August 27, 2012

Going for Gold

Posted in Sunday Business Post · 221 comments ·

Last Friday’s Financial Times contained an article which suggested that the Republican Party is seriously thinking of returning the US to the gold standard, and that it will discuss this idea at the annual party convention in Tampa this week.
Many people will react to this radical idea by asking if the Republicans have learned anything at all from history. But do they actually have a point?
Surely anyone with a grasp of economic history knows that strict adherence to the gold standard, with the balanced budget mantra, at a time of asset price deflation in the early 1930s exacerbated the recession, which morphed into the Great Depression. But is the case as open and shut as that?
While the lessons of that era are reasonably well accepted, there are also those who will rightly point out that, whatever about the 1930s, anyone with a grasp of recent economic history can see that the massive quantitative easing of the past five years has had little or no effect, other than facilitating a massive increase in the US’s national debt.
This is the heart of the matter, and there are two legitimate sides to the argument.
On one side, you have Barack Obama and most moderate to slightly left-of-centre economists, led by Paul Krugman, who believe that the way to jolt the US economy back to life is with as much credit as possible. They contend that the economy is suffering from a liquidity trap, because the banks are not lending money.
Therefore, orthodox monetary policy, where you cut interest rates and the economy recovers on its own, can’t work.
This school of economics – to which I subscribe – sees the recession in the US as a balance-sheet recession, and believe those broken balance sheets are forcing the central banks into more unorthodox policies.
On the other side, you have those who believe that all this printing of money will lead to massive inflation in the US; that the bond market will collapse; and that the US will descend into hyper-inflation, driven by far too much paper money sloshing around the economy, which is the direct result of too much of it being printed in the first place.

By picking Paul Ryan (a budget hawk and admirer of Ayn Rand) as his running mate and paying homage to Ron Paul (an interesting thinker and a man who believes that the Federal Reserve is destroying the US by printing too much cash), Mitt Romney hopes to define the central debate of the US presidential election.

This debate will be over big government versus small government, and the gold standard is emerging as a central plank for the small government side.
The advocates of this side believe that linking the dollar in this way would prevent the government and the central bank from printing money to finance deficits.
This would stop the US budget deficit in its tracks and – they claim – put the US economy back on a solid footing.

How would it work? And what is meant by “returning to the gold standard”?

The gold standard was an exchange rate system that worked very well from 1860 to 1914. It tied all major currencies to gold. If gold reserves began to fall, the country would have to raise interest rates and deflate, with wages and prices falling in order to get gold flowing back into the country, attracted by the high real interest rates.

The currency parity was maintained, but the entire adjustment fell on workers’ wages. As long as workers’ wages were flexible downwards, a country that was experiencing an outflow of gold could rectify itself.
So if a country was experiencing a boom, and its people were buying imports, the amount of gold in the country’s reserves would fall. This would have to be replaced quickly by offering investors a higher interest rate. The higher interest rate would grind down wages, and the economy would deflate.

As long as inflation wasn’t too different between the countries, and workers had few rights, this all worked. But when the big powers went to war with each other, the central banks (to varying degrees) started printing money to pay for guns, and all countries came off the gold standard.

Then, after the First World War, inflation rates were massively different in many countries, so going back to old exchange rates meant huge deflation in countries. This obviously drove up unemployment.

After the crash of 1929 – triggered by an increase in US interest rates – all countries that wanted to stay on the gold standard had to deflate their own economies in the face of collapsing demand. Obviously, wages would only fall if trade unions (which had largely been absent in the period 1860-1914) allowed this to happen. However, they wouldn’t, as they wanted to maintain the wages of their members. The result was that unemployment rose rapidly.

As it went on, deflation fed on itself, while the policy of letting the banks go to the wall caused the amount of credit to fall further, reinforcing this.

Without the government stepping in and boosting demand, the countries of first Europe, then Latin America and then ultimately the US, contracted further. The gold standard, because it implied that you could only increase the money supply if you increased actual gold in the vaults, prevented any reflation.

Ultimately, all countries, when faced with deep recessions, abandoned the gold standard. The US, the last to ditch it, came off gold in 1933. Now Mitt Romney’s team want it to go back to gold, to force the Fed to stop printing money without a corresponding infusion of gold.

The implications of this would, I believe, be a massive recession in the US and massive deflation with it. The gold standard advocates dispute this, though. They say there is no bond crisis on the horizon, and point to the fact that bond yields have never been lower – indicative of a demand for US government paper.

In fact, with yields so low, the gold standards advocates claim that there is no value in US bonds, particularly if the Federal Reserve keeps printing more and more money to finance more and more government programmes.

This is not an academic debate, and it is not going away. For now, the ones in power are those who believe that reflation – via the government and the central bank, using fiat money or created money – is the logical way to go (because there is a balance sheet recession, a liquidity trap and the economy is still very weak). But that might not last.

The US presidential election looks set to pit two big ideologies against each other, and there can only be one winner.

  1. Adam Byrne


  2. Hegemonic Ideologies…Yaaaawn!

    Just a quick note, the past six years can be described as a period of bad government and central bank policies that allowed the financial capitalist industry to continue their global heist. You all heard the term, “Kicking the can down the road”, while at the same time the slogan “Too big to fail shall never happen again!” echoed around the world but as we all know today, they got even bigger, much bigger.

    Imperial dominance is established by means of force. Political and military, cultural and economical imperialism dictates internal politics and the overall societal character of the captured states within the sphere of hegemonic influence.

    Sometimes you can hear the blatant expression of such hegemonic ideologies, “The american way of life is not negotiable!”, the famous words of George Bush Snr. spoken at the earth summit in 1992 and parroted by Dick Cheney and others.

    Contrary to DMcW, I do not subscribe to any of the quasi religious economic schools on offer, they simply do not suffice, in deed they are miserably inadequate.

    They all lack to take into account our real world situation and dismiss the fact that underlying paradigms are inherent and desired design flaws to allow for an elite establishment to force hegemonic structures onto sub ordinate states exploiting their natural resources and workforce no longer by gun ships but “structural reforms” and debts, in essence neglecting the fact that we all share this one planet and as such are interdependent in deed.

    The hegemonic and already totalitarian emerging tendencies we witnessed evolving with the arrival of the IMF and Troika on these shores. These and other events were described rightly so – and this I do subscribe to! – by Juergen Habermas as a coup d’état, while on the public stage this battle of ideologies is presented to the public, it is Plato’s cave.

    The Gold standard as well provided just such a hegemonic ideology which was supported and advertised to the public by a rhetoric of morality and rectitude. …

    …”The hard boiled deflationists and bitter-end liquidationists of this era simply overplayed their hands.” – Barry Eichengreen, Peter Termin – National Bureau of Economic Research, Working Paper No. 6060, 1997.

  3. Philip

    Georg comment along with David’s article are 2 of the best I have read in months and months. Together they describe the social pressures are work in a evolving world.

    Just as we are now witnessing the limits of what the earth’s biosphere can withstand by way of mindless resource use, we are also starting to see the limits of how far you can “economically advance” civilization while mindlessly consuming the labors of those less fortunate.

    The fight is between those who know those limits and those who do not want us to know.

  4. Romney and the list of endorsing economists

    In context:

    Myron Scholes (along with his collaborator Robert Merton) shared the Nobel for “developing a new method for valuing derivatives”. This method gave birth to the trading model used by Long Term Capital Management in the 90s. Remember LTCM? The hedge fund that almost brought the financial system to its knees in 1998 were it not for the Fed-orchestrated bailout. 10 years later derivatives trading managed to finish the job and produce a far bigger crisis. Scholes himself was accused by LTCH vs. US of using illegal tax shelters to hide profits from the hedge fund.

  5. wills


    Straight of the bat the QE in USA was a means through which private interests (who run US) funneled public monies into their pockets.

  6. padser

    Which one are you?

    Marbles (Golliers & Steelies) or Football Cards?

  7. StephenKenny

    My feeling with economists is that they’re just out of ammunition, and the image of alchemy is starting to loom too large for comfort.

    Every sector of the economy has borrowed itself almost out of existence, over the past 20 -40 years. The state, the corporate sector, and the consumer. Each in turn has been through at least one bubble, and has wallowed in unlimited borrowing. In the USA it was known as the ‘Greenspan Put’, and when ever anything looked less than rosy in the US economy, there’d be decisive Fed action, resulting in another bubble. None of it has produced any noticeable increase in wealth creation. In fact in many ways the spectacular mal-investment has shown that Gresham’s law is all too true, that bad money drives out the good – so everyone’s a property expert and knows how to drive German cars.

    Even the financial sector, which has found ways to borrow up to, and exceeding, one hundred times the money it actually has, is out of ideas, at least legal ones.

    We’ve now reached the point where borrowing isn’t possible any more, so governments have started printing more money. In any previous period, even a mention of such an event would have had general hysteria, klaxons ringing all over the place, and everyone running for the shelters. But today, in this increasingly upside down world, it’s lauded, as the only way of ‘increasing demand’.

    The alchemists are getting frantic in their efforts to create gold from base metals. Every effort results in dismal failure, but instead of being a lesson, it merely increases the fire of their faith, and their steely determination to try it again, but this time with a demand increasing policy so vast that even the martians will feel the benefit.

    One possibility is that the next bubble will simply be the public sector itself. Wages will rise, employment will rise, and it will become economic suicide to work anywhere except for the state. Investment in the state will rocket, with the huge range of available performance indicators becoming signs, then evidence, and finally proof, of economic success. The markets will rally, property prices, at last, will start to rise, and we will all be eyeing up investment properties in Uzbekistan.

    • mishco

      Stephen, 3-bed houses for sale in Yangyul, a suburb of Tashkent, excellent earth for fruit and veg, 10000
      dollars US, but spare a thought for those who built them and are now deperate to get to Russia. If you can pay in gold, so much the better!

    • bonbon

      Alchemy all around, bubbles from money, economic from gold.

      It is high time to study physical economics. Ireland is founded on this principle, a scientific principle, well explained by Arthur Griffith. The productive powers of labor, something missing from Alchemists incantations, is key. We have a country founded on scientific economics. The US and Germany also.

      Hence the Dionysian flailing of the Zauberlehrling, the Sorcerors Apprentice of Schiller…

      The use of fire goes back to the very beginnings of mankind. No animal ever made fire. It is also not magic, and now we have thermonuclear fire, hopefully to be used for increasing the productive powers of labor.

      The oldest story ever told is about someone who gave that secret to mankind, and the reaction of the Titans…

    • Tony Brogan

      Good comments stephen

  8. michaelcoughlan


    First of all David I am going to thank you for never censoring any posts because this one is going to be one of my most robust.

    When I read this article in the SBB I found myself intensly irritated at how juvenile the post is so let me explain. The full title in the SBB is ‘The perils of going for gold’. It’s very misleading because gold is a very important store of value in times of inflationary expectations. The article quite rightly points out that deflation is the big threat however.
    Since the article offers analysis on the merits of returning the US to the gold standard then the correct title should be going for the gold standard.

