Mr Hollande has promised to roll back on deficit-cutting programmes and renegotiate the fiscal compact treaty. By the way, the fiscal compact is dead in the water now for obvious reasons. All the recent evidence indicates that fiscal rules without flexibility make things worse not better.

But maybe Holland will give the EU head honchos more to worry about than Mr Hollande.

The coalition government is gone. Geert Wilders’s Freedom Party, which up until now has supported the ruling Liberal Party, says he won’t agree to the roughly €15bn ($19.8bn) in budget cuts needed to bring the country’s deficit under control. This is nothing in the overall context of one of Europe’s richest and most dynamic economies. But it does show you that the national mood across Europe sees through “austerity at all costs” and is unwilling to accept the status quo that has prevailed up to now.

Mr Wilders, who uses the term “Brussels diktats” to wild applause every time he mentions the EU, is pushing for an exit from the euro and a return to the guilder.

All this is good news for us because it might sharpen the debate around the fiscal compact. The evidence from Spain is that applying the fiscal compact rules causes capital to panic. The reason for this is the following: the more austerity imposed, the less likely it is to work. The less likely it is to work, the greater the risk in that particular country, because if there is no plan B, anything can happen when plan A fails.

This is causing money to cascade out of Spain as it seeks refuge in Germany. German bond yields fall and the spread between Germany and the rest widens, making a mockery of the idea that we have a monetary union. After all, in the monetary union there is meant to be no difference in interest rates amongst the members. That was, you might remember, one of the selling points of the single currency.

What we have instead is a monetary apartheid where capital is now regarded differently. We have first-class capital and second-class capital and even third-class capital.

German capital is first-class capital and it is treated differently to capital in other countries. Spanish capital and thus its citizens are now financially second-class citizens. This monetary apartheid will persist as long as there is not growth but there can’t be any growth as long as there is monetary apartheid.

So we will lurch from one crisis to another and the ECB will keep printing more and more money to try to prevent Spain from going the way of Ireland, Portugal and Greece. But the more money it prints, the farther away it gets from the strong, no-nonsense currency that the Germans and Dutch signed up for.

Ultimately, the Spanish and Italians will get fed up with austerity and the Germans and the Dutch will get fed up with bailouts.

As we have observed over the years in economics, what is important is rarely complicated and what is complicated is rarely important. Things are only going one way for the euro and that won’t be pretty.

  1. happyboy


  2. Adam Byrne

    Good article, enjoyed it on Sunday.

  3. george

    David it’s time for Punk Economics Lesson 4. By the way, I never told you that specially number 3 is absolutely brilliant! The following is my comment for your last two articles.

    There are many cases in real life where the medicine ends up killing the patient, and all this austerity by itself is not going to save us, because it is the wrong type, or the wrong doses. In President Roosevelt’s time, during the New Deal for America, the difference between the average industrial wage, and the best paid in the public and private sector was five times. How much is here now?

    Its interesting that before the previous general election that put this Government in power, independent TD Shane Ross, and SF economic spokesman Pearse Doherty were saying the same, that the maximum salary in the Public Sector and Semi State companies and the Banks, that had to be saved by the State, should be caped at around 120000 euro or around it. Austerity should have started from the top, and , when somebody leads by example, others follow suit. We cannot keep paying these rates of unemployment benefit, or child benefit neither. And we are doing so because this Country is too expensive, rents are so, commercial rates are so, professional fees are so, and others. And everybody hides behind the Constitution, and very little is being done.
    But most of our politicians are a bunch of procrastinators. It was going to be “Dublin’s way not Frankfurt’s way”, and it was going to be “not a penny more for the Bondholders”…isn’t it? And now the new way to emotionally blackmail people is by saying, “we are going to create 2000 jobs with the new Water Board”. Or “if we don’t approve of this coming fiscal compact treaty, “we are going top be cut off the rest of Europe, it won’t be any money to pay your salaries, and there won’t be any investment or new jobs created in this Country”. Typical of procrastinators , who in their ivory towers, want to save their privileges, at the cost of not doing what is needed but what they are told. We need human beings not names, and the convenient excuse we are given, that if we don’t pay exorbitant salaries, some jobs cannot be done properly. There are people ready to do it for a third of it, but they are not given the opportunity do it.
    If some people would be paid less nobody has to loose their jobs.

    It’s OK to cut waste, but it seems to me that privileges for the better paid, and the big earners , are not dealt with properly, and only superficially, to create the impression that something is being done, when in reality very little is being done. Nobody wants to come down the Pyramid!

    The ideal shouldn’t be a revolution, it should be a transformation…austerity should have start at the top, and not with measures that affects the most ordinary families, and the small and medium size indigenous business who can create jobs. We already know that we need a new bunch of politicians leading the Government, with radical ideas for effective changes, which will benefit Society as a whole. Any chance of that happening?

    So if we know that we are doomed if we vote YES, (including this so called “reluctant yes” that is a total nonsense), and we know that we are doomed if we vote NO, I ‘m voting NO. Because it gives me more hope, that a total transformation can be done. Because even if we have to pull out of the euro, we’ll start to rebuild the Country, from a solid foundation, and not on top of a heap of recycle ruins.

    • george


    • Harper66

      Excellent post George.

    • C21living

      If we leave the EZ we’ll repeg our currency to sterling, as it was before 1979, to ensure “stable long-term conditions” for exporters based in Ireland.

      What the country really needs, to encourage the local economy, is local currencies, following the lead of Kilkenny, which already has its own currency.


      • Harper66

        Hi C21living,hat
        pegging to sterling is not a fait accompli. Sterling is intertwined with the euro proof of this is that it is back in recession.


        I do agree there are those would be very keen to see this happen but it is not a foregone conclusion.

        • C21living

          You’re right there Harper, it’s not a foregone conclusion that we would return to monetary union with the UK via a currency peg.

          Nothing is certain, not absolutely certain.

          I never said ‘the property bubble WILL burst’ although I suspected it would from 2002 onwards exactly the same as I see a punt nua currency peg with sterling coming down the line, for extremely obvious reasons.

          Nor am I suggesting that a currency peg with sterling would be necessarily a ‘bad thing’ for Ireland.

          But if I was a betting man, which I’m not, I’d say a ‘punt nua’, floating this way and that, would not be allowed to do so for long.

  4. ECB lends to banks at 1%

    Banks lend to Governments at 1+x%

    X = banks profit

    Another fcekin scam!!!!!

  5. EddieN

    I would like to see an article or Punk Economics about what will happen to us when we pull out of the euro with emphasis on your expectations for the following:
    1. the value of our new punt compared to say sterling
    2. will the multinationals pull out of Ireland (which is what we are being told will happen!)

    etc etc

    Keep up the good work….

  6. redriversix

    Governments will collapse……..

    Austerity has never worked except during the English Industrial revolution………and they were having.yes,correct a industrial revolution …

    Our Country [ Company ] is poorly led and managed by people who are not qualified.Once again,Democracy has proven that electing people with good intentions does not work as their lack of professional training allows them,or they allow themselves to be manipulated by the bigger kids on the block………

    The vast expenses and waste of money internally in this Country is shocking and will not change until this financial crisis explodes and by then it will be too late.

    This Country HAS excellent resources and with proper management and tough decisions taken,can get itself out of trouble or at least begin to stabilize.

    But that won,t happen as Government is weak and unable to stand up for itself or its Citizens.

    So,protect yourself and your family,do a budget, find out were you stand and impose austerity on those who impose it on you.

    Nobody is coming to help you,you must realize you have a legal and moral obligation to look after yourself and your family first

    Fail to prepare..? prepare to fail

    This treaty is officially dead,either way.

    Have a great day !


    • EddieN

      So RR6 how do we impose austerity on those who impose it on us?

      • redriversix

        Morning EddieN

        By protecting your family and you.Doing a budget,knowing were you stand,slash your bank creditors to 20% of what you were paying,If you are in trouble or your budget tells you you are going to be.Make sure you prepare yourself.Talk to your creditors.

        Slash any expenses you can do without.
        Contact http://www.citizensinformation.ie
        or http://www.mabs.ie.

        If we cannot take care of our-self,how can we take care of family ?
        How can we function at work if we cannot function at home ?

        If your unemployed,we just have to try and survive,sell whatever you don,t need.

        I suggest not paying unrealistic taxes,Household charge,water charge etc.

        Its Tough EddieN,but it can be done………….I know.

        Have a great day


    • Deco

      The predominant Irish concept of management is not up to the task. The IMI should be disbanded and sacked. Start again from scratch, and do it sensibly this time. As Morgan Kelly pointed out about the D4 banking sector, appointing people to positions of responsibility, because they played a certain postion in a rugby match in Donnybrook in the 1980s is a really stupid way of selecting leadership. (or for that matter any other relevance to any other sport).

