May 21, 2012

Only one way out of this mess

Posted in Sunday Business Post · 138 comments ·
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The only thing that can stop the euro from breaking apart in the short term is old-fashioned capital controls. Otherwise, more and more money will flow from the periphery to the core. The weaker the peripheral countries become, the higher the risk of political instability and the greater the risk of a change in policy.

Peripheral Europe – including Ireland – suffers from that most politically regressive type of economic policy, one that hurts but doesn’t work. And it doesn’t work eventually – it doesn’t work at all and never has worked anywhere.

A policy that hurts but doesn’t work will become an ex-policy in short order. If all the countries in the euro had full control over their currencies, they wouldn’t tolerate a policy that hurts but doesn’t work. But because they don’t have control, they have to tolerate a policy which hurts but doesn’t work until it becomes insufferable.

However, right now, we do not have control over the currency we use. For a currency to be described meaningfully as a “country’s currency” or “our currency”, we have to be able to print the currency freely or not as we choose, and we have to be able to change its value as we choose.

The problem is that the euro is no one’s currency and everyone’s currency at the same time. For Ireland and Spain and any of the other peripheral countries that have huge debts, the implication is that we have to pay debts in another country’s currency.

If a country is already running a current account deficit, as much of the periphery is, paying back all the debt will make the economy contract. As the economy contracts, unemployment rises and this – understandably – prompts political instability.

So without the currency to offset the different competitive positions of the countries, the entire adjustment has to come via the rate of unemployment in the weak country. This is because wages rarely fall. The academic idea that you can get wages to fall effortlessly goes against everything we know to be the actual way things work. In an actual economy, everyone at work fights to keep his wage up.

For those in work, it’s better that the rate of unemployment rises rather than their individual wages falling to absorb the unemployed. So the labour splits into a classic insider/outsider pattern, where the interests of the employed are pitted against the unemployed, rather than the old Marxist line where the interests of the employed are pitted against the boss classes.

The only way to quickly get real wages down in this type of scenario is to devalue the currency, generating a bit of inflation and reducing wages both externally and internally through currency depreciation and inflation. That’s how it is done. (See Iceland, all the Asian tigers, Scandinavia in the early 1990s, etc.) But if you can’t do that, then the rate of unemployment rises permanently. This puts huge pressure on the afflicted country’s budget deficit.

Furthermore, if the afflicted country has high levels of debt, the people will want to pay that debt back, and the banks of that country are also likely to have large amounts of bad debt. This means that the people don’t want to borrow and the banks don’t have the ability to lend. This is a classic liquidity trap which – regardless of the rate of interest – will have no effect on the economy. Everyone is saving to rebuild their balance sheet.
This is exactly what is happening in Ireland, Italy, Spain and, of course, Greece, where the dilemma is most severe.

Now think what happens when everyone is saving and a foreign country instructs the afflicted country that its government must save too. Well, if everyone is saving, no one is spending and, as your spending is my income, everyone’s income falls too.

This is what austerity does in the liquidity trap – it makes things worse. I likened it on BBC’s Newsnight the other night to putting an anorexic on a diet and expecting that person to put on weight.

Now let’s see what happens to capital in such a strained environment. Some bits of classic economic theory state that capital will flow into the afflicted area to avail of opportunities. But that is not what actually happens. It will only happen after a massive policy change, like a devaluation – not before. Until then, the risk that there will be a devaluation pushes capital away.

But why could there be a devaluation in the euro? Wasn’t it supposed to be an irrevocably fixed system? Well, it was until last week. The minute the European elite in Brussels under José Manuel Barroso told Greece that the election should be a vote on whether it is in or out of the euro, the notion that the euro was permanent evaporated.

We now have a currency which is conditional. And it is conditional on local politics, which are themselves dependent on local economic conditions, which we know are getting worse in the periphery.

If it is not a monetary union, it is a system of fixed exchange rates, and the credibility of this system is based of the willingness of the weaker countries to tolerate austerity and the willingness of the stronger countries to tolerate what some have called “peripheraid”.

Peripheraid is the ongoing cash infusion from the rich countries to the poor countries, which could go on for generations.

The working model for peripheraid is Italy. In Italy, the north has been transferring money to the south for years. But this is one country, with one language and one political system.

Do you think that Germans will pay for Spaniards for the next few generations? Nor do I. The people with money in Spain think exactly the same, and that is why they are getting their money out.

As a result of this analysis, money is flooding out of the periphery. There is what looks to be a bank run in Spain. In Greece, whatever money hasn’t left is on its way. We are seeing similar developments in Italy.

A friend who works at a large bank in London told me last week that it was experiencing a massive inflow of money into sterling. Significantly, she said that the bank didn’t have many peripheral clients, so the money was coming from countries like France and Belgium.

The only way to stop this is with capital controls. It will buy the afflicted countries a bit of time, but once you introduce capital controls it means you have given up on the central basis for a monetary union. Once that goes, so will everything else.


  1. wills

    David,

    The euro and monetary union is on course.

    It is working very nicely for the insiders.

    The euro and monetary union has generated wealth on a scale never before imagined for set interests.

    If capital controls suits them in the next stage of their wealth transfer progrom they will more than likely use them I am sure.

    They’ve used the printing presses without worry, they’ve used public monies without worries, they’ve used you without worry so they will use capital controls is needed.

    • bonbon

      And they are doomed, whoever “they are”. They know it, maybe they did not deign to inform you. BBC may report on the rubble after, but why wait.

      Subjects must be kept calm, at all costs!

  2. wills

    Typo *is*. Should be *if*.

  3. Capital Controls

    The time factor is important because once the panic button is pressed by our Minister for Irish Feta Cheese, its too late and Your capital in your bank is no longer under Your control .

    Excuse me …..I am listening to RTE news flash at 9.59pm 31st May , 2012 …sorry its incoherent ….and the news reader is looking for water ….’ It has been announced by the Minister Mr Michael Mooman …( a pause) ~~~~~~ the newsreader is struggling to hold the announcement ~~~ After a cabinet meeting held urgently a few moments ago it has been agreed that all banks will be closed from tomorrow morning Friday 1st June , 2012 until further notice.People are being asked not to panic . Until then the government have said this was a necessary precaution and that matters will be rectified as soon as possible .When asked the Minister was not able to say how many weeks but assured everyone that their money will stay in their banks for now at least ….sudden abrupt stop …and the Late Late Show resumes …and Ryan Tubridy has his face in his hands and unaware the cameras are shooting on him …the audience are in silence and freebees are the last thing on their minds and replaced with ..how will they pay the baby sitters when they get home.’

    Roll it there Collette .

    • # make it friday 1st June

    • Dorothy Jones

      Hmmm……maybe:
      - IE inc should just quetly print punts [maybe it is already]
      - Have the vote on 31st not about the Tree-aty but whether IE inc stays in the Euro or not
      - Depending on the outcome, the Govt could freeze all transactions for 24 hours
      - Then…..start again…recalibrate the dial

      • Panic is something that happens ….just like that says Tommy Cooper( c0median).No one knows when .And when it happens you wish you never knew it .

      • bonbon

        Initial step no need to print yet – the Euro serial #’s as discussed 2 years ago at Freiburg, will do. And Germany “discovered” the DM printing pressed in a basement last year.

        Still the foot dragging is literally killing Greeks and emptying Ireland.

      • bonbon

        But not start the “investment” game again. Commercial banking yes, free of synthetic derivatives.
        FDR made sure the banks opened after a holiday, with their act cleaned up.
        Then we need Reconstruction Financing – Hamiltonian Banking. 40 years of financial warfare have left a rubble heap.

        • Tony Brogan

          Hamiton’s bank was the first attempt to impose a central bank on the US.
          it produced currency from thin air and loaned it into existence and charged interest. Just like the central banks of today and the licenced charted banks that practice fraction reserve banking today. Just the very thing that has us in the trouble we are in now.

          FDR was a failure. He stole private property from the people and placed in government accounts. he devalued the currency by 60%. there was no recovery until after WW11 but by then FDR was dead and his policies died with him.

          http://online.wsj.com/article/SB10001424052702304024604575173632046893848.html

          • bonbon

            Ah, so at long last the Austrian School lines up with WSJ – who fears FDR like nothing imaginable.

            Let’s do it to them again and slice up their banks.

            I relish the thought!

          • Tony Brogan

            bonbon
            you are turning out to be a bigger fool than I thought you would.
            You are myopic, discentious, and have only the thinking of Larouche to quote.
            You assign policy to people on a whim that is counter to their actual statements and pholosophy.
            you are a hollow shell of an intellect.

  4. jonathan

    David, The more I learn and that has been quite a bit for someone with a technical background. Finance is now the key subject of living from forex, capital markets, current account and budget management.

    Let’s get back to real basics
    - Cash Management; &
    - Treasury Management

    Do not spend more than you earn!!!

    Aren’t all the other offshoots, problems, issues, crisis fundamentally caused by a lack of cash management! I know this sounds so simple that it could not be true. Disobeying this simple guideline opens the doors of finance to enhance / exploit any country that puts itself in that position.

    Now maybe it is nieve and that too little growth may happen and public services would be very limited including social welfare, pensions etc but it would feel like a reality with a foundation….

    The Central Banks are Private and Immune. The Bondholders of the corrupt banks are protected more than the citizen of the country.

    Something very very wrong!

    • george

      jonathan: In case you are interested in watching it. Aaron Russo talking to Alex Jones.
      http://www.youtube.com/watch?v=FuinaIm-kd4&feature=related

    • Private banks are privatising the wealth of nations while laying their debts on the nations they are exploiting. It’s a double mind feck. They suck up the wealth and privatise it while socialising their toxic debt onto the mugs who buy into the three card trick and continue paying their taxes. Tax payers are the real mugs

      Central banks are runners for the big boys and tools of the main cartel. Who is the main cartel is the question that can get you disappeared. We are all royally screwed. And I do mean royally. They have never gone away you know

  5. Adam Byrne

    subscribe.

  6. Lius

    It’s all irrelavent when you see what is being paid out to bondholders (most unsecured) on a regular basis.

    see:- http://bondwatchireland.blogspot.com/

  7. paddythepig

    “”I likened it on BBC’s Newsnight the other night to putting an anorexic on a diet and expecting that person to put on weight. “”

    You have it backwards David. The patient is not anorexic ; the patient is chronically obese.

