July 16, 2012

Searching for real growth

Posted in Sunday Business Post · 166 comments ·

This week has been an extraordinary one for financial markets. On Friday, five straight days of losses were reversed in equity markets. The world is slowing down. The Chinese growth model, for so long the envy of the West, is stalling. The American recovery is spluttering and the crisis in Europe rumbles on.
What is happening is not that different from what happened in Ireland. A huge investment boom is coming to an end. But China has the resources to plough into the domestic economy, so let’s wait to see what happens there.

One of the dilemmas for China is that when you have an investment-led, rather than consumption-led boom, you tend to be left with overcapacity – an Asian version of a giant ghost estate. Cutting interest rates in such an environment, if it doesn’t boost consumption and goes into yet more investment, makes the problem worse.

Over in the US, something stranger is happening. The consumer, the great hope of America, has disappeared. Consumer spending is not responding to the many interest rate cuts the Federal Reserve has offered in the past few years. The problem now is that real interest rates are negative, so cuts in nominal interest rates are not going to help much.

In Europe, the ‘did they, didn’t they’ game goes on. The debate about what the Germans actually agreed to at the summit two weeks ago continues. Some high-placed people in Germany are saying that Chancellor Angela Merkel didn’t agree to backstop peripheral banking debts or if she did, she agreed to an accounting trick – taking debts off sovereign balance sheets but still making the sovereigns liable – rather than a eurozone debt mutualisation deal.

This will come out in the wash over the coming months, and we hope with a positive result for Ireland.

However, looking at home, the evidence from the economy is depressing. The latest GNP figures released this week show continual contraction. This is not a huge surprise, but to see the figures so starkly reinforces the question of where our growth will come from.

This growth question is made yet more urgent as unemployment is still rising and the latest Irish League of Credit Unions survey showed that 70 per cent of people said their disposable income had dropped since this time last year.

Over 1.8 million people had less than €100 left at the end of the month after paying all their bills. And nearly a quarter of credit card owners rely on another credit card to pay their bills at the end of the month.

When we add these figures and survey data to what we know about mortgage arrears, we can see that significant mortgage default crisis is almost upon us.

The big issue for Ireland is if we want to avoid a mortgage crisis, we have to find a growth engine and we have to do it quickly. In the boom, it was construction, but now that is gone, where will the growth come from?

The growth question isn’t just about economics; it is about the future of our society too. For example, since 2006, the number of Irish residents born outside the country has grown by over a quarter to a figure of 750,000. Without economic growth and its promise of opportunity for most people, how can we keep the lid on potential race problems and the type of ethnicity problems which have blighted richer European countries?

When we examine, again against the background of zero growth, some of the trends in our economy over the years, we should sit up and question where are we going.

Take the Social Protection budget. It was €8 billion in 2001 but it was €21 billion by 2011. This is a 162 per cent rise.
In 2001, the Exchequer net pay and pensions bill (excluding local authorities) was €10.2 billion; it was €16.2 billion in 2006; €18.7 billion in 2008 and about €17.5 billion in 2011 – an increase of 72 per cent since 2001.

All this would be grand if the economy was expanding at these types of rates. But that is not the case. For example, the value of GNP shown by the figures released during this week was €127 billion in 2011. Compare this with €130 billion in 2004. GNP – the real measure of Irish income – has hardly budged in the past seven years, but spending is way up as we can see from public sector pay and pensions and the overall social protection bill.
In total, comparing where we are now to 2004 and now, public spending in 2011 was 37 per cent above the 2004 level, according to the Department of Finance.

And while there is a great fuss made over the export sector, according to the very comprehensive economic website finfacts.ie, jobs in the international tradeable sectors are at 1999 levels. So we are getting lots of productivity in the exporting sector but few jobs, which means that the figures look good but the impact on local Irish wealth and income is not that significant.

Don’t get me wrong: we should welcome any increase in exports, but in reality the impact on the ability of the state to support its commitments is not as significant as it looks.
Let’s examine agriculture for a moment, the sector which has become suddenly sexy again. Teagasc says public subsidies comprised 72 per cent of family farm income on all farms in 2011, a reduction from 97 per cent in 2010.

Farm income rose 32 per cent and farmers are reducing their debts rapidly. Debt levels in the farm sector totalled just over €1.8 billion in 2011- a 20 per cent decrease on the 2010 figure showing a substantial repayment of debt.

However, it seems that increases in food prices rather than output explains why there hasn’t been a big increase in jobs in agriculture despite increasing farmers’ incomes.
Agriculture, looking at the subsidy figure, is still largely a ward of the state in some shape or form.

Take all this together, the huge public salaries, the social protection bill, the absence of jobs in exporting and the subsidised state of agriculture and it’s hard to avoid the conclusion that Ireland is a rich country getting poor quickly.
In 2007, I suggested on a TV programme that Ireland could become like Uruguay – a formerly rich country that became poor. The notion was dismissed as ridiculous by many people. Unless we figure out a new growth model, maybe we should have a second look at Latin American economic history.

  1. Adam Byrne


    • lar

      Growth cannot continue for ever, it is time that we realized that and developed a new way of sharing resources.
      Money is obsolete and with modern technology there is no need for most of the people to have to find menial jobs just to survive, a fairer way of redistributing wealth is now needed, particularly to third world countries.
      It is criminal that billions of people live in poverty when trillions of dollars are spent on armaments and luxury for the few.

      • +1 Bang on the money

        It is a very simple idea. Why not just dish it out more fairly and allow people to live a life of plenty. There is no reason whatsoever for thinking that there is anything wrong with this very simple idea

        Hard workers should be paid more yes but not at the expense of the rest

        There is no good reason why children in Rwanda suffer like they do. They are black babies and their lives don’t count. Only a sociopath would fail to feel sympathy for the poor in this world

        But we must reduce the population to 500m!

        But we can’t encourage lazy people to become lazier and we would be in mortal danger of losing the moral backbone of the country and introducing moral hazard I tell you. Not that there was any backbone to start with. It sounds like biblical times

        Forty years ago workers were reasonably well off. They are not now. Half of Ireland is living below the line again

        However expect the Eugenics crowd to come by have go, if they are hard enough. It should be a Turkey shoot and a right laugh

      • Tony Brogan

        Innovation and growth have enabled mankind since the dawn of time. It will continue to do so.

        distributed wealth evaporates. Those that produced it find no reason to produce more as it is stolen from them, while those that receive it waste it away. All are poorer.

        Teach those who have no wealth how to acquire it and all are better off.

        i understand the sentiment of the last sentence.

  2. Worm Hole Projection

    Super Sucktion Dryson Power Cash Evaporation

    Massive Wave of Plantation of Ireland 2012 style

  3. Gerry C

    Thanks for that David – for a moment there I was almost distracted from the reality of how bad things are – once again a fine litany of the depressed state of affairs with NO positive suggestions except the usual royal “we” which is of little help. As I said in a previous comment – you really do not help ( I won’t say us ) me by telling me that which is now old news. Surely with the wisdom you have ( prophecy of 2007) you can do better than say I told you so. I really wish “those in the know” would stop layering the news of our status on top of last weeks layer or sometimes yesterdays and start reporting the positive that exists without the immediate put down as seen with the exports statement above.

    • Colin

      Help? The time for benefiting from listening to David was back in 2000-2007. If you did, you wouldn’t find yourself in negative equity, and you wouldn’t show any bitterness towards him.

      You now want to milk David to make yourself rich. Ain’t gonna happen, seems like you missed the boat.

      • Tony Brogan

        I did not see anyone asking for personal help or financial advice either. you malign Gerry c

        I do not see any “solutions ” from David Mc either. lots of savvy observations but no solutions.

        count me as waking up pissed off at the obtuseness of most people and being frustrated with the endless road show of mindless debate and obscure reasoning.

        Getting to the heart of the problem and cutting out the cancer is the only answer or the patient dies. Band aids , medicines, potions, and bandages will not allow survival. There is no solution now to the debts occurred.

        The cancer is the central banking system. It must be cut out of the country and discarded. If it is still alive and wrigling dispose of it with a couple of quick chops with the axe.

        Out of the central bank is spawned the debt. The debt like the coils of an octopus emesh , disable and snare the pray. enfeabled the pray is drowned, its life forces digested and the bones discarded.

        such is the state of the people. Weakened, emeshed in debt and to be drowned in a sea of odious debt of the bankers direct making.Worked to death as a financial serf.given a paupers grave and forgotten.

        All the debate about who is or is not to be elected, or what will the Germans do or which country goes down next or will Ireland get reprieve is so much twaddle and a waste of energy.

        Kill the octopus and the coils losen. Freedom is at hand.
        Annul all banking privileges. Close the central banks, refuse the embraces of the european mistress, Stand and stride forth to seek your fortune in the world. Have nothing to do with the BIS, the UN, the IMF or any of these creatures of the bankers.
        Be your own self as a nation.

        Set up an honest money system based on silver and gold .Return money to the people as private property. The currency will be strong the world will beat a path to the door. It is easy to do do, it requires the will.

        • Fine sentiments Tony but nations are living breathing entities and not ‘patients’. I’m nobody’s patient. Are you?

          The analogy is derogatory, disrespecful and could only have come from the mind of a real cold son of a bitch playing god

          That was the word most favoured by infamous psychopaths and monsters like like Ewen Cameron and ‘Uncle Miltie’

          Patients my bottom. To hell wth their crazy ideas. We are ‘human beings’. Time to break down more walls. Let’s do it now

          • Tony Brogan

            Ireland is dying from the cancerous debts piled up by the central banking system . The credit boom was enjoyed while it lasted but now the marker is calling for payment.

            Do you have any comment on the proposed solution or are you too busy playing psycologist

      • What happened to nice Colin?
        You are a gas man Col
        Why so cruel?

