May 7, 2012

Let's talk about Germany.

Posted in Sunday Business Post · 146 comments ·

Let’s talk about Germany. What does Germany want? Why is it important? How does what the Germans want affect us?

This week, we have an American flavour to the column because I am writing this from southern California, where I have just had the pleasure of listening to probably the most important player in the global bond market, Mohamed El-Erian, the chief executive of Pimco, the world’s largest bond fund.

When this guy speaks and shares his view of the world, we should listen, not only because he is one of the most influential people in the market but because, unlike many financial market superstars, he is thoughtful, analytical and sensitive.

Equally significant is the fact that he is also addressing a group of investors who will have an impact on how the world reacts to political news from Europe and, to a small extent, from us in the months ahead. (The details are at Before we think they are worried about Ireland, they are not. However, they are concerned about Germany and the euro and what happens next.

If you believe that we even have a small amount of leverage over German decisions, it is important to figure out what the Germans want. When we say the “Germans”, we are not talking about the average man on the street in Munich, but the German establishment and the power behind the political throne, the industrial interests of Germany.

Germany doesn’t want a United States of Europe; it wants a Federal Republic of Europe, based on the model of the Federal Republic of Germany.

Constitutionally, it doesn’t want an American-style republic, but something much more like Germany. It also wants this with the minimum of fuss.

The reasons are simple. It wants to do with banks what it couldn’t – historically – do with tanks. It wants a Europe that looks and feels democratic, but in which Germany really rules the roost and makes the final decision in all the big calls. This it will achieve by financial dominance.

It wants the euro to stay intact for internal European and external global reasons. First, the EU is Germany’s biggest export market. It is therefore in its economic interests to keep the single currency going in order not to disrupt trade. Secondly, Germany has been the main beneficiary of the euro because the euro is a much weaker currency than the Deutschmark would be. This means that the euro gives Germany, as the world’s biggest exporter per head of population, a huge competitive advantage against the US and China. It is not unreasonable to suggest that if the Deutschmark were around today, it would be worth two dollars, as opposed to the $1.31 that the euro is worth today.

Again, the reasons the Deutschmark would appreciate rapidly against the dollar are simple. Unlike the US, Germany is a country with no debt problems, no budget deficit, no competitive problems, no current account deficit and no political gridlock issues. From the German standpoint, it is getting a free competitive lunch with the euro, and it doesn’t fancy losing that.

So what do the Germans want? They want a federal Europe with a weakish euro and no political or financial shocks coming from some of its unruly peripheral neighbours.

What is the obstacle to attaining this?

Well, Germany is like the good, house-proud neighbour in a bad area. The rest of peripheral Europe are the bad neighbours. France is the neighbour that copies the German lead, trying to match the Germans in terms of their hanging baskets and their freshly-swept drive. If you’ve ever had a neighbour who copies your home improvements, you know how annoying this can be. But at least this neighbour doesn’t bring down the tone of the area.

Unlike Germany’s lawn, which is pristine, peripheral European neighbours live in houses that have plywood on broken windows, and their lawns are full of weeds, overgrown and tatty. The paint is peeling off the neighbours’ porches and the slates have not been fixed. Unlike some of the neighbours, the German house is the picture of order, symmetry and solidity. But the problem for the Germans is that the value of their house is more dependent on the state of the rest of the houses on the estate than on the quality of their own manicured hedge.

As the estate worsens and becomes more and more anti-social, hoodies-up, menacing-the-old-people, the value of German’s property plummets. So the Germans have a massive personal interest in cleaning up the neighbourhood. They will pay to have the other houses tarted up, to get the delinquent kids off the street and for the neighbours generally to act a bit more like them.
In the past, the Germans could at least enlist the support of the French in their efforts to clean up the area. But now, even the French are threatening to go rogue. The Germans fear that it is only a matter of time before the French put an old Renault up on blocks and leave it on the driveway.

So the Germans need to sort the estate out if they want to continue living there. But they know too that they can’t move. They are stuck. How much are they prepared to pay? Well, obviously, the less the better for them. If they can clean up the estate cheaply, they will do so. But if they have to fork out a bit more, they will do that too.

What they know is that they can’t isolate the bad houses with a wall, because that just attracts attention to the problem and potential buyers will always worry about what is happening on the other side and whether the delinquents will jump over and rob them in the night.

They also know that just policing the area with security guards and rules will just make the situation worse because even if the delinquent neighbours promise to clean up their properties, they won’t stick to the promise.

So the Germans are trying to change the rules of the management committee of the estate, but they need to do this voluntarily. They can’t just call a meeting of the residents and upbraid some of the delinquents in public. They have to do it so it appears on the outside that the area has had a change of heart and is now going to clean up its act.

Here’s where the leverage is. If the neighbours tell the Germans where to go, the price of their house may fall but it has already fallen hugely, so they don’t care. Or at least they don’t care as much as the Germans, who have devoted so much time and effort to the house. If the neighbours prove difficult, will the Germans pay a gardener to do their lawns and a painter to refurbish the exteriors? Yes, if they think it will achieve their goal of cleaning up the street.

But how will the Germans know the intentions of their neighbours or the price their neighbours demand for compliant behaviour? Well, they won’t know unless we tell them. Otherwise, they are only guessing and it is in their interest to offer the lowest price to clean up the street. Obviously, it is in their neighbours’ interest to drive that price up because the management agreement is about to be changed permanently.

By the way, the head of the largest bond fund in the world largely agrees with this way of looking at things.

  1. Adam Byrne


  2. stiofanc02

    “Wants to do with banks what it couldn’t do with tanks”
    What a great line!
    There is a song in there somewhere.

  3. Alf

    “When we say the “Germans”, we are not talking about the average man on the street in Munich but the German establishment and the power behind the political throne, the industrial interests of Germany.”

    This makes sense. So we have is a battle between Irish ‘elite’ and German ‘elite’ while the man on the street is bargained away like a cheap gambling chip?

    • Lorcanf

      Thats exactly it, the distance between the ordinary citizen and the people we elect to represent us has gotten so big that people are losing faith in their political systems.

  4. Lorcanf

    What really troubles me is the election results in Greece. People are getting sick of the yes-man center right/left parties and are going to the extremes of left and right. The Golden Dawn Party in Greece which are are from the far right and have been labeled neo-nazi’s have 7% of the votes which translates into 20 seats in the Greek parliament. 7% of the vote in the original country of democracy going to neo-nazi’s!!!! This in my opinion is where we start to see the results of populations loosing trust in their governing elite. I sometimes think that politicians don’t have a clue. History has shown time after time that a population will only put up with so much bullshit and eventually will reach a breaking point where they don’t give a f**k and start voting for non traditional parties out of spite or if it really gets bad, taking to the streets where anarchy ensues. All we have to do is look at the opinion polls in our own country to say how things are playing out. FF decimated and rightly so, Labour have been seen for the true yellow-belly yes men they are and this is reflected in the reduction in the opinion polls. FG are still holding their own but I think that is just the upper/middle class still have faith in Enda that things will be “grand”. Then there is Sinn Fein making huge gains in the polls on taking up where labor left off with their populist sound bites. I have no doubt that sinn fein if they ever get into power will tell the EU where to go and then what?

    I cant help having a really uneasy feeling that we are right at the very top of the European/world roller coaster just about to go over the edge only we just don’t know how steep or long the decent is. hopefully though the rails are in tact and the whole thing wont coming crashing down.

    I’m not a political or economics expert, I am a layman with an interest in what goes on around me and what I see is scarring the crap out of me. Hold on people, its going to be a wild ride.


    • molly

      One layman to another Ireland if we stay in the euro and Europe are going to be worse off.
      The Ireland I want to live in should be able to balance its own books.
      Why do we need to borrow all the money
      To pay the greedy who run the country
      To pay the over payed
      To pay the banks
      The last government put us on life support
      The present government are turning off the life support machine
      Anything would be better then what we have in power now do you think the uk will let Germany controll the uk.maybe I am not with things I thought the euro and Europe was about all the member country’s having there say in a fair way thoes that seem to you the way europe is beening run now ,it’s a big boys power struggle and guess who’s the big boy.

      • pauline

        I’m with her. The Euro is dead whether we stay in it or not. The rise of the right n Greece means that Germany is once again driving Europe into ruin and I don’t want Ireland to be in that cart when it does so. We have a large enough diaspora once again to help out. But I’d rather a poor Ireland with a chance of future recovery rather than part of the train wreck Europe is about to become.
        The only thing standing in our way is the unwillingness of our political elite to share the pain their so interested in doling out.

