May 3, 2012

The Isolation of Germany

Posted in Irish Independent · 118 comments ·

Yesterday was International Workers’ Day. It was celebrated all over Europe with public holidays. It is a bit ironic that on the day that Europeans celebrate our workers so many millions of these workers are on the dole. Traditionally, periods of high unemployment are also periods of social and political change. It is easy to see how the present levels of unemployment might lead to political U-turns.

Today, unemployment in Spain is 23.6%, Greece 21%, Portugal 15% and Ireland 14.7%. Greek, Italian, French and Irish voters will all be given a chance to express their preferences over the coming weeks and months. Although some of the political elites are trying to divorce local difficulties from greater European issues, everyone realizes that it is mendacious to try to do so because policy is being set in Europe.

And it is not just policy that is being set in Europe. Governments too are being determined by EU technocrats. This is extremely dangerous. Lest we forget, in the past six months, two legitimate national governments have been deposed by the EU. The democratically elected leaders of Italy and Greece have been thrown out and replaced by technocrats. These are now EU puppet governments. In Ireland, the government’s job, to use the words of one of our senior Labour politicians has been reduced to “policing” EU agreements.

The biggest loser in all this, if other electorates turn, is going to be the German view of the European Union.

Are we seeing the beginning of a process whereby Germany becomes isolated in Europe?

The Germans know that they do not yet have the “permission” to behave like a bully in Europe. If they overstep the mark, most countries have sufficient collective memory of German “form” to react in the expected way.

But Germany itself is changing too.

We now know that the design flaws of the Maastricht Treaty that created the rationale for European monetary union in 1992 have been exposed by the current sovereign crisis. Convergence, the mantra of EU central bankers, politicians and bond dealers in the 1990s, has proved a cruel mirage.

The Mediterranean did not magically transform into Greek, Italian and Spanish templates of sober, inflation obsessed, high savings, high tech Germany. Nor did we become a Celtic version of the Saxons.

The Euro triggered a tsunami of wasteful fiscal spending in Greece and Portugal, the loss of export markets for family owned Italian firms dependent on lira devaluations and an epic construction bubble in Spain whose denouement has devastated its banking system and cajas. Ireland has mirrored Spain.

“Convergence” was an illusion in Europe and the ECB’s “one size fits all monetary policy” was a disaster under Wim Duisenberg, Trichet and possibly even Draghi. Europe simply did not meet the economic model of an optimal currency area even a decade after the creation of the ECB and the Euro.

Germany has unquestionably benefited from the Euro project, the strategic goal of every postwar German chancellor since Konrad Adenaur. The people of Germany loved their Deutsche Mark but German industrialists dreamed of having a cheaper currency. Within the Euro, German business created a trillion euro export colossus and accumulated the world’s largest trade surplus. In fact, the crisis in peripheral Europe benefited Deutscheland AG since it triggered a devaluation of the Euro against the dollar and the Chinese Yuan, increasing Germany’s most important trading partner.

Just examine the graph, which shows the different unemployment experience of Germany versus Spain, Ireland and Italy. German unemployment is now the lowest in twenty years, while the rest are experiencing something quite different.

By using the French-German axis, symbolized by the term “Merkozy”, Berlin has emerged as the geopolitical and financial hub of 21st century Europe. Germany is no longer an American appendage, occupied and self-conscious, but the strategic partner of Russia and China in the brave new world of international power politics.

Ever since the Greek debt crisis escalated in May 2010, Germany in Europe has imposed its fiscal diktat: austerity and cuts in government spending in exchange for Troika bailouts.

But all is not rosy in the Teutonic garten. The Bundesbank was forced to acquiesce in the ECB’s giant “cash for trash” scheme. In addition, in recent weeks Chancellor Merkel’s insistence on balanced budget amendments in the “fiscal compact” which is supposed to seal German dominance in the EU is running into trouble.

The Dutch budget crisis, Nicholas Sarkozy’s humiliation in the French elections and the Spanish repudiation of its deficit targets are all symptoms of a new backlash against the German vision for Europe.
In the past week alone, there have been safe haven flows into German Bunds and US Treasury debt and rumours that the Bundesbank is secretly preparing for the end of the Euro. (These rumours are now monthly occurrences in financial markets.) However, if the Elysee Palace in Paris under Hollande were to become a fulcrum of anti-austerity, the Germans could look quite isolated and the unthinkable could become thinkable.

Berlin is losing its tenuous power to dictate the future of Europe.
But what happens if Germany decides it doesn’t care? Yes it is looking isolated, but what if the Germans’ patience with the rest of us is also fraying?

If Germany keeps being blamed for the woes of others and if it senses that it is surrounded by a bunch of ingrates who assume that Germany will write the cheque every time, might the Germans themselves get fed up?
Sometimes when we listen to the debates here on the fiscal compact, we could be forgiven for thinking that the world is waiting for us to make up our minds. This is not the case. The world is moving very quickly, with many parts in motion. We are now part of a European process.

Up to now, the talk has been that certain countries — Spain, Italy and Greece – might go it on their own, but what if the country that breaks ranks is Germany?

Have we considered that one yet?

  1. Adam Byrne


  2. Melanchton

    The Germans did not dream of the Euro, far from it! It was sold to the German public as the price to be paid for Allied approval of re-unification. France and Britain were opposed to re-unification as it meant Germany would
    be the largest country with 80 million people as compared to 55-60 millions in France, Britain and Italy. France demanded the EMU as a way to reduce the power of the Bundesbank who had practically defined monetary policy in Europe for a number of years, very much to the dislike of
    France and Britain.

  3. Compass Alignment

    So David ,I believe , is saying The West goes East because what will be left is not worth staying around for .

    We ‘ en peripherique ‘ will be left with an Outback where you drive for miles and meet no one … least that is the Idea.

    Where old technology will be the same as the modern technology only different . The Amazon comes to mind.

  4. Amazon Jungle

    Welcome to Euramazon where the new King Tarzan will be Hollande and all the little animals will be caged to be fed their daily rations . There will be full employment and lots to do ………..and to pay back in your lifetime.

  5. Grey Fox

    The single European Currency was being talked about as far back as the 1930′s in Germany.(see )
    I will assume that if Germany decides to go it’s own way that will be the end of the Euro, and maybe, just maybe, that’s not a bad thing.
    For the Euro to be imploding as it is, at such a young age, is absolutely astounding and proves what an ill conceived project that it was.
    I believe that the ordinary man in the street in Ireland hasn’t up to now, given much thought to our Government being redundant, to handing all power over to Europe and that is not necessarily his fault, it is like everything else of importance in this country, our Government never, ever explains issue’s correctly. It is like they have this ultimate dastardly plan and plant mis-information and distraction to hide the facts, this may well be true based on the recent Treaty Referendum’s and again they are doing nothing to dispute this with the EU Fiscal Treaty, probably because they know this one is the final nail in the coffin of Sovereignty. Successive Governments are guilty of this and I say it is the “cute hoor” trait in the Irish psyche, the need for secrecy, probably cultivated by the all powerful catholic church who had a stranglehold on Ireland for so long. For what it is worth I truly believe that Ireland will vote NO, not that it will make any difference, we are irrelevant in this treaty and in general from the EU point of view, contrary to what they, and our Government spout.
    Either way the Euro is fast making its way into the history books, I hope the EU does not but for it to survive there has to be radical change and I just don’t think the politicians in control have it in them!

  6. Grey Fox

    Just a quick mention, off topic somewhat, my friends,
    As 2016 is approaching fast, what are was supposed to celebrate at Easter 2016?
    Our Sovereignty?
    Our Independence?
    Our intention to stand free as a Republic?
    Maybe the reading of the Proclamation at Easter 2016 will not be the symbolic gesture it is now, but more an actual call to action for the second time!

  7. Nouveau Pauvre

    Hi David, Here is a YouTube video that quickly gets to the core of the European stability Mechanism THE SHOCKING TRUTH OF THE PENDING EU COLLAPSE!

    • Interesting video alright.
      Question …
      Who made it what are their motives?

      • First alarm bell is that narrator speaks with an American accent. Who, where, what etc. Like I said – interesting.

        • Nouveau Pauvre

          Hi Paudly,
          My guess is that the American who made the video is trying to educate the people about the worldwide corruption of the banking system. The entire central banking system is so corrupt that Liens have been filed against all 12 Federal reserve banks in America

          • Yes maybe Pauvre. I wonder will see someone in Ireland creating such a persuasive video in the coming weeks. Hell we have run out of time

            What concerned me is that THEY can sue us but WE can’t even take them to court as they have immunity

            I found the video disturbing.

          • Nouveau Pauvre

            Yes Pauldiv it is disturbing but unfortunately it seems that all the politicians in European nations want desperately to pass responsibility for this financial mess to anyone who they think is capable of fixing things and that these Bankers are employing the old PROBLEM REACTION SOLUTION formula to gain even greater financial control of the people (ie. create a Problem create a Reaction then provide the Solution = ESM)

          • That is what I suspect Pauvre. The Problem – Reaction – Solution technique is becoming part of everyone’s vocabulary now. It is simple and clever can fool all of the people all of the time

            It is so obvious and when you look at history you can see they have been playing this old game from the beginning of time

        • martino

          By the look of it it was originally a German production (bank slip, German Eagle, etc..) and this is a translated version. Probably from some anti-EU German faction.