    Your point of view regarding the deflationary effect that would ensue should the US go down this road is 100% accurate even mathematically so. The part about the inflationary effect that would ensue should the economists who offer the other school of thought regarding printing money resulting in hyper inflation is also valid argument IN THEORY ONLY. If you were to present this analysis for the leaving cert exam you would receive an A1 no question or as a thesis in degree course in economics you would receive a 1.1 no question.

    If you were to present this analysis to a senior management team in a financial institution buying government bonds you would be fired! Why?

    The reason there hasn’t been inflation in the states is because the printed money isn’t finding it’s way into the local economy. It’s sitting on the balance sheets of the banks who are using the interest payments in bonds purchased to repair their balance sheets. This begs the question if the money isn’t being invested in local businesses to create wealth and the US has such a huge budget deficit where is the wealth ultimately coming from to repay the loans since there is no such thing as a free lunch in economics? Ans;
    It’s being transferred from the wealth creating economies (china) etc by paying back the government bonds they purchased with newly printed devalued currency. The analysis is also hopelessly flawed because which ever side of the economic divide you find yourself on the fact that the US Dollar is the worlds reserve currency means that every country in the world has unpolitical need for the US Dollar not to collapse in value! You had an article some time ago McWilliams whereby you said that the Irish bond Market had decoupled from thd Irish economy basically that bond investors were investing in Irish debt based on their belief that the ECB would continue go back Irish bonds irrespective of how the underlying fundamentals were. The us bonds are similarly decoupled from the underlying fundamentals for decades. What it boils down to is that the people who buy US bonds will continue to do so as long as the feel that the US will continue to use it’s military to ptotect the value if the Dollar no matter what the underlying fundamentals! A militarised paper economy!

    In you analysis above you state that the gold standard existed from 1860 to 1914 and then it stopped . I presume to world and particularly Germany realise who was adding the value then (Germany) and then Germany saw that it was being fleeced on the cost of raw materials coming from feudalist Russia and being fleeced in the cost of borrowings coming from the cash rich UK after a century of plunder in the colonies and know what happened then? WW1.

    If you remember the gulf war was really fought to stop Hussein from trading oil in currencies other than the dollar despite all the shite about WMD and the disinformation re the war was fought for oil etc? We all know the dollar would have collapsed if he did. Now the Iranians are sick shit of being short changed by the US and are considering trading their oil in currencies other than the dollar and what do you think will happen McWilliams?

    This article verges on thd childish.

    • morango

      Well Said Michael. The reason the US is placing embargos and restrictions on the Iranians is to keep the Petrodollar system alive. This system created a worldwide demand for the US dollar and trade surpluses are reinvested in US treasury notes & bills etc. Sadaam Hussein, Gadaffi and now the Iranians have tried to get out of this system and accept other currencies including gold for their oil. The boomer generation in power in the US will not let this happen without many people being killed in Syria and Iran. The survival of the Petrodollar system is the real issue at hand here and should be discussed more. However the media hardly ever mentions it……

    • Tony Brogan

      The inflation will come with a vengence when the world loses faith in the US currency. Hyperinflationary depression.

      good comments

  9. cooldude

    An interesting article David exploring the nature of our monetary systems. I think there is another important distinction between the pre WW1 gold standard and what replaced it after the war. Before 1913 an ordinary citizen of any country could walk into a bank and exchange his paper notes for gold or silver. This was known as the classical gold standard and is the only one that is of any use to ordinary people. During the war this right was denied as part of the “war effort” where the governments deemed it to be selfish and anti nationalistic to look to exchange paper for gold. After the war the governments tried to keep the price of gold at $20 despite trebling their currency supply due to the war effort. This was doomed to fail and the only way it could have worked would have been to increase the price of gold to reflect all the new currency and give the citizens the right to exchange their paper for gold again. The point of this is that the only type of gold standard which actually works and is of benefit to ordinary people is one in which paper can be exchanged for gold at any time.

    I am sure what Romney is proposing is just some sort of mickey mouse standard which would be of benefit solely to the bankers and wouldn’t be of any use to ordinary Americans. Romney is a very dangerous warmonger and is as bad or maybe even worse than Obama if that is possible. You mentioned Ron Paul in your article and his views are very interesting and I am big admirer of his views.

    Firstly he wants to stop all these ridiculous wars the America is engaged in all across the world. This is simply the sick imperialistic ambitions of the neocons being enacted across the globe. The CIA are paying the so called Free Syrian Army, many of whom are Al Quaeda, to try and overthrow the sovereign government there. This is just a prelude to their main goal which is war with Iran.

    Secondly Ron Paul wants the Federal Reserve to be audited and accountable to the people. Eventually he wants to scrap it and let America print it’s own debt free money with no interest to be paid to the banking mafia. I fully support this and is something every nation should try.

    Thirdly he wants to repeal the legal tender laws and let different types of currency circulate side by side and let the people themselves decide which type of money they prefer. This not only takes away the bankers franchise over what we use as money it also gives people a choice in what type of money they can put their hard earned savings into. If they decide to save in silver they would not be taxed because their money is appreciating in value when they exchange it back to paper money.

    Finally he wants much less state interference in every aspect of our lives. Governments are becoming more and more intrusive in all aspects of our lives and he supports individual freedom and private property.

    Ron Paul is not just an interesting thinker he is a beacon of light in a world which is rapidly heading to some type of Orwellian nightmare unless people start to question the direction our so called leaders are bringing us and look at who is guiding the agenda and more importantly who is benefitting from it. Control of the money supply has to taken away from this banking mafia who have failed miserably in all their functions.

    • morango

      Good to see Ron Paul getting a mention here. If the media actually gave him a fair chance to deliver his message, we could have had a more interesting election in the US. He is too dangerous for the establishment and the American public are not ready for him. They are too dumbed down to explore his rhetoric. Hopefully one or two of his followers will carry forward his ideals in the future and bring forward a more balanced discussion rather than romney and obama who are both out to serve the interests of the same people.

    • Reality Check

      Absolutely spot on Cooldude.
      David, Keynesianism only works when you have a surplus from the good times “saving for a rainy day”. Virtually all the governments of the world (esp the US) are running huge defecits. “stimulating demand” or as you have put solving the problem of toom uch debt by adding more debt won’t work because the debts are impossible to pay back – you simply consign future generations to debt serfdom.
      Krugman is a coward and a moron.

      • Deco

        Quotes by Paul Krugman:
        “By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”

        “To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

        Krugman is over-rated, and has shown a propensity to make extremely incorrect assessments.

      • Tony Brogan

        You got that right

    • bonbon

      When I hear Ron Paul acknowledge the USA’s greatest banker, Alexander Hamilton, a beacon of thought for all economists since 1795, I will believe he is American. His favorite theme is imported straight from London.

      The Credit Clause of the US Constitution was a stroke of genius, there to be used by any President such as FDR did. It is the most powerful clause of a Republic’s constitution. Thoughtful bankers, even reformed ones such as Sandy Weill of Citigroup, know what this means.

      From this point of view, the modern nation-state of industrial progress, metal standards are obviously a doomed attempt to void it. The other highly dangerous attempt of course is Bernanke’s hyperinflation. Both are attempts to erase the modern nation-state. Add in war to this witches brew and consider the situation.

  10. Four months until budget 2013, articles are leaking into the press and the softening up has begun. This is The Showing Of The Instruments

    When the hammer falls you can’t complain. You did nothing

    This might waken you up

    Kirwan and Jeff Rense discuss the final nail in the coffin of free speech (mp3)

  11. michaelcoughlan

    The way to solv the problem in the us regarding thd currency issue is to restore to the American government the right to print it’s own currency which was given to the FED in 1913. Bill still agrees with you that returning the us to the gold standard would not work only restoring the control of the quantiy of the money supply to the US government will allow the us economy to expand because the currency in circulation would not be borrowed into existince as is currently the case with FED issued currency. The people would not be paying interest on their currency they would have it interest free! Since the currency would not be gold backed it would allow for the money supply to expand as the economy expands just like the roman republic! If you watch the superlative bill still documentary the secret of oz available on YouTube all will be explained.

      • as per Page131 of the audit report:

        Citigroup – $2.513 trillion
        Morgan Stanley – $2.041 trillion
        Merrill Lynch – $1.949 trillion
        Bank of America – $1.344 trillion
        Barclays PLC – $868 billion
        Bear Sterns – $853 billion
        Goldman Sachs – $814 billion
        Royal Bank of Scotland – $541 billion
        JP Morgan Chase – $391 billion
        Deutsche Bank – $354 billion
        UBS – $287 billion
        Credit Suisse – $262 billion
        Lehman Brothers – $183 billion
        Bank of Scotland – $181 billion
        BNP Paribas – $175 billion
        Wells Fargo – $159 billion
        Dexia – $159 billion
        Wachovia – $142 billion
        Dresdner Bank – $135 billion
        Societe Generale – $124 billion
        “All Other Borrowers” – $2.639 trillion

        It is all so obvious… yaaawn.

        • They are all imposters .I have a better chance of finding the real owners if I walk the Arve River as it runs underground in Geneva and follow the aquifiers and then locate whoses pipes are coated in gold.

          • bonbon

            I know Geneva very well and I just never knew the pipes were full of gold.

            It for sure never gushed up at the Jet d’Eau. There were rumors of tunnels linking the banks though.

    • Tony Brogan

      Are now Michael
      There inlies the rub.
      True id the CB is closed then currency can be issued by treasury debt free.
      Thinking that an economy needs an expanding money supply in orto grow an economy is an error.
      Money acting a a means of exchange is not used up in the transaction. It is a catalyst to the exchange of good and services.
      With your model there is the problem still remaining of induced inflation by expanding the money supply. No person can know how much to adjudt the money supply until after the fact when it is already too late. The economy will still be subject to booms and busts
      It is important to, in a new system, expand the money supply till demand is sated and then stop.
      That is where fixing the currency to the amount of gold stops the over issuance of currency. All notes must be 100% backed by gold with no fractional reserve banking allowed

      Cheers, tony

  12. george

    Iceland is the best example to follow if Ireland wants to pull out of this debt crisis.

    In Iceland, Banks had to accept debt reduction to businesses and home mortgages, up to 110%. And here our Government is hiding behind the Constitution, and doing next to nothing of significance, for small and medium size businesses and homes, that are on the brink of bankruptcy. It should be Iceland way, not Frankfurt way.

    And Professor Robert H Wade is adamant it’s the only way, as shown by Argentina and most recently by Iceland, where they were able to protect on of the best social welfare systems in the world.

    In the other hand inflated salaries and professional fees, should have to fall in line with other European countries like Germany, France and Spain, via straight forward reductions or through income tax.

    Iceland’s loud NoCan’t pay back, won’t pay back!

    The people of Iceland have now twice voted not to repay international debts incurred by banks, and bankers, for which the whole island is being held responsible. With the present turmoil in European capitals, could this be the way forward for other economies?

    by Silla Sigurgeirsdóttir and Robert H Wade

    • bonbon

      Spot on. They put Glass-Steagall on the parliament agenda too. More power to them! But do not forget the President had to override the parliament to force a referendum. An example to all.

