September 17, 2012

Bernanke the Radical Revolutionary

Posted in Sunday Business Post · 203 comments ·

If I were about to retire and hoped to depend on my pension for an income, I would be very worried about the implication of the US Federal Reserve’s move last Thursday.

Before we look at the pension implication of the world’s new zero-interest rates policy, lets examine what the Fed did last Thursday, why it did it, what is says about politics in the US and what it says about what might be around the corner for the US. After that, we will bring it all back home and see what it means for pensions.
Here’s what Ben Bernanke said: “We’re looking for something that involves unemployment coming down in a sustained way, not necessarily a rapid way, because I don’t know if our tools are that strong, but we’d like to see an economy which is strong enough that it will support improving labour market conditions.”

With this statement, Bernanke set the record for American – and to a large extent – global monetary policy for the foreseeable future. This is the most radical monetary move by a central banker that I have witnessed since the Bundesbank converted worthless East German marks to real Deutschmarks at a rate of one for one. But back then, the German central bank’s reason was a once in a two-generation moment – German reunification.

Even Draghi’s moves last week were set against the backdrop of a collapsing monetary union.

In contrast, the Fed acted because it was fed up or mildly annoyed with the jobs market not reacting to previous stimulus quickly enough. It was impatient, so it decided to fire the big bazooka.

But the true scale of the radicalism is not yet appreciated.

The Federal Reserve has said that it will print money in unlimited quantities, with no upper limit, and it will lower its own standards about what sort of collateral it will accept in exchange for these new crisp dollars.
From now on, Bernanke has eliminated any doubt about what he is going to do. If economic data is weak in the US, the Fed will buy up all sorts of securities, creating money and making sure that, whatever else might be lacking in the US economy, it won’t be liquidity.

This is in contrast to the ECB’s move of last week, which now seems prudent and coy. The ECB is targeting Spanish and Italian bonds to save the euro – which is a big deal. The US central bank is reacting because it’s a bit irritated.
Both central banks have signalled that monetary policy will be used extensively to achieve different aims. In Europe, it is to bring down bond yields so that countries don’t default. In America, rates are to be kept low primarily to coax people to invest and spend, generating the demand necessary to bring down unemployment.

While I can see why Draghi acted, Bernanke perplexes me. It scares me to think what horrors he sees down the road for the US economy to justify such an aggressive response.

We know that monetary policy takes a while to work, so does he see a massive recession next year or a major bond sell-off? Is that why he wants the dollar weaker and is prepared to use everything in his power now?

The move has prompted rallies in all sorts of assets from stocks and gold to property prices in Singapore. Obviously, the timing of the move in the US has also given political commentators much to chew on.

Those in the Republican camp see this a blatant economic engineering to protect Bernanke’s boss, Obama, ahead of the election. Those in the Democratic camp see it as responsible central banking in the face of a weakened jobs market.
Indeed, in the great culture war that defines American economics, the different sides are interpreting Bernanke’s move completely differently.

On the Democratic side, left-of-centre economists are urging Bernanke not to stop here, but to keep printing money until the economy turns around. They depict the Fed boss as a well-intentioned man who hasn’t got the courage of his convictions, which are urging him to be more aggressive. They argue that the absence of inflation means that he can do more and more. They say let’s worry about jobs now and worry about inflation later when it emerges.

On the other side, the type of economics that were on display at the Republican convention the other week, believe that, the more the Fed prints now, the more hyper-inflation in the US will become a reality in the years ahead.
They also point to the fact that there have been two previous bouts of quantitative easing and nothing has happened. They offer this as evidence that monetary financing doesn’t work.

The Democratic side says it hasn’t worked because it wasn’t big enough and therefore, the US needs more of it.
Whatever side you are on, there is no denying that the moves from both central banks – but now led by the US Federal Reserve – will drive interest rates down to extremely low levels.

The angle I would like to finish on is all this means for your pension and for the outlook for investment in general.
There are many thousands of Irish baby boomers, who are now looking to live off their private pension, and there are more who depend on the state pension.

There are people who are managing their savings and need to get a low-risk return over the coming years to live off. What does the zero-interest rates policy mean for them?

In short, it means they are up the creek. The simple truth of the matter is that keeping interest rates near record lows tramples all over investment income and retirement prospects.

There is no return now in the safe bond market with yields down at 1 per cent. This is less than the rate of inflation in Ireland so you would be paying a government to hold your money.

In the past, when bond yields were at 5 per cent, a risk-averse investor could invest in bonds and not worry. These days are over.

Investors now have to go looking for yield ,and this is dangerous and risky. Also, the many fund managers in Dublin who simply took people’s money and put it in a bond fund, took a fee and headed to Guilbaud’s for lunch, now have to think a bit harder.

The implication of the zero-interest rate policy for Ireland’s retiring baby boomer generation, traditionally dependent on bond yields for their pension’s income, is disastrous.

A cynic looking at the ways that different generations in Ireland have fared over the past two decades might say that it is only fair. Since the late middle-aged and recent retirees made all the money on the property boom, we shouldn’t worry too much about them.

In terms of the generations in Ireland, it is now clear that the zero-interest rate policy is the debtors’ revenge. Maybe it’s about time.

  1. michaelcoughlan

    Whisper it David (follow the money)

    If you use the above statement as a guide and apply it’s principles to Beranke’s policy the motive in my view becomes clearer. The above council was offered to the investigative journalists investigating the watergate scandal remember.

    In last weeks article the points you made were that in the future we were likely to see hetrodox economic policy as well as fiscal expansion. It appears that you have been proven correct again at least on the hetrodox issue and will be on the fiscal issue shortly.  

    Beranke’s  policy seems to be hetrodox to me because despite the last two attempts at printing money not working here he is again going for round 3 despite the observation that the problem seems to be structural (too much debt) rather than cyclical (liquidity trouble).

    The reason in my view that there hasn’t been rampant inflation in the US is that the government bonds every one is buying are just sitting on people’s or companies’ balance sheets as they respectively repair their balance sheets and pay down debt. In other words the money isn’t making it into the local economy (either from the coupon revenue or sale proceeds of assets which is being used to purchase US Government bonds or pay back loans instead).

    The government isn’t spending the money internally in America either which means no inflation in materials  goods and services etc so what is in actual fact happening? My two pence worth is MrBeranke is facilitating the build up of an enormous pile of FREE Cash for his employer the US Government who doesn’t give a fiddlers about unemployment or pensioners or savers but cares a huge amount about the next phase of it’s military expansion in the middle east. And what is needed for to pursue this policy in the first instance is an enormous pile of cheap or better still free cash!  

    As for fiscal expansion when the military (fiscal) expansion takes place the second point you made last week in that regard will come true. 

    The financial markets at the moment    are indicating the first phase of an enormous drive to build up for a very serious conflict I’d say in the middle east involving Iran. For those of you who don’t believe that the markets can foretell the future here is a link to explain how it can happen;

    What Beranke sees down the road David is a contracting economy perhaps even stagflation due to a collapse in revenue from a crash in China. Beranke can’t afford to wait for that to happen because he won’t have the money necessary for the next phase of military conquest in the middle east.

    The reason you are perplexed is because you were born with a conscience and would try to do the job of an economist not the job of a political lackey for your political superiors in Washington.

    There is another reason for me to suspect that Beranke doesn’t give a shite about US or Iranian citizens alike and it is in the photograph of Beranke himself in the SBP. There isn’t a line on the mans face. A normal economist would be so stressed at his predicament the stress of it would be written all over his face unlike Beranke who looks like he hasn’t a care in the world.

    You can only look that good in such circumstances if you truly don’t give a shit.

    Remember David whisper it (follow the money)

    • padser

      Good theory…I listened to a military strategist, back in February on Newtsalk Radio. He said, that war with Iran, would probably start in October or at least no later than January 2013.

      • It’s won’t happen because ministers within the Israeli government and the majority of Israelis have had enough and the have mad dogs Netanyahu and Barak on a tight leash. It’s all war games and we are all picking up the tab

  2. Seanie

    David, are you not a big fan of Paul Krugman? Krugman actually said he was disappointed with QE3 in the sense that quantity of money involved is not large enough.

