June 21, 2012

How we'll all get scalded when they break China

Posted in Irish Independent · 108 comments ·

THIS week we are going to raise our heads above the lip of the European trench and have a look at the rest of the world. This is critical to an Ireland where the strategy of export-led growth needs the world to grow, to buy the exports that we make.

Regular readers will appreciate that this column is not too persuaded about the ability of exports to do the heavy lifting for the economy.

Without domestic demand, the Irish rate of unemployment — the only really meaningful economic indicator — is not likely to fall.

We are going to examine first China and what is going on in the country. Remember that up to now this has been the one constant positive economic story. I have been lucky enough to spend a bit of time over there — four working trips to the Middle Kingdom in the past two years. Sitting in a cafe just off the impressive Bund in Shanghai, watching the world racing by, it struck me — as it has many others — that “growth” has replaced “equality” as the Communist Party’s central slogan.

As long as it can deliver growth, the Communist Party can remain in power. Consequently, the Chinese authorities will do anything to keep the growth miracle going. But it’s going to get harder and harder for them.

The other thing that strikes you when you look out over the Bund to the teeming new metropolis across the river, is that China’s investment boom is now so huge that it might be impossible to protect with traditional economic means alone. Let me explain this. If a country has a boom which is driven by too much investment then increased demand for more investment at a time when there is too much investment will just increase the excess capacity, causing prices to fall further.

Two weeks ago the Chinese central bank cut its lending rate for the first time since December 2008 even though inflation expectations have not fallen. This tells us that the Politburo is seriously worried about China’s GDP slowdown as the property boom turns down and exports to Europe plummet.

The Chinese economy is now hostage to a leveraged banking system clogged with dubious real estate loans and provincial government loans. It’s not hugely different to the Spanish or Irish banking crisis. Property loans and mortgages in China are 25pc of GDP. Consumer debt has tripled since 2008. As the property boom unravels it will destroy the balance sheet of the Chinese middle class who have bought into it and, of course, the knock-on to GDP will be seen in time.

Much of the commentary on China, written by investment bank analysts who have a vested interest in keeping China going, suggest that China is different. We should be cautious because readers of history might say that China is no different to the USA of the 1920s where the economy boomed, when millions of Americans came off the land into industry (think Steinbeck’s ‘The Grapes of Wrath’) and when America, like China now, turned into the world’s lender of last resort, lending gold in particular to Germany.

These analysts claim that China can’t have a hard landing. I believe they are talking rubbish, just as similar vested interests writing in Ireland claimed the problems would be limited to development land or claimed that Spain’s fundamentals were sound.

High economic growth is the Chinese Communist Party’s last pillar of legitimacy, now that Maoist ideology is irrelevant. This sharp slowdown in China comes at a dangerous time for the mandarins of the People’s Republic. The Beijing Consensus of a united Party elite and autocratic rule is falling apart. Internally the Party is in disarray as evidenced by the squabbling and public humiliation of some of its key figures in recent weeks.

Against this background, is it clever to expect China to remain politically stable or pull the global economy forward? The Chinese miracle, which produced now close to two generations of 10pc growth, has been financed by exports generating cash which was in turn reinvested into the local economy.

This massive investment has now reached 50pc of GDP — an unsustainable level — which, as observed above, can’t be improved by lower interest rates alone because lower interest rates incentivize more housing investment, making the overcapacity worse and causing prices to fall more.

Now let’s turn to the other giant of the world economy.

Will the Fed cut American interest rates this week in response to evidence that the American recovery is stalling?

The April and May job numbers have made it clear that the labour market is deteriorating. New York Fed President Bill Dudley has stated that a lack of jobs will lead to policy easing. This is now happening. As recently as February, January and December 252,000 jobs a month were being created in the US. In the past three months only an average 100,000 jobs are being created.

Because, unlike the ECB, the American Fed’s dual mandate dictates that it act to protect growth in the USA as well as concern itself with inflation, the Fed is likely to cut interest rates.

There is no sign of inflation anywhere. Bond markets are signalling that the world economy will see no inflation in the next year. This is obviously helped by the $30 fall in Brent crude oil, itself an indicator of faltering demand.

IN China, India and Brazil, growth rates have plummeted, which is a major risk for US exports to emerging markets. The world economy and emerging markets, not just US payrolls, are now a source of recession risk for the US. This is an election year and we know that Obama needs the economy to be motoring come October.

Given the crisis in Europe and rolling bank disasters here and in the rest of the periphery, we can probably be forgiven for not seeing or appreciating what is going on in the rest for the world. It’s not a pretty sight.

  1. Adam Byrne


    • EddieN




































    • mccool

      Seems China should be trying to slow economic growth to a steady state and so should be raising interest rates not lowering them. Also seems it may now be too late to do this as demand in the rest of the world falters just when China needs it to grow. Lowering interest rates will fuel overinvestment. Seems China is doing an Ireland on it and soft landings will come crashing hard. Prepare for the fallout which are likely to be wide and deep. McCool

  2. Compass Re-alignment

    The East becomes the west and the West becomes the east.

    Current Economics seems to dwell on the East -West axis .
    There was a Time when a North-South dominated .

  3. The domestic consumption of the East is not picking up mainly as the wealth creation is concentrated in large sums to a tiny amount of the overall population. These individuals much like the Irish during the Celtic tiger are coming into money for the first time in their life and are expressing that by embracing the consumerism of the west. Wealthy Chinese buy western luxury goods with an insatiable appetite and happy to pay premiums unheard of in the West. I feel that the counterfeit economy of China has alot to do with this as the new money try to distance themselves from the image of fake goods and purchase lavish luxury goods. Until wealth is dispersed more evenly in China domestic consumption will not pick up, until that time the government will have to keep the ball rolling whatever means necessary to try and find employment for 1.4bln people, not an easy task-

    • Deco

      Jim Chanos has been sounding the alarm when the mainstream media was continually talking up it’s own hype.

      Chanos grasps one essential element of China’s stimulus packages since 2007. The scale of malinvestment. It is a once off stimulus.

      When you invest in infrastructure it is all about utilization. Invest in a hospital, and you get 24*364 utilization. Invest in a football stadium (dublin has two) and you get 2% utilization/98% non-utilization. Invest in the National conference Centre and you get close to 8% utilization.

      Invest in a block of apartments in Leitrim and you get 10% resource utilization.

      It is easy to see how misallocation of capital and a low level of resource utilization causes serious problems.

      In the Bertie Ahern era, Ireland went rampant on capital malinvestment.

      It does not generate a return.