  8. piombo

    In answering David’s question, I would say that:
    1) The German people, in general, are profoundly Euorpean and patriotic German sentiments of superiority is expressed through harmless proxies such as cars, sports and beers;
    2) Also, the German design for Europe since WWII has not been to dominate and is still not the case. The strongest evidence of this came from Poland’s finance minister a few months ago who encouraged Germany to step up it’s leadership and not step down!
    3) Germans are practical and know that the Euro is of huge benefit to them;
    4) Unfortunately, the German people are served by a local media which has not had the courage to tell them how much their landesbanken are into the Irish, Spanish and Portuguese and Greek local banks/governments; The same media dovetail the political and financial establishments;
    5) Ergo, given the above, the only reason why the deutschen volke would en masse push for the exit from the euro would be that their own local banks get destroyed by bad loans, but certainly because the Irish, Italians, Spanish etc., are complaining about them.

    Let us learn to love the people of Goethe, Von Beethoven, Schiller, Kant, Benedict XVI and Rilke and the Lion of Munster.

  9. Good article

    The Stability Treaty leaflet is out. It says that the treaty will tackle the economic crisis, ensure Ireland can get funding and restore international investor confidence and lead to social cohesion. Sounds good doesn’t it?

    But this just sounds like the hot air being blown by our politicians since the crisis began and we have stopped listening to them. Can they put numbers on their claims? No. I suspect they are just winging it

    If Ireland votes yes then what?
    If Ireland votes no then what?

    Why vote for more austerity when this is not in the interests of ordinary people struggling to stay above water

    What will be the consequences of a no vote?
    Would we be cutting out noses off to spite our faces?

    We have to get it right for the sake of future generations

    I am undecided. Rather than read a government pamphlet I would like some feedback from people who can spell things out in plain English and call it for what it really is. Like a sheet of paper with columns for pros and cons

    Thanks in advance.

    • bonbon

      What Stability?
      FLASH–—The Oh So Stable “Stability Treaty” Takes Another Hit

      there is more happening – DMcW is right, things are changing fast! Ye had the time to make up yer mind.

      • That is not very helpful.

      • If you mean we take advice from followers of this guy then you are mistaken brother

        • ioseebee

          Is their a blackout on news of Junckers resignation?

          • I don’t know is there?

          • ioseebee

            I dunno, I searched for it on google, under the following;

            juncker resigns

            rte news juncker resigns

            yahoo news juncker resigns

            ….see for yourself – the only thing I got was an article about him saying he will quit this year
            dated 16/17th April on Yahoo news….

            has he resigned as per laroucheirishbrigade’s report in link above, or are we getting this news blocked due to
            the possible signals it could send to irish referendum voters I wonder?

            Can anyone find reports on thsi in general news…..
            I might just have missed it somehow…

          • What makes you mention Juncker?

            No one mentioned it before.

          • ioseebee


            Bonbon posted the floowing link;


            saying there were big things happening (referring to Juncker resignation as the article on his link seems to be be about….)

            “FLASH–—The Oh So Stable “Stability Treaty” Takes Another Hit
            Posted on May 2, 2012

            The dumb and dumber attempt by Government to spin the Austerity Treaty as the “Stability Treaty” was junked by leading Eurocrat Jean Claude Junker himself today.

            In a speech in Hamburg today, Junker, who is also Prime Minister of Luxembourg , announced that he’s quitting his job as President of the Euro Group, the grouping of Finance Ministers in the Eurorzone. Junker cited interference by France and Germany in managing the euro-area debt crisis as the reason for his decision saying;Germany and France “act as if they are the only members of the group.”
            He cited interference by France and Germany in managing the eurozone debt crisis as the reason fore his decision.
            Junker has been the head of the Euro Group since it was created in 2005.

            After criticizing the role of France and Germany and their interference in the debt crisis, Junker went on to, strangely. endorse German Finance Minister Wolfgang Schaeuble as his replacement. This becomes less odd when one realized that Junker is just trying to get off the very unstable EU-Titanic before its imminent demise.

            Now, isn’t stability great lads?

            Vote NO!”

            I dunno, seemed to me that this was a pretty damning summary of France & Germany’s Eurozone rescue efforts..
            ..which I imagined wouldn’t be the preferred news for Irish people to be hearing right now… for some people who want to see treaty pass the Irish referendum hurdle…

            …but I have since read below that LaRouche isn’t necessarily a perfect organisation by any means from some of the posts below…

            …maybe some other posters can give their opinion on whether this article should be treated with a certain distance?
            …or if this Juncker speech actually was made yesterday?

          • Nono

            Jean Claude Juncker is indeed resigning by mid-2012. I googled his name followed by démission and it comes out 3 times. Only Swiss news are reporting on it… Weird indeed!

          • Thanks for clarifying

            The rats are bailing from the ship

            We have a cardinal in deep water and the DSK story is coming back to plague Hollande

            We are seeing out betters for what they are

            Dominique Strauss-Kahn could face gang rape charges

            It is awful.

          • Nono

            Pauldiv, there has been another rumour about a right-wing minister a few years ago who would have attended a pedophile orgy in Morrocco (in the famous Mamounia hotel). He had to get hushed out of the place as it degenerated and the whole hotel room was ransacked. The king of Morrocco paid for the expenses and the minister never got into troubles over the events. There were 9 years old boys at the orgy… It is despicable and quite representative of the immunity those guys have or think they have. I’m not sure if the DSK story (about him being invited to a party where campaign officials were also invited to) really tarnished Hollande’s reputation since he has clearly distanced himself from the guy. Also, during another affair with DSK (the one where a French woman, Tristane Banon accused, him of trying to rape her), Hollande behaved quite impeccably, asking for an investigation when other high profile socialist members tried to minimized the story. Unfortunately, the victim’s own mum, who was a socialist deputy at the time, convinced her not to bring charges…

          • bonbon

            I wonder why Swiss report that? Maybe acause the largest Greek bank moved from there to Luxembourg to get the EU bailout maybe?

    • Example of the language used in Article 14

      “The instruments of ratification shall be deposited with the General Secretariat of the Council of the European Union (the Depositary)”

      Hmm instruments huh?
      What kinds of instruments?

      • I keep thinking about these damn hinstruments

        Cellos, trombones and violins presumably?

        You can’t fail to laugh. It is bathos and absurdity packeged in a bawdy victorian burlesque stage performance for the purpose of mass hentertainment

        If not funny then the great Irish public needs a humour transplant damn fast

        Or maybe they mean serious hinstruments. Like inclinometers and gyroscoples in order for us all to consider this catch 22 from a position of halitude?

        Nite nite Irish brothers.

  10. Grey Fox

    Pauldiv, a small piece of your wish, maybe!

    1.All Government Budgets will be balanced,
    or in Surplus. Annual structural deficits must
    not exceed 0.5% of GDP. = NO JOBS NO GROWTH

    2.Countries which are able to maintain Government debt
    levels below 60% will be rewarded by being allowed to
    have deficits up to 1.0% of GDP.MAYBE JOBS MAYBE GROWTH

    3.The above rules will be introduced into member
    states Constitutions or the legal equivalent. This rule will contain an automatic correction mechanism that shall be triggered in the event of a deviation from the rule, the correction mechanism will be defined by each member state based on principles put forward by the European Commission. All member states will accede to the European Court of Justice the right to verify the imposition of this rule at National level. NO JOBS NO GROWTH
    4.The European Commission will provide a calender
    of events by which each member state will converge
    on their specific reference level. NO JOBS NO GROWTH

    5.Any State whose Government debt exceeds 60%
    will reduce the debt level by 1/20th of the level above 60% per year. NO JOBS NO GROWTH

    6.Any State in excessive deficit will submit an economic partnership programme detailing the necessary structural reforms to ensure effective correction, for endorsement by the European Commission and the European Council. NO JOBS NO GROWTH

    7.A mechanism will be put in place by member states
    to report debt issuance plans before any debt is incurred. NO JOBS NO GROWTH

    8.Each State will accelerate the ratification of the ESM Treaty and it’s entry into force including any amendments. NO JOBS NO GROWTH

    9.The Eu’s highest court will be able to fine any member who does not adopt the above rules into their Constitution, this fine will be 1.0% of GDP and will be paid to the ESM. NO JOBS NO GROWTH

    10.Member states agree that all major economic policy
    reforms will be discussed prior to implementation and
    coordinated with the EU Institutions. NO JOBS NO GROWTH

    11.Member states must meet twice annually with
    the European Commission president to discuss Euro matters. NO JOBS NO GROWTH

    In my book that’s 10-1 on the scorecard

    • Thanks Grey Fox. Good information presented in plain English

      Does anyone care to argue for the yes side?

      • redriversix

        I think we should vote yes even though my heart says no but my head says yes.It will bring in jobs and investment and when we need more cheap money We will get it no problem.

        America will also pour loadsa money in here as all the Chambers of Commerce think its a great idea.

        Ireland will be rewarded for its obedience and all debt will be forgiven.

        The Germans have also promised to teach Minister of State,Brian Hayes T.D how to get a sense of humor.