    What’s interesting is that it seems whenever physical goods and services are traded/exchanged for fiat (or whatever the medium is) the system seems to naturally correct itself. What the central banks are doing now is the equivalent of the dutch boy sticking his fingers in the holes in the dyke in order to prevent a flood.

    And I used to think economics was a science :(

    • Juanjo R

      The real only function of economic forecasting is to make astrology look respectable.

      I forget who coined it though…and another good one…

      Economics is the only field in which two people can get a Nobel Prize for saying exactly the opposite thing.

      • Seanie

        Fek it lads, lets just de-base the money ;)

      • bonbon

        Well I’ll second that, and go further with precise proof, economics as it stands both sides of the Keynes/Fischer divide is there only to make Alchemy look respectable.

        Imagine believing an economy effuses in an unknowable way from metal, or paper? Well Bubbles Ben and Draghi, both “respectable” suits, actually believe that. Ben is getting a little wild-eyed, (DMcW says impatient) with that metal and paper. No sign of an economy with all those QE’s. He is mortally afraid Ron Paul’s gold will spring forth an economy before his incantations stir that lifeless hoard.

        And the statesmen holding their breadth as the mumbled incantations reach a hum. The are showing the white of the eyes too!

        • Tony Brogan

          The paper debt based fiat currency is garbage monopoly money.central bank credit to controlthe masses enslaved in debt.
          The smart ones repudiate that currency ASAP and load up on the timeless value of real money. Most of the world are already doing it, why not you.
          China net importer of gold 400- 600 tonnes and silver. All citizens who can are saving gram by gram.
          India, net importer of 800 tonnes. Indian women know the value of real money.
          Russia, importing 400 tonnes
          Vietnam net importer.
          Turkey, Arabian countries buy, even European customers are about to become net importers of gold.Only the US and a few others lag. The laggards will be left behind in the new financial order. emerging.

      • +1

        Economics is a bluff and interferes with common sense. Probably by deliberate design

  3. mediator


    Have you still not figured out what the Fed is about?

    • bonbon

      I think Bubbles Ben himself does not know anymore. He has clearly lost his marbles, like Draghi.

      It’s desperation facing Obama and the horror show down the road. He is laying the US economy as an offering to Nero, an appeasement. Rationality left the stage, leaving an echo of an explanation.

    • I reckon he knows very well. Just that he wont say for whatever reason he has for sounding so smug this time. DMW is a cute operator but if you watch the Keiser Report you might notice similarities between their research and his articles. Click click. There is always someone better

  4. Juanjo R

    Unrelated to the above but of interest here is the essential problem with Germany – from the Guardian here is a link to an article entitled “Angela Merkel’s austerity postergirl, the thrifty Swabian housewife”

    The Guardian have a group of articles and info graphs on Germany today on the front page.

  5. Reality Check

    Bernanke’s Bible;

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

    “A Monetary History of the United States, 1867-1960,” a book of nearly 900 pages published in 1963, is considered a classic. Ben S. Bernanke, the Federal Reserve chairman, called it “the leading and most persuasive explanation of the worst economic disaster in American history.”

    The authors concluded that policy failures by the Fed, which largely controls the money supply, were one of the root causes of the Depression.

    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.”

  6. Reality Check

    Guys if you buy one book this year buy that book – No central banker wants to preside over a 1930′s style deflationary depression.

    • bonbon

      Right, because they remember the last time when they were given a little lesson on national banking. This time around it will be the graduating lesson, the semester when bankers become adult.

      That’s what Glass-Steagall is all about.

      • Tony Brogan

        Glass Steagall does not control the central bankers who are the bsaic reason for the monetary debasement.

        • bonbon

          Right now, no as it was repealed. Correct.

          Even they want it back, as they know very well their system is out of control. Remember Sandy Weill and FT’s call for help?

          Well Obama refused. That is the problem.

          • Tony Brogan

            Let me be more exact.G/S will not, has not and can not control the central bankers and the central banking system which is the basic cause of the monetary policy and financial problems we see today.

          • bonbon

            Lets be precise, Glass-Steagall is the only way a statesman can act to bring this under control. And a statesman it will have to be, acting constitutionally. Not a Pinochet of the Chicago School nor a Hitler.
            Not a “hinted” “someone must do that” dictatorship.

            The US Constitution has all that we need for this, a stroke of genius from Alexander Hamilton. That statesman can act legally for the Public Good. That is what Glass-Steagall means. The problem is not money and the solution also not money. Totally beside the point. The problem is political, major league.

  7. Tony Brogan

    a hyperinflationary depression is in view and the more Benanke shovels money out the helicoptor door the bigger the bust will be.

  8. wills

    Well there we go, the Fed’s dollar printing press is been raided by insiders while Rome burns.

    Basically what we are witnessing is the crony class of USA looting the dollar before the imminent collapse of USA economy into a massive real depression.

    The insiders in USA see the writing on the wall and figure why not just completely loot the dollar now that the economy as it stands is toast.

  9. molly

    Turn this back to us and what I want to know is how much of a hole there is in our pensions,I was due to start getting my pension at 60 and I am 54 now ,I was told there was 70000 left out of 200000.
    What I keep thinking about is these pensions to the government and civil service ect ,who’s going to pay there pension bill .
    Is there pension going to be cut and if not why and if there pension is going to be cut by how much.
    Is there still such a thing as a safe pension .?

    • It’s a question of faith. What do YOU think?
      I reckon pensions have been a total con all along and never believed in them.
      A fairy tale.
      Just like the last sentence in the above article. Only I am not so smug to enjoy seeing people losing out after a lifetime of work.

      • molly

        Yes but what’s the point in the general public low to middle income people paying for these gilt eage pensions and most of these are index linked.
        Why should we struggle why these people ride on the backs of us enough is enough.

        • I posted an apology to you in the last article Molly. I hope you saw it.

          If I had been paying into a pension for thirty years and saw it coming to grief I’d be distraught. Distraught because I’d realise that my retirement dreams were built on quicksand. But I’d waken up fast be determined not to be asleep for the next thirty years believe me

          When I first came over here I worked for an electronics multinational who insisted that joining their pension scheme was part of my terms and conditions. I wanted to know why it was not possible for me to take care of my own financial arrangements and they stuck to their guns. I didn’t have a plan but that is besides the point. Likewise I gave to fingers to the boom and went in search of something more wholesome and meaningful

          The HR man thought I was stupid until I told him that I thought pensions were a scam and that even if I did live until 65 I’d have no need for money at that age. Life is for living and money is for spending. He was not used to people questioning things and he didn’t like it one bit

          There is a moral question too. Where does the money come from?
          At worse it could be blood money and at best probably obtained at someone’s expense. Or it could have come from the incessant rape of the planet’s natural resources by corporations and money men. These are points worth pondering on as they bring out the notion of personal and collective responsibility. If it makes you uncomfortable them face up to it and learn to live with it. It’s tomorrow that counts and not yesterday

          My solution is to stop giving them money. And stop voting because in doing so I am giving two fingers to the system and telling them that it simply does not work. If enough people refuse to vote then the message from the people would be clear in saying that we have spoken and decided that you politicians are not fit for purpose. The country would be ungovernable and they would not be walking all over us as they do now

          You are right – enough is enough. Don’t get sad and angry. Get even

  10. Jimmy R

    While I appreciate David’s angle on this in relation to pensions and investments, what’s infinitely worse is what this means for the economies of the world as a whole.

    This vast money printing of both the Fed and the ECB, leaves massive amounts of cheap money in banks who at the moment will only lend in large quantities to financial investors. All this has led to in recent times is the money heading into government bonds, creating a bond bubble, but more worryingly into driving up the prices of commodities, especially oil.

    The fact that oil is traded worldwide in dollars means that europe is doubly hit in that first, our currency weakens and then the dollar weakens meaning the price of oil skyrockets. The knock-on is that almost everything in life people depend on just gets dearer and dearer. From the food we eat, to fuelling the car, paying the electricity, and anything that has a high cost of transport involved.