        • Colin


          I’m always nice.

          Yes, I’m gas too.

          Ain’t cruel, I call it straight talking, why use 2000 when 20 will do?

      • That reminds me. My faither was well in with a certain social club and in 1976 they sent us boys off to a summer camp. We used to look out for own back then and It was a dormitory life and the summer was fucking reoasting. Council house green and cream walls and all that stuff

        He said to me : you will meet poor fellas who have no mammies and daddies. I was slow on the uptake as this was beyond my experience but later I met ‘sargeant’ who was an orphan and the happiest guy I ever met. We were great pals and protected each other from outside forces (bullies)

        On the day I left faither said, remember what I telt ye. If you disappoint me I will break your fucking back and you’ll never walk again

        • Colin

          So now you bully McWilliams from your keyboard at home, calling for him to work for free for a year. I think you are mad, and out of control.

    • Gerry C

      The point you make is valid – to an extent. I appreciate your frustration, indeed I might even share it. So all ok on that front. And I don’t take things/coments personally.If you take the time to come on the site, read and respond, then you are entitled to say whatever you want. Give me time over the summer and lets see.

      All the best


      • Gerry C

        Apologies if you are at the brunt of my and I’m sure many other’s frustration – thank you for the response and of course I will give you or anyone time but frustration is less at the situation as to the constant reporting / repeating of same – I and others are not immune to having to graft to get a forward movement but sometimes it feels as if the finger pointing and jeering being printed daily is like the sly foot trip. I do feel that we have an ability to perhaps better our situation if not correct it – we have the knowledge from past and the intelligence of the learned in abundance , question is ” will we use them?” – thanks again David and of course I value your – why else would i subscribe – hopefully yours

        • Gerry C

          I understand what your saying.

          All the best David

          • woodsey

            Not certain that a ‘pop-economist’ can be expected to come up with solutions that seem to evade the world’s presidents and prime-ministers. The value of David McWilliams column is that it cuts through the politics to get at the economics. The economics are for us to digest so that we try not to act as we did in the past. The solution for a world-wide debt crisis is the slow repayment of the debts coupled with an effort at slow economic growth. Not easy to achieve but, whilst that’s going on, we’re all likely to be a lot poorer than we were when we were spending other peoples’ money.

          • Not really. As usual

  4. hibernian56

    Out on the front lines things are getting worse. There are plenty of jobs, but a reluctance to pay for your efforts. Everyone is guarding their cash, can we really believe anything the muinteoirs are telling us?

    Last week we came back from a short break to find the gas off. Funny I thought, then realised I didn’t pay the bill AND had ignored all of those pesky “pay or else” letters. Bord Gais claim we owe them €650. No I said, we owe you €250 and an unsecured interest free loan they are calling a deposit of €400. I said I had no issue paying the €250, but I am NOT paying €400.

    This €400 will apparently be retuned to us AFTER 17 months IF we have a good payment history!! This is a Semi-state company no? Is their mandate to provide affordable gas or not?

    The “gentleman” I spoke to suggested I visit the community officer if I couldn’t afford to pay. I was trying not to picture his fat overpaid ass on the chairs we bought him (http://www.independent.ie/national-news/150000-bill-for-bord-gais-office-chairs-2861994.html).

    Anyway, they made me pay €525, half of what I “owe” plus the deposit or no cooking / heating.

    Gougers the lot of them.

    • Pedro Nunez

      Neo-gombeenism go deo!
      By gum,

      “What need you being come to sense,
      But fumble in a greasy till,
      And add the halfpence to the pence
      And prayer to shivering prayer, until
      You have dried the marrow from the bone?”

    • hibernian56

      I forgot to mention. They charged €80 for disconnection and another €80 will be charged for reconnection. €160 into the feeding trough.

      That should pay for a nice lunch for Mr Mullins in the next week or so.

      • molly

        That reminds me of clampers these are in the same school of thinking,my mate has 20 parking fines and he went to court and was fined by the judge.
        He still would not pay so a warrant for his arrest ,garda called to his home to bring him to cloverhill prison ,the cops said because it Friday we will leave you till next Tuesday and bring you in then,he said don’t call for me to early as I don’t get up till ten and the cops said you will only do a couple of hours and if you have no money the state will pay your bus fair home.
        That was over a year ago the cops never came back for him to do his couple of hours,my mate bought him self a cordless grinder and said if he gets clamped he will cut it off.
        Is he right?

      • Sounds like par for the course Hibee. I forgot to add customer service people to my list of hated ‘professions’

        With Hibernain in the final oh oh what scene
        All Hampden was covered in banners of green
        Too ra loo
        Too ra lay
        All Hampden was covered in shamrocks and green

      • woodsey

        It’s probably a bit late now but, back in the ’80′s, when Ireland went through a similar cash and jobs crisis, the payment of half of all bills received resulted in a cheap form of unsecured loan that ensured a continuation of service. The hope was that the arrears could be cleared later. I’m sure suppliers have since realised this but …?

  5. I have to say I was taking aback this week by the figures that revealed that Google is now our largest ‘exporter’. Leaving aside for a moment the issue of Silicon Valley companies using Ireland as a tax break, what the bigger picture demonstrates is that the country is now extremely dependent on this kind of inward investment. It has in fact become the main feature of our growth policy – to attract this type of foreign direct investment. The current administration has zero interest in developing an indigenous industrial and manufacturing sector. They trumpet the low corporation tax rate as an indicator of ‘what a good place to do business’ Ireland really is. In my view, if Ireland really was a good place for foreign investors to do business, we would be charging the highest rate of corporation tax and we would also picking and choosing the type companies we want investing here; asking serious questions about their intentions, etc. Was that not the dream that Arthur Griffith’s dreamed?

    So in answer to the question, ‘where will future growth come from?’, it is usually instructive to look at where past growth came from. I’m afraid this isn’t altogether helpful in Ireland’s case however. Past growth was largely the result of a fluke of circumstances. There was little or no conscious planning in any of it.

    • Gerry C

      very helpful

      • Dude, are you being like, sarcastic or something?

        • ha ha. that is a cracker Oscar.
          My lovely dude lol.

        • In Glasgow, Auld Reekie or Dundee it would be politely put something like this Oscar..

          Are youre taking the effing p*ss or what pal?
          Get the **c* oot of here before you get a fat lip buster and don’t start. Then again there are savages lurking in that post industrial wasteland which is trying hard to be grown up like the monsters in our nightly TV3 shockumentaries. The grass is always greener but it is all a shit hole unless you have the good sense to get out and live in the country and find your own sense of heaven. Adam will tell you

          The savages are blind victims of snide politial agendas and economic policies. But Begbie was not a product of post war economic policy. Of course not. How could he be? He was just a maniac right. Now the place is full of tssers like Bebgie

          Begbie was a warning. Soon there will be begbie mark 2.

          Still we had the biggest stadium on the planet till 1950. Not bad for a wee country

    • bonbon

      So it is time for conscious planning indeed. After first splitting the banks it is easy. But first split them before another Barclays falls on any naivete.

      Hamiltonian credit, and huge high-tech projects have worked and we have them all ready for the post criminal empire.

      The only question is will current text-book trained economists even recognize physical economic growth if it is right in front of their nose.
      Your point about the big dot.communists being an engine of “growth” is correct. Look at California after years of silicon (sand after all). Oakland is totally bankrupt, ruined by not only Schwarzenegger.
      California needs water, NAWAPA North America Water And Power Alliance, the Great American Desert needs greening with Artic runoff. This will dwarf even the China 3 Gorges (last of 37 turbines up and running this week). Europe has the new Marshall Plan for the Med and the Eurasian Landbridge.
      We have the Shannon Deep Harbor to handle the newly opened Arctic shipping and link into the Eurasian Landbridge. All worked out here :


  6. Arthur Tormay

    David, you’re depressing me, again. We met in Waterstones’ in Nov/Dec 2009 and we said then that it was only going to get worse. What I am wondering today is; is there any strategy we can employ to lift us out of this mire that doesn’t require the cooperation of Gov? The present crew have by now demonstrated that they are as inept in dealing with this as the previous crew were. So, we are wasting time in expecting any useful help from that source but unless we fix this from the bottom up, you are right that we will end up looking more like a Latin American country than a European one in another 12 months time.

    • Learn to enjoy the experience there are no chickens to count and hindsight now is a future tense until after it has passed.

    • Tony Brogan

      Individual protection is offered by holding hard assets and being out of debt.
      Land , house, physical assets owned, do not leave savings in the bond(biggest bubble yet to burst) market, or stock market in general. remove savings from the fiat currency banking system and save in physical (not paper promises to pay) gold and silver , held in hand. ((do not divulge to anyone if, or where it is held)
      It is every man for himself as there is no government help available or expected.
      The hyper inflationary depression is at hand.

      After that go live a life and enjoy the simple things. A walk (without I-pod) in the country, a bike ride, a bus trip, a family picnic at the beach, a quiet brew at the local with a friend or two.
      Eat good food produced locally and execise will clear the mind.
      Life will be simpler and better. Oh yes, abandon the MSM and get your info off the net where it is mostly still uncensored. Vote for integrity and not taxpayer funded goodies promised.

      Not a lecture here but a few thoughts expressed.:)

  7. Philip

    Time has come for a radical change in philosophy. The closest thing I have seen to try and quell uprising is the men-in-a-shed initiative or else get everyone smoking to ease the long term pension timebomb.

    We need less government and less state apparatus, but we need more community support. It seems the very engines for community – credit unions – are about to get their wings clipped by this insolvency act. What a sickener…the thing needed to try and get people out of a debt hole kills the very debt issuer we need and rewards the banksters.

    Right now, we seem to have a reserve of talent – a Chinese level of over capacity of same – we have infrastructure and we just need to nudge it in a roughly similar direction.