      Therefore loads of work must be performed in other sectors to pay for the investment, when the investment actually functions as an expense.

      Let’s not forget the role of the ECB, and their low interest rate policy in this. Or the role of the Construction Industry Federation as chief lobbyist for these wasterful policies. Or IBEC-ICTU as rulers in the shadow. Or the Central Bank of Ireland in giving the entire debacle the all clear. Or the ESRI for putting a positive gloss on it. Or the media for putting a massive spin on what was a reckless policy.

      So much of public discourse is destroyed in rampant deceit, that the lesson of the era was to ignore everything official and mainstream, and steer clear of all the nonsense.

      And it still is the lesson for today. Because the all gombeen elements listed above….they have not gone away you know….

  4. Scruffy

    Gold is for optimists, ammunition is for pessimists. I think David prefers the latter, I am with him.

    • alan75

      Good read David. Interesting article on the far east but my own impressions of a greater local threat to any medium term “export led” recovery are based on Euro 2012.

      Having spent a hugely enjoyable (other than the outcome of the game itself) recent two nights in Poznan for the Croatian game, I feel Poland offers some early indicators of where Ireland is, or might be heading in the years ahead. By means of backdrop, I travelled with a group which included current and former work colleagues one of whom now works for a U.S. Financial services firm who employ in excess of 1,500 staff in a number of Dublin and provincial locations. His firm opened a Polish office, currently managed from Dublin, three years ago where small teams of Irish staff from one of the Irish provincial offices are currently on rolling secondment to Poland to train local staff as they gradually outsource incrementally upskilled aspects of the currently Irish based work. The staff in the Irish regional office are acutely aware of the likely result of this training.

      The key differentiators he pointed out in terms of the Polish office were — entry level staff salary €7K (€25K in Ireland), rent €7 per sq ft in Poland versus €50-€75 depending on the various leases they have in Ireland (some of them signed at the peak). Polish government incentives such that first 18 months salary nearly all grant aided and no local authority rates or charges whatsoever. Crucially he said it is the last point that was one of the key drivers insofar as the day to day cost both in time and cash terms of interacting with local govt agencies in Poland is minimal relative to their experience here.

      My own impressions of Poznan; spotless and high spec new airport, excellent roads (everywhere, even the minor roads), well developed tram system, attractive old town. Also, very friendly local people who certainly appear to demonstrate a tremendous hospitality and outward capacity for hardwork (think Ireland circa 1990 but good roads and you’re onto it). Following on from the lower cost of employment referred to earlier, the cost of living relative to Ireland was shockingly cheap (€25 for an excellent lunch for 6) and served to illustrate how expensive Ireland continues to be both as a place to live as well as to create and maintain employment.

      Poland, or Poznan at least, has built the physical infrastructure (saw multiple large high spec office buildings in the city centre with to let signs) and has a low cost base to pitch for that business which Ireland currently remains as a perceived centre of excellence in (think IFSC firms, aviation finance, pharma, bio-tech research). Once the global economy, eventually, realises and writes down its bad debt and begins to recover, unless we have addressed our domestic cost of business and cost of living issues then these sectors are under grave threat in this country I fear.

      • Deco

        Our establishment is firmly committed to sticking this out on a high cost base.

        One manifestation of this is a continual reliance on short term policies. And the state will do just about anything that will prop up the failed finance/insurance/real estate. FIRE.

        The Poles have a plan. Poland means business.

        We only have superficiality. Ireland means confidence boosting gimicks/PR stunts.

        Not hard to see where this will end up.

        We need to get real.

        • Deco

          First rule of survival in Ireland.

          Where possible, avoid throwing your hard earned sweat away to provide the profit in some gombeen’s business plan.

          This is how you will clean up the corruption in Ireland.

          A boycott against gombeenism.

          • molly

            Noonan tells Spain don’t do what we did,when I heard that it says it all FF fucked up this country and LAB/ FG just keep carrying on the exact same road ,if we don’t change the government we are going to end up in a place where we won’t have any hope or any say.

          • molly

            It will be great when Europe gets real I fancy a cheep weekend to Paris not only cheep flights but it will be great to see the rip off prices gone when you get there.

          • Adam Byrne

            Don’t hold your breathe on that one.

        • Dorothy Jones

          Deutsch lernen…

  5. If “growth” has replaced “equality” as the Communist Party’s central slogan then Maoist
    ideology is becomming more relevant into the future.

    This latest ‘exploitation phase’ is just a transient phase in the passage of time.


    In ther fifties and eighties net emigration was 400 and 200k. We could lose 500k over the next decade. What a mess. So much for the IDA and their job destroying MNCS. Unemployment is double the UK level.

  7. fordprefect

    I sat in the hotel in Shanghai as Enda Kenny et al paraded in twenty years after they should have in April with not a word of Chinese nor a clue between them. it was a disgraceful show of arrogance and as far as I was concerned it was just a jolly for the useless Enterprise Ireland shower.

    We aren’t at the races here in China. We don’t even figure in many things. We send milk and thats about it over here and the pervading attitude is of China being an exclusive club for Irish insiders looking for the next big thing.

    Its not the next big thing. Its big but we have to do it properly. There is potential but its hard. We have to put in the work and build the networks and I saw no evidence of this over here. “Local Irish” are shunned and no matter how hard we try to communicate with the embassy or get things going its almost impossible due to a total lack of any coherent support. Not even a powerpoint presentation nor a video showcasing Ireland was forthcoming and as for talking to state agencies a corpse would be more helpful.

    China is building like mad. I see it everywhere but when I went to the market city of YiWu last month I could see the demand from abroad for Chinese products is anemic and the wholesalers were quiet and some places were empty. This is a market city of hundreds of acres and 65000 wholesalers.

    When China goes bang we are all going to know about it. We know practically nothing about it and we have shag all people with business knowledge and Mandarin skills. I travel around China without an interpreter and I have business experience.

    We had the people. We had students from China learning english and business in Ireland but we squandered them by only hiring them to work in pubs and restaurants. In 2006 I hired a Chinese accountant in Ireland and now I live full time in China and speak Chinese. My phone is not ringing from Ireland and I am not expecting it to either.

    I’ve been here a few years and I have friends who have come here to make products and friends who have opened businesses. We need the language skills and to drop the “ah shur it will be grand attitude”

    That said. China is a fantastic place to be. Its difficult but its do-able but we need the right attitude. The Chinese have been through turmoil before so they will muddle through whatever comes next. I don’t think it will all go bang together but some places will slide and others will remain unaffected because they never came up in the first place.