    We are fast approaching the point, where along with a large part of peoples incomes taken up by debt repayments and more taxes, they are now being hit again with increasing costs of necessities.

    I have heard it said that when over 40% of peoples incomes goes to food alone, then we start to see riots in the streets and coups in the countries involved.

    Now is not the time to be asking where to invest, or what to invest in, now is the time to be stocking up on non-perishable foods like pastas, rice, etc, stacking bottled water in the attic or under the stairs.

    This is only going to get worse, until much of the debt in the economy is forgiven, not government debt, private debt. On the current path, the courts will be full of bankruptcy cases, and unfortunately the funeral homes will be full of suicide victims before this is over.

  11. chrisi313

    First of all, monetary explanations for the Great Depression don’t really hold water anymore, now that we’ve seen monetary solutions tried and fail in Japan and the US.

    The unemployment of Great Depression was caused by the insiders in society getting too much power and control, and being able to protect this position thanks to government regulation and unions. In other words, the same thin we fact now. Check the statistics, in neither the Great Depression nor the Great Recession have skilled or unionised workers taken much of a hit, despite soaring unemployment, in fact I would argue that deflation has made their wages increase.

    Until this situation reverses, high unemployment will persist. Pumping money into the economy will not create a great many jobs for the unemployed, although its better than nothing, its not ideal.

    Secondly, it’s commonly speculated that Israel is fixing to attack Iran soon, I’d reckon in October or the end of September. The economic damage caused by the inevitable spike in oil prices are probably what Ben worries about, and he has timed this QE3 accordingly.

    • bonbon

      The Great Depression was cause by the Hoover austerity after the Crash. Only FDR game-changed the entire Wall Street gang, by first the Pecora Commission, then Glass-Steagall (repealed in 1999). But most importantly FDR’s Reconstruction Finance Corp, to counter Wall Street’s monetary burnt-earth policy, enabled the greatest recovery the world had ever seen, just in time to defeat fascism. The RFC used the Credit Clause of the US Constitution, as its framer Alexander Hamilton intended.

      Bubbles Ben is not acting with this intent, and I believe simply cannot understand why everything he did has not worked. So he tries it again. That’s lunacy.

      And you are right – Bibi was on all channels over the weekend pleading for an attack. JCS General Dempsey, who was in Ireland last week, is most outspoken about the danger and that the US is not at the back if Bibi goes ahead.

    • Tony Brogan

      The great depression was caused by the busting of the credit fueled boom of the 20′s. you know the roaring 20′s.
      bigger the funny money boom, the bigger the bust–unavoidable.

      • bonbon

        Not precise enough. The Crash of ’29 was the bubble bursting, but the Depression was the banker reaction with austerity, credit-freezing. Bubbles and austerity are 2 different things.

        Knowing this we can see how FDR game-changed the little garden party at Wall-Street, a beautiful move.

        That is why Bernanke, who said he took Milton Friedman’s advice, admitted banker complicity for the Depression, is repeating exactly the same thing again. That money-printing first will not appear in the economy, then suddenly as a hyperinflationary tsunami. And the economy will shatter.

        Ben does not understand FDR, and has been ordered by Obama to never attempt to even mention the real and only solution to this.

        The problem is Obama.

        • chrisi313

          >That money-printing first will not appear in the economy, then suddenly as a hyperinflationary tsunami. And the economy will shatter.

          Very well said, I agree entirely.

  12. rohan1666

    It is naive to think people like Bernanke , who are in such position of power but still answerable to public will give a true reason for their actions. They instead find a good reason to justify their actions. QE is attracting considerable opposition in America ,not just from opposition party but also in media and from prominent intellectuals. What could be a better reason to justify QE to the public then its claims to reduce unemployment ? Has Bernanke ever explained how money printing is supposed to help unemployment ? I think if he did , he would probably be held for treason. Money printing just before election may at least give a temporary boost to stock market. No US president has ever been reelected upon a crashing stock market. Opposition party leader has already expressed his intentions to remove Bernanke if he came to power. So could this be motivating Bernanke ?
    who knows !

    • bonbon

      Ben is trying to bailout Obama, on orders. Obama is the decider on this. A sudden shattering hyperinflation across the entire Transatlantic region will be the result, soon, unless Glass-Steagall is immediately implemented.

    • StephenKenny

      If you go through the interview he gave after this speech, you’ll see that he did explain how he believes money printing create jobs:

      It wil push up the stock market (reflected in 401k accounts) and property prices, this will make people feel wealthier, so they’ll be happier to go out and borrow and spend more.

      If he hadn’t said it, I wouldn’t have believed that their only solution is to attempt to create a simultaneous rerun of the last two bubbles.

  13. michaelcoughlan

    Hi Tony Brogan,

    Excellent observation. I agree completely. The mother of all stag flations. Lived through one already as a child in the 70′s.

    This time it really is different for all the wrong reasons much bigger and more destructive!

    Enjoy your trip by the way!


    • Tony Brogan

      Good day michael.
      first time in the history of the world that ALL currencies are issued into a debt based credit system. We are in to a massive competitive devaluation race to the bottom. Destructive policies are everywhere. there is no place to run.
      Last man standing. Real money–gold and silver. get some or you go down with the titanic bust.
      That and your garden plot. Subsistence living will be back in vogue.

      • bonbon

        For less than 1 billion, the elites, especially the Monarchy hope and frequently state.

        The motion is now to damage the food supply, bailout banks to the point of collapse. Obama is at the trigger now to speed that up.

        Tell the “garden” stuff to citizens of Dusseldorf, Tokyo, Shanghai and see what they think of that policy.

  14. bonbon

    DMcW : “While I can see why Draghi acted, Bernanke perplexes me. It scares me to think what horrors he sees down the road for the US economy to justify such an aggressive response.”

    Horrors are the right words. Now imagine Obama’s owners and himself, incapable of creatively implementing FDR’s game-changer. We face immediately war. If Bernanke thinks he can do a QE3 to appease Obama he is tragically mistaken. It may be an act of desperation knowing what’s being planned otherwise.

    Is it clear to everyone why Obama got a mustache now? He is capable of starting a war with Russia, rather than acting as a human being. We are dealing with the worst threat humanity ever faced.

  15. dwalsh

    Unless and until the financial markets are reined-in and shut down there can be and will be no resolution to the global financial crisis.

    The longer this obvious truth goes unacknowledged, and the obvious course of action is avoided, the closer we move to the destruction of the physical economy and our civilisation.

    • Tony Brogan

      Yes and the way to it is to shut the central banking system, ban fractional reserve commercial banking and implement a gold based economy and a silver based currency.

      • dwalsh

        No. Nationalise central banking and use it for the common good; national infrastructure and development.

        Gold is the wealth of oligarchs not ordinary men.

        We need a system run by and for citizens.

        If you or others choose to hoard gold or other commodities well and good. But the whole theory of commodity-based currency is a primitive relic; and not the way forward.

        • bonbon

          I’ll second that. Just a vital detail, after Glass-Steagall-ing the banks, hanging out the synthetic debt to the wind, the banks will be all bankrupt. So as FDR did, purchase them for $1 dollar each, but make sure they open for normal business next week. Meanwhile put a Hamilton Reconstruction Finance Corp. in place to immediately issue credit for massive projects all waiting for years and now updated. Those banks will return to normal business quickly, and the economy can be stepped up to new levels not yet seen anywhere.

          • dwalsh

            Banks are alway bankrupt, in a sense. Money is a fiction; properly nothing more than a utility.
            The financialisation of our economies has been a disaster for all but the parasites operating the system.

            As you know I dont accept the grandiose plans and schemes Larouche proposes. We have much to do at the ordinary level first; and we do not know enough yet about the biosphere to start screwing with it any more than we already have….for now.

            The priority must be to develop new methods of production and distribution. And to improve education so as to create a generation of humans capable of the scientific work necessary to reconstruct our world as is into a sustainable system that does not destroy its own life-base.

