June 14, 2012

Closer ties with Britain offer us a way out of our euro nightmare

Posted in Irish Independent · 192 comments ·
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We have a better chance of winning our group in Poland than the euro has of surviving in its present form.

The currency may survive but not as it is at the moment. The total failure of the huge Spanish bank bailout changes the game because it signals the end of the easy options for Germany which must face up to how much it will cost to hold the euro together.

It is important to appreciate that this is not a fire drill. You know the way we Irish are with fire alarms? We pretend that someone must be messing about as the alarm couldn’t possibly suggest that there is anything to worry about, could it? We don’t have to evacuate the building because it must be just a joke, surely?

This is not a joke. It is deadly serious. According to Reuters yesterday, European finance officials are discussing limiting ATM withdrawals in Greece as well as introducing capital controls in the event that the Greeks vote this weekend for parties that want to tear up the bailout agreements.

We now have Spanish and Italian bond yields soaring, despite the €100bn bailout for the Spanish banks.

Remember the Spanish PM Mariano Rajoy, as recently as May 28, insisting: “There will be no Spanish banking rescue.” And what about the European Banking Authority stress tests last year which prompted Spain’s central bank governor to claim that there was no need to inject further capital into Spanish banks? It was all bogus.

No one believes a word that comes out of EU officialdom because they are making it up on the hoof. There is no plan and alarm bells are ringing all over the place and they claim there is no exit.

Up to now, the EU’s strategy has been described ad nauseam as “kicking the can down the road”. The strategy was to try to patch things together and hope that something would turn up. Well this week’s events in Spain reveal that the policy is less akin to kicking a can down the road and more like rolling a snowball down a hill. The more you roll, the more the snowball builds momentum, getting bigger and bigger, heavier and heavier until what was a tiny snowball builds and builds into something enormous and out of control ready to smash into something.

The key is the decision of Germany. Is it about to put itself in a huge hole for the rest of the eurozone? Could Merkel sell a deal to the German people which risks infusions of German cash for generations to countries such as Spain, Ireland and Italy, not to mention Greece?

If Germany decides to pull the plug, where does it leave us? Would we go it on our own? Or would we join a weaker euro bloc with Spain and Italy? Or would we opt for a new punt nestling in the shadow of sterling?

If you believe that the euro is 100pc secure, then you should stop reading now. However, if you think that there is a chance that the euro will, under the pressure of defaults and economic stagnation of the periphery, have to be changed, then stay with us.

The epicentre of the crisis is Germany, not the periphery, because Germany is the only country that will or can save the project. It is easy to say that Germany has profited from the euro and therefore it should pay the price now in transfers to the south and the west. But let’s think about things from a German point of view.

They will have heard a former Portuguese communist, Manuel Barroso, talk of the immediate need for a banking union. But as one German diplomat, quoted anonymously, said yesterday: “How can we have a banking or fiscal union with France which this week decided to bring its retirement age down to 60, when we decided to increase ours to 67?”

The Bundesbank was out of the blocks early on the banking union idea, dismissing it as not workable. Germany wants hard money not some fungible commodity that can be printed when the situation demands it.

Germany is a nation of savers and therefore they want to ensure that the currency they are using is a safe place to store their wealth. For them, a soft euro, made softer by printing money to bail out peripheral debtors, is not an option. They wanted the rest of Europe to be more German and thought the single currency would enforce discipline. But who ever suggested that the way to enforce financial discipline was to give those you are trying to discipline the pin number of your ATM? This is what Germany did when it joined the euro and the Spanish, Greeks, Italians and Irish withdrew as much cash as they could. The euro didn’t discipline the rest of Europe; it gave us all a free lunch — which now we can’t pay for.

The only real way to protect German savings is for them to pull up the drawbridge around a hard euro of Germany, Benelux, Finland, Austria and France.

Otherwise, the eurozone will end up like the Italian state where the prosperous north of Italy infuses cash to the Mezzogiorno indefinitely. Germany already operates such transfers from west to east Germany but, like the Italian example, the Germans are the same nation. Europeans are not.

If the Germans move to protect themselves and decide to put further European integration off for another generation because the place isn’t ready for it, what then for Ireland?

It is clear we would not be in their Premiership but would be relegated to the second division with Spain and Italy. Then do we join a currency union with the Mediterranean or do we choose to revert to the punt but with the understanding that we shadow sterling, our natural ally, our main trading partner and home to the majority of our emigrants?

Just to give you an idea of how inappropriate a link with the soft euro would be over and above a link with Britain, consider this: 51.2pc of all our imports from the EU come from Britain, excluding Northern Ireland, as opposed to 2.9pc and 2.4pc for Italy and Spain.

Initially we wouldn’t explicitly link to sterling, as this would only give speculators a target. There would be no need to explicitly tie the punt to sterling but it could behave more like the Swedish krona or Danish krona. Indeed, in the future, closer financial links with Britain and the three floating currencies of Norway, Sweden and Denmark, might make more sense than another supposedly irrevocable monetary union with Italy and Spain.

The crisis in Europe is not a drill. It is real. We would better be drawing up plan B pronto. By 2016, 100 years after the Rising, will we be closer to Britain than any of us expected?

David McWilliams will be among the speakers at the Dalkey Book Festival this weekend. www.dalkeybookfestival.org


  1. Deco

    Britain’s finances post New Labour/Phony tony/Flash Gordon are a disaster. The only way out will be to print Sterling. The ConDem coalition have been extremely reticent at fixing Britain’s financial problems. And Milliband is likely to beat them both in the next general election.

    In other words, Britain’s future will be lousy. Because Britain does not have a plan for fixing the future. If anything Britain is stuck with a plan for messing up the future, from which it simply cannot escapte. In fact this is what has been observed for most of British history since the 1950s.

    We might be getting ourselves into trouble. We need to chart our own course, and behave our way into a stronger and more sustainable financial position.

    We do need better ties Britain. But we also need a better understading of what sacrifices are necessary to produce financial sustainability in the long term.

    The Eurozone is now heading to become as David indicates, a greater Italy. Not a great idea in the long term. Even to the point of having absurd rules, and regulations about everything that inhibit economic efficiency.

    • C21living

      +1

      We were supposed to be becoming more European as a destiny for our people.

      Britain is still hostage to a post-imperial mindset, most comfortable when opposing any kind of ‘European destiny’ for the culture or economy of Britain.

      We are in a bind.

      Britain is preoccupied with disentangling its ties with Europe. Indeed, a referendum in the morning on EU membership might take Britain out of the EU altogether.

      Our multinational exporters will be very frustated with this talk of leaving the EZ. It may lead to their relocating to Slovakia or Slovenia or Estonia, which are in the EZ.

      Pointing out our trade figures with Britain is not enough, if multinational pharmaceutical manufacturers depart our shores, we will be Greece with rain.

      • happyboy

        David Cameron is as pro european as they come. He is refusing to hold a euro referendum

        FDI is not connected with being in the eurozone. Switzerland and Britain get massive amounts of FDI

        In the 1990′s American FDI flooded into Ireland, when we were not in the eurozone

        • taylorcr

          You are exactly right there happyboy, I get irritated when people confuse our membership of the euro with our membership of the EU, a lot of our FDI came in because of our various benefits (language, education & tax) and our being part of the EU. None of it came because we are part of the euro, in fact a lot of the manufacturing left because of the euro being too strong and went to non-euro EU countries (Dell, Proctor&gamble, ABB etc etc).

          We never needed the euro and should have never been members, its been a disaster and the quicker we realise it and leave it the better.

    • Nonsense. London will rule the roost and call the shots like it always has done

      You seriously underestinate the power of the powers that be

    • happyboy

      1. “Spain is not Greece.” (Elena Salgado, Spanish Finance minister, Feb. 2010.)
      2. “Portugal is not Greece.” (The Economist, 22nd April 2010.)
      3. “Ireland is not in ‘Greek territory.’” (Irish Finance Minister Brian Lenihan.)
      4. “Greece is not Ireland.” (George Papaconstantinou, Greek Finance minister, 8th November, 2010.)
      5. “Spain is neither Ireland nor Portugal.” (Elena Salgado, Spanish Finance minister, 16 November 2010.)
      6. “Neither Spain nor Portugal is Ireland.” (Angel Gurria, Secretary-general OECD, 18th November, 2010.)
      7. “Spain is not Uganda” (Spanish PM, Rajoy to Luis de Guindos, economy minister… last weekend.)
      8. “Italy is not Spain” (Ed Parker, Fitch MD, 12 June 2012.)
      9. “Ireland is not Iceland” (Irish Prime Minister, Brian Cowan)

  2. Charlemagne Empire

    It took a Frank in 768 to rule the EU then and Hollande will be his successor now .It is important to realise the area of that empire then covered exactly the same first division championship as in the caption of this article to include France & Germany .

    Charlemagne then executed his orders by a systematic logistic known as ‘missi dominici ‘ , or agents to investigate as we have today in the troika .He then issued royal decrees of observance to his people known as ‘ capitutaires ‘ now known today as ‘austerity measures ‘ .

    The Saxons , the Spanish and the Italians he fought with in bloodied battles and never embraced them or did they of his kingdom.Some things never change .