        Austerity has been a terrific success across Europe so the powers that be know what there doing and will always put people ahead of Corporations.

        Lucinda Creighton T.D has promised not to patrionse anybody for 24 hours if the treaty is passed. conclude with this information I have shared with you,I know you will vote yes on the 31st of May,If you don’t you will NEVER see Dorothy or Toto EVER Again.

        Peace and goodwill to everybody earning over 80,000 euro per year [ terms and conditions apply ]

        • Lol. You have a great sense of humour RR6.
          I needed a laugh.

        • Grey Fox

          Very Good RR6 Very Good!

        • molly

          Funny now be serous ths treaty is bad for Ireland and the grip of Europe is like the hangmans nuse around the Irish people.
          We need to borrow money for what .
          Social welfare
          The government pay and pension new and old
          The civil servants
          The police
          The crones
          The cook the theaf the lover and his wife
          The county councles
          Who’s happy with this government ?
          Who’s happy living in Ireland
          Who’s happy being fed lie after lie after lie dont do as I do ,do as I say.
          This government is talking down to people and when you start talking down to people it’s the start of the end.
          What’s going to happen when the next round of cuts come in after ,or before the next budget .
          How many things will have gone up between now and December.
          Try forcing more cuts on people who just can’t take anymore cuts.
          When will this government put them selves in other peoples shoes.
          As an oap said to me who have we left to vote for only the shinners.

    • Tony Brogan


  11. I wanted to find out what people say about Larouch Pac. This is the crew Georg hates with a vengeance

    Lyndon LaRouche’s Long Campaign

    LaRouche? I was just called by LaRouche PAC. Can DU educate me?×2335574#2335577

    Interesting stuff

    • Correction:

      I chose to not participate in a blog where ultra right wing extremist cult propaganda is willingly tolerated by it’s host albeit numerous complaints.


      I have no time for this crap, and certainly do not tolerate it.

      • StephenKenny

        The difficulty with that approach at the moment – over the past 20 years or so – is that the relevance of ‘left’ and ‘right’ has all but disappeared. Political activists are so busy fighting the last war that they fail to see the current one.

        Of course, political activists have built their lives, usually including their social lives, around their political grouping, and their dislike of the ‘opposition’ is usually based on a combination of straw men, group think, and are as much defined by what they believe to be opposition’s dialectic, as it is of their own.

        It will probably take a new generation – who grew up during the current world situation – to really get to grips with the problems. The activists are far too busy hunting reds under their beds, and public sector cutters.

        I saw, with a sense of great nostalgia, that a US Senator has recently been warning about ‘Russian Spies’. Ah, the days of my youth!

        • bonbon

          Correct, the current one is taking on the real colors, hidden during the so-called cold-war which spawned the ’68ers, now running things and stealing the future from the next generation and wishing for censorship.

          Ironically the real war is between imperialism and the republic, in fact ancient. The true face of the enemy is less and less hidden, just see the Royal Society’s “People and the Planet” report out now to get an idea of what we are up against.

          And Eire faced this before.

      • Come back we Georg. We will fight them on the beaches and prove that our words are stronger than theirs !!!

        Evil flourishes when good men do nothing

      • DMW never censors. That is to his credit surely?

    • Nina Ogden

      If you really want to find out about LaRouchePac, why not read the material on their website, rather than the yellow journalism bought and paid for by the industry known as “LaRouche experts” who repeat all the fictions that “Georg hates with a vengeance.”

      For instance, you could listen to the webcast between Helga Zepp-LaRouche and Spain and Portugal, which covers many of the topics emphasized in recent Dave McWilliams columns and readers comments.

  12. Tull McAdoo

    Hi David,
    I am in Frankfurt at the moment, flew up from Oz on Monday, heading back home on the red eye on Friday night, you know how it goes …….you sparked this memory of this post that I threw into the mix back almost 3 years ago….. Jasus you can read these clowns like a book…..

    1. Jim says, May 20, 2009, 2:13 am
    Given that Europe will invariably bail out Ireland, and later on Ireland will ratify the Lisbon Treaty, it seems to me that the Dail per se will be downgraded to the level of a glorified County Council in the eyes of Europe.

    As it stands at the moment the Dail has all the appearances of a County Council at work. Look at the evidence. It has boosted its own staff (Public service). It seems totally oblivious to the outside World, which includes everything in Ireland that is not Public Service. It feels no obligation to interfere in any way with what it refers to as a small open Economy run at the behest of the Free Market.

    Cowen (Kenny) himself shows no signs of Statesmanship but looks more comfortable as a type of Chairman of this Country Council. They obviously don’t trust their own to make decisions or at least be seen to offer solutions to problems. They prefer to hide behind a plethora of Outside Consultants, or prefer to wait for some diktat from Europe to tell them what they have to do….

    They pack up the numbers employed in the Public Service with their own Party Faithfull, thereby giving the hardcore support evidenced in the recent polls. This Government has no clue no more than any County Council around the Country on how to create jobs, or run an Economy outside of the Public Service etc…..

    It took me quite a while to get my head around these People, but when I did it was easier to understand their thinking and actions when I looked on them as glorified County Councilors….

    I’ve watched Cowen (Kenny) and His frontbench as the Banking crises unfolded and they just seemed mystified as to what they thought people expected them to do. They just seemed preoccupied with their own jobs of running the Public Service. It all seemed like a huge intrusion into their normal functions…..

    When they did speak it was like as if they had just left their local clinic and had just been informed by some developer, that all was not well and could they make inquiries on their behalf with the Dept.

    The recent Budgets were more of a book balancing exercise that you would see by an Accountant for a County Council, extra levies, extra taxes…I was just waiting for Linehan (Noonan) to say something about bin charges or sewerage connections fees, it was that bad from an Economics point of view.

    That’s how I see it. We are being run by a bunch of County Councillors, and Governed by Europe….Free State me arse, free lunch for the chosen few more like.

    “Maybe something happened along the way, and yesterday is all we have”…..Take it away boys and ………Goodnight Ireland, sleep well. ;-)

    • Jimmy

      “We are being run by a bunch of County Councillors, and Governed by Europe….Free State me arse, free lunch for the chosen few more like.”



  13. Deco

    Personally, I don’t beleive in the isolation of any country. The regime might need to be isolated, from time to time, for countries like North Korea, Zimbabwe, and Syria – because of the way they abuse the people. But the isolation of a country is a serious matter, even on a minor scale.

    News in, and this is a serious blow to Sarkozy.

    Basically one of the serious candidates on the French Presidential race, and probably the one who talks the most sense of the lot of them, has decided to back Hollande.

    Melanchon has already also plumped for Hollande.

    Hollande now has the Left, the Far left, and the centre of French politics. This means Sarkozy is as good as finished.

  14. martino

    Is Tony Brogan out there tonight? Tony, silver down quite a bit today. What’s going on and should you buy on this current dip or wait a bit for even bigger dips?

    • StephenKenny

      I can’t help you with silver, but it is worth considering the current situation in regard to efforts to maintain the value of savings.

      For a very long time currency rates and their effects on interest rates have been used as indicators of the strength of economies.

      For the first time as far as I know ever, all the world central banks are working in synchronisation to maintain all the world’s major currency rates within fairly limited ranges. As a result currency rates and interest rates tell you nothing useful about an economy.

      This is enabling everyone to print and borrow like there’s no tomorrow, without any fear of raising interest rates, or changing their balance of payments too much.

      So they print and borrow, and print and borrow, and the indicators we use are saying that all is, reasonably, well. So market confidence goes up, so markets goes up, so people buy their Lamborghinis, we all start to think that picking up a foreclosed buy-to-let might be quite smart after all, and so forth.

      The problem is that at the apex of this upturned pyramid is a premis based on a set of completely misleading indicators. These indicators are telling us that we are entitled free lunches, possibly for a very long time, so we’re starting to dig in.

      I cannot tell you what will happen, because I don’t know, but just as I can tell you that there is no such thing as a free lunch, I will tell you that this won’t end nicely: If it looks like a free lunch, smells like a free lunch, we can be quite certain that it’s a trick.

    • Tony Brogan

      Hi Martino
      how are you.
      The fundementals have never looked bettert yet we have this set back and the blast down of the PM shares.
      There is no doubt of a concerted effort to prevent any excitement in the PM’s by the western Central banks and associated governments.
      The financial cris is worse behind the scenes than we are allowed to view.
      gold is the baromiter of monetary and fiscal problems. It must no be allowed to rise. Silver its baby sister is in less physical supply and more volatile. It too must be suppressed or it gives the lie to the gold supression.
      The shares are majorly shorted by the same government entitities.
      All three areas are driven down by algorithum computer programs that trigger traders stops and the fall becomes computer driven.
      Do not wait as it is impossible to guess the bottom. All the charts and graphs are yelling buy. Of course it could go lower but not by much and it may bounce back tomorrow.

      Reports are that there is little physical supply and these paper traders will soon be overpowered.

      I will send you some sites to visit and you can do your ownm reading.