    Maybe we need to try anarchy for real. No Government. Just a constitution – there shall be no leaders. No laws. Etiquette is all we have left and maybe a few “Men in Sheds”

    • Anarchy is effectively what we have and have had for some time. The global economic crisis and our response to it was merely a reflection of this. These things start from the base and gradually erode the superstructure. The political foundations of the Irish state crumbled when the crisis happened. I would not go so far as to suggest that what remains is merely a phantom. It still exists and has some power; but it exists to serve foreign and not Irish interests. There was a time when it was able to serve both and that is what accounts for it having survived as long as it did; but this is the case no longer.

      • Tony Brogan

        The globsal economic crisis is a function of the production and expansion of the debt based credit system.

        The operators of the system are not stupid and know the results of actions taken. Therefore one must assume that this is a deliberate policy.

        all countries become destabilized by the debts and the people cry out for solutions. those solutions provided are inevitably for a larger more encompassing entity and thus the draw strings of a one world authoritarian government drawn a little tighter. This is what the EEC is all about. Loss of sovereignty and more bureaucracy. Less freedom and more controls for the people.

        A master plan is incrimentally implimented rather than anarchy but the result is as you suggest that it is foreign interests being served.


    In his books ,the late Ray Crotty wrote about the economic history correlation between Ireland and South America. Nobody listened . As usual, he was spot on.

    • Hi Slickmick

      There was at least one man listening. Crotty was my lecturer in Trinity in the late 1980s, he was brilliant. I remember sitting at the back of the hall, thinking this guy is on the money, he was cleverer and more passionate than all the other academics I ever listened to.

      So there are a few of us lucky enough to have come under his influence.

      As a result I have the annual Raymond Crotty lecture in Kilkenomics. Last year it was given by Professor Jeff Sachs. I know it small thing but its an honour to honour him.


  9. Willie C

    Have we reached the end of growth as we know it?

    Annual GDP growth is the goal of every country in the world.. is it not obvious that this is a delusion? Not physically, mathematically or biologically possible to have infinite growth on a finite planet. How can there be enough iron in the ground, fish in the sea and fresh water to continually expand economies in this “growth at all costs” model? Are we hitting the physical limits to this model?

    Something has to give. Maybe better to focus on needs rather than wants and community rather than corporations.

    • What some people have in mind when they talk about growth is one dimensional: that the only way is up. That kind of growth is always going to be unsustainable. Growth has to be multi-lateral: outward, inward and every other way you can think of. That is what the world is actually crying out for but the people who are in a position to affect that outcome aren’t listening, for some reason. Maybe they’re like the rabbit staring into the headlights.

    • Tony Brogan

      GDP is a monetary figure. So if the banks increase the money supply all prices rise and the extra money inserted to the economy results in a higher figure and voila! there is increased growth reported .

      In the meantime the distortions in the economy resulting from the induced extra money result in inefficiencies and a lower standard of living.

      It is quite possible to have a vibrant economy with a static amount of money in circulation with an increasinly wealthy people but the GDP counted in actual money could fall or remain static at the same time.

      The current calculation of GDP using cash is the illusion. There has to be a better measuring devise if one insists on such measurements which are largely meaningless anyway to the average person.

  10. Puschkin the Black and White Cat

    It’s a pity that the word anarchy has come to mean disorder and lawlessness. Anarchy means the exact opposite, it means freedom and society following natural law, personal and corporate responsibility.
    We are in a time of change worldwide. We are seeing that endless consumption of rubbish is not leading to happiness and cannot even support an economic model. For myself, I just need freedom. We have the capacity for great productivity in food, fishing, building, travel etc. We could re-balance the economy towards free time and not higher pay.
    I’d like to work 2 or 3 days a week and consume far less. As I’d have loads of time I would not need a car, my bike would suffice for all my travel needs. We have the worst of evils, big huge Government/Banks and huge debts. One should see our Government/Banks (and Governments/Banks in general) as a huge parasite that is willing to kill its host to keep on sucking and whinging. I suppose the setup is similar to feudal overlords, who paid their lackeys (civil serpents) to suppress their people so they could squeeze the very life from them.
    The Ulster Bank “problem” is exceedingly interesting indeed, a whole Dail speechless to rebuke their masters, how can a banking institution have a banking licence when they fail to demonstrate the bare minimum banking requirements that is, the correct and accurate keeping of customer accounts?
    As for O’Reilly, well it’s Déjà Vu all over again!

    • hibernian56

      Agreed. I am working less for less money and enjoying spending time at home. Unfortunately the feeding trough has to filled so us peasants must consume and pay over the odds for even the necessities of life today; food, power and soon water.

      I love my country but HATE MY GOVERNMENT and the phony state they represent. Its a scam. The so called state is a ponzi scheme where most of us work ourselves into an early grave to fill the state feeding trough accessible to a privileged few.

      Nothing will change due to the collaboration between state, media, the semi-state monopolies and their masters in the banks. Regulation = revenue = filling the trough.

      Now that the trough has been watered down there is a rush to end “social protection” whatever that phrase means. Endless tripe in the media about dole fraud. What about Mr O’Brien, Mr Lowry, Mr Ahern, Mr Cowen etc? THEIR rules, we pay.

      I want freedom and an acre or so to build a house myself and grow our own food. Free from THEIR taxes and regulations.

    • bonbon

      Ulster Bank fades in the shadow of Barclays. One may be IT, the latter calculated resolute thievery. Still the coincidental timing is indeed curious.

      • Tony Brogan

        Not incidental to those who have lost access to their private property. No money available. Deposits evaporated.
        Was the problem fixed today as promised. Maybe there is no money there at all and this is Ireland’s mini MF Global.
        Do you still trust the banks, any banks with your money

        • Tony Brogan

          See this Jeff Neilsen posting from LeMetropolecafe.com

          The Man Ray Table
          Topic du Jour


          How Your Bank Account Could Disappear

          Another “MF Global” highlights the risk of putting your cash in someone else’s hands

          Jeff Nielson

          On the same morning we hear that ¼ of Wall Street executives think that fraud is a necessary part of “doing business” in the financial sector, we hear of a second “MF Global”. The U.S.’s so-called regulators are now reporting that somewhere around $220 million in customer funds is “missing” at a financial institution known as PFGBest; once again closing the barn door after all the cows have run off.

          With at least one out of every four bankers at U.S. Big Banks (that’s how many admitted to being crooks in the survey) thinking that stealing is part of their job descriptions, it’s very important for people to realize how little protection there now is between these thieves and your bank accounts. Based on the writing of a number of other individuals with more expertise in these markets, it is apparently an inherently fraudulent banking process known as “rehypothecation” which is allowing the mass-plundering of accounts at U.S. financial institutions, with other Western financial regulatory authorities also rubber-stamping this relatively new form of bankster crime.

          Rehypothecation is a heinous practice permitted by the pretend-regulators of Western markets, where financial institutions are allowed to pledge their clients’ funds as collateral to cover their own gambling debts. I say “inherently fraudulent” since few of the clients of these financial institutions would ever knowingly enter into contracts with these gambling-addicts where their cash could be used to cover their bankers’ gambling debts.

          Instead, what is happening here is that the rehypothecation clauses are being buried in the “small print” of these contracts and (obviously) never properly explained to these clients: seemingly textbook fraudulent misrepresentation. The only “advantage” to a client into entering into such a contract is a slight reduction in fees, or slightly improved interest rate — certainly not near enough to entice people into risking some near-100% loss insuring someone else’s gambling debts.

          So we have our “regulators” (i.e. the only protectors of our funds in the hands of these admitted thieves) giving these fraud-factories the green light to enter into these inherently fraudulent contracts, putting any/all funds of these clients in permanent jeopardy. Thus it’s important to outline how this could happen with ordinary bank accounts.

          First it must be noted that the Corporate Media (loyal friends of the Big Banks) are referring to this as a “brokerage” problem. Understand that a brokerage is nothing but a legal “bookie”, an entity which takes (and makes) bets, and which must hold the funds of its “customers” in order to do business. Apparently the principal difference now between a “legal” bookie and an “illegal” bookie is that an illegal bookie is much less likely to use his customers’ funds to cover his own bad bets.

          What people must also understand is that the world’s biggest bookies, indeed, the biggest bookies in the history of the world are the Big Banks themselves (specifically U.S. Big Banks). Most of their gambling is done in their own, rigged casino: the $1.5 quadrillion derivatives market.

          Note that you won’t see that number quoted by the Corporate Media (any longer). As concern about the size of the bankers’ mountain of bets grew; the bankers asked the Master Bookie — the Bank for International Settlements — to change the “definition” of this market, and instantly the derivatives market shrunk to 1/3rd its former size.

          As many know, the BIS is known as “the central bank for central banks”. What a smaller number of people know is that this is the world’s great money-laundering vehicle, an entity created just before World War II specifically to allow Western industrialists to continue to do a vast amount of business with Adolph Hitler. In other words, it’s not exactly a reliable source for information. So I choose to use the same numbers that the banksters previously used themselves, before they started getting defensive about the insane amounts of their gambling.

          We are being led to believe by the Corporate Media (another unreliable source) that this problem is only a risk for all individuals with “brokerage” accounts, however as we piece together all the pieces of the puzzle (already revealed) this is what we see before us:

          Our banking regulators knowingly allow financial institutions to engage in recklessly misleading (if not outright fraudulent) contracts with their clients, through the use of complex “small print” in their account contracts with clients.

          The three largest U.S. “banks” by deposit (JP Morgan, Bank of America, Citigroup) have made bets in their own rigged casino, which total well in excess of $100 trillion, an amount which completely dwarfs their total, combined deposits (and assets).

          A large portion of those bets occur in the $60+ trillion credit default swap market. Pay-outs in these markets can (and do) exceed 300 times the amount of the original bet. It is bets in this market which “blew up” AIG, requiring more than $150 billion in immediate government aid.