    What you are advocating is force-feeding this chronically obese person, and expecting them to lose weight.

    It won’t work.

  8. george

    I thought I was going to read a proposal, with which people was going to go out on the street, like the Chinese did with Mao’s red book. …ummm I don’t think that will achieve a significant change!
    .
    Is rather more interesting what Jonathan says: “The Central Banks are Private and Immune. The Bondholders of the corrupt banks are protected more than the citizens of the country”.
    .
    Somebody has to pay for this mess, and they think should be us, the ordinary citizens running ordinary lives, while the political and financial elites want to keep it all! They are becoming more totalitarian by the minute. Wait until the Olympic Games are over, and then they’ll play their hand.

  9. piombo

    David,
    I assume you wrote this article as an intellectual provocation!
    There are much more effective ways of achieving debt forgiveness.
    Anyway some feedback:

    (1) Capital controls on what assets and versus whom?

    (2) Complete prohibition by the Treaty on the Working of the European Union versus EU members (article 46);

    (3) If Ireland were to sequester the US$1 trillion of assets belonging to mainly US & UK banks currently sitting it the IFSC, I think we would have the warships sailing up the Liffey by teatime;

    (4) Irish companies would be dealt the same hand with their assets by the international community;

    (5) Ireland, on day 2 post-capital controls, would make North Korea look like Las Vegas on crack in comparision;

    (6) Much better to dust off Morgan Kelly’s platform of reforms as espoused last May coupled with the renegotiation of State debt starting with a 10 year moratorium on both capital and interest (assuming a constant 2% inflation within the EZ for the period);

    (6.1) All social welfare, state pensions and civil service jobs and pension be aligned to Northern Ireland from 1st June 2012;

    (7) Failing this, Ireland should seek immediate renegotiation of all State debt and achieve a primary surplus by mid-2013 so that if we have to default on State debt, the public sector will be self-financing by then.

    (8) Italy is near to achieving a primary surplus and once they are there, that is when the real negotations commence…

    (9) Primary surpluses guarantee the maximum leverage in debt deals, are perceived as worthy and earn the best renegotations.
    Capital Controls achieve the exact opposite.
    Remember we possess all of us an indomitible Irishy.

    • bonbon

      I’d like to see those ships flounder in the muddy Liffey!. Let’s invite them to a tea party!

      Things are changing – regime change is cited by Medvedev at Camp David as very likely leading to thermonuclear war. It is interesting that the real meaning of R2P – Blair’s “Responsibility to Protect” – is the banks!

      Iceland was threatened with anti-terrorism UK laws which quickly looked red-faced no-clothes like. Nakedly embarrassing for the City?

      So the blustering about Iceland, Argentina, Ireland is indeed amusing and will reach fever pitch.

      Banshee’s anyone?

  10. molly

    I have a feeling the government will announce some bit of good news any day now to try to sway the no voters

  11. bonbon

    Interestingly, here was reported the UK imposing exchange controls on Santander since 2011 already :

    http://www.davidmcwilliams.ie/2012/05/17/premature-vote/comment-page-2#comment-117429

    So the UK has slapped one of the largest Euro Banks.
    I’m sure CEO Botin is not amused.

    • bonbon

      Santander is living off the Brazil Carry Trade, looting the country with the help of the gov’t there. Argentina’s Repsol expropriation though has dominoed to Brazil. So Santander better watch out! It has Cameron on one side trying to save the City and the World, and the New World republics on the other.

      Beef sandwich anyone?

    • bonbon

      THE LONDON {ECONOMIST} May 19 published a shameless cover-up and defense of the bankrupt Inter-Alpha Group’s Santander Bank, BBVA, and other Spanish banks. Spain’s banks are among the most efficient in the world, they write, because they have fancy computer software… and because they make most of their profits outside Spain, noting about Santander that “almost 90% of its profits are made outside Spain.”

      They don’t say it, but that’s the Brazil carry trade, and the British real estate bubble.

  12. tony_murphy

    Was in an airport in German recently, and a barney type cartoon was been broadcast to any idiot who was in a trance, letting them about the EU’s capital controls.. ridiculous. Most Germans aren’t as smart as people make them out to be, they are utterly brainwashed and under control

    • molly

      That statement sounds like the Germany of old ,the country that went over the cliff.
      We may as well be in the trance well at least the Irish government have enough people in the so called trance to keep them in power.

  13. tony_murphy

    “Barroso’s political activity began in his late teens, during the Estado Novo regime in Portugal, before the Carnation Revolution of 25 April 1974. In his college days, he was one of the leaders of the underground Maoist MRPP (Reorganising Movement of the Proletariat Party, later PCTP/MRPP, Communist Party of the Portuguese Workers/Revolutionary Movement of the Portuguese Proletariat).”

    http://en.wikipedia.org/wiki/José_Manuel_Barroso

    perfect for the Soviet European Union

    Vote YES = Vote for Communists

  14. bonbon

    I think DMcW is close to what’s going on. The UK has Santander already under controls, but bank run’s are already on, as the Economist admits.

    BRITISH ARE PANICKED THAT “THE DAM IS BREAKING” ON THEIR FINANCIAL SYSTEM

    May 20 (LPAC)–The elephant in the kitchen at the Camp David G8 summit, was the fact that the British Empire’s entire trans-Atlantic financial system is in meltdown, with runs on banks already underway in a number of nations, accompanied by shrill calls for “unimaginably large” hyper-inflationary bailouts issuing from the mouths of London’s freaked out policy-makers and financial elite.

    One such banker quoted by the May 19 London {Economist} put it this way: “The typical thing with a bank run is it trickles and then it floods. The real concern is that you could have the dam breaking, first in Greece, but then elsewhere.” The article mentions the reports of withdrawals late last week from UK Santander Bank, in that context.

    The problem with Spain’s banks is particularly urgent, the {Economist} notes in a second article, and they have to be “recapitalized” immediately: “One way might be to directly inject equity into the banking system using European bailout funds.

    Another would be to set in place some sort of European-wide deposit guarantee scheme or fund. Whatever is done, it should be done quickly,” it urges.

    With this elephant tromping around in the kitchen, the G8 leaders barely managed to cobble together a final communiqué which is a bunch of self-contradictory gobbledygook with something for everyone in it (“we are for both growth and austerity”), while signifying absolutely nothing.

    The London {Guardian} comes closest to confessing the truth, when it reports: “Barack Obama and David Cameron have clashed with the German chancellor Angela Merkel at the G8 summit in Camp David, demanding she set out a clear path for Europe to emerge from its current crisis. The German leader resisted pressure for fresh measures that would include looser monetary policy for the ECB, enabling quantitative easing similar to that deployed by the Federal Reserve and the Bank of England.”
    ——
    Eire must know this – how can such a bankrupt system threaten anyone?

    • wills

      ‘British Empire’s entire trans-Atlantic financial system is in meltdown,’

      Really now!!

      The British and their Empire system is intact.

      I’m watching BBC 2 presently documentary on how the British played all sides in the war.

      Look to history bonbons and calm your self lad!

  15. Tony Brogan

    “The only thing that can stop the euro from breaking apart in the short term is old-fashioned capital controls.”
    The reason the euro is breaking up in the first place is because it is an artificial construct. It is run by technocrats-bureaucrats? More controls will worsen the situation just like every other government 5 year plan conceived.

    • bonbon

      Yes it is an artificial construct straight out of a financial transatlantic policy which has ruined almost the planet over 40 years.

      There is no way to partition the Euro off, quarantine it off – the FED is already “saving it”. Capital controls are inevitably a step, but likely will not stop the plague out there.

  16. Tony Brogan

    “Peripheral Europe — including Ireland — suffers from that most politically regressive type of economic policy, one that hurts but doesn’t work. And it doesn’t work eventually — it doesn’t work at all and never has worked anywhere”

    In Canada there are 10 Provincial economies and other state territories (Yukon, Nunavit, north-West)all operating separate fiscal policies with only one national currency. This is spread over the second largest land mass in the world. 3500 miles from east to west and 2000 miles north to south.

    National monetary policy does not fit all parts of the country at the same time. A boom in BC happens at the same time as a recession in Ontario and Quebec. Monetary policy that may help in one, worsens the situation in another. Population numbers determine the results(where the greatest number of votes reside).
    Ameliorating this is the equalization admendment formula. “Have not” Provinces receive federal tax money per capita grants from the national government courtesy of the “have ” provinces. the long term result of this is that reportedly Quebec has received 100 billion and Alberta has paid out 100 billion. Environmentalists from Central Canada like to point fingers at Alberta’s supposed dirty carbon footprint, but they do not refuse the cash from there, or stop using the oil.!!
    Europe will have to do the same. the rich will have to keep the poor in the manner in which they expect to be maintained if they wish to have a chance to maintain the status quo. Subsidies are inherent to all socialist economies.

  17. whirmark

    Hi David

    Interesting article – I agree in principal with many of your points but I’m less sure of the efficacy of a devaluation in the case of a currency block the sheer size of the EZ. This has a large footprint in global trade (devaluation of a small country can be “absorbed”) and and will I believe lead to currency war and global recession. In my view, some form of dual currency (with debt write-off) approach may be workable but messy to say the least (given the political & legal journey to get there). The only precedent I can think of here is … ahem … Cuba!

    Also, while your points on capital controls make a lot of sense (especially given the looming bank-run possibility, as expounded in zerohedge links below), they are in contravention of European Treaties (in my understanding of them at least – see below). I’m far from an expert in this area though.

    The one glimmer on the horizon I believe is the resurgence of the possibility of eurobonds (which will invariably be contingent upon much Franco-German brinkmanship in the couple of weeks we have left before the unfolding of the Greece elections/bank-run/ELA-target2 denouement)

    All the best,
    whirmark
    —————————————————–

    Article 63, Chap 4 of the Treaty on the Functioning of the European Union/Title IV: Free Movement of Persons, Services and Capital:
    “Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited.”

    http://www.zerohedge.com/news/forget-bazookas-here-come-tomahawks-and-howitzers-r-rated-walk-thru-greek-endgame
    http://www.zerohedge.com/news/elephant-room-european-capital-outflows-and-another-%E2%82%AC215-billion-spanish-deposit-flight

    reuters.com/article/2012/05/21/uk-euro-summit-idUKBRE84K09620120521

    • bonbon

      Start quoting the law, the EU has broken all the laws with LTRO etc only in the last year. Various German bankers resigned over this.