    We need to open our eyes to China and Asia and be realistic about our chances and by understanding how things work out here we can either profit from or understand how things will go wrong.


    • Peter Atkinson

      We send milk powder, the Chinese just add water.

      I take it from this article we are coming close to the end game worldwide.Nothing is working.Even our precious gold has slid in value three days on the trot.Maybe its time we got into the plutonium market.

      We are edging closer to some form of worldwide conflict and God knows how and where it will be played out.What is certain is we won’t be witnessing it on some shaky film footage from Youtube.Remember we could rue the day we decided to turn off that old analogue broadcast.I for one am stocking up on the good old shortwave receivers.

      One thing here is for certain.Nothing any country is doing is making a blind bit of difference to the worldwide economy.Maybe the German victory over Greece in the quarter finals of the Euros will be the trigger similar to the killing of Arch Duke Franz Ferdinand which triggered the beginning of WW1.We all know how important football is these days.

    • Adam Byrne

      Fascinating insights into China.

      Kenny is an embarrassment, imagine that guy running around the world trying to represent this country. A thundering disgrace I heard him described elsewhere.

      I can well imagine the lack of support that the embassy gives, I’ve seen it myself in other locations. Pathetic. The words ‘hard work’ are not in the vocabulary of the the gombeen cute hoors.

      This place will never fulfill its potential. The hour of escape draws ever nearer and I for one won’t ever look back.

      • Reality Check

        Where have you in mind Adam?
        just curious.

        • Adam Byrne

          Back to the Caribbean Seamus.

          I was out there for 10 years from ’99 to ’09 and there’s no place on Earth like it.

          Having said that, I’m open to all opportunities while still young enough to adapt, but I will definitely die in the Caribbean.

          I think Philip’s comments above about being open to a nomadic existence are valid. From my point of view I like to be able to construct my own reality, I can’t be taking orders from other people or settling down to a ‘conventional’ life.

          All the best,


          • The Argentine Mendoza neck of the woods is worth a look too.

          • bonbon

            To order a coffee on those “islands” you have to speak Russian – the maffia has taken over. Putin is doing something about that, where even Medvedev got confused.

            Economics of the islansds? LTCM happened there over Russian GKO bonds under Kiriyenko. Soros ran/runs the Queens very own Quantum fund there.

            Look at whatObama did to Haiti – wall street economics.

          • Adam Byrne

            Haha ok Mr bonbon, which island and which ‘maffia’ are you referring to? I’m sure we can come to some compromise for your convenience.

  8. Philip

    Interesting article which is painting a global picture of what we face. Let’s not get too upset about China. The BRICS are a problem as well and the US and Europe are faltering by being both the cause and by being impacted. Global demand and thro’put is collapsing. FULL STOP. Which is odd given we have so many extra people over the last 2 dacades.

    I find the flight to property as an interesting commonality for all cultures. Everyone who’s a wannabe wants to be a landlord. Result? In the rush they get burned. No one seems to learn. I wonder is this just a common primordial cave man thing that all of humanity needs to tackle? Maybe worth some study. Personally I believe we need to learn be more nomadic – putting down roots and settling down is probably a large part of the problem.

    While I like Deco’s view of using utilisation as a measure of value and possibly ultimate health of the economy, I look to the likes of Belgium which probably has THE most advanced infrastrure you can get and still has for the last 3 decades around 12-15% unemployment…and they are bi and tri lingual as well. Belgium for all its development always felt tired and delapidated.

    I think the problem is one of homogeneous values of excessivness and want and worse a decrease in innovation. We all want the disney land dream and it simply is not there. The get rich quick, not get hands dirty, be a land lord, have the right spouse/2.5 kids it’s just not on. When all are contented (or enough are so) then the demand for anything new that changes the status quo will be washed away. The fact is next innovations will change society – looks like we have to be pushed before we realise and embrace the inevitable.

    Be a nomad…maybe the Irish are more advanced than we give them credit for. The US is intrinsically very nomadic and maybe the first to embrace a new era simply for that reason. Rules are changing. Time to leave your nests and fly.

    • Deco

      From the youngest age we are “educated” to demand a high level of consumption. We are “educated” to want “experiences” to sate emotional needs that are generated in a very carefully crafted program of needs management.

      They even call it needs management.

      Basically, your primary function is to have business give you “needs management” instructions via the dynamics of the crowd.

      The level of advancement in our society, is officially proclaimed in a manner that just happens to increase in proportion to the level of compliance to needs management.

      The recession is not a disaster.

      It is a door to personal liberation, in an intellectual and emotional sense.

      • Philip

        Fully agree and I am hoping a truly innovative way at looking at outselves and our real needs.

        Right now, it is falling apart simply because the mantra of “better faster cheaper” or whatever “need” is subliminated upon us is becoming banal.

        I can’t get no….satisfaction….

  9. Deco

    Wills, you will enjoy this.


    He is right about the ponzi scheme. The past fifteen years in European economics has been about leverage, and ponzi economics.

    Same in the US also. Same in the UK. Same in Japan.

    It seems to be the common consensus approach.

    Did the West really win the Cold War ? the West tells itself that it won. But maybe the dislocation that occurred in the Soviet Bloc created a false sense of security, in the midst of a long term secular decline ??

  10. Deco

    Now this is the type of nonsense, that will have the Politburo in Beijing realising how smart they are relative to everybody else.


    No Bruton. The problem is financial.

    Not that Bruton would know anything about financial problems with all of his pensions. Bruton has an existence that is oblivious to financial problems, from his living off the fat of the state for three decades.

    • cooldude

      Correct the problem is financial and it is based on most of the European banking system being insolvent. Their insolvency has now been taken on by the sovereigns most of whom are now also insolvent. Typical Bilderburg that John Bruton is he wants to use this mess to press for greater political integration even if that just spreads the cancer to all economies. Never let a crisis, which was deliberately created, go to waste is these guys motto. Nigel Farage is the only one making any sense in Europe!!

    • joe hack

      Hello Deco,

      For the first time in my life I agree With John Bruton it is without question a political decision that will decide whether the Euro will continue or fail and it is a failure of integration that the so called Euro crisis exist;

      It may have been a design plan of those (Fran̤ois Mitterrand) that pushed the euro Рbring in the euro first it is easier to achieve than full integration with the euro in place full ingratiation is now achievable.

      Remember Thatcher and Mitterrand were against the fall of the Berlin wall but Mitterrand realised it was inevitable so he persuaded Kohl to agree to the Euro the Euro was a political (Tool) instrument and it still is today, Remember Mitterrand spent time in a Stalag before he escaped.