    • Good post

      You are reinforcing the aged old argument that Irish politics has and always will be a sham. It’s not real and is a side show for people whose world ends at the bridge leaving the village

      Now that Europe has Nazis and Communists crawling out of the woodwork tells me one thing. Things are changing fast and not for the better

      We have learned not an iota from history and there are many angry and weak minds queuing up to have their anger relieved my braveheart rhetoric spouted by those who have no real answers and no power. They are all sham merchants and they are on our doorsteps

      We have to be careful and selective about whom we listen to. It is all looking pretty ugly

  5. 5th Republic of France

    Hollande will decide what France wants and Germany will reveal the new order of Europe with or without the EU/or part of .

    The Euro will definitely devalue very soon including France and Germany .What will happen in Irish Banks is sooner than you think.Nobody can be prepared for the avalanche of catastrophe to follow .

    Now the moments are liken to a Fairyhouse Race Handicap and the devaluation prices could look like this :

    Germany 25%
    France 25%
    Nederland 25%
    Greece 60%
    Ireland 50%
    Spain 40%
    Portugal 50%
    Italy 30%

    Of course the weights of every jockey will not be the same and that will add further to the obesity of the national deficit.

    We will hear the Gallops and the thunder of the hooves will only alarm us to the proximity of the new experience and the pain or joy of the eventuality of this great Currency Race and mankind.

    The race starts very soon :

    Moon Wobble has maximum effect from 20th May to end of May ………….please take note what you do now is at your own peril.

  6. NeilW

    “By the way, the head of the largest bond fund in the world largely agrees with this way of looking at things.”

    If you’re going to appeal to authority, make sure it is a proper authority.

    Even the head of the largest bond fund in the world needs Euros if he’s going to buy Euro denominated assets. And that means he needs to get those Euros from somebody who already has them.

    So look behind the monkey and find the organ grinders – those who are hoarding Euros in a broken banking system.

    • This all sounds like schoolboy stuff right enough. Monkeys and Organ Grinders. Blah blah. We see ‘em every day in the workplace and on the tubes. It was a good article even though it sounds like he doesn’t give a shit and is ‘aving a larf. Must cost a bomb all this damn jet setting after all hor hor

      David has obviously been swayed by the velvety poetry flowing from the sweet lips of the bond guru and I can picture his tongue hanging out and his whole body shaking as the lecture proceeded to it’s earth moving and unbearable climax

      I imagine him in raptures. The trouble is that no-one over the age of thirty has any use for clever lines and poetry when there is bugger all in the fridge (if you are lucky to own a fridge). Still it’s the life of the celebrity intellectual that interests people more than the dull ones and it is entertaining and educational. We take and we give back if you like

      It’s easy to stop thinking straight when you are seduced by the California sunshine, Beach Boys sounds in your head and all those lovely American girls smiling and wishing you good day

      It reminds me of the deadly seductive powers of the Celtic Tiger that lured so many Irish people into the mess they are in now. Still it’s nice to see one of us out there on a smile and shoeshine and being successful while being smart and not stupid. Allowances should be made

      Ireland is better for having him around. Give him a wee chance. I hope he raises a John Daniels while looking at the Pacific sunset at the same time as I am sipping Scottish ale and deciding whether it will be spam or sausages tonight. At least I have the luxury of choosing so life can’t be bad after all

      Can you give me an example of a ‘proppa authority?’

  7. leargas

    Ill write that song but Id be terrified tha Wolfe Tones would want to sing it….

    As for the resurgence of Neo Nazis, you forget about Marin LePen’s 19% of the vote inn France. Conservatism and austerity created the perfect storm for the rise if the Far Right, the only sane response is a term of left wing inclusion policies tempered with caring social reform and taxation of the wealthy to pay for it.

    The wealthy are the only grouping who are or seem to be doing well from this recession, their abstention from assisting will be their undoing sooner or later.

  8. lff12

    David. Don’t think you’re right here. The Germans were not the drivers of the united currency, it was France who wanted that. And they did no want it because, counter intuitively, Germany always preferred to have a strongr currency than a weaker one. In fact a weak euro isn’t something well regarded in Germany, even though it benefits them. This is wha differentiates them from us Hugh. The Germans don’t look at things short term and go great, like Ireland did in sucking up the insane property boom. Part of the problem in Ireland was the fundamental misanthropic nature of the entire property boom, one which we have never faced up to the truth about. The property owner got rich by rogering his tenant with high rents and by pushing up the price of housing or the next buyer. It was a business of exploitation and gouging. We need to handle this as a society. But Germans are different, they are industrialists. They make things. they design, they trade in their enormous messe, they sell. Our problem is we only seem interested in overpriced premium markets because we are unwilling to develop the efficiencies that lead to the possibility of mass market success. Hence the death of most of the manufacturing side of ict in Ireland. And look at the number of me too, poncey spa hotels with poor service and overpriced rooms that the hotel industries crybabies now weep and whine over, as if how somehow it was never their fault.

    Germany is not as dependent in the currency or as attached to it as you might think. Let there be no doubt they’ve considered every strategy and have several plans for the end game. As we do too, only politically nobody can admi it for fear of raising the support level or the huge political challenge to this country that is Sinn Fein IRA. The problem is the conflict between short and long term interests and the level of willingness to sustain different things in different paces.

    • Kaitriona

      Here here. Was listening to BBC radio 4 before Christmas and a German government advisor said much the same thing.

  9. It wants to do with banks what it couldn’t — historically — do with tanks.

    The naivety of this statement is a striking sign of yellow press economy journalism.

    By the way, the head of the largest bond fund in the world largely agrees with this way of looking at things.

    Yeah well, if you need to ride an elephant to appear bigger, that indeed tells a lot about the guy sitting on the elephant!

    To put people like El-Erian on a pedestal is the same like worshipping hedge fund terrorist John Paulson who is more than likely shortening core Europe now.

    This copy cat, “riding the elephant” article is the very essence of McW’s distorted capitalist views.

    ….Next chapter in this tragedy is the GROWTH LIE, already prepared by Draghi, now picked up by national politicians, and preparing the ground for the final attack to destroy workers Unions and achievements to allow for a European wide slave labor market where wages are so low that even a full time job will not allow people to make ends meet, as is the case in Germany since years.

    This will be sold as a job and growth Initiative, where de facto everybody knows that there is no growth coming miraculously along.

    Don’t believe me?

    Well you need not to look at Europe or USA to identify where growth is supposed to come from but BRIC and the indicators are pretty obvious.

    Growth Pact?

    Utterly risible!

    • This is the El Erian, he is just another ant-democratci crony capitalist and of course, posting on huffington.

      El-Erian is advocating it is the further devaluation of the dollar, more price inflation thereby destroying valuable capital and robbing the elderly of their savings, distorting the business cycle which will lead to further economic stagnation and high permanent unemployment, and increasing federal debt as a percentage of the economy thereby creating debt slaves of future generations who, like us, will obtain no benefit from what we spent the money on.

  10. gizzy

    The world needs balance it craves it every political and economic system needs it. The super wealthy have tipped the balance in the last few years to get ordiary citizens and tax payers cover their losses. But they need the same people as active consumers to maintain the system in balance and by balance I do not main fairness just a balance that allows the whole thing tick over. The Banks needed balance between profiteering and the well being of their borrowers so the borrowers could maintain enough wealth to repay loans. They went mad on profiteering , severely damaged their borrowers so are faced with huge debt book problems. The political powers needed a balance between protecting vested interests (which they always have done ) and representing the little man. They swung way too much in favour of the vested interests amd now the man on thne street has lost faith in the system and some are turning to extreme views as a way of restoring balance.

    Now the whole economic, wealth and political system is in imbalance they to not know how to fix it. But they need to look back on the last few years on address the actions which caused the imbalances.

    They need to take more tax from the rich, they need to let banks collapse and set up new banks governed by strict rules that sanction profiteering. The world may need the rise of more left wing politicians just to achieve a balance in the political system.

    Otherwise if the imbalances continue inevitably it will all fall over be it the Euro, Europe or the Western Economic system.

  11. jonathan

    David, an excellent analogy for the current status!