      This is exactly what has gone on.

      We fail to comprehend that this sort of stupidity creates disasters. The entire culture of decisions being made on the golf course, or in the clubhouse bar after a round is completely idiotic.

      • 33square

        “appointing people to positions of responsibility, because they played a certain postion in a rugby match in Donnybrook in the 1980s”

        also appointments made due to length of service as opposed to actual ability are the painful norm…

    • Grey Fox

      Subscribe +1

    • molly

      Yes again the nail is drove through the heart,I think in a way the Irish people are like an alcoholic still drinking or should I say trying to stop drinking ,the point I am trying to make is the Irish people have not suffered enough so they cling on to the hope that a turn around will or must come.they say that an alcoholic that is still drinking has not suffered enough that’s way he or she still drinks while all the people around suffer .we the Irish are going to suffer a lot more because in this ,because we have not seen real pain yet,
      Some of us can see the wood from the trees but not enough to start the change that’s needed.

  7. Grey Fox

    Excellent again David, your analogy using Botox is spot on.
    Cosmetic, and rotten under the skin!
    I am including a link to a somewhat long Youtube clip from probably one of the last survivors and witnesses to Germany’s intentions, his references to the first time he became aware of Germany’s mention of the single european currency over 7 decades ago is astounding, is the Germans collective memory of the Wiemar Republic still so strong today that it drives them to control everything still! Or are they just that good! (facepalm)

  8. Deco

    DE,NL,AT,FI want a no-nonsense currency. (and have found out that it is not what now exists). Corruption meets a sharp rebuke from the people, and the institutional state is in fear of the implications of displeasing the populace). These countries also demand accountability.

    IRL, FR, ES want a currency that will continue to prop up a nonsense financial/banking system. (and are going to get it). And the politicians are compromised, if not corrupt. The institutional state is powerful, unaccountable, though the population contains an element that is liable to ignore the institutional state, and which distrusts authority, and the motives of their own rich. These states are demanding a continuance of the pretence that everything is fine, and coverup of the local elites.

    IT, PT, GK want a nonsense currency, that can be printed to pay for politicians borrowing more than they take in. (and have got it since day one, but now have to undertake austerity to please group 1). The political system is rotten with corruption. The institutional state is highly successful at leveraging EU money as a means of feeding the corruption. People feel helpless concerning corruption. These countries want bailouts (for the local elites) and continued EU money.

    Brussels reckons it can stick this into a bundle and call it currency union. Really, it is Euro-Fudge.

    And Brussels depends on taxing the group 1 for it’s gravy train.

    There are three currency groups (based on the behaviour of the of the financial systems involved).

    The article perfectly captures the essence of where things are heading.

    This is turning into a moral divide.

    For the sake of Ireland, it is important that we fillet the local establishment and hand them out to dry. Regardless of where we are headed, we need to re-establish the moral credibility of this society. And it is going to be a very important issue.

    • Deco

      By the way, in the midst of this morass, you have the clowns in Brussels barking out the orders to everybody. They have no credibility at all. Of course, in the Irish media, we do not see this. But travel outside the EU, and watch news broadcasts – or check the same on the the internet – and you realise the scale of the mess they created.

      The Austrian School of Economics holds that human behaviour is the root of all economic activity and results. I suppose what we see proves the old adage that “behaviour breeds results”.

  9. Deco

    So we have bust banks lending to bust governments and we are calling it success.

    In essence, that describes exactly what is going on, in the most succinct terms possible. As Wills, says, it is a “ponzi scheme”.

  10. Everything that is happening now is of the consequence of having allowed most of the “West” manufacturing base to have been transferred to South East Asia. This has been in the pursuit of cheap goods for everyone / whilst still trying to maintain high asset values.

    This has been happening for decades – Taiwan, Hong Kong, now China. And it is now on a massive scale.
    The jobs that should be in the Euro zone to allow for economic growth have gone.

    And it never seems to be hi-lighted by any of the commentators. If we cant even recognize the problem – let alone deal with it, then however bad we think things are now – they are holiday time compared to what is coming down the line.

    • 33square

      it is still possible to win with cheap asian manufacturing… the onus then, however, is to design truly sought after products, using intelligence & intellectual property.

      take the op1 musical instrument @ http://www.teenageengineering.com … designed and assembled in sweden… parts most likely manufactured in asia… but still money to be made because they designed a sought after product and provide decent service and updates. they have a passion for what they do. they made a product worth more than the sum of its parts.

      if your product is mediocre, then no amount of “the money game”, export controls, pegging to currencies can make your product worth something when the chips are down. they are just tricks. tricks that work when the living is easy will leave you flat on your face when the arse falls out of the market.

      i’d be surprised if there are 10 companies in Ireland capable of such things. can we name a few?

      • 33square

        @PhilRuss1: obviously the above is an edge case compared to what you are talking about, but it highlights a deficiency nonetheless.

    • Deco

      Well, I think the scale of waste that exists in the West should not be forgotten. In fact the level of waste of resources in the West, is what makes Asia so competitive.

      The West is intellectual laden with so much nonsensical structure in it’s thinking, and public discourse, that is basically inevitable that it is being undermined within.

      SE Asia is not the problem. SE Asia is doing a lot of things right. The West is doing the same things wrong. It is the flaws in the current Western model that is undermining the west. And the deliberate, sophisticated, and elabourate game of delusion that exists in the West, over what happens makes sure that the political system can continue to be used to undermine the West.

      Just like the state undermined the society in the Soviet bloc, we now have the state undermining the society in the USA and EU. And part of the pretence if to imagine that the source of the problem is Asia.

      Asia is not responsible for Dublin Airport’s Terminal 2 being empty. Asia is not responsible for the idiots in the Dail, and the Seanad. Asia is not responsible for the forecasts offered by media commentators that house prices in Ireland would go up forever. Asia is not responsible for Seanie Fitz, or any of the bankers. Asia is not responsible for the high cost of Irish electricity. Asia is not responsible for the level of taxation levied on the people in this country. Asia is not responsible for the mess that is the HSE.

      Ireland is responsible. And Ireland, and the people must accept responsibility. Ireland must start being more grown up. And Ireland must stop wasting the public discussion on dead horses, irrelevant minutae, and fake heroes.

      • C21living


        Western and, might I emphasize, Irish people look outside themselves to apportion blame, because they are spoilt work-shy, narcissistic, self-regarding bitches.

        People actually pay money to buy ‘the Sun’ newspaper, rather than make an effort to inform themselves.

        The West is degenerate and in dietary, moral, behavioural decline.


      What you’re describing Phil is “Globalization”, which moved the manufacturing jobs out of the EU and the US by allowing access to our markets to the Chinese, who don’t play by our rules, whatever they may be, so therefore should not be allowed play on our pitch. Globalization (or Corporatization?) also allowed huge amounts of speculative capital to flow anywhere there was a killing to be made, causing speculative bubbles of all sorts to arise. Soon the real economy was being sunk as it couldn’t compete with the returns being offered in the Phony FIRE Economy. Allowing China into the world’s markets while still a centrally planned dictatorship is akin to playing them in a game of soccer but allowing them to field their entire army against our 11 players. The OP1, at €800, is a joke & has no hope of success, it’s a dead duck. I mean, it has a tape recorder in it FFS! There is Scandinavian and German-manufactured musical equipment which has been successful but it tends to be at the top end of the market. We cannot compete with the Chinese and other Asian economies in the manufacture of consumer electronic hardware, fact!

  11. NeilW

    And yet every Eurozone government has the power to get out of this at their fingertips if they just throw off the neo-classical shackles.

    They can instruct their local banks to purchase government debt – which the government then spends into the economy.

    The way TARGET2 is setup that generates a liquidity demand at the local central bank which ripples up to a liquidity demand at the ECB, which the ECB must accommodate. Those imbalances can then stay on the ECBs books forever.

    So all a local government has to do is look the Germans in the eye and call their bluff. Then get spending. There isn’t a damn thing they can do about it other than leave the Euro themselves.

    Marc Lavoie explains the mechanism in detail here (pp24): http://www.boeckler.de/pdf/v_2011_10_27_lavoie.pdf

    • StephenKenny

      So all we have to do is press a button called “Throw off neo-classical shackles” and we can return to a life of German cars, shopping trips to New York, €500 bottles of wine, and ever increasing values of our “investment” portfolios?

      Press.. press.. press..

  12. John LK

    George you are correct. Damned if we vote yes and damned if we vote no.