      He knew the consequences of the village versus village mentality that is prevalent in Europe, the UK still play this game more than most in the EU Mitterrand set out to break this and Kohl understood this.


      Those like Vincent Brown formally of Dalkey (the core) play to the gallery those in the core of Dublin will have access to the airwaves to promote their books or bookfestivals on the Pat Kenny show cronyism does not just exist in politics it is inherit in the human condition.

      I am not suggesting that they should not be heard or listened to or that I do or don’t agree with what they have to say from time to time it is simply that their motives should always be taken into account like that of John Burton, Vincent brown of Tony Ryan’s Sunday tribune, Irish press ,Irish Independent and others Brown may justify this by saying he uses any source to get his point across but playing to the Gallery has made him a penny or two.

      I am sure you are aware of this.

      If an economist tells you that a bubble will burst it is not insightful, history has always proved them right just as a bust will lead to a boom or that a clock will strike 10pm once every 24 hours “that’s Capitalism for YOU”

      Brutton said “The challenge for Europe and its currency is more political than it is financial” if some in Ireland says that they did not vote for Van Rompuy for example it is untrue as Irish MEPs vote the Brussels bureaucrats in, we just have a very small amount of MEPs.

      That is the challenge for Europe;

      The challenge for Ireland and its self loathing is do we want to be part of this inevitable future of political integration or do we not?

      Bad words today;

      Communism, not sure if it refers to the communism that Engels and Marx’ wrote of, which has never been tried?

      Capitalism, has been tried but it does not work for most of the people, it has lots of carrots for the aspiring wannabe greedy people- you can all be rich.


      The media are controlled by Capitalists, Nigel Farage appears on Fox news and it’s a love in, his is not questioned by the capitalist advertisement and war mongering company.

      Barossa is a Communist! what does that mean? Is that good or bad? Or is it I don’t like him but I can’t explain why, If I call him a “commy or a red” its means he a baddy?

      Patriotism is now bad now?


      Today you can go any Media say want ever you like it’s taken as a fact and it is rarely questioned.

      A vote for Syrisa was apparently a vote to pull out of the Euro at least that is what every news channel suggested including “The BBC”, this was untrue.

      There is no Mechanism to be forced out of the Euro.

      • Deco

        I am not sure if Barroso is a communist. But he certainly is a chancer, and an opportunist. And he has no clue how to fix anything. He has been there for four years, and has presided over a mess. And it has got worse, and then worse again, and then worse again. The evidence is there to back up the claims of Farage that Barroso is an idiot, or at least a moron.

        Bruton sees himself as John Redmond 2.0. John Redmond, the original of the species, led thousands of Irish men to their death, in a war that still has not ended as far as the Middle East is concerned. And their deaths did nothing for Irish freedom.

        And here we have Bruton, emulating Redmond, displaying his loyalty to the Imperial project of the day. We cannot rely on Bruton to advocate the interests of the Irish people, when he defers to the imperial need that is always superior, to every other consideration.

        Mitterand was a soldier for the Vichy regime, who changed sides during the war, probably when he realised who was going to win. Another career convert to anything that ever fitted his sense of opportunism. The French Haughey. Except the Irish have copped on to Haughey.

        If Syriza got into power, they would make demands that are anethma to the bankers. Therefore the Greeks needed to be instructed that voting Syriza into power, would be really bad for the Greeks. And the corrupt Brussels-favoured parties were the safe bet.

        Once again, fear is used to produce a compliant government.

        The strange this is that until Syriza, or Independent Greeks (who are a centrist version of Syriza – focussed on cleaning the corruption in Greece), or both, get into power, this Greek crisis will just keep continuing.

        • joe hack

          Brutton said “The challenge for Europe and its currency is more political than it is financial”

          What has what Bruton said got do with Redmond, I assumed it was Bruton said that you disagreed with.

        • Reality Check

          QED about socialists…

          “A people can vote themselves into slavery, though they cannot vote themselves out of it”.

          “I have seen welfarism introduced as a temporary measure, intended for relief of the masses during the Depression, and have watched it grow into a permanent policy of the nation, so much so that even to question it is to draw down on oneself the opprobrious name of reactionary. In 25 years it has come to pass that one out of every six Americans is the recipient of government handouts of some kind, and the number is growing. To be sure, the very beneficiaries of the system pay for what they are getting, in taxes and in inflation, and they pay in addition the cost of administrating the collection and distribution of the largess”.

          Frank Chodorov.


          • Adam Byrne

            My parent’s next door neighbour is a drunken slob, always causing minor trouble around the estate. A coward though so won’t mess with me or any other man. Prefers to slap his wife around.

            He has been on the dole for 40 years! Since his mid-twenties. Hard to believe isn’t it? What use are people like this? I know what I would do with them if I was in charge, haha. So there’s the extreme example of the welfare state gone wrong.

          • joe hack

            Adam Byrne, I did not know you’re by your first name I just knew you as the son of those nosy people next door.

            I don’t have all the answers but if people are been forced to pay for other peoples excesses – for example paying the borrowings of others via the universal social charge or for the tax bill for the likes of Mick Wallace company via the household charge there is a serious moral hazard.

            21 thousand households would not have had to pay the household change if Mick Wallace had paid his companys VAT I work for myself and vat is not a disputible tax this was pickpocketing

            When I hear people say that people on the dole don’t want to work I always ask what were these dole spongers doing during the boom if they did not won’t to work, after all during the tiger there was only 3% on the dole which is considered full employment but there are some people who may never work due mental and other issues.

          • Adam Byrne

            I have no clue why the geezer never wanted to work. I wasn’t here most of the time after childhood and I’m not that interested or nosey – he’s just a waster as far as I can discern!

            I also have a small business alongside my studies and am careful to make sure my VAT affairs are always in order.

          • bonbon

            Von Mises Austrian School of Hayek et al, all have great difficulty with FDR’s successfull handling of the Great Depression, specifically Glass-Steagall banking separation. Ron Paul, candidate, Mises’ biographer, so far has not signed onto Walter Jones’ H.C.R. 107 for restarting Glass-Steagall immediately.

            After $29 trillion welfare to private corporations from AIG to GM to GS, JPMC, which “Austrian’s” seem to have no problem with and cannot tolerate any “interference” by Gov’t, it is indeed revealing to see the attack on FDR’s Social Security, Medicare, Medicaid.