    A question is, do we have “turn around plans” for the countries that are suffering independent of German control? And the answer seems to be “NO!” or if they do exist why are they not gaining prominence in the public eye so that alternatives can get traction.

    The only debates that I hear on the news is on the news are the central controlled European approach where the Troika step in give more debt and it is the hard slog of austerity for the next X years!

    What are the potential forecasts of countries road back to prosperity without receiving more debt

    1 – Do they have to leave the Euro or not?
    2 – Can they become beneficiaries of the Euro Fund ESM or whatever other funds are at our deposal?
    3 – Could they review their public sector spending to be in line with “Spend less than you earn!”?
    4 – Could we live with deflation?
    5 – Would over exposed debtors be forgiven or put in debtors jail?

    Where could we see the Governments plans for the longer term like 10 years?
    Best, Middle and Worst Case scenarios with various options that show us that they fully grasp the impact of the variables? Standard practice for an investor! Which analysts actually work on behalf of the Government and why are they reach the conclusions that they do?

    I am sorry if these sound very basic and boring questions but I am not clear on those answers and until we are, how could we imagine having solutions more advanced than we have!

    We could keep on the German case but they are not our parents :) We can’t blame them for our errors. They are very influential in our world. Could we begin to run Ireland like a successful business with the obvious understanding that certain elements will be at a loss on a monetary basis for reasons of social responsibility???

  12. piombo

    The tanks-to-banks quip is in bad taste.
    Also, it is incorrect to state that Germany does not have serious macroeconomic challanges ahead, such as their debt/GNP position, their overexposed landesbanken, their public pension underfunding, their aging population and chronic high unemployment in the East. The plain fact is that Germany needs strong consistent growth just to stand still over the next 10 years.

    Last year, you posed a question phrased in Latin, cui bono? Well ask yourself the same question, who does it benefit attacking Germany for it’s rectitude during this crises? Perhaps the road is being paved to permit the “hedgies” to achieve what they failed to do in 1992 and that is to take down the Bundesbank once and for all through a burning of the peripheries.

    Finally, you make the assumption that the new D-Mark would go to 2 versus the US$. Maybe so, but not if the BuBa has to first recapitalise all the landesbanken with close to 1 trillion…

    Bis bald!

    • gizzy


    • piombo

      Hi Georg,
      Two questions, namely:
      1) Are these numbers gross or net exposures?
      2) Who owns the Bundesbank?

      As you seem well-informed, what is your opinion on the introduction dual currencies in those countries within the Euro to allow them an internal devaluation period thus permitting them to at least correct the current account imbalances?


      • Hi,

        IN GENERAL

        Nothing to do with you in personal, but I have neither the time nor the interest to engage in further discussions on this blog anymore, I am happy to post informations once in a while, but I will not engage in any other way.

        Further, and for the sake of an example, you need to ask the right questions to be able to get answers that matter. Your second question makes no sense at all.

        Die Buba ist eine bundesunmittelbare juristische Person oeffentlichen Rechts (vgl. § 2 BBankG). Diese Rechtsform taucht nirgendwo sonst in der deutschen Gesetzgebung auftaucht, BuBa ist eine juristische Person! Das Grundkapital geht an den Bund (§ 2 BBankG) und sie ist von Weisungen den Bundesregierung unabhaengig (§ 12 BBankG). Außerdem der Vorstand die Stellung einer obersten Bundesbehoerde (§ 29 (1) BBankG).

        Understand that the term ownership simply does not apply here,it is something most people have misconceptions about.

        A much better question would be to ask who controls the BuBa, that is simply the board and president, but now dig further and educate yourself how people are positioned there, and WHAT people are positioned there…. then you get a little closer to the reality and eventually you end up at the BIS as well….


        • LOL

          Sorry, I was assuming you speak german as I was communicating with someone over skype in german at the same time….

          Bottom line:

          The Deutsche Bundesbank is a Federal institution with legal personality under public law. It is represented in and out of court by the Executive Board.

          From the horses mouth:

          and here:

        • piombo

          Hi Georg,
          Don’t worry I don’t take offense, but if you don’t want to reply, well then don’t offer the reply function on your posts. As well, given you post information, you should be prepared to explain it, eg., explaining to all that the CDS positions you posted are gross and if netted off would be much smaller.
          Engaging on this blog is an intellectual exercise and provides me with “time-outs” during the day.
          To the point of David’s article, I believe I know Germany quite well as half of my businesses are there and my wife is half German. I speak basic German enough to get through meetings etc.,
          So, differing from David’s thesis, I would contend that the German House is not as well-kept as it may appear. To continue David’s analogy, it would appear that the Accountant son of the House has unknowingly lent out the family savings to the rest of the housing estate along with the life assurance payouts to pay for the 3rd marriage (and no kinder) and the Porsche. Now, as Mother and Father begin to discuss retirement plans Son starts getting really worried and starts complaining about the neighbourhood…..
          In short, if the landesbanken and the pension funds in Germany were to experience a “crystallization” of their assets held across Europe, the German populace (rightly so)
          would rebel to put it mildly!
          And do you really believe that the “hedgies” don’t know this already!

    • dwalsh

      Excellent post: thank you.

  13. The solution to this crisis!

    Unemployed people in Europe should have no right to vote in elections or referenda.

    • As usual Georg great links….. and great quotes.

      e.g. “If the purpose of a state is only to become more competitive, then the central question of democracy is forbidden: how do we want to live?”


      “If you can no longer talk about alternatives, it’s the end of democracy.”

      Keep posting Georg! Keep posting!

  14. Deco

    Strangely enough, I don’t have a problem with the German perspective on the Euro. The Germans wanted a sound currency, and they wanted it to be run in a transparent and open manner.

    Unfortunately, there were Keynesians in the PIGIS before Keynes was invented. And France had a history of statist obsession with controlling everything in the lives of the populace, for their own good, going back to Richelieu.

    The Germans wants the EU to be run like Switerland. And compared to the EU Siwitzerland is a success. They speak different lanuguages, and have no resources to commandeer from one another. And they allow the people circumvent the politicians. Of course it is built of a dodgy banking industry, but then Britain under Blair was immoral is respect of facilitating dodgy characters with third world loot (Libya comes to mind).

    Folks, Europe is simply going to have to face reality. The level of solidarity, social cohesion, and sheer hard work that made Europe prosperous in the three decades following the end of WW2 are no longer there. Europe’s big problem is the dependency ratio. An increasing proportion of the population is in the world of “something for nothing”. This means that democracy itself ensures a perpetuation of denial. This is not due to demographics, half as much as it is to psychology. A large proportion of Europe is waiting for the rest of the population to assume responsibility (i.e. to work hard to pay for all the nonsense).

    Europe is in denial. The Germans are less in denial than the rest of Europe. Germany woke up after the wall fell down, and the Germans suddenly realised that there were high quality workers in neighbouring countries prepared to work for less than them. And the Germans responded to this reality.

    France, Spain, Italy, and Greece did not respond. They instead relied on cheap interest rates and a powerful institutional morass to protect them from serious declines in cost competitiveness.

    Despite what we might say about Irish politicians, they have been more honest than their neighbours with respect to our predicament. We have to work our way out of this mess.

    We also need to achieve wholescale reform of the entire state structure. It sucks in a massive proportion of the national income, and delivers abysmally poor results in comparison to it’s cost.

    Ireland needs a massive efficeincy drive. But the vested interests in Ireland, will not have any of that.

    • Adam Byrne

      I agree with everything you say Deco except the bit about the honest Irish politicians. Nothing could be further from the truth on that matter (in my opinion).

      Gene Kerrigan sums it up well here I think:

    • Deco

      I know it might sound like a shock to some people, but intellectually the US is more likely to get itself out of the mess before Europe.

      Simply put in Europe, there is NO intellectual debate. Europe is too much driven by a centre-periphery scale of debate. Even when electorates kick back, this gets subsumed into the requirements of Brussels. Europe has reached the point where the debate is forbidden. The debate goes as far as the possibility of having a debate, and then it is prevented from going any further.

      We are headed for a market crash. It is impossible to repond successfully to a crisis, when so many delusions are being entertained in Europe. From Greeks who think that they can run a railway that loses money in a spectacular manner, to French students who refuse to study, to Irish NAMA planners.

      At the centre of the crisis we have Brussels.

    • bonbon

      No German citizen was ever asked about any treaty, never mind dumping the most successful currency in modern history, the DM. This is and remains the core weakness.