          Following the Crash of ’08; these same banks mooched a package of hand-outs, tax-breaks and “guarantees” (i.e. future hand-outs) from the Bush regime in excess of $15 trillion, the last time their gambling debts went bad on them — and all of these banks have been allowed to dramatically increase the total amount of their gambling since then.

          It would take only a minor change in the gambling contracts in which these bankers engage to allow their creditors to seize funds out of ordinary bank accounts.

          The existing language for the bank accounts of these U.S. banks is possibly already so vague (and prejudicial to clients) that it would allow these banks to reinterpret the terms of these bank accounts — and allow rehypothecation to be used to rob the holders of ordinary bank accounts, people who themselves make no “bets” in markets whatsoever. Alternately, customers could be blitzed with an offer for “new and improved” bank accounts, where terms allowing rehypothecation are slipped into the contract, with the banks knowing that the “regulators” will do nothing to warn account-holders of the gigantic risk they are taking.

          The same media apologists who would scoff at this suggestion are the same shills who claimed “there could never be another MF Global”. Meanwhile we have the biggest gambler of them all, JP Morgan, just confessing to having made more of these bad bets — which continue growing larger by the $billion.

          When we add-in the fact that the U.S.’s mark-to-fraud accounting rules mean that these banks are easily able to hide the level of their insolvency, the pretend-regulators apparently don’t have the slightest idea of the level of risk to which account-holders are being exposed. This is the charitable explanation for these facts. The alternative interpretation is that these “regulators” are direct accomplices of the criminal banking cabal.

          I have consistently referred to the U.S. financial sector as a “crime syndicate” for several years now, often drawing considerable criticism for supposedly hyperbolic rhetoric. Obviously I have been completely vindicated here. One quarter of these bankers are now confessed thieves. The pretend-regulators (notably the SEC and CFTC) on a daily basis rubber-stamp the banksters’ acts of fraud (where they are caught red-handed) — handing out totally trivial fines, and not even requiring these thieves to admit their guilt.

          If there are any substantive differences between how the U.S. financial sector is allowed to operate versus any generic definition of a “crime syndicate”, it would be enlightening to hear what those (supposed) differences are. And now these thieves are closer than ever to simply reaching into peoples’ bank accounts and grabbing every dollar they can steal.

          The principal reason why I and others have urged to convert their banker-paper to gold and silver in the past was the 1,000 year track-record of these bankers’ paper, fiat currencies always going to zero (through the bankers recklessly diluting these currencies via over-printing). However, we can add to that a much more basic reason: every ounce of gold and silver which you purchase (and store in your own home “safe” or other secure location) is wealth which cannot be stolen by the banking crime syndicate. This is what commentators are really referring to when they speak of “counterparty risk”: placing your future financial security in someone else’s hands.

          What the large financial institutions of the 21st century have taught us (through the cruel “lessons” of their serial crimes) is that there is no one in the world whom you can trust less with your money than a banker

          • cooldude

            Excellent article Tony. We are approaching the endgame for this current experiment with unbacked paper money created by bankers. Converting the banker paper to sounder forms of money is the only protection we can take. The libor scandal is just the tip of the iceberg. ALL financial markets and instruments are manipulated because the system is based on an unsound currency system. Until we return to some sort of honest money system not in the control of this banking elite mafia the only growth going on will be a growth in the level of fraud being perpetrated on us by the banking elite.

      • bentley

        What on earth are you talking about ?? RBS is one of the worst LIBOR criminals … even more so than Barclays —– this is what you get when the Bank of England and the FSA collude with financial institutions to rig markets in order to create enormous monetray advantage for the City of London and the UK ….. media call these events scandals …in fact it is criminlaity based on fraud and deception and nobody in these institutions will even be prosecuted … a paltry fine compared to the advantage they created is the most that will be applied ,,. and even that goes back to the Bank of England indirectly, who were undoubtedly aware that most major UK institutions and traders were rigging the LIBOR market for years yet they just turned a blind eye to it.

  11. Willie C

    We have to get ready for a pace and a scale of change that is nothing like what we’ve been planning for.

    People in the financial markets are talking openly about how they think growth is going to stagnate in the developed world for the foreseeable and indefinite future.

    The more we’re prepared, the more we know what we need to do and the more we understand what was coming and don’t freak out, which is really important. Do things with an understanding that things are going to change rapidly when they do change, and therefore let’s get away from the idea of incremental change or steady-as-she-goes transformation. Let’s recognise it’s going to be dramatic when it comes, and therefore not restrict ourselves in our thinking as to what’s possible.

    We should be spending our time planning for what the new economy looks like and starting up the new businesses that will thrive in that context, getting our personal lives in order and ready for a very disruptive time, and building the resilience of our communities. – credit Paul Guilding.

  12. Fergal Walshe

    Thank you David. Informative and concise as always. Nobody should criticise a man who keeps us well informed. Today’s news is not the same as yesterdays. Similar maybe, but not the same! It is that kind of attitude that allowed our country fall into a state of delusion at the time when this situation COULD have been avoided or lessened, when objections to the pay rises and bonuses of the public sector COULD have been made! (along with other preventative measures) it’s too late now. But to the man who is sick of listening to the same old drole

    • 33square

      “Today’s news is not the same as yesterdays. Similar maybe, but not the same!”

      history doesn’t repeat… it rhymes

  13. Fergal Walshe

    …that is Gerry and authur. You didn’t listen yesterday! (2007) so please don’t let your erratic dispositions interfere with you seeing a way to help today.

  14. Arthur Tormay

    Fergal misses my point!
    I have listened and agreed with David for some years now. My point is this; while being aware of the current state of play and recognising that the current crew will not be able (or willing) to take the steps David has outlined, we should be looking for a way to fix this from the bottom up.
    There will be no revolution in Ireland, it is not in our nature.
    Whatever chance we have of digging our way out of this mess will only come from using our natural resources (by that I mean resources that come naturally to us, rather than, but not excluding, the other kind)to build an economy that can earn foreign reserves – the only real wealth.

    • Tony Brogan

      Foreign reserves can not be earned until there is a surplus in the domestic economy to export.
      Therefore the domestic economy is the solution. Each person buying local produce where posible and local manufactured items keeps the money (the medium of exchange) circulating to the benefit of all.
      Real wealth is built by the efficient use of resources within the country. Therefore no subsidies and as limited government interference as possible.
      Once the domestic economy is vibrant then exports can be made and the earnings from abroad saved.
      The answer lies not in consumerism and the acquisition of the latest gadget. Efficient work, savings, proper investment to acquire capital and frugality will succeed.

  15. Fergal Walshe

    1. Politicians need to have a wage capped at the average industrial wage. Somewhere circa 30-35k I think it is. This would help attract the right kind of candidates
    2. Cabinet ministers should have a requirement of relevant 3rd level education. Ie. they should be qualified to do the job

    Can we get this list to continue? Anybody think of any more?

    • Adam Byrne

      There have been dozens of lists of this type on this blog over the past 4 years that I have been involved. I think there was even a section devoted to them at one stage.

      No one ever listens, it’s like pissing in the wind. The ‘government’ are only interested in lining their own pockets, protecting the vested interests and maintaining the status quo. Meanwhile the lumpen proletariat are too lazy to do anything. Work hard and plough your own furrow dude, then get out if you can. This island is going to stay the way it is except worse (nice Irishism).

      • coldblow

        The only contribution I ever made to these lists (interesting as they were) was that everyone’s assets and income in Ireland should be public knowledge. I don’t know how that could be arranged, if at all, but I’d see it as a pre-requisite of doing anything.

    • tsoparno

      Just on point No.2, I too thought the same as this. Then we get Dr. James Reilly as health minister, look how that has panned out….

      • Pedro Nunez

        not sure its fully ‘panned out yet’, the health service needs to be a service to the people of the state, instead its full of failed leaving cert types who politicked up the greasy pole of political but not performance driven health care.

        Reilly says he wants to reform this, to me the jury is still out (in contrast to unfettered populism that operates in Mauritius). We have an under-performing so called ‘management’ but in essence ‘gombeen administrator’ class ‘running’ the health service taking big salaries, ‘performance bonuses’ for hiring competent professionals from other health care systems, raping them of all their productive ideas, getting them to do the work and gombeen manager presents these ideas as their own and gets ‘Peter principled’ to another level beyond their competence.

        The Irish political system is anti-performance, anti-cometitive and designed to achieve nothing other than keep Is mise le meas Gombeen in situ.

        We have Gombeens in all key regulatory positions of civil society to ensure that the clever, competent, capable and wealth producing Irish can;t succeed or produce without paying the toll/cut to Gombeen nation.

    • Gerry C

      3. All inquiries must have a mandatory requirement to find and hold SOMEONE accountable
      4. In addition to point 1 above – there should be NO additional payments other than a basic salary – plus there should be a contribution to what will now be a “modest pension”

  16. CorkPlasticPaddy

    Couldn’t agree more with what you had to say, Adam!! This country has completely ‘gone to the dogs’ altogether!! As I mentioned in a previous post the sooner people realise that if they keep on voting for the same old people at election time then you’re just going to get the same results!! What’s sadly lacking in all forms in this country of ours is common sense!! I say just vote for independant candidates at election time and let the political parties go hang!! You never know we just end up with a completely different type of politics altogether if we did??

  17. Iron Horse Express Cargo Robbery

    I think that currently the rumour that there is not enough cash to pay the redundancy lump sums in Ironoid Eireann seems to spell out exactly what is ahead of us …and very soon.