        • bonbon

          Very good. Barroso “the communist” sees no problem with the Unites Soviet of Brussels. Honecker did’nt either! Interesting how an apparent raincoat switch reveals true character.
          Mitterand and father were press agent for Vichy, the guys who invited the invader in – blitzkrieg my foot. And he never changed his brown jacket color. So no surprise he forced the Euro on Germany after reunification (prodded on by Brit Thatcher). Mitterand loved the brown invader, but hated the modern nation of Germany. Now must we pay the Euro price for Mitterand’s Germanophobia?

          Who other than Conor Cruise joined with Thatcher (and Mitterant) to deliver this poison to Europe.

    • Philip

      Unforecastable????. This was seen by anyone with half a brain cell since the late 90s. Mr DMcW has written loads on same. So animal spirits were never accounted for? Definately a case of profound emotional dyslexia.

      • bonbon

        Correct. Sir Alan Greenspan, knighted by the Queen for bringing financial stability after Black Tuesday knew exactly what he was doing. But the only unforcastable aspect here was when Ayn Rands lover himself would shrug as Atlas Shrugged and wrecked the world. Sir Alan was instrumental in shrugging off Glass-Steagall, campaigned for 20 years to do it.
        His “counterpart” Volcker is right this week conducting a phone call-up campaign around D.C. to block any attempt to restore Glass-Steagall. Volcker has been caught red-handed making an exhibiion of himself. Now we know the true meaning of the Volcker Rule – banksters rule!

      • cooldude

        Correct Greenspan fully understood that his policy of excess liquidity and negative real interest rates would lead to a boom and bust economy but he just sold his soul to the banking elites. In his youth he was very clear on sound monetary policy but he joined the Bilderberg’s and took all the plaudits for his ruinous policies. Here is a piece he did in 1966 called Gold and Economic Freedom which shows he knew exactly how the system works

        • bonbon

          He started out as the lover of Ayn Rand, objectivist. He saw no contradiction with the rest of the oligarchy. It would be good to focus on the particular economics of this circle.

  11. molly

    Back to china again it needs the world to be back to the boom times,only then can china trive.will china rule the world someday soon ,I remember someone saying to me in 1980 that German scientists made the smallest drill bit in the world and set it to china ,the story goes that the Chinese scientists sent it back to germany with a hole drilled through it,
    China needs us to buy there goods,why is scrap steel at such a high because china needs it ,who owns USA /china.
    What happens when country’s stop buying goods from china,what happens when china wants its money back,china is the main wheel in the world cog and the wheel is comming off the tracks,all the trouble with oil prices is not good for china.
    When the collapse comes it will make our recession like a tea party,there’s no forward planning or thinking in this island of ours for the what ifs.

    • The word Hacker was once a word meaning an act done by someone when someone was butchered .

      Today it means something else and tomorrow what will it mean?

      • In the old days when shirts had a long tail and men couldn’t afford underwear, the shirt was hung on the line before washing and a Hacker was employed to remove any excess material on the tail before handwashing!

        • Tail Ends

          Monsieur Maurice Artois ….there was another time …a time before your recollections ….maybe in your great g g grandfathers time when he arrived from Calais to London during the then many blocade periods ….shirt and tails …were washed in very large basins using a strong natural detergent then called urine . Steeped under these volumes of shirts required hands stronger than your hands ….they required ….your feet . Thus those brave fectless feet walkers on the tails & shirts became known as the ‘ Walkers ‘ ….can you remember any of those family names in your neighbourhood in Dublin in the 50′s ?

          So much for your tail.

  12. David –

    I may totally out of sync here – BUT:

    Destruction of wealth; obsession with driving down costs in pursuit of need; the transfer of jobs to the Far East; the deluded policy of treating finance and property as an industry (to replace jobs redirected to the Far East) is why the West (i.e. States and Europe) are in the mess we find ourselves.

    Capitalism is the preserve of the few – so, I suggest, that transferring “capitalism” to China – is to our detriment (or worse).

    You make no mention of the appalling working conditions or the total disregard to the Environment which appertains in China.

    We have the bones of 2 decades of a flawed economic model ingrained into the West. Solution is to take back the jobs from South East Asia by means of tariffs so that Europe and USA can compete on an equal footing against “State controlled” capitalism – that has destroyed many of our lives.

    • Philip

      You’re not out of sync at all. The problem we now face is how to negotiate ourselves out of this mess when the whole ediface is crumbling around us. Confidence is falling at an alarming rate. We have no leadership and I fear that in the coming months, we will be accepting of any leadership who seems to have a good story to tell. That’s when we need to be most alert.

      • bonbon

        Negotiate with whom? As Tsipras of Syriza in Greece says you cannot negotiate with hell.

        Confidence is falling slower than the fortunes of the Inter-Alpha collapsing morass.

    • fordprefect

      China isn’t in South East Asia.

  13. Alex Jones and Mr Icke discuss The Globalist Endgame

    “They are all out of their minds”


    • Adam Byrne

      What on earth (or elsewhere) are the waffling about Pauldiv?

      David Icke is off his rocker. I managed about 7 minutes and that was enough.

      • Tony Brogan

        I found the whole thing interesting with some good insights.
        Hey Adam, you may think he is off his rocker but what he is saying that you are not on your rocker enough!!

        At least I am convinced there is a small group of elitists trying to take over the world. A mass depression being induced is a good start to enable the “saviour” ” for the good of the people” to arrive with a solution that will be gladly accepted by the masses. One world , authoritarian government just one step closer.
        In Europe the near failure of the Euro will be saved by a fiscal union, to be followed by a political union. World government block by block.

        We will be ruled from afar by faceless bureaucrats in serfdom unless a few more minds get more on their rocker.

        I am glad you have a dream to follow but I am not sure it is an escape.

        Have a great weekend.

      • It’s a matter of perception Adam.
        I think Tony is more in tune.

    • bonbon

      Icke, being of the British Empire, is having difficulties. To be expected.

  14. Peter Atkinson

    Below is an extract from the Gold Core newsletter today.Seems that even gold is not immune from the global financial scam.Pirite one could say, fools gold


    Chris Powell, Secretary and Treasurer of the Gold Anti-Trust ActionCommittee told Bernie Lo on CNBC Asia overnight that central banks arecontinuing to manipulate the gold market as they are interested insupporting government bonds and the dollar and keeping interest rateslow.

    Powell warns about “paper gold” and says that we “try to persuadeinvestors that if they are purchasing gold, they had better get realgold — metal. They should not get “paper gold” and keep it within thebanking system.”

    He says that “there is huge naked short position in gold” andestimates that perhaps “75% to 80% of the gold that the world thinksit owns does not exist and is just a claim on a bullion bank that isunderwritten basically by the central banks.”