    • Some lands were never conquered even by the Roman empire.
      Like Scotland. Too wild and untamed. Even the Viking was slaughtered and sent fleeing for his mammy

      NO fucking surrender

      • bonbon

        Actually the Irish Celts overran the Picts. I think neither Rome of the vikings could handle the two of them – the constant bickering would make roadkill out of any invader!

        • Tony Brogan

          Argyle–Kingdom of the Gaels. Scots of Ireland, the sons of Scota (the wife of Milesius who sons invaded Ireland)gave the name to the Pictish north of britain from the Irish Monks in the 4-7th centuries.The name Scot was then lost from Ireland.
          (From Memory of past readings!!!)

  3. Philip

    David, the question is…do we have a better plan than what you have suggested?

    England/ UK is a land in decline we like to say. It is just an economy which is a bank. But then again, it does have the BBC and it locks up white collar criminals and fires goverment representatives regularly.

    The consequences of dumping the Euro will be witnessed by all in the coming weeks as Greece tries to sort itself out. As I read the papers over that last few months, Greece was racially abused by the rest of Europe from its biggest institutions. Little respect was shown to that nation. We better hope to God that the Greeks sort this out in a civilised manner – because anyone thinking that “We” are different is going to witness the same crap – and it gets colder here in Winter.

    It is serious.

  4. mick downey

    Its obvious….only oil producers, cheap household item producers, electrical goods and car manufacturers are doing well….Chinas been producing merchandise so cheaply that the rest of the world cant compete….the german car industry is propping up the whole of Europe…its time to get back into cheap manufacturing and stop importing from China. They have agreements with the US and have been subsidising them for a while now…but thats not much use to the EU. Are the Germas the only people in the EU capable of producing a car? For all the talk out of Angela, is she willing to break up the domestic auto industry and disperse the plants around the various ends of Europe so everyone can get a slice of the pie like they promised us before the last referendum…or WTF were they talking about, cos I dont see any signs of the investment they were talking about. The concepts of debt/cash/credit are all manmade…HOW did humanity survive before we manufactured these things? With our own dumbass ‘politicians’ unable to wipe their own arses were as good as f**ked when they cant see these things and wouldnt know how to act on them even if they could. Shur they cant pick their own noses without an adviser..and even at that theyd have to get clearance from Angela before having a good root around.

  5. mediator

    It seems like we’re nearing endgame after 4+years of distress. Most of us don’t have 100+k to worry about.
    Can I ask the regular contributors – what tangible preparations are you making to protect yourselves and families over the next 6 months assuming some form of financial chaos?

    • mick downey

      I really don’t think we’re nearing endgame at all yet,they’re only getting going…I first heard endagame mentioned 2 yrs ago. The E.U. haven’t made their point yet…nor have we because our reps. haven’t the back bone to make choices and follow them through..the E.U. will drip feed us misery for a few years and then they’ll hit the rest of us with it…..referendum for a Federal Europe.

    • Good question mediator,
      I’m buying silver coins, as much as possible via celticgold…very good to deal with and the cheapest out there. Gold is way too expensive for me now.

      Also I’ve set a vegetable patch in my garden, encouraged my parents to do so also and they have with gusto.

      I try and keep a lot of non-perishable foods in the house too, pastas, rics, tinned beans, pasta sauces etc….just in case, it should keep me going for a month at least.

      I only buy now what I need and in bulk.

      I try to keep 500€ in cash as well.

      That’s it, I pray it doesn’t come to that but it is a possibility now.

    • Cassandra

      I’ve seen the ‘how do i protect myself’ question asked a lot of times over numerous blogs. However, there is typically very little response given. This seems odd considering the extensive debate and discussion that goes on and has been going on. What is the reason? I think it is very simple. People do not know what to do as no one knows what can happen. Euro in trouble – Greece in trouble – Greece is broke – Greece to leave the Euro and create their own currency, but when and how long will it take? – possible contagion to other PIIS, but who first? will it be managed? will it be sudden? – PIIS in trouble – PIIS go broke, but which one? biggest? smallest? – EU cant finance, will IMF et al step in? will they allow an orderly segregation between north and south – PIIS need to do something unilaterally, but how and when? over the weekend? extend bank holidays? – Ireland leaves Euro to create own currency – Irish Capital Controls required to stop bank run. What controls though? will people be able to draw a fixed amount for normal day to day expense? Does Irish Government stop clearing system? How do you set controls on debit and credit cards? – What happens to Euro and non Euro balances in Irish banks? Do the Euro’s become punts. What happens to Irish banks do they get nationalised as they go bust? is there a moratorium then on withdrawing funds? For how long? Can Irish Government honour the deposit gaurantee? If so when will they deliver? What happens to Euro and non Euro balances in non Irish banks? There are so many permutations that even the most proactive personal finance manager will still likely be exposed along the way somewhere. The only sure thing will be that Governments will change the rules to suit themselves when chaos begins, which will endanger all strategies to protect savings.

    • joe hack

      Please don’t engage the panic button it can create panic itself

      • breltub

        He who panics first panics best!

        • joe hack

          ha ha! Do you know any good recipes for pickling?

          • If you ever go to Glasgow then spend time around the Uni in the west end and you can visit the museumn in the anatomy department of Glasgow University. It’s free like all Glasgow museums and is an experience you will never forget. You need Taggart’s sense of humour mind you

            Across the road is a replica of Charles Rennies Mackintosh’s house complete with amazing interior design work that takes your breath away

            All types of pickled body parts in glass jars including the head of a ten year old girl who died 100 years ago are to be admired in the museum. Blue eyes wide open she looks like she is alive and calling for help. After that you can visit the wonderful ornate tea rooms and partake in a cup of Earl Gray and perhaps a fruit scone if you are not feeling too queezy

            Failing that go to Edinburgh and learn abour Burke and Hare. I have to warn you. It’s macabre stuff and not for the faint hearted

            Still Burke and Hare were working on the theory of supply and demand. It could be said that they made a vital contribution to medical discovery. This was the ultimate in free enterprise

            Uncle Miltie would have loved the simplicity of it all

          • Adam Byrne

            Haven’t been to Scotland since I was a kid Pauldiv but I definitely check out those fascinating suggestions next time I do go.

          • Then there is the transport museum and the Kelvin Grove art galleries. On Byres Road there is an old Italian cafe that sells home made pizza and the decor is authenic 1930s art deco

            After that little lot I would recommend taking the train from Glasgow to Fort William. The west highland is one of the top 5 scenic rail journeys in the world Adam. I did it several times when I was a kid and I still remember it. This is Braveheart country

            From Fort William you can take a stream train up to Mallaig and then over to the Isle of Sky. West is best I think. Edinburgh is lovely but it’s a bit touristy

            It’s a pity Ireland got rid of the railways on the western seaboard. Imagine the tourist income if people could travel by rail from Shannon all the way to Letterkenny

            Pressure from the roads lobby I guess

          • Adam Byrne

            Been to the transport museum numerous times in Glasgow. We always stayed in Paisley and it may have been near there if memory serves me. I still have a grand old 1000 piece jigsaw of a train that I bought there.

          • Really?

            jisgaws were simple and great fun

    • transitionman

      You are mentally taking the first step by asking the question. You now go on a journey of learning which may take you to facing the future that 99% of the population cannot contemplate. You will come to understand that what you have now will not be there in the future. Enjoy the summer take a holiday spend time with friends and family spend some money. Make sure you have your cash to hand not in banks. If you are mentally prepared you may be able to help some of the headless chickens in the months to come. There is a mountain of information online on preparation. I do not see one mega market move bringing the house down. Collapse is now in slow motion before your eyes. We live in interesting times.

    • Absolutely none. There is no protection.

    • Tony Brogan

      Gold, silver and land, a little of each will see you through

  6. Adam Byrne

    Die “Stunde der Abrechnung” ist gekommen.

    • Tull McAdoo

      The “day of reckoning” has indeed arrived, but for who, and there in lies the nub of the question Master Byrne….Sean Fitz is out in Poland for the match, staying in a 550Euro a night hotel(ala the “bull” Donoghue)while you my friend are sitting in lucan with your flat screen TV……

      • Adam Byrne

        Don’t even have a flat screen Tull! The 20 year old 16″ Sony still works – why should I need to replace it just to keep up with the ignorant neighbours?

        • Adam Byrne

          And I’d rather be in Lucan than watching utter shite ‘football’ from Ireland tonight in Gdansk. At least we have the Spanish artistry to look forward to. Come on Spain!

          • joe hack

            Excellent Adam,

            It won’t be long now till it climaxes, I going to get the box-set when it come out?

            “Spain’s 10-year bond yield today hit a euro lifetime high of 7 per cent – a level above which Greece, Ireland and Portugal were driven to seek international bailouts – despite last weekend’s euro zone agreement to lend Madrid up to €100 billion ($125 billion) to recapitalise it ailing banks.”

          • Dorothy Jones

            Watching the footie here in northern Spain in a Galician bar……:) Esp2 Irl0….great atmosphere here and planty of good-natured teasing by my Spanish colleagues :)

          • Dorothy Jones

            ….make that 3..0

          • Careful Adam. After saying this you might with you were Lord Lucan

          • Dorothy Jones

            Did you fall into the VAT…..it was 4 0

            Good Morning to that part of the day you rise next to .