    • Pedro Nunez

      +2, apart from Irish politicians comments.
      The Irish state is still more ‘abusive’, gombeen serving and more self serving than the catholic church ever was.

      The appointment of incompetent planners in local government, HSE ‘managers’, ‘DOH, just get it fcuking done’, modern day plastic paddy versions of Lord Cardigan and Raglan, charging their gombeen serfs into the international financiers’ guns is galling! The sh1t folk in Ireland put up with for the quality of Irish freedom that has been delivered by successive corrupt and non-performing executives.
      Montesquieu’s separation of powers my derriere (Monm

      What are the cohesive values that define Irish nationhood 100ys on? Sleeven slipperness, gombeenesque gaucheness, modern day ‘flibber-de-gibbets’ that stand for nothing and fall for everything?

      “If you don’t know where you are going, any road will get you there.” Lewis Carroll.

    • pauline

      I agree..but simple put like Murdoch who claims no responsibility for the culture that created the hacking scandal.. Europe failed when it shoved a constitution down people throats as the Lisbon rather than re-addressing it so it reflected the concerns of the people of Europe. Europe created a culture of disfunctionality and then wonders why it all fell apart. The Germans cheap money ruined Europe. While we should bear responsibility for our overpriced houses and deficit because of an unsustainable state structure supported by unsustainable stamp duty.. the bank debt is not ours.
      Though I’ll give Fine Gael that their doing their best and trying to keep a steady ship in rough waters, Irish Politicians and the people who continue to vote for them, are a large part of the problem. The looming tsunami disaster similar was the Bank crash is on it’s way. This time we need a plan before it comes here.
      Simple way to do this
      1. Park all bank debt and interest rates .. including all owed to EU and ECB for 10-15 years.
      2. Until the economy can support it, defer any wages/payments over 50,000 to State employees and advisors, limit expenses to a max of 30,000 for ministers and 10,000 for all others.
      3. Bring out state bonds, with the proviso that this money will be used to keep things running.

    • “We have to work our way out of this mess.”

      How ?

  15. CitizenWhy

    Whatever gores on among the German elite, they would certainly not mind seeing countries like Ireland or Spain or Greece develop prudent economies such as they have in the Scandinavian countries or Canada. They do not believe that their model is the only one, but they do believe in a culture of prudence and technical excellence.

    • Deco

      The Irish elite, in comparison, have displayed a culture of serial recklessness, rampant nepotism, arrogance, and incompetence.

      The lesson for the ordinary citizen is to make sure you are not part of the collateral damage, when the train goes off the rails.

    • bonbon

      I concur – see the Hindenberg post below. Either DMcW is not up to date, or what…?

    • Tony Brogan

      Sorry to say but it was revealed this week that Canada bailed out its banks to the tune of 114 billion dollars. Not devastating,( What is a billion or ten here or there), but not squeaky clean either.

      • bonbon

        Well it is transatlantic after all. It ‘fessed up to that, like the way the EU started with a mere 145 hitting 9000 now, Billions of course.

  16. Dorothy Jones

    From above:
    It [Germany] wants to do with banks what it couldn’t — historically — do with tanks.

    Dear David
    This is exraordinary stuff from you. With respect, much of your analysis on the German approach is fact-based, well researched and informative. However, a statement such as this deviates substantially from an empirical approach, and I feel detracts substantially from your piece. Notwithstanding that many feel that the German approach is the not correct one, such platitudes do little to convince anyone of the same. Apologies if this appears too harsh, but I am surprised.

  17. goldbug











  18. When the postman arrives at this housing estate with the overdue notices,and then the baliff arrives,what happens then?.Even the most well kept house will be in trouble if it has purchased on credit by printing money all these years and have their SUV reposessed?.

  19. wills

    Who can blame the German ruling class playing hardball with the drunken neighbors.

    Also, the German ruling class did not point a gun at the head of the neighbors to glutton themselves sick on German savings.

    Also, German ruling class interests and USA/UK ruling class interests are fighting it out over the balance of power geo-politically.

    I wouldn’t believe one word out of anyones mouth when it comes to the players in the geo-politics monopoly board game.

    UK / USA and Germany all are vying for dominance over BRIC and the euro is one weapon now in armory to fight the currency wars for global hegemony power in the new age of digital economy!

    • Colin

      I can blame the Germans, because I was in a room in ‘House Ireland’ where sensible people lived and did not get drunk or envious about how others lived/behaved/portrayed themselves, yet I was booted out of ‘House Ireland’ for the mistakes of others in the house, and mistakes of those making the rules in the house and those not enforcing the rules in the house, and found work across town, far away from the ‘Euro Neighbourhood’, in a quiet cul-de-sac called ‘Sterlingham’. There’s a vacant lot at the end of the cul-de-sac, might fit a ‘BallyPunt’.

  20. dwalsh

    Stephen Kenny wrote in reply to a bonbon post on the previous article:

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

    Well considering it has been a train-wreck since the 1970s maybe it would be a good thing to put our economys back!

    But of course we cannot; we have to go forward; but not in the way we have since the 1970s.

    Until we all get that, deeply, and our politicians understand we have been on the wrong track; and until they are able to vision a more human and social economic model, we will continue the neo-liberal train-wreck economics we have now.

    The current ruling ideology considers our civilisation a resource to be exploited. We need a new economic vision. An economic vision which understands that civilisation is a human social phenomenon…not a business venture.

    • bonbon

      Correct – we cannot go back. That defines the Le Pen crowd in France. The “glorious past” was not in fact so glowing.
      Human beings, different than all other living forms determine their actions based on the future, consciously, or in an active way.

      So all programs for the next step will be easily sniffed out if they hark to some pre-agro/industrial feudal fantasy. Great how reality delivers a strong ammoniac!

  21. [...] Share this:TwitterFacebookLike this:LikeBe the first to like this post. This entry was posted in Economy, Crony Capitalism and the Engineered Crisis, The Fascist European Union. Bookmark the permalink. [...]

  22. Julia

    David, I watched the news at six tonight and was so dismayed. The first item was the news that Merkel is refusing to discuss changing the fiscal treaty.
    The second item was Greece, the chaos after the election. A film showed an old man sitting on the step of a closed shop surrounded by his furniture and some large plastic bags. A old lady in black walking across the road with a little plastic cup in her hand.
    Crowds of people queuing for food.
    What is happening to the Greeks is absolutely immoral. Whether austerity works or not it is immoral. The people who suffer the austerity are always the people who did not behave foolishly during the good times. They never had enough money to behave foolishly. My neighbour, who has been unemployed for four years now is hoping finally to get on a course he has applied for. He’s looking forward to “feeling like a man again.” He wants to be able to look after his family.

    Meanwhile, the boys and girls of the ‘elite’ are playing games with our lives, talking nonsense about ‘trust’. It’s all a game to them because not one of them will ever have to count the fish fingers on the plates to check are there enough to go around.

  23. Tony Brogan

    What does Germany want?

    As of two years ago 700 plus billion owed to Germany by the 5 little piglets. Germany would, perhaps, like it’s money returned??

    It will be lucky to get it’s gold from New York!

    • redriversix

      Morning Tony
      Perhaps Germany would be happy with a deal on resources if no money to pay back from P.I.G.S….?

      • Tony Brogan

        Good day

        Germany wants a stable monetary and financial system. Then it would not have to give out the loans in the firstplace. The little piggies have no resouces that Germany does not already have, and one that the others do not have. Industriousness and cheap labour. I was talking with an East German now in Canada and he tells me that the cheap labour in the east was utilized by the industries in the west and that millions still work in Germany for wages considered below the minimum wage in many other countries. Like 3-4 EURO/hr.
        Can any one verify this??

  24. Deco

    We are about to see another EU Debt crisis saga in motion.

    Outside of all the drama, there are a few underlying factors like the entire “something for nothing” promise of the EU empire. In fact all imperial constructs are based on the promise of “something for nothing”.

  25. The source of the problem is not the euro. The source of the problem is how euros are created. 3% of euros are in the form of cash and are created by Central Banks across Europe. The remaining 97% is digital money and is created by the commercial banks.

    Banks create money when they process loans. They type a higher bank balance for the borrower without lowering any other customer’s bank balance. This is where money comes from today and this is why every euro has a corresponding debt.