    • Tony Brogan

      Tungsten bars plated with gold origated in USA. Good possiblity that most US gold is replaced with such.
      Some surfaced in china 18 months or so ago.
      The pure gold bars were spirited out long ago.
      That is why you need authentic gold (Coin guaranteed purity like a Canadian Maple Leaf) and keep it at home or in a private storage not at a bank.
      Silver too.

  15. joe hack

    Tomorrows sports headlines — Germany forces the Greeks out of the Euro

  16. Deco

    Laugh of the day, produced by the ECB and the EU Commission.


    And that is before Europe decides that it can fix the problem with money iit has not got, and that it cannot talk about getting until AFTER the election in The Netherlands, as it does not want accountability to become an issue, in the election.

    The defining moment of the entire Euro-bureacratic-centralist movement is the financial collapse, that politics created, and that politics will be unable to fix.

    “Europe” is the problem. More “Europe” will only make it even worse.

    • bonbon

      I’m laughing at China looking down from orbit right now at the United Soviet of Brussels ! After all they had the gang-of-four in the 1970′s and then rediscovered FDR.

      Been there done that!

  17. Deco

    Barroso takes a question from a Canuck and thinks he is dealing with a Yank.


    Alright, anybody could make that mistake.

    But it is funny the way he blames everything on the yanks.
    - Greek state borrowing and corruption
    - Spanish banks telling fibs
    - Irish regulators playing golf with the bankers that they were supposed to regulate.
    - Irish DoF officials getting wined and dined by Irish bankers
    - useless politicians and government ministers who were too drunk to know what was going on
    - Irish media outlets talking about house prices going up forever
    - Silvio B. having bunga bunga parties while the youth unemployment in Italy rocketted to levels not seen since the early 1960s
    - Gordon Brown and an end to boom and bust
    - Northern Rock
    - Fred the Shred and RBOS
    - Low interest rates causing a housing bubble in Spain and Ireland, and debt bubbles in Greece, Portugal and Italy,

    Barroso is in denial about how much of the mess in Europe was very much a mess that was made in Europe.

    • Deco

      Just realised.

      Barroso is a complete and absolute idiot.

      The Canucks must be rolling over laughing at this idiot. If they are laughing at the idiot, then it is fair that they should, seeing as he insulted them, and assumed that they are part of the Wall Street Casino. What an idiot !!

    • bonbon

      Actually looking at that blog ref. is a classic example of complete confusion.
      Barroso is what he is, no confusion there.

      But transatlantic finance is one complete ball of wax. Thatcher and Mitterand created the Euro, but only because papa Bush supported Maggie. So in fact GW’s (in)action brought this mess upon the FED now bailing it out with US tax dollars. Paul Volcker has openly admitted this $2 trillion heist must go on.

  18. bonbon

    Being a typical even if critical mainstream transatlantic economics blog, the only astronomical issues discussed are monster bailouts.

    China has astronomical ambitions, and now some are looking down and smiling at the EU antics and the implosion of Britain’s (who 3 times opened fire on China) Inter-Alpha banking group (Ulster Bank…).

    China Has Its First Crew on Its Prototype Space Lab

    June 18 (LPAC)–After a thorough check-out of Tiangong-1′s environmental, power, and communications systems, the three-person crew of the Shenzhou-9 spacecraft entered the small prototype space lab module, to begin a 10-day stay on board. The docking was performed through computer control from the ground, as it had been with the unmanned Shenzhou-8 craft last November. Later in the mission, the two craft will undock, and then re-dock under the manual control of the crew.

    Automatic docking is more difficult and created one of the worst potential disasters in space history, when an unmanned Russian Progress cargo ship tested a new automatic docking systen with the Russian Mir space station in the late 1990s. The Progress crashed in to a station module, causing it to depressurize. Quick thinking and action by the crew saved the rest of the Mir station. The Chinese crew will carry out the manual docking as a test, in case, in the future, there is a problem with the automatic system.

    All three crew members will live in the Tiangong-1 while the craft are docked, and Shenzhou-9 will be basically shut down. While two sleep, one astronaut will remain on duty. Tiangong-1 has about double the volume of the Shenzhou, and, as seen in the live TV coverage of the mission, has adequate space for experiments, as well as living quarters.

  19. bonbon

    Essential Background on Ulster Bank, Natwest Bank and their Inter Alpha Parentage

    It will be next week before Ulster Bank manages to fix its collapsed computer systems, resulting in further chaos for tens of thousands of customers. Ulster Bank has now admitted that the problem, which is the biggest banking IT failure the country has ever seen, won’t be fixed before the weekend.

    Ambulance drivers, nurses and home helps were among 40,000 staff in the Health Services Executive (HSE) who were left without wages yesterday because the health body uses Ulster Bank to distribute salaries. Workers in private-sector firms were also affected. The bank said 100,000 people had been affected by the collapse, but banking experts said far more were left unable to use their bank accounts.

    The problem is affecting both UK and Irish divisions of the banking group.

    NatWest customers were unable to transfer money in or out of their accounts for a second day as the computer glitch hit customers there. The bank said is was continuing to experience technical issues with its systems, impacting a large number of customers.

    Key to remember is that both Ulster Bank and NatWest are subsidiaries of the Inter Alpha Group Behemoth, The Royal Bank of Scotland, which together with 14 other global banks and financial institutions, including Lloyds, HSBC and Barclays, have been clipped, or downgraded, just last night by ratings agency Moody’s.

    Two articles which we posted in February of this year will help elucidate the reader as to what is really going on here…



  20. bonbon

    This is why “they want to break China”. Who said the green agenda was peacefull?


    June 17 (LPAC)–As a result of major disagreements between the trans-Atlantic and southern countries over key issues, the draft final document of the Rio+20 United Nations Conference on Sustainable Development, June 20-22, is filled with vague generalities, while the “controversial” issues have been omitted. The Brazilian delegation has had to take over the preparatory talks, still going on, to try to hash out agreement.

    Barring that, what’s left is what one observer called an “unambitious and overly general” draft document.

    Since trans-Atlantic nations didn’t want to fork over the money to create a $30 billion fund to finance the transition to a “green economy,” as proposed by Brazil and China, that proposal was ditched. In its place is a recommendation to create a forum to discuss the matter once the UN General Assembly begins this Fall. While the document emphasizes the need to strengthen partnerships through which transfer of “clean, green” technology can occur, no further details are discussed.