      And doing this did not save the Euro. More laws as in the upcoming vote will also not save the Euro, bind the citizens to unrelenting austerity and leave bankers to change laws to make everything they do legal.

      • whirmark

        Could you do me a favour and just ignore any comments I put up here – my views aren’t up to your . Don’t be offended but most of your comments scattered throughout these articles make it look like you have a very narrow axe to grind(just my impression), and I’m not really interested in thrashing it out. Good luck.

        Thanks in advance.

        • bonbon

          Well you quoted the law, not the lawbreakers. I will post the exact details which laws have already been broken, and these do already form part of the German Gundgesetz, and will soon form part of Eire’s if Enda gets his way.

          Ignore the law if you want, but do not pull legalese please.

          • whirmark

            you’re a bit of a strange lad, aren’t you. if it doesn’t bother you too much I might just draw on any quote I think is relevant to my point and you can just maybe ignore my comments altogether and move on, good man.

          • bonbon

            So all the key laws have been broken with LTRO, and bonds etc. Never mind the 3% deficit thingy we never hear about anymore. We are in a criminal gangland and you quote the law? That’s hilarious.

            Eurobonds remain illegal, of course that is not a concern of Cameron at the G8 as my posting from Economist shows.

            And as Max Keiser repeatedly shows, the law does not apply to finance, they rewrite offending paragraphs when needed.

            And to revoke a treaty is not a legal issue, rather political as reported from Italy in the last thread. We simply duly inform partners of our action.

            To use anti-terrorism laws against Iceland was silly bluster, a bunker mentality from the City.

          • whirmark

            do they allow unsupervised internet usage at St John of Gods?

  18. Tony Brogan

    “The only way to stop this is with capital controls. It will buy the afflicted countries a bit of time, but once you introduce capital controls it means you have given up on the central basis for a monetary union. Once that goes, so will everything else.”

    Capital controls are the result of trying to defeat the market assessment that the country’s currency is overvalued. people in a free economy invest where they have confidence and remove funds from where they do not.

    Many countries have operated with a successful economy without a national currency, including the early days of the US. People used the currency they had the greatest faith in. Be that gold and silver or bales of tobacco, or someone else’s currency.

    Money is private property. A country which recognizes that fact and protects the right of citizens to have and trade in any currency they wish will not have a monetary crisis to solve.

    The best most universal currency is gold and silver. Ireland needs to provide its citizens with the right to use any currency they wish and let them individually choose which currency they wish to use.
    As currency should also be money, (there is a difference) people will choose the money in which they have the most faith. They will pick a money not subject to devaluation or inflation.
    You get three guesses as to what that would be.
    The same money three quarters of the world are in the process of opting for right this minute.

    • bonbon

      Tell that to the G8 especially the “Sherpa’s” as their spin doctors are known. They desperately need help.

      Imagine that, a wave of the wand and the crisis goes away.

      Borderline magic there, but no surprise, coming from Mandeville.

      • Tony Brogan

        I see you are still in the first stage of denial-
        ridicule. no cogent argument.

        • bonbon

          So “sound money” is the solution? This sounds cogent, but has no argument except “there is a law of this or that” that will happen when fistfuls of money are possessed. That’s, in a modern industrial age, simply wild.

          • Tony Brogan

            You talk gibberish on this.
            You scoff and ridicule.
            your intellectual snobbery is not appreciated.

      • Tony Brogan

        The balance of power has shifted to Asia, particularly China, and central to that power is control of real money, the money that society chooses for itself, not that enforced by government as a monopoly upon us. Untold amounts of gold have disappeared from the advanced economies’ central banks, and the London Bullion Market is exposed to a sharp rise in the gold price. With this knowledge, anyone who does not take steps to protect him or herself from the increasingly certain event, a collapse in paper money, a fundamental change in our whole economic paradigm, is nuts.

        Alisdair Mcleod- goldmoney foundation, Hard asset conference New York 2012

        What goes for an individual goes for a country too.

    • Nono

      Tony, did you watch the documentary “The secret of Oz”? The link was published here last week by another poster. Here it is again: http://www.youtube.com/watch?v=swkq2E8mswI
      Please do watch it as it will change your perspective on gold.

      In a nutshell, we are where we are because we gave away our soverainty to the central bankers who have the ability to print money and lend it to countries as debt (i.e. with interest to be paid).
      With this power, they had total control on the money supply to countries and could therefore create bubbles and busts as they pleased by controlling how much money they put into or took out of the system.

      The fact that money is backed by gold or not is not the issue. In fact, it was even easier for central bankers to control the quantity of money in circulation when there was a gold standard. Please do watch this documentary as it is very well explained and backed by tangible historical facts.

      The solution to all our woes are quite simple really. Give back the supply of money to the government with no debt and tell the bankers where to go. Think about it: no more national debt! Plenty of liquidity to keep the real economy working as it should be.

      • Tony Brogan

        Hi nono
        I took in a lot of the video but i find it a biased presentation. It does not change my view at all as it was developed from a wide range of writers and a lot of thought about what constitutes money and why some money is better than other money.

        In a nutshell, we are where we are because we gave away our soverainty to the central bankers who have the ability to print money and lend it to countries as debt (i.e. with interest to be paid).
        I AGREE COMPLETELY
        With this power, they had total control on the money supply to countries and could therefore create bubbles and busts as they pleased by controlling how much money they put into or took out of the system.
        YES, I AGREE WITH THIS TOO

        The fact that money is backed by gold or not is not the issue. In fact, it was even easier for central bankers to control the quantity of money in circulation when there was a gold standard. Please do watch this documentary as it is very well explained and backed by tangible historical facts. THIS I DO NOT BELIEVE TO BE TRUE.

        The solution to all our woes are quite simple really. Give back the supply of money to the government with no debt and tell the bankers where to go. Think about it: no more national debt! Plenty of liquidity to keep the real economy working as it should be.
        YES THIS IS VERY INTRIGUING AND SEEMS TO HAVE LEGITIMACY. AS FAR AS IT IS PRESENTED IT COULD WORK BUT IT HAS ONE MAJOR FLAW.

        It is not a recognised fact by many that there is no requirement to have an expanding money supply in order to have a thriving economy. the amount of money in circulation or available to the population can remain static.
        The main function of money is to act as a medium of exchange, and then as a store of value. It is held temporarily before being spent and so it circulates within the ecomonmy and everywhere it goes it facilitates trade.Once the transaction is complete there is no longer a need for the money.
        Wealth is gained by providing gooods and services that are in demand. Wealth can be harboured in other ways besides money. For example as in a house, or car or painting or antique or possession of land.

        If there is a demand for money by some of society it means the money is seen as more valuable than owning something else. Or a person is simply saving to purchase.
        This demand for money does two things. It leaves less in circulation and there is less demand for goods or services. in the first case the value of the remaining money in circulation has to spread a little thinner for the rest of the economy to function and so the value of the money rises. This makes all goods and services a little cheaper. In the second point the reduced demand for the goods and services also tends to reduce the values. Thus the results are falling prices in the economy and so every buyer is a little better off and the sellers of the goods have to accept a little less.
        now the saver seeing that things have gotten cheaper and that his saved money buys more than it did might be induced to spend that money on a now cheaper good. Thus the money returns to circulation and the whole process reverses. Thus as thousands of people make these decisions there is always just enough money in circulation to enable the economy. It self regulates.

        any addition to the money supply adds distortions as it does not enter uniformly. The first recipient of the new money gets to spend it at par value while the later recipients of the money gain no advantage as they find prices have already risen. Those at the bottom of the economic pole do not receive any new money yet find what they do have does not buy as much and so grow poorer.
        Inflation is induced by the addition of new money and the rich get richer and the poor get poorer.this explains the widening wage gap and the wealth discrepancies getting worse.
        Paper money that you propose even earned into existence and charging no interest may help remove the debt based currency but it is still available to be manipulated by people. Who is to decide how much money is enough or too little. It is still subject to being inflationary. (defined as the devaluation of the purchasing power of your currency by its dilution because of the extra supply.))
        Because gold and silver must be produced by sweat and toil and pulled from the ground as commodities they have an intrinsit value. also it means that the addition of money to the existing supply is limited and difficult. Thus the problem of inflation is eliminated.

        a major problem inherent in the modern banking system whether we use gold or paper for money is the fractional reserve banking system. It is a fraud but is declared legal. commercial banks on receiving a deposit are able to lend multiples of that deposit as loans.
        In simple terms if the reserves are nominated to be 10% then for every 10 dollars held by the bank 90 can be loaned out. These loaned out are simply a leger entry and are loaned into existence. Thus today over 90% OF THE MONEY IN CIRCULATION DOES NOT COME FROM THE CENTRAL BANK BUT FROM THE COMMERCIAL BANKS.
        This fractional reserve banking must be shut down or the bankers still control the money supply.
        Even using gold and silver as money this is the case as a deposit of gold can act as the reserve that allows ten times is value to be issued pretending to be backed by gold. This was the quasi gold standard of the bretton woods agreement.
        It is proposed to issue silver coin at a weight and fineness and allow the people to choose. It is expected that the silver coin would initially be horded or saved and eventually move into circulation.silver is the money of the ordinally people. gold is for saving larger amounts of value or for use in high value trade.

        This is a large subject to explain. I am remained convinced that paper money is a trap to be manipulated by banker or politician. silver and gold are a freemans money and is private property and not the possession oF the staTE. A state looking after the intertests of the people will provide a money that is not the possession of the state but of the individual .

        Thank you for taking the time to draw my attention to the video.

        Best regards
        Tony

        • Nono

          hi Tony,
          Thanks for taking the time to watch the video and reply to my post. I would reply to your assertion that gold backed currency is a better solution with one question: if the amount of currency a country can create is function of the amount of gold this country possesses, then where does that put Ireland? With the paltry amount of gold we have in our central bank, we wouldn’t have much money going around, would we?

          And what about countries that DO NOT have any gold in their reserve? Are they condemned in using bartending? I hope you can see the flaw in a gold based money system. Also, that is not without including the fear to get invaded and our gold plundered. By using a rare, finite, physical commodity as a base for money, you open yourself to all sorts of troubles.