    • Tony Brogan

      Here is a brief report from Goldcore of Dublin

      Some Swiss gold out of the country; refineries see ‘massive’ demand

      Submitted by cpowell on 10:14AM ET Thursday, May 3, 2012. Section: Daily Dispatches

      1:13p ET Thursday, May 3, 2012
      Dear Friend of GATA and Gold:

      GoldCore’s Mark O’Byrne today relays a report that the Swiss National Bank, while refusing to specify the location of its gold reserves, acknowledges that they are held both domestically and internationally, the latter locations providing “access to a gold market where stocks could be liquidated if necessary.” Presumably “necessary” includes the sort of surreptitious currency market intervention seen against gold simultaneously with the Swiss franc’s devaluation last September. O’Byrne’s commentary is headlined “Swiss Gold Stored At ‘Decentralised Locations’ — SNB Does Not Disclose Where” and it’s posted at GoldCore here:

      Meanwhile, Swiss gold fund manager Egon von Greyerz tells King World News that the seeming calm in the gold futures market is deceptive because Swiss gold refiners are reporting massive demand. Von Greyerz expects the futures market to disintegrate because it cannot deliver the goods. An excerpt from his interview is posted at the King World News blog here:

  15. molly

    Look David if Ireland was to leave the euro and Europe and we could not borrow money from any one would we become a third world country.
    Or would we survive ,I keep going back to how a business is run if you run a business the way Ireland is run how long would the business survive.

    • Running a country is not the in the same league as running a small business. Anyone with limited intelligence can run a small business

    • Tony Brogan

      If Ireland stays it will not be a country at all. Just a European provice governed from Brussels

      Survival will entail a shock initially.NO NEED TO BORROW.
      Ireland prints ITS OWN currency and issues into circulation through the post Office, side stepping the banks and their fractional reserve system
      silver coin money can be issued into circulation the same way and the Irish mint authorized to coin until demand sated. All done at no cost to the government.
      Close the central bank
      outlaw fractional reserve banking.
      within 2 years the Irish currency would be partially backed by bullion and the money respected.
      AH yes and revoke the bank debt and any other private debt assumed fraudulently by the taxpayer.
      Exporters do business as usual.Biggest market is the UK.
      Ireland dumps the EURO and reclaims sovereignty.

      Ireland , proud, selfsufficient, independent, free and sovereign.

  16. ioseebee

    Hi All!

    I am not a Fianna Fail voter, or in anyway affiliated to them.

    So it is has stunned me that one of the best, maybe most genuine, intelligent and respectful consideration of what this referendum and these treaties entail seems to have come from a longtime serving Fianna Fail member….

    ….Eamon O’Cuiv

    I know someone posted link to this under a previous DMcW Article, but I genuinely thought that it might be of interest to everyone on this blog and its readers to post the excerpts from his speech here?

    I am interested in what people here think…
    …personally I think it’s the closest most balanced representation of DMcW columns’ central themes & direction, and for the firs ttime believe their is a politician who is looking at this from a refresging perspective….
    ….shame he is going to stop actively campaigning for No Vote in my opinion…

    ….some of the others in the No camp are really putting out far too simple a message…also treating the people of Ireland as idiots.

    From Eamon O’Cuiv’s website….

    “My Fiscal Compact Woes

    Written by Eamon Ó Cuív Friday, 20 April 2012

    News – Press Releases

    I’m under attack in today’s Irish Times, you can have a look for yourself here.

    I am disappointed that the Dáil debate was more about sloganeering, prepared speeches from the Government parties and bad mouthing those that questioned the Fiscal Treaty rather than a careful analysis of the very serious issues confronting the Irish people. I hope the debate over the coming months will examine very carefully all aspects of the decision we are about to take as a people. This decision could have huge consequences for the medium term future of our country.

    I regret that Sean Sherlock did not address the detailed points I made rather than getting into a rant that has nothing to do with what I said. As I have stated consistently over and over again, I believe that we need to look at the small print of this Treaty. We need to examine it carefully and choose a course that will serve the interests of the common good and the plain people of Ireland and not the banks and powerful financial lobbies of Europe.

    Abridged Address of Éamon O Cuív T.D. to Dáil Éireann on Wednesday the 18th of April 2012 on the Thirtieth Amendment of the Constitution (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) Bill 2012

    Fiscal Compact Must Be Ratified as Part of a Triptych of Interlocking Treaties; the first of which requires unanimity

    I am delighted to have an opportunity to address this Bill. I strongly support [the Fiscal Compact Treaty] being put to the Irish people. I am glad the Government eventually came to the conclusion that the Irish people should be asked their opinion. However, my view is that since there are three interlocking treaties, and this is not the first but the third of them, the Government should have put the three treaties as a package to the Irish people. I understand a case is being lodged in the courts on that basis. This is fundamental because, as I will point out later, the fiscal compact will become a reality only if all countries ratify the initial Treaty and then the European Stability Mechanism, ESM is set up.

    The Principle of Fiscal Insurance, in the form of the ESM, Makes Sense But More Precision is Required on the Rules That Will Govern Our Budgetary Policy
    No one can argue against the principle of a backstop of cash or of fiscal rule. I do not know anyone who is against fiscal discipline. The question is; does this Treaty provide fiscal discipline or simply rules that will become a straitjacket and are unenforceable? Furthermore, will anyone know what [constitutes] these rules? This is like asking someone to play in a football match where there is no set of rules that anyone can read and understand. We know what would happen in such a case. People would argue with the referee.

    Necessity of Treading Carefully In Referenda and Examples of Previous Mistakes
    I welcome this debate but am disappointed with it because it seems to be a series of pre-prepared statements for backbenchers and Ministers [which] do not analyse the issue. When we hold referendums we should remember the safe cross code. We should look right, look left, look right again and then cross the road. We know that in previous referendums that did not happen and difficulties arose. … In some cases, referendums were passed and we then had to undo the damage caused [at a later date]. In other cases, the people examined the small print and decided they were being sold a pig in a poke. A good example is the referendum that followed the Good Friday Agreement which was passed with great fanfare. There were difficulties within the small print of that amendment to our Constitution. We had to have a second referendum on the question of the Irish born child because of the flawed wording we had passed in the Good Friday referendum. We had a rushed referendum last autumn where eight former Attorneys General pointed out that what was being proposed was deeply flawed and the Irish people, rightly in my view, decided to vote against the amendment.

    Moving Towards a Real Legislature
    Those who dismiss all argument, analysis and inquiry into what we are doing at present are letting themselves down and, furthermore, are reneging on every promise they made that this Legislature would be a place of debate and inquiry and not of pre-prepared speeches. When the Government came to office, there was much talk about the Legislature taking the initiative and holding to account the Executive, but we are back to the same old, “Don’t question anything; get the backbenchers to read the same old pre-prepared speeches; don’t ask the awkward questions and hope no one else asks them either”. It is important to examine the small print of what we are doing, [but ...] we must also look at the wider picture of what we sign up for and the context in which we do so. This is particularly important as we are writing something into our Constitution and are being asked to pass a law that will be permanent. That is why I am looking at this issue from all angles.

    This is Not a Referendum on Our Membership of the EU or the Euro
    Can we dismiss the rubbish from the Government that this has anything to do with our membership of the Eurozone or of the European Union or that there are pro-EU and anti-EU parties involved? I know of no one who is proposing that we leave either the Eurozone or the European Union. Sloganeering on that basis [is nonsensical].

    Do We Have to Vote Yes to Stay at the Heart of Europe?
    The second argument is that [passing this Treaty] will keep us at the heart of Europe and will make it clear that Ireland is open for business. We are also told that if we vote against this Treaty we may be thrown out of the euro. That is a veiled threat and one that has no substance in law. People who argue on that basis are abdicating their responsibility to get the best deal for Ireland and for Europe. They argue that we must vote ‘Yes’ to keep ourselves at the heart of Europe … If one were to accept that argument one would have to vote for every EU referendum put forward and all proposals from Europe would be waved through without question … Therefore if corporation tax is next on the agenda, will we automatically support that approach as well? Will a day come when a Government or the Legislature will say we do not agree with what is being proposed? We are keen on being at the heart of Europe but does this mean we agree with everything proposed, any more than saying we must agree with everything the Government proposes if we are to be at the heart of Ireland? How would rejecting a proposal put forward by Europe mean we would not be at the heart of Europe? That is a nonsense argument and has no validity.

    The Fiscal Compact Cannot Proceed if the Irish People Reject This Referendum
    I am in favour of fiscal discipline. Does this give us fiscal discipline or merely an impossible straitjacket? [... We need to examine] the wider context of this proposal. Time and again we are asked, ‘where we would get the money if we do not pass the fiscal compact?’ The reality is that we are passing three treaties. The first is an amendment of the definition of the treaties governing the European Communities to include reference to the Treaty establishing the European Stability Mechanism. We cannot have the other two treaties without that one. It has not been ratified. The Government has, rightly, agreed not to ratify it until the fiscal Treaty has been ratified. Secondly there is a Treaty to set up the European Stability Mechanism and thirdly there is the fiscal compact Treaty. It is fair to say the second and third treaties can go ahead without Ireland’s ratification. However if Ireland refuses to ratify the first Treaty [then] the second and third cannot [proceed]. I presume the Government’s reason for postponing ratification of the [first] Treaty until after the referendum is that in the event of Ireland not ratifying the fiscal compact we can hold up the whole ship until we get a proper package that deals with Europe’s problems.