  13. cooldude

    Very interesting article David. It is now clear that the ECB is becoming the “bad bank” where all the insolvent European banks can dump all their dodgy collateral for full value. The ECB is now leveraged 38-1 and if it had to mark all it’s assets to current market value it too would be insolvent just like most of the banks. This is what happens when you start to bail out failed institutions. The losses just keep mounting up and the governments transfer them onto the taxpayers. It really is time we stood up and said no to all this nonsense. All over Europe people are becoming more and more fed up with what the ECB has turned into. It exists solely to prop up the insolvent banks. It is now obvious that our real masters are the banker elites who dictate policy to the weak politicians. We can start by voting NO in the referendum. After that all the fraudulently induced debt should be completely defaulted on. This is the debt of private companies and has nothing whatsoever to do with ordinary citizens. Then we will have to balance the budget. There will be a 10 billion shortfall to be closed when we get rid of the bank debt. This will have to be done as we must have a public service that actually serves the public and not the so called servants. All government quangos should be abolished immediatly and the public service will have to be completely restructured so that it actually serves the public. We need to exit the Euro and print our own currency. Included in this should be a choice to use commodity money for people to keep the purchasing power of their savings. We should then lower the corporation tax rate from 12.5% to 5% to keep the existing multi nationals sweet and try to attract some new ones. There should be a complete 5 year tax break for all new businesses to give our young people a chance to become entrepreneurs and avoid emigration. These are just some of the steps that can be taken. We are being threatened with all sorts of stuff if we vote NO but we must have the guts and the vision to stand up to our new oppressors who are the banking elites. The only thing to fear is fear itself.

  14. ian22

    have to laugh really at the latest threats from the establishment if we vote no in the upcoming treaty.well i for 1 aint afraid,what more can they take from us as ordinary people.austerity has NEVER worked in creating jobs and turning a country back from the brink.yet we have elected politicos telling us everyday that its the only game in town.its quite obvious that the big financial companies are running the show,who after all provides the funds to the imf and the world bank,its the big corporations and multinationals,thats who and they sure as hell aint going to take a hit on their massive finances are they?i say lets call their bluff and let the hammer fall where it will.at least it will be an ending of 1 thing and maybe the start of something more positive.

  15. Philip

    I agree wholeheartedley wityh PhilRuss1. The whole thing is down to a world imbalance between east and west and the latter’s inability to readjust to the changing circumstances. Poeple getting fired and pensions going up in smoke started making folks think in terms of investing in bricks and mortar. And it is not an Irish thing. This is endemic right across Europe.

    I would not be so hard on Ireland relative to our better of European neignbours. The level of corruption, cockups, ineptitude etc is roughly the same. Germany was a bankrolled country courtesy of the Marshall Plan and it’s having a fine time exporting to the east “precision” engineering…which face it is actually pretty old hat. It is just a mid 20th Cen economy that just makes the old stuff well and fair dos to them. But it will not last and it is sad to see the various countries point fingers at one another’s deficiencies from their high moral grounds. Gross political inepititude.

    Am also a bit pi$$ed off at the constant slagging off of Irleand relative to our neighbours. I am ok with the Irish calling the Irish idiots. But I will not countenance the Irish calling the others better in the same breath. It is complete nonsense. Let’s sort out our own mess and if David’s article is correct (which I believe to be so) then we need to back away from the EU while it tanks. I am not woting to solve the wrong problem only to be sucked into whirlpool of a sinking EU.

    So…we need to to looking east before the rest of the the EU are doing it. We are faster and more flexible and a few crumbs off that table will do us very well indeed. We may need to be doing it in punts sooner than later…but it looks that we do not have to make much effort becasue events will overtake us. In the meantime, let’s stay friendly and keep our distance and view ourselves as real players who consistantly punch above our weight. Ireland has nothing to be ashamed of relative to others – be careful and midnful of that negative narrative which our Brusselois gravy trainers love so much to spread about.

    • C21living

      Look at the bungalow blitz of this country, where houses were built on flood plains, on marginal land formerly full of reeds, anywhere at all with no thought put into the consequences. Look at the An Taisce report of overproduction of houses in Donegal, Leitrim, Cavan, Sligo and Roscommon. You couldn’t destroy the value of existing homes more comprehensively if you tried.

      As a result of this destruction of the landscape and private wealth, theses counties are experiencing mass emingration, to Dublin or abroad.

      Now look at the extraordinarily tight planning laws in north County Down, or anywhere in England, or, for the tightest of the tight, Holland.

      Now tell me again that we are ‘the same’ as these others. Just tell me with a straight face!

      The Spanish also made a ghastly dogs dinner of their countryside with reckless overbuild.

      How on Earth can you justify your politically correct foolishness that ‘we’re all equal’, certainly RE: how we manage our environment?

      Are you so spoilt you want to be told ‘there, there, don’t worry, county Down/England/Holland isn’t better than you, they’re just different!’

      You know with 25% unemployment, there are still Spanish snobs walking about who think their country is a great Empire and above other. I kid you not! There are also Irish who genuinely believe ‘everybody loves us’ even when the world and his mother seizes upon St Patrick’s Day as a chance to behave drunkly and irresponsibly because ‘hey! we’re oirish for de day!’ and Irish think it’s great craic altogether, as the damp rises in their flood plain vinyl and glue gaf worth exactly fuck all!

      • gizzy

        Interesting that in the uk planning is actually granted by elected councillors on recommendation by officials.

        Here it is granted by the officials who were singualarly impossible to deal with and like to pretend the whole planning mess is down to crooked councillors. Lies and damned lies.

        Not that I don’t think we should abolish 80% of the councils.

        • redriversix

          Morning Gizzy

          “Their are 1600 Councillor’s in Ireland !”

          Hope your well today ?


        • Philip

          You are in danger of using exceptions to prove the rule that the Irish are a write off. There are planning scandals in the UK and NL. Higher population densities mean more issues with pollution, zoning areas for living that are only fit for heavy industry etc. Remember the little controversies which had Mr Robinson running for cover a few years back. There is dirt everywhere.

          Higher density forces environmental awareness. Ireland has not reached that point yet. The Dutch have little natural environment that is not engineered. We are at different stages of evolution and only arrognace blinds people to why they came as far as they did.

          Pay no attention to loudmouths.

        • Philip

          Officials are always overruled in Ireland as well. Cannot comment on bedside manner of officials. Look, it’s a mess.

  16. C21living

    Like DMcW, I’m convinced the EZ will fall apart.

    On the last 2 threads, I mentioned that multinational FDI in Ireland will be very worried about the breakup of the EZ and the uncertainty about the ‘punt nua’.

    To confirm my view, in today’s IT, Barry O’Leary, Chief Executive of IDA Ireland, writes “Foreign Investment hopes hinge on Treaty result (FDI wants a YES)”.


    If we leave the EZ, which looks increasingly inevitable, FDI will panic.

    FDI is the biggest tax payer in Ireland.

    So what’ll we do, if exiting the EZ is inevitable?

    We’ll repeg our currency the the GBP sterling, as it was before 1979.

    From the point of view of IDA Ireland/American and other multinationals in Ireland, an independently floating Irish currency is too unstable. We’ll be asked to repeg to sterling and we’ll do it, because so many jobs and so much tax depends on “stable long-term conditions”.

    Get ready for an unexpected turn of events – if and when we leave the EZ, we are going back to monetary union with London.

    • molly

      Yes this is almost certain to happen but is it going to happen in 2012’2013
      Whats Ireland’s back up plan ,will Jenny and co bury there heads in the muck.

    • bonbon

      I’m afraid you have misunderestimated the US economic “strength”. It is now official, the policies of Paulson and Geithner have killed the US economy. It cannot be restarted in the current system.

      Get ready for some surprising changes. Those global “employers” better be looking over their shoulders. Any attempts at dictating Irish policies will look rather foolish.

      With this in mind, consider what this means for London. You can be sure Cameron et. al. are way ahead on this one.

      So no silly “going back” can occur. The Euro is doomed, and the door to the future is opening.

  17. molly

    Thats kenny and co.

  18. cooldude

    Good article on the bailout of Spanish banks by the IMF. All of this will be paid for by the tax payers of Europe needless to say. Let insolvent private institutions who have behaved recklessly fail I say but the banking elites want privatization of profits and all losses to be covered by taxpayers.

  19. gizzy

    Have the three unions who recommended no mainly private sector members and Impact who recommended a yes vote public sector?

  20. gizzy

    Reading John Maudlins articles he has harped on about Spain being the big issue for months now

  21. wills


    Spain does not need a massive bailout.