          If, on the other hand, you use paper money not backed by anything (nor debt, nor a commodity), then no one can stop you from doing so.
          Also, giving that power to your elected representatives gives the power back to the people as if a government doesn’t manage it well, then they won’t be re-elected. However, that power has to be written in the constitution to avoid bankers from taking it back as it so often happened in history.

          I totally agree with you that fractional reserve banking would have to stop also. In fact, this is mentioned in the documentary at the end (in the Solutions part).

          However, I have trouble believing that an economy can function properly with a fixed amount of money supply. Wouldn’t the economy become stagnant then? What would be the incentive in creating wealth? Think about a company trying to expand its productivity. What would finance the gain of productivity if there is a fixed amount of money going around? If the increase in productivity makes the currency increase in value then wouldn’t that mean a zero-sum gain as it would mean that instead of selling 1000 items at 10 cents each, your 20% increased production would result in each item being sold 20% cheaper since there is no increase in the amount of money available? What’s the incentive in creating value then? In fact, it would encourage a company to decrease its production and therefore make products scarcer on the market.

          I know that’s a lot of questions but it’s good to poke at ideas and it might just show that unfortunately, there is no perfect system, just less imperfect ones…

          • Tony Brogan

            “if the amount of currency a country can create is function of the amount of gold this country possesses, then where does that put Ireland? With the paltry amount of gold we have in our central bank, we wouldn’t have much money going around, would we? ”

            Currency would generally be silver for day to day transactions. For example. a one ounce silver coin of pure exact fineness and a one troy ounce weight. There would be no stamped value on the coin. The treasury allocates by decree a monetary value for trade purposes. This value must always be in excess of the melt value or the coin will go out of circulation.
            I suggest a monetary value be 20% or more of the world spot price. The current quote is E22.11 per ounce. Plus by 20% and round up to the nearest multiple of five and we have a monetary value for trade of 22.11 plus 20% (4.42)=26.53. round up to the next multiple of 5 and we have E30.
            This value assigned can never decline (just the same as a printed banknote) but if the world price of silver increases where The monetary value is less than 20% of world price then the monetary value rises to the next multiple of 5 which is 35.etc. etc.
            Treasury can buy as much silver as is required on the world market at spot price and then refine to the required quality and mint as a one ounce coin. The cost of this are paid for by the 20% difference in the sale of the coins at the monetary value. any extra left over is seigniorage earned by the government and the treasury accumulates silver bullion.
            Thus unlimited silver coins can be issued to demand by treasury at no cost to the government.
            These coins would be offered along side the paper fiat ((whether your new currency or the existing) and the people can choose what they would like to save in.
            Eventually the coins will go into circulation and people will price goods and services in ounces of silver and trade accordingly.
            If the silver coins are not demanded then there is no loss either.
            (I will get to your other questions but am out of time here for now.)

          • Tony Brogan

            “Also, that is not without including the fear to get invaded and our gold plundered. By using a rare, finite, physical commodity as a base for money, you open yourself to all sorts of troubles.”

            The last country to be invaded and their gold plundered, 130 tonnes, was Libya, and western countries cheered the action.
            money is not to be horded by the state. Proper money is private property and should be dispersed among the population.
            Are you really afraid of being plundered. It does not need a foreign army just a central bank with the ability to print unlimited amounts of money.

          • Tony Brogan

            “If, on the other hand, you use paper money not backed by anything (nor debt, nor a commodity), then no one can stop you from doing so.”
            “Also, giving that power to your elected representatives gives the power back to the people as if a government doesn’t manage it well, then they won’t be re-elected. However, that power has to be written in the constitution to avoid bankers from taking it back as it so often happened in history.”

            Part of the problem today is the excess spending by government at the behest of the people. The people want and the politicians give and the bankers acquiece with a big fat loan addee to the national debt.
            your proposal removes only the addition of extra debt and of interest on that debt. It does not remove the demands of the electorate or the ability of the politicians to “borrow ” more money to give away their freebies.Extra money can be provided by the boat load (helicopter) and create booms and busts and dislocations in the economy. Nothing changes there. inflation and the robbery of the poor and working class to the benefit of the well connected would still continue.
            Who throws out a government that gives away free goodies? The people are complicit in the problem.
            Better to have a money system that can not be expanded willi nilli. Then the freebies can not be paid for without increased taxation. Then the people will think twice and the politicians will be forced to be honest.

          • Tony Brogan

            “However, I have trouble believing that an economy can function properly with a fixed amount of money supply. Wouldn’t the economy become stagnant then?”
            THIS IS A QUITE NORMAL AND COMMON THOUGHT. IT SEEMS COUNTER INTUITIVE THAT THE MONEY IN AN ECONOMY BE INELASTIC..
            What would be the incentive in creating wealth? Think about a company trying to expand its productivity. What would finance the gain of productivity if there is a fixed amount of money going around? If the increase in productivity makes the currency increase in value then wouldn’t that mean a zero-sum gain as it would mean that instead of selling 1000 items at 10 cents each, your 20% increased production would result in each item being sold 20% cheaper since there is no increase in the amount of money available? What’s the incentive in creating value then? In fact, it would encourage a company to decrease its production and therefore make products scarcer on the market.
            nO, IT SEEMS THAT AS INFLATION IS REMOVED THERE IS STBILITY IN THE ECONOMY AND THAT ANY DEFLATION IS MINIMAL. pERHAPS 10-15% OVER 100 YEARS.

            i SUJEST THAT YOU TRY TO GET HOLD OF A COPY OF DETLEV SCHLICHTER’S PAPER MONEY COLLAPSE.

            HERE IS A BLOG I LOCATED WITH A SUMMARY OF THE POSITION OF A FIXED MONEY SUPPLY, AND HOW GOLD AND SILVER GENERALLY MAKE THE BEST MONEY.

            http://www.samizdata.net/blog/archives/2011/12/summarising_sch.html

            Thanks for your response and civilised questioning.The questions are good ones and in providing answers I am more confirmed in my understanding of why gold and silver historically have been chosen as money. simply, they are the substances best suited for the task.

            Best regards
            tony

            P.S.
            I am gone for the weekend starting Thursday taking part in an international sail boat race out of victoria BC. Saturday/Sunday
            The web site is http://www.google.ca/search?sourceid=navclient&aq=1bK&oq=swiftsure+2012&ie=UTF-8&rlz=1T4SKPT_enCA449CA449&q=swiftsure+race+2012&gs_upl=0l0l0l7574lllllllllll0&aqi=g1g-bK1

            The Tracker section allows info on how to follow the progress of the race in real time. My boat is Radiant Heat.
            There is a life to live outside this blogg!!

    • bonbon

      The Austrian School recipe’s, repeated and refuted at length here, have actually at the core no argument at all, rather a wild-eyed belief. It is shocking to discover, otherwise seemingly well-thought-out arguments resting on sand. Now that kind of carry-on may have fooled many on the tiger epoch, but not any more.
      Spontaneous, unknowable economics, is sheer alchemy. How can anyone try to push this stuff today? Pure Dionysian fantasy, or rather Newtons “I make no hypothesis” utterly incompetent rubbish.

      The Austrian school core never discussed economic hypothesis is indefensible. The entire house of cards is rendered fiat. A Sound recipe based on very unsound intellectual currency is hollow.

      • bonbon

        And the reference to Bretton-Woods is also incorrect. Dexter White countered every effort b Keynes to go in a British monetarist direction (remember the bancor – a model for the Euro).

        We had a regulated exchange system until Nixon killed it, opening the door for petrodollars, and Inter-Alpha derivatives. The repeal of Glass-Steagall in 1999 put the nail in the coffin, Dodd-Frankly.

        There will be no “unknowable spontaneous” recovery – calm definitive steps must be taken to actively intervene.

        • Tony Brogan

          The reference to Bretton Woods as being a quasi gold standard is entirely correct.
          The US dollar was tied to gold at $35 an ounce.A US dollar was redeemable for gold. all other currencies were tied to the US dollar. in effect all currencies were tied to gold at a fixed value. This is a quasi gold stand.
          Under a true gold standard, gold is the standard against which all currencies are measured. The currencies float one against the other and all against gold.
          The trade deficit of the us with other countries allowed those countries to accumulate dollars that were redeemed for gold. because the US continued to add to the money supply as the world reserve currency the number of dollars far exceeded the amount of gold available at the fixed $35 value.
          20,000 tonnes of US gold was reduced to 8200 tonnes by 1971. When france tried to redeem their surplus dollars Nixon reneged on the contract and the currencies were no longer backed by anything. since then increased money supply has caused accelerated inflation and booms and busts of increasing number and intensity.

      • cooldude

        Here you go again Bonbon talking about “wild eyed belief” about a monetary system which achieved full employment, rising real wages, and real growth when it was used throughout the second half of the 19th century. I have detailed all the statistics in relation to this but as usual you just ignore them because facts don’t fit into your blinkered view on monetary policy. I have given detailed statistics on the benefits sound money bring to an economy and much more importantly to ordinary people. What we get from you is some vague mutterings about Hamiltonian banking and how this will mysteriously solve our problems. This was a central banking system allied with fractional reserve commercial banks producing debt based money ie. the same as the problems we have nowadays. The reintroduction of Glass Steagall is a good idea but doesn’t address the core issue of how to take away this extraordinary power to print all the money in the world off the bankers. You constantly fail to address this issue as this is the core problem of our modern banking system. The issuance of debt based money, unbacked by anything at no cost, to benefit the few and to rob the population in general. How about addressing this real issue and stop criticizing a monetary system, not perfect by any means, but one which actually worked in the favor of ordinary people.

  19. wildwest

    I find it interesting that the EU is paying to influence the people – just Google “eu fiscal treaty” and look at the sponsored link at the top.

    So the “yes” vote is all about being able to get more funds from the EU “if required” via this EU stability fund. Weren”t we told we wouldn’t need another bailout?

    Can anyone help me understand the possible implications of this “second tier status” point on a sponsored link? http://www.iiea.com/blogosphere/the-stability-treaty-faq-frequently-asked-questions:
    WILL IRELAND HAVE TO LEAVE THE EURO IF IT VOTES NO? a ‘no’ vote risks diminished influence for Ireland and potentially a second tier status for Ireland within the Eurozone.

    To me that’s a threat without any clear framework on which it is based (granted I have only read the FAQ on this sponsored site). They’re just making this up as.