        • I liked that reply. Quite right to keep the old tv.
          I’ve got a 1985 Sony VCR and would never part with it.
          A 16 inch screen is more than enough

      • Lol. I would the wager the ‘story’ about ©550 hotel rooms is nonsense

        It would not surprise me if the man was nowhere near Euro 2012

        Does it not worry you that one story in the tabloid sewer has the capacity to render a nation devoid of it’s common sense?

        Get a grip lads and watch the ball

  7. mick downey

    A friend of mine who by his own admssion has even less of a clue about finance than I do said the same…the best thing we could do is tie with sterling…..theyre our biggest customer and most likely always will be..they never had any intention of abandoning the pound and it was extremely shortsighted of us in our innocence to buy into the euro knowing this. For all the free education in the country people still havent a notion how to vote about things, blindly being BS’d by politicians into the wrong move time and again..then complaining about the politicians, then the politicians not having the nuts to turn around and admit..oops, wrong move better fix this. The writing was on the wall when Bertie retired so early….going on the lam like that should’ve been enough of a sign he’d gotten it completely wrong and was bailing out before the storm hit ‘cos he knew he couldn’t fix this mess.

  8. John Q. Public

    maybe we should never have left the empire and stayed part of Britain!

    • coldblow

      I think the threat of conscription during WW1 helps to account for the timing.

      • bonbon

        Not the conscription, the cannon fodder. It became clear we were a consumable. That lesson others are learning again, right now.

        • 65,000 sent to die in a single day

          The minds who created those horrors would do the same today

          Just to prove a point

          Only one problem. They are well and truly reigned in. Haw haw

          • bonbon

            Who’s well and truly reigned in?

          • The European political elites.
            Just that they have found banks and not tanks to make us bend to their point of view

          • bonbon

            Bankrupt banks are as useful as rusty tanks.

            The British Empire is reined in otherwise – if the old trick of “the Somme” is tried again, Putin has made it perfectly clear thermonuclear weapons will be used. That is end-game for Empire. Our mastery of fire has finally caught up with and surpassed this ancient “tradition”.

  9. mick downey

    @John Q Public.. Well were on the way gently into the bundestag as it is…what odds does it make? At least Cromwell came over and said straight up…to hell or to Connacht..the current crowd arent even offering that much choice.

    • Tull McAdoo

      That’s because they have the Bollox mortgaged out of Connaught for the foreseeable future…..Having said that I’m not sure if the Aran islands are in negative equity at the moment…….Maybe John Allen can enlighten us, given he fondness for Dun Aenghus and the western seaboard in general……

      • mick downey

        Connacht mortgaged to the bollox??? There was never a pot to piss in here to begin with…even cromwell knew that…any bank financing the place deserves to be in the shit.

    • Oor Oliver was a truly great man. Up Cromwell and up the Blueshirts

      • Professionally executed fine art pencil sketchings of Oliver’s heroic army in glorious battle action against a verminous, hated and terrorist enemy

        You almost sense the clatter of superior ironwork and cutting edge sterling craftsmanship on the rotting wooden bog trotter shields. Hip hip and hurray for St George, England and the Dragon. Arise sirs and peasants for the Queen

        A must have collectors item for any self respecting self harming masocitsic catholic psycopath

        A real work of art to pass down through the generations in tastefull oakwood frames designed to age gracefully with fine English character and sentimal value beyond financial mere worth

        Priceless and safer than gold. Your great great grandchildren will cherish your vision and want to follow in the glorious and hallowed footsteps of those fine Englishmen who marched before

        100% Guarantee or your money back (after 200 years)

        Don’t miss out. Call today for a once in a lifetime hopportunity to own a unique piece of hart!

        Call now on …

        • O yeah. Talking about Oliver

          How about a wee song to remind us old guys about happier carefree times when we used to screw garden sheds and make off with home made beer and the new year cairy oot. We were just getting on our bikes

          Elvis Costello, Olivers Army, 1979

          http://www.youtube.com/watch?v=uVwrrkt22Ag

          • Only poofs took economics in third and fourth year if I remember. I’m not implying anything. I know that there are bright people who study economics. I just thought I’d mention it

            ‘Real blokes’ took Maths, Physics, Metalwork and Techie Drawing. This took more effort. Not that it got us far. We were just winging it and hoping for a good job down the shipyards. We grew up in a different age. The change has been unimaginable thanks to technology and the amazing stupidity of the masses. Common sense died out in 1983

            No shipyards now. No electronics. No steel no nowt. Lochaber no more. Clydebank no more. Thatcher and her vandals no more

            It’s like it was all a figment of the imagination. All gone and replaced with concrete structures bearing pimpish business slogan bought with a Laser card from a tatty 5 buck web shop

            A clean slate. Wiped and primed just and uncle Miltie imagined. The old fucker is probably still laughing and the only way to bury for ever would be dig down and see him through with a silver blade

            I am coming to the colclusion that economists are some of the most dangerous people on the planet. Head fucks and game players. There is no evidence whatsoever that allows us to measure their performance

            It’s time to take back our power and keep them on a tight leash

            They may be ones with PHDs and Master Degrees but we all know that means jack shit when the cupboard is empty

            I don’t know why I even bother my arse. It’s so futile that even a fool can see it. Game over

    • Yeah say what you will about him but at least we knew where we stood with Ollie. He was a gas man

      At least then there was land worth fighting for. What is there now? Fuck all!

  10. Napoleon

    There is a beach place near Cannes known as Mandelieu La Napoule and is the arrival place of Napoleon from nearby Corsica and where he gathered all his army of men to conquer Europe by the sword.

    He marched with his thousands through the deep mountain gorges / ravines to avoid other settlements from local attacks so that he would reach Paris to conquer and make it his seat of throne .

    What is interesting is the ancient settlements of many villages perched atop of very high rock tops almost in accessible that lie along the mountain paths and are still habitable today ans almost untouched since those dangerous times .These people have seen many an army pass and pass by and uninterested in their settlement . They look Tibetan in structure and almost falling off the rock tops . They are amazing to watch and all have their own church .Their existence is a rare secret and a knowledge we need more to know so as to learn for our own welfare.

    Nearby in the same beach front is a castle of Henry Clew who in another time led the French Armada along the west coast of Ireland and changed the course of history and thus the name Clew Bay in Mayo .

    • mick downey

      Nice history lesson there John. You obviously know your european history. Are you spotting many similarities or history repeating itself between days gone by and some of what’s going on nowadays? Care to point out a few things to us..? Napoleon tried to take over Europe…he failed…the Germans tried twice..and failed…will they fail a third time now theyre trying such a different method?

      • Many things can be read into from history and knowledge of the past as they often repeat themselves again . Essentially , I am saying we are an Atlantic Economy and as such we can never become a continental one without a full Political Takeover which is unlikely to happen .Nevertheless the higher public servants still believe it will to save their pensions and extraordinary pay levels.

        We should be like Iceland but we cannot because we were too stupid to give all our natural resources to foreign entities . Iceland did not neither did Norway .

        So what we should be doing as is done in Iceland cannot happen either so we continue to remain servitude to England as a malcontent .

        We have set up ourselves as more commoners than the Scots have . They see their image as Chieftains of various clans in a democracy . We have a low esteem of what we really want and and a poor aspiration to any dream and absolutely no confidence in any Legal System .

        Thus my call for a new revived Brehon Law where a proper Economy can rebuild again .

        • Adam Byrne

          The key words are in your second paragraph John –

          “too stupid”.

          • coldblow

            Hi Adam

            I don’t agree it’s a question of stupidity although it might appear that way. I’d be more persuaded by Crotty’s view that under colonialization the country was subject to inappropriate institutions (most notably private property in land) which skewed the whole future development of the country (or as he called it, “undevelopment”), like other postcolonial nations. Mind you, it does look pretty stupid sometimes.

          • Adam Byrne

            Yes, there is more to it than just stupidity coldblow, you are right. The whole structure of our society needs to be overhauled to enable a better future but I doubt it will happen in our lifetimes. It’s damn frustrating, I tell you that much but at least I am free to do what I want. I am like RR6 – waiting in the long grass to see what happens. I probably won’t hang around here (in this country) much longer. Not worth it.

    • Minard’s Infographic on Napoleans Long March to the darkness

      A masterpiece for anyone studying information graphics

      http://en.wikipedia.org/wiki/File:Minard.png

  11. Scruffy

    I don’t think David is suggesting a currency union with the UK. Just a currency that floats and would likely act in a similar way to our main trading partner. We cannot get away from the fact that Ireland is an Anglo/American economy. Dublin is as much Bristol as it is Boston.
    A floating exchange rate and monetary policy set by the Irish Central Bank, fiscal policy set by an Irish Govt.
    It is time for some soul searching in Ireland and time to ensure the mistakes of the past are not repeated.
    Our future in Europe looks like Tasmania in Australia….a Joke. At least the Danes have some self respect!!

    • mick downey

      I understand this Scruffy, my point was we’re being cajoled by Germany, and seemingly on a need to know basis, but at least with Cromwell and Britain so long ago, they put their cards on the table from the start. Im not suggesting we tie up completely financially with UK..I phrased it badly. My bad.