    The Responsibility of Banks in this Economic Crisis
    What European leaders have decided is not the best package for Europe. Fiscal stability is only part of the package. The main cause of the problem in this country was not fiscal instability and [research on the Fiscal Compact issued by] Davy Stockbrokers [is worth referring to on this matter]. The main cause of the [economic difficulty] in this country was the behaviour of [our] banks. Nowhere in all of this do we see a ‘rolling in’ of bank behaviour or international finance across Europe. If the following issues were dealt with, would it not be better for Europe and for Ireland? Should we not have proper regulation of the financial and banking sector at a central European level to ensure the banking crises and the problems of the past ten years do not recur? Let us get that into the package.

    Attack on Democracy at the Heart of EU’s Response to the Crisis
    There should be no further attempts by the EU to impose non-elected technocratic governments in the European Union. The EU is founded on a bedrock of democracy and yet Europe, centrally, is either imposing or trying to impose technocratic non-elected governments. We need a commitment from the European Union that the right of initiative remains with the Commission and that two strong member states, that is, France and Germany, will not be allowed, by stealth or by practice, to lay out policy for Europe. It must remain the role of the Commission to propose policy and the role of the intergovernmental meetings to roll it out.

    We Need Strong Commitments on Preserving our Corporate Tax Rate
    We hear about preserving investment in the country. The biggest challenge to investment in this country at the moment is the uncertainty being raised by President Sarkozy about our corporation tax. Let’s start again and this time get a commitment that corporation tax and common consolidated corporate tax base, CCCTB, will not be imposed on this country and that the promises that were given to us in the Lisbon Treaty, on which some of us canvassed, will be adhered to … [We should] have insisted that an employment and growth strategy would be part of the package. Let us go back and get that first. [We should also demand that] the ECB reformed as a normal central bank with the normal powers of a central bank and that in particular it would have the power to buy sovereign bonds at 1% instead of selling them to the banks at 1% and selling them on at one remove at 5%, leaving huge profits for private institutions.

    Continental Banks Must Carry Their Share of the Burden
    An issue that goes to the core of implementing the fiscal compact is that the European banks that lent to the Irish banks or their sovereign governments would assume their fair share of the losses caused by their shared reckless behaviour instead of trying to saddle the whole debt on the Irish people. If one leaves the debt as it is and we assume all of the bank debt, when one applies the fiscal compact rules it is tantamount to slow strangulation. One might argue that if we say “No”, we will go over the cliff, but that is not the case because we can hold up the whole show and go back and renegotiate in the interests of the ordinary, plain people of Europe who do not seem to count for much among European leaders. … [W]e need to ensure a good deal for this country as well. My experience of Europe is that every country looks after its own interests.

    Nobody Knows What the Fiscal Compact Actually Means
    When one looks at the fiscal compact itself, one of the interesting things is that nobody knows what it means. In other words, we are buying a pig in a poke. A document was published by Davy stockbrokers, who would not be considered revolutionaries, which indicates that “[The] structural budget deficit target of 0.5% is a poor choice.” The report states:
    “The structural deficit is an abstract economic concept that cannot be observed with certainty. For example, the IMF estimates that Ireland ran a structural budget deficit of 5.4% of GDP in 2006, whereas the EU Commission estimates that Ireland ran a surplus of 2.2% the same year. Markets are unlikely to derive confidence in fiscal policy from budgetary targets they cannot observe.”
    The report continues: “[The] Treaty does not go far enough; IMF proposals that could have preserved Ireland’s creditworthiness are not included.” The report also states, rightly, that “The fiscal compact would have had no bearing on the collapse in Ireland’s public finances had it been adopted at the inception of the euro … However, the IMF has proposed mutual insurance mechanisms for the euro area that would have preserved Ireland’s creditworthiness.”
    In the context of budgets, Davy Stockbrokers state:
    “The key innovation in the new Treaty is to enshrine the rules in national law. The immediate case for reinforcing fiscal discipline in Europe is illustrated by the problems in Greece. But some argue that enshrining the rules in Irish law will imply a sea-change in the discussion of budgetary policy — by framing the debate around abstract economic concepts such as the output gap, structural budget balance and automatic stabilisers, perhaps our politicians might better manage the public finances. However, our view is that this approach ignores the key risks to the public finances from financial spill-overs within the euro area and the banking sector.”
    The reports indicates that the “Structural budget deficit target is a poor choice as official estimates differ starkly and are prone to revision over time.”
    We have been given examples of where we are buying into the Treaty yet nobody knows what the Treaty is about or how to measure it. Even the briefing from the Library and Research Service [of the Oireachtas] states that there is no accurate measure of structural deficit and that this is a matter of opinion. We are buying into a Treaty but nobody knows what it is about and what effect it will have. I will set a challenge for those who claim to know.

    Can the Government Show How the Fiscal Compact will Impact on our Deficit?
    If the Government is so sure about the impact of the fiscal compact on our deficit and budget and how it will pan out, I suggest it does two things. First, it must get the Fiscal Advisory Council to prepare a ten-year budget on the basis of what the Government proposes. It would also prepare a second budget based on the presumption that a fair share of the bank debt is assumed by the countries who caused it. In other words we would divide the bank debt of the sovereign by two and then we would run a second budget and see how it works out. Perhaps neither would work out to be possible or perhaps the second one, which would be preferable if we had the full package I outlined earlier available, would work out far better than the one the Government is offering. If one puts the figures on the table for the people, I am sure they would make a mature choice.
    I stand to be corrected but my view is that when one is forced to do the budgetary arithmetic based on the Treaty that is proposed, one will find that one will not be within the terms of the fiscal compact with the current level of debt which the Taoiseach insists is going to be paid to the last cent, and that he is not going to look for the recklessness to be spread among the people who were reckless or do what the Labour Party wants to do. I do not have the resources to do those calculations but the Fiscal Advisory Council does. I believe that if we work out the figures, they will prove conclusively that this is a straitjacket into which we cannot fit.

    Is there an Alternative?
    The Government’s problem is that it cannot see a way out. I have provided the way out. If the first Treaty did not exist there would not be such a handy way out, but because it exists one can hold up the whole train until a proper package is put together that deals with the banking issue. I am flabbergasted that the Labour Party in celebrating the 100th year of its foundation by James Connolly seems to [believe] that this crisis was caused by sovereigns rather than by banks. It seems absolutely determined to defend the private banking and financial interests of Europe. I have never taken an easy view [on the question] of bonds because I recognise that there are a lot of pension funds involved, something the Labour Party did not recognise when it was in opposition, and that it is not simple. To paraphrase the Tánaiste, Deputy Eamon Gilmore, there is a choice to be made [here] between Ireland’s way and Frankfurt’s way. The Government is choosing Frankfurt’s way. I believe we should choose Ireland’s way.

    The full content of the speech is available at

    • Tony Brogan

      Good post, worth reading

      • gizzy

        good to see a politician give a serious issue some thought before speaking about it.

        • ioseebee

          Yes I really thought that he encapsulated all the argument for voting No, but in a reasonable considered way.

          This is what everyone through-out the country could do wih reading in my opinion.

          It’s amazing come to think of it, that Fianna Fail have muzzled him!

          They don’t seem to realise that it is his very thought process and argument to Vote No which could offer a genuine alternative to Sinn Fein, and to Fine Gael/Labour.
          It is this kind of considered approach and truthful engagement with people that we need.

          But typically they don’t even seem to understand the value of what is right under their nose!

          Eamon O’Cuiv should continue to campaign independently on this front, and this synopsis should be tweeted, e-mailed, blogged to as many people as possible,
          in my opinion…

          As I said first time I heard any politician speak to my gut feelings & understanding of this critical situation we are in…..through all the fog of ‘sloganeering’ by most politicians ‘representing’ us!

          Ah well interesting times ahead no doubt!

          Have a good holiday weekend all!

    • Harper66

      Excellent post.
      Credit to O Cuiv and thanks for posting it up.

    • I’m not a fan of the boy whose grandfather gave us the “Devil Era”, however sometimes “truth” shines from unlikely places

      And today, for me, the truth shone it’s light brightly through the thoughtful and intelligent words of Mr.O Cuiv.

      By far the most compelling argument for a No vote that I have yet heard from any politician.

      Thanks ioseebee for posting this. I will point people to this one.

      • ioseebee

        Thanks Paul, it’s good to hear other’s opinion on his argument.
        I thought it was a pretty compelling & well-reasoned case for voting no!

        I still can’t fathom why he would want to stay with Fianna Fail if he works things out like he has on this issue.

        Fianna Fail can’t even work out that his argument is so much thought out & convincing than the one they keep spinning out for a Yes vote!

        The reason I thought it was important to post this argument again, was that there is so many lies and untruths, fear-mongering, and jargon politics going on that if we don’t find a more resolved alternative to vote for we will have our own versions of Golden Dawn parties like in Greece finding more success!

        This feeds right into the hands of those who want to steam-roll the public with private bank losses!

        If I hear one more time in the news, the simple summary that our debt was too high, without been parenthesized
        by the fact that this is European banks lost gambles we are paying I think I’ll go spare!

        I don’t mind the idea of cut-backs if we are trimming our sails on year to year government debt, but to have these ‘generous’ european bailouts forced on us, swallowed up by Anglo/IBRC black holes continues to be the central obstacle to achieving a more manageable debt.