    If we changed to using punts and allowed the Central Bank to issue the cash punts and commercial banks to issue digital punts with a corresponding debt nothing would change in principal.

    Ending this recession will most likely occur when we allow Central Banks to create debt free digital money for their Governments.

    Paul Ferguson
    Sensible Money

    • Grey Fox

      Source of the problem is the euro!
      We need to be able to devalue our currency to get out of this recession, it is the age old answer to the problem, so! we can´t because we are in the Euro, answer, GET OUT QUICK! go back to our own currency, devalue and get on with it, as for the bank debt, forget about it was never ours to begin with! Wake the hell up people!

    • wills


      This idée fixe of blaming the euro merely just feeds the engineered propaganda erected to hide the truth.

    • bonbon

      This is a digital version of the Austrian School “sound money” where public good, growth will ooze from the mere possession of such monetary tokens. The digital version is that we can generate Public Good, from binary bits!

      But wait a minute, that’s exactly what the Nobel Prize winners, Black and Scholes proved mathematically, gave us their formula, dutifully run on computers.

      Result – the LTCM crash that triggered all this.


      • Tony Brogan


        BS you are totally wrong on blaming the Austrian School for this.
        Sound, commodity money never allowed for inflation and excess money creation in the first place.

        It is the rampant printing of paper script or its digital equivilents that lead to random bubbles and associated crashes and the attendant social devastation resulting. That is the probable result of the sensible money proposal and differs not from the current system except of the avoidance of interest and additional national debt.This is an adaptation of Keynes if you wish to give it a name.
        It is similar to your advocation of the Hamilton central bank policy.

        It is certainly nothing to do with Austrian economics or sound, specie, commodity money which will not allow booms and busts to occur.

        The other thing that needs to be outlawed is the use of the Fractional Reserve Banking system where huge amounts of script(Paper promises to pay, otherwise known as bank notes)are loaned into existance.

        Paul is correct to identify this which means inflation as the notes are issued and deflation as the loans are paid off and the money disappears as the notes are redeamed by payment of the debt.

        Paul is correct that to regain sovereignty Ireland must control and issue its own currency. I disagree on the use of more unlimited paper currency but subscribe to the use of commodity money that holds the politicians in check from adding to the national debt and prohibits expansion of the money supply.

        I also disagree this is best handled by the central bank.
        I believe the central bank is a tool of the bankers for their benefit and that the control of money , if any control is needed, is best handled by treasury a direct arm of the government where any actions can be held to account by the people. We do not need unelected officials determining monetary policy independent of the government. We need a return to active effective democracy whre the government is accountable. Yet another reason to leave the EURO far behind.

        Money is or was essentially private property allowing the owner to do with it as they please. commodity money will become free of government control and is an international currency beholden to no banker or state. for a free person that is the only money to aspire for. Money that is an asset, not a debt, money that does not rely on a counterparty to maintain its value, money that retains its value as it can not be depreciated by profligate people instructing a profligate government to flood the ecomonomy with printed notes. Money that is universally accepted around the world.

        “Result — the LTCM crash that triggered all this.”

        The crash of LTCM was an earlier warning, a symptom of the malaise of the fiat monetary system. The root cause of the disease was not addressed while the patient was in remission and now is on it’s death bed.

        We are in the early stages of the final collapse of the current monetary system.

        All this debate on what Germany wants or anyone else for that matter is smoke and mirrors to obscure the basic problems. Most of the resulting comments on this blog and others is insignificant tittle tattle not addressing the real issues and problems. As such it is generally a waste of resources and energy.

        Thomas Jefferson: 1816 “If the American people ever allow private banks to control the issue of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.”

        BANKER: Mayer Amschel Rothschild 1828 “Allow me to issue and control the money of a nation, and I care not who writes the laws.” [Even a 4 year old can understand that people with control of money...write the laws!]

        The problem are the central bankers and their controllers behind the curtains.WAKE UP!!!

        What Germans want is their gold back from the US.
        What germans want is not a return to the inflationary boom and bust of the past.
        What germans want is economic stability.
        What germans want is a sound currency and I believe they will return to gold as are the Chinese, Russians, Indians, Iranians, Malaysians etc. etc.

        Ireland should ask for no less but as an independent sovereign country in control of their own destiny and not tied and bound hand and foot by European masters.

        • Tony Brogan

          US states are returning to gold. 17 of them have or are proposing to make gold and silver legal tender within the state. Thus returning to a major provision of their constitution

          As goes the US, so goes the world. As goes China so will the world go!!

          That is a good reason for Germany to want its gold returned.

          • Tony Brogan

            Will the U.S. government, as geopolitical analyst Jim Rickards has suggested, end the price suppression scheme by confiscating the gold reserves it holds in custody for other nations?
            Chris Powell

            Possession, it is alledged, is nine tenths of the Law so Germany may whistle in the wind for its gold to be returned.

        • bonbon

          Amazing the blind-spot at the core of monetarism. I will repeat my argument – the mere possession of a “sound monetary token” will seep general welfare and growth like an essence from the rapidly becoming magical wondrous tokens. This is pre-scientific, pre-industrial and pre-nation-state.

          But of course the effect of “silver and gold” coinage just shows the feudal mindset of primarily bankers, but right across the entire culture.

          But now people have begun to see the other side of glittering tokens, and see how the were fooled.

          The factual assembly method of argument protests too much, I fear.

          • Tony Brogan

            Your response is rubbish!
            Sound money is not monetarism.It is the obverse.
            You imply it is the cause of the current crisis-
            The last thing the bankers want is a sound money system. They diss it just like you, so who’s side are you on?
            Sound money has nothing to do with glitter. Just common sense.
            A factual argument is much preferred over ill informed opinion.

  26. Good writing sir

    This treaty is the final nail in the coffin (it began with Maastrict) and once the lid has been securely fastened Ireland will be nothing but a perpetual debt slave because there isn’t going to be any growth. Forget it folks. ‘Stability and growth pact’ is a contradiction in terms and by it’s very title we can deduce it is defective by design, or at least it is for Ireland

    Nothing has changed since the last genuflection and the government is clueless. They even refuse to debate the social and economic consequences their policies will have in the coming years because they are arrogant and need a bloody good kicking at the polls to remind them who is boss. The alternatives are not pretty by god

    If we have no growth we can’t pay back these debts and the only way to do so is to punish the Irish people further and destroy the fabric of our society. This is what will happen if we sign up and our politicians seem perfectly happy to let this happen. Mind you anyone watching trashy TV3 ‘documentaries’ each night may well have came to the conclusion that our society went to hell a long time back

    We are talking billions more in austerity cuts. Is this what we want?

    If we don’t sing up (intentional misspelling) and take our chances we might have a fighting chance as DMW and others have been arguing for years we could recover like Iceland. People laughed at Iceland three years ago but they are not laughing now because Iceland is the only western economy that is performing to it’s potential. They are laughing on the other side of thir faces. (of of my father’s strange expressions)

    Our politicians have no aces to play such is the negotiating power of the German Chancellor and we can forget playing hardball because they have us by the nuts as long as we play by their rules. Do we want to is the question and do we want to hand them even mor epower or do we have the balls to tell them srry pal the bus stops here auld china

    Irish politicians don’t have a scooby doo what to do and they are suffering from chronic Stockholm syndrome. We have two right wing parties and a supposedly socialist one all singing from the same hymn sheet and another party who are not really sure what they stand for but whose supporters will love the line about banks and tanks such is level of their poetic output

    That is highly suspicious and proves that we can’t trust anyone to tell us the truth. If someone belongs to a political party or religious organisation they are tainted because they are intellectually handicapped. Just my opinion

    It’s a sad day when you have to look further afield to find opposing arguments. Left and Right wing extremists across Europe are having field day at the polls because their rhetoric sounds good and makes people feel that they are being listened to. They are not because they are being conned because and don’t know what they are voting for. Like the masses in Ireland who are like stunned rabbits paraylsed by the headlights and engine roars of an oncoming Panzer


    PS The banks and tanks line is woeful. My family had a spot of bother with the Germans but I was taught that Germans were good people who let themselves become brainwashed by madmen. Sound familiar Paddy? Show a bit of respect and cut it out wee man. Thanks.

  27. CitizenWhy

    Noam Chomsky: Revolution or New Dark Ages?

    Long but insightful article.

  28. Mark Aherne

    For anyone to use a line like that one with the tanks is ignorant, but for a leading economist… I think you should probably at least refer to yourself as a political economist if you’re going to indulge in xenophobia.