        • Tony Brogan

          I beg to disagree about gold. It is the national wealth and basis of a stable monetary system. This is judged to be so by All the major nations on earth. it is why European countries still retain gold, it is why most other countries are accumulating gold, such as the Chinese, Indians, Arabians, Russians, Turks, Iranians etc.

          They are all wrong, of course.
          Gold and silver are the only metals or substances that have all the characterisics required to be good money. All other money has defects. Using a substance other than gold and silver destroys the ecomomy as we see today.

          All people should be free to use what ever they wish as money. That right should be returned to the people. What they have voluntarily chosen before they will likely do again.

          Money “run” by anyone or thing will distort the economy and lead to ruin. NOBODY should manage the money. Set it free. A freed money is the money of a free people.

          money has been managed long enough. This management has resulted in the largest depressions ever recorded. The mother of all depressions is coming toward us now. It will be the hyperinflationary depression that will be in danger of destroying civilization.
          There will be quadrillions and zillions of currency units but a ruined economy. This is the ultimate ending for QE to the Nth, to infinity. The oblivion of all currencies.Gold will be infinity in value as calculated by currencies.
          gold and silver will be all that is left as reliable money. Money that is not a debt, or relying on a counter party. It is no no ones liability.

      • Tony Brogan

        Money is a medium of exchange. you confuse currency with money as they are not the same.
        The only good currency is that which can be redeamed for the asset it perports to represent.
        TThe currency currently in used is irredeamable. It represents nothing. It is a vacuous pretence, a hollow promise operated as the greatest con game in history by frauds and cheats who have been given the trust of the people. such trust never honoured and never intended to be.
        We have been suckered as marks.

        Any system of public credit issued by mankind will be equally as well manipulated. The last people that ought to be left in control of a currency are the politicians.

        You slag thrift and savings as a vice when it is a virtue. Savings is not hoarding in the sense of trying to obtain control.Savings are the fundemental bedrock of investment and the development of capital. The foundation of the prosperous economy.

        We have tried and are still trying to grow an economy through debt expansion. It is doomed to failure as we see. It is financial suicide , a death wish.

        Those things nationalized ALWAYS work AGAINST the public interest of the common good. All nationalized economies have failed and will continue to do so.

  16. dwalsh

    If we believe what it says on the tin — that buying 40 billion dollars of derivative junk a month is to stimulate the economy and employment — then we would have to conclude that Bernanke is a complete incompetent and an imbecile.

    But if we ignore what it says on the tin, and presume that Bernanke is not incompetent, we might ask instead: what is Bernanke really up to?

    I would say Bernanke’s actions are calculated to continue the destruction of the wealth of the American people. I would say Bernanke is involved in the controlled demolition of America as we have known it.

    Why would the Western elites want to transform America in this way?

    • Jimmy R

      A year or two ago if I read the same thing i’d have fallen for the conspiracy theory too, but I actually think it comes down to this:

      Which is more likely, that a few people are stupid and have gotten their high-powered jobs without merit, or that a few people are so smart they intricately control the world?

      Having read Steve Keen’s Debunking Economics book in particular, he addresses Bernanke quite a lot and actually goes so far as to say, that despite Bernanke’s supposed clinical understanding of the Great Depression in the US, the economic thinking that he and so many mainstream economists subscribe to is actually deeply flawed, and that in truth they do not even understand economics.

      • dwalsh

        You and Keen may be right.

        However, I think it is an error to believe that Bernanke acts on his own initiative or by his own will. Bernanke is a functionary who carries out the instructions of others. He is a frontman for a vast organisation with global strategic intent.

        Keen’s analysis is based on the presumtion we know the Fed’s intentions. My analysis is based on the presumption we must infer the Fed’s real intentions from its actions.

        • Jimmy R

          There is always that possibility, i’ll admit, but personally, I look at it with the opinion that even those with the best intentions, if their entire philosophy is based on false assumptions, then they can do untold damage.

          Couple that with even just a small number of people who are out for their own self interest like politicians, lobbyists, bankers, and you very quickly could get a situation where even those with the best intentions can seem evil.

          Given Bernanke’s supposed expertise in the causes and solutions of financial crises, there’s a good chance he actually went into his role as chairman believing he was the best qualified to fix the economy.

          Keen makes the point that economics as a discipline has rarely taken on itself the responsibility that sciences like physics, chemistry, biology do where theory is one thing, but what’s provable in reality is what makes the laws of the discipline.

          Economics on the other hand, has a process where theories are submitted, peers pick apart the theories but base their criticisms of it on current assumptions rather than empirical evidence.

          Economics right now seems to be where astronomy was back when galileo dared suggest the earth wasn’t the centre of the universe, and while we can look back at those times and say, how could they be so stupid, or was there a conspiracy to keep the truth out of public eyes, in the end it just comes down to the evolution of intelligence in society.

          • bonbon

            Very good point about economics, but it is vital to be precise. Copernicus, the first since Aristarchus 1500 years before, pointed to the Helio-centric way, but crucially important, Kepler showed orbits were not circular, rather elliptical. Kepler sent his New Astronomy to Galileo, who wrote to a friend he understood not one word! Galileo was a fraud. Economics similarly, is fraudulent in the extreme, and to catch it means being unflinchingly exact. It is important, then see Ben’s total incompetence, coupled with a psychopath, Obama, ordering hyperinflation. Poor Ben.

          • dwalsh

            @ Jimmy R

            Some of what you say is correct…imo.

            Neoliberal economics, which underlies the global crisis, is inherently an abstract discipline based on a priori assumptions about human nature and society which are fundamentally wrong.

            But I don’t believe what it says on the tin when it comes to the Fed. Nor do I accept the fiction that Bernanke is the Fed. He is a frontman for a vast organisation with global strategic intent.

            Bernanke is media meme. He is not the generator of Fed policy. He is its public face.

            You seem to believe what it says on the tin. That Bernanke (the Fed) is there to fix the economy and restore growth…in spite of the fact that all their actions indicate this cannot be their real intention.

            You are not alone in this belief. It is the mainstream belief; and the mainstream debates in the media and on blogs like this are driven and dominated by it.

            I contend it is a fantasy; a fiction; cultivated to keep everybody distracted in spurious debates about the most recent events and actions of the various players. No one must suspect they have anything other than the public good as their intention. One of the symptoms of this fantasy is the impossibility of thinking the thought there are people organised and thinking with long-term strategic intent.

        • Tony Brogan

          “”He is a frontman for a vast organisation with global strategic intent.”"


    • Tony Brogan

      Benanke is taking 40 billion a month of mortgage backed securities off the banks balance sheets. $0 billion goes on the taxpayers account with the liability of all the subprime uner water loans.

      it is a bank bail out.To hell with the people.

    • Adam Byrne

      Why would they? Please expand on this.

      • Tony Brogan

        Why would the Western elites want to transform America in this way

        It is not the WESTERN elites.

        It is simply a few people who think they have a way to be the possesser of the power. to be the emperor.It is all about power and the control of the money gives them that power.

        gold as money takes away that power as the money is returned to the people. The total opposite of the monetarism practised today.

        Rothschild Brothers of London, 1863. “Give me control of a nation’s money and I care not who makes it’s laws” – Mayer Amschel Bauer Rothschild …

        As long as a house is like yours, and as long as you work together with your brothers, not a house in the world will be able to compete with you, to cause you harm or to take advantage of you, for together you can undertake and perform more than any house in the world.
        Nathan Meyer Rothschild

        “It is well enough that people of the nation do not understand our banking and monetary system, for if they did,I believe there would be a revolution before tomorrow morning.”—Henry Ford

        If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. — Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809)

        The real truth of the matter is,as you and I know, that a financial
        element in the large centers has owned the government ever since the days of Andrew Jackson… -Franklin D. Roosevelt
        (in a letter to Colonel House, dated November 21, 1933)

        When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” — Napoleon Bonaparte, Emperor of France, 1815

        “The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots and the bankers went anew to grab the riches. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt civilization.” Otto von Bismark (1815-1898), German Chancellor, after the Lincoln assassination

        “The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.” The Rothschild brothers of London writing to associates in New York, 1863.