        With this approach people will never come on board with all these severe cuts, as they are gaining absolutely nothing in return!

        And we are been sucked further and further into a European Fiscal Union that wholeheartedly believes in sticking it to us!

        Yes to a Europe based on social & economic justice, but not this kind of casino mad-house Europe!

        That’s how I feel about it all!

  17. redriversix

    Breaking news………..

    Pinochico taking Irish Government to European Court,claimimg damage to reputation…

    AL Queda distance itself from Vatican claimimg they have gone too far and our operating without any decent morale or human restraint.

    Martin Sheen has been asked to go up river to elimante with extreme prejudice , Colonel Kurtz [Cardinal Brady].Church claims if Sheen captured they will deny any knowledge of his existence………….

    Tanasite Gilmore claims he “did not”make ANY decisions yesterday and says rumours saying he did are unfounded and a attack on his person and his party……

    Meanwhile , in Afghanistan…same shit,different day.

    Good Morning

    • Grey Fox

      Hmmmm…. are you sure you are not “Noonan” incognito….lol

    • gizzy

      humour at 7.47 am there is hope yet

      • redriversix

        I have decided to use humour from now on.We all know how serious things are so time for new direction,Grey fox.Have a great weekend Grey Fox,PaulDiv,Gizzy etc

        • stiofanc02

          All do respect RR6 but, you are not very funny.
          Comic writing is hard work and mostly best left to professionals.
          Here is a quote that comes to mind when reading your attempt at humor, albeit in good faith, you are no comedian.
          “Very few people posses true artistic ability. It is therefore both unseemly and unproductive to irritate the situation by making an effort.
          So in future, if you have a burning, restless urge to write or paint simply eat something sweet and the feeling will pass”. No insult intended but even Sean Moncrieff is funnier, and he sucks.

          • Grey Fox

            Plain to see what you excel at !!!

          • Harper66

            by “true artistic ability” do you mean a photograph of a naked man on a beach with a big sombrero over his face and a little one over his crotch?

          • redriversix

            morning Stiofan02

            No problem,opinion duely noted.I shall endeavor to continue however as it is better for one person to laugh than a thousand to cry.

            Sean moncreif is a comic genius who is misunderstood,bit like pat kenny………..A Bear and a rabbit were taking a dump in the forest………the Bear turned the Rabbit and said “Excuse me Mr Rabbit,do you have problems with shit sticking to your fur”? ..Of course not ! replied the rabbit……… the Bear wiped his ass with the Rabbit……!!!!

            Good Morning

          • stiofanc02

            Eddie Murphy did the bear/fur joke about 25 years ago in his standup. It was funny then.
            Look at the photo, its not me, but it is actually funny.
            Im a Mexican food addict so I like the photo.
            You are right,Sean Moncrieff isnt funny.
            Groucho Marx, Woody Allen, Steve Martin, Richard Pryor, Alan King, Johnny Carson, Robin Williams W.C.Fields{he is the all time best) Are funny.
            Brendan Grace is one of the best standups ever. He is also a great singer.
            Moncrief and Pat Kenny are nobodys.
            Outside of this Irish market they wouldnt get a toilet roll ad. Glad you agree.
            The point is, if you are going to try written comedy about local motion you are already in a crowded market place with really good writers.
            All I am saying is you are out of your league or to put it another way, Dont try this at home!
            I suggest you listen to Green Tea on Saturdays and hear how it is done really well.
            Wet Erin! Ha! now that is funny!
            Lenny Bruce would have agreed!
            By the way, do you like Quesadilla’s?

        • I had a great w/e RR6, unplugged and doing simple things like chopping wood, making healthy food and living good. Life goes on and it can still be enjoyable if we switch off sometimes. That’s what weekends are for

          Humour is educational. We need more and not less of it like the serious men will tell you

  18. Not my favourite politician. Is there any substance behind these claims that a Yes vote will result in a further 6 – 8 Bn in cuts?

    It seems to me like it’s a choice between spam or sausages. Either way it’s crap.

  19. bonbon

    Since Germany is in focus, here is what is going on,
    (and it is not a tantrum)

    More Opposition to Fiscal Pact in Germany

    May 3, 2012 (EIRNS)–While a broad range of leftist extra-parliamentarian opposition is consolidating nationwide in Germany for protest rallies and other events against the Fiscal Pact, opposition is also building in the Bundestag, among the established parties there. Following a manifesto f the SPD party left (DL21) which is being circulated now, an anonymous German Social Democrat has placed a statement on Facebook, for Facebookers to sign up on a call to the Bundestag to reject the Fiscal Pact, on grounds that it is anti-social, anti-democratic, and anti-constitutional.

    Among Christian Democrats as well, things have started to boil: Andreas Schockenhoff, deputy chairman of the CDU group in the Bundestag, has called for a postponement of the scheduled vote on the Pact on May 25, saying it does not make much sense to vote on it, if the French Socialist and likely winner of the May 6 French Presidential election, François Hollande, insists on renegotiating the Pact anyway. Chancellor Merkel’s “Europe” pitbull, Peter Altmaier, immediately intervened to suppress that initiative, claiming that the Pact must go into effect at the earliest possible date; otherwise, the consolidation of the euro is not possible. Whether that will suffice to silence the opposition, remains doubtful.

  20. bonbon

    More on what is happening in Germany, and there is yet more below. None of this is on RTE, so maybe Enda does not know…

    Finally, Some Anti-ESM Groups Take to the Streets (as the BueSo Told Them)

    May 2, 2012 (EIRNS)–The Zivile Koalition group and the website have, as they told the press yesterday, have mobilized 600,000 e-mails already in protest against the ESM. The aim is to reach, or get as close to as possible to, 1 million. The e-mails are sent by citizens to members of the Bundestag, demanding that the Parliament vote “no” on the ESM in its special session on May 25.

    The group will also hold a one-day conference in Munich, today, and another one in Berlin, May 10, and take part in a public protest rally in Stuttgart, May 5. The Koalition is one of the plaintiffs that are expected to take the government to the constitutional court on the ESM, in June. The Freie Waehler party also plans rallies, public speeches, and information booths in numerous cities, on May 5, with the rally in Detmold being the central event, featuring the party’s national chairman, Hubert Aichinger, as main speaker.
    Prominent Warning in Germany Against Hyperinflation.

    May 2, 2012 (EIRNS)–Torsten Polleit, former chief economist of
    the German branch of Barclays Bank, now working at Degussa in
    Frankfurt, charges the ECB with a hyperinflationary policy
    course, in an interview today with Germany’s two leading business
    journals, the {Wirtschaftswoche} weekly and the {Handelsblatt}
    “The ECB is on an inflationary course,” Polleit says. “It
    will do everything to prevent sovereign defaults. It has granted
    the banks cheap central bank money, so that these can purchase
    higher-interest sovereign bonds of the crisis countries and
    thereby lower the interest rates of these. Should the banks no
    longer play along, the ECB will be forced to purchase sovereign
    bonds directly, paying for that with freshly-printed money. It
    will try to inflate the state debt away. That can easily result
    in hyperinflation.”

  21. bonbon

    We had Merkozy, so how about M&M’s (a type on Bonbon I suppose, but not recommended for mental health) !!

    Secret Monti-Merkel Pact To Ratify the ESM/Fiscal Pact Replaces “Merkozy” Duo

    May 1, 2012 (EIRNS)–Former Italian Foreign Minister Lamberto Dini has confirmed the existence of a secret plan between Monti and Merkel to replace the Merkel Sarkozy “Merkozy” axis in anticipation that Socialist François Hollande will win the French election on May 6, to ensure that the Fiscal Pact is not modified as Hollande has demanded. The new “MM” Berlin-Rome Axis would ensure the ratification of the ESM and the Fiscal Pact with a political show:

    “It is a plan prepared by Monti together with the German Chancellor,” Dini told Radio Radicale on April 30, explaining that “a small number of Italian members of Parliament are supposed to be present in the Bundestag during ratification, and German members of Parliament are supposed to be present duringthe second reading in our Parliament. Let us hope that there are no delays in the discussion.

    “There are political problems in the Bundestag, let us see how they solve them. I believe that there are constitutional doubts about the Fiscal Pact. In particular, they think that the measure is unconstitutional, because once it’s been included in the EU Treaties, it can no longer be changed. Therefore, there are those in Germany, who say that this would create serious problems should new events required different policies. And this could create some delays vis-à-vis the deadline indicated by the Italian government, which thinks that everything can be finished some time in June,” Dini concluded.

    According to the daily {La Repubblica}, Merkel would make some concessions to Italy on the issue of “growth” — in the Orwellian meaning of the word, of course. However, the aim is “to show the markets an image of Italy definitely on the road to budget discipline, with a one-way ticket,” but also “to sneak in the crisis of relationship between France and Germany.”

  22. bonbon

    From France a reasoned and clear statement, very relevant now that O’Cuiv has spoken out. Hollande’s crowd after all opened the door to the financial mess, but it seems something has changed.