    Also removed from the document is a definition of “green economy” altogether, since there was no agreement on what it means or how to achieve it. There were reportedly at least 15 definitions of the term, some of which included the idea that “sustainable development” should be connected to national sovereignty–that is, that countries should be able to adopt whatever model of development suited them, without conditionalities being attached by advanced sector nations.

    All the draft could finally come up with is the statement that “green economy, in the context of sustainable development and poverty erradication, has different foci, points of view, models and tools in each country, according to its circumstances and national priorities.” Many developing-sector governments demanded discussion of poverty, health, education, and infrastructure to defend against natural disasters–issues which don’t fit into the population-reduction agenda of the Club of Rome and British monarchy -
    And I add many “respectable gentlemen” members of very special clubs.

  21. bonbon

    This is why “they want to break China”. Who said the green agenda was peacefull?


    June 17 (LPAC)–As a result of major disagreements between the trans-Atlantic and southern countries over key issues, the draft final document of the Rio+20 United Nations Conference on Sustainable Development, June 20-22, is filled with vague generalities, while the “controversial” issues have been omitted. The Brazilian delegation has had to take over the preparatory talks, still going on, to try to hash out agreement.

    Barring that, what’s left is what one observer called an “unambitious and overly general” draft document.

    Since trans-Atlantic nations didn’t want to fork over the money to create a $30 billion fund to finance the transition to a “green economy,” as proposed by Brazil and China, that proposal was ditched. In its place is a recommendation to create a forum to discuss the matter once the UN General Assembly begins this Fall. While the document emphasizes the need to strengthen partnerships through which transfer of “clean, green” technology can occur, no further details are discussed.

    Also removed from the document is a definition of “green economy” altogether, since there was no agreement on what it means or how to achieve it. There were reportedly at least 15 definitions of the term, some of which included the idea that “sustainable development” should be connected to national sovereignty–that is, that countries should be able to adopt whatever model of development suited them, without conditionalities being attached by advanced sector nations.

    All the draft could finally come up with is the statement that “green economy, in the context of sustainable development and poverty erradication, has different foci, points of view, models and tools in each country, according to its circumstances and national priorities.” Many developing-sector governments demanded discussion of poverty, health, education, and infrastructure to defend against natural disasters–issues which don’t fit into the population-reduction agenda of the Club of Rome and British monarchy.

  22. bonbon

    While transatlantic economists try to drink “monetary liquidity”, China again shows what people can do.

    China’s Huge Water Project ‘Going into High Gear’

    Construction of the central route of China’s South-to North Water Diversion is now going into high gear, two years ahead of this section’s original deadline. The South-to-North project is currently the largest water project in the world; when completed, it will carry water from the Yangtze River northwards along three routes to northeastern China’s water-starved cities, including Beijing and Tianjin. When finished, the project will carry about 44.8 billion cubic meters of water a year. The project includes constructing huge reservoirs and taking water under the Yellow River via enormous pipes. The central route will 1,432 km long when finished.

    As of June 10, over 60% of the projects in central Henan province have been completed, the provincial project office told Xinhua. About half the central section will be built through Henan. “Projects on the central route are now going into high gear, and the are expected to be finished by the end of 2013 and provide water in 2014,” according to project head Wang Xiaoping.

    “Ensuring construction progress and quality are both top concerns.” Builders are facing the coming rainy season, with high potential for floods and very hot summer temperatures.

    Construction of the eastern route, which runs from the Yangtze River to Shandong province, will be completed by the end of this year, and water will start to flow next year, meeting the original deadline. The western route, which would send water from the Yangtze directly into the Yellow River near the two rivers’ sources on the 3,000- to 5,000-meter-high Qinghai Tibet Plateau, represents huge challenges, and is still on the drawing boards.

    Another proposed water project, would re-open the full length of China’s ancient Beijing-Hangzhou Grand Canal to traffic. Currently, the southern half of the 1,776 km Grand Canal, the longest artificial waterway in the world, the section between Hangzhou and Jining, is still in use, but northern sections have been closed for 110 years. Retired Shandong government advisor Li Diankui told China Economic Weekly earlier this month, that “It’s time for the grand canal to be put into use again.” To do this, a way must be found to cross the Yellow River, likely by a channel under the river, and develop an advanced canal system.

    Li stated that “Neither railway nor highway can replace the canal. Water freight is not only low-cost, but [the Canal] can also carry the equivalent of three highways and two railways.” Closing off the canal in Shandong has also led to deterioration of its surrounding areas. “Over the more than 100 years when the canal was cut off, the ecology and environment of the surrounding areas suffered severely and has even led to some geological damage in Beijing and Tianjin,” Li said. The Canal is now a world relic, but Li Diankui thinks making it a working canal is the best way to preserve the 2,500 year old project. “Restarting traffic over the grand canal is the best way to protect the canal and the best guarantee of success.”

  23. Tull McAdoo

    It’s hard to know really where the truth starts given the level of u-turns, denials, muddying of waters, brazen it out, hard neck, gombeen gobshittery that’s is passing itself off as some sort of considered response to a crises that has well and truly shown up the rulers of Ireland for what they are……..

    I was given this link recently to some videos of this JB Yeats and needless to say he is not the painter, but a bloke from Northern Ireland who seems to give a shit about what is happening in the south…..He has some interesting things to say about our Seanie et al


    I am not really talking out of school when I say that we have closed out all our positions on the Euro as of my last visit to Frankfurt a few weeks back. We just cannot see where the growth is going to come from and without growth there will be no recovery and again it goes without saying that without growth we just have nothing to invest in.

    I mean how the hell do you invest in austerity?
    Unless people start to recognise the losses on their books and start to go somewhere towards real market valuations, then we are in for an endless round of “pass the parcel” and denial. If that continues for much longer then the euro project will be well and truly bollixed, simple as….We have software running down here and when we plug in the numbers for Europe the output reads like the f…… obituaries…

    Maybe on that note I will leave ye with AL Webbers piece which can act as a requiem for the Euro, holed below the water line with torpedoes from Ireland, Spain, Portugal, Greece and now Italy has her in the cross hairs at periscope depth, with all the forward tubes flooded , doors open and waiting to pull the trigger……
    Take it away boys with your rendition of Pie Jesu and Goodnight Ireland , Sleep Well….


  24. Tony Brogan

    Liar, Liar pants on fire

    Politicians habitually lie while corporate financial statements don’t.


    • bonbon

      GM’s GMAC books were wonderful – right up to the end.
      ENRON’s financial statements were awesome, right up to the implosion. Solyndra’s greenie books the same.

      Corporations spin-doctors are simply better payed than public servants. They have higher quality lying – sorry spin.