  13. tony_murphy

    FIAT currency pays for wars and Eugenics. The globalist central bankers print money out of thin air and bribe sociopath politicians to implement their evil agenda. I hope someday soon you will address these issues, but I won’t hold my breath waiting for it.

    Thrash precious metals all you like. But at least physical gold and silver cannot be as easily manipulated by the evil global elite. They are real tangible assets, that store wealth of hard working individuals

    The global elites have engineered a nightmare, the media continue to facilitate them. The communist future you lot (Central banking and the College of Europe) dream of will never happen

    • bonbon

      As Bush would say, you misunderestimate the cleverness and desperation of the Empire. Do you seriously think the metal gold or silver will war off those devils? Or is it a case of the Devil you know is better than the Devil you don’t?

      That’s the scam in the entire shaggy dog story. The Empire knows it is finished, and its derivative quadrillions are worthless. So it is pushing metal as it’s next move for a much reduced population. The 1 billion who are allowed to survive the culling can be handled with their metal system, they calculate.

      None of this is hidden, it is all out in the open. It is calculated the masses will go along to get along to hell. We are seeing this now with Obama, and just look at how masses are going along with murderous austerity.

      Seems to me FG is doing a similar calculation.

  14. morango

    It was only a matter of time until Gold was discussed. I’d like to know David’s opinion on the possible use of Special Drawing Rights (SDR”S) which are issued by the IMF and its possible role as a future global currency.

  15. Adelaide

    Hocus Pocus!

    ‘The Wonderful Wizard of Oz’ by L. Frank Baum is his parable on this very topic and his two primers are as valid today as when it was published in 1900.

    WHO creates credit and how is its QUANTITY determined?

    Discussing economics without regard to these two primers is a redundant discussion.

    (Yes, there is wall-to-wall redundant discussions on our airways. Perhaps ‘expert commentators’, excl DMC, should read ‘The Wonderful Wizard of Oz’ before airing their blissful ignorances)

  16. Philip

    Throughout history there has always been this divide between workers and gentlemen, peasants and landowners, blue and white collars, unions of artisans and members of the court. As soon as there is change which is militarily/ financially important, like ships, aircraft etc, there has been a disruption created by a newly empowered social class (call them pilots or scientists or professionals of any sort) which becomes subsumed under a new hierarchy – Doctors and Nurses, Bank Managers and Tellers, Captains and Privates. The elites merely morph and re-create closed shops for the upper echoleons. These closed shops or institutions are what define the success or otherwise of the overall society they define and they will fight any change that seeks to redefine or eliminate them.

    Today in this new and emerging world, I wonder if current institutions have been side stepped by a combination of new factors. New players and the dizzying rate of change which has led to this:

    USA is wounded and very powerful. It is increasingly desperate. UK is just an ailing bank which is now blowing itself apart. Europe is irrelevant and toothless – a failed consumer with just one country propping it up. China is the new big kid on the block and making shapes – but it too needs to make a mark because the growth agenda is evaporating.

    In the past, when an institution was threatened with extinction – as I believe financial institution are – they will resist. Financial systems have massive tools of destruction at their disposal and they will be deployed – make no mistake. The massive imbalance that exists to make them irrelevant will be resisted.

    We are heading for a bust up in an emerging multi-polar world. It will be a time of great change and major conflict because of the failure of financial backstops for creating stability.

    Backstops (like credit and stimulus) are being undermined by the twin forces of paper wealth retainers using ponzi schemes (to save existing institutions) and rising differences in productivity between regions in the world. Social tension is both inevitable and global.

    Conspiracy? No. Let’s say – we are screwed up globally by being mindless.

    • bonbon

      Mindless is exactly the point. Hip swing opinions, the utter disdain for any idea is what created the mess and put those in power.
      Any “theory” that bases itself on that Dionysian “exuberance”, that even Sir Alan Greenspan, lover of Ayn Rand, could openly point at (and support actually), is a swindle.

      And we have been swindled enough!!!!!

  17. Reality Check

    David, Keynesianism only works when you have a surplus from the good times “saving for a rainy day”. Virtually all the governments of the world (esp the US) are running huge defecits. “Stimulating demand” or as you have put it solving the problem of too much debt by adding more debt won’t work because the debts are impossible to pay back — you simply consign future generations to debt serfdom.
    Krugman is a coward and a moron.

  18. The Euro is to be Circumcised

    Germany to issue circumcision stamp

  19. bonbon

    DMcW, I think you hit the Klondike! Real gold is not metal, rather ideas, economics. And exactly, it is not an academic debate. It is more like having a future or not for our expanding population.

    The debate will not be shoved under the carpet! And it is monumental.

    (Phew, for a moment there exhaustion was winning).

  20. bonbon

    And the last line :
    “The US presidential election looks set to pit two big ideologies against each other, and there can only be one winner”.

    It would be real if indeed just one candidate actually represented the American System of Political Economy, as detailed by Alexander Hamilton and our own Arthus Griffith.

    What is actually happening is the scissors attack of Romney, and Obama, and (I presume unwittingly) Ron Paul is an assault on the very foundations of both the USA and Eire.

    This must be taken personally Americans!!!

  21. Tony Brogan

    This school of economics — to which I subscribe — sees the recession in the US as a balance-sheet recession, and believe those broken balance sheets are forcing the central banks into more unorthodox policies.

    Non so blind as those who refuse to see, David.

    The central bankers are the problem not the solution as expressed and explained, without rebuttal, many times.

    David, you are the blind leading the blind into economic serfdom and poverty.

    interference in the economy by bankers on behest of poiticians to the profit of the banker is all we have seen this last hundred years

    Simple David. Paying off debt with additional debt leads to bankruptcy both in personal and state finances.

    all have borrowed so much that they can borrow no more. Lenders will not lend and borrowers are broke.
    The party is over and now the bill is to be paid.

    It is a debt trap pure and simple. Look to see where all the assets are accumulated and by who and you know the engineers of the system.

    David you lead the nation, like the pied piper, but into authoritatian economic enslavement. You are now seen by me as a major cause of the lack of a solution to the problem. you lead the people astray.

    • Adam Byrne

      I was waiting for this. Good luck Tony.

    • bonbon

      Most do not subscribe to von Hayek’s Road to Serfdom. It is only one point of view.

      Another point of view is to split the banks up, leave the investment arms to fend for themselves, without access to commercial deposits, and no bailouts for them – their debt is null and void.

      Legitimate debt, caused by complete lack of growth for 40 years, actually itself caused by the very financial policies of those investment arm, will be honored over 25-35 years by building up the real physical economy. That will be financed by the RFC methods FDR showed to work.

      Ireland was not given sovereignty by coins – it is not something to buy. Only then did the economy get some attention. The Shannon Scheme, which gave FDR a key idea for the TVA is an example of what a sovereign country must do.

      I prefer to be “enslaved to progress and pursuit of happiness” than to a gold mine in Sierra Madre.

      We are not going back to a world of 2 billion, the rich’s playground, we are going on to a much different world than von Hayek could even imagine.

      • Tony Brogan

        My Karma just ran over your Dogma.

        bon bon is road kill

        As I posted before you do not have a clue about finance of economics and interminally quote the same tired old cliches

        You have an Austrian fetish and lately an Arthur
        Grithiths one too

        Your comments are ramdom and illogical, insane to some degree.

        • bonbon

          So The Road to Serfdom , von Hayek’s required reading at the Austrian School, is now some kind of guiding light.

          It is a ridiculous tract, when carefully examined. In fact there is no economics there at all. That is the stunning conclusion. But as von Hayek himself said at the London School of Economics, the greatest book ever written, Bernard Mandeville’s Private Vice, Public Virtue, is a psychological tract! So it is a mistake to expect economics from the Austrian School. It is a psychological tricksters academy. And that precisely defined by von Hayek himself!

  22. Reality Check

    Bernanke’s playbook is entitled;

    “A Monetary History of the United States, 1867-1960″

    Mr. Bernanke acknowledged as much when he spoke at a 90th birthday celebration for Mr. Friedman in 2002. “I would like to say to Milton and Anna: Regarding the Great Depression, you’re right, we did it,” he said. “We’re very sorry, but thanks to you we won’t do it again.”

  23. Reality Check

    In Plain English that’s more bubbles than a bubble bath.
    Bernanke is a politicans wet dream – always be seen to be doing something at any cost.

    • Deco

      The politicians we have are the wet dream of the ponzi speculators in the Financial Services and Banking sectors – because they are obsessed with the need to always be seen to be bailing out the system.

      And they do it with other people’s money.

      • bonbon

        MF Global did not wait, it simply took the money itself.

        • Tony Brogan

          JP Morgan took the money and MF Global is bust
          Corzine walksfree .Larger contributor to Obama and a buddy too. no charges laid. I guess all the evidence left with the money.

          • Deco

            And no coverage on the state broadcaster or the so called paper of record.

          • bonbon

            there is plenty of coverage, very well understodd what happened. All these, from Lehman to MF, happened in London. I have plenty of statements on that. It’s Maggie’s Big Bang that enabled this.

            Maybe I just hit a blindspot, what?

  24. Deco

    I am scratching my head here trying to understand why this is about the only Irish media coverage that is given to Ron Paul.

    Paul’s main tendency is to do the completely obvious. In political establishments in the West this is a real shocker, and the media has a tendency to ignore this as much as possible, because of the need to serve corporate interests.

    The same applies here. No political option is allowed exist which serves the interest of the ordinary individuals in society, to the cost of negating the influence of vested interests.

    The only conclusion that I can arrive at, is that the media in Ireland is the servant of vested interests. And this applies to the state broadcaster even more than anywhere else.

    Ron Paul concept of “Audit the Fed” has me thinking….any chance of an Audit of the ECB ?

    Imagine what would roll onto the floor if there was an audit of the Bank of England, in the aftermath of the mess left by Gordon “No more Boom and Bust” Brown….

    I do not think that Romney will do anything to make public institutions more accountable to the people in whose name they exist. But Romney will make loads of soundings as if he wishes to do exactly that. After all he needs every single vote he can get, and he is not very convincing.

    • bonbon

      So Romney trots out Paul Ryan, the lovable guy who wants to seriously hurt millions of Americans. See what Maureen Dowd said about that – it was also on the IT.

      Ron Paul, all for small gov’t, seems to know the only entity capable of auditing the Fed is the US nation itself. He also knows what FDR did to Wall Street in 1933, using the Constitution.

      But he must come into conflict, considering his book on von Mises, the Austrian School founder, with the Alexander Hamilton banking and credit clause of the very same Constitution. This after all is the target of the Austrian School.

      I do no know how Ron Paul will resolve this fundamental conflict.

      But why wait for that.

    • Tony Brogan

      An honest politician is deemed to be an oxymoron.
      most can not believe a Ron Paul even exists.
      you get the politicians you vote for!!

  25. Deco

    They say there is no bond crisis on the horizon, and point to the fact that bond yields have never been lower — indicative of a demand for US government paper.