  20. redriversix

    Ralph Atkins reporting from Frankfurt breaks news today in the Financial times that Greece has received a secret 100 Billion euro aid package for its Banks.See how much coverage THIS gets in Irish Media……..Seems the 1% DO get what they need,while REAL people have to sign away their lives to try and survive…….

    Incredible.Vote NO to this fiscal treaty,which,if in use 10 years ago,would not have prevented any crisis as this was created by Banks…..

    • molly

      Hi RR6 the more the state of Ireland goes head first into this so called Europe ,we seem to be in worse shape .
      The whole thing unfolding is one big con job and Ireland is going to suffer big time unless this government changes it’s tactics big time ,
      Borrowing money to pay back borrowed money it’s like a never ending story ,it’s like a credit card with no limit.
      Thers a lot of talk about euro bonds surly that’s another way to get into further dept,where’s the death write down.
      All we here is vote yes so we can get cheep money but that’s not the way forward.

      • redriversix

        The only way I see getting out of this crisis is for all debt to be cancelled and start over fresh,Its the only way I can envisage it,Molly.

        Europe has been kicking this Barrel [was a can] down the road with no solutions and more and more indecision with more to come.

        Unless they face up to the fact that Banking Caused this crisis and continues to hinder us,their will be no solution until their is a revolution which may happen in Greece quicker than I would like.

        Have a great day and keep the faith Molly

        RR6

  21. molly

    When so many people are leaving Ireland and so many on the dole.
    So many on social welfair and so many young surly we will have no chance of paying back even a small amount of this country’s dept.
    Maybe I have this wrong but at the present time the bonds we are paying back unsecured and secured, is beening payed back with borrowed money.
    So how come Europe thinks Ireland is sticking to the program sure that’s a con job surly.
    Who’s fooling who.

  22. David,
    why did you not share your wisdom on the Euro with the rest of Ireland and the world, when Ireland glorified itself for being the second richest country in the world? Wages have been ridiculous high back then – only a few years ago. As well as that a lot of new-rich Irish send (aka “invested”) their money in Germany, Spain, France, Eastern Europe and even in the Gulf States. There was a huge flow of Euros leaving Ireland and indeed the Euro-zone back then, so where was your warning voice then? You didn’t shout for stopping the money outflow from the what you call periphery back then. Was Ireland in the centre in the mid 20′s?
    I really wish you would have warned some folks back then, rather than shouting for corrections now. And pleaas stop comparing our little Ireland with Spain: the Spanish problem is a much larger one ;-)

    • Dorothy Jones

      Eh….in fairness….David did actually….all the articles are here in the archive…

    • StephenKenny

      A lot of people, including David, were. No one was listening.

      The Spanish problem is less for the Spanish, than the Irish problem is for the Irish.

    • StephenKenny

      It’s interesting to consider the general bubble cycle. One of the features of a bubble is that the majority don’t see it, thus “this time it’s different”, “new economy”, “capital availability meritocracy”, and all those sorts of arguments.

      When it starts to go completely mad, it’s in almost no one’s interest to say so, and those that do, are crushed under tidal waves of contradictory views from economists.

      After it’s impossible to deny it, the popular views are that it will “all be over by Christmas”, with the economists leading the charge.

      When it is finally realised, several Christmases later, that it might not be, a tipping point is reached and a general malaise sets in.

      At that point, everything starts to go into reverse, and now all the economists are saying that it’ll never really recover.

      For the extreme minority who really see this, that it when it’s time to start really get going again.

      My take on where we are on this, is that we’re still in the downslope, nowhere near the tipping point. It’s been held up by many $trillions and €trillions, and more to come, which we’ve been assured will make sure it’s all over by Christmas.

      The reason is that only one of the criteria for hitting bottom could, even in principle, be sorted out by this sort of approach – the financial one. The need for business to adjust is getting further away, with all this cheap money and government intervention, and that process is the process of the next up phase.

      Until then, it’s just ever increasing intensity of more QE, more politics, more mal-investment, more systemic corruption, probably more wars, and generally more “moral hazard”.

      For an interesting thought exercise, go back to the news from the end of 2008 and look at the world-stopping, stunning, awe created by the first high profile major US bailout -TARP – and then consider how comparatively trivial it would seem today.

    • Dear Pike,

      You obviously know very little about my work if you are saying this. I wrote an entited book about it called The Pope’s Chidren which told peope exactly where all the money was coming from. I even invented a ficticious German character and saver to make it easy for everyone to understand.

      Here is something from 2006 on exactly that topic

      http://www.davidmcwilliams.ie/2006/02/26/celtic-pirates-plundering-credit

      But please go and check the archive.

      I wrote about it most every week!!

      Best

      David

      • Dorothy Jones

        Maith an fear David……I remember good old Udo Lindenberg with great fondness!

      • My apologies, David. indeed I didn’t read you back in 2006 and haven’t got the time to go through your archives (which I probably should have done before commenting on this thread).
        I warned as well back then, but same thing: nobody was listening.
        *eeerrr* – and I don’t have to read about an invented German character, I am German myself ;-)That’s probably another reason why no one was willing to listen to me back then in what they call now “the good times”…
        An btw: I have a (German) MA in economics on my C.V. and worked as producing editor for almost eight years ;-)
        Keep up the good work, but don’t blame it all on Merkel and the Germans!

    • bonbon

      On Spain, yes Santander is huge, and has Cameron in a fit, under exchange controls for a while now.

      Eire pales in comparison.

      And DMcW has gone out on a limb on these issues over the years, incurring the wrath of geniuses like Lenihan.

  23. David mentions our currency is not our currency because we cannot print it freely as we choose.

    In actual fact the Central Banks of Europe can print as many euros as they like as long as they show the demand for them to the ECB.

    However printing euros is an insignificant ability in modern times since only 3% of the total European money supply exists as cash. The 97% is digital money and consists of the numbers in our current accounts and savings accounts on a computer screen.

    It is the commercial banks which create this digital money and they do so through the loan process. When you get a loan from a bank they increase your bank account but don’t lower anyone else’s account and in doing so banks create 97% of the money supply, all with a corresponding debt.

    This is the source of the debt crisis problem and a resolution to the crisis will most likely occur when we control the creation of euros by banks, or we allow Central Banks to create digital euros for their Governments.

    • bonbon

      Sorry, that will not work. Ron Paul believed this wild idea too, unfortunately.

      First Glass-Steagall, a political move, not economic, then Credit (monetized in various ways) for huge projects to rescue our dead physical agro-economy.

      We live in the 21st century, lads, not anymore in fantasy worlds of feudal pre-industrial low-population density legendary past.

      • Hi Bonbon,

        I’m confused. As far as I know Ron Paul is promoting a return to a currency backed by a commodity, namely gold.

        I’m proposing a fiat currency which fluctuates in line with how busy and quiet we get. The difference between my proposal and the current system is that money would be issued debt-free at source and would never be deleted like today’s money is.

        What do you feel won’t work about either proposal?

        Paul

        • bonbon

          Ron Paul did not vote to repeal GS in 1999-2000 and has run a GS theme on his blog. But he will apparently not afaik, endorse the GS bills going through now and recently. GS is a conscious intervention, not economic into a field which Austrian School’ers hold sacrosanct – the “free market”. At the same time Paul does want to put the FED back under control!

          I wonder who is confused now?

        • cooldude

          Hi Paul, I just want to clarify Ron Paul’s proposal for monetary reform. What he has outlined is giving people a choice in which type of money they can use. This means allowing gold and silver to become money again and float in value relative to a county’s paper money. This gives people a choice in which medium they can hold their savings. If a government is constantly debasing their paper currency and causing it to lose purchasing power people could simply switch to the sound money and preserve the value of their money without being hit with taxes on the appreciation of this form of money over the debased paper system. This system is all about choice and by giving people a choice in the type of money they can use you take away the inordinate power the bankers have over us. In his recent interview with Ben Bernanke Ron mentioned he would like to structure this in similar way to the Mexican proposal by Hugo Salinas Price which is now before Congress in Mexico. The details of this bill and how it could be implemented are here
          http://www.plata.com.mx/mplata/articulos/articles.asp

          • Thanks very much Cooldude.
            Sounds like an interesting proposal.

            We’re not dogmatic about our proposal at all by the way. It’s one way we could run the economy better but it brings it’s own issues.

            At the moment we’re trying to highlight how money is created and why there’s less of it during a recession. We’re also trying to show how unique this recession is because we’re finally at the point where mortgages and national debts can’t increase. From there most rational people will automatically start to look at other ways we could create money for the economy.

            Thanks again,
            Paul Ferguson
            Sensible Money

          • bonbon

            Those smart people tried a new dot-com, and apparently are suing Zuckerberg for losses. If its not these, who are “we the smart people”?

            I am sure Zuckerberg would much rather gold now than all that paper likely soon to be worthless.

            I wonder what Wall-Street thinks of this, or Goldman-Sachs/JPM. Have “ye” posed this solution to Monti, Draghi, or Papademos? Or even Cameron?

            what does Ron Paul intend to do about the $70 trillion derivative holdings of JPM alone which are about to unwind?

      • Tony Brogan

        http://www.youtube.com/watch?v=ji_G0MqAqq8

        Don’t see any wild ideas here.

  24. goldbug

    HERE IS AN IDEA….

    AUTOMATIC LIMIT DEFICIT 0.5%…

    -> NOW PUT IT IN CONSTITUTION..

    -> SO WE CANT CHANGE IT

    -> IF WE WANT ??!

    IT MUST BE A “SURE” THING? HA

    NEVERMIND….WE CAN BORROW FROM ESM!

    -> BUT NOT MORE THAN 0.5% DEFICT?

    OOPS!

  25. gizzy

    I agree with most posters here that the only way forward is reducing our debt levels either by a write off or restructure plan from Europe or a euro exit and a new currency that matches our ecoonmic situation.

    But even achieving that where are we as an economy. None of the promised structural reforms have come into place. All we have done is reduced services and increased taxes for the private citizen.

    We are like beggars with a bowl out to multi national corporations and the 12.5% tax rate is so precious it cannot even be discussed while citizens pay effective tax rates way over 50%.

    Our agri food business is talked up but in a recent drive from Dublin to Cork, it struck me that nothing was happening. There was no activity on the land, there were no greenhouses, no small factories for miles of the journey.

    So if we get a debt write off or a devaluation is our only strategy to sit back and hope dell have expansion plans. There is no economic plan. There is no restructuring plan. We need new political parties and politicians (and less of them)who are not afraid to shake up the lethargic permanent government. We need leadership that we have never had in this country.