        “The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.” John Kenneth Galbraith (1908- ), former professor of economics at Harvard, writing in ‘Money: Whence it came, where it went’ (1975).

        As Nicolas Trist — secretary to President Andrew Jackson — said about the incredibly powerful privately owned Second Bank of the United States, “Independently of its misdeeds, the mere power, – the bare existence of such a power, – is a thing irreconcilable with the nature and spirit of our institutions.” (Schlesinger, The Age of Jackson, p.102

        It is perfectly plain to me that we must get rid of the central banking system and the fractional reserve banking system in order to defeat the forces arraigned against humanity. -Tony

        • bonbon

          Good to see you have discovered the most corrupt Andrew Jackson, the destroyer of the Hamiltonian Banking of the USA. And a British agent, proven below.
          He is indeed the reason for the Party system that Washington never intended, which we see right now.

          Here is the definitive economic and financial analysis, packed with detail, a great video.

          Introduction: The Condemnation of Andrew Jackson

    • bonbon

      The danger of this method of deduction-induction, the Sherlock method, is to miss the point completely.

      Listen to repeated public statements on population, “too many” people. That is the key to all of this. Why have we 7+ billion now? How did we get from the Roman epoch 110 million. No animal could ever have done that. How do we master fire, no animal ever could.

      We discovered the only way to govern ourselves, a totally different species, is with the Nation State and its commitment to progress. That increased longevity and density exponentially.

      Of course that leaves in the dust the ancient oligarchy who then declared war on that nation-state itself. The USA is the first real expression, since only 1783, of a modern nation, followed by others.

      Oligarchical reptilian “logic” – destroy the USA as a Nation, and any other attempt to implement one such as Russia. Targets 1, and 2.

      This means Obama is actively complicit, not even conciously, but merely picked for that role because of his profile.

      The deafening silence in economics of this vital, literaly life and death matter is telling enough, but economics complicity in genocide is beyond toleration.

      Pull the nation-state out from under people today and cause genocide beyond imagining. Blair would call that letting population reduction occur all on its own, hands clean of course.

      • padser


        Is there an era, in Man’s existence, to which you would have aspired to live in?

        • bonbon

          Of course! All human beings, unlike any other species, are determined by the future, and a future devoid of oligarchy, which we are rapidly approaching one way or another anyway.

          All glorious stories about the past, 99% of the time and people was oligarchy, so ingrained most do not see it in the economic theory generally pedaled as wisdom with past experience to back it up as well!

          The only metric is relative potential population density, a measure of any proposed policy or “hinted” theory. All economic policies must base themselves on a desired future, and in fact they ALL do. Identifying that future measures the intention of the policy.

          • padser

            Is it possible for Mankind, to redefine his notion of ‘progress’ – (regarding his mental/physical well-being, aspirations, etc.) with the exclusion of money or finance as we know it?

            Same question……if after a “culling”.

          • bonbon

            Progress means water, sanitation, power, interesting work, time to meet 3 generations, the granpa’s and grandkids.
            Collapsed societies called old 25 years, who never saw grandchildren, or granparents who died at the ripe age of 35 from the simplest of illnesses. Society progresses in a way no animal species ever did or could. To be human is to realize this in practice. Removing progress is to force animal population densities densities upon humans with those results.

      • dwalsh

        It seems to me that whatever else I might say about what you write here bonbon….it “is to miss the point completely” as to what I was saying. You have quite a knack for doing that you know.

        • bonbon

          That deductive “method” from sense-evident facts is in danger of leading us to the slaughter.

          Lots of posters cry “wake up”, but do not go after unflinchingly that mindlessness which has gripped all in a silent acknowledgement of hopelessness. Its is as if people have given up being human. That alone would guarantee the cull.

        • bonbon

          Maybe I am being too harsh, sorry for that.

  17. Adam Byrne

    Never got an email notification of this article.

  18. Dorothy Jones
    Link to the letter Ballyhea Bondholders group will present to the Dail today

  19. Dorothy Jones

    1pm: Begin to gather at Garden of Remembrance.
    2pm: March to the Dáil, meet Enda Kenny or Michael Noonan, or if not, hand in a letter demanding they stop repressing and start representing the people who elected them.

    Details of the 3rd day Ballyhea Bondholders march, aim to be there at 2, hope they get good coverage.

  20. Deco

    Print-Baby-Print !!!!!!!!!

    Swiss Investment guru Marc Faber predicted that there would be loads of QE. That we would have QE18, QE19, and so on.

    Bernanke is a money printer. Of course he cannot print oil or gold. But he will print USD.

    Bernanke is a revolutionary the same way that the central banker of Zimbabwe is a revolutionary. And he also printed to prop up the regime. There is a large quantity of people in this country who have a defiant loyalty to the US Democratic Party, which is ver similar to the loyalty that used to go with FF. In essence the Democratic Party in the US get the same sort of defiant loyalty that the Labour Party in Britain gets. People say good things about it, regardless of what policy disasters it creates, because it is good at the “feelgood factor”. The something for nothing economics that is espoused by such political movements is about to bring ruin on their societies.

    In the end it will end in ruin. Currently there are more Mexicans trying to get out of the US, and into Mexico than the other way around. That tells you a lot about the US economy.

    America will need a massive war very soon to enable control of the populace. The economy demands that it occurs.

    People are worried about China. There has been a precedent for China’s economic problems. Southy Korea and Taiwan went through the same economic problems. Unfortunately, China seems to be diverging from the brutal honest approach taken in both these countries to debt. China’s mistake, is that it might imitate the West.

    And here is why. The Western political system is far less robust that it was in previous decades. There is too much deceit and lying inside the system now. In effect the deceit has become rampant. And in such circumstances coverups are inevitable when a crisis hits. To see this in evidence we only have to look at EU policies to protect failed speculators holding bank bonds.

    Well China, is in the same predicament as Europe, and the US. It’s regime, cannot withstand the criticism.

    South Korea and Taiwan had similar problems in 1998, and took the problem on the chin. They went cold turkey. And the cleaned up their act.

    The US, Europe, and China have regime credibility problems, and will not do so. They are going to cntinue ith “extend and pretend”.

    It will be a disaster when it eventually falls apart. Until then you will see “print-baby-print”.

    • Adam Byrne

      Your former optimism of a couple of years ago appears to have completely evaporated Deco.

      • StephenKenny

        The mistake that many, including myself, made, was the assumption that the politicians and public sector were on the side of right.

        We assumed that those guilty of the greatest theft and fraud of modern times, would be brought to book.

        What we hadn’t realized was the all pervasiveness of the corruption. The problem is systemic, and far from trying to fix it, those in positions to do so, are using it to enhance and entrench a totally corrupt system, to their own benefit.

        The system cannot be fixed. Unlike in the movies, where we’d be saved at the last second, this can now only end badly for the average person.

        • StephenKenny

          Had anyone suggested this to me five years ago, I would have viewed them as being in the same category as the UFO-abducted-by-dog brigade.

          Every time I persuade myself that I must just stressed and exaggerating, something like MF Global happens, and the reality just gets worse.

          • bonbon

            As I try to point here the difficulty today is the indoctrination of the senses, discreet, being the truth. The discreet events you mention, are sensed evidence of something only the mind could possibly know.

            It is popular to use small-steps, incremental hinting, dropping silences, whenever the mind is evident as in economics, reality in fact.

            So seeking popularity, in today’s world, means to never grasp what is going on, and to never appear, the divil forbid, to know something.

          • Tony Brogan

            What in hell are you trying to say bon bon.
            bull shit baffles brains.
            Use laymans language to explain and you might gain a convert.
            Use convoluted

            Stephen, you are totally correct. the bastards are out to get us and the sooner we face the fact the sooner we fix the problem.

            I was just 5 years ahead of you but a similar graph line.

          • chrisi313

            StephenKenny I am in the same boat, I could never have imagined our Great and Good would turn out to be so evil.