    In general, very interesting stuff. Perhaps imposing the prism of the nation-state on the analysis of our current situation risks being anachronistic. We can’t blame the Germans for doing the responsible thing and stepping into the political vacuum. The markets await our collapse like stalking wolves. Robust europeanism is arguably our only viable option. Pity it’s not so robust.

  29. David says :’it wants to do with banks what it couldn’t — historically — do with tanks’

    I know what Simon Cowell would say :

    ‘ It was brilliant….absolutely brilliant… be very honest , it must have been written under a Full Moon… was great ‘.

  30. molly

    Greece Greece there in deep deep trouble and we could be in the same trouble if we continue on the road we are being made go on.
    We are being led on a merry dance buy a bouncy of clowns we are power mad ,they say we know what’s right for Ireland .
    Do you believe them I don’t .
    Think about where we have been led so far by FF and now think about where FG /LP are bringing us to the unknown they are paying out vast amounts of our money to spin doctors to advise them on where our future is .
    We the Irish people have not had this treaty explained in full nor have we ever had other life changing decisions that where made explained in full to us the Irish people.we are being treated like fools ,this government is of the view the they have beening elected by us so they can do what they like.
    Would you trust somebody that tells lies,they told lies to get into power and they will do the same to stay in power.

    • Molly – You’re so right!

      When is the last time you heard an Irish politician state the absolute fact that “territorially” we, Ireland, are the third largest state in Europe?

      Our Atlantic territorrial waters and the resources beneath us add up to the third largest?
      And there’s only about 5 million of us??
      But they never mention this? – Never, ever ever?
      Why because since the 70′s they’re been actively selling it under our noses!
      Why don’t Irish Media ever ask about the serious potential here?

      If Shell spent 4 billion so far we should give them 8 billion, thank them, and tell them to go away.

      We should immediately nationalise OUR resources and offer Shell a guaranteed 20 per cent! Do you really think they’d turn it down?
      Stop these Mickey Mouse Fas retraining programmes like ECDL and Manual Handling and instead get our people trained in renewable energy, exploration, drilling, pumping, shipping, tunnelling, Deep Sea Docking.

      The smart economy is all around US – WE’re standing on it and the Bertie boys are still gonna gain from the selling of Coillte to the Troika fire-sale guys!!
      Flynn already got €200,000 state grants for the €48,000 farm he embezzled, sorry acquired.

      Bord Gais is being asked to “use it’s expertise” to set up Bord Uisce …for what? What expertise? -

      They’re the most expensive in Europe!

      Question; Why isn’t it set up so the revenues from water go directly to the particular local authority who service the delivery of same????

      Answer; Cos you can’t sell that!!!

      They’ve either accidentally set it up like this or they know exactly what they’re doing?
      Therefore these guys who lied to govern us are either accidently or on purpose the massive danger to our children’s future.

      In fifteen years time we as a country could be offering the right type of multinationals subsidised energy costs to set up in this country.
      (Between Hydro and Wind)
      What we absolutely lack is the leadership required!

      And don’t talk to me about money! Look at the DMc message over and over – Money and investors are always available for a smart investment.

      Only a couple of years after independence when we were just crawling as a nation we took on a massive infrastructural undertaking in the Ardnacrusha project on the Shannon.
      We had no money – In fact we hadn’t a pot to piss in….but we did have leadership!

      God how I wish we had some of those people today. People that did stuff because it was difficult…..not like those who today do nothing because it’s less risky! (And cost efficient?)
      Today’s counterfeits are thinking about their pension in five years time…not yours in fifteen or twenty.

      Imagine what your grandparents would have said to you if you told them that you’re now paying for water in Ireland.
      And then tell them how we went and sold the Irish Water Company to a Troika approved whomever?
      And some board of directors somewhere, on another continent maybe, are gonna be pissing themselves laughing because Paddy is struggling to pay the rent on his tap!
      (And somehow you know instinctively that I am telling the truth here?)


      The NO I’m voting doesn’t express enough the F**K Off I soooooooo wanna shove up …….arrghhhhhhh!

      …But I can’t spoil me vote now….it’s way too important for that!

      • Great post Paul

        This kind of controlled anger and plain taking is what makes people sit up and listen

        I agree with everything you said and with Molly

        To put it rather bluntly your words make say this:

        Come on to fuck. Who is kidding who here?

        Maybe we have lots of aces up our sleeves after all and not just the peat which they are telling us to stop digging. Bastards

        • We have lots of Aces up our sleeves!!

          I know a community that has recently finished the refurbishment of an old parish hall. It was falling apart and unused.
          It’s now thriving as a centre for old folks , young folks, drama, dancing and socials. (Official opening next Sunday!)

          The guy to suggest the refurb and eventually become Chair of the committee was a returned emigrant from US. He was ridiculed beyond belief and even the Parish Priest took umbridge to the talk from this upstart!

          But now – even though a few still won’t admit it (or remember it) the community is much the richer for the upstart and his vision!
          It’s a true story which I believe could be replicated up and down the country!

          But we are governed by the PP’s at a time when we most need the upstarts!
          And the PP’s are the self appointed and self annointed:
          Gerry Ryans daughter has a slot on 2FM – She’s doing media studies……but is she the best in her class?
          Maybe she’s the best student for the last 10 years? …….Because she’s the only one to get such a slot doing Celebrity News bits.

          Well the truth is – she’s actually one of the lads – they owe it to their old friend to look after the daughter.

          But eh? isn’t RTE a State Broadcaster… not a family business????

          Eh …kind of….sort of….but just not your State!

          Even though it’s you who foots the bill!

          What say our naturally just leaders to this??

          They’re like note takers at a paedophile enquiry!

          Dum dee dum!

          • It’s a great story Paul and in complete contrast to the tale of Ryan’s daughter

            I am sure many people have had similar ideas but never had the belief to act on them

            I am intrigued and want to know more. Like how did he or she fund the project and get bypass all the dodgy middlemen who runs this place?

          • Well initially I gave him a hand to get a crew of volunteers to completely tidy up and repaint from top to bottom. (I believed he was serious when he specifically told me who wanted to use the hall)
            Paint we got sponsored by local hardware.
            Then everyone was invited from church next door after Christmas Eve Mass for refreshments and treats for the kids, and a bit of music – That was Christmas 2009 and attracted more helpers.

            Volunteer labour is counted as matching funding – since then 80% funds came through NDP (Leader) for Community Enterprise.
            New Roof, Heating, Wiring, Plastering, Stage etc. etc. etc. And a huge amount of local Voluntary labour. (Electrician, plumber etc.)
            Point is; Clear specific vision. Add required effort, hey presto – achieve planned result!

            JFK – We’ll land a man on the moon by the end of the decade! Look – Clear specific vision. Add required effort, hey presto – achieve planned result!

            Enda – Vote Yes to be at the centre of Europe – Unclear Vision, unknowable effort, hey presto,- achieve unplanned result!

            What specific vision was ever outlined by FF/Green or FG/Lab??? Well that’s what we’re gonna get!

            I rest my case!

          • Deco

            Gerry Ryans daughter has a slot on 2FM — She’s doing media studies……but is she the best in her class?
            Maybe she’s the best student for the last 10 years? …….Because she’s the only one to get such a slot doing Celebrity News bits.

            Well the truth is — she’s actually one of the lads — they owe it to their old friend to look after the daughter.

            But eh? isn’t RTE a State Broadcaster… not a family business????

            There you have it. This is how Ireland is run.

            Nepotism, cronyism and the old school tie trumps ability, initiative, and hard work every time.

            RTE should be sold off, and let real management (not party political/social partner clowns) run it.

            This is widespread.

          • Adam Byrne

            That’s a superb example of what’s wrong with this country.

            What’s more, the guy was a total coke head. Now I don’t think the young lady should be discriminated against because of her old man’s terrible behaviour but there certainly should’t be any favours done in his name.

            Good luck to her if she knows what’s she doing but it should be on her own merits. It’s not the sort of shite I would ever listen to on the radio, and neither was her father’s show.

            The proles lap it up though.

      • Today’s T-Shirt Idea

        Give up Socialism!
        - Join The Labour Party!

        • Q. How many Socialists does it take to screw in a light bulb?