    I disagree.

    The bond market in several Eurozone countries is highly dependent on ECB intervention. It is also dependent on state backed private banks buying government bonds. [which I suspect is going on here....].

    If the Chinese, the Russians, and the Indians have stopped buying US Treasuries, then who is buying the record levels of bond issuance ?

    Basel II also classifies state bonds as Tier 1 capital. Now that is a joke. Especially in the PIGIS.

    There is deflation in the real estate market. But if there is an incremental volume of money being issued into the economy which is greater than the incremental value of production, then you will have money going to the presumed hot areas of the economy. You will have net inflation. And materials for which production is stagnant or declining will experience price increases.

    In the current environment, the money has flowed to Dot Com 2.0 boom (Facebook, the social midia sector, etcc). It has flowed into oil, and certain commodities. I expect this to happen shortly in the cereals sector, where reduced output from the US and Russia, and an anticipated El Nino will act as a signal for speculators to rush in and control the supply with the money being released into the system.

    In any case, given the mess created by Greenspan, Trichet, King, etc… it is good to see demands being made for greater accountability.

    Though in Europe few if any have yet connected the dots between the Trichet easy monetary policy, the asset bubbles, the subsequent oversupply, the undermeasurement of risk, and the resulting banking crisis in Spain and Ireland.

    • Tony Brogan

      The FED monetizes the gov bonds.
      Prints the money and through surrogates buy the issue to drive the price up and the rate down.

      Quote Chris Powell, GATA,”there is no such thing as a free market”.

      most of the extra cash is held by the banks to bolster reserves. Most banks are still bankrupt in the US if they marked their assets to market and not to book.

      QE to infinity is a foregone conclusion.

  26. Halo Effect

    I am tired – jet lag- from a creche in Dublin to a crossroads in china – we then slipped into the Greece -went back in time to USSR – defaulted on the creche payments in Dublin – now we digging for gold in USA….. Anyone fancy a trip to Iceland for relaxing spa next….

    • Tony Brogan

      nothing so peaceful as a sail in and around the gulf islands of BC on a warm day with a light breeze.

      Hey, tonight the moon had a halo of light fluffy clouds shing in the moonlight. there was a slight smile on face of the man in the moon.

  27. padser

    Hi David’ Sorry to detract from your current story. I was looking back at your story about TEACHERS NEED TO LEARN HARD LESSONS ABOUT PAY
    April 11, 2012

    “There is no way in the world that anyone is going to lend to Ireland, unless we offer a realistic way out of this and stop pretending that national wage deals signed in 2010 have any realistic hope of being paid.”

    Did we not go back to the bond markets recently?

    I’d also like to add that I did hear that INTO radio broadcast….and for a moment, stopped and thought about just what type of people were teaching my daughter…..the noises coming from the assembly were reminiscent of certain caged wild animals.

    Please create more domestic topics!

  28. Reality Check

    Padser, I came across Teachers yesterday pulling the all day (3:30pm) Martyr face and then they said the children hadn’t comeback yet!
    Just be glad these cosseted peeps are running the country – making sure the country gets what it deserves.

    • padser

      I get sucked into that argument sometimes as well just about the ‘teachers’ and one only has to look at the TUI websi……God damn it, I ain’t typing another word.

  29. Tony Brogan

    “Surely anyone with a grasp of economic history knows that strict adherence to the gold standard, with the balanced budget mantra, at a time of asset price deflation in the early 1930s exacerbated the recession, which morphed into the Great Depression.”

    You are not going back far enough in history for an explanation of the 30′s depression.
    The later 1800′s and the period before the 1st world war were a period of dymanic growth and the classic gold standard.
    Money supply is tied to the amount of gold . There is no increase in the money supply that is not tied to an increase in gold. This creates stability in the economy, creating trust and long term investments to occur. People save and savings are invested in to capital and the economy grows. any amount of gold is always enough in an economy. an increase in the money supply is not required for the economy to improve or enlarge.

    Also there is not enough to have a rapid expansion to fund a war. Rapid expansion was needed for the prparations for war by both Britain and Germany. both went off the gold standard and printed large amounts of currency. This created a boom in activity.
    after the war Germany had to pay reparations and as the debts were so onerous decided to inflate the debts away. Huge amounts of money were printed by the central bank and loaned into existance.Money sloshed around the country in the roaring twenties.Not the fault of the gold standard.

    But as happenned to Ireland in the 2000′s the lender came acalling and the debts could not be repaid. The economy collapsed and hello depression. Like today, central banks printed more money but the borrowers were too deeply in debt and the depression deepened.
    There was no recovery until the stimulus of wwII created work that lifted the countries out of depression.

    Adding debt to debt will not solve the problem today although a war might and that is where we may be headed or we could have 30 years of recession.

    Alternatively a sudden change in the monetary policy could create a full blown depression, a truck load of bankrupcies in every town and it is over in two years and we start again at a lower level.
    what politician will opt for that. I doubt Romney will call for that. Talk of a gold standard I am afraid is just that.

    I suspect it is designed to stop Ron Pauls supporters asking him to run for the presidency as a third candidate. He would strip the Republicans of at least 20% of their votes and a good number of fiscally conservative democrats as well. Ron Paul has the youth vote, the veterans vote and the tea party vote. He may yet run up the middle and take the presidency!! that would be fun!!

    There is another way and that is a full other story. However there is no avoiding the hangover occuring after the party.

    • padser

      It probably wouldn’t be a bad idea, for a gold standard to be in effect in Ireland! For starters all the laid off construction workers would take up mining for gold…and the phrase ‘going for gold’ would be apt for hoards of people heading for Croagh Patrick’ rosary beads in one hand – shovel in the other!

  30. Tony Brogan

    Therefore, orthodox monetary policy, where you cut interest rates and the economy recovers on its own, can’t work.
    This school of economics — to which I subscribe — sees the recession in the US as a balance-sheet recession, and believe those broken balance sheets are forcing the central banks into more unorthodox policies.

    Why not call it buy its real name Major depression II
    Or the Greatest Depression.
    If you take the level of economic actity and measure in terms of supply and demand the economies around the world are in contraction. Because the measurement use it GDP and that is a monetary amount it includes inflation. if you subtract the inflation rate form the GDP figure you get the rteal rate of growth.

    Shadow stats dot com figure the inflation rate, calculated using the same more accurate medology of the 1980′s is 7-8% there for usinf a GDP rate of 2.5% one gets an economic contraction of 4.5-5.5%. depression territory.

    Interfering in the economy is well proven to create problems and inefficiencies in the economy. So David you are a major part of the problem as you believe that meddling produces better results than not.
    you should listen more closly to Ron Paul and aim to reduce the sixe of government and stop interfering in the natural process of the market. So you are on the side of the central bank cartel.

    Too bad. Know thine enermy!

  31. Alan42

    Ron Paul is a nut. He is a interesting nut but at the end of the day he is still a nut . I went to see him speak at UC Berkeley ( of all places ) a few months back . He excites young people with his talk of the US ending wars and leaving the world to it’s own devices and fixing the economy with a return to the gold standard . Reduce government and introduce tiny taxes .

    However his social policies are absolutely brutal . End social welfare , end Medicare . Let people make their own choices and take their own risks . Take a look at You Tube of him answering a hypotectical medical question of a young man in a coma without medical insurance in the Republican debates . The crowd cheers when somebody shouts ‘ let him die ” ( new to I Pad , can’t link to You Tube yet ) Paul’s answer was ‘ let charities look after him ‘

    This was not a one off , his fans in the audience were full on US libertarians . One comment I overheard was ” there is a direct correlation between welfare and crime ‘ Other people were discussing how meny guns they owned and how the federal government were coming after them .

    Mittens is a pure PE guy . He will do anything to get elected .He has even been flirting with Birtherism in the guise of Trump . He is trying to embrace Paul supporters ahead of the convention , in case of a ugly showdown during his nomination at the convention .

    He is also really desperate to bring the Tea Party fruitcakes into the tent . the Tea Party are off the scale in conspiracy thinking .

    Glenn Beck pushed his crazy conspiracies through Fox News until he was sacked . In Tea Party world . Obama ia a secret Muslim and or a ‘ Terror Baby ‘ who was placed in the US by his Communist Father to one day become President and lead the US into decline . Check out ‘ Obama ‘s America 2016 , the big cinema release this week .

    They also think that Obama is staging mass shootings so that he can declare Martial Law and have the UN come in and disarm Americans . They think that FEMA are setting up secret concentration camp’s to imprison US citizens .

    The conspiracies go on and on . Even the leader of the Tea Party in Congress is calling for a return to Mc Carthyism because she believes that the Muslim Brotherhood is operating at the top levels of the US government .

    This stuff is mainstream in US politics . I had respect for Ron Paul , but once he started flirting with these people and giving interviews and time to nut jobs like Alex Jones at , I lost respect for him .

    These are the people Mittins is hoping will vote for him with vague talk of a return to the ‘ Gold Standard ‘

    Mittins would talk about going back to the Stone Age if he thought there was votes in it .

    • Deco

      Medicare will end when the people buying US treasury bonds stop buying them.

      • Alan42

        Is that something you would like to see .?

        • StephenKenny

          Healthcare in the US is a massive problem. They spend almost twice, per capita, what European countries pay, and still something like 40% have no real, effective, cover.

          There are legal problems – US healthcare companies are immune from anti-monopoly legislation, for example, which is a stream of gold for the legal system as well as the healthcare industry. Since Roosevelt, people have ben trying to fix it, and it just gets even worse.

          Whether you, or Deco, like it or not, Medicare is going to collapse, as is the Social Welfare system, and most of the rest of LBJ’s expensive Big Society projects . The figures are as clear as the day is long. The official answer at the moment, from the Federal Reserve, is that they won’t collapse because they will simply print more money to cover the bills.

          It might be worth noting that the same problems are faced by most European countries. Except for the favoured few at the very top, the value of state pensions, when they are paid, will simply decrease, to the point where they will have very little buying power.

          Over the past 50 years, people have promised themselves a golden old age, based on a ratio of something like 6 workers to every retired person. For most western countries, it looks more like it will be 2 to 1.

          They don’t need solutions, they are already known, but no one wants to, or is politically able, to do anything.

          It’s very wrong to stand up and say ‘get rid of medicare’, but it’s fine to sit back and, knowing what is going to happen, watch the chaos as it collapses, while wringing your hands and assuring everyone that you didn’t want this.

          • Deco

            Medicare is a scam on working people. It is another form of “taxation now (definite), benefits in future(maybe not)”.

          • bonbon

            It is very strange, that now that Obama and Bush have given $29 TRILLION DOLLARS to a small number of private entities, suddenly medicare is too expensive.

            I am amazed but I expected this. It is exactly what happened in 1939 in Germany. Precisely. There was signed the infamous Aktion T4, listing classes of medical care that were declared TOO expensive for the EFFORT. This document was produced at Nürnberg and the doctors’ signatures literally hung them. This opened the door the the Holocaust as Dr. Alexander, prosecutor said: ” a subtle shift in emphasis”.
            Look at Obamacare (Never mind the Tea Party). His advisor who wrote it, Peter Orzag, advised Blair on NICE which gave us Liverpool Care Pathway.