          • bonbon

            The mindless Austrian School has always difficulty with the mind in economics. It believes “laymen” lust for gold in “dem dar hills”. It is not popular to use words the Austrian School simply cannot understand or bans.

            Popularity itself is, today, deadly, and populist gold diversions are just that.

    • StephenKenny

      The problem with trying to use a war to control the population is that either you end up with a totalitarian state – surveillance, checkpoints, and the state taking responsibility for your actions and access to information – or you have a citizen war, directly involving millions of people.

      Neither is an attractive prospect.

    • bonbon

      You guys are not living in the 21st century! Our mastery of fire has passed you by. Today war means thermonuclear, and over in 60 minutes with no winner. The shortly still living would envy the dead.

      The basic unit of arms is 470kt, 20 times Hiroshima, and 18 Ohio-class boomers with 27 missiles each with 8 of those are now on patrol. Not to mention Russia and China. I think E=mc**2 has changed history where war was always used.

      So snap out of it. Bibi Netanyahu just cannot understand what it is he keeps running headlong into. JSC General Dempsey, who knows what war is, does understand.

  21. dwalsh

    The fed is not acting to halt the recession or to restore growth.

    The Fed is acting to manage the descent into depression.

    The Fed is acting to manage the deconstruction and transformation of America.

    • bonbon

      Observationaly accurate, but as I point out below, the “why” is knowable, and a widely popularly held insane belief, not just Ben.

  22. dwalsh

    @ Jimmy R

    Some of what you say is correct…imo.

    Neoliberal economics, which underlies the global crisis, is inherently an abstract discipline based on a priori assumptions about human nature and society which are fundamentally wrong.

    But I don’t believe what it says on the tin when it comes to the Fed. Nor do I accept the fiction that Bernanke is the Fed. He is a frontman for a vast organisation with global strategic intent.

    Bernanke is media meme. He is not the generator of Fed policy. He is its public face.

    You seem to believe what it says on the tin. That Bernanke (the Fed) is there to fix the economy and restore growth…in spite of the fact that all their actions indicate this cannot be their real intention.

    You are not alone in this belief. It is the mainstream belief; and the mainstream debates in the media and on blogs like this are driven and dominated by it.

    I contend it is a fantasy; a fiction; cultivated to keep everybody distracted in spurious debates about the most recent events and actions of the various players. No one must suspect they have anything other than the public good as their intention. One of the symptoms of this fantasy is the impossibility of thinking the thought there are people organised and thinking with long-term strategic intent.

    • Jimmy R

      I think in this case we can both be right.

      Bernanke like his colleagues in power do have ties to a vast organisation, the banking industry. Not necessarily as covert as you may think but a vast organisation all the same. When every political appointment in Europe or the US to any and all financial positions comes from Goldman Sachs/JP Morgan/Morgan Stanley etc, then it does tie in with your idea that they have a single intent, keeping the banking system alive.

      Their failed economic thinking includes the ideal that the banking industry is sacrosanct to the economy and economic growth. At every turn they have attempted to continue the life of the banking industry.

      One could definitely argue that they are doing it either in the false beliefe that the banking system must survive as it is at all costs for the sake of the economy as a whole or purely for their own sakes for future employment.

      If the central bankers worked for years in the likes of Goldman Sachs, they no doubt made many friends in that time, and now their duties should require them to allow those previous employers to go bankrupt for the sake of the economy. Either they can’t do that to their friends, or they don’t realise that in order to protect the economy, they must screw over their friends.

      All these central bankers come from the same schools of thought, whereby the macroeconomy can be treated like a microeconomy. As I said before, if the fundamental theories of their economic education are wrong, then all the best intentions in the world aren’t enough to be able to do the right thing.

      It’s like teaching a child for years in school that 2+2=5. Everything they do in maths based on this will then be wrong and they won’t understand why until they actually investigate the assumptions of 2+2. Now scale that up to economics and we see that bad economic teaching and theories, if perpetuated can lead to massive destruction given the power these people have.

      It becomes a case of them being too stupid to question their own beliefs rather than so smart that they can control almost every single detail in a massively complicated financial system which is more akin to chaos theory than to a system that one person or a number of people can manage completely.

      • bonbon

        Let me try to show how the mental disease spreads and takes root. Some may think they have heard all this before, but wait…

        Imagine a teacher and student, at the drawing board. One draws a circle and asks, hmm, how to get the area. Other points out a square just outside and just inside, so it must be somewhere between both areas. Ok. fine.

        Another pipes up, try a six-sided polygon inside and outside, and the area can be better estimated as between those two. Ok.

        Then another pipes up, hey, lets add a few billion edges and then no one will see the difference! With my iPad I’ll have it number-crunched in a minute! Brilliant! Another pipes up, hey we got the circle now, trillions of edges. No measurable difference. Order from all that chaos.

        The smallest at the back, worrying over the whole show, pipes up : teacher how can you have the circle with trillions of edges if a circle has exactly 0, none at all?

        Teacher replies, but the difference between the circle and the great polygon is smaller than any difference you give, so it must be the same!

        It is not!

        You cannot get a curve from straight lines which are self evident to the senses, lines and points, easy to agree on, what?

        Now another appears, and takes the circle, folds it across. From a curve a straight line! Another fold and a point. 3 circular and folding actions, and we have those self-evident lovely lines and points back! But in no way do we get a curve from them. We need circular action first!

        All our senses are discreet, so how could we know the universe where circular and other curved action does exist. Only by accepting the senses basically lie.

        Breaking the economy down into pennies and notes, transactions, trades, and then trying desperately to incant an economy from these reduced elements is not just a silly pastime, but criminally insane. Like trying to produce life from powdered chemicals after killing the principle of life itself because it cannot be sensed in the parts. Any maths used that does not counter this is incompetent.

        That’s why I say Alchemy. Killing the economy because its organizing principle can only be known by the mind, is actually what they are doing. And the idea of the economy is determined by our chosen future, altogether not to be sensed yet! Yet we can, I think, see what future they have in mind. I think people can, if given ways to express it, sense that the future is being taken away, never mind their pensions, wallet etc.
        No animal could understand this, it is uniquely human.

        Well then fight for it! Put on the table huge projects that take at least 25 years, vitally important to our future, as we do every time. And discover a whole world of action. Take the future back! It is ours to be known and made actual, and realize there is no limit except to impose arbitrary discreet self-evident sense-evident strait-jacketed rules.

        When you think about it , the car based on circular and other curved action, with fire, also only to be understood by the mind, could not exist with the economics taught today.

        • Okay Mr.B,

          I’m not one of your greatest fans to be honest but, credit where credit is due.

          The above is a very reasonable train of thought and your conclusion to undertake large decades-long projects is precisely what we need at this time.

          We need people to envisage and envision instead of this myopic cancer which is blinding us from options and stunting our potential for development.

          We need to dream again and we need our children to dream again.

          We need new blood and new ambition at the helm.


          Who’s going to start the Party/Organisation? And is it going to be the disappointment that was the PD’s all over again?

          Or will we wait until this Government collapses and look to Ross, McW and friends only to be disappointed and told that there wasn’t enough time to organise?
          Leaving us to vote for the next best lot of false promises?

          We’re sitting on substantial oil and gas reserves in the second largest, windiest, waviest territory in Europe (When you consider our territorial waters)
          And the odious actions of our Ray Burkes et al are legally reversible – Or at least worth the fight?

          Lets vote for someone who does not so glibly dismiss this vast potential!

          So we’re broke? So what? We were broke before and managed this;


          Thank God somebody didn’t listen to the detractors!

          • bonbon

            That power plant, which only got built after the empire was thrown out, was the inspiration for FDR’s TVA, the Tennessee Valley Authority, on a massive scale.

            Today we have the NAWAPA XXI Water and Power Alliance for the north american continent, and we have the Shannon Deep Harbour for the Arctic routes now opened up. We have the Northern Horizon, and Russia is a strategic partner.

            Do not listen to the hordes of detractors now!