  12. cooldude

    Very interesting article David. Jim Willie has been saying the same thing for over a year. He says the Germans will leave with similar countries to form a Northern Euro and not only will we be turfed out but France will as well. I believe you may be correct in all of this as the recent “bailout” of Spanish banks was a joke. How can bankrupt countries loan money to bankrupt banks. Its all absurd as Daniel Hannon described it as extracting blood from one arm and injecting it into your other one. You are correct this is not a fire drill and things could get very serious very soon.
    Personally I have protected my savings by moving a significant proportion into precious metals. This protects me from any upcoming devaluation and also protects me from just moving to another easily debased currency like Sterling. I have urged people to look seriously at this issue for over a year now and the time to do something is closing quickly.

    • Cassandra

      Unless you have been in for a while, Metals are very expensive. These markets have benefited from free liquidity like every asset market and are therefore destined to fall like every asset market when the bubble bursts. Therefore the safe haven bid tone that some believe is supporting them will disappear. Metals are a safe haven from FIAT currency but there will be a time when they will be far cheaper to get into than current levels. The most vulnerable part of a portfolio, during an agressive asset bear market, is the assest that is in profit not those underwater already. Metals will get crushed along with everything else. One scary thought also. The US government made it illegal for private individuals to hold Gold during the great depression. That’s what they do. They will get at you anyway they can so nothing is safe.

      • redriversix

        will silver be the first “metal” to disappear from the periodic table..?

        • cooldude

          Some interesting points Cassandra but not ones I agree with. Firstly precious metals have risen against every unbacked paper currency in the world over the last twelve years from between 300%-1000% depending on the currency. The Euro has actually been one of the stronger ones due mainly to its association with Germany. The reason for this is the excess of supply that has occurred in all currencies and realistically this will only increase to try and inflate away all the debt that is building up in all economies. There will be a massive global increase in money supply shortly and this will be reflected in higher precious metal prices.
          Secondly both Silver and Gold have dropped from their peaks of last year and are both at very attractive price entrance levels from a technical point of view. I know all of this is subjective but I expect to see both metals make new highs before the year is out in all currencies. In Euros Gold is very close to it’s all time high at the moment and will probably take it out this Summer.
          Thirdly both Silver and Gold have over five thousand years of history as money and have never been devalued against a paper currency. If we do get an aggressive bear market, and that is not certain due to all the excess liquidity, precious metals will do just fine as a store of value just like they have done for thousands of years. In monetary terms we are in unchartered waters with this 41 year experiment in currencies not tied to anything of intrinsic value. This started in 1971 when Nixon broke the link to Gold and I think it is fair to say it has not been a big success. What is happening is that this modern currency system is predictably falling apart and soon we will be returning to currencies which are backed by commodities.
          As to your last point about governments confiscating precious metals when their unbacked currencies start to fail that is a possibility but it is well worth taking as this will be an admission of failure by them and their Keynesian economists and they will be reluctant to admit failure. During the great depression people were paid $20 an ounce for their gold and the government then revalued it UPWARDS to $35. Nothing is totally safe in this world but I would rather trust the lessons of history than believe any of these lying politicians.

          • Cassandra

            Sub USD 500 is attractive – I’ll wait till then

          • bonbon

            So the recipe is “silver gold and land”? Industrial civilization is very new, did not exist when these feudal concepts were formulated.

            Interesting the Confederacy had exactly that recipe, just cheap labor to work that land. The title to the land apparently was divine right to impose slavery.

            Germany is an industrial nation, today about 2% feed the population and more. In 1900 that figure would be 60% (need figures). So quoting 5000 years to support your thesis is literally passee.

        • bonbon

          Good one.
          But elements are being added all the time. It seems Merkel does not like that idea, shutting down as much uranium as possible.

          If we need silver or gold we’ll make it.

          • cooldude

            The usual mixture of misinformation from Bonbon. Some FACTS for you. Under the Classical Gold Standard, which ended in 1913, most modern industries were invented. These include electricity, telephone, motor cars, air transport, and practically every other modern industry that we benefit from today. Since we left this stable monetary system the main industry to benefit has been the fascist military industry which is going very well at the moment. I know these inconvenient facts don’t agree with your very blinkered view of the world but non the less they happen to be correct.

  13. joe hack

    My definition of Fungibility:

    The punt was worth 240d – 12d was a Shilling – a Shilling was once worth a cow — five cows was a crown – in some places a sheep – five cows was a crown – but for some reason there was a bull on the Irish Shilling – then a Shilling was 5p but it still had the image of bull on it – then 240d became 100p and it had a stag on it – then they said Euro made cents – but it didn’t – it could not – it made no sense – it did not even have a image of beast on it – I told them I did not want it but they told me I had to had to use it, now that they made me use it I owe someone I never met a truck load of them but soon there may not be any of them they are just going vanish so I won’t be able to pay back the debt that I never incurred — I spent years in school learning how count ds and £s and they vanished too – I think the magic part of Fungibility is that thingy are worth so many d, p or cent then they are only worth 1/10 of d, p or cents but where are all the d, p or cents go. I think I liked better when money was a solid object or maybe when a d was a cow.

  14. joe hack

    Anglophobia fear Angela or fear of England?

    “London calling”

    It is not going to be pleasant but we need to plan our own future not wait for hangouts which demoralises nations as it does a person on the dole.
    My Memories of 1986 and my first trip on the overcrowded boat to Holyhead;

    After arriving to Holyhead then trying to find a seat on what seemed to be the most dilapidated train carriage I have ever seen the train to London departed at 3.00am it had no spare seats, no food so the three of us stood for over five hours with luggage bags and our pockets full of Irish fifty pence pieces, it seemed like English were putting on the poorest welcome they could muster up for the thousands of new “Paddy “immigrants.

    My girlfriends brother was in toe he used the same suitcase his father had used when he had took the boat in the fifties it had the belt strap his father had used he looked so ridiculous at that time after all this was the 80s and all the cool dudes including myself had haversacks.

    The customs and passport control were laughing at him along with the suspicious armed special branch men, he looked like someone from another era, odd they did not search his bag
    .
    I guess they thought no one would use a case like his to carry bomb making equipment I hear this type of case is cool now, maybe he was ahead of his time and the rest of were un cool.
    When we arrived in Victoria station five hours later and transferred to the tube my girlfriend’s brother got lost, within just fifteen minutes of arriving in London, later when we finally found him he looked like a lost five year old I have never seen such face before or since, he was so naïve lost in this big metropolis.

    He was to be taking to his uncle’s house in Arsenal I was glad that he was not staying with us I had enough to worry about and babysitting a grown man was more than I could handle after all I was in a new world too.
    Within two weeks I was in permanent full time employment and was selected for a special training program with full pay the training lasted a year I have never received this kind of in house training in Ireland.

    The train may not have been welcoming but London branch of international company that I worked were welcoming friendly enough but of course some of the northern English mentioned the six counties and as you may know most of those in the British army are from northern England.

    This was not easy to deal with considering time period and my beliefs but I never felt I was discriminated by the English employer and or the Londoners most of whom involved me in their camaraderie.

    I was not treated as second class because of the nature of my work I did not work or hang out in Irish ghettoes and I know that some of those that did never integrated or really got to know the Londoners and I remember well how the Londoners congratulated me because Ireland were on their way the euro finals after beating the English I have never heard Irishman congratulation the English.

    So it seems to me linking a new Irish pound with our next door neighbour who has forced their culture on us, some of which we have continued to use ever since, including their, laws, tax systems, ok over the years we may have infiltrated them too and in return 50% our tourist trade is from past Irish migrates travelling back and forth including the likes Louis Walsh Eke!.

    Who knows what may happen who knows what going on in the back rooms EU/EZ maybe nothing; The Germans do not appear to want to change their constitution?
    The euro may collapse and later it may reappear with the next generation but I think we are better off on our own even if poorer for now at least we should have a plan and may be even saying we are putting in place a plan might help our case should the euro continue (Or it might scare The Germans lol).

    We don’t live in the centre of Europe surrounded by hundreds of millions of consuming people so we can never be as competitive as the Germans.

    they know this so that is part of the reason they pushing us to be more austere but in doing so the debts we have are unplayable so this means we have to default or the Germans and others will have to write some of them off, as this is not forthcoming and appears less likely at the moment we need to take matters into our own hands.

    so it looks like I am going back to boiling the kettle to fill the bath, no central heating, ice on the inside of the windows, the sisters have emptied the cylinder after I tuned in on for myself and the little back boiler will take a hour to heat the water, even then someone will use it.

    three kettles of boiled to take water above freezing and I stand naked in the bathtub wash me-self with a wet towel and cup to rinse me ginger bits while standing in the bathtub with a mass of Goosebumps and me particles shrinking into my insides to try and warm themselves.

    The door of the bathroom fly’s open with a shriek from me mam-what are doing! — I must remember the latch the next time, I am a adult now it’s Saturday and I am now ready to chase the girls, ,I will shave on Tuesday it’s just too much hassle now, anyway, designer stubble is all the rage-“the cave man look”

    With the £1 I had that day I was able to buy 3 pints of Guinness and a bag chips on the way home.
    From that low point, the money I earned rose and my spending power rose too right up until time of the euro.
    After the euro my earnings slowed but my ability to borrow rose tenfold it was a false.

    It was due to a drop in interest rates and later banks changed their lending policies the house I had bought pre euro rose stately but after the euro it continue to add the original price value year after year eventually reaching oven ten times what I paid for it.
    Building materials and labour cost had not risen at the same rate as my home something was not right we were not in sync. But the banks were still lending and people were still borrowing which continued to push up prices I was not one of the borrowers as in did not make sense after all I had a home why would I want two homes.