    • cooldude

      Wow Alan you really are very innocent. You think all this FEMA camp stuff is some sort of conspiracy stuff. Why don’t you simply check out the freely available facts which show that these camps are open for business and that Haliburton have been actively recruiting guards for these camps over the last year. No conspiracy just facts which you are too lazy to check up on so you simply brand anything which interferes with your cozy little everything is ok world view as conspiracy. Do me a favor and check up on your facts.
      I suppose the FACT that over 1000 engineers, including a nobel prize winner, have stated that it is IMPOSSIBLE for fire to bring down a modern steel structure building is also a conspiracy. This FACT was also confirmed by the designers of the World Trade Centre but I’m sure these facts also interfere with your extremely blinkered world view.

      Ron Paul is not a nut he is an extremely honest individual who has been proven right time after time in his predictions over the last thirty years. Taking personal responsibility is not fashionable in this era of the nanny state but that doesn’t make it wrong. Actually it is a way of life I fully endorse and practice in all areas of life.

      • Alan42

        A 9/11 truther . Brings me back . These days it has moved on to UN Agenda 21 , disarming America and these secret FEMA camps . You should pass on your information to Alex Jones . He loves this kind of stuff , he may even publish it along with his patriot and Oathkeeper stuff .

        • cooldude

          The fact that FEMA camps exist is just simply a fact. Why they exist and if their existence is in any way sinister is the question. Your inability to question anything you hear or read in the mainstream media is unfortunately quite common and is in many ways brought about by our educational system which emphasizes regurgitation of facts over critical thinking every time. Unfortunately you seem to have lost this faculty because there is no secret about FEMA camps and they exist openly in America today. Thankfully most people on this blog, even the ones I don’t always agree with, do think critically and don’t get all their information from Morning Ireland and The Irish Times. I think you would be better suited to ringing in to Joe and whinging with all the owl wans about all this conspiracy nonsense. By the way here are some details about these camps seeing as you are too lazy to look up some facts on them

      • whatamess

        “including a nobel prize winner” – who was that do you remember Cooldude? I ask as I too am suspicious what might really have happened that day (9/11) …

        I ask this of everyone here interested in replying….
        What i myself witnessed with my own eyes on TV, LIVE that day , 9/11,could have been falsified /faked??
        i understand from a friend of mine who is very well experienced in field of communications and such like ,saying that it would be practically IMpossible to pull it off as a live event ( and keep it all hush hush ) ( pre-recorded ? –a bit of a stretch in fairness– )

        I understand the benefits for certain interested parties in USA regarding $$$ considering the conspiracy theorists attitude that the event in question maybe gave US licence to invade &’plunder’ etc etc

        You hit the nail on the head when you called it “interferes with your cozy little everything is ok world view as conspiracy” ….

        I was ( maybe still am ) that VERY guy with a cozy perception of the world..

        I find myself now finding it difficult to have any ‘concrete stance’ on most things …

        I believe in science tho’ ….

        as many “experts” say that the building(s) fell with help , others say planes of that size travelling that speed would certainly DO the damage as ‘witnessed’ on 9/11…

        any thoughts would be welcome / any links v.welcome supporting either side

        thanks in advance

        • bonbon

          All these discussions miss the point. Macchiavelli had 3 simple questions : Cui bono (who benefits), Who has the capability (logistics), and most importantly Why now (timing).

          Looking back from today, what happened after 9/11? Laws that no American before would support, except Wall Street. Financial explosions, and long wars. We see a massive financial collapse not to read about in the press. It was underway already in 2000. What then should replace this empire was the question then as now. The Nation State with its Public Credit, Hamiltonian banking of course.

          So the attack was to remove that only alternative from the planet even as the empire self destructs.

          More succinctly, 9/11 was a Reichstagsbrandt to enable dictatorship exactly as in 1932 in Germany. We said that months before as soon as Ashcroft was hired.

          As such it failed. Bush, grandson of Hitler’s moneybags, was not Hitler, as bad as he was. So another was to be expected. Obama is now in that role.

        • cooldude

          I was also that guy for a long time myself. It is difficult to “go there” on this issue but it is also important to look at the evidence and to draw your own conclusions. Here is a video of some experts discussing how the fire theory is simply impossible. As Sherlock Holmes once said when you eliminate the impossible whatever remains, no matter how improbable, is the truth. Decide for yourself

          • cooldude

            The name of the Nobel Prize winner is Dario FO. He features in the movie/documentary which came out recently which investigates all the facts in relation to 9/11 and is a very thorough and moving piece of work. The link is here

          • bonbon

            I wonder what Sherlock would think of British Aerospace Engineering, BAE, whose Board included Prince Bandhar of Saudi. He financed some of the hijackers, and that is in the 28 pages Obama promised and refuses to de-classify. Bandhar became Saudi Intelligence chief recently and that is what is stirring up Syria. BAE handled the Al Yamamah (Dove of Peace) deal with Maggie – 35 years arms for oil barter. $180 billion for a slush fund that all terrorism draws on.
            Impossible, Sherlock? I say not.

          • whatamess

            thanks for link
            as are so many details about that day ,building 7
            just doesn’t add up eh …hmmmm
            i will ponder the imponderables

          • whatamess

            cheers for the links cooldude

    • bonbon

      You are perfectly right about Ron Paul. Anyone can check the Austrian School on medicare, social welfare, medicaid. It is brutal. Everything that FDR did is to be rolled back.

      But do not forget, Nixon rolled back Bretton Woods, Sir Alan Greenspan et al, Glass-Steagall, and Obama is going after the weak and elderly with “Obamacare”. So while you are right, do not get blindsided by the rest.

      Imagine what Romney will do, just read up on his sidekick Paul Ryan!

      This an anti-American onslaught, being done in full view while voters and Congress are so terrified and corrupted they cannot stop it.

      In the EU the onslaught on the nation-state is well underway. Greece has been disemboweled in full public view. It is a warning of what is coming.

      We face a dying empire in a murderous stampede from its doom. Russia realizes it it is maddened and have drawn a red line at Syria. Look what was done to Libya, and a public gang murder of a head of state.

      This is Obama’s watch. Nero at work.

      And we are told not to meddle!

  32. Tony Brogan

    “Surely anyone with a grasp of economic history knows that strict adherence to the gold standard, with the balanced budget mantra, at a time of asset price deflation in the early 1930s exacerbated the recession, which morphed into the Great Depression. But is the case as open and shut as that?”


    From Wikipedea

    Milton Friedman stated that “the severity of each of the major contractions – 1920-1, 1929-33 and 1937-8 is directly attributable to acts of commission and omission by the Reserve authorities”[27] He further believes that the US got out of the Great Depression because of the “natural resiliency of the economy and WW2, and not due to any acts of government, which in general were “very destructive” and extended the Great Depression.[28]

    Barry Eichengreen believes that the Austrian School view that the Great Depression was the result of a credit bust has much to recommend it.[29]

    Alan Greenspan wrote that the bank failures of the 1930s were sparked by Great Britain dropping the gold standard in 1931. This act “tore asunder” any remaining confidence in the banking system.[30] Financial historian Niall Ferguson writes that what made the Great Depression truly ‘great’ was the European banking crisis of 1931.[31

    Seems like some expert opinion thinks that central bank meddling,and britain going OFF the gold standard prolonged the depression and that it fixed itself.
    A third said the boom caused the bust.

    So best leave well alone and stop the meddling. It causes all the problems to start and only makes them worse to finish.

    • Philip

      Ah yes…let the invisible hand of the market take its course and yield an optimal result – like a stone rolls down a hill and finds its eventual resting place. Thing is Tony, the invisible hand might decide you’re no longer part of that optimal endgame. Then what?

      The democracy of the highstreet footfall with its highly media led tendencies only follows the interests of the unelected cartels. I am all for keeping an eye on governmental big brother, but remember, there are a lot of other big brothers who might have less savoury views about your welfare.

      • Tony Brogan

        I do not follow your logic
        The invisible hand as you call it is the total combined actions of all those acting in the market place.

        What has that got to do with a supposed hidden threat to an individual?

        You are confusing a market place with law and order.
        We are not proposing anarchy here.Just the peaceful series of decisions made by people as they trade in the marketplace.

        It is not to do with big brother but to do with the banking catel who wish to strip you of you assets and a bloody good job they are doing too.

        • Philip

          Law and order only serves those who can argue the best. It serves those who can pay for the lawyers.

          The total combined forces may not produce a positive result and may destroy you and your community. This is a global marketplace.

          Laws for a global marketplace that you can fix and properly police and sanction requires global cooperation. That’s some way off IMHO.

          Banking Cartels are institutions which have evolved. No one created them one day to destroy the world. They are now under threat cos there are alternative and more effective ways of conducting an economy in our fast changing world. The threat is that a reserve currency like the dollar can become irrelevant and you can bet that every maneuver is about keeping it that way.

          • Tony Brogan

            you sidetrack the subject.
            did the gold standard help or hinder the recovery from the depression

          • Tony Brogan

            Banking cartels did not just evolve.
            They are plannned and implemented with cunning deceit.
            They are malignant, destructive and corrosive to mankind. they are in short, evil.
            They are implimented and planned to destroy the world as we know it and to have it controlled by the double handfull of dynastic families that owne the majority of the wealth of the world and almost all of the world institutions.
            No exceptions except the internet has got away from them. They control, banking, education, medicine , food, politicians, bureaucracies, and communications of MSM They operate with impunity from the law as we now see.

            You are right about the reaction to the losing battle to maintain the US dollar as the world reserve currency. Murder will be/is committed to sustain it.

            See Creature from Jekyll Island.

        • bonbon

          That’s not it. The invisible hand is a swindle. It results from Adam Smith’s statement : “… every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. … he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. …” — Adam Smith, Wealth of Nations, 1776, Vol I, Book IV, Ch. II, 421.

          This is a sanitized version of Mandeville : from Private Vice, will spontaneously in a unknowable way, spring Public Virtue. This is the core Austrian School economic document.

          Directly opposing this we have Alexander Hamilton and Arthur Griffith showing that an economy “left to itself” will suicide. Removing the mind from an economy creates a walking monster of dead capital.

          • Tony Brogan

            never mind all the BS

          • bonbon

            A swindle it is, and was always meant to be. The trick is Venetian, masked.
            The irony of the “gold standard” is the invisible hand steals the future, destroys the physical economy. It is a weapon.

          • Tony Brogan

            You do not know what of you speak. You are confused searching through the gloom and clouds for an answer.

            you never comment on the central banks the creators of inflation that destroy societies and the individuals within them.

            Ah yes of course, Alexander Hamilton was a banker with a particular admiration of the British model, that bankers paradise of the evil empire, to be foisted on to the American people in the guise of progress.

            So you favour the central banking model that strips the people bare this very day.