    • molly

      All the crap the government spin about how well we are doing in meeting our targets,
      Or are the farmers and the export led company’s going to keep the lights on.
      The current government will try to burrow its way out of this,they want to return to the markets for what to keep the lights on and the gravey train going.
      How can certan sections of this country get there pensions protected when these pensions have clearly taken a hit .my pension took a savage hit and I suffer but why should I suffer when the pain is not spread even.the government pension is in deficit and will be topped up with borrowed money.

  18. bonbon

    Looks like the German Constitutional Court at Karlsruhe has got months to take time for a decision. This means it must take into account the LIBOR and ricocheting scandals now daily hitting the news, which proves the level of criminality an immune unelected ESM gang would be. Deutsche Bank got itself Crown Witness immunity for cooperation. LIBOR runs right through the system, it could be called the system. The looting level was immense in multi-trillions, Barclays bailout amounted to $860 billion while this was going on – Geithner will testify on this.

    Whether or not “no one listens” as posted above, this is a real process unfolding to its lawful destiny.

  19. bonbon

    To put LIBOR in perspective, $360 trillion PER DAY was subject to interest-rate manipulation over at least since 2005, but likely since 2000 after Glass-Steagall was replaced with Gramm-Leach-Bliley. All kinds of instruments were tied to this, such as Credit Default Swaps, which will now reach the light of day. It is going to make very interesting reading!

  20. joe hack

    But on a brighter note, I seen the sun for all of 3 minutes today, the growth is slow and withering in the economy, the crops are suffering with growth issues too, crop yields are dropping stock market yields may rise as a result at least in the potato market due to a rise in prices, it seems there is a glimmering of hope for some, but for the majority of us pheasants, we may have less food on our tables.
    The good news is with all this doom and gloom, weather wise at least, skin cancer rates may fall and the HSE’s budget may be reduced as a result of it.

    Peter sellers AKA “Chancy Gardener” in the movie Being There said “spring will come again” if only we had a gardener running the economies??

    Just looking on the “blight” side of life, at least 3 minutes of it, we are not in a famine just yet.

    Now is the winter of our summer’s discontent made glorious by 3 minutes of sun?

    • bonbon

      Not to blight your enthusiasm, but it looks like the Sun has gone either into a Dalton or Maunder minimum. Last time that happened the Thames froze, you could walk from Copenhagen to Malmo, and have a nice hot up on the way!. Repeated crop failures for the poor of course. So much for idiotic global warming, or food shortages!

      Not sure how this worked in Ireland. It was well before the so-called famine (Gorta Mor).
      We have extreme weather variations now plaguing the US harvests. On top of that a financial collapse. The last time that happened was in the 1300′s when the Bardi and Perruzi banks collapsed (derivatives!) sparking the black death.

      Nature has a way or reminding us to progress or die out!

      • bonbon

        nice hot cup of tea on the way

      • Tony Brogan

        Yes, the global cooling and the coming reduction in temperature will re-freeze the arctic and put paid to the touted northwest passage solution and the Shannon superport. It will be another government boondoggle.

        • bonbon

          The Arctic clearing is not due to global warming, rather the polar jetstream changes. This is a big subject in itself.

          Worrisome is the fact that during the last ice age the arctic was mostly ice free, the glaciers formed on mountains lowering the sea level, such as the Rockies.

          The Arcic was already ice free during the previous MWP, the Middle Ages Warming Period the Global Warmers did everything to remove from the data.

          Major sources of raw materials in Siberia are about to be tapped and moved, and Rotterdam plus the Channel are choked.

          • Tony Brogan

            I found Every reference to the artic water clearing of ice is about global warming. I found nothing about jet streams . any references please

          • Tony Brogan

            I just did some more reading.

            It would seem that the warming that is melting the arctic ice is exposing more water to sunlight and increasing more solar absorbion leading to greater warming . a self propelling sequence. In turn more moisture is lifted into the atmosphere and so in areas there are greater preciptation and more snow. Pressure gradiants are changed and softened and so this affects the jetstream and is making it stick in one place longer than usual.
            The jet stream is the border of warm air on the south and cold air on the north. This is resulting in extended cold and snow in some places but extended warmer than usual in others at the same time. Longer more extreeme weather periods.

            none of this was suggested that the jet stream affected the winds in the artic and pushed the ice to one side. Rather that the jet stream is affected by the open water.

            however if the climate cools and the ice rebuilds then it may reverse the cycle. We will see.
            I have seen nothing to indicate ice patterns in the past in colder or warmer periods.

          • bonbon

            The so called “hockey-stick” of the Climate Research Unit (CRU) at University of East Anglia emails is caused by getting rid of this :
            The incriminating emails have attached fortran code with comments of how to fudge the statistics. So not only LIBOR, but science is gamed.
            The reference to the change on polar circulation is a series of NOAA reports eg. http://www.arctic.noaa.gov/report10/seaice.html

          • bonbon

            Arctic Oscillation Index. Same but more pronounced occurs around Antarctic. Improved remote sensing brought this to light.

      • coldblow

        I’m reading Enquist’s Livlaegeren’s Besoek and I’ve got to the bit where Struensee (the Danish govt’s Enlightenment prime minister) is on trial for his life. The Queen, his lover (daughter of British George II or III), is under arrest, and through the window of the castle she sees that the sea has frozen over. Around 1772. Is this the date?

        • joe hack

          Yep, the economy over heated due to greenback effect and now it has cycled back to a frozen economy.

        • Tony Brogan

          1400′s to the mid 1700′s was the cold snap. Been warming since but now may be reversing to a cooling trend since 1998. Related to solar radiation cycles.

          • bonbon

            Solar cycles :

            A quiet Sun, like now, allows extra solar high energy radiation to reach cloud formation levels, causing more cover, dropping ground temperature. This is the magnetic field region and solar wing sweeping effect.

            Anyway we get exposed to galactic environment. And to top that we are heading into the galaxy bow shock wave again after 62 million years. Last time that happened…

  21. molly

    Take all this together, the huge public salaries, well said and as we are all aware there is more going out then is comming in.
    It’s called greed of the gravey train,what I can’t get my head around is majority are sitting back and allowing this to continue.
    Remember all the lies told before the election has anything changed,yes things have got worse.
    This thing about all the people who are the new poor and at the end of each month have very little left,well is that living no ,what happens when the heating backs in ,the fridge packs in I could go on and on.
    We are being controlled by people who we put in charge and these people still have a very good standard of living and are so far out of touch that there heads are up ther back sides.
    I am sick and tired of the government in the Media saying that they know the people are suffering and we sit back and here thers lies.
    We now live in a banana republic.

  22. Harper66

    Very timely article.

    The media has been awash with “it’s time to look at the positives” guff from Fg since they came into power. It is all smoke and mirrors….

    From a recent Namawinelake post – “Many of us are still scratching our heads at the Irish Times claiming “the domestic economy grew for the first time in two years in the first three months of 2012” — perhaps that was Mary Minahan’s contribution to the article, rather than the Irish Times’ own economics editor Dan O’Brien! Economist and UCD professor and Forbes contributor, Karl Whelan felt it was Orwellian (see his tweet…”


    Seeing the stories about DR. Debt Reilly and Phil and his soft loans clarifies for me that really FG and FF are just different cheeks of the same arse. I have heard this government described as being like the pigs in animal farm. I am in agreement.

    There is no meaningful growth beyond the accounting exercises continually churned out by Government. Anyone who is actually trying to run a business will tell you. The only businesses I know of who are anywhere near comfortable have some contract or other with some government department.

    A smaller and smaller group of people are paying for those at both ends of this society, it is unsustainable and as they say gravity always wins.A point in case is the recent comments coming out of europe about burning Spainish bond holders. I spoke to an ardent FG supporter today who was in terror of the prospect of Spain burning bondholders because of the heat it would put on the Irish government…….

    • coldblow

      “A smaller and smaller group of people are paying for those at both ends of society.” I think this may be true but I am a little surprised to hear you saying it. Most of the unemployed these days are ‘deserving poor’ surely and need help (of course I’m sure you agree). But perhaps the undeserving poor need a few incentives? One problem is that they all end up being pushed into that bracket (and that the incentives for the hard cases might not work anyway).

      About the sheltered private sector – this is one of the things Paul Hunt goes on about at irisheconomy, but I thought you had no time for him (I could be wrong and have the wrong person). That’s not to say that I agree with everything, or even most of, what he says. For example his calls for privatization seems quite wrong to me (I’d take Hudson’s line here: the sharks would borrow the money to buy cash cows and consumers would end up paying their interest plus fat profits) but on the other hand Crotty was a staunch proponent of cutting the state back to the bone (altough he also advocated a national dividend payable to all citizens, irrespective of ther other income – this is a different concept to job-seeker allowance, seeing as there aren’t any jobs).

      Not being smart here, just trying to keep tabs.

      • Harper66

        You have me mixed up with someone else RE: Hunt. I don’t think I’ve ever mentioned him.

        Not sure why you’re surprised to I wrote “A smaller and smaller group of people are paying for those at both ends of society.” I believe in capitalism. I think it is imperfect but at present it is the system that most allows people to reach their potential.

        I don’t think we have capitalism in the west .What would you call it Neo Liberalism? I occasionally do a little mentoring for local groups looking to set up businesses in an area I have knowledge of. (I do it for free)I am amazed at how quick the government gets onto the backs of these people looking for their “slice of the pie”. It is crippling. Likewise I attend meetings with “suits” who talk big .They are on big money and achieve very little.

        Government is too big and too expensive. Professional fees from doctors, solicitors etc have driven the cost of living in Ireland to an extent that our wages are unsustainable. 55 euro to visit a doctor? Crazy. I spoke to my father today (a pensioner)he got a letter through his door today telling him his refuse collection charge is rising again…and he is also expected to pay a household charge?? I have lived and worked in England and when I recall what I received in return for my council tax it just highlights how badly out of kilter things are here.