    Spanish insider banking – developer crony networks demand they do not pay their bill for their property bubble swag grab.

  22. wills


    The market did not give up on Spain.

    The market is gambling short on Spanish bonds etc in the shadow banking system casino table.

  23. wills


    Spain will not topple.

    The debt ridden internal parasite system feeding on the host will kick over the real economy in its feeding frenzy.

  24. wills


    The markets have not giving up on Spain.

    The markets are gambling Spain in a shorting.

  25. wills


    The *cash for trash* scheme was ALWAYS part of the property ponzi bubble scam.

    The banks conspired to use the ECB and its printing presses to mop up the mess after when the bubble exploded.

  26. wills


    The bust banks lending to bust govts is only been called a success by them and their mates in the crony networks.

    The WE is them.

    So say them and not the we/

  27. wills


    Listen up. The banks are rebuilding their capital reserves right now using the printing presses from the central banks.

    The toxic mess from their ponzi property bubble is on the sly being written off in the back ground on the sly.

    Please for Christ sake everyone get real and wake up to this please.

    The banking system is taking you all for a ride.

    Article above is as foggy as the morning dew.


      No Wills, the global banking system is honest, it just made a few mistakes, it can manufacture risk-free money out of thin air, the real economy can’t function without it, people will die if all this debt isn’t repaid by those who don’t owe it and everything will be alright if we just make a few adjustments. It’s not as if our political and economic systems have become dysfunctional and are in need of as big an overhaul as any system has ever had, and survived.

  28. straboe1

    It is completely unfair to blame us on the bad leadership that we have had over the years. An elite has run this country for the last fifty years, this is the first thing that needs to change for this country to be run properly. After that there is still plenty of hard graft needing to be done. Start the process by voting NO.

  29. Deco

    Well, this is the latest update on the farce that is the D4 banking sector….


    Two and half Pillar banks is obviously a bett strategy than two pillar banks.

    The important thing is not to sack any useless managers…..


      The language in this article made me laugh until I cried. “Striping out” the toxic loans, “clensing” the Irish banking system, a “bad bank” that will “deal” with the toxic loans, “toxic loans”. Very entertaining, especially when PTSB used to be the TSB a “Trustee Savings” bank which by law could never have got involved in any of the dirty deeds that sank the economy. Hilarious.

  30. gizzy


    What a strategy though take any shite business call it pillar and voila

  31. dwalsh

    @ Tony Brogan

    I hear what you say about capitalism and corporatism; and I understand. I hear that a lot.
    However, I don’t agree.

    What you mean by capitalism is what I would refer to as the toy-town idealism of butcher, baker candlestick maker, capitalism we were taught in school. The mom and pop corner store ideal of business and competition for customers. The text book ideal of what capitalism is supposed to be.

    But this ideal of capitalism, or anything like it, is not the reality of capitalism. Mom and pop business people are not capitalists. They are ordinary working humans who happen to have their own business. That’s not capitalism.

    The reality of capitalism is ruthless competition. The aim of the true capitalist is to maximise profit and control of the market; and whenever possible, and by whatever means, to eliminate competition. Real capitalists do not like competition and do not play fair.

    And that is what we have today. Pure primeval capitalism; where the dominant capitalists control the market. They even refer to themselves as ‘market makers’; and still people believe them when they preach the myth of free markets.

    And they control the governments too. They are delighted when people cry out that government is the problem; not realising that governments merely implement the policies of the ruling capitalists.

    And they own the media; so almost everything we read and hear comes from them. They provide the myths of ideological capitalism and free markets that we argue about on this blog.

    Corporatism is capitalism; it is pure primeval evil capitalism; organised, trans-national and utterly ruthless. The reality of so-called free market capitalism is monopolies and completely controlled markets.

    As far as I’m concerned this is all completely obvious; you just have to look at what is actually happening in the world. But people cannot see what is happening because their heads are full of idealised theories about capitalism and free markets.

    • C21living

      …particularly in North America.

      Even in Britain, the birthplace of Adam Smith and David Ricardo, pretty much nobody is so naive that they actually believe the rhetoric about “free markets”.

      They have historical memories in Britain – they remember Smith and Ricardo were writing at the time of the mercantilist bully corporations like the Dutch and British East India companies. Smith and Ricardo wanted to see a “freeing” of possibilites to allow little guys to compete for the abundance of wealth flowing in from the colonies.

      If Smith and Ricardo were alive today, they’d look at most transnational corps, especially huge American ones, and say “wanna-be mercantilists” or, in the case of Microsoft and Apple, “mercantilists”.

      • dwalsh

        Yes I agree.
        What we are witnessing is the emergence of a new form of power and empire system in our world; no longer based on nations but operating trans-nationally. They are as you say mercantilists; but it’s not state mercantilism.

        They work through nations and state agencies by funding the political systems and elites and placing their agents in key positions; but they are not nationalists. In fact I am convinced they are working to destroy the nation state.

        • bonbon

          Correct! It has a name – the British Empire. Why dance around it – Eire faced this before as did the USA.

          The great “evil of the Nation State” is increased population density. Now the re-release of “Limits to Growth”, the June conference and the Royal Society’s “People and the Planet” openly requires genocide.

          We faced this too in 1846. But typically Irish, saying this in “good company” might get a frown from the masters.

        • bonbon

          And it is not new. 99% of human history was oligarchical, in various modes, all with a certain principle best brought to light by Plato, Greek, European.
          Join with those who take this on, the oligarchical principle itself, now in its last expression of a collapsing British financial empire that is fully prepared to start thermonuclear war to “survive”.

        • dwalsh

          I’m not dancing around bonbon; dont presume.

          I dont see that the corporate financial empires are falling. The only thing I see falling are the nation state; civilian rights; living standards etc.

    • gizzy

      well said.the myth of caring capitalism

    • Alf

      Hi dwalsh,

      This is an important point. The myth of free markets is a dangerous idea which is pushed by those who seek to gain the most. It is difficult for people to see this but the problem may be the use of the word ‘free’; it sounds so just and fair. To show how it can’t work it is best to give an example. If someone suggested we live in a ‘free’ society, most people would probably like the sound of that. However, if the society that person was referring to was truly free (meaning no laws or regulations) and people could do as they wished, we would have a dog-eat-dog (a Mad-Max) scenario where the most brutal wins and the weakest are crushed. In free markets, this is a scenario where (in one society) children can work in slave camps to produce garments which undercut the wages of the adults of honest fair societies. This is why the ‘free market’ ideology is causing so much problems. It is a nice idea but the truth is that we need regulations (tarriffs, etc) to balance out and restrict abuse by free market ‘principles’.

      • dwalsh

        I agree with you. I just wish libertarians and other assorted anarchists could see what you have laid out so clearly.

        Another example would be a sport – rugby for instance. If there were no rules of play and no referee, but just a ‘free game’, there wouldn’t be a game at all. Maybe something like a melee; but no sport of rugby.

        It’s the same with markets. What we ought to look for is a ‘fair market’; where there are basics rules of engagement and effective regulation; which aims to create a level playing field for all.

    • cooldude

      Hi DWalsh, you make some interesting points as always. What we have in the world today is not what you term pure primeval capitalism but a cross between crony capitalism and corporate fascism. For capitalism to exist the government has to stop controlling interest rates and the supply of money. Pure capitalism ended in 1913 when all the major economies came off the classical gold standard in preparation for the upcoming war. If they had stayed on the convertible gold and paper standard the war would have been over in months as none of the main protagonists could afford a longer war and millions of lives would have been saved. Since then unbacked paper money has become more and more the norm because it suits the corrupt politicians and gives total control of the money supply to the banking elites who in turn control the politicians. This eventually led to Nixon’s complete break with gold in 1971 and since then the increase in the money supply has gone exponential bringing with it the asset bubbles and the destruction of wealth that is inevitable with this flawed system.
      The world is now ruled by 147 major corporations who control governments and who are themselves controlled by the elite banking families. They use the IMF, the BIS , the World Bank. the WHO, the UN and a host of other global organizations to keep countries in check and to spread their corporate poison. If a country like Libya doesn’t play ball with them they take them out. They control all the mainstream media but fortunately not the internet. At least not yet as they are closing in rapidly on this also. Don’t worry about capitalism they got rid of that a long time ago. Corporate fascism is the new game in town.

      • cooldude

        Here is an article and a website which explores all of the above and more.

        • dwalsh

          I saw the Thrive movie a while ago and one of the disapointments in it for me was his endorsement of Austrian economics. The Austrian school and it’s American scion the Chicago school provide the theoretical apologetics for the economy of greed.