    • bonbon

      Glass-Steagall was not “meddling”, anything else is. Let’s be serious. We are not going t meddle them or give them golden medals, we are going to split them cleanly.

      Sit Alan him self said he lobbied for 20+ years to repeal that and admitted recently the Dodd-Frank cannot work, only Glass-Steagall would.

    • bonbon

      Not to forget, Sir Alan Greenspan was knighted by Her Majesty for “bringing financial stability to the markets” after Black Tuesday 1987. He took the job from Volcker.

      Serving the Crown, what?

    • bonbon

      You quote Milton Friedman of the Chicago boys who put Pinochet into power in Chile to implement their agenda?

      Well Pinochet did do just that!
      You quote Sir Alan Greenspan? That’s mind boggling.
      I’m afraid your “experts” are well known the be the problem.

      In June 2012, another move to forcefully reject the Empire, Argentina has announced that Milton Friedman’s portrait will be removed from the entrance-way to Argentina’s Central Bank, along with the inscription of his words

      that the Bank’s primary mission is “to preserve the value of the currency.”

      Bank President Mercedes Marco del Pont said that by removing these symbols, “we are turning the page on what was one of our most perverse periods in terms of abandoning the sovereignty to define our economic policy.” Friedmanite policy ruled Argentina from 1976 to 2001.

      • Tony Brogan

        They are joined by 100′s of others with similar opinions. The depression was not caused by any gold standard of whatever nature but ultimately because of a lack of a proper aka classical gold standard.

        Be not deceived by false prophets.

        • bonbon

          Well this was discussed at length. At Bretton Woods, the British efforts led by Keynes were all rejected.

          We see through British monetarism in various guises now. The British Empire ruined the planet. Alexander Hamilton saw through it in 1795, Arthur Griffith in 1905. FDR in 1933.
          Argentina is not deceived. President Cristina de Fernanadez Kirchner, like her late husband is not deceived.
          Remove the pictures of Milton Friedman from banks for a start. We do not need Pinochet’s to enforce these liberal imperial policies.

          • Tony Brogan

            Yes and I see through LaRouche

            I presume you use the Royal We, you and the brigade , I guess it is.

  33. Deco

    We could do witha Taxed Enough Already movement in this country.

    Now we have Noonan saying that he wants to levy a property tax directly from peopl’s pay packets.

    In addition to 23% VAT, expensive fuel, and all the other levies extracted from working people to get the proceeds of their sweat from them.

    And the we have market interference mechanism like NAMA to prevent working people from being able to get any vale in the property market.

    • Philip

      The trick is to keep people muddled and confused so no concrete base for a platform to define clear outrage can be established.

      Look at the counter arguments that take things out of context…we have the lower levels of income tax imposed, we have the smaller of public services relative to population, our fuel prices are similar to most other countries – one of the lower end in fact and so on. What they do not tell you is that services are failing left right and center for want of good management

      So the real argument is not about taxes, but the value for taxes plus the stealth. And the real answer is about poor management which a huge section of the self interested (Unions) will not countenance.

      This is why Croke Park must persist. If this fails, the web of interdependence starts to unravel and then you’ll start to see thing happening. Trouble is, it could get nasty.

      • Deco


        There is no value for your taxes.

        Unless you are an Anglo Irish Bank bondholder. In which case you get “something for nothing”. Well, a bailout for effective lobbying in Paris and Brussels.

      • padser

        Agree. Tis a very thin ice government is treading on. The extremities the gov. have gone to, to avoid civil unrest! The “supreme tolerance” of the Irish people, would be foolishly accredited to anything else other than the CPD. If it falls. Let’s see, just who starts the rioting!

    • padser

      Deco’ “movements” in the country are to be restricted’ only to the ones that prompt a quick and decisive visit to the jax!

    • padser

      If Builders created NAMA – what agency would be created to recoup some of the half billion paid to a ‘toll bridge’ owner?

    • bonbon

      Taxed and swindled enough!

  34. Tony Brogan

    BTW David
    I appreciate the chance for a discussion. Please take nothing personally. You are a grand fellow to give us this forum.

    • padser

      Stick to your guns Tony….that hypercritical tirade followed by flattery will evoke a response’ not!

      • Tony Brogan

        True, likely as not.
        however critical I may be I still value the forum provided.
        I can disagree with his position and still respect the man.
        Others I can agree or disagree with and not have respect for the individual.
        Everyone is right now and then regardless of who they are!!

        This forum is a teaching and learning experience. many times I have to refesh thinking and facts based on others opinions that stimulate.

  35. cooldude

    I have done some research on this gold standard issue and it seems none other than helicopter man Ben Bernanke has a clear grasp of the difference between the classical gold standard up to 1914 and the flawed version which took it’s place after the war. In 2004 at Washington and Lee University Bernanke noted that ” The gold standard appeared to be highly successful from 1870 to the beginning of WW1 in 1914. During the so-called classical gold standard period international trade and capital flows expanded markedly and central banks experienced relatively few problems ensuring that their currencies retained their legal value.”
    He also noted that “unlike the gold standard before WW! the gold standard as reconstituted in the 1920′s proved to be unstable and destabilizing.”
    Also in a NBER working paper with Harold James Bernanke noted that the sustained deflation which was the precipitating factor of the Great Depression was NOT the fault of the gold standard but was “the result of a MISMANAGED international gold standard.”

    Now I know a lot of people find this stuff boring but is important to get these points clearly as Bernanke has done. In the context of today what does all this mean? Well the main thing is if there is to be any attempt to revert to a WORKABLE gold standard it will have to be done at a gold price which reflects the massive currency creation over the last forty years. If we take the US for example and simply use the criterea used at Bretton Wood in 1944 (which is basically divide the currency supply by the amount of ounces in reserve) it would give us a current price of roughly $10,000 an ounce. That is the type of price gold would have to be for this type of system to work again and that is dependent on the US having all the gold reserves they say they have. Ron Paul has been looking for an independent audit of these reserves for thirty years yet the Fed won’t do this. Whether or not the US or any other country does return to this standard these types of prices will be achieved anyway over the next few years as the fraud of the current currency scheme becomes more transparent and people seek protection for their savings. Jim Rickards has written a good book on these issues called Currency Wars.

    • bonbon

      Bernanke had a fit about Ron Paul’s “Audit the FED”. He likely rolls his eyes and goes catatonic about Glass-Steagall.

      Let’s make his day!

    • Tony Brogan

      AA1 cooldude.
      Your figures are likely very conservative these days. I have seen calculations that to back a dollar currency gold would have to be $100,000 per ounce. That tis the inflationary impact of all the QE and the national debt.

      Sounds rediculous, I know, until one looks at Germany and Zimbabwe in the past. Then we are talking millions, billions, trillions, quadrillions an ounce.
      A paper currency inflated to zero value give gold a price of infinity.

      In light of that $100,000 per ounce may not be unreasonable.

      Whatever the calculations, the US will lose it’s reserve currency status as the world moves to a basket of currencies with gold as one of the components on a fractional basis.

      any country whose currency is 100% backed by gold with silver freely traded and used as coin will have a huge advantage in stabilty of the economy and respect around the world. Trade will flourish and people will have full enployment again.

      Recent past example is Switzerland until they were blackmailed into selling off half their reserves in order to have access to the EU.
      Their gold backed (unofficial)currency made them rich and prosperous.

      The political will is required and that emanates from an educated populous. It is a long road ahead, but one person at a time it will be done.

  36. Dorothy Jones

    Portugese Gold Standard:

    So cash-for-gold outfits in Portugal increase by 30% this year; wedding rings sold to pay the rent; while the Germans apparently are the biggest hoarders of gold.

  37. Scarcity principle…Gold

    Just a funny thought… as Gold and Silver are limited and speculated with, hence using the economic principle of scarcity and demand… I present you the future…


    • padser

      Funny Georg, I was thinking of that myself tother day…we’d be “AWASH” and “FLOODED” with a new notion of wealth!

      • Tony Brogan

        Yes Canada is wealthy in that regard, but still suffers from drought,
        Canadian desert is found on Southern BC. Annual rainfall 8″

        • bonbon

          NAWAPA XXI will deal with that detail. Plenty of water simply flowing the other way to the Arctic. Bring it south over the Rockies, to Mexico, greening the desert along the way and generating power. Biospheric engineering!

          After all during the last 22 “ice-ages” water flowed quite differently. Why wait for another?

          • Tony Brogan

            Arrogant plan. all talk of promoting the nation state in the one breath and then walk all over them with a Larouche master plan in the next. American wasted its water and canadians are keeping theirs. Candadians will tell you to p…off. That is why it is not included in the free trade pact.
            Douche LaRouche

    • StephenKenny

      I wonder how much of this is true.

      One of the little back stories in the movie V for Vendetta is the fact that in every other scene it’s pouring with rain, and the government is warning about the price of ‘water vouchers’.

      It warrants some serious research.

    • whatamess

      yea, remember the movie “Waterworld” everybody

      and Gay on The Late Late telling us 20+ years ago that bottled water would be all the rage … I laughed my ass off…brother , now don’t i feel like the f***in’ ass**le …

  38. I’d just like to point out that when discussing who creates money you have to distinguish between cash, central bank reserves and the main type of money, bank-account money.

    1. Cash is printed by the central banks but the amounts are trivial in today’s digital world.

    2. Central banks reserves are the type of money that banks use to pay each other and this is the main type of money which central banks create.

    3. The main type of money, bank-account money, is created by the commercial banks and forms over 97% of the Eurozone money supply. It’s normally created through loans and that’s why almost every euro has a matching debt. It’s also deleted through loan repayments which is why there’s less money in circulation during a recession.

    We recently published the document at the link below which explains it all in far more detail. I hope you find it informative because I think it’s primarily through education about banking that we will find a resolution to the debt crisis;

    • cooldude

      Thanks Paul for that very clear account of our monetary system. What can possibly go wrong? Quite a lot I”m afraid if this earlier experiment with unbacked money is anything to go by

    • Philip

      Is all down to confidence in the future or it all locks up. Deposits mean nothing if they do nothing and so it is with Gold and Precious metals.

      But as I keep on saying again and again, once you have global imbalance, you are only reflating a burst tyre. Plug the hole by trade protections and you suddenly have nails sticking up all over the place.

      The only way is to reach out an put the problem on the table as equals.

    • bonbon

      FDR educated all about banking, with his fireside chats – “let me tell you about banking”. We learned how to cultivate a commercial sector and discard the casino. We know what to do.

      And Economics is not accountancy. Monetarism is not economics.

  39. Economic lessons on this site should now evolve to include the word ‘ Attachment’.

    Many of us send missives with attachments and likewise we receive them too . However in the legal economic sense the word has now morphed in the public eye to mean something else .

    How to explain ‘that something else’ is a daunting task and will remain a passive nimph to most or wake up call to a few .Somehow that few will be you and I soon.

    So who is attaching what and to whom ? Is it a picture we are all hanging ( Michael Collins did a bit of that during the civel war ) ?