        With regard to those on the top and bottom – I don’t regard those who have lost their jobs and are now unemployed as being on the bottom. It could happen to anyone of us. It angers me that a life time spent paying prsi etc entitles you to the same as someone who has never paid a cent in tax or even worse to be self employed cuts you out of the equation entirely. We are subsidising a life for a certain strata of Irish society (as is the case also in the UK) that is unsustainable and will have to cease at some stage. Then we will have another crisis on our hands.

        My view of the world is informed by my own experiences. I was born into a working class area to a family that had a strong work ethic and a belief in education. I have worked hard and paid my own way. I received grants for my fees throughout college and university without those social supports I would not have achieved what I have. So yes I staunchly support social supports but only when they act as aid to people developing and not when they act as a barrier to people developing themselves.

        • coldblow

          Thanks Harper.

          I see it all as a minefield. There are loads of obvious reasons for reform, but the problem is it would almost certainly be used to advance other agendas that would make things even worse.

        • Deco

          We have a facade. It pruports to be capitalism with a socialist safety net. Really, it is a rigged economy controlled by vested interests, where ideology is selected because it suits the need of a particular interest group.

          The “debate” is usually built on false assumptions.

          We need a more level playing field. This means cut out all the market rigging mechanisms. Especially the professions, and NAMA.

          • Colin

            100% correct Deco. But I would see Ireland as a Socialist-Liberal-Justiceless society.

            Socialist with BIG Government and High Taxes & Rates (VAT, VRT, Stamp Duty, etc…) Social Partnership with ICTU at the helm shaped our economics.
            Liberal Chattering Classes have been well fed in the last 20 years, and continue to be comfortable. Quangos remain mostly untouched.
            Justiceless, as murderers and rapists are given light sentences or let off after a technicality is found to be at fault, e.g. Garda Arrest warrant not signed off before actioned.

          • Tony Brogan

            Good summary Colin

          • Pedro Nunez

            +1 colin

  23. molly

    David how did the hols go and tge family dog,my sons wife is from Africa and can’t understand how the Irish treat there dogs like there human.

  24. Philip

    Anyone listening to Vincent Browne last night. Interesting stuff on post war GDP ratios – it was around 250% for UK etc. Italy was 70% inflation in the 50s and interestingly, the Marshall plan (in an effort to keep the Iron Curtain at bay) wiped out Germany’s debt down to 20% of GDP – a great stimulus.

    Seems to suggest that when there is a will there definately a way and history needs to repeat itself.

  25. piombo

    We will grow as soon as the Irish economy becomes wage-competitive versus the EU like it was in the ’90′s.
    To achieve this Ireland needs to slash it’s civil service wage bill by at least 35%.
    Same deal on social welfare and pensions. We should benchmark Northern Ireland.
    I know the familiar refrain, we are an expensive country, etc.,
    The reason we are more expensive than N.I. is that our salaries and wages are much higher.
    The other reform needed to get us back competitive again is a secular overall in the legal and medical professions enfusing competition into these professions.
    There is a lot of pain in the above, but no mortal wounds. Instead, the opportunities I believe would be astounding as we would compete in the Global Services markets with competitive wages, good time zone, English speaking open economy.

    • Philip

      This is the “obvious” solution and it would work. But until all parties as we know them are out, we are not for changing status quo.

      I believe that all current incumbents in the dail are tainted by the good life and the gravy train if EU benefiance. Becasue everything is turning solwly to pooh we are reaching a point of explosive revulsion of current day politicians and the media that has supported them. This is not good – it creates uncertainly and a rise of Messianism for that search of a way forward. We might be lucky – who knows.

      Anyway, Ireland is a vassal state to the EU with the current gombeens acting as paid caretakers. Who knows, maybe the EU needs a lower cost militia to keep this country under control. Be careful what we wish for.

    • coldblow

      Hi Piombo

      I enjoy your posts but don’t agree with much.

      1 First sentence. No – race to bottom ultimately serves nobody, capitalists included.
      2 Civil Service only a small fraction of Public Service. If govt chooses to intervene in PS wages then it should also be able to intervene in other kinds of wealth and income.
      3 The reason we are more expensive, according to Crotty, is mainly because land is held without cost and is not productive enough. High wages a result rather than a cause. Agree with B. Kavanagh’s call for land tax above.
      4 Cutbacks in legal and medical costs – agree.
      5 Pain. Much more pain for some rather than others. If your plan worked (and in view of the effects of debt deflation we see around us it might well not) Ireland Inc would survive. But who is Ireland Inc exactly?
      6 English speaking. How many workers would this really be an advantage for? As Hartnett said:
      English is a necessary sin,
      A suitable language for selling pigs in

      • coldblow

        Just to clarify:

        2 I don’t think govt should interfere any more in these things if possible as their track record isn’t that good
        1 The issue of a fair wage for labour and that of generating demand for goods – wasn’t this what exercized Marx and later generations of ecnomists, until relatively recently when it seemed to have become unimportant?

        • joe hack

          I suppose there is some logic in some of the above cut everything to zero and the only way is up let’s pay ourselves less than everyone else on the planet.
          We could have those on the dole and those who worked all their lives to put the likes Leo Varadkar through trinity the man has not worked a day in his life and is still living off the state a true sponger, the neck of his ilk.
          We could have the people who educated him making jewellery out old tin cans that they collected from a tip sure we could even let them use Zimmer frames as tools to dig on the dump.
          We good sell the jewellery to 3rd world countries but they may enforce a trade embargo or who know they may invest and there people may buy.
          So I agree let’s cut the wage bill and increase taxes on those who abused the goodness of a mature state we good start by cutting Leo Varadkar wage and asking him to pay back for the expensive education he received the free ride he received and he has not yet returned anything to the society others built a negative return on my investment in him he has sponged off those who worked all their lives including those below on minimum wage.
          What selfish sentiment I read here above
          A sickness in our society of greedy self interested people worried about their money and gold hording.
          They take and give nothing and blame those who struggled to give others every opportunity denied to themselves.
          What a sick group of people who dare to not to thank, but rather asked for more from those that gave and who always left the first steps of the ladder on the ground and thy continue to try to pull the ladder up that was there for them.

          • piombo

            Hi Joe Hack,
            I am not advocating cutting everything to zero. I have always held to a minimum level of social welfare that protects people from desperation. I come from a smal farming background so I know how important social welfare is to sustain families and individuals in hard times.
            Equally, a lower paid public service does not mean penury nor even poverty. It simply means that the benchmark for private pay is lower and thus more competitive.
            I would also ensure that no one under say €60,000 per annum pays no more than 33% in direct taxes. I would advocate compulsory health and pension insurance for all however.
            My principal concern is seeking to render Ireland’s people and hence economy more attractive to investment. Whilst we have our weaknesses, we have awesome strengths in our DNA which render our people and country an excellent place of business.
            However, forget about the home market, it does not exist in reality.
            My company competes with the Chinese, Indians, Saudis etc., in the mineral and metals business. I sell to the Germans, Italians, Israeilis and the British.
            We Irish have nothing to fear about competing except perhaps ourselves. Forget the politicians and their business. They do not constitute any hope for the Irish people in any real sense.

          • Deco

            Expect nothing from the gombeen element in Irish society except deceit and elabourate scams dressed in superficiality.

    • Harper66

      …all well and dandy but what about the over hang of personal debt?

      How would people repay their debts if their spending power is slashed?

      why bench mark to northern Ireland?

      Could it be a familair refrain because it is true? I am back and forth to England on a frequent basis and I assure you the differences in costs is astounding.

    • bonbon

      So you dole out pain to save the precious Euro. I believe we should dole out pain to the financial system, as it goes into death throes. You apparently are not up-to-date on LIBOR and the HSBC drug laundering scandals.

      What is most painful for these is Glass-Steagall. Deliver it. ASAP.

  26. Tull McAdoo

    Nothing will contract your GNP quicker than the absence of discretionary spending, especially when your economy has passed its industrial phase and has become 75%+ dependent service economy.

    Given that the bulk of the remainder of the economy, the 25% is being led by transfer pricing multi-nationals etc etc. then it does not take any great genius to figure out that we are on the same trajectory as the pelican who flew in ever decreasing circles until it flew up its own ass.

    • Tull McAdoo

      Sorry last bit there ,is a bit of Ozzie humour. I remember saying that to a Japanese bloke up in Tokyo some years ago, nearly choked on his suschi, still make me laugh even after this time…..anyway….

  27. contrarian

    In 2009 our business dropped like a stone (down 60%). Over the last 12 months – no of inquiries up 50%. Sales back to 2008 levels. Many of our customers have crawled out from under their bunkers asking for prices.

    While I totally appreciate DMW excellent analysis – sooner or later all recessions come to an end.

    Many folk thought the bubble would never end – same for this recession.

    Are we being too pessimistic?

    • Tull McAdoo

      All recessions come to an end, but do the careers of the people who caused them? There in lies Ireland’s dilemma.

    • Gerry C

      Congrats on that contrarian – delighted things are improving and no you are not too pessimistic – it’s great to hear a positive but I do agree with Tull McAdoo in part – I think the system and the confines in which many find themselves in are more the problem. I honestly do not believe anyone elected to politics enters to make a balls of things but the rules / precedents and obligations of the past create obstacles to what are well meaning people. Well done again and continued success.

    • bonbon

      First this is not a recession, just look at the scale of the bailouts, and the Barclay LIBOR. It is the funeral of the 40 year globalized (funded by LIBOR) looting.
      Now we face a Depression of global scale, directly threatening massive population reduction if not stopped.
      The last Depression did not “come to an end” – FDR acted decisivly to turn it around. Glass-Steagall bank splitting was that action. If Hoover continued as Brüning did history would have been very different – you most likely would not be here to blog. It is that serious.