          That is the ideology which lead to the disasterous deregulation of the financial markets; and is driving the operatives in the financial markets today.

          And lets be clear about this…the financial markets are bankrupting the world; and if not shut down soon will destroy the underlying real economy which they parasitise. I mean the real economy we all rely on for livlihood and life itself…our food etc.

      • dwalsh

        @ cooldude

        “a cross between crony capitalism and corporate fascism”

        What you describe there is pure capitalism. It is the triumph of the strongest capitalists over the weak and the capture of the market; and today the capture of the state. Such is the aim of the true capitalist.

        The major corporations are the ruling capitalists organisations. Private empires. Because they don’t abide by idealised toy-town corner store rules does not mean they are not capitalists. On the contrary. Pure capitalists will use any and all means they can get away with to achieve their goals; which are to maximise profit and control.

        As to currencies:
        Most governments do not control currencies. The example you give is the dollar. The dollar and the USA interest rates are not controlled by the USA government. In 1913 the leading Western banking families took over control of the dollar…captured it in a silent coup.

        But don’t believe me; listen to Alan Greenspan clearly state that the Fed is completely independent of government:


        The Fed has government backing through the Fed Res Act; (drafted by the banking families) which gives it the franchise to produce and control the USA currency; but its actions are not subject to control by the USA government; and cannot even be audited.

        The Fed is a private corporation with government power delegated to it (not placed over it).

        The reserve currency of the world is a private currency.

        In your argument you lament government control of money and interest rates; and you also admit that private bankers control money and interest rates. Both points are made in your argument; and I submit they contradict each other.

        Your also focus in your argument on this gold issue which you obviously have strong opinions and beliefs about. Many in these times do. Gold in times of uncertainty is a good store of value. But that is not the crucial issue. What is crucial is who controls the currency; the public, through legitimate representation; or private interests.

        Today private interests control most currencies. And wars are waged to destroy governments who dare to control their own central bank and currency.

        Fiat currencies:
        Many people today make a big fuss about ‘fiat currencies’; but the issue of fiat is irrelevant. Fiat merely refers to the fact that the face value of the utility currency is backed by the will of the people through law. This is necessary unless we are all to carry around lumps of precious metals.

        There is nothing wrong with a fiat utility currency in a properly organised market system. Problems arise when the fiat of the people is delegated to private control; as is the case in the USA; and organisation of the markets is dominated by monopolies, as is the case today.

        • Tony Brogan

          Hi Dwalsh.
          Loose definions lead to misunderstanding. here is IMO a good solid definition. By this definition the larger portion of the economy is no longer capitalism. There is little free market as you know. a free market and individual liberty is a prerequisite of capitalism.
          On this basis with the government and the federal reserve interfering in all major markets and working closely with selected corporate entities we are closer to a definition of fascism than Capitalism

          Definition of Capitalism
          “Capitalism” is conventionally defined along economic terms such as the following:

          An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.
          Source: Dictionary.com

          This is an example of a definition by non-essentials. An essential definition of capitalism is a political definition:
          Capitalism is a social system based on the principle of individual rights.
          Source: Capitalism.org

          In order to have an economic system in which “production and distribution are privately or corporately owned”, you must have individual rights and specifically property rights. The only way to have an economic system fitting the first definition is to have a political system fitting the second definition. The first is an implication of the second. Because the second, political, definition is fundamental and the cause of the first, it is the more useful definition and is preferable.

          Because people often use the term “Capitalism” loosely, “Laissez Faire Capitalism” is sometimes used to describe a true Capitalist system. But this phrase is redundant.

          It is important to define “Capitalism” correctly because a proper definition is a prerequisite to a proper defense. Capitalism is the only moral political system because it is the only system dedicated to the protection of rights, which is a requirement for human survival and flourishing. This is the only proper role of a government. Capitalism should be defended vigorously on a moral basis, not an economic or utilitarian basis.

          Copyright © 2001 by Jeff Landauer and Joseph Rowlands

          From the Urban dictionary

          Fascism By The Numbers:
          1) Corporate Dominance of Law and Society
          2) Military Supremacy in Funding and Policy
          3) Reckless Nationalism in Foreign Affairs
          4) Suppression of Organized Labor
          5) Unification By Fear and Hatred
          6) Expansion of Prisons and Prison Sentences
          7) Usurpation of Power and Authority
          8) Abuse of Human Rights at Home and Abroad
          9) Religious Zealotry in Government and Military
          10) Alliance with a Tightly Controlled Mass Media

          The following statements illustrate the fascist mindset:

          “Voice or no voice, the people can always be brought to the bidding of the leaders. All you have to do is tell them they are being attacked, and denounce the peacemakers for lack of patriotism, and exposing the country to danger. It works the same in any country.” — Hermann Goering, Sr. Advisor to Adolph Hitler

          “The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly…it must confine itself to a few points and repeat them over and over.” — Joseph Goebbels, Senior Advisor to Adolph Hitler

          Looks pretty much that I am agreed with Cooldude on this point

          • bonbon

            Strange omission there – Mussolini coined “fascism” – Latin for that handful of stick-tokens (Corporatist technocrats) while a MI5 asset, pushing the G.K. Chesterton Distributionist feudal fantasy of the Fabian School (now London School of Economics).

            Now we find that Austrian School von Hayek praised to high heaven Mandeville’s economic theory, the LSE core curriculum?

            Odd that the above “definitions” go sideways on this, what?

          • dwalsh

            With respect to your complex juggling of definitions let me offer a definition:

            Capitalism is a system based on the rights of capital.

            I write about the reality of capitalism; not the textbook ideals. Capitalism inevitably leads to a concentration of capital and thus power in the hands of a relatively small number of people. These people will use their power to subvert the political and social order and this is fascism. America has long been a fascist state by this definition.

            The only protection the general population has from such powerful corporate capitalism is a stronger state system which is insulated from corporate control.

            I know; tricky one that.

          • Tony Brogan

            Hi Dwalsh
            A lot of these discussions result from the use of terminology or definitions that mean different things to different people.
            My understanding of capitalism may be differnet from yours.
            We may in fact be trying to say the same thing but because of different understanding think otherwise.

            I suspect that you and I are basically on the same page but …definitions lead us astray.

            “Capitalism is a system based on the rights of capital.”
            I am sorry to say I do not know what you are trying to say here.

            Here are a few definitions of capital but the one I understnad capital to be, is the plant and equipment acquired and assembled to build a factory or office or some other business. such capital is used in the production of the goods or services sold for a profit.
            Such profits can be spent or reinvested in further capital to enhance or expand the business.


            Capitalism defined under this process is economic activity carried out through an accumulation of capital obtained by investing savings or profits.

            The reality is that there are no free markets as intervention by government and their agencies distorts and manipulates the economy to favour the government interests and those who support the government in those interests.

            I agree with you on the results of all this.

            However although it requires “honest government” to make the required changes to restore free markets it is not enough to expect governments to remain honest.
            A system must be placed that enforces honesty in politics or does not allow dishonest policy or behavior.

            This is the problem, to decide what that may be.

            It seems to me that the singular largest tool used by government in concert with the central bank and commercial banks is the control and manipulation of the money system. The systematic move away from commodity money to fiat paper money was not requested by the people but forced on them by the monied elites.

            We know that inflation is induced by excess production of currency. We know this enriches the masters first and most people not at all. We know the regular folk are hung out to dry while the banks accumulate the assets. The bankers masters cream off the profits from the operation and it would surprise me if they do not use the proceeds to acquire hard assets.

            In the meantime a determined small state government could set up a monetary system of honest commodity money that prevents increased money production and eliminates the basic inflation, and forces the state to balance the budgets. Increased expenditure would have to be paid by increased taxes. The people would decide if they wished to pay the extra taxes or not.

            It would be a start in the right direction. without a reform of the monetary system nothing else can work.

            sorry this is so long, It would be nice to crack open a bottle of wine and spend an afternoon in a friendly discussion on these issues and others.


        • Tony Brogan

          Hi Dwalsh

          “In your argument you lament government control of money and interest rates; and you also admit that private bankers control money and interest rates. Both points are made in your argument; and I submit they contradict each other.”

          Why are you beating this horse with a stick. Seems to me you both agree that central banks control the money supply and it is legislated by the governments. each in bed with the other.

          “Today private interests control most currencies. And wars are waged to destroy governments who dare to control their own central bank and currency.”

          Totally agree. We have listed previously those who have died trying to thwart the system.Lincoln, Garfield, Kennedy, Kennedy, Saddam, Gadaffi and more.

          “Your also focus in your argument on this gold issue which you obviously have strong opinions and beliefs about. Many in these times do. Gold in times of uncertainty is a good store of value. But that is not the crucial issue. What is crucial is who controls the currency; the public, through legitimate representation; or private interests.”