    I did not vote for the euro, nor do I want it now but it is going to be really hard to get out but some are now too but harder in the long term to stay in. we simply cannot afford to pay back the banks we should defaulted a long time ago but we are where we need to stop now Germany is not going to pay because they know we are Germany we do not in the centre of millions of consumers everything we produce cost more which means we have to pay ourselves less even if we are more efficient than the Germans.

    Auf Wiedersehen, Pet,

    • mick downey

      Fellows Ive worked with, and family, young and old (some retirement age now and older) have always maintained english people are the finest people you could work for, treated them well and respected them. Time and again I heard the worst you could work for in England was another Irishman..I remember them when theyd come home for holidays…the lads with the long white dresscoats…bullshitters the lot of them, more often than not borrowing money to get back to england again.

    • coldblow

      I came in the opposite direction the following year (1987) – I don’t think there were many like me on the boat. One surprise I got after a few weeks was finding out that I’d have to pay a grand or so to cover keeping my car here or I’d find customs officials seizing it one da. Prices were very high in the shops here. In England they were at the height of a housing bubble so it was easy to recognize the Irish version a few years earlier.

      My mother came to England in 1937 to train as a nurse. She was already in her 20s and although Castlerea was only 5 and a half miles away (half a mile more than Ballaghaderreen) she’d only been there once, and that was to accompany her father to a solicitor to try to get a debt paid (they ran a small country shop). She thought the English were fine people, although she described the Eastend women fighting when they were drunk and sticking hat pins into each other.

      A friend of my father’s came over around 1970 and stayed with us for a few months till he found work. He could cycle like the wind (he’d overtake cars) and played the fiddle just as fast. He ended up working on the Underground your friend got lost on – it was hard work, night shift, but it was a good enough living I understand. He married an English girl.

      My brother came over here to a wedding about a dozen years ago with a few of the regulars from his pub, some of whom hadn’t travelled much in their lives. One of them told customs: “‘Allo, I’m Alfie from the Royal Albert.”

    • Colin

      I agree Joe Hack. All the English I work with are a pleasure to work with, so much so I enjoy going into work in the morning, and having banter with them, including my boss. Irish subbies on the job still have a culture that has a regard for cunning and one-up-man-ship, which the English rightfully despise (the culture that is, not the persons).

      Spoke to a mate of mine the other day, he was talking about management in a company (in Ireland) he worked in 15 years ago. It was a Friday, and he was about to start 2 weeks summer holidays. His boss came down to him, to quiz him on where he was going, and reminded him of all the work he would face when he returned from his holiday, waiting on his desk for him to plough through. So I said to my mate, your old boss was such a w###er, a bully who abuses power, and informed him of how my English boss just simply wished me a pleasant holiday and left it at that, no nosiness, no reminders of work to return to, no bullsh1t.

      And yes, don’t work for Paddy in London, he’ll ride you.

      • Adam Byrne

        I have to agree on this one as well having worked productively and enjoyably in England for a few years.

        We really have to sort ourselves out in this country; it’s not right they way we are living and working. The attitude and culture stinks.

        I don’t mean to come across as someone who constantly puts down this country and its people but there are serious problems here.

        • Colin

          Adam,

          Hope your exams went well.

          I agree there’s serious problems here in Ireland and with all strands of Irish people, from those in positions of power and all that to those who choose addictions and lifestyles without any responsibilities, but it is still possible to visit and feel like you belong, stay connected, and observe Ireland through the eyes of an outsider, and enjoy it all.

          • Adam Byrne

            Thanks Colin, they went very well indeed. There’s no excuse for not working hard. Good for the body, mind and soul.

            On the whole, I am enjoying my (ultimately brief) return to Ireland but it’s frustrating when you realise the unfulfilled potential all around, most of it wasted through pure ignorance and sloth, plus a large dose of endemic corruption.

      • I worked in England for years and they were very good to work with. They do have a sense of fair play

  15. joe hack

    David,

    Finally you have moved the Debate from the past, the now, or what the Germans are others are doing to WHERE DO WE WANT TO BE, planning the Teutonic way, maybe.

    Lots of hardships ahead, if we plan we may do better than Greece are now, I pity them now.

  16. joe hack

    Since the German people are likely to reject a change in their constitution and assuming Anglia Markel wanted to persuade the German people to change it, how would she go about it?

    Fear? Morality?
    What would you do?

  17. breltub

    Hi David,

    Just to try and add to your argument, as I have been on here lately and criticised and I do think it too easy to criticise so don’t want to get into that.

    So in the event of Germany pulling up this draw bridge and going hard-core Ireland will be left with a number of choices. Before it commits to one course of action the real effect of this going hard-core should be considered.

    1.The Deutsche-Euro will become a strong currency making it’s goods and services very expensive for us to import and their strong currency should make exports for us easier, but what do we export to them?
    And how much will it stall their economy’s on the world scale as their customers can no longer afford them?

    2.The dollar and pound will react to this too. Both are currently in a race to the bottom, so a sudden shift may cause a lot of people to dump the dollar for this strong currency and we end up with an even worse dollar crisis. How will the yanks react to that to protect their interests?
    They want a strong Euro so they can export to Europe and help balance their books, but not one too strong that kills their reserve currency privilege?

    3.This might make importing raw materials, oil especially, very problematic for Ireland with its weak currency and a potential petro-dollar crisis. What are we going to have that we can compete with for the raw resources we need?
    Will we be looking at astronomic prices for petrol, electricity and gas?

    I don’t have any answers, just throwing out questions to see if it sparks some ideas!

    Regards,
    Brian

    • Cassandra

      Do Euros deposits held in a German bank turn into this new currency overnight? Will there be different treatment for domestically owned deposits and foreign holders? Will there be witholding tax on the latter?

      No answers just questions questions…

  18. joe hack

    Does this Martin McGuiness might be asked by Enda Kenny to shake the English Queens Hand when she arrives in Stormont, mending bridges?

    • The Queen was here last year. It’s all been discussed.
      She was not just over here taking in the atlantic breeze.

      • McGuiness and Adams are finished and are ghosts from a hellish past

        Anyone who thinks otherwise is demented and on a hiding to nothing. They ‘served their purpose’ and should disappear and vanish from the scene fast and without trace

        If Adams got control it would turn plenty of stomachs. Better be careful. These people know where I live. Cowardly bastards

      • joe hack

        To much sea air getting to;

        The ENGLISH queen is going to visit the north don’t know if she going to visit Mullaghmore and shake Martin McGuiness there.

        • My brains must be turned to seaweed with all this is sea air I have been taking in around Mullaghmore over the last ten years. It is the best place on earth. Echoes of a SAvage Land by Joe McGown will tell you what we’ve lost. We lost a lot and found a nightmare

          Sea air and time out does a man a power of good as long as he doesn’t have too much of it. When you are too used to freedom you become unemployable and can’t ever go back. David will understand this very well

          I wish we could bury all the political and religious crap and think of the future. We have a chance to change here but not at just any price. It’s important to remember from the past yes but we have to learn and move on. No one has ever offered a real vision of what Ireland will look like in 50 years time. No long term vision and all short term economics is getting us nowhere

          Why not get men off the dole and build that railway line from Shannon to Leterkenny. When the first train rolls we could take pride in knowing we built something people will be enjoying for a hundred years

  19. molly

    Crime pays crime pays and your chances of committing crime and getting away with it are very high ,just as Sean fits and all the big wigs the list is long and includes the government past and present .these shower are laughing at us from the moment they wake up till the last thing at night ,he’ll for all we know they are laughing at us while they are sleeping and I bet you they sleep like a baby ,wish I could sleep like a baby.the only reason I have trouble sleeping is I live In the real world.the main proplim is this government is not trying to solve the big problem ,they are more interested in there own skins and there croneys.
    Wake up people of Ireland before its to late,this government has a snow balls chance in hell of saving Ireland ,they are experts at saving there own skins it’s heads they win tails they win,what I mean is there gravey train runs where they are in or out.remember c h telling us to tighten our belts while he lived it up nothing is changing and we are beening made fools of .

  20. Deco

    For your enjoyment.

    http://globaleconomicanalysis.blogspot.ie/2012/06/spain-is-not-greece-and-other-such.html

    We are all German taxpayers subsidising Greeks.
    [
    “Spain is not Greece.”
    Elena Salgado, Spanish Finance minister, Feb. 2010

    “Portugal is not Greece.”
    The Economist, 22nd April 2010.

    “Ireland is not in ‘Greek Territory.”
    Irish Finance Minister Brian Lenihan.

    “Greece is not Ireland.”
    George Papaconstantinou, Greek Finance minister, 8th November, 2010.

    “Spain is neither Ireland nor Portugal.”
    Elena Salgado, Spanish Finance minister, 16 November 2010.

    “Neither Spain nor Portugal is Ireland.”
    Angel Gurria, Secretary-general OECD, 18th November, 2010
    ]

    The bit the Irish media never told us was the bit where Spain was saying words to the effect “Ireland is not Spain”.

  21. mediator

    @ Josey +1

    Could I advise all readers and contributors to this blog to read Joseys post above on preparation for financial chaos. If there is no chaos you will not lose out but if there is chaos then basic preps ala food water and energy will pay dividends.