  28. joe hack

    I suppose there is some logic in some of the above cut everything to zero and the only way is up let’s pay ourselves less than everyone else on the planet.
    We could have those who are on the dole due to circumstance and those who worked all their lives to put the likes Leo Varadkar through trinity, the man has not worked a day in his life and is still living off the state, a true sponger, the neck of his ilk. Sure why not shoot the pensioner and those on the dole to save a few euro bullets are cheap.
    We could have the people who educated him making jewellery out old tin cans that they collected from a tip sure we could even let them use Zimmer frames as tools to dig on the dump.
    We good sell the jewellery to 3rd world countries but they may enforce a trade embargo or who know they may invest and there people may buy.
    So I agree let’s cut the wage bill and increase taxes on those who abused the goodness of a mature state we good start by cutting Leo Varadkar wage and asking him to pay back for the expensive education he received the free ride he received and he has not yet returned anything to the society others built a negative return on my investment in him he has sponged off those who worked all their lives including those below on minimum wage.
    What selfish sentiment I read here above
    A sickness in our society of greedy self interested people worried about their money and gold hording.
    They take and give nothing and blame those who struggled to give others every opportunity denied to themselves.
    What a sick group of people who dare to not to thank, but rather asked for more from those that gave and who always left the first steps of the ladder on the ground and thy continue to try to pull the ladder up that was there for them.

  29. Tony Brogan

    James Turk interview on King World News blog

    Points out how there is a silent bank run on European Banks that is back stopped by sovereign bonds that are downgraded to two points above junk status in the case of Italy. Even so the ECB accepts these bonds at face value.

    There is a constant devaluation of the fiat currency and so the protection is to own hard assets. Land, houses, gold and silver. do not save money in the banking system!!!

    Read more here…

  30. Negative interest rates eh?

    Rewind and play it again Sam and bang the lambeg while you are at it. Let it strike fear into fenain hearts till we think about it and come out battling them from ower street. Never trust a guy with orange hair. If it it looks like a duck and talks like a duck …. christ is it that time of the year again? Bugger me it the 18th before I even knew it. I missed the fair fortnight trip to Blackpool. Only a few weeks till the glorious twelfth mind you. The Grouse is a mighty old bird and even has a whisky names after her

    Did you just mention negative interest rates?

    Or we could go to Bundoran and see the drunkenness, puking and pissing on the streets. Then Ireland might not look so bloody rosy unless one is a comeplete imby

    But hey Ireland is doing great. Summer reporting makes switched on people burst their sides with rapture at the tosh people get away with peddling for money. It it like a brothel where once a year they all get invited by the whoremeister general to perfom some public fanking ceremony and give false shanks for all the lots and lots and lots and lots and torns of support they received throughout the year

    Did I mention that they actually receive tons of support? Yes in order to clear up any ambiguities let me say for definate that they do indeed receive tons of support

    Em. I keep thinking about negative interest rates. This is an economics blog after all. Can’t seem to want to behave today. After all it is the fair fortnight and a working man needs a break right. Three weeks cash in a brown packet and off your hols? How we are talking. Not now though  

    Has anyone on here ever known what that feels like?
    Hard earned cash in a paper poke with a payslip.
    Walking home proud as a peacock after a weeks works with your tail in the air

    Easy cash for easy words. Joke …

    What do you call change from a Durex (trademark) machine?
    Johnny (….)?

    The intellectually challenged pick up their monthly checks without trying a leg. Just like John Terry and other manky mobs. It’s a gas I tell ye if you get the nod and a weeks work from someone in the know. Wheesht. We don’t talk like that in Ireland now. Language is very important you see and and I’m not talking bout the old gaelic malarkey. All that is for far right parents who want to sell their kids to secret military schools on the west coat that would make you fecking hair stand on end

    Im not saying they are nasty cnuts or anything remotely like it but I think we ought keep close tabs on this new carefully farmed citizen battery. And too bloody right I should think. I mean you never know what sect the parents might be in. They might even well be bloody reds!!!

    Let’s celebrate our culture. Inbreds in Tipperaray chasing a puck (is that what you call it) and outbreds in Belfast commiting suicide over silly fcuking bloo jerseys. Jeez it’s a fcuked up weird wee cuntry. It’s almost enough to make you want to leave it and live somewhere less bent, if that is possible

    Belfast bros and all that. Ye will not be offered a glass in this house ye fcuker. Only kidding you unnerstand. Depends on how far apart your eyes look. So tell me boy how is this economy goin? Got any sound ides like and where did ya do yer degree like?

    Tons mate. But you need cash to speculate and there is no spare cash so what is the point even thinking about unless you are a simpleton?

    Let me get my backstreet experience around this osbcene little conundrum. Negative interest rates means that savers and people using bamking services are paying the bamks to hold their money right? Conclusion. The people are bampots. Crime is the only answer. Why not? Anyone on over 100k is a criminal of sorts of a fraud at the least. We can’t afford the rich and we need to get rid. Become leaner and more efficent haw haw

    In light of what we learned in the last four years is this not the biggesty piss take in the history of the world? If not then why not call a spade a spade? Or are you another corporate paid teat who is one of the one percent? David I have lots of gold to stash! I will sook any teat that will save me gold sir. Please save my bottom David. Well it is an economics blog after all

    Do you want me to tell you what really sickened me this last week?

    Some tosser hacker on the indo website last friday faffing on about how the Irish were the good boys in the front of the class, as you have been pointing out for years, and will be the first country out of the traps. Delusional

    We are a small open economy on the fringes of Europe. We have to become competitive, Blah blah blah. Yes sir two bloody bags full sir. Why not just let Leery O’Leery and Brien the O’Frying pan run the whole shop?

    Corporate sponsored bs that caters to the likes of Mr Coughlan could ensure that we stitch off become brainwashed, socially delinquent and mentally ill. They should be stopped because they don’t know what they sow. They don’y know what they are buying into and even if they did their cold hearts would not give a curse about the future of this country. Self pitying you know whats. Oh but but but … this an heconomics blog right. Stupid me

    An un-named pensioner was quoted as saying something to the effect of ‘I am proud of Ireland and proud to have been part of it all’ (austerity) ha ha ha

    I mean come on to fcuk. Does anyone on this blog not see that is propaganda manufactured, packaged and pushed by the O’Brien crew to levels that insult even the dullest of minds? They are so arrogant that they have no problem pushing trash documentaries and selling it as education (outsourced and for a profit probably). Who benefits?

    Is anyone benefiting. Our education and health systems stink. Probably thank to lazy privateering bastards who have neve done an honest days work in a long time. Privatization = lazy bastard tossers who do too much lunch

    Billionare media is turning people’s brains to mushy peas. Think TV3 and you are really getting your nose close to the stench of the gutter. They are all cashing in and we are being royally conned. But then most of the guys here already know this. They are far from docile but Ireland does not let them let rip

    Personally I will take on the who if I feel they are talking shite and I don’t care if they are the chief of police or the geshtpapo who boss the hacks. Fcuk them. The long and short and the tall

    I don’t break the law but I am getting very close to my limit cock. I am the same most of ye and pretty pissed off when I listen to the cock and bull media tripe

    Personally I think this invented old codger should be hauled in front of a camera to explain himself so that in decades to come people will break their balls laughing at propaganda Ireland style in the twenty tens or whatever the hell the idiots in D4 have labeled it. Reeling in the years? But but b b b but Oat!!

    Shift the first letter one to the right ^

    Afer we’ve laughed ourself stupid at we can wheel out the garden gnome to regale out souls with tales abot the old days and have mad auntie skinhead old is ‘and

    Ireland at the turn of century? They will piss themselves hysterially in ten years time and that is why guys like you need to think ahead. Get out while you can and take the ultimate risk. No crutches and all. Uncle Miltie would be coming and coming again to to see our flash of blinding light. In fact he might even drive himself to blindness at all the furore

    They will have a jolly bloody laugh because most people now are laughing at the sight of you all intellectually bossing off in front of the camera

    An invented and imaginaray stupid old murstard is like something from the Philantrpists. Me might even me Colonel Mustard, the very man himself Sure he was invented. Or was he? Ask your boss

    He’d know best hafter hall as he is the man. He is a mean old man

    Rant over. Beer time.

    Thanks for reading this crap if you managed it. You deserve a fcuking medal

  31. The world is stuttering to a halt because the financial system is based on crime. Western politicians are behaving like dogs of war as they have done for centuries and they are the real problem now. Tinpot insiders dictating to the massive ingorance of sleeping giants (us) and cosy limp wristed teachers come politicians who have never done an honest days work in their lives. I depise politicians more than phoney academics, economists and sensationalist authors on the make

    The source of most of the trouble trammels three major western capitals and no one wants war but the warmongers, like the lunatic McCain and fifteen pints a night Hague. ‘Wee Willie’

    We are heading for really serious trouble fast if the Iranians close the straits of Hormuz and these double chinned wimps are let loose and not kept in check. Fcuk ecomonics. All that is out the window because without political stability economics runs riot. Disaster capitalism. It is the job of Mr McWillaims to make sense of the turmoil from an economic stand point and no more. The rest of us. Well what the hell do we know? We are just ordinary people trying to understand

    Fifteen pints a night. Really. Maybe that is why wee willie adopted the skinhead look years back around Euro 96. Otherwise his long blowdried locks would have made him look as ridiculous as Friar Tuck. Mr Knobby knobhead haw haw haw

    Meanwhile there are mass protests on the streets of Tel Aviv that apparently have nothing whatsoever to do with econmics. Shoosht!. Eh wakey wakey wee willie. Your paymaster is shitting himself and wants wee willie to shake it a bit and scare the natives. The power and prestige of the European empires is still raw and awesome and do not kid yourself otherwise. Look how they trashed Libya. We are still terrorising countries for ecomomic reasons like we always did and we have out own attack dog to do the snarling. Like a doberman coming off speed

    The infamous TSA is coming to London which probably means Shannon too. Does that mean this post will trigger an orange alert because this sentence contains two words that are inflammatory. Make up your own mind. I was just thinking out loud. Then again maybe I shouldn’t. The thought police might decide to disappear me. Wankers. Then again maybe we can pay off the guards and let Haliburton and the TSA take care of our business. Get on your knees mother and chew this. You will laugh but in ten years time it may not sound so far fetched

    I bet wee willie’s biceps look like a knot in a piece of string. Like Sarkosy he is a small man with a big mouth and totally despicable. Yet his boss Dave wants to protect the ‘freedom of the city’. They are the biggest wide boys on the planet but they are in a tiny minority. Yet the stupid fekcers voted the Eton boys in and they are not running riot only because they have been chained to the gates. Thank christ. Does the big fellow warrant a small ‘c’. In this day definately yes. Christ Almighty

    In light of this reasoning and if my reasoning is valid then all talk of economics is rendered null and void. Maybe I am the one who is not on the level and in need of a friend to put my mind straight. Please shoot straight if you have any thoughts

    Economics and politics are inseparable because they are two heads of the same monster. Both feed into Sociology and it is the Socialogical angle I am interested in

    Switch off your new computers for writing’s on the wall

    Now do I hold the gold or do I fold?