          I beg to differ here.The issue is commodity money or fiat money.Commodity money is private property owned and paid for without counterparty risk, while fiat paper is state owned and an instrument of debt bearing interest charged to the taxpayer.
          Fiat money ALLOWS to happen all those things you complain about. Excess printing and resultant inflation. The issue of fractional reserve banking is relavent to both fiat and commodity money systems.Fractional reserve banking should be banned as it is the major reason for inflation although limited by a gold money system as the reserves can easily be expanded, but the ratio can!
          Gold has all the charscteristics required of good money. Paper does not. gold is a store of value, paper is not. gold is immutable, it does not decay, paper does. gold is fungible, acceptable to most people in the world as money. Fiat is a national currency and not acceptable elsewhere (except the US dollar as reserve currency has wider but not universal acceptance). Both are easily divisable. gold is not easily increased in amount whereas paper is. gold limits inflation while paper is subject to inflation.
          your point about nobody wanting to carry gold clunking in your pocket is an obsolete viewpoint.
          Gold deposited in a custodial account cannot be loaned out, without permission from the account holder, by the bank. But an electronic accounting is easily done and one is easily able to spend gold(silver) money using a debit card as many do already with fiat.
          Gold backed currency one for one forces governments to balance the budgets and eliminates profligate spending by the state.
          Your faith that fiat currency can be properly mangaged by people is admirable. However history tells us that this is not going to happen as the temptation to manipulate the system is too large to resist and we will shortly find ourselves back where we are today. No matter whether this be a private or public system.


          • dwalsh

            I guess we see things differently and disagree.

          • Tony Brogan

            “I guess we see things differently and disagree.”
            I can respect this in a civil discussion. No problem

            “Unfortunately the Austrian school is an ideology. It has the character of a religious belief; and there is no arguing with religionists”

            This kind of comment fostered by Bonbon causes my respect to wain. Too bad, The bad guys are laughing all the way to their bank.

          • bonbon

            LOL, the banks are bust, no laughing matter!

            “Ideology” is not the problem, rather the insanely irrational belief that the economy will spontaneously order itself in an unknowable way, if only sound money existed. This is not modern, not scientific, and is exactly the premise of the existing rabidly hysterical efforts to make the Euro “sound”. In other words this is British School monetarism – exactly what we must banish before it destroys us.

        • bonbon

          @dwalsh – no wiggle room, you will have to take on the Austrian School by principle and name to deal with these 2 promoters. Do not try to deal with “issues” such as monetary tokes, go after the school’s premises.
          And this is London School of Economics at work, again…

          The glitter of silver of gold “sound money” catches the eye, mesmerizes, while the hypnotist programs the unsuspecting victim. This is a variation on Heidegger (the nazi “philosopher”).

          • dwalsh

            Unfortunately the Austrian school is an ideology. It has the character of a religious belief; and there is no arguing with religionists.

          • EMMETTOR

            Just a point, not a reply to you, bonbon, “Free Market” gets bandied about in some of the (rather pedantic) stuff above. Insofar as I’ve ever understood it, (to be pedantic) this is not an economics term, like “Perfect Market”, but a political one, referring to a type of Capitalism, where it’s probably a tautology. I don’t think economics posits the idea of a free market and the term “Perfect Market” has an inbuilt implication that it’s not achievable. Whereas, as also pointed out above, “free market” sounds much better and maybe even achievable.

  32. Tony Brogan

    The basic problem is the monetary system.
    foisted on country after country by the banksters with conivance, cajoling, thuggery and threats.

    We have for the first time in history no country with a sound monstary system.
    All print money issued into debt by a central bank subject to interest.
    Ever increasing amounts of money are printed. Firstly to supply currency so that the interest can be paid and secondly because the bankers have duped us into the idea that an expanding economy needs an expanding money supply to be successful.This last is totally untrue

    It is beyond a shadow of a doubt that on close examination it is apparent that an expanding money supply in itself inflationary and the only cause of inflation.

    so who benefits from this system and who does not?

    Firstly , the issuers of the new money benefit as they spend the money at par before it causes the inflation.Strike one for the bankers.
    Politicians borrow the money (and add it to the national debt at interest) and spend it on goods and services to bribe the elctorate to vote them in to their jobs again and their gold plated pensions.strike 2 for the politicians

    Who loses.
    Initially no one as the credit provides a stimulus and a bubble appears. This bubble is uncontrolable.
    Early investors in the bubble think they are getting rich without work. Strike three for the early people on the ladder.
    but as the extra money moves through the economy it devalues the existing money.We call this inflation.
    first of all inflation looks benign.
    Savers find their savings devalued and it becomes that even the interest earned is taxed and the net result is a loss.Negative for the frugal and thrifty.
    Savers start to spend instead to get solid assets and so the savings pool erodes.
    The average worker find wages do not buy what they used to. The only way to keep up is to demand more money. Prices rise , costs of business rise, profit margins are squeezes and businesses go broke one by one.Negative for the entrepreneurs, middle class and workers.

    More stimulus is demanded and so the money supply is increased again. More distortions arrive and more bubbles produced. More inflation, more misallocation of economic resources.Rich get richer and the poor get poorer.

    As the cycle continues each stimulus has a lesser effect until it is a totally negative economic outcome.

    This is where we are today with each stinulus package having a negative effect on the economy.

    David, your solution is to nullify the debt, default and clean the slate and start a new cycle.

    I think it was Einstein who said only an idiot keeps making the same mistake and looking for a different outcome.

    When you have a mega state you get mega distortions. The Euro is classic. One monetary policy, and a faulty one at that, for 17 different countries, each with different economies and cultures.
    Bubbles form here and there and busts likewise.
    This produces your so called “Monetary Apartheid”

    It totally evident that the current fiat paper ponzi scheme is coming apart at the seams. Europe appears to be collapsing before the US.

    Other countries ar quickly looking at alternate methods of monetory policy.China, Russia and India are accumulating gold as are dozens od other countries. Deals are being made with payment in bullion.

    Here in the west we are lead by maleducated economists who have been told what to think and not how to think. We do the same old same old. how stupid can we be?


    This is just one informed opinion of many that the gold standard is reasserting itself despite the banksters best efforts to denegrate gold as a “barbarous relic”




    See also: Kelantanese dinar

    In 2002, the prime minister of Malaysia proposed a gold dinar standard for use in the Islamic world.[2]

    Kelantan was the first state in the country to introduce the dinar in 2006, which was locally minted. In 2010, it issued new coins, including the dirham, minted in United Arab Emirates by World Islamic Mint.[3] On 25 August 2011 Kelantanese government collected and distributed zakat from people in Kelantanese dinars and dirhams in a public ceremony officiated by Chief Minister Dato Nik Aziz Nik Mat.[4]

    The state of Perak followed suit, minting its own dinar and dirham, which was launched in 2011.[5

    To save itself Ireland needs to get with the new program not repeat the mistakes of old.

    Vote no
    Leave the EURO
    Establish a national currency.
    Repudiate odious debt. (private debt assumed by the last government that was of no benefit to the people)
    monetize silver coin along side the fiat paper.
    Trim government to 35% of gdp.
    Home made austerity where the politicians lead the way with a 50% pay cut.
    earn into existance the new currency, building infrastructure and put people to work.
    freeze all government borrowing as currency can be supplied at no cost for all government enterprise.
    There is no need to issue bonds.
    Recognising that all paper currencies are subject to manipulation a plan is proposed to move to a commodity based monetary system over the next 5 years.
    Ban fractional reserve banking.
    close the central bank
    Use the post office as the nations bank and all currency and banking functions will be available at any post office.

    There is a plan and I am sticking to it.It is right off the top and needs polishing somewhat, but give me your comments David

    Thank you.


  33. Dorothy Jones

    Well, here’s someone who’s doing somethimg about it:

    ”Thomas Pringle, TD has initiated legal proceedings challenging the Government on fundamental aspects of far reaching amendment to the EU treaties, of both the European Stability Mechanism (ESM) and the Stability, Coordination and Governance in the Economic and Monetary Union (Fiscal Compact) Treaties.”

    Clear, concise outline of the case on:

    • cooldude

      Fair play to Mr Pringle. It’s about time we had a good look at this poisonous treaty in the courts.

      • Dorothy Jones

        Yes; and I just got notification by mail that David Hall’s (of New Beginning) challenge to the constitutionality of the promissory notes is to return to the courts in the next week or so. Two cases indeed to watch closely.

  34. Keego11

    Hi David and Co.