          • coldblow


            You are entitled to your point of view and you often raise interesting and valid points (unfortunately your discourse about curves above is not one of these) but this strikes me as millenarianism which seems to draw heavily on extreme Puritan thought from not that long ago. As if Puritanism could be anything but extreme. And perhaps for ‘thought’ read ‘dogma’, or better still ‘emotion’. Which at least leaves ‘Puritan’, which if one is a Puritan is all that really matters.

            The other night I was reading something about the 19th Positivist philosophy/ school of thought, mainly about Comte and other French thinkers although the chapter also included the English Utilitarians, such as Bentham (and Malthus). The first sentence read “Positivism was the romanticism of science.”

            Of course, this is more or less the default philosophical setting these days(?)

            However your opinions about population control seem much more humane than some of the exponents of the above school of thought.

          • bonbon

            The cull is on, the oligarchy wants 1 billion in short order. Nothing Puritan about this either by pointing to their exact statements.

            We have a 3 point plan, points 2 and 3 being vital to a growing population. Any banking idea that does not address this directly, no hints, no silences allowed, is to be takes as a direct attack on mankind. We are rapidly reaching the point where this threat becomes palpable. Then economists just better be clear! No hints, no academic dryness. Address the relative potential population density and show how your prescription, which you expect others to carry out increases this metric. If it is discovered it DECREASES it, there will be no place to hide.

        • Adam Byrne

          Good stuff Mr. bonbon.

      • dwalsh

        Maybe…I am not 100% certain.

        The Fed system is global. It has unlimited resources. It has access to research and planning from hundreds of the best institutes and think-tanks on the planet. I could go on.

        They know what they are doing…in my opinion….within the insane logic of the system they serve.

        I agree with you that their system and economics is totally skewed and insane. Your example of 2+2=5 expresses it well. It is that bad. No question about it. I would say their system is a disease; a cancer; and like any cancer its logic is implacable and terminal to the host….and thus itself. It is inherently life-destructive and ultimately suicidal.

        That is why I keep on writing here that until the disease is recognised and localised and shut down (the financial sector) there can be no resolution of the crisis.

        As things stand today, the American economy will not recover. It cannot. It is dead in the water. There is no productive or consumption capacity in the system to drive a recovery. The Fed knows this.

        The only hope for America is to nationalise the Fed….take public or sovereign control of its currency and treasury….and begin a New-Deal style national mobilisation to rebuild America.

        But will this be possible….will the American public, or anyone, be able to see the cancer….it does not look good at this time….or anytime soon.

        • Jimmy R

          I think we can both agree that the financial sector is a plague that needs to be eradicated. We’ve gone from a history where rich people made their returns by investing in factories, businesses and people to one where rich people may earn there money originally from industry and employment, but where that money then gets invested in things like deriviatives, options, currency and commodity speculation crating a bloated financial system based on leverage that leeches real wealth from the working economy.

          As has been said by bonbon many times, we need to re-instate Glass-Steagull type laws the world over, the problem is, that to do so now and to break up the financial system would show up the likes of America and the UK for what they are, once industrial powerhouses, but who then ignored industry (ie the real economy) and bet their futures on the bloated financial system. When the GDP of the financial systems is actually cut out of national GDP’s, it will be interesting to see which nations actually are the greatest powerhouses. My guess is, the ones that actually make things, the Chinas, the Germanys will be the next group of world superpowers, although a 3rd world war could be a gamechanger.

          The thing is, that while the policymakers and the central bankers may try their best to avoid this financial collapse, it is inevitable and even necessary for the world to return to growth.

          The only way right now that any western economy can survive, is to not only re-invest in industrial and agricultural production, but also to purge the household and private debt from the system.

          When GDP is strongly related to aggregate demand in the economy, having people using a huge fraction of their incomes on debt repayments effectively reduces GDP by the same fraction once the supply of credit stops dead as it did in 2008.

          The problem is, to right off the debt, the banks take a huge hit on their balance sheets. As long as those in power have strogn ties to the banking system like the Bernankes, the Draghis etc, the only path we seem to be on is financial collapse of the Great Depression kind.

          The thing is, unless we own the collapse and make it a structured one, a chaotic one will likely lead to massive tears in the fabric of societies the world over as we are seeing right now. It is no co-incidence that we are seeing massive political tension along with financial stress. When you back a man into a corner, and he is faced with survival or destruction, you then create a system of desperate volatile people where something stupid like a non-sensical film that will likely never see the light of day ends up causing riots in many different nations across the globe.

          • Tony Brogan

            Pretty good Jimmy
            I agree with you.
            There is no saving us with the current prescription and doctor.
            We need a new doctor that will treat the problem instead of the sympton.

            it seems to me the manin problem is the central banking system as I posted above.
            The infection killing the patient must be treated with the finest antibiotics. (Interestingly one of silvers great usages is as an antibiotic in the form of colloidal silver)
            close the central banks.
            Return monetary policy if one must have one, to treasury,
            Implement an honest money policy that can not be manipulated.
            It is the only way to avoid mayhem, insurrection, civil strife and the authoritarian closure of our civilization.

          • bonbon

            You are right – take away the derivative shambles, and the destruction of the physical economy over 35 years will be unavoidavbly evident. That is why we have a 3 point plan :
            1 – Glass-Steagall immediately, now
            2 – Hamiltonian national credit to fund :
            3 – a list of massive necessary projects, high-tech in physical economic terms

            Only all 3 together can work, and will over 25 years.
            Anything that stops 2 or 3, is part of the doomed system now.

          • Seanie

            Repealing the Glass-Steagall act won’t make one iota of a difference at this stage. It had to be repealed at the time otherwise the system would have imploded sooner rather than later. Over the last 2500 years or so no fiat money system has ever been successful. China tried it multiple times. We’re witnessing the final death throes of the current system.

          • bonbon

            The incredible lie, rather Goebbels, that any kind of money an economy makes, is exactly the “conspiracy” we are dealing with. It is a perverse sophistry, in fact it is mindless. It is the incredible statement that a piece of metal has more value than the powers of labor. It is a denigration of every engineer, doctor, teacher, judge, mechanic, pilot, astronaut, chemist, biologist, poet, and artist to less than lifeless metal.
            It is in fact the oligarchical Venetian POV itself.

            It is the Confederate “life, liberty and property” attack on “life, liberty and pursuit of happiness”. It is theft of the very pursuit of a future itself – the ultimate insult to mankind.

  23. dwalsh

    @ Adam Byrne

    I wrote:

    Why would the Western elites want to transform America in this way?

    Adam wrote:

    Why would they? Please expand on this.

    I will say more about this anon.

    Meantime, the mainstream fantasy is that our rulers have our best interests at heart. They are always acting for our good. They destroyed Libya; and will destroy Syria and Iran….for our good

    Likewise, They have given the banks 20 trillions or so in bailouts and free loans….for our good. And the Fed will now buy 40 billions of derivative junk every month to help American workers find jobs.

    They really care for us….that much.

    They have no strategic intent or ulterior motives whatsoever in any of their actions. The very thought is unthinkable in the form of mind induced by regular consumption of the mainstream media.

    In order to make any sense of what is unfolding globally one has to see through this media-induced fantasy; and when you do everyone will call you a conspiracy theorists; because everyone who is sensible and well adjusted knows that our rulers care for us and only act in our best interests; and when things don’t seem to go that way, it’s only because they made a mistake; or are only in the job because of some pull or privilege they enjoy; as another poster believes about Bernanke.

    • Philip

      Is there one independently and academically accepted and unequivocal historical example (one that every serious student of history will accept) of a mass level conspiracy which affected one or more nations at a time.

      I suspect there are none.

      Conspiracy at this level requires a degree of organization that is beyond the psychological capability of human beings. No organization can keep secrets and management and coordination of same requires a level of expertise that has yet to be developed. If you are right, then these people or entities are not human. FULL STOP

      Sorry guys, but I have worked as a manager of 10s to 100s of people in organizations running to 100s of 1000s of people. Conspiracies were attempted and plans invariably collapsed. I happen to know that in Citibank (one of the evil groups), their environment is subject to the same horrors of bumbling along and doing their best.