          A. I can’t tell you because that is an official government secret.

        • A capitalist was hiring big tough men as loggers to chop down huge trees. This small Irishman applied and the capitalist asked “do you have any logging experience?”

          The small Irishman said “I worked in the Sahara Forest.”
          The capitalist said “You mean the Sahara Desert?”
          The small Irishman said “Yeah, sure it is now!”

      • Great post Paul….I hear you 100% and so too feel your frustration…it makes you want to scream and break something but instead we internalise it and suffer mentally and physically it twists our insides til we’re warped and disfunctional and the easy option is to reach for the bottle and go into denial and act childish/ silly and quaint….sure if you’re irish come into the parlour…..

        ARGENTINA just nationalised their oil and gas….they told REPSOL to take a hike!!!!

        … if you’re oirish come into our parlour…take what you want just leave us some whiskey…we’ll be happy singin’ a song and lamenting our young….oh woe is US!!!!!

        • bonbon

          Brazil took Argentina’s example, and President Fernandez de Kirchner also is going after the vulture funds. What a politician – Europe needs more of this!

          Argentine President: We, Not Those “Interests Opposed to Our Nation,” Shall Rewrite Our History

      • molly

        You can see the wood from the trees,when we let a bunch of liers run the country thats what we get ,but the sad part in all this is the majority of this island and the ones beening the worst hit with all that’s beening dished out.
        So my next question is how much more to we the majority have to take till we stand up and say anything would be better that FF,FG,and LAB and tell them to f off.
        Things will get worse because this government are going to try to get blood out of a jude Judy says do you think I was born yesterday.

  31. dwalsh

    Financial markets feed on instability. For them civilisation is a resource to be exploited. Our civilisation is being hollowed out and destroyed by financial capitalism. If not stopped the financial markets will destroy the physical economy upon which we all rely for life; and there will be global catastrophe.
    Humanity is on the cusp of a new age. A new vision of civilisation is needed. Capitalism as we know it cannot deliver the vision nor the next level of human civilisation.

  32. Philip

    Of course financial markets feed on instability – both positive and negative. That’s how they make money. So far the instability is negative – the various groups who made money the lazy way and want to retain the status quo are getting more and more into trouble when they resist change. The more you resist, the higher the shorting pressures until you collapse.

    Unfortunately, the small people get squished as well and with a disproportionate level of damage. This is the one thing that needs to be addressed.

    I believe if the markets are not allowed operate as freely as they do, you run the danger of stagnation and exclusion of the young. This is what is happening right across Europe and indeed a lot of the traditional west. As long as elites resist change, it gets worse by the day.

    Let’s look at Germany? Why it became what it is today is because it changed profoundly. My bet is that it’ll be the first to change if it has to. It has the attitude of looking at at things as they are and doing what is necessary. Germany is not perfect by any means, but we need to look hard at ourselves as well. So while the rest of us are going off noisily with clicks and squeaks and worrisome pings…you’ll just hear a big solid CLUNK from Germany and then silence. We need to wake up and realise that our little petty collective agreements and sweetheart deals are doing the all the harm and damaging our society…Not Germany and certainly not the markets.

    • dwalsh

      The more instability the financial markets can generate, the greater they can profit…and parisitise the real economy on which we all rely for life-support.

      Maybe 35-40% of the price for petrol is speculation; which means profits goughed out of the real market (out of your wallet) by speculators operating in the virtual financial market.

      How can this be a good thing?

      The financial markets are destroying the global economy; bankrupting the nations; how can this be good for humanity or civilisation.

      How can this farce be called development or progress?

      But I can see in your comment you are an ideologue…a believer; and belief is irrational.

      • Tony Brogan

        “But I can see in your comment you are an ideologue…a believer; and belief is irrational”

        Why is it your comments are so rational and others are not if they differ?

        Argue the point rationally yourself and you might be more persuasive.

        Where is your evidence that “Maybe 35-40% of the petrol price is speculation. You will find taxes are the greater part. The profit margins on refined products are so low there are no new refineries built the last several years.

        you make some good observations in your postings but pointing figures at people and saying they are irrational is not conducive to proper debate or discovery of truth

        • dwalsh

          Fair comment Tony Brogan. I should not have included that sentence. Thank you.

          Some evidence in support of my contention that speculation is playing a major part in commodity price inflation; specifically petrol in this case.

          • dwalsh

            I might add that perhaps you should not have included this sentence in a reply to bonbon above:

            “Your response is rubbish!”

          • Tony Brogan

            Point taken

          • Philip

            Merely seeing the pragmatic simplicity of it for what it is. Markets take advantage of good and bad. They do nothing of themselves. They never did. They merely accelerate what was happening anyway because that is the nature of money – a time shortener.

            People making money out of markets loose it as well – by the bucketload. It is ultimately a zero sum game. Winners and loosers. The “winners” are the commission collectors who facilitate the whole thing and collect some froth. We focus too much on flash cars and fancy offices. The reality lies in fundamentals – and all a marketeer does is find and angle and leverage it out of its cosy “holding” position.

            I come back to collectivism, sweetheart deals etc that are another fact of life. I am not just talking unions. It covers backhanders, trade restrictions, Innovation quenchers you name it…anything that has “vested interest” in it. The only weapon that consistantly cracks this nonsense open is the greed by these vested interests and their ultimate demise on a market.

            The West is having a major shakedown. What we are witnessing is the consequence of incompetence, blindsiding you name it. Yes, little folks like you and I get squished a bit and the poorer get hit more – that is not the market (whose rules are very well known) fault. That is a fault of vested interests who we vote for and look to for protection or are part of in some aspect of our lives.

            The only defense in honesty and letting go of the past. As long as this is not allowed to happen, the mess will get bigger.

  33. Adelaide

    Interesting contradiction re JobBridge Scheme

    Three days ago:
    Sunday Times> A damning article on the failure of Jobbridge, “JobBridge Scheme Suffers 75% Drop-out Rate’. 2,000 internships ran since it’s launch, only 500 completed the internship.”

    RTE Website> “The number of places on the National Internship Scheme is to be increased by 1,000 to 6,000 due to the level of demand. Of the 2,000 people who have completed the scheme, 797 have gone into full-time employment. The success of the programme has led to its expansion.”

    I wonder. Hmm…………….

  34. Deco

    Let’s talk about Spain…..

    For reason the media has completely ignored the elephant in the room for about 5 years.

    Because the people are not supposed to know the scale of the disaster brought about by cheap ECB interest rates…..If you knew about that, you might start to understand the flaws of central bankers messing with the asset markets.

  35. Paul Moriarty

    I salute you with a good glass of Artois

  36. bonbon

    I just found this:

    A Tale Of Two Treaties — A Citizen’s Guide to the Stability Treaties of 2012

    Ireland is being asked to approve two new international treaties amendment to the European Union Treaties.
    These are:

    1. Treaty establishing the European Stability Mechanism (called ‘ESM Treaty’)

    2. Treaty on Stability Co-ordination and Governance in the Economic and Monetary Union (‘Fiscal Treaty’ or ‘Stability Treaty’)

    3. Amendment to Article 136 of the Treaty on the Functioning of the European Union (‘TFEU’)

    Referendum (31st May 2012)

    The Government has decided on advice of the Attorney General that Ireland cannot ratify the Fiscal Treaty without the consent of the Irish people. The Referendum will take place on 31st May 2012, seeking the approval of the people to amend the constitution so as to permit ratification.

    The Government is not holding a referendum on the ESM Treaty or on the Article 136 amendment. The Government intends to ratify the ESM Treaty and to approve the Article 136 Amendment by passing laws but will not do so until the outcome of the Referendum on the Fiscal Treaty is known. If there is a Yes to the Fiscal Treaty in the Referendum, the Government’s plan is to ratify both treaties and approve the Article 136 amendment so that Ireland will then be bound by all three.

    The purpose of this website is to give people an introduction to the content of each treaty and to explain how the two treaties are interlinked. We also describe the proposed amendment to Article 136, agreed by EU Heads of Government to facilitate the establishment of the ESM.

    Above are links to guides to both of these treaties as well as to the texts of the treaties themselves for you to read.

    Feel free to share the information.

    This Citizen’s Guide was written by Mary Linehan, Solicitor and Joe Noonan, Solicitor.

    A Tale of Two Treaties · Mary Linehan & Joe NoonanMay 2012

    Full info here :

    • This remarkable finding raises at least two questions that are
      fundamental to the understanding of the functioning of the global
      economy. Firstly, what are the implication for global financial

      • Philip

        Secondly…seriously, is there anything better?