      Now Monti of Goldman-Sachs and Rajoy’s powerful economics minister Lois de Guindos from Lehman Bros. demonstrate a level of quality lying to be expected from 2 bailed-out Corporations, Goldman-Sachs, and Lehman Bros. London yesterday ordered regime change in Spain with Guindos to replace Rajoy.

    • bonbon

      And the ‘black-tie’ corporate accountants of simply the highest standards, Arthur Anderson Co. who did ENRON’s books, was disbanded for their wonderful arithmetic. Where I wonder did the operatives go then? Why to none other than that unquestonably upstanding firm PWC!

      So it would be good to see who is actually doing the corporate statements!

      Goldman-Sachs did Greece’s books to gain entry to the gates of hell called the Euro.

      • Tony Brogan

        Bon bon
        you are correct with regard to the financial corps you mentioned.
        i was thinking generally.
        most companies accounts are accurate and most politicians can not be believed, but your point is well taken

      • StephenKenny

        It’s interesting to think about Enron when looking at how modern large organisations work.

        In Brian Cruver’s book, ‘The Anatomy of Greed ‘, about his ex-employer, Enron, he talks about a senior Enron executive man he calls ‘Mr Blue’. Towards the end, Mr Blue says that his great fear is that the ex-employees will take ‘The Enron Way’ to the four corners of the world.

        If you look at remuneration policies in the public and private sector, the structure of banks and national financial laws and policies, even how a CDS works, you will see little bits of Enron. I forget who it was, but a senior investment banker described a CDS as ‘basically Enron in a box’.

        • Adam Byrne

          So you are saying StephenKenny that the significance of ‘Mr Blue’ is that he developed a late guilty complex about what was bound to unfold or what?

          • bonbon

            Mr Blue likely was legally bound to silence until the firm was dissolved. A lot knew what was going on, and the CEO was an unbelievable case.

        • bonbon

          The ranch at the crooked E, Enron, even had a false Bourse – a floor in the Houston building filled with “traders”. Hard to believe how far the swindle went. The bailout of around $80 billion and the damage done to the power grid (intelligent reconfiguration) which apparently the EU adopted (and maybe Merkel is depending on after shutting down nuclear) is a lesson.

          CDS’s packaged Enrons – I’ll bet they have them in all flavors!

  25. Morning

    Thanks for all the comments. Apologies for not being on top of the site these last few days, but have been a bit busy with new book amongst other things. Its a bit like trying to hit a moving target at the moment.



    • David

      I think you should in your book have a special chapter on the immediate events prior to the fall of the government ( FF) and to quote extracts from this site that might have been significant at that time . What is different now and how you have an advantage above any other writers is that you own a great site that I believe was formative at the time to contribute then to the fall of FF and their failed economic policies.

      Those contributions then were very significant and their revelations were extraordinary .

      Hark Hark……furrylugs, deco. tim, malcolm mc clure, andrew mooney and many many more

      • I believe the site then was as significant as ‘The Proclamation 1916′ , ‘within context’.New Era of Dawn.

      • Flip me John, I agree with the sentiment but as for my blabberings having any significant effect on things, I’d be dubious.
        Having said that, everyone of the long term posters here must surely agree that Dun Aengus and the multiplicity of “Wobbles” did actually cause change, particularly when aligned to your well documented contratemps with the powers that be, way back when.

        Anahow, I’m off to the Aran Trad Fest on the weekend of the 6th July.
        Might see you for a spin on the spaceship??



        • When you are there , stand inside the circle of Dun Aengus and that part that was the center of the circle before The Great Change . ( This is a cliff edge point) And look out and beyond to the Atlantic Ocean …..and THINK ….what was out there before ……BEFORE .

          Before …it was a great Land Mass with plenty ….and NOW…..NO MORE …..all is GONE.

          Now look down those rugged cliff edges to the foaming sea of white gloves . Read those protruding rocks and it will tell you that their parting was not an act of God rather it was a sinister conspiricy between the banks and the government .

          Now look inside the land …and see what is left . What Freedom do we have now ?

          Now walk the lenght of the remaining circle ( semi) and feel the Life that is Gone . What was a complete circle was made by man and what is left was made by both man and nature.

          Can you rebuild an Economy on that ?

  26. bonbon

    Keep in mind, transatlanticists, Obama is in a Nixon Watergate trap he cannot get out of (Holder’s gun-walking scandal). Things are about to happen, and not prettily.
    I has come to the point that the Constitutional removal of Obama is the only chance now to tackle the crisis. His continuing presence in the Oval Office is a menace to the entire globe. Just look at the Turkish flare-up over that jet.

    With Obama safely playing basketball somewhere, we can immediately implement Glass-Steagall as the first critical step to recovery.

    • bonbon

      The Lunatics are in Rome spinning up yet another chimera 130 Euro billion which does not exist. Monti went into the meeting saying apocalyptic things.

      I wonder how they will look coming out!

  27. bonbon

    China is heavily dependent on transatlantic markets and the implosion of the financial “economy” there is having immediate effect back in China. Cooperation with Russia is fully underway to offset this, but it is not enough.

    So watching China’s numbers is like a Richter Scale for an earthquake right under you feet!

  28. Dorothy Jones

    Eh folks, looks like there may be no ESM after all.


    That’s surely the beginning of the endgame? WOW! Makes putting out the issue to vote by our pols look pretty silly now doesn’t it?


    Extract from Irish Times article 120622 by Derek Scally:

    EURO ZONE members face a new wave of financial uncertainty after Germany’s constitutional court yesterday halted German ratification of the €500 billion European Stability Mechanism before its launch next month.
    The court in Karlsruhe has asked German president Joachim Gauck not to sign into law the Bill for the permanent bailout fund until the judges have ruled on several constitutional complaints, likely to be filed as early as next week.
    EU leaders meeting next week in Brussels were scheduled to announce July 9th as the day the ESM treaty goes into force, according to a leaked draft of summit conclusions.
    That date was increasingly in doubt, with nine countries still to ratify the treaty. Anxious not to be among that number, the German government secured opposition party support for the ESM yesterday after months of negotiations, guaranteeing the necessary two-thirds Bundestag majority in a vote scheduled for next Friday.
    That in turn put President Gauck under pressure to examine and sign the Bill in the days before the July 9th activation deadline. Hours after the Bundestag vote deal, conscious of widespread criticism in Germany of the ESM, the constitutional court intervened to ask Mr Gauck to withhold his signature.

  29. fordprefect

    The problem with China is that most “experts” are outside China. The slowdown is mega though.

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