    • Grey Fox

      You are right right right! gizzy
      The land is lying dormant, few beef herds roaming around! big deal!
      Bring back the Sugar Plants, grow rapeseed, grow wheat and barley, the only reason our farmers have gotten lazy is because they are paid not to grow!
      That’s because we export 95% of our agri produce, and then import what WE NEED!
      Jesus! how stupid is that, another brain wave from the Eurogeniuses.
      We have a temperate climate we can grow anything we want whether in a greenhouse or not!
      Wake up people.
      We have wave power, wind power in abundance, exellent farmland and we are wasting our God given resources because some plonker in Brussels or Berlin says we have to! Time to take it all back I say! Vote NO

      • bonbon

        Wind and waves yes, but power no. Lots of geothermal hot air too in Dublin. The greenie trap layed for the hapless to fall into from the financial debris is well documented. Another financial scheme from the very same who brought this down on everyone.

        Just look at Desertec, or Helios or Solyndra (Morocco, Greece, USA) – all finance. It is so daft in Germany they forgot about the cabling for offshore windy farms!

        Germany and Japan have this year committed a gargantuan error which will have major repercussions. And Brussels is the one pushing E10 bio-fuels, wind turbines. The Euro looks like gold on one side (to keep the Austrian School bedazzled or agitated) but the other side is moldy green! Piling injury on insult to the green island.

        Jonathan Swift put this very nicely in Gulliver at the Academy where the Professor was grinding cucumbers for sunbeams! Seems it is not new, pure alchemy, nothing to do with 21st century agro-industrial economies.

    • bonbon

      There is an economic plan, I beg to differ. Saying that there is none is an FG echo!

      I have documented here repeatedly and will continue to do so. So what if Dublin cannot understand it? What can they except servile shoe duty?

  26. Adam Byrne

    “We need new political parties and politicians (and less of them) who are not afraid to shake up the lethargic permanent government. We need leadership that we have never had in this country.”

    Good luck with that gizzy, you’ll be a long time waiting and then you’ll probably give up and leave.

    • gizzy

      Starting point Adam is to vote no. Shake up the current system because as long as things are rosy in their little bubble nothing will be done. They think abandoning Croke Park for instance is a major change when at this stage the whole system needs to be overhauled.

      Would have thought there were so many burning platforms for change but the lads in control are not feeling the heat.

  27. bonbon

    Watch out! Here is what’s going on while we focus on the admittedly gripping financial meltdown.

    Blair is running Obama’s reelection campaign! The “advisor” who gave us Iraqi wmd mirage, wants the greatest Wall Street hero back in the saddle.

    Obama’s willful provocation of Russia was the test – he passed. A thermonuclear war-monger.

    Blair obviously knows the system is melting.

    http://laroucheirishbrigade.wordpress.com/2012/05/22/tony-blair-running-obamas-campaign-preparing-his-own-comeback/

    • wills

      Bonbon,

      For jaybus sakes will you open eyes bit more and see the crisis was engineered and get with the program!!

      If the system is melting its because the controllers are manipulating it so.

      Its called dialectics.

      • bonbon

        Blair calls it religion, he lectures on globalization theology – no joke. Gives it a nice cover don’t you think?
        So between Marx’s dialectics, and Blair’s religiosity, we have preparations for war.

  28. wills

    Here we go.

    JPM lying through the back teeth.

    The losses are now 6 billion and counting – CNN

    Anyone who blindly accepts the banks and their spiel I have a bridge I wanna sale ya contact me at…..

    http://money.cnn.com/2012/05/18/markets/jpmorgan-loss/index.htm?iid=Lead

  29. bonbon

    Greek Budget Would Have A Surplus Without The Debt Payments

    May 21 (EIRNS)– Figures have come to the surface that nearly 20% of the Greek national budget goes to debt service. As could be expected, the Greek budget would have a surplus if it were not for the debt payments.

    In fact, it is demonstrable that it was the fact that the memorandum wasimplemented, which has led to the collapse of the economy, and had it not been, Greece would have had a surplus. According to a report by Eurobank EFG, in 2011, Greece made EU16,384 million in interest payments, which compares with primary expenditures (not including debt) of EU60,395 million and a revenue collection of EU53,861 million.

    Although in 2011, there was a so-called primary deficit of some EU6 billion, because there was a shortfall in revenues, and these revenues fell because of the collapse of the economy. VAT collapsed because people simply don’t have the money to spend. Expenditures increased because, when companies went bankrupt because of the economic collapse, government transfers to the social security fund had to increase. Social security fund outlays increased because unemployment doubled. There has also been an increase in interest rates.

    The projected picture for 2012 is said to be “encouraging,” with revenues at EU56,159 million euros and primary expenditure at EU57,248 and interest payments at EU13,050 million. This already figures in a further decline in the economy and represents simply looting the population to pay the debt.

  30. bonbon

    London Professor Declares the Failure and Death of the Euro

    May 21 (LPAC) — Dr. Jonathan Eyal, speaking of the euro experimant, writes that “seldom before has there been such a comprehensive failure.” Eyal is a Romanian who was educated at Oxford, taught at Oxford, and now heads the International Security Studies sector at the Royal United Services Institute (RUSI) in London.

    Eyal, in a {Singapore Straits Times} op-ed, writes: “Europe is rapidly approaching one of the most critical decisions in its post-war history. It can either offer an unlimited amount of cash to failed states such as Greece, thereby unleashing high inflation, or it can start ejecting some countries from the euro, and risk the collapse of the continent’s single currency. European leaders still like to pretend that the current crisis is temporary and containable. In fact, the real problem lies with a euro project, which was always misconceived….

    “The ECB’s narrow mandate to ensure just price stability without any reference to problems such as unemployment or economic growth became part of the euro’s problem. So did many of the targets which euro zone governments were expected to meet….

    “But whatever happens, the original objectives of this enterprise already lie in ruins.”

    Eyal covers for his British hosts by ascribing the creation of the euro to Mitterrand and Kohl, with nary a mention of Maggie Thatcher’s deadly threats to Kohl and Germany if they failed to follow orders from London and Paris in giving up Germany’s sovereignty to the euro system.

  31. bonbon

    Have you heard of a Bank Jog? Well it’s on!

    So, You Think You Still Have “Your Money”?

    May 21 (LPAC)–This week opened with reports from CNN and others, that, lo and behold, losses at JP Morgan, once king of the derivatives casino, are not the $2 billion admitted on May 10, but are now running in the $6-8 billion range, and going up daily. Given JP Morgan’s reported $100 billion holdings in casino paper, are you dumb enough to believe {those} figures? Obama’s favorite banker, JP Morgan chief Jamie Dimon refused to say how big the loss may get, when asked at a Deutsche Bank conference this Monday. And other participants in that conference admitted to Bloomberg TV that “if we end up with a catastrophe in Europe in the short turn,” Morgan’s losses are going to soar.

    If? With European leaders and President Obama still grimly determined to escalate the monetarism which blew up the system in the first place, there is no “if.” Money continues to flee from the European banks, and cannot be expected to long remain in what the {Financial Times} dubbed today “a slow motion bank run” (or “bank jog,” in the words of another financial idiot). President Obama and France’s President Hollande joined the chorus demanding European banks be “recapitalized;” that is, printing “unimaginable amounts of money” London is demanding to bail them out.

    Yet another European summit has been called for this Wednesday to deal with the crisis, with no prospective that anymore will come out of this than the G-8 meeting. Hollande says he’s going to propose eurobonds be issued to finance the needed bailouts; Germany’s Deputy Finance Minister Steffen Kampeter reiterated the Germans have no intention of going along.

    So, preparations are underway, no longer quite so behind the scenes, for Greece’s exit from the Euro, in short order. German media (e.g. Focus magazine, primetime television programs) began preparing the German population for this inevitability as the week opened; El-Erian, head of the PIMCO bondholding behemoth, told Bloomberg TV on Monday “its probably inevitable and therefore we should plan for it;”

    London’s Royal United Services figure, Dr. Jonathan Eyal, added his bit to the obituaries being written for the Euro.

    But Morgan’s Dimon said today that “a Greece default is not the problem, Greece leaving the euro is the problem”.

  32. molly

    Some people can see through the government.
    Some people don’t want to see through the government .
    Some people are not affected by the government or so they think.?
    The well has run dry for sum .
    If the current government are using scar tactics to freighted people into voting yes is it not a sad day for the return of the school bully.
    I wonder if any of the current government where school bully’s when they where in school because it seems like they have resurrected the past or has the past come back to haunt.

    • Personally I hate bullies molly but After the 31st we can look forward to certain knuckle draggers being unleashed on a shell shocked and disoriented public. I am waiting for the return of Big Phil Hogan, neanderthal in chief and a pure thug if I ever saw one. Bovver boy in a shirt and tie

      Just as people are stunned and coming to terms with higher taxes, water metering, household charges and whatever added measures to recoup around 13 billion we sit and watch as the government shifts billions to the bankers. Big Phil will appear on RTE news and frighten the children and adults too I suspect

      It will be interesting to see what they are getting upto when nation is obsessed with Euro 2012. The best time to tan houses is when everyone is at the circus. Not that I have ever tanned a house because I was simply not brought up that way. I had good parents

      But I suspect the Irish government need to be watched during the tournament. They are bloody desperate

  33. We don’t have political instability and that is the heart of the matter. How can we have debate when a coalition government and their opponents sing from the same hymn sheet. Who do you believe? You have your beloved state but there is no democracy. Foolish!