    I left Ireland in 2007 for Sydney and am now seeing what I believe to be the start of a housing decline (not a bust but a long term deflation) and if people were to look under the hood the beginnings of a recession in non resourece boom states like QLD and Western Aus.

    I occasionally get into discusson with Aussies about the Irish situation and similarites to waht is happening here. There response is ( quite correctly) this is not Ireland or UK or US and whats happened there won’t happen to us.

    All this got me thinking about what the “Pope’s Children” the 30 somethings of Ireland will learn for this? Will this scar us for life and prevent any form of speculation and investment in the future or will we be a cuter more discerning group of investors, unwilling to swallow the sanke oil and to act as a weather gauge for the gen Y & Z’s as they hit adulthood

    • dk1210

      Hi Keggo11,
      Non resource boom states like QLD and WA?? Surely you mean non resource resource states other than QLD and WA?
      Perth and WA is booming, all we hear about is skills shortage and not just in the mining sector. Up until 18 months ago it was necessary to head up to the Pilbara or any other mining region, to earn the big bucks, but that’s changing, because of the major projects that are underway (or planned) in the city, like the city Northbridge tunnel link, the foreshore redevelopment, the new stadium, the East Perth development, to name a few.
      Having said that I get what you mean about the Aussies thoughts (or lack of) regarding possible slow down or deflation. Generally people in WA particularly, sees themselves as being impervious and almost recession proof and who could blame them really? But the fact remains that this is all on the back of China’s unquenchable thirst for iron ore and if/when China stops buying as much as they do then WA will see a major downturn. At the moment it seems nearly all the eggs are in one basket.
      Finally I think a lot of Irish people here are investing and speculating in the future, mainly in property and that’s on the back of bad or indifferent experiences back home in Ireland. For now at least the future is bright.

      • EMMETTOR

        Hey, dk1210, if the Irish are investing in property in Oz, you’re in big trouble. The same thing happened here, next thing, Bust!

  35. Philip

    I think there is no denying the fact that the lack of bank collapses while the economy dies is crazy. Government nationalistion of banks has become a situation where people are governed by banking interests rather than the other way around.

    We are looking at status quo preservation pure and simple. Right now, the government borrowing is paying for 1) Schools, 2) Nurses & Doctors and 3) Guards. We destabilse that and you will spook the place very fundamentally – certainly in the near term.

    I am not sure how we are getting out of this mess. I see no real ideas that are not short on major disruption to most people in this country. A muddle though approach being currently adopted by keeping banks alive is starting to have a lot of nasty side effects. Whatever happens in the next 12-24 months , Ireland as we know it will not be the same. As for Europe, I think the shocks are now starting to hit the core.

  36. george

    Yesterday in Vincent Browne’s program, Paul Sommerville said that this coming referendum should be postponed for few months, until Europe’s future is better define. And he said that many people asking for a yes vote, are doing so because they are ready to sign anything no matter which conditions, in exchange of money.
    I said that most of our politicians are procrastinators that don’t want to take hard decisions, and come down from the Pyramid. They are weak in front of the powerful Elite, and tough with the most vulnerable majority of the population. Paul has the courage of not saying a “reluctant YES”, with the excuse that a gun was put to our heads.
    And Vincent kept asking why did the Government paid one billion euro of unsecure AIB bondholders, when there was no obligation to do so? http://www.tv3.ie/videos.php?locID=1.65.169

    • Dorothy Jones

      Paul’s always very clear and very definite! about these things. You’re right about the pols….worse than risible. But y’know, the whole show is careering towards an abyss in any case. Treaties and such matters may be overtaken by events sooner rather than later.

  37. Grey Fox

    Slightly off topic but worth a mention, Discussion on the Ratings Agencies and their fall from grace, and how they are turning on themselves.

    Also how Richard Parsons of Citigroup is confessing that the repeal of Glass Steagal is the cause of the Financial Crisis — another Financial Criminal looking for absolution when his Bank balance has reached a satisfactory level — suddenly growing a conscience!

    • Dorothy Jones

      Ehh….rating agencies…falling from grace??? ‘Dem sharks…?? They were complicit in the ‘slice and dice’ mechanisms of mortgage packaging in Lehmann, they gave advice on how to do this this and then gave this crap high ratings. In Germany last year they wrote to regional banks telling them that their ratings would be downgraded if they were not awarded additional contracts with them, i.e. not through local authorities.
      Aricle on said sharks in Guardian:

      • Grey Fox

        Sorry Dorothy,
        ” rating agencies…falling from grace”, tongue in cheek!
        I subscribe to your view of these locusts, (apologies to locusts), that is why I felt the segment from Max keiser was so relevant, again sorry, didn’t mean to raise your ire.

    • bonbon

      Correct on that repeal – they ought to know!
      Without this banking separation, we depend on “banker morals” in a system based on “Private Vice, Public Benefits” – the core Austrian School theory from Bernard Mandeville (of Hellfire Club fame) and London School of Economics core curriculum.

      Most of the flagellation, weeping, chain-rattling, imploring I see here is delusional considering the door left open by the Glass-Steagall repeal.

  38. piombo

    I agree with DMcW’s main idea that the EZ is about to undergo a radical change, however the dynamics will not be driven by people demonstrating on the street….unfortunately, the people don’t matter in this context.
    If I were sitting in the ECB or in the BIS/IMF, I would be planning for Greece, Ireland and Portugal to be exited in that order over the next 12 months so as to perserve the “core” and prepare the entry of Poland into the EZ which is slated for 2013/14.
    The dynamic of how this will be achieved is standard text-book stuff for restructuring sovereigns. Essentially, it should work out as follows:

    1) Each of these countries will “voluntarily” re-introduce “kerb-side” local currencies pegged to the Euro at the moment of issue.
    These local currencies will be used for internal consumption and will fluctuate the moment they are issued;

    2) All existing international debts and obligations of the State will continue to be settled in Euros. The IMF and ECB will provide 5/10/15/20 year bonds to ensure these are settled.

    This solution is normally used in war zones (Bosnia and Zosovo) and allows decoupling of local issues from the broader money supply. It also allows internal devaluation to occur and yet perserve monetary union until the internal devaluations that have to occur have indeed happened.

    I disagree that EZ exit tout court is viable as well as the idea that Ireland simply switches into a GBP peg as the fundamental issue is money supply and it’s velocity (currently hampered) determined by the ECB and not the ICB.
    Replacing Frankfurt with London is perhaps a Dublin South wetdream but the real money knows it is impossible because it is unnecessary.

    • Piombo

      You may be right, however, your home country of Italy needs to think in this direction too. Also not too sure we need to shadow sterling could float freely like Icelandic krone?


      • piombo

        Italy should never have been admitted into the EZ in the first place.
        Had the Blair government in 1997 not imposed the five tests to determine the UK’s suitability and simply promised to enter at some future date the Italians would simply have been shut out. This is straight from the autobiography of Theo Weigel, the then German finance minister. Also, the German Industrialist Federation strongly pushed for Italy’s inclusion fearing that their engineering markets would have been wiped out by a continual devaluation of the lira. The Euro benefited the overblown corrupt Italian State by allowing them to finance with relatively cheap money their public debt.
        Italy should be exited from the EZ, but this won’t happen as the amount of State debt in foreign hands comes to €1 trillion. Simply too much to be absorbed by the ECB/IMF/BuBa.
        Also, the “punt nua” should float freely. Why not? The key to the local currency will be it’s velocity within the Irish market, as international trade will be conducted in £,€,$ etc., Domestic savings and Pension funds will determine the acceptability of punt nua and with normal capital controls in place, Irish people will be asking themselves why they hadn’t pushed for this solution years ago.
        Prices will go up, but as we all know, inflation is a strong catalyst in attracting FDI into a country.
        Forza Irlanda e l’Italia!

      • bonbon

        Just in case readers get a skewed view of Italy, Tremonti has this to say as the EU undergoes radical change :
        I would vote for Hollande, against finance

        April 26 — In several television and newspaper interviews, former Italian Economy minister Giulio Tremonti has surprised many by saying that he would vote for Hollande int he second round of the French Presidential elections.

        “I think that the old left and right do not exist any longer”, Tremonti said to the daily La Repubblica on April 24. “A new left and a new right are being formed. I see an example of the new right in the reactive spontaneity of the french extreme right. I see the new left with a more reflexive logic, a calm reformist. This can be true for the center as well. The litmus test is the policy on finance. On one side, there are those who think that its [finance] power is positive; on the other side those who, like Hollande and myself, who consider it to be the factor that ha subverted the old order and generated chaos”.