    Presidential Candidate Cheminade: “What I Will Vote for on May 6″

    May 3, 2012 (EIRNS)–In anticipation of the May 6 run off election in France between Nicolas Sarkozy and François Hollande, former Presidential candidate Jacques Cheminade issued a statement on May 3 with the above title.

    It begins: “I will not vote for Nicolas Sarkozy. Through his bowing down to financial forces, he is responsible for the current state France finds herself in. His behaviour and his electoral themes are all completely opposed to the historical mission of my country. Therefore, within my means, I will contribute to his defeat.”

    Since a blank vote (an empty ballot) is insufficient, Cheminade says, he will choose François Hollande in spite of all his warnings to the socialists who, when they were in power, helped put France at the mercy of financial powers.

    While Hollande has stated that his main enemy is the world of finance, and that he would defend the French social model, Cheminade doesn’t see how that would be possible if, at the same time, he vows to reach a balanced budget by 2017, and to enshrine a balanced buget in a law that could be voted up as early as July 2012. Moreover, for Cheminade, the contacts established between his advisors and the financial community on the need to keep the “universal” banking model, raise serious doubts.

    Nonetheless, Cheminade concludes, “Everybody can change.” Therefore, he will vote not only to defeat Sarkozy’s policy, but also “to put Francois Hollande’s on probation.” If he “launches a legislative process to divide the banks in two, taking up the policy of Roosevelt in the United States and of France at the Libération, that is, if he decides against the policy adopted by François Mitterrand and Jacques Delors at the time, if he adopts the principle of national banking that allows the people to recover their power, if he clearly states that Europe has taken the wrong path and has lost its raison d’être, then he will have my support, probably more than the support of the many socialists of the Strauss-Kahn bent who have no principles. If he acts otherwise, I will be his enemy, because he will have become the accomplice of the financial world which he denounced at [his Jan. 22 meeting] in Le Bourget. I hope, for France, for Europe and for the world, that his acts, by resolving my doubts and my warnings, will serve a certain idea of France and the `grandeur of the nation’ which he raised on April 27 in Limoges.”

  23. bonbon

    Gerry Adams makes a very clear distinction here :

    People must decide between austerity or jobs and growth

    Hollande also wants a growth pact, and Draghi’s reaction is most interesting (from a bankers POV).

    • StephenKenny

      Well, that’s a relief then. Just press the right button and we’ll get jobs and growth. And there was I thinking that we’d starting having to do something.

    • Deco

      Where is the money for the growth pact ?

      • bonbon

        Alexander Hamilton faced this issue after the War of Independence with a huge war debt. His response was to break with British monetarism and laid out the principles of the Credit System, enshrined as a US constitutional clause. As well as that Hamiltonian Banking, not British Central banking which now requires Glass-Steagall bank separation.
        The issue is credit, not monetary tokens. It is time to reject British banking, which after all has ruined the entire transatlantic regeion.

        • Tony Brogan

          My reading of the hamilton bank was that it was the US first central bank. It was modelled after the Bank of England the mother of all central banks.
          It was a private bank with private shareholders where the US government took a 20% interest.
          The US government was broke and so the bank printed up paper script of 2 million(the 20%) which was loaned to the US government so it could be used to buy the 20% share. It then had to be paid back with hard earned taxpayers money.

          Sounds like the modern central banking system to me.
          Print worthless paper script and lend it to the paople therby creating a national debt.

          The scheme was opposed by Ben franklin and James Maddison.
          It was sighned into law (don’t think it was encapsuled in the constitution)by president Washington under duress and pressure of friendship from Hamilton who was a loyal follower of Washington during the War of independence.
          The Bank was chartered for 20 years and the charter was not renewed and so the Hamiltonian sponsored central (National ) bank faded into obscurity.

          As far as the current situation is concerned. The major problem is allowing the central banks to issue unlimited paper script . Every dollar, (Euro or any currency you care to name ) is issued as a loan and is an instrument of debt.
          The deffinition of a dollar in the US constitution is still a weight of silver.
          “On April 2, 1792, U. S. Secretary of the Treasury Alexander Hamilton reported to Congress the precise amount of silver found in Spanish milled dollar coins in common use in the States. As a result, the United States Dollar was defined[11] as a unit of weight equaling 371 4/16th grains (24.057 grams) of pure silver, or 416 grains of standard silver (standard silver being defined as 1,485 parts fine silver to 179 parts alloy)”.
          Seems as if Hamilton himself research the value of coins prominenently in use in the early Us and defined a dollar as a weight of fine silver.

          “All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation” John Adams to Jefferson.
          Nothing has changed in that regard to this day

          US constitution
          Article I, Section 8, Clause 5. The Congress shall have Power…To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.

          Article I, Section 10, Clause 1. No State shall…coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt

          No mention of paper money here. BUT a specific that says that money must be coin.

          In the 1960′s silver was eliminted from coin in the US.
          In 1971 the US went to unlimited paper money printing. That together with fractional reserve banking allowed the unlimited issuance of paper credit produced from thin air and loaned to government and bankers to inpoverish all people except those at the front end of the “food chain:, those who received the new script on issue.

          Sounds like a refrinement of Hamiltonion banking.

          The answer is to remove corrupt money from circulation. Corrupted money corrupts politions, and then business and then the people.
          Return to honest money. Money that is a store of value (is not depreciated by inflation), money that is trusted (fungible), money that does not decay or rot or end up as toilet paper or wall paper or is more valuable to fire for warmth, money that is not easily replicated, not easily counterfeited .
          Money that has stood the test of time.

  24. dwalsh

    @ cooldude

    As I have said before, I do not see money itself as the problem. Therefore money itself cannot be the solution. This issue of fiat versus commodity money is an irrelevance.

    [At the same time I accept that investing in gold today may be a wise decision; though I would think that land, if you can get it, would be even better. Remember, if gold is used in the creation of the new world reserve currency, there is a possibility of confiscation or compulsory purchase.]

    So to say something about your monetary solution.

    We cannot resolve the problems we face as a species at a global level unless we analyse and diagnose the problems correctly.

    In my opinion the problem of money is – who controls money?

    Today our monetary system is controlled by private capital.

    But money is only an aspect of the global economic problem we face. In my view the fundamental problem is private ownership and control. Our human world is essentially owned and controlled by private capital; today concentrated into a few privately owned trans-national corporate empires.

    • bonbon

      The fundamental problem is no physical-economic growth in the Transatlantic region for 40 years. Nothing to do with monetary tokens. This has been literally papered over with a derivative mountain by banks promoting the Limits to Growth mysticism. In other words the private financial elite have promoted policies that created this disaster and now expect us to bail them out. This is injury piled upon insult.

      The Austrian School’s absolute silence on this betrays their allegiance, even if they themselves are not consciously aware of it. Ron Paul’s refusal to endorse Glass-Steagall, Hamiltonian banking with massive growth projects, even when he sets up hearings on the damage the FED has done is symptomatic.

  25. Nono

    Situation in Sarkozy’s political meetings are becoming extremely worrying. Several journalists (whether right or left leaning) have been agressed verbally and physically while covering such meetings. Some were thrown bottles of water at, others had their hair pulled, their badge forcibly removed, punched in the back, pushed… Sarkozy has been claiming that journalists have been partials against him and have slandered his name. Asked after one of those agressions if he has anything to say, he replied “I do not condone violence but one has to understand that these people are extremely angry at the news coverages against me”. So, when it’s protesters against him who commit violence, he has a zero tolerance but when it’s his own supporters, we have to understand the poor dears. It’s also ironic considering that we’ve just had 5 years of pro-government propaganda in most medias… It’s really time he goes as this man is crazy. He continues to divide and stir violence in the country. 2 more days and we’ll be rid of him, thank god!

  26. Deco

    Another housing bubble caused by the EU and ECB.
    And this is about to fall in a heap…

    The Euro is a disaster.

    For the Germans, the scale of the bailout is about to get extreme….

  27. bonbon

    As DMcW asks what if? Well look at what Berlin has to deal with:

    Eurosystem Concentrates Insolvency Risk on Bundesbank
    “Target-2 payments system is the hydrogen in the {Hindenburg}”

    May 4, 2012 (EIRNS)–Thanks to the Euro transfer system called Trans-European Automated Real-Time Gross Settlement Express Transfer System, or “Target-2,” the risk of insolvency of a national banking sector or of a single large bank has been concentrated in one central bank, the Bundesbank!

    Target-2 is a clearing house system, by which part of the money transferred between Eurozone banks goes through their respective central banks. Money is never transferred physically, but it is written as a credit or as a debit on the bank books. As a result, Bank A no longer has a debit towards Bank B in another Eurozone country, but the national central bank A does have a debit towards national central bank B.

    When there is a massive bank transfer, as in the case of capital flight from one Eurozone country, as there is now, liabilities tend to be concentrated between respective central banks. Currently, the Bundesbank is exposed with EU615 billion in claims, 252 billion of which is with the Banco de Espana, and 270 billion with the Banca d’Italia.

    As analyst Martin Hutchinson put it in a recent article, “the Target-2 payments system is the hydrogen in the {Hindenburg},” referring to the dirigible that exploded on landing in New Jersey after a trans-Atlantic crossing.

    A professor at the University of Munich, Bernd Schuenemann, has sued the Bundesbank over its participation to the Target-2 system.