    Supposing after Christmas your weekly take home pay is less due to an attachment by the Minister for Finance .He has already on public record said he will deduct property charges from wages .So the Minister has attached a deduction from your hard earned wages and given it to a property clerk who will request you for more if your wages are not enough to pay all this amount as per the attachment .

    Now , if the property clerk records that after demanding the balance from you and you have failed she then looks for another attachment .No not from your wages or your employer .This time ( with full approval from the Minister )its your friendly bank .This time you are not aware of it but your bank is .So when you some day peruse your bank account you either have no money in the account , your account is frozen or you have less than what you thought you had .In other words your long awaited holidays have been attached and you have no money to pay for your vacation.

    And thats only the beginning .

    • StephenKenny

      The word that, in this evolving language, sends Orwellian shivers down my spine, every time, is: “Rendition”.

      It used to sound like someone was about to sing a song. And now it doesn’t.

  40. molly

    The subjects all different in there own wright all end up in the same way of making me realise how power and greed all go hand in hand .
    Also the game and it’s all one big game who gets caught in the cross fire does not seam to matter.
    Ireland is no different to any other country in so much as the holders of power,big company’s the government and there cronies ,who controll and want more and more power.
    Crime does pay and it’s got to the stage where it dies not matter who we elect is such a wast of time .

  41. Deco

    Well, this article is about the US. And here is some American humor concerning the way that lobbyists have destroyed the system on the people.

    Now young kids can aspire to be a crony. Because it seems that cronies are highly successful.

    I think we could operate a world excellence centre for developing cronies here in this country. In fact, I reckon we are already leading in the field. The Americans had a spell with meritocracy, but in Ireland we never let such detestable concepts interfere with developing cronyism. Leave that sort of thing to Israel, Singapore and the like.

    • Philip

      Center of excellence for cronyism – That’s one for a Martin Turner cartoon if ever there was one. Genius.

      But I wonder if we are not there already? Strange as it may sound, but Ireland has the highest level of management and financial consultancy resource per head of population. And still me make a mush out of it.

  42. Has anyone noticed a Moon WOBBLE ?

  43. Tull McAdoo

    One question that has always bothered me down through the years was; why is it that a large percentage of the populations of both Australia, Canada and New Zealand are made up of Irish and English decent who are capable of creating a quality of life in eight of the top ten cities in the World as outlined below, and yet back on their native soils the cities they have left behind are no better that 43rd place in the rankings.

    What is holding these people back? Is it the politics of these places? Is it the unequal distribution of wealth? Nepotism? Cosy clientalism? Gombeenism? Anybody???

    What we do know is that people from Ireland and England are capable of great things when they are given the chance. I think it is a huge mistake for successive governments to go about trying to restore and rehabilitate a system that was clearly flawed. I think they should see what their own people have created elsewhere and set about reproducing those models at home.

    There will be opposition from deeply embedded vested interests, but it is my contention that these same vested interests are the ones who are responsible for holding Ireland back….Ye have nothing to lose but your chains people. As I have said before, maybe it is time Ireland was given a functioning democracy, as opposed to the sham that has existed since the foundation of the state.

    The following table is a summary of the Economist Intelligence Unit’s 2012 Global Liveability Survey.
    The liveability report surveys 140 locations around the world to assess the best or worst living conditions. Cities are scored up to 100 on their political stability, healthcare, culture and environment, education, and infrastructure.
    City Country Rank
    Melbourne Australia 1
    Vienna Austria 2
    Vancouver Canada 3
    Toronto Canada 4
    Calgary Canada 5
    Adelaide Australia 5
    Sydney Australia 7
    Helsinki Finland 8
    Perth Australia 9
    Auckland New Zealand 10

    So I will leave you with them thoughts for now, have a look at the table above and ask why not.
    Take it away the beautiful Sissel and Goodnight Ireland, Sleep well.

    • bonbon

      It seems you have never heard of Transportation? And who and what ordered it and why? Very odd gaps in learning there, what?

      And have you noticed anything going on in the financial world (I wonder where that is run now, hmmm)?

      This time around Transportation is given that cuddly feelgood label “Choice of Lifestyle”.

      For a list of the fascist laws Australia has introduced recently see :

      Anytime a republican Austrialian gets cocky enough to challenge the Crown, she dismisses him :

      Those shipped from Ireland then or now will face the Crown directly. Looking from Australia back, it must be surely clear its the same empire at it again.

      • Tull McAdoo

        I was’nt quite sure bonbon whether you were a “troll” who came on this forum to disrupt various discussions or whether you were some “shill” for some organisation with its own agenda, and having reviewed some of your posts over the last few weeks I have formed the opinion that you are indeed a “shill” for Lyndon LaRouche and the associated ideologies that accompany that particular view of the World.

        I have posted a link below to LaRouche’s so called Irish Brigade with which I am sure that you are familiar, so that other members of the forum can judge just exactly where it is that you are coming from with the views that you express.

          • Tony Brogan


            Get the full story on Mr LaRouche-no slander.

            Verging from Marxism to Trotskism to anti left to far right.
            Employed voilence agaist perceived adversaries and claims to be target of assination.

            Has used psycops programming on accolytes to reduce them to their inner core to be rebuilt (as whom one might ask)

            There is a lot more if you take the time to read it.
            Then you decide whether LaRouche is a nut bar and all his followers similar or whether they are truly informed illuminaries.

            Maybe you will sign up with the Larouche Brigade. Good luck.

        • bonbon

          Everyone is invited to read for themselves. No slander.

          Pointing out the problems in Australia is also highly important, as so many are “choosing” a different lifestyle (to put it in the Governments terms). Anyone who paints a rosy picture to desperate jobseekers, is downright mean.

          Ireland has suffered under the British Empire, and now under a pair of administrations that seem unable to do anything else. So look up the republican spirit in Australia, it is alive and in fighting spirit!
          And that spirit is alive today in Eire!

        • Credentials and Investigative piece from :

          John Foster “Chip” Berlet (born November 22, 1949) is an American investigative journalist and photojournalist activist specializing in the study of right-wing movements in the United States, particularly the religious right, white supremacists, homophobic groups, and paramilitary organizations. He also studies the spread of conspiracy theories in the media and on the Internet, and political cults on both the right and left of the political spectrum.

          He was a senior analyst at Political Research Associates (PRA), a non-profit group that tracks right-wing networks,[1] and is known as one of the first researchers[2] to have drawn attention to the efforts by white supremacist and anti-Semitic groups to recruit farmers in the Midwestern United States in the 1970s and 1980s. He is the co-author of Right-Wing Populism in America: Too Close for Comfort and editor of Eyes Right! Challenging the Right Wing Backlash.

          Berlet, a paralegal, was a vice-president of the National Lawyers Guild. He has served on the advisory board of the Center for Millennial Studies at Boston University, and currently sits on the advisory board of the National Committee Against Repressive Legislation. In 1982, he was a Mencken Awards finalist in the best news story category for “War on Drugs: The Strange Story of Lyndon LaRouche,” which was published in High Times. He served on the advisory board of the Campaign to Defend the Constitution. He was affiliated with Chicago Area Friends of Albania.[3]

          Fascism Wrapped in an American Flag

    • Tull,

      the lethal cocktail of uncertainty, fear, deliberate and indoctrinate disinformation via controlled media, and all of your above … Is it the politics of these places? Is it the unequal distribution of wealth? Nepotism? Cosy clientalism? Gombeenism? … has this country in it’s iron clad grip.

      Essentially a one-tier political system, where the very same people have their snouts in the trough since decades, is the presented illusion of democracy.

      As I have said before, maybe it is time Ireland was given a functioning democracy, as opposed to the sham that has existed since the foundation of the state.

      That would be the day….but I am afraid, no one is giving them this functioning and transparent democracy, they have to demand it.

      • bonbon

        Certainly not Britain. We threw them out then.

        But as Arthur Griffith wrote, when organizing, we need an economy. Political sovereignty means nothing without economic development. And the economy got some attention. The Shannon Scheme inspired FDR’s TVA for Tennessee.

        The US threw out Britain, and started manufacturing, not just delivering raw materials for British production.

        Bismark threw out the British Empire in his own ranks, and gave Germany sovereignty. The key here is his close friend and economics advisor bring certain economics workd to his attention. Of course Britain’s Edward VII made sure a 7-year war would start exactly as Bismark warned on his last speech after they got him fired. That “7-years” war, the Anglo Dutch model, was WWI.

        All of this was published by Arthur Griffith, especially Alexander Hamilton’s National Banking and Friedrich List’s famous American System of Political Economy. A banking for the public good, based on a national credit system.

        Germany at the moment is in a fist, the Euro fist that no-one voted for. Poised now, the British Empire wants to extract Euro 9 trillion from the nation of Germany.

        Will Germany , and Ireland, quickly get its act together and put the future on the table? No more imperial wars, and no more British Empire, no more TINA? Will Karlruhe defend the nation against predators or will they cave in?

        We have all suffered at the hands of the doomed oligarchical “tradition”.

    • padser

      I live in a provincial small town 60km from Dublin County.
      A Community Hall, that had been unused, and condemned for use for about thirty odd years was, by fundraising and grants Etc. – renovated and re-opened for full use again by the Public. Well over half of the people credited with the success, were non-indigenous to the area (mostly Dubs). Moreover, I find that around 30-40% of people in the same area, who are involved with the Tidy Towns and local charities are also non-indigenous.

      In direct response to your question though…and according to the Cities/Countries you have listed – these countries seem to have a lot more ‘natural resources’ and in great abundance!

      From my own experience and thoughts on the matter is, we have a lot of begrudgers. We act imperfectly, so as not to draw attention to ourselves – especially around ‘our own’….but when we move from our origins, we are less inhibited. On our island – the more we see people getting on – the more ordinary others strive to be! As where abroad, it seems to be embraced more!

      Maybe’ we are still a bit Tribal!

      • Tull McAdoo

        It is interesting padser that you raise the “natural resources” aspect for it is only a short while ago that I raised the same issue myself about Ireland’s natural resources and how they were traded and in some case’s given away very cheaply.

        One example I gave was based on a study ( I will try to locate original link) which calculated the value of Irish fish stocks that were ceded to our European partners. The value calculated in today’s money was in the region of 200 Billion euro’s, a princely sum I am sure you would agree.

        One guy from Donegal that I spoke to at a function recently over in Sydney was of the opinion that the money that Ireland received in grants and subsidies from Europe was only “our own money coming back” and that it could be construed as “a transfer of wealth from the taxpayers of Ireland who owned the fish stocks to the landed classes/ big farmers and also big developers who were the main recipients of the grants / subsidies and contracts for capital programmes that came back from Europe”.

        I would have liked more time to flesh out them ideas with the guy but alas time was our enemy as usual. So what do you think of all that?

        • whatamess

          So what do you think of all that?

          Whatamess thinks “whatamesss!”

        • One guy from Donegal that I spoke to at a function recently over in Sydney was of the opinion that the money that Ireland received in grants and subsidies from Europe was only “our own money coming back” and that it could be construed as “a transfer of wealth from the taxpayers of Ireland who owned the fish stocks to the landed classes/ big farmers and also big developers who were the main recipients of the grants / subsidies and contracts for capital programmes that came back from Europe”.