  32. [...] here to see the original: David McWilliams » Searching for real growth ← Steve Rhode: The Seven Emotional Stages of [...]

  33. cooldude

    Here is some straight shooting from Egon Von Greyerz. He tells it exactly like it is and has done for over ten years. Enjoy

    • Tony Brogan


      Ludwig von Mises

      We have accosted David McWilliams about his lack of solutions to the current problems.
      The above quote says it all and so apologies are in order to DMW as there is no solution other than debt reduction by one means or another.I think DMW has proposed a write off, of the debt..
      Either we bite the bullet now and get it over with or we attempt to “resolve” the problem by the very means it was caused which is the production of ever increasing amounts of debt, also known as quantative easing or QE. This will only prolong the agony and enlarge the final destructive nature of the collapse.

      See another excellent piece by Von Greyerz


      • gizzy

        Banks are still holding lots of loan assets that are way out of line value wise with the value of the business or asset they were lent for. In some cases I have come accross 90% over the new values. They are ptting in receivers at great cost who are on some jobs now for two years and running high court cases at more cost to get worhthless vindictive judgements against already ruined business owners. The advising professionals of course are happy and it all follows the letter of the law. But it is bankrupt thinking and is avoiding the inevitable if the asset you lent against has bombed and the borrowers is bust. You have to write down the debt to the real value, Better to do so before you waste money on receivers and barristers. But still this is about arse covering not solving.

      • bonbon

        Von Mises, founder of the Austrian School, a subsidiary of the London School of Economics, fails to deal with industrial society. Ron PAul who wrote von Mises biography, also has this, strange for an American, feudal outlook when it comes to progress. Monetarism, as von Mises represents, is from a bygone epoch, not glorious at all, when no machine noise existed. Since en not only have we expanded the human population, food production, energy intensity, but with Hamiltonian banking discovered a way to even further expand.

        We are not going back.

        • cooldude

          As usual Bonbon you are factually incorrect in just about every remark you make.

          1 Von Mises did not start the Austrian school of economics which existed for half a century before he became involved.

          2 There is absolutely nothing feudal about a sound money system. The industrial revolution actually occurred during such a monetary system. All the great inventions such as motor and air transport, telephone and electricity happened under such a monetary system,

          3 Alexander Hamilton was an agent for the Rotschilds who wanted to introduce central banking into America. Though his effort of debt based central banking combined with fractional reserve banking were abandoned quickly the elite bankers had their day in 1913 with the founding of the Federal Reserve. This abomination has for it’s shareholders the members of the banking elites which it is supposed to supervise. It’s main goals were supposed to be to protect the value of the dollar and to stop unemployment. On both counts it has been a monumental failure and the once mighty dollar has lost 97% of its purchasing power under it’s watch. Ron Paul is 100% in that this privately owned crime syndicate should be audited and then eliminated,

          4 When this current experiment with paper currencies backed by absolutely nothing comes to an end very shortly there will be a demand for a monetary system which actually works for the people who produce the goods and services and is not just a scam to line the pockets of these mafia bankers. When this happens we will once again go forward to a non elastic system of money.

        • Tony Brogan

          “In his monetary theory, Mises revived the long forgotten British Currency School principle, prominent until the 1850s, that society does not at all benefit from any increase in the money supply, that increased money and bank credit only causes inflation and business cycles, and that therefore government policy should maintain the equivalent of a 100 percent gold standard”
          Quoted from the biography written in the web site of the von Mises institute.

          Hayek lectured at the london School of economics in opposition to Keynes philosophy..
          your reference to not dealing with industrial society is unsubstantiated. Mises was active in the first half of the 20th century and died in 1973
          Mises was not a monetarist but an advocate of a gold standard of sound money and understood that a sound economy does not need an expanding money supply.
          In fact he postulates correctly that expanding the money supply leads to inflation and economic inefficiencies.

          Your Hamiltonian banking is credit based fiat money and just like the central bankers of today would lead to inflation and centralized control and a failed economy.

          Your reasons for opposition to the London school of economics and Ron Paul are based on false allegations without substance.

  34. I’d like to highlight the limitations of growth. Bear in mind that money comes from bank loans and that ever euro has a slightly higher debt.

    The production of, or indeed the sale of, an asset doesn’t affect the nation’s money supply. If I produce something, no money is created. If I sell something, no money is created.

    And hence it’s growth in the money supply that’s the real important thing. This tends to come hand in hand with a growth in GDP which is perhaps why most economists see a growth in GDP as so important.

    We can only grow the money supply by getting banks to create it and loan it to us. It’s unfeasible to imagine that we’re going to borrow sufficient amounts to have a significant increase in the money supply for the foreseeable future. However, there’s no reason why we couldn’t have more publicly created money to replace the role of cash which has is a diminishing force in today’s digital world.

    • bonbon

      Real growth is not money supply, we have that. Look at the M1,M2,M3, never mind the trillions in bailouts.

      Real growth is in the physical economy, and the human population.

      It is odd indeed that above the von Mises post and now this one, all believe that control of the amount of money givesd control over growth.

      It should be time to re-examine the British monetarism that caused this crisis, not to propose more of the same.

      • Tony Brogan

        It is odd indeed that above the von Mises post and now this one, all believe that control of the amount of money givesd control over growth.

        Bonbon, this statement is plainly put a lie. you fabricate. You twist the statements in the von Mises post.

        you seem to have an agenda to discredit the “austrian” economic model and to diss Ron Paul at every opportunity. As I asked you some weeks ago. Whose side are you really on. You wish to propagate the central banking system through Hamiltonian banking which puts you in the same camp as our friend Paul Ferguson who also suggests the printing of fiat currency which he sees as somehow being non inflationary.

  35. Philip

    We need to understand that “real” growth – societal growth at the level of culture and civil achievement is for the most part driven by ethical values.

    All we are witnessing is dearth of ethics. The banks etc are utterly beside the point.

  36. bonbon

    Fukoshima triggered the most abrupt U turn in EU history, Merkel did not even consult France, directly affected. Then Austrian press reported the Euroshma warning there. Now this :

    Former German industrialist leader Hans-Olaf Henkel writes today in the Financial Times that opportunist Merkel could make on the Euro the same abrupt shift she made on nuclear energy.

    An abrupt return to nuclear power as Japan has done, is also essential. Merkel is earning the name of Zik-zak Kanzlerin indeed.

  37. bonbon

    No real physical economic growth is possible without high intensity energy sources such as fission and especially fusion. All talk og “growth” is a swindle if windy green low-density power is promoted, and is is no coincidence those very same LIBOR – connected criminals will promote green. None of them will give credit for reactors.

    So let’s talk growth – population density, energy intensity, and real greening of deserts by moving rivers and runoff. In other words growth lies outside a Tiger’s ken. But being human one can see that, right?

    • Tony Brogan

      How do you propose to have the water of the arctic water the deserts of the south without forming a North american super government that eliminates the sovereignty of the nation states.

      constant irrigation of the existing deserts already greened has lead to the leaching of all goodness from the soil and the degradation and quity of the food.

      If they want water they can build nuclear powered desalination plants. That should be a large enough project to satisfy you for a while.

      Together with your hamiltonian banking suggestion it makes you sound more and more like a one world government advocate which is anathema to the vital interests of Ireland as a nation.

    • Please follow the emmergency warnings and exit signs and do not take the lift .

    • Tony Brogan

      “Eventually if everything goes wrong, they can even buy equities.”-Roubini

      Has Roubini not heard of the “”Working Group on Financial Markets” aka as the Plunge Protection Team

      They have been propping up the stock markets since the late 80′s. Orininally for emergencies it is now a daily occurance.

      There is no such thing, anymore, as a free market. All is Manipulated. All will be destroyed. all will fail.

      There is a reason that the “third world” and “developing” countries are buying gold for their reserves. Self preservation.

  38. Deco

    Take all this together, the huge public salaries, the social protection bill, the absence of jobs in exporting and the subsidised state of agriculture and it’s hard to avoid the conclusion that Ireland is a rich country getting poor quickly.
    In 2007, I suggested on a TV programme that Ireland could become like Uruguay — a formerly rich country that became poor. The notion was dismissed as ridiculous by many people. Unless we figure out a new growth model, maybe we should have a second look at Latin American economic history.

    I found this hard to swallow a few days ago.

    But now I get what is meant.

    Since 1996, Ireland has been increasing debt levels, and since we joined the Euro there has been a divergence between debt and real wealth in Ireland.

    The property crash merely exhibited the underlying reality that had been ignored by the ECB’s low interest rate policy.

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