    You are correct in stating that austerity has never worked in a western democracy but it looks like the Chicago Boys are trying to prove you wrong. Their warped ideology has never worked anywhere except in brutal dictatorships but that’s besides the point in ‘polite company’ at least. It never happened of course and was a figement of the imaginations of communist ‘terrorists’ and various collaborataros

    It never happened. Keep it shut and remember that. We are talking serious censorship, torture and bodies thrown from helicopters in the dead of night with stomachs ripped open so that the bodies don’t float and are not meant to be found. Your Uncle Miltie was noting more than a psycopath

    If any Irish person is bleating about austerity then they might want to look at reality in Chile and Argentina in the 70s. Get a grip. This is a cakewalk and life in Ireland is a doddle

    Providing you rent and have no debt and always have done. A single person in Ireland on the dole has the best life available anywhere. Tax payers must hate that thought but that’s the reality. Tax payers have to keep up appearances but single people don’t give a shit. Maggie never defeated such people and never could do in a light year

    The media will always claim that celebrity economists are geniuses. What else would you expect from a coprporate controlled media empire? You are all part of an experiment and the muppets who can’t afford a beer on Friday evenings are the lab rats

    Meanwhile those with the big paychecks are looking after number one

    Vote yes if you are a scared unthinking puppet. Vote no if you are pround and the have the fire in your belly to give them a good bloody node. You know they deserve it

  34. Only way out of this whole mess is to laugh. If we are not under the thumb of the Chicago crew then it is someone closer to home

    Just got a message from Pat (can I please please ask a question Pat!! slurrp!) and v v v vinnie

    http://www.independent.ie/world-news/europe/hands-up-if-youre-david-cameron-now-internet-pokes-fun-at-his-chelsea-celebrations-3116219.html?start=10

  35. michaelcoughlan

    Capital Controls.

    Indeed.

    I presume McWilliams you are anticipating what the government is going to do next and I agree with you and have been articulating that citizens have their savings in a mix of gold and sterling.

    Your article however is self-contradictory from the point you have been arguing all along and even within the article itself. You start by making the statement that there is only one way out of the mess and then end by saying more or less that it will only be a short term measure anyway as you feel all hell will break loose.

    I happen to agree with that final observation.

    Is there any chance you may raise your view from the tactical (capital controls) to the strategic (tell the ECB they now own AIB and BOI) and start arguing a point of view consistent with dealing with the cause of the problem rather than dealing with the symptoms?

    I can assure you that the retrospective praise that will go your way if you can build some momentum with Morgan Kelly and his advice of ECB ownership for AIB and BOI from the power brokers of the future will be far more gratifying than any adulation going your way from the few of us here on the website.

    You may even qualify for the most respectful title of patriot rather than smug top of the class economics student still applying leaving cert economics solutions to real world problems.

    • Michael,

      You might have not seen it but I proposed giving the banks to the ECB in Jan 2010 some months before Morgan!

      http://www.davidmcwilliams.ie/2011/01/08/if-i-was-taoiseach-what-i-would-do-to-save-ireland

      Look at point 5 here.

      It can be a bit frustrating to read comments like yours.

      Maybe this article and an entire run of a theatre show called “Outsiders” got lost in all the other stuff.

      Best

      D

      • michaelcoughlan

        You are correct.

        Don’t take me too serious. I just can’t believe that we are all being hoodwinked the way we are. I would gladly walk to the gates of hell with you if someone with the clarity you have brought to all of this would stick your head above the parapet. I just needled you a bit too much there.

        I no longer think that it matters much now about republics or countries etc. We must act to prevent our children from becoming scapegoats. I sincerely mean that. WE MUST act to prevent our children from becoming scapegoats. We are no longer the pope’s children we will become the banks children if we don’t hand BOI and AIB to the ECB. Blathering on on websites like this only panders to our vanity.

  36. StephenKenny

    Just considering the comments by whirmark and others, a couple of things come to mind.

    Firstly, it seems to me that this blog – and it is a blog, not a forum – is about providing enlightening, edifying, and engaging, commentary, on these historic times. Unless I misinterpret things, the blog entries are neither advisory, not are they for tactical or strategic policy. I’m sure that David would be delighted to be consulted, but that is not here.

    Secondly, the comments naturally turn into conversations, and, over months, include broader and broader areas. What most people would deem ‘conspiracy theory’ can become part of the stream of these conversations. Conspiracies, or course, are not necessarily untrue, but they are, by definition, beyond the credulity of the majority. (When they cease to be so, they stop being called conspiracies, and are to be found under either ‘history’ or ‘current affairs’).
    For myself, I’ve always been interested in UFOs, and regularly look up the most recent photographs of ‘sightings’. The fact that in over thirty years I haven’t seen one that I believe is real, and most are just silly, doesn’t stop me in believing in the fundamental mathematics of hundreds of billions of stars, etc. Like Molder – I want to believe.
    The problem with going the conspiracy route, is that people simply stop taking it seriously, and see it as a bunch of basement living, end-of-the-world-is-nigh, chatter. In itself this isn’t bad, but given my first thought, it detracts from an otherwise very positive ability to educate, enlighten, and engage.

    The difficulty that may seem to have is that the fundamental problem haven’t actually changed in five years, and just saying the same thing over and over again can probably get a bit boring, so they stop, and go away. This is a shame as the wider audience comes and goes, dips in, ignores, forgets, and would probably find what we might see as repeats, interesting. I know I repeat myself a great deal; a great deal.

    • Repetitive dialogue on different days and different articles are not always meaning the same . In fact they are very Different .They are in fact new experiences to the changing circumstances and viewpoints.

      Just because it rains every day does not mean everything is the same outside .It could mean a Dam is going to burst SOON or it could mean Growth returns . It depends when it is written and why and the same words even though written have changing perceptions and that is what this blogg/forum is ‘Interesting’.

      Hindsight and Foresight play a big part too so whether you read this now or next year each moment means something different to the same reader.

      As for UFOs just go to west Limerick near Ardagh and you will see flying chalices every night .

      • Yes John,
        Ballylin Fort is the second largest three-ring fort anywhere. Ardagh itself is nestled beneath this wondrous edifice from the top of which the six counties of Munster can be seen.
        It seems to attract a lot of UFO’s as well as the oul crusty Chalice Pokers (as we like to call them)
        I’m just back in from whitling at our community stick heaping. The villagers gather “live” sticks during Bealtaine for our Wicker Man ceremony during Lughnasa.
        This would be when most of our chalices would have been churned out.
        Still it’s not the same as the old days. And a virgin’s hard to find since the old vodka and Red Bull.

        Anyhow I heard what you were saying and Googled the whole “Roswell Chalice” thing – People just aren’t talking?

    • coldblow

      Stephen

      Yes, that’s how I see it too. No harm with a bit of repetition if the basic issues remain the same.

    • cooldude

      Hi Stephen, some interesting points on the whole “conspiracy” thing. As this is an economic forum/blog I will leave the UFO’s well alone. What the economic conspiracy people have to say is actually well documented in facts although most people find this too much trouble to be assed with. Our theory, well documented with facts and I can give you all the links, is that the global monetary system is now controlled by the the central banks of the world, who are ALL private bodies, under the watchful eye of the Bank of International Settlements, which is also a private institution and whose main shareholders are the extraordinarily wealthy banking elite families. This is all well documented and if you want any links to this I would be glad to give them. This is a system of global control of money, as all these central banks prohibit the use of money backed by any commodity. The reason for this is that unbacked paper money is an ideal way to create asset bubbles through excessive liquidity and low interest rates. This creates asset bubbles which sucks in the ordinary Joes, like you and me, and then we have the bust which is used by the ruling elite to bail out bankrupt financial institutions,their cronies, and subsequently asset strip the countries as they go broke. Go to John Perkins website and read about how he did all this twenty years ago. This is not conspiracy this is fact and the sooner people realize what is ACTUALLY going on the better chance we have to stopping all this nonsense. We are being robbed, slowly but surely, of our money through the central banking, and it’s ugly twin sister the fractional reserve banking system, and these people have very unhealthy goals. Do your own research and don’t start with Primetime.

    • This is an honest post and your replies are illuminating. There is noting wrong in questioning things Stephen and lots of people are interested in the subject you raised but it does not really come into the field of economics

      I am surprised that some people have not responded viciously and called you names. I mean how dare you!

  37. Deco

    The EU is bunched.
    America is bunched.
    Japan is bunched.
    Australia, New Zealand, Norway have ten years left and then they will be bunched. (when the easy resources run out).
    Canada is exposed to the US.

    The biggest liar on the block is right next door to us. No more North Sea oil. Financial Services based on Derivatives. That could explode. Maybe Scotland will be able to get out in time, before it all blows apart. Probably not.

    Folks, save yourselves. That’s all I can say.

    The G8 conference resulted in loads of jawboning.

    We were informed last week that 80% of media graduates in Ireland were unable to use MicroSoft Word. And the secondary schools are turning out people who use mobile phone spelling in the exam hall.

    For some reason I feel the need to read a book concerning the Fall of the (Western) Roman Empire. Maybe in the hope of seeing what exactly we are doing wrong.

    Obama thinks the solution is more stimulus plans, and the stimulus stimulates job creation in Mexico and Asia. Keynesianism does not work when you have globalization.

    Spain is going to hit the fan. Belgium is going to hit the fan afterwards. Then France. In my mind France is a bigger mess than Italy. I know this will shock some people, but Italy is a country where a lot of money is squirrelled away in Swiss Francs, in cash, or in real estate Latin America(purchased when it was cheap and backed by better demographics than Itlay itself).

    But the French put their savings in the banking system, and the French banks “invested” it in every disaster going, from Anglo Bonds, to Greek bonds. And now France has elected a well intentioned man who is backed by a party that completely undermined French competitiveness, and which regards this as an acheivement. He will not turn France around. He will not be let. France is a country is massive denial.

    It is not the Euro that is the problem, but the entire model of behaviour and expectation that exists in Europe, and which has existed since about 1970.

    Europe is frozen intellectually from a time before the Oil crisis. The entire intellectual basis of the current public discourse in the West, is bunk. And it has been for about forty years. And coming with it is a massive intellectual dishonesty.

    It will only get corrected in a massive disaster.

    • Another one of your best performances Deco …..sing more hymns from the Cradle of Knowledge

    • Dorothy Jones

      Deco, I think that that an event of magnitude is necessary, it’s ‘on the cards’ anyhows…and maybe a new order…I don’t quite know what…..starts from scratch…..in a sensible way.
      I have never understood why the ‘marode’ books of the Spanish banks re property loans have been standing ‘a la white elephant’ in the room for such a long time, but, this is the case.

      I have absolutely no control over these events.

      Now……I just would like to make a little point, in a very simple and practical manner:

      - Gemany is very good at reaching austerity and paying…..but Germany does not play by the rules itself….

      OK…..so….hypothetically speaking:

      - An invoice to the German Foreign Office may go unpaid for a year and upwards

      In the meantime the amount budgeted for the following falls due, all intended to be honoured with said monies owed from German Foreign Office:

      - Down payment to Revenue for year ahead tax returns
      - Professional Membership fee
      - Mortgage, Food, Electricity….you know…those sort of things

      So………

      these fall due, the debtor is unable to pay as their own monies have not been paid by German Foreign, and debtor must bear the consequences of an event over which they have little control…..