        Europe is “like the old Society of Nations, like the Spirit of the Sudeten. At that time it was appeasement towards nazism, now it is the justification of finance.

        Hollande, instead, said that finance is a faceless monster. I think that too, and I have written it. The worst can still be avoided.”

        Confronted with thte fact that some members of his party (PDL) have supported Marine Le Pen, Tremonti answers polemically that “I am frankly more interested in understanding what is going on in the Netherlands”, where the ugly face of rightwing populism is clearer.

        “The truth is that the economy is in free fall”, Tremonti says, “The real estate sector is dead. And real estate is made by Italian families. The furious and progressive sequence of taxes will be cause of serious tensions… we are implementing in Italy a policy similar to the one the IMF has unsucessfully imposed to Greece”.

        Tremonti concluded by saying that he will not vote for Monti’s labor reform, which his party is supposed to vote for.

  39. Grey Fox

    “The fiscal pact is negotiated, it was signed by 25 government leaders and has already been ratified by Portugal and Greece.
    Parliaments across Europe are on the verge of passing it.
    Ireland is having a referendum at the end of May.
    It is not open to new negotiations.”
    Ze diskussion iss closst.
    But Ireland is having a referendum on it. So 25 government leaders could become 24. Indeed, the latest poll says that this will probably happen.
    Ze diskussion iss closst.
    But that means one of the signatories will have negotiated an exit from the Union.
    So the discussion clearly isn’t closed.
    Ze diskussion iss closst.
    But Greece looks set to elect a majority of Parties against the Troika bailout.
    And they’ve ratified the Union pact.
    So the Greek people are negotiating to unratify it – because they can’t accept the bailout AND join the Union.
    Ze diskussion iss closst.
    And Spain has already told you where to stick your austerity targets. So it is negotiating about the ability to negotiate with the Union.
    full article at source: http://hat4uk.wordpress.com/2012/04/27/a-new-word-is-invented-the-oxymerkel-15/

  40. tony_murphy

    if your not a communist, read this.. one of the most important articles ever written – by Charlotte Thomson Iserbyt


  41. Barbecue with The Stars

    Whether you are on the beach in Malahide or Dalkey the Sun can be seen to rise in the East as it lifts its head to mark a new revelation from the darkness of the night before .What is less noticed is that just before the Sun lifts its head, already Venus has done so momentarily and so close to the rising Sun.

    Venus is the Planet of love , of opulence and luxury and creativity . It is usually either the brightest Star of the morning the herald of the dawn or the first star after dusk.Very soon after Sun goes down ( in the West from the beaches in Dingle to Galway ) …Venus follows it down in the west .

    As Venus is close to the Sun during daytime , it cannot be seen as it is drowned out by the Sun’s light.

    Once every hundred years on a couple of glorious occasions you get the same conditions you would get during an eclipse where Venus is right in front of the Sun and appears like a tiny black dot crawling across the face of the Sun .It can be viewed with eclipse glasses .

    The symbolism of this occurrence is POTENT and Immense , it speaks of some hidden force within us all being revealed , allowing us to see something we wouldn’t normally see .Something so obvious we couldn’t recognise it .

    This the immediate dilemma before our eyes .

    Australia was discovered during this Venus Transit so we associate it with the discovery of new continents and new horizons .

    The idea that the world will open its mind to new possibilities becomes very strong this year .

    This event will take place in June 2012 , the run up to it and the aftermath will last a very long time and we are on a journey of discovery that will make us more loving and lovable.It is also linked with a sense of financial well being the potential is that the world is going to finally shake off its current uncomfortable love affair with Doom & Gloom .


    Saturday 5th May , 2012


    Today we are the 7th day before the next full moon so go slow …drive more slowly ….and just remember this :

    ‘ there is no such thing as urgent business only people in a hurry’…….this is what I learned in a camel traffic jam in the desert .

  43. george

    SPAIN 25% unemployment! Ireland, Greece and Portugal almost bankrupt! Italy …? Who will be next?

    Are we not starting to see the social cost, of an ill thought globalisation and EU expansion, and the common currency?

    Globalisation and the EU expansion are fine if Countries would have the same social policies, to guarantee the conditions of workers, and the rest of society. But have we not legalised exploitation, by allowing products to move freely, when they are being produce in places, where labour and social conditions would be considered inhuman in the developed world. Isn’t this a race to the bottom, and a turning back in progress, and social progress?

    Are we not delusional thinking we live in a democracy, when it seems clear big Corporations and Banks have the power through the market, to dictate Societies the course of events?

    • StephenKenny

      It’s why any corporations and governments were so enthusiastic about it. It’s probably also why any effort to criticise it was met with an immediate accusation of racism, and raising of that to a serious criminal offence.

      • george

        How can countries within Europe, be integrated through the EU, with different social and labour conditions and legislation, and even with enormous economic disparities regarding salaries and the cost of living, all under the same currency, and expect it to succeed?

        How can reasonably and socially globalised trade in the world , when a great percentage of the manufacturing goods that are consumed in the developed world, are made outside of it, in conditions that would be considered against fair labour and social conditions in it?

        Have you ever watched any of these TV program, where many of the people asking for funding for the manufacturing of certain products, that are expected to be sold over here or in Spain, where legislation doesn’t allow you to have people working 12hs a day, 7 days a week, and sleeping in containers adjacent to the manufacturing plant; do it so with the intention of manufacturing the products in far away counties where those things are tolerated?
        Is this the world we want to pass on to our children?

        Isn’t it time we start to ask ourselves what is the social cost of cheap goods?
        Isn’t it time we demand and expect that globalisation, and EU expansion, be done from the inside out, where first we agree in fair rules of the game for everybody, and then we apply it to production and economics?

        • tony_murphy


          those who run this world do nothing fairly. you need to realise that.

          they like communism because they can get rid of competition. they are they only show in town

          the EU is a communism. it’s an absolute nightmare. globalists are pure evil

          • bonbon

            Now that one brings up evil, have a look at this.
            The Royal Society’s “People and the Planet”, just out, an open program for genocide. No more masks as the empire implodes.

  44. Harper66

    Relax everyone – austerity is working


    Meanwhile for the majority of people –

    “In an interview, the former finance minister warned against the rise of the ultra-nationalist party Golden Dawn, which could win around 5 percent of the vote, comfortably above the 3 percent threshold for entering parliament.

    “Golden Dawn is an extreme phenomenon, I believe they are an example of fascism and we radically oppose them. It’s an offence to our history and to parliament,” he told Reuters, suggesting Greece could be experiencing its version of Germany’s “Weimar” years which led to the rise of the Nazi Party and Adolf Hitler.

    Golden Dawn, which vows to expel both legal and illegal immigrants and meets under a flag of an ancient Greek symbol similar to the swastika, has won over many of Greece’s poor by giving away clothes and food parcels….”


    Clearly austerity is supporting a small group of people at the expense of the majority of the European population. Use your vote to reject these policies.

    Vote NO in the upcoming referendum.

  45. rebean

    You are correct. People who run the country are indeed unqualified. There is huge waste in the country and nobody really cares how taxpayers money is spent. Yes I can see a Friday when noone is paid and mayhem on the horizon.Then I wonder is it all a bad dream?

  46. piombo

    I agree with you on Tremonti, I even read his book “uscita di sicurezza” that you recommended, which by the way, I recommend to everyone if it comes out in English.
    Through business dealings over the years here in Italy, I have come in contact with his close circle, although not the man himself. He WAS/IS the natural choice to navigate Italy once they got rid of Berlusconi…….but what happened, he was “nobbed” by an investigative magistrate over his righthand man’s expenses in mid last year. No charges were ever brought, but the damage was done! His cardinal sin was to commence voicing concerns about the entire Euro edifice and he openly made reference to “decisions being made in the lodges”. The expense scandal hit after two months and the rest is history.
    Today, Tremonti is an outcast in Italy but that does not mean he was/is not trusted by most people in the North at least.
    My earlier comment was based on the macro fundamentals of Italian public finances, and with due respect, I stand by it.
    Complimenti pero’ per il suo interesse negli affari italiani.

    • bonbon

      The account on the Lira (and Stg) fails to mention the Soros attack on both leading up to the Euro decision.

      Also it fails to mention the Britannia Boys (likely what Tremonti meant by the “lodges”) as it leads straight to London.

      So we have 2 events, run out of London that paved the road to hell – the Euro.

  47. molly

    Shane Ross Sunday indo says it all well said Shane yet again.

  48. Mark B

    The first and second class money argument is spot on in terms of a monetary union not being possible under such a hierarchy. First read on this issue in detail in the attached about half way into the report….highlights the case of the Germans having their cake and eating it too.


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