    €500 will buy a lot of basic foodstuffs

    Oil will be a lot more expensive if we devalue/get new currency

    All the talk on this blog will be worth little if you don’t make some basic preparations and the proverbial hits the fan

    • Cassandra

      Holding physical cash is a basic preparation, unless of course Euros cease to exist but that can only happen over a period of time through which all your cash will have been spent anyway. But I think 500 is well shy of what you need personally. Don’t forget that you will probably end up being a bank for all your relations and friends who didnt take the precaution. So another basic preparation is to make sure these also keep cash at home. It will be very hard to turn down family who need money for living when you are the only one able to provide funds as ATM’s are empty, and cash is held in the banking system until further notice. (as per my prior post: Do credit and debit cards get ‘turned off’? Probably not as this is spending and not capital flight which is what capital controls would be trying to prevent. You will probably be allowed buy things with those cards but no cash back sorry!)

  22. bonbon

    I raise the question, when Eire gets around to burning the bondholders, well Britain be affected? Are they afraid of another Iceland? They are sitting on Banco Dantander right now, mostly a City apparition. This makes Northern Wreck seem like a currach!

    So are some trying to protect the City? At expense?

    If this is the situation, well there is nothing they can do about it without bringing the City under Glass-Steagall. Imagine Britain has now to implement FDR policy to survive. Eire cannot help them!

  23. tony_murphy

    Ask the Rothchild’s and Rockefellers what’s going to happen.. They want one world electronic currency, controlled by them and other globalists. Everyone chipped, speak ill of them, and your chip stops working, and you starve

    The financial crisis has been designed by them. They want their ORDER OUT OF CHAOS. People need to educate themselves to head this off! Don’t expect a complicit, some “criminal” ruling class to do anything useful.

    The horrible idea of a 2nd class Euro you floated on Sunday, is more like what the globalists would settle for now, not a link with Sterling

  24. I wouldn’t see this as the end of the Euro as such. More the end of our current system of money creation.

    Banks have created the money supply for centuries and to keep the system going someone has to organise enough bank loans to dwarf the existing money supply.

    Businesses used to borrow, then Governments, then households but we finally appear to be at the point were all three are maxed out. National debts are unsustainable, mortgages take two incomes 30 years to repay and cannot increase further.

    If we went to a currency other than the euro it would still be the case that no-one would be willing or able to get enough bank loans to have any significant amount in circulation.

    Providing the economy with a source of debt free money is one solution to the crisis.

  25. joe hack

    The Euro is not going to go

  26. Just driving drunkenly home from nightcaps at the Tiggy-Legg-Burkes chaps. The law does not apply to us haw haw

    The Irish came up in conversation. Haw haw haw haw haw. Haw!

  27. bonbon

    People are seriously underestimating the state of British fiance. The rate of collapse has exceeded the rate of bailout with Spain. In fact pumping more bailout will accelerate both! What a bind!

    Will Monday Bring One, Two, or Three Systemic Explosions of the Euro System?

    June 14, 2012 (LPAC)–A panicked Spanish Foreign Minister, Jose Manuel Garcia-Margallo, stated late Thursday that “the future of the European Union will be played out in the next few days, perhaps in the coming hours.”

    He’s right about that.

    Garcia-Margallo was reacting to the fact that on June 13, Moody’s downgraded Spanish sovereign debt to near junk-bond status, and that 10-year government bonds today soared into the stratosphere of 6.99% yields — which means that Spain’s sovereign debt cannot be refinanced, and that the major capital flight already occurring from Spain is likely to escalate to flood proportions in very short order.

    The irony is that Spain’s descent into the maelstrom occurred within days of their announcement of an 100 billion-euro bailout of Spanish banks by the European EFSF, which was supposedly designed to put out the Spanish fire. But the fact of the matter is that the latest Moody’s downgrade and soaring bond yields didn’t occur {despite} the EU100 billion bailout, but rather {because} of it. As Moody’s put it bluntly, they downgraded Spain because the 100-billion package will add considerably to the government’s already unpayable debt burden.

    So, just as LaRouche warned, every attempted bailout of the system at this point simply aggravates the problem and accelerates the process of disintegration.

    The British Empire’s actual intent in ramming through the EU100-billion bailout package earlier this week, was not to try to actually salvage the Spanish banking system — that would require some 600-700 billion euros, for starters — but, rather, to just keep Spain from blowing apart until at least after this Sunday’s Greek elections, which could signal the end of Greece’s membership in the EU, and of the EU itself.

    The British didn’t think they could handle {two} simultaneous systemic crises, but now they are looking at the very real possibility of {three} such crises all hitting at once, early next week: Greece, Spain, and possibly Italy as well.

    As Spanish bond yields soared today, so did Italy’s, with rates on their 5-year bonds jumping by more than a third, from 3.9% to 5.3%. Italy may soon join Spain in being locked out of international capital markets.

  28. bonbon

    Tony Blair (who lectures on Globalization and Religion — see below) Decrees: Save the Euro, Germany Must Comply; Hyper-inflate, Kill Off Population with Social ‘Reforms’

    June 14, 2012 (EIRNS)–Tony Blair, adviser to Obama, issued his decrees for what Germany and the Eurozone nations must now do amidst turmoil, in an interview with the {Financial Times} of London, done earlier this week, while he was in Jerusalem. Blair called for a deal between Germany and the others of Europe, to save the euro, and the bankrupt imperial system, by killing the people. In his terminology, a “grand bargain” between Germany and the others of Europe, must be struck, in order to rescue the “single currency,” by taking actions to pool the European debt, speak of growth, and impose deficit-reduction through pension and welfare “reforms.”

    Blair stressed, “I have no doubt that the single currency makes sense.” He said of Germany, as quoted in today’s edition of the FT, by Lionel Barber: “Mr. Blair praised Chancellor Angela Merkel for her ‘courage’ and ‘steadfastness’ during the crisis, but Germany now had to make ‘an unequivocal commitment to stand behind the single currency’ and be ready to inflate its economy. In return, the rest of Europe had to give credible commitments to rein in deficits.”

    ——-
    TONY BLAIR IS IN HONG KONG, where he gave a speech on religion and globalization at the University of Hong Kong June 14. An unidentified heckler, who spoke with a British accent, came within meters of Blair, before being blocked by university staff and escorted peacefully from the room.

  29. bonbon

    Perspective for self-flagelators wandering through the blog :

    Senate Banking Committee to JPMorgan Chase’s Dimon: You Pay Us, You Get Your Way

    June 14, 2012 (EIRNS)–The scandalous behavior of the U.S. Senate Banking Committee, bowing and scraping before JPMorgan Chase chief Jamie Dimon yesterday, needs no comment. But readers might find the following background informative.

    First, only 6 of the 22 members of the Committee have not received campaign contributions from JPMorgan Chase. Second, one of the leading staffers for Committee chair Tim Johnson (D-SD), Dwight Fettig, is a former lobbyist for JPM Chase (JPMC).

    The “Agenda Project” website today, in an email, provided the following additional info:

    Sen. Bob Corker (R-TN), who lavished praise on Dimon as “one of the best CEOs in the country,” has received $60,000 in contributions from JPMC since 2007.

    Sen. Mike Johanns (R-NE), who gushed to Dimon, “Your enterprise (is) big and powerful… you’ve got a lot of firepower. You’re just huge,” has received $147,000 from the financial services sector since 2007.

    Sen. Jon Tester (D-MT), who said, “You guys know the industry better than anybody sitting up here”), has received $45,000 from JPMC from 2007-1012.

    Sen. Mark Warner (D-VA) has also received contributions from JPMC.

    The Augean Stables had nothing on the U.S. Senate today.

  30. Tony Brogan

    Had a lovely supper after a pleasant day fixing things on my boat. cycled to town for groceries and came back with panniers stoked with bacon, eggs, tomatoes, and mushrooms for breakfast. Looking forward to a sunday sail in the Jack and Jill race. My daughter will come as Jill to my jack.

    Three squares a day, a warm place to sleep and some pleasant company is what life is about.
    it is what we work for.

    The rest is all froth and noise. The world is to hell in a handbasket and I too am sitting at the side of the road in the tall grass. did when I was a kid too.
    Great way to spy on the neighbours and see what they are up to.

    time for a good nights sleep.

    blessings to All

    t

  31. Tony Brogan

    A few quotes

    Having trouble viewing this email? Click here

    “Ranting Andy” Hoffman

    Quotes of the Day

    Greece has about €2 billion to pay salaries and pensions until July 20th. Therefore, it is heading into a Sunday election which could lead to it leaving the euro zone.

    -RTE Media

    After Monday’s action, I would think Bernanke would be gassing up the helicopters. Bernanke just needs a tiny excuse to give us QE3. So load ‘em up, Bennie! The most bearish action would be the Fed triggering QE3 and the market failing to rally.

    -Richard Russell

    For what it’s worth, I also met with executives of the ETFS Gold Trust (SGOL), and they told me the bar Pisani (of CNBC) held up was one of their bars. They indicated they shared the same vault as GLD, but their gold was “segregated” from GLD’s.