  28. goldbug









  29. dwalsh

    David wrote:
    “We now know that the design flaws of the Maastricht Treaty that created the rationale for European monetary union in 1992 have been exposed by the current sovereign crisis. Convergence, the mantra of EU central bankers, politicians and bond dealers in the 1990s, has proved a cruel mirage.”

    But the crisis is not a sovereign crisis…it is a financial crisis; a crisis of private banking; the costs of which have been imposed upon the public.

    The crisis does not arise from sovereign bugetary deficits; but from sovereign regulatory deficit. Our governments allowed the financial and banking sector to regulate itself; and the result is planetary bankruptcy.

    The crisis has nothing to do with the European project; nor with the Euro.

    [which is not to say there are no difficulties with the project - just that this global financial meltdown is not one of them.]

    How does David always manage to get it so wrong?

    • bonbon

      DMcW has got it mostly right, except that the Euro project itself is a Mitterand/Thatcher imposition after German re-unification. Even when the original design was in the 1960′s by Mundell, the timing itself betrays the rational. Thankfully Hollande may go after the Mitterand aspect, but what about the British role?

      The natural impulse after 1990 was to rebuild the Comecon, using Deutsche Bank then led by Herrhausen, along the lines of the KfW reconstruction under Abs.

      The murder of Herrhausen, like the murder of JFK plunged the EU into the mess we see now.

      Kohl himself knew this and in his biography said the signing of that original treaty was his “darkest hour”.

      So there is no way to rescue this Euro, no way to hold on to chaffed threads. It is symptomatic and inherent in the doomed financial system.

    • bonbon

      To put it in physical-economic terms, imposition of de-industrialization, “free-market” Limits to Growth, specifically blocking Germany in 1992 with a monetary token, caused the global financial meltdown.

  30. dwalsh

    @ bonbon

    There is a de-industrialization program being implemented – I agree with you on that; but the mechanism of meltdown has nothing directly to do with the Euro or Germany.

    The global meltdown is being engineered and managed through central banks, the financial markets and hedge funds – mainly using derivatives.

    The only way to make sense of what is unfolding is to see it from a global perspective. The oligarchs are implementing a new world order; and as Kissinger has said, the process and the outcomes will have different characteristics in different parts of the world.

    We could say they are restructuring their estates; and Europe is one of their estates.

    Their aim is not to destroy Europe or the Euro; but to weaken us sufficiently so we will capitulate to their conditions.

    • bonbon

      From the Trilateral’s, through Sir Henry, right up to the present day with the Royal Society’s “People and the Planet” prescription, a de-industrialization has been systematically deployed (helped by economic hitmen) but covered over by derivatives which started the minute Nixon broke the Bretton-Woods. The Inter-Alpha banking group (check out its members) started this snowball which is now in meltdown.

      “their” aim is exactly as proposed in that Royal Society report – to “downsize” us to 1 billion and carry on with the monetary imperialism. They want to restructure our species to keep power.

      Personally I take that as an affront!

      The financial system is absolutely finished. Are we?

  31. bonbon

    It is time for Glass-Steagall in Britain!

    Mervyn King, Quoting FDR, Calls for Bank Separation

    May 3, 2012 (EIR) — Bank of England Governor Mervyn King has called for bank separation in a lecture sponsored by the BBC. While the media plays the speech as an apology for not doing more to prevent the crisis, in the lecture itself (an audio of which is available on the website of the {Guardian} daily), King attacked the banks and the total failure of former Chancellor of the Exchequer Gordon Brown’s “light touch” banking regulation.

    While the lecture was punctuated with excerpts from historical recordings by Montagu Norman on the honored history of the BOE, it also has an excerpt from Franklin D. Roosevelt’s first Fireside Chat on the banking crisis, one week after entering office in March 1933.

    In the part of that “Chat” quoted by King, FDR said, “My friends, I want to talk for a few minutes with the people of the United States about banking. We have had a bad banking situation. Some of our bankers have shown themselves either incompetent or dishonest in their handling of the people’s funds. They have used some money entrusted to them in speculation and unwise loans. This was of course not true in the vast majority of our banks, but it was true in enough of them to shock the people of the United States for a time into a sense of insecurity, and to put them in a frame of mind where they did not differentiate, but seemed to assume that an act of a comparative few had tainted them all. And so it became the government’s job to straighten out this situation and to do it as quickly as possible, and that job is being performed.”

    King followed this FDR quote with King’s three needed reforms. The first is bank regulation, which as of next year will revert to the BOE. King said this mandate was taken away in 1997 and replaced with the so-called “light touch” of the newly created independent Financial Services Authority, which in reality was no regulation at all.

    The second was the implementation of the new “bank resolution” law, which would allow banks to go bankrupt without affecting the entire system.

    The third was to restructure the banking system. King asserted that there are two sides to the banking system: The essential bank (his term for what in effect is commercial, or “narrow” banking) and the part that engages in risky trading. “We don’t build nuclear power stations in densely populated areas, nor should we allow essential banking services and risky investment banking activities to be carried out in the same `too important to fail’ bank.” Separation is essential, King said, “to make our economy safer.”

    King also mentioned that the biggest risk to banks at present is from the troubles in the Eurozone, which are “far from over.”

    • StephenKenny

      If the UK introduced anything like this, it’d put their economy back into the 1970s.

      I suspect that the more likely approach is to enact the proposed law making private pensions compulsory for those without a pension. The pension would of course be taken out with a City of London financial company.

      • bonbon

        Do you mean the Gov’t would force subjects to purchase a financial product? Sounds worse than water charges.

  32. bonbon

    Germany and what if ? : here is a bombshell :

    Handelsblatt Sat 050512: Der Euro war und ist eine Schnapsidee.
    from Prof. Arnulf Baring. “The Euro is a daft idea”.
    I’ll get a good English version. This is the core establishment business press!

    As Kohl had no “Plan B” in 1989 whn the Wall fell (even when the warning was long before), has FG/LP the same blindspot?

  33. Deco

    Obama took over from Bush, and found a mess left behind, and it was a shock.

    When the Con-Lib government took over, they were shocked by the state of Britain’s finances, when they got inside and seen what was happening.

    When the Spanish PP took over from Mr. Bean, they were shocked by what they seen, and by what they uncover everyday.

    We had a similar situation when FG/LP took over from FF/GP.

    Chances are, that when Hollande and the Socialists take over from Sarkozy, they will be shocked when they see what us really going on, and the real state of the French economy.

    Does anybody seriously trust Sarkozy to tell the truth ? I don’t.

    It has nothing to do withe ideological perspective. The right and the left, are both producing politicians who use money to buy “feel good factor” related support.

    And it is wrecking everything. Then suddenly, there is a change of the guards, and everything becomes obvious.

    Disaster up ahead.

  34. Norman Speight

    I think that you are totally wrong in that your target is continually wrong. The matter is certainly not any more (if it ever was) a political one, and all the pointers I’ve seen go not to a political problem and a political solution.
    The fact of the matter is, that Europe is a Civil Servant invention and it was always so, right from the beginning. A group of highly influential Civil Servants promulgated the ideas, then convinced politicians that this was ‘A Good Thing’ and, being the sort of minds they were not only convinced them but started a dynasty of politicians of all parties who believed exactly the same.
    What about the 84,000 civil servants (BuDget for 2012-13 €110 billion, up by over 6%) employed by the EU should the EU and the Euro currency collapse? Will countries and governments be happy to continue to pay their exhorbitant pensions and wages? The public certainly will not.
    Merkel is convinced she is right because being from East Germany they do not ever entertain the idea of EVER being wrong. I believe that history will judge this all entirely differently in that the entire process was dreamed up by those who benefitted most and also, did not have the problem of facing any electorate periodically. Where’s the ‘Democracy’ in that? (another unanswered question never put of course)
    I repeat my point. I think that all of you people who look at this as political are being very partial in the evidence you look at in your assessments.
    In the UK it is a fact that the Civil Service have long long ruled the roost and benefit accordingly and I’m not talking about the middle aged ladies behind the unemployment counters. There is a Royalty which is as permanent as the royal Family and who live like that. They have credit cards to pay for Gym membership, furniture, school fees and even mortgages all of which are paid for by the taxpayer (some 20,000 at the last count).
    In short, they are the model for the EU. What they don’t have, is politicians with current party links.
    Don’t believe me? You look at them more closely, you’ll find what I did over sixty years ago. A Model for the current EU and largely unnoticed.
    Cui Bono?

  35. Hi All,

    I think we have to be careful in blaming the Euro as the source of the debt crisis problem.

    I also think that while balanced budgets sound like a sensible thing, we shouldn’t blame runaway national debts for the crisis either. Indeed runaway national debts have been necessary to keeping this system going.

    The root of the debt crisis is as follows;

    While Central Banks create cash for their Treasuries, it is the Commercial banks which create all our digital money, or 97% of the money supply.

    Banks can only create this new money through the loan process and indeed every Euro has a corresponding debt.

    It is also the case that money is deleted as loan repayments are processed by banks. This is why there’s less money during a recession.

    For a graph that explains better what I’ve said above visit

    Once we realize the source of the problem we’ll be well on the way to designing a better way to run our economy rather than debating over the symptoms.

    Paul Ferguson
    Sensible Money

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