      Caveat Emptor to persons voting on the Tree-aty

    • bonbon

      Europe is frozen intellectually, at least those in power betray all signs of a serious mental disease. Even well-intentioned contrarians show signs of early-onset. It’s called monetarism. This crisis cannot be averted of dealt with from a monetarist POV, and every attempt to do so (LTRO, ESM, “sound money”) accelerates the onrushing disaster. Real intellectual development is blocked at every opportunity.

      Is there an alternative to monetarism, tested in a modern age that clearly identifies the error? Yes !

      However there is a psychopathic irrationality that is likely to lead to very serious trouble, from those in advanced stages.

      Some believe, or take comforts in fondling the thought, that after a major smash, “things will reset” in a “sensible way”. That to me is sheer wishful misdiagnosis. A smash would make life hell for everyone and again the very same game would start over on rubble.

      Much better to sensibly now split the system up as FDR calmly and sensibly did. France, Germany, Italy went a different way then, and this time around Obama and almost all Candidates refuse to act sensibly.

      Note “European” Blair is running Obama’s election!

  38. bonbon

    Syriza leader Tsipras: You Don’t Negotiate with Hell

    Greek Syriza party leader Alexis Tsipras at a press conference in Paris, once again reiterated that Greece’s rejection of the brutal memorandum is non-negotiable, the issue is the debt crisis, and that is a European wide crisis.

    http://laroucheirishbrigade.wordpress.com/2012/05/22/syriza-leader-tsipas-you-dont-negotiate-with-hell/

    Well worth reading what Tsipras said in full. He is in Berlin to meet the SPD and Die Linke.

  39. gizzy

    Now Enad is adamant no Finacial Transaction Tax because it would be bad for this country.

    Can he say for who in this country. Can he quantify in euros or jobs how it would be bad. It’s enough now just to say it would be bad.

    So now we bail ouy Banks, we suffer years of austerity to do so and it would be bad now for us to tax them. Enda you muppet.

    • bonbon

      Dublin has been playing offshore EU for the City. Enda my be confused thinking that City is the capital.

      Seriously the transaction tax, Tobin tax, from at least 1992, is to too little too late. Like the Dodd-Frank (Volcker Rule) which no-one can figure out how to implement anyway, the game will continue.

      Time for Glass-Steagall, no more distractions!

  40. Another leaflet came through the door. The woman smiled, handed me her leaflet and said ‘i am campaigning for a yes vote.’ so I thanked her and read the leaflet but found it unconvincing because it sounded like ‘a lot done, a lot more to do’ (yes as if) and ‘vote yes for jobs.’ She was about 50, had a nice smile and believed in what she was doing. She knew she was on a hard sell and wanted to leave fast

    After reading the leaflet I wanted to lie down in my old bedroom and listen to the Rats and Sham 69. Whenever friends call round I play these songs and they want to save the names of the groups in their phones and listen to them in the car. The music sounds fresh to them and it grips them by the base chakra as it bloody well should do because it appeals to the anger and rage within

    I wondered maybe I have still to grow up and wondered if I was a just sham and maybe a rat to boot. After about a minute of such hell I snapped out of it and remembered what it felt like to be around in 1978

    I played the lads two bands that they are now have in their mp3 players. This has everything to do with economics because life and music is always about economics if you think about it. They are the songs old timers listened to when they were trying to make sense of the world and drown their reality in a few beers on a hot afternoon like today

    None of us could be arsed jetting off to enlighten the world and we sat back and watched strange looking trails in the sky. We laughed in the sun while we drank beer and felt our faces getting red with the sun. It felt like being on the dole in 1983 and that we were human again

    The most shocking song was from one of our own. It ought to send shivers up the spines of the young idealogues who think they have it all sussed. Their opinions are worth jack shit just like the opinions of their idiotic parents. This is why future politicians will be a nightmare

    http://www.youtube.com/watch?v=9g5vmfwphQQ

    The second one should make any of the Irish brothers feel proud of knowing this island produced it’s best and most underrated band a long long time before U2 were even invented

    http://www.youtube.com/watch?v=oYQ_MBFmpi8&ob=av2n

    Good luck. Watch the head and watch the pennies.

  41. Summer is here and it’s time for rambling boys of pleasure to ramble again. Up and down the great west coast where Cuchulainn’s ghost will make you forget those urban myths and fears

    Turquoise waters where silver trout roar among flashing silver sands that make the eyes sore. The finest place on irth says I and my Sligo granny who was born in 98 but expired in 88 told me so in 73

    Its early. The sun is coming up and it makes you want to go shore fishing for sea trout because it a fine May morning

    The rivers are birling and the Hawthorn bloom makes the heart dance with the liquorice scents it sends wafting through sad open windows. The windows are only sad because they appear sad. The tales of love behind such windows is what makes us. Through such windows Irish people lived and loved and remain so

    There is a fairytale waiting for hearts that can see. In beaten down city youths it’s hard to dream but dream we will. The west was my dream and it was the photo of the Donegal cottage on the granny’s wall that made the heart dream. My dear old Ireland of forty years and another forty if the main man serves. Helplessly and incurably Irish

    Peculiar, strange and idiosyncratic. Just like the granny. Irish you see. We are good because we dream and don’t have a bad bone in our bodies. The ordinary man is a true man and maybe a fool but being a true man is a virtue. We are not hall cut out to be hin hin hintellectuals sir.

    Wakening in the dawn in a rambling wrecked cottage on the west coast is the test of a true Irishman. If you feel strange when west of the Shannon River then you have never lived and you should stick to being English or semi English like the fine people of manky Dublin. For that is the land of dreams, desire and self realisation. You can’t hack the west coast if you are not prepared for painful home truths

    This is the difference between people who love life and those who are scared and can’t smell the roses

    It is the other life. The life that is far away from the the grown up life of responsibility and intellectual combat. The space we drift into when we are relaxed and in the state of mind where it all becomes so clear

    • If you cant hack life and have nothing but contempt then have a butchers at this and grow a pair. Time to reload the mp3 player with some proper music and feel the blood flowing again

      The alternative is slow death by a thousand silent cuts

      Music comes from the streets and economics affects people on the streets and in the pubs of the type of concrete shit holes that spawned the nightmare that was Begbie

      It’s more than thirty years ago. We are drowning in such an ocean of spin and bullshit that we need goggles and snorkels to even breathe

      http://www.youtube.com/watch?v=XOmN3jXL5OU

  42. I got a girl there waiting there for me
    Well at least she said she’d be
    I got a home and a big warm bed
    And a feather pillow for my head
    Goin’ back to Houston, Houston, Houston

  43. Capital Controls are anathema to uncle Milties vision. No let’s bin that suggestion tut tut. It is not in the manual and is a surely a clear sign of mental illness and proof that ‘the patient’ is not responding and in need of even more shock therapy (and all at once) just to make sure he is jolted into getting his mind right and being brought to his senses. Kubark mark 2 .. Iraq and Afghanistan

    Dr Cameron obviously did not make his position clear enough and it shows that his disciples have a lot to learn on the basics of media manipulation, persuasion and attracting some love their way. After all Cammy was a sound guy but just misunderstood right?. His heart was in the right place according to some accounts. That such an evil human being was handed so much power is scary beyond our wildest nightmares and in all seriousness we know that such monsters are a plenty in Ireland even today

    Assuming Miltie and Cammy were sane we would be talking about taking a flame thrower to life as we know it. All controls would be abolished and government would be decimated by tomorrow morning. Corporations would run rampant over us all like they do now but only worse. Wars are now private affairs run for profit. Murder incorporated

    Social welfare would cease to exist and would be privatised just like rackets such as private healthcare in Ireland. People can’t afford to keep these professional spongers and welfare scroungers of the highest order yet they like to make us feel like shit and call us useless. It is audacious when you see the billions flowing out of the country yet people are blindly listening to intellectual giants such as ‘the dragons’ and the awesome geniuses we laugh at on The Apprentice. Tom and Jerry is more educational

    The lunatics have been kept in check thanks to Keynesian philosophies and the alternative would literally result in a capitalist blood bath. Stupid little boys who think they are god because they got invited to study at the economics dept of a rabid right wing uni. In my opinion they are nutcases and completely dangerous individuals who need reigning in fast before they destroy us all

    Then again such a vision would appeal to many of the cold hearted monsters out there who thankfully are not allowed to see their psychotic visions come true

    That is why we need to hold on to the democratic freedoms we have and not easily surrender them to some faceless centralised bureaucracy

    But of course we will. Fear is an incredible motivator. Shankly, Stein and Busby knew this and used it to devastating effect

    Meanwhile the Famous Fighting Ones have acquired 40,000 tickets to Euro 2012. For such a poor country pleading poverty this beggars belief. Maybe someone can explain where all the money is appearing from. It looks like a sham to be honest

    The silly season is starting. The propaganda is bigging up the property market in the hopes that people will let hope override common sense and Inda is riding high on the polls. Apparently he is so famous that he can’t even attend his own parties or appear on tv

    Sure it’s a great wee country and always great for a laugh

  44. dvfischer

    Why doesn’t each country simply start issuing its own currency again? Don’t leave the Euro, just use two currencies in the interim.

    After all, if any country leaves the Euro, the physical coins and bank notes will still be around and at least some merchants, if not all, will still accept them. Under any scenario, other than total collapse, there will be a two currency situation. If the inevitable collapse of the Euro is certain, why not preempt the crisis by each country issuing their own currency again and mandating all government transactions be in that currency?

    Yes, it would be confusing, but is that worse than the uncertainty which now exists? What would happen is the Euro will become the defacto intra-bank transfer currency and the local economy will subsist on the local fiat currency.

    The only real way out of this mess is debt forgiveness. The problem is, and always has been, the ancient evil of usury. This is the unavoidable end of arrogance; of thinking we can control economic forces. The inevitable end of permitting the charging of interest is a national debt crisis and we (the whole world) have fallen into this ancient trap. We swallowed the hook, line and sinker. Add fractional banking to the mix and it is a wonder we have lasted this long. The old answer was a year of release, a year of jubilee. If this issue is not resolved, more than banks will fall. Governments will fall as well and maybe not just in Europe.

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