    -Anonymous London Portfolio Manger

    UNLESS THE FED IS ACTIVELY ENGAGING IN MONETIZATION AT EVERY GIVEN MOMENT, THE IMPACT FROM EASING DIMINISHES PROGRESSIVELY, ULTIMATELY APPROACHING ZERO AND SUBSEQUENTLY BECOMING NEGATIVE!

    -Goldman Sachs analyst, for once getting it right!

    Europe is giving itself a transfusion, pumping blood from one arm into the other. But the tube is leaking.

    -Daniel Hannan, UK House of Commons

    If you can’t dazzle them with brilliance, baffle them with bulls—t.

    -W.C. Fields

    The European political leaders and policymakers are frantically trying to put their fingers in the dyke. The euro is on its last legs. It’s very late in the game to expect anything like the coordinated action necessary to restore confidence. People are moving to the exits.

    -John Hathaway, Tocqueville Fund

    The way inflation is going, it’s wise to have the maximum amount of dough in merchandise.

    -The King – James Clavell’s “King Rat,” Singapore, 1945

  32. David you have been sucking too many Jubilee ice lollies laced with Bushmills

    Over here we look and laugh at all that

    Hell will freeze over before we start taking orders from the Eton mafia

    I’d rather eat seaweed

  33. Deco

    We still don’t get that humility is more useful than pride.

    We still have a herd mentality in this country that loves an expensive escapade.

    Mediocrity is more acceptable than performance, for some strange reason.

    When the crowd loses the plot, it is the clearest signal to run for cover.

    • Pedro Nunez

      +1, at least the Greeks have the gumption to call it in football!
      Peasant class thinking for a peasant class ‘me fein’ people.
      Wake up and smell the coffee FFS!

  34. TARGET 2, ELA, LTRO…. Central Wankers at the Helm

    http://neweconomicperspectives.org/2012/06/germanys-constitutional-conundrum.html#more-2489

    The entire financial capitalist Industry needs to be dismantled, someone needs to shit down these markets, the system has to be flushed out, and restarted.

    Every other suggestion, like the one DMcW proposes here is just a continuation of the same, keeping the failed system alive at all cost, a typical insider solution.

    • freudian slip… LOL… of course shut down these markets…. the shit has to be flushed out.

    • We need a new global reserve system and banking that is based on principles of social finance and responsibility. Examples are out there, and bigger brains than I like Roland Benedikter (Stanford) had written about this since long.

      The shit that I refered to is 1. global odious debts 2. Rating agencies, hedgefunds, and super rich manipulators.

      The worlds richest fart, mexican Telco tycoon Carlos Slim recently suggested in the FT that we all need to raise the retirement age to 70.

      It is people like him and a few thousand more, that needs to be flushed out of this system once and for all.

    • Christian Noyer, just one example:

      Here: scroll to the left in the chart

      http://www.ecb.int/ecb/orga/decisions/eb/html/ebtimeline.en.html

      and here:

      http://www.bis.org/about/board.htm

      ….go figure….!!!!!!

    • Quote:

      What is actually happening with the bank run in Europe? Deposits are leaving the banks on the periphery and going to banks in the core. The banks in the core lend to the System of European Central Banks (with basically the ECB “on the hook”) which then provide lender of last resort financing to the banks on the periphery. It may be that by April the banks in Greece, Ireland and Portugal had lost half their deposits and the banks in Italy and Spain had lost a quarter of their deposits. To understand the eventual significance of this process, let us assume the bank run continues and the banks on the periphery overall lose the majority of their deposits, the banks in the core have corresponding huge claims on the ECB, and the lender of last resort position of the ECB is now equal to a majority of what was the outstanding deposits in the banks on the periphery.
      What kind of a banking system is this? A dysfunctional and a highly unstable one. One would have a set of banks on the periphery that are massively dependent on ECB lender of last resort financing. That would probably be dysfunctional, as they would be disinclined to lend to their normal client base. That is negative for these economies on the periphery.
      The banks in the core would not be so impaired. With a larger deposit base they might be more inclined to lend to their usual client base. However, most of the deposit funds received from the periphery will probably flow into the System of Central Banks with, ultimately, the ECB “on the hook”.
      Add to that the proposed additional fiscal austerity which Germany is proposing as a reason for additional help to the periphery and you have a major problem on your hands. So what is the nature of the problem?
      What is wrong is the distorted role of the ECB and the unstable nature of the euro banking system overall. If we simply trend the recent deposit run forward, within perhaps six months the majority of the original deposits in the peripheral countries will have departed. That would basically leave the ECB with a lender of last resort exposure to the periphery on the order of three trillion euros or more. That would represent a loss exposure equal to almost 40 times ECB capital (before revaluation of gold reserves). I do not believe central banks, as basically government entities, need to have a positive capital. But I think a loss exposure from possible euro exits by these peripheral countries of this magnitude is highly problematic.

      • ‘what is actually happening’ is as clear as the nose on our faces Georg. Disaster capitalism is cleaning up and there are plenty of people getting rich. The Enemy Within has corrupted the state and there is battle for control between states and corporations. Control of the people is the goal

        Nobody has a clue. Nobody. A laboratory of organised chaos

        The information is out there and there is no excuse for not joining the dots together. Perception is everything but we are crippled with politicians with severe intellectual handicaps. The people who join the dots are not welcome in such polite society

  35. joe hack

    The Euro is Dead long live the Euro

  36. StephenKenny

    Unless I completely misunderstand something, something very peculiar has just happened in the UK government. They’ve announced a stimulus package of £140bn, which is roughly the annual amount by which they’ve been printing/borrowing since 2008.

    What’s peculiar to me is the declared source of these funds: It seems that this is not QE, and it’s not on the government’s balance sheet, it’s just ‘from the Bank of England’.

    So this debt is not, as such, to be declared anywhere? Should we rename the Bank of England ‘Raptor’, after one of the undeclared ‘vehicles’ that Enron and several Wall Street banks created to enable Enron to borrow money without declaring it, or having it on it’s balance sheet?

    Why not just QE, then we all know where it is, what it is, and what it represents?

    Perhaps I’m just showing my ignorance here – I don’t follow the UK media at all, so perhaps I’ve missed something.

    • bonbon

      Today is the anniversary of the 1933 Glass-Steagall Act, and central bankers are in non-stop crisis mode. Whatever the U.K. tries without separating banking, cannot work as stated (bailouts won’t work either).

      After much hype in recent days about the Bank of England and the British Finance Ministry going ahead with their “ring fencing” scheme for bank separation, it turns out that the legislation separating the retail from the investment banks is not to be enacted until 2015, and not to be put into implementation until 2019!

    • bonbon

      See below – there is a coordinated QE going on. Sheer panic has broken out.

      • StephenKenny

        The question that is interesting to me is not that there is coordinated QE – that’s clearly been going along for four or five years – but is that of the attitude of the UK finance ministry towards this latest £140bn. They are not borrowing it from someone else, and they are not admitting to QE.

        Therefore the indicators that are used to rate the UK finances will be unaffected by this latest £140bn. The latest declared QE was of £75bn, which will look after their government deficit for about 9 months, and – via various taxes – the £140bn will benefit government coffers very significantly.

        This will therefore look like the UK is growing at a good rate, and not increasing it’s government debt, which will mean a declaration that all is well.

        The US has been doing quite a lot of this, with a reported $4tn to $5tn (some say more) being added to the economy without affecting any declared debt levels or money supply figures.

      • bonbon

        Cameron is betting Merkel will cave in on Eurobonds, and see below the sheer homicidal state of mind of bankers including Draghi. Hollande is having a fit. Merkel cannot give on this.

        There is no way to see how this will work, too many uncertainties.

        Anyway ring-fencing, Dodd-Frank are a joke even in bankster circles. Glass-Steagall will have to happen even in London.

    • joe hack

      Gordon Brown separated the bank of England from the treasury Osborne put pressure on it to do this the British savers must be getting real pist off as their savings keep shrinking.

      What is really interesting is how little coverage it has got its becoming blasé and done when all eyes are Greece

  37. bonbon

    A very nice quote from Jakob Burckhardt, paraphrase “Small countries exist only so that the largest proportion of their citizens think nationally and that freedom offsets the larger countries” – I think that explains exactly the Swiss point of view. Precisely what I experience there. Exactly Ireland’s strength!

    Well worth listening to that short audio!

  38. bonbon

    The Consequences of Monetary Union (1972)

    The financier and businessman Emmett O’Connell, formerly of Aminex and Eglinton Oil and still successfully engaged in the international mining business, has long held the view that abolishing the Irish pound and joining the eurozone was the biggest policy error ever made by the Irish State. The Greek crisis and its drastic implications for the euro-currency, interwoven as it is with the crisis of the Irish public deficit and banks, seems to be confirming this daily before our eyes.

    Linked here a pamphlet in pdf format which Emmett O’Connell wrote in 1972. It sets out why joining a European currency union would not be in Ireland’s best interests.

  39. bonbon

    While moderation takes its toll, the exact translation of Burckhardt’s wonderful summary :

    The size of freedom
    (JAKOBBURCKHARDT1818-1897. Switzerland Weltgeschichtliche Betrachtungen)

    Small States exist in order that there may be some countries in the world where the maximum number of nationals are citizens in the true sense . . . For a small State has nothing else save this real and effective freedom, which fully offsets the advantages of a large State

  40. joe hack

    To Pauldiv,

    Religion started when people were scared so they worshiped the sun and even stones, the speculators of the day coped on to this fear and became the witchdoctor’s, shaman’s, necromancies, and so called prophets today we realise that religion was and is a farce Now we are been scared by money or inputs on a computer program, speculators and encomiasts.