        We need to move from conspiracy theory narratives. Anyone trying to work in a large project will know just how hard it is to coodinate to make something simple let alone run an entire world.

        We will always have movers and shakers in any domain of activity. The top 5% or whatever. But does that does that mean we should despise them. Does it even mean we should hold them responsible? Are we ascribing more power to them than they indeed have?

        • cooldude

          Hi Philip,
          What we are dealing with here is far more than a few “movers and shakers”. There is a .001% of elites who control the privately owned central banks and thus control the politicians. These are the elite banking families whose wealth is in the trillions and who never appear on any rich list. Do your own research on this and you will be surprised how well organized this whole set up actually is. Here is a quote from professor Carroll Quigly from his book Tragedy and Hope: A History of the World in Our Time. (1966)
          “In addition to these pragmatic goals, the powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. The growth of financial capitalism made possible a centralization of world economic control and use of this power for the direct benefit of financiers and indirect injury of all other economic groups.” p324.
          These guys do not have just some power they have all the power and by deliberately creating the types of crisis we are now experiencing they are increasing their power. Seriously there is a better way and we need to take back control of our lives from these people before they control every single aspect of our lives. Only by being aware can we take control back. Vote NO for a start.

          • In the 2052 Club Of Rome Report that was published on May 7th last week, Argentine investment manager Carlos Joly wrote that the triumph of the – I include parasitic – Financial Capitalism Industry is the downfall of the West.

          • The austrian Club of Rome member Karl Wagner prognoses a global Revolution around the years past 2020, comparable with the Revolution against feudalism 1848, when the younger generation had enough they will uprise. The culture of consume will shift to a culture of sustainability.

          • rebean

            Yes I agree with you. A study of the Knights templar and how they were butchered because they became wealthy and powerful is a useful study. The whole money world is a ponzi scheme with a few people doing really well at the top. The top families are in the process of buying back some assets at cheap prices right now. I think however the chinese will add a wild card to the economic mix.

          • dwalsh

            Agree with all you say here cooldude.

            The myth that the elites are not thinking and planning ahead plays right into their hands. They are quite happy for people to believe that everything is just happenstance or some Darwinian random chaos machine playing out with no direction or purpose.

        • Adam Byrne

          That’s hilarious cooldude.

          You lay out this grand conspiracy theory which has ‘testicles in every country’ (to quote a wise man), then you suggest that we vote NO in a meaningless referendum, in an irrelevant country and we’ll be on our way to taking control back from the ‘elite banking families’.

          If they were so all-knowing, don’t you think they might have worked out how to nullify the power (or lack thereof) of voting?

          Voting is a complete waste of time under the current system and ‘they’ know that all too well – ‘they’ set it up that way – it’s a charade and a sham.

  37. Deco

    The entire EU experiment post-Maastricht, is now being proven to be flawed, and heading for implosion.

  38. rebean

    The problem with the whole European state idea is that it will take ages ie about 100 years to properly integrate the whole of Europe so we are all singing off the same hymn sheet. Germany wants to run Europe even though thats not what we all signed up to. Thank God the French had the balls to call a halt to the debacle. Europe is not the United States that grew as a country to become one harmonious unit. Look at Ireland , It has taken 100 years to learn to live with our nearest neighbours.! Germany became very self righteous over the last number of years. They used the economic collapse to enforce their form of austerity. The real problem in Europe was all the cheap cash available. Now the loss of German funds loaned will focus those hardworking Germans in the Rhineland . Their investment in Europe has become a liability like the Irish property scene. How much will be the price indeed for the reckless lending of money earned by the hardworking Germans. They thought everyone was as black and white regarding money as they were. The German model is like a perpetual sausage machine . Input /manufacture / output. Unfortunately the Irish boom was about build/ inflate / breakdown / deflate . Like a guy who ate too many German sausages and drank too many pints of Guiness they dont quite mix . I am off for a 5 mile walk now , I need to keep fit , its a good long-term investment.

    • Philip

      Europe works pretty well even now. I hope it never looses its many variations. I do not want the Irish becoming too German any more than I want Germans to be too Irish. The stereotyping needs to stop and honestly and clear thinking needs to prevail.

  39. The many faces of Angela Merkel

    Just click on the picture and more will come. I refrain from comments, they speak for themselves.

  40. michaelcoughlan


    You have left out the last paragraph of your script. Didn’t you mean to conclude?

    “Therefore in order to use leverage with the Germans we in Ireland should tell them that we are going to implement Morgan Kelly’s solution to the problem. We will use nothing more than an eraser on the document agreed with the ECB and replace the word creditor with owner. We can demonstrate the moral argument to the Germans for acting in this manner by showing them that their bank Hypo Real Estate was at least culpable in taking advantage of the nonregulator we had in Ireland and which allowed them to do so much damage to Germany as well as everyone else. We can also remind them that the shit backing up into German banks and onto the German taxpayer is a much lighter load for them to carry than us. This will allow our economy to recover faster which will allow the ECB to liquidate these illiquid assets in a much quicker time frame and recover its money much faster than will happen by landing Ireland with the toxic waste in the banks. We are only asking our German neighbour to place a skip on his well manicure lawn for the length of time it takes us to reseed ours”.

  41. rebean

    Yes you are correct lets leave Ireland alone and have our own economy. Thats the point of the article the referendum and just about everything else in Europe right now. The Germans need to stop treating everyone else like a German. We dont seem to have the resources, the work ethic, the drive ,the traditional industry, the vision, the management, the politics, the business intellect,and just about everything else that goes into succeeding in the modern world at the level of the German economy.

  42. Gudguycj

    We all know the world Economies are banjaxed we all Know who is at fault but take that to 1 side and look at the suffering on people in Greece elderly people scavenging for food they getting a hand out of bread a apple and a bowl of Greek pasta a day and the whole world looking at it. I don’t know why Amnesty international or some church ever came out about it but that’s is cruelty to people. It makes me wonder if people think back to the end of the 2nd WW to the birth of the Berlin Wall and its fall the Germans were better looked after than some of our own people and Greece is a witness to that all you have to is look at the TV That to me is Human suffering. The food was dropped from the sky by the Allies to the German people at the end of the 2 WW but i don’t think it is happening with the Greek people today and some EU countries, makes me wonder would it be better if the Berlin Wall was still Standing would we be better off or if Ireland caused a WW would we be treated better at the end of it.

    • rebean

      I often wonder about that Berlin wall. Did Merkel not come from the far side of that wall and now she is going to tell us all how to live. Enough now of this . Lets go back to post WW2 politics if thats what this is going to take. What did we ever get from the ex USSR anyway. Cheap labour and a load of reds

  43. Bernd Kemmereit


    I’m sorry but I couldn’t disagree more with you. Germany is up to his knees in debt. Currently they have 2000Mrd dept, with a ratio of 86% to GDP. Germany has a very high unemployed market. The numbers given out by the Govt are cleaned. All people in so called back to Job programs are not in it. People who are on the social benefit are not in it. People on social benefit are forced to take jobs for 1€ an hour. The real unemployed figure is something like 6M.

    In relation that Germany need the Euro, that is not correct either. Ok Germany does well with the Euro but they don’t need it. Germany was Export Leader in the World without the Euro and will it be again. That is even confirmed by Companies like Bosch…etc as these companies manufacture in cheap countries.
    I agree that the DM would be much stronger than the € no doubt about that, but Germany would loose only a fraction of Export.

  44. rebean

    You are correct there Molly. Why cant we balance our books. Well the EU program for debt reduction was supposed to bring our debt ratio down from its current rate starting back in 2010. Now I believe they have kicked the can down the road to 2016. The real problem is that since turkeys wont vote for christmas Irelands govt wont be making any major cuts to their own depts.The private sector seem to pay their way. The taxes collected from the private sector pay the civil service and the dole. There is also a massive health bill. In a properly run country the govt runs the country on the money it has. This has been thrown out the window for the last 20 years in Europe. The thing is the numbers are gettin real big so big that some day real soon there will be absolute mayhem I believe. So I am wondering do I need to consider emigrating at some stage. I know one thing I had no savings a year ago but I have enough now to survive for 6 months or maybe longer somewhere cheap.I hope the bubble does not burst for another while. I am peddling like a mother right now.

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