          Greetings from Donegal :)

        • padser

          Totally concur…I could be wrong, but I think David McWilliams…..quite a number of years ago (15 maybe) wrote an article in the SBB, about a book titled COD!

          The book makes references to Codfish as a commodity in centuries gone – and the remarkable efforts of the Basque nation in cultivating, salting and trading the Cod stock, from previously un-fished regions like Greenland and the North America’s. No other nation at the time, knew where they were getting it from. The Author Mark Kurlansky, would it seems have a fascination with the Basque’s and subsequently wrote a book about them.

          However’ DMcW’s article outlined the unique qualities of Cod as a commodity and it’s use as a viable currency in it’s day.

          Moreover’ he went on to say that a figure close to 30 Billion Punts, was gifted to our EU partners and taken during the mid 70′s – 80′s!

          As a once avid beach-casting Angler myself, and been a member of various Clubs along the east coast over the past four decades, have been witness to the complete and utter depletion of anything that resembles ‘a good days fishing’! I remember the Irish Navy having to chase the Spanish trawlers out of the ‘five mile limit’…. till it’s accession to all and sundry!

      • Tony Brogan

        Vancouver is listed. It has a magnificent harbour, is backed by mountains. Ski and golf on the same day. fish, sail, go crabbing. Stanley Park for a stroll, or run. cycle all year.
        It is just 50 north of here.

        20 miles south is victoria. an eighth of the size and we need to drive further to ski but all the rest. We think victoria beats Vancouver any time and the climate is better.

        80 miles north is Comox. Fraction the size of Victoria and all the above but not the big city ammenities like large theatres and stadia.

        All would make the top 10 in livability.

  44. bonbon

    Euro Break-Up: Getting Closer to D-Day!

    August 28, 2012 (EIRNS)–”The Secret Plans for the Euro-Crash” is the title of a detailed article in the Aug. 25 {Frankfurter Allgemeine Zeitung} on an exit scenario for life after the euro. Advisors from the business consultancy Capco have already written a 300 page study detailing every step of a euro exit, and lawyers are going from door to door of companies, to explain how subsidiary companies could go bankrupt without affecting the proprietary company, should Greece, for example, leave the euro. But since Spain is in need of the bailout fund, the teams are preparing for a complete breakup of the euro.

    Under the subhead “All Plans Are Already in the Drawer,” Alexander Roos from Boston Consulting Group claims that a third of all German corporate executives think that a breakup of the euro into north and south is probable. Although the so-called crisis teams in the various companies have been working out these scenarios for a long time, they still see the breakup from the standpoint of a statistical probability and not from a principled basis.

    Apparently, no one is willing to admit that these plans exist, but they are already acting accordingly. Michael Diekmann of Allianz states, “Developments of the last months have increased the risks of a different scenario.” Commerzbank also admits that it is going through different scenarios, and Deutsche Bank simply states “no comment.”

    But Deutsche Bank is one of those cutting off their foreign subsidiaries by refinancing them through the national central banks and no longer through the parent company, so that in a breakup both their liabilities on a national level and also their allowances to the central bank would go through the same devaluation. Furthermore, the big players are taking their liquidity out of Europe and renegotiating their derivatives contracts, so that their securities no longer are in Greece, Italy, or Spain (which would obviously default on the contacts), but in places like the City of London, which themselves want to include transferring the Greeks’ sovereign debt to the U.K.

    Even though the line of all the big DAX [German stock exchange] firms is still that they are “not participating in doom-mongering,” Bodo Uebber of Daimler told {FAZ}, they are acting fully opposite by withdrawing all their liquidity from foreign banks every evening, so that if any Southern nation should leave the euro overnight, they would not face devaluation.

    It is high time to stop these mad flows of money, and use them sanely for a new economic miracle.

  45. bonbon

    Draghi’s Witches’ Brew Tries To Combine Hyperinflation, Austerity, Lax Bank Standards

    Aug. 28, 2012 (LPAC) — European Central Bank chairman Mario Draghi will make a surprise non-appearance at the Jackson Hole bankers’ conclave starting Friday, CNBC reports. The reason given by Draghi’s office is that he will have too much work to do between now and Sept. 6, when he will announce his much-ballyhooed plan for hyperinflationary money-printing and Eurozone sovereign bond-buying. But one clear reason is that the market “shock and awe” from three weeks’ worth of Draghi trial balloons, has worn off, and anything further “Hyper Mario” might have said about it at Jackson Hole would likely be counterproductive to the intended effect of delaying the debt blowout.

    ECB board member Joerg Asmussen told CNBC that the opposition of German board member Jens Weidmann will not stop Draghi’s plan. Asmussen implied that through it, somehow the ECB would develop enforcement mechanisms for national austerity regimes, or recessionary “conditionalities” attached to ECB bond buying.

    Ironically, Weidmann still intends to go to Jackson Hole.

    In contrast to his demands that countries bleed themselves for access to money-printing, Draghi plans no enforcement of rules on banks, just the opposite. As Bloomberg reports, Draghi has antagonized the Federal Reserve by proposing to weaken the liquidity coverage rule (LCR, under Basel III) for European banks. In their plans to weather a 30-day liquidity freeze, Draghi wants the banks to be able to count as liquid capital, asset-backed securities, which have very recently proven to be completely illiquid in such a crisis!

    The ECB already counts any scrap of IOU as collateral for its loans, so Draghi apparently wants to make the bank capital rules match his own collateral standards. As Tim Geithner has told him, bankers are the best sort, and their concern for their banks’ reputations would never allow them to use laundry tickets as collateral or junk as capital….

  46. Morning from the Stena ferry, can just make out Howth. This boat journey always makes me feel nostaligic for my student years of working in bars ec in London before Ryanair made air travel affordable. Thanks for all the comments on this piece. We are obviously an eclectic bunch…no uniformity of opinion here!


  47. Philip

    I was chatting to a farmer friend of mine – looking at his field of turnips. He said maybe I should buy them all and same for next 2-3 years and while I’m at it, buy all the turnips in the country on the same basis .

    He said, that’s what investment banks do and have been doing for a while now. And then since they have the muscle, they become a monopoly supplier of turnips and you and I, the customer, take the hit and the Investment bank pockets the profit. Value added by this bank? ZERO.

    I suppose if we did have a gold standard or some sort of tight level of central issuance – however you devise it – the amount of funny money available to pull off these kind of commodity deals would be nipped in the bud pronto.

    • whatamess

      “…be nipped in the bud pronto”
      maybe ,but they would find a way …’they’ have been running riot for decades ,especially the last 10 years… Greed always seems to win out

      U.S has Walmart for example
      Europeans have Tesco

      If you want to take these guys on as a competitor or stall their growth in ANY way ,you’d better have deeeeep pockets….They’ve already won the race really, just like “they” will find a way to sidestep whatever landmines you throw at them regarding commodity deals ….money talks,bull**it walks

    • bonbon

      The daft idea that some sort of “money” could be used to control those who know nothing else but money is a fairytale for the incredulous and desperate.

      Only the constitutional republican nation-state can do that. There is absolutely no magical power in metal. We developed the nation-state to deal with this.

      I am reminded of the North American Indian tribe who were not allowed to assimilate the rapid industrial changes. Jesuit missionaries sold them the thoroughly non-Indian “cultural” idea that if they wore vests, they would be bullet proof! They even sold them the “ghost dance”. You can imagine what happened to them when they rode into the hail of bullets.

      Someone is trying this trick on Ireland, like a tribe. The condescension of imperial finance! They have the “tribe” attacking not only the very basis of their own nation, but any sign of industrial progress.

      What’s the end-game – Irish holding pieces of gold (a true Celtic cultural tradition) rushing headlong against progress to their destruction? What a setup!

      • Tony Brogan

        “What’s the end-game — Irish holding pieces of gold”

        Beats LaRouche’s one world, do it my way, dictatorship

      • bonbon

        What a swindle the “gold” game is. It expects the natives to play along like something out of a role-book.

        Slavery to a gold mine is surely slavery, even if the chains are made of gold.

        Slavery to monetarism in all its forms, is the British Empire’s way, be it Euro, the petrodollar, or some king of metal backed “sound” currency.

        Much better life liberty and the pursuit of happiness, building a world with a high standard of living for 9-25 billion.

        We are not going back to an imaginary past where the rich thought the sun never set on the golf course.

    • Tony Brogan

      I suppose if we did have a gold standard or some sort of tight level of central issuance — however you devise it — the amount of funny money available to pull off these kind of commodity deals would be nipped in the bud pronto.

      Correct. Exactly, one of the benefits of commodity money. Together with killing off the central banks and banning fractional reserve banking of the commercial banks.

  48. Philip

    Was asked earlier did the Gold Standard cause the great depression or not. I do not know. But I am learn a lot from the comments and I am trying to de-muddle.

    Basically the argument goes like this:

    Look at famine in Ireland. There was plenty of food, but the higher price available elsewhere priced people out of survival. The same goes on today except the highest bidder comprises groups who can command a monopoly control of a scarce resource – be it food, oil or whatever.

    When we look at global imbalances in trade and in human rights, I can see how such can be used to fund big pockets were they to cherry pick a critical asset at the right point in a business cycle. Money needed to make a recovery would be hovered up by paying prices exaggerated by monopoly buying activity.

    It is the equivalent of throwing petrol on a smoking fire. Maybe if there was less petrol and something less flammable or subject to “expansion”, we might be better off. This argument seems to be leaning towards the need for more inertia.

    • bonbon

      Leaning and tendencies, trends and statistics. Very muddling. Even more would be 2 of leaning and 3 of tendencies, just to give everyone the feeling they have part of the truth.

      Meanwhile the physical economy is being destroyed.

      There is an Irish tendency, leaning towards calling it the famine “Famine” at least on Wednesdays. Other days, well “there too many Irish, wer’nt there – it was their own fault”.

      Enough with leaning – it was genocide, calculated. If Eire saw An Gorta Mor for what it was, they would not be so easily swindled out of a country.

    • Tony Brogan

      With 8-9 million people, double today, the peasant worker was reduced to living on milk and potatoes.Three generations in one house (mud hut) on as little as a quarter acre.

      also grown were grains and meat. The rent had to be paid or the tenant farmer was out of house home and livelyhood.Rent was paid with the grain and meat.

      People were so desperate to stay on the land they paid the rent and starved as the potato failed to the plague.

      when the rent could not be paid, houses, buildings,destroyed and livestock driven off. People driven to the byways in the middle of winter. Shelters assembled in the ditches and hedges were destroyed as well. Man’s inhumanity….

      Irish land lord were complicit as well as anglo.

      • bonbon

        Food exports peaked, with British Army escort, to protect prices. That is why the British Empire has always been monetarist. This is how genocide is committed. Protecting a currency such as the Euro, has reduced Greece to 3rd world levels in a matter of months.

        Monetarism is genocidal.

You must log in to post a comment.
× Hide comments