    The new church building is a stock exchange, the shamans of today are economist stock brokers pension funds manages and others this is not reality but the witchdoctors today seem quite happy to be the masters of death and destruction, they are not solely at fault as they are scared too it is those who in fear worship the false god which money or a computer input.

    But the priest of today are happy to see fear, this gives them control and power over the masses I believe some contributors on this site are so in fear that they have already started stock piling food and cash this shows you how much power the witchdoctors have.

    Money, real money was created to make it easier to trade now it is a god with no real value other than fear like that of the Black Stone of Kaibab, or wine and bread turning in to the body of christ (transubstantiation) or the Bible and others.

    Seaweed has more value, do you have and recipes for seaweed dishes?

    There is no offence intended to any one particular religion, other than that, of money

    The Real money has long left us, 12d was once worth a cow?

    PaulDiv, Keep the fate

    • Thanks for making the effort joe hack. I was beginning to think there was no one plugged in out there tonight

      Everything you said makes sense so I wont repeat you. I hear the message

      People are waiting for the new shaman. He who is all powerful and can travel to the bowels of the earth and connect with other spirit realms outside normal perception

      It’s interesting that shamanism has existed on all continents for centuries and is not mainstream. It was snuffed out but today people are much more in tune and opening up to the possibility of other realities

      We create our own reality, yawn it’s so well worn I know, but as long as we are happy with it and not living off the misery of others then we can rest assured

      Each to their own

    • Allow me take your objectiveness from a higher level….in one word…Aquarius .It will last another 2000 years or so. We have only recently entered it and this was celebrated when millions and millions gathered in one place in India to acknowledge its arrival over ten years ago.

      We are now living in The Age of Aquarius .

      This is the element ‘ AIR’ .

      The power of this element is seen in the – internet – faster communications – more capacity of knowledge sharing – education – making the world a smaller place – networking ( ie stock exchange ) – Secrecy also plays a great part in this too etc etc

      Adopt an Aquarius today and make him/her your best friend .

      • Insights from Dun Aengus

        You cannot contain Air without imprisoning yourself first .

        Air moves fast and changes rapidly .So why hoard stocks of food or buy gold and silver ?

        It is the food of blood in our bodies and don’t try to change that .So Breath and do that better and you will be too .

        Air should not be allowed to become cold and heavy so mix with your community and gather in song and dance .

        Air …well this is what brings us all here to this great room . Enjoy it . It’s FREE .

      • Knowledge. I love that word. It makes me think of the type of knowledge that all the private education in the world can’t buy. The knowledge to be honest and true to yourself and have the guts to discover your true talents

        I know this is the age of Aquarius. My auld granny told me we were Living in the Dawn of Aquarius. She was rooted to the old mythology and on rainy days she taught me about the legends and the Irish character. It was much better than what passed for schooling in those days and she saved me from becoming a Brit

        Having said that, schooling and education is priceless. Private education is useless because it is about money and power. Some of us are simply not interested

        The student will approach the subject he needs to know. Eventually. Even if he is 70 years of age

        To thine old self

        • To anyone on the dole or in pain from someone who is on the dole but has given up on pain …

          Keep The Faith in Yourself and give it time. God might help but only your dreams and your character will make it happen

          I smile every day because I went back to my passions

          Reading, writing and drawing. Yet it took 45 years to find the truth. They knocked it out of me and scared me shitless for 40 years but I found it again and just to spite the buggers and to conquer my imagined fears I went back to it

          It turns out that I am getting good fast because it comes naturally. I wits they took art seriously in those days and encouraged us more. There was no shortage of art in every day life and our lives could have been so different if someone showed some faith in us

          That is why it is a crime to force a child into something they have no passion for. Like politics and economics?

      • Astro Economic Dictionary

        Printing Money = Blowing Air

        Euro-Bond = Network Air Condition System

        Austerity = Yogo Breathing System whereby you Hold your breath until your face turns red ( Merkel )

  41. bonbon

    Financial Oligarchy Panics

    The Financial Times Deutschland published the following in GREEK today:

    “Dear Greeks, create clear political conditions. Vote courageously for reforms instead of angrily against the necessary, painful structural changes,” read the Financial Times Deutschland’s editorial, published in Greek and German.
    “Your country will only be able to keep the euro with parties that accept the conditions of the international creditors,” the daily said, adding: “Resist the demagoguery of Alexis Tsipras and his (radical-left party) Syriza.”

  42. bonbon

    Court challenge to Implementation of Fiscal Treaty to be heard next week.

    Tom Pringle posted the following article from the Independent on his website

    By The Independent reporter Tim Healy

    A CHALLENGE to the implementation of the May 31 referendum on the Fiscal Stability Treaty will be heard next week in the High Court.

  43. bonbon

    As LaRouche has repeatedly warned for months, either we impliment Glass-Steagall or the bankers will go for Hyperinflationary madness.

    In the wake of the Spanish blowout, there has been a non-stop series of panicked crisis meetings among European heads of state, Eurocrats, and central bankers — all aimed at one objective: Getting German Chancellor Angela Merkel to cave in to a German bailout of the euro. In statements covered prominently in the Financial Times today, Merkel flatly refused to cave in to the pressures, warning that “German resources are not unlimited,” and that she rejects the kind of “big bang” proposals coming from the likes of Timothy Geithner.

    She also reiterated that the eurobond scheme is unconstitutional under Germany’s postwar constitution.

    On Monday, at Los Cabos, Mexico, on the sidelines of the G-20 heads of state summit, Merkel will hold a meeting with Monti, Hollande, Rajoy, Cameron, Von Rompuy, Barroso–and Obama, where they will make one final stab at getting Germany to pick up the tab on all of Europe’s gambling debts. French President Hollande flew to Rome on Thursday to meet with Mario Monti, where the two agreed on the urgency of eurobonds, and arranged to meet with Merkel and Cameron next week after the G-20 summit but before the scheduled European Union heads of state meeting.

    The “Big Five” central banks have all signed on to the hyperinflationary panic. The Fed, the Bank of England, the ECB, the Swiss National Bank, and the Bank of Japan all issued statements on Thursday and Friday, indicating that they were prepared to inject an unlimited amount of liquidity to bail out the banks. The Swiss extended their zero-interest rates, the BOE and British Ministry of Finance announced two separate “quantitative easing” programs to inject an additional 100 billion pounds sterling into the British banks — for starters, and the Bank of Japan made similar announcements about massive yen purchases to drive down the value of the Japanese currency.

    The Federal Reserve Open Market Committee (FOMC) meets next week, but it is no secret that the Fed is already pouring money into Europe through swap windows and other mechanisms.

    A senior City of London banker told EIR this morning that he expects the entire trans-Atlantic situation to blow up in the immediate days ahead, starting with a Spanish explosion next week, to be immediately followed by the long-feared Italian debt crisis. He emphasized that the big Wall Street banks are heavily exposed to the eurozone collapse, because all those US banks bet on the survival of the euro and the reduction in bond yields.

    This is why, the London banker said, Obama is in a total panic. “This may be the last normal weekend we ever have.”

  44. [...] lenders first test of mortgage ‘shop’ €12,000 per acre for residential land Closer ties to Britain offers a way out Boost as Ireland records third-best trade surplus Irish use of cash highest in EU Cost of buying [...]

  45. goldbug

    ALL EUROS ARE CREATED BY LOANS

    -> DEPOSITS CANNOT BE LENT OUT!

    BANK DEPOSITS ARE PRIVATE PROPERTY

    BANKS CANNOT STEAL ONE CENT!

    EACH BANK HAS ACCOUNT AT CENTRAL BANK

    -> DEPOSITORS CASH IS SEPERATE

    DEPOSITORS DO NOT GUARANTEE BANK LIABILITIES

    -> DIGITAL SAFE DEPOSIT BOX

    -> DEPOSITS ARE FOR FRACTIONAL RESERVE ONLY

    DEPOSIT GUARANTEE?

    -> THEFT & FRAUD & BANKRUPTCY DELAYS ONLY

    DAVID KNOWS THIS

  46. bonbon

    Here is the Financial Times Deutschland’s panic appeal to save the banks, in GREEK.

    Banksters showing their true faces directly interfering in democracy with terror tactics.

    http://www.ftd.de/politik/europa/:wahlempfehlung-antistatheite-sto-dimagogo-widersteht-den-demagogen/70050480.html

    I wonder will they try this in Irish, bankster Gaeilge?

  47. Dorothy Jones

    Hmm…..
    Don’t kill me Georg, but I am Angela Merkel’s biggest fan!
    Think Depeche Mode ‘Your own personal Jesus’ re-sung by J Cash……
    As for Spain….this country [working here this week] will win… despite adversity.
    Ireland has crap politicians and great people. Loads of opportunities present themselves in recessions.
    Going from the airport to the debate in Dalkey [book festival]….David…I promise that this time I’ll be as quiet as a mouse. :) Best Dorothy

  48. Nigel Farage on Spanish Bailout- The genius of Mutual indebtedness – June 2012

    http://www.youtube.com/watch?v=K4ElFN77nkg&feature=player_embedded

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