      Wise up guys! This has nothing to do with economics or conspiracies. It looks systematic and global because we now act that way. The global economy is a domestic economy in it’s own right. That was one of FDR’s insights. Maybe we need to start thinking that way before the Martians or whoever get us.

      • Adam Byrne

        I tend to agree Philip but there doesn’t have to be an explicit (but hidden) conspiracy, with rules and strategies etc.

        Rather, tacit understanding exists among certain elements, classes, professions etc. to screw the ass out of everyone else wherever the opportunities arise. A self-fulfilling prophecy of sorts.

        Mr. bonbon talks of plans to reduce the world population from 7 billion to 1 billion. If something outrageous like that was really true then I am making damn sure I am part of the 1 billion through manipulation of whatever talents I have and manipulation of other people where necessary. It’s getting so bad now, that the old phrase ‘if you can’t beat them join them, becomes more relevant.

        And you can never beat ‘them‘.

      • bonbon

        The fault with “conspiracies” is the deductive-inductive method itself. Its utterly false belief in the senses, leads to incredible inventions.

        The economic and financial mess is actually that deductive-inductive method itself!!! Not a conspiracy, but much more deadly, a mental disease, with historic roots, but widely and popularly held. “Just the facts ma’am” approaches.

        In other words “conspiracies” are both a cover for that deadly mental illness, belief in the senses, and a result of the utter incompetence of that insane belief. All economic and scientific theory based on this is sheer incompetence. Watch now how not only economists are getting high blood pressure, but also physicists.

        Imagine believing the Higgs Boson at Cern should be essential to hold the big Bang together? Look at the cost and effort! Great data but likely ignored in the effort to uphold the deductive-inductive sacrosanct error.

        This madness boils down to the weird belief that an economy must seep, or ooze, emmanate or emerge from money of paper or gold, because an economy uses them!
        Like a universe must ooze, emerge from particles because we can find them everywhere.

        Does anyone dare point out the incredible error there?

        Well, as Ben thinks, more money must be good then, but after QExxx where are the jobs?. The gold brigade on the other hand want to control money, and an economy of goodness should then emerge in some unknowable way.

        This is the deductive-inductive mental disease about to destroy the economy. Not a conspiracy as such, more like syphilis, or bubonic plage. To see to camps fighting this out as they both contract pneumonic plague is daft!

        To most this “small-steps”, follow the data, incremental pace is simply second nature. So out with Sherlock’s glass to sift through the dust.

        This mental disease leads straight to genocide, when the economic theory, a fallacy of composition shows some effect or other. This is why I believe Keynes and Fisher both just had to be Directors of the Eugenics Society of Britain and the USA resp.

        According to these sick minds, we would never have mastered fire in successive jumps. To the point now that the old war method simply cannot work anymore.

        That stepwise anti-entropic development of life and man shows we are beating them! In fact we already have won. Now we must make sure Obama does not exterminate us.

        • Tony Brogan

          The gold brigade on the other hand want to control money,

          Totally wrong , a misleading statement.
          The gold community want to return the money to the people. No manipulation. No monetarism, Just the right and opportunity for people to make a free choice.
          Mankind has voluntarilty chosen gold and silver as money more often than any other substance for reasons that make gold and silve rthe only honest money available.

          They wish to remove the current manipulation of the currencies and the value of gold by the banking cartel and the central banks.

          • bonbon

            The gold people sound so generous, doling out gold “to the people”. Its like Romney stating the middle income is $250,000! If “the people” fall for that , well they could elect Romney because their income would then be pleasing to him!

            Nobody falls for this ridiculous diversion.

            The Austrian School is a monetarist school just like the Keynes crowd. Money, whatever type, is the focus.

      • dwalsh

        As I say….the thought is unthinkable.

        At this time the conspiracy is something like what Adam suggests:

        “(a) tacit understanding exists among certain elements, classes, professions etc”

        Specifically the elites who own the private empires we call trans-national corporations are operating on the basis of tacit understanding and collusion through every means to reconstruct the world in their image….as a resource to be exploited for private profit.

        This is sold to the ordinary dupe as neoliberalism, libertarianism, free-marketism, tea-partyism, Austrianism etc.

        Libertarianism is really propertarianism.

        People think that Libertarianism et al applies to them as individuals. It does – relative to the size of your wallet. But the real beneficiaries of Libertarianism are the legal persons known as corporations. If you look into it you will discover that the liberty of corporations trumps the liberty of human beings.

        The series of free-trade agreements for instance being imposed on the world are all designed to liberate Corps from any interference from governments. It goes on.

        The reality of Libertarianism is a world owned & run by corporations…or more correctly, owned and run by the oligarchs who control the corporations.

        But all this unthinkable….surely all that’s happening in the world is a Darwinian chaos of competing survival of the fittest etc. Of course it is. And all for our good too.

      • Tony Brogan

        To start the enlightenment, try reading The Creature from Jekyll Island by G Edward Griffin.

        Wise up guys! This has nothing to do with economics or conspiracies.

        It has to do with the monetary system, economics, and it is NOT a conspiracy, it is a fact, quite provable.

        • dwalsh

          The book you refer to Tony is one of the clearest descriptions in print of an actual conspiracy to gain economic control of a nation and the world.

          How on earth you imagine you can use it to debunk the notion of economic conspiracies and condescend to those who suggest such possibilities baffles me.

      • cooldude

        The libor manipulation.

    • Very funny

      Reminded me of Bathos

      Couple of funny example here listed under the heading ‘Modern’

  24. Dorothy Jones
    Ballyhea Says NO to bond repayments. March just over now; letter delivered to the Dail.

  25. michaelcoughlan

    Hi Philip,

    The Holocaust was a conspiracy of the magnitude you describe and it took the whole world to bring it to an end.

    The slave trade of African Americans in the US up until the US civil war was a conspiracy of the magnitude you describe and 600k people had to be slaughtered in the US before that industry was consigned to history.



    • bonbon

      Well, it took the allies USA and Russia to bring an end to fascism and genocide.
      Slavery was an economic policy. Globalization is an economic policy, and various others too.

      To bring these policies to an end, as Lincoln proved even after being murdered, economic development is essential.

      Then one runs right into “Limits to Growth”, Environmentalism, Sustainability, Global Warming, Earth and the Human Spirit (Gore), and Dr. Schellnhuber’s decarbonization.

      What is the policy driving all these? Population reduction, culling of the human herd. Suddenly we are right back at the Holocaust on an astronomical scale.

    • dwalsh

      Both conspiracies were centrally planned and managed. Thank you for pointing that out Michael.

      The British Empire was run as a corporation….a global conspiracy to systematically plunder and pillage far and wide. It goes on.

      How about the US policy in South America in the past decades; Chomsky and others have revealed a vast conspiracy to subvert any social progress in that continent. Etc.

      • bonbon

        Exactly, in 1763 a private(er) company was crowned Empire. And Adam Smith, CEO, wrote the economics bible quoted all over the place. Follow that economics and self subjugate. Arthur Griffith realized this. The dupe Marx unfortunately did not, even after being informed of the American System, which he repudiated in a letter.

        A “conspiracy” indeed, but to know how it works takes some study. That is why I repeat the story of Austrian School von Hayek (LSE subsidiary) writing that British “economist” Bernard Mandeville’s method is psychology, “the most brilliant ever invented”. It is a truly evil attack on the mind itself, a perverse sophistry, like a modern Aristotle.

        One must grapple with this, to clear away “conspiracies”.

    • Philip

      The idea that there is a conspiracy running over decades which is inter generational is a hard one to accept given human beings inability to be competent all the time to maintain the status quo. Holocaust or Slavery are not like that.

      Now, Adam and Bonbon and yourself are saying something else entirely – we are victims of our previous successes AND this has created a stratified society which is unconsciously self reinforcing and self destructive. This I 100% agree with.

      Bonbon’s description of deductive/inductive thinking is known as machine like algorithmic thinking which by Godel’s 1931 theorem of incompleteness cannot ever lead to a method that “thinks outside the box”. Also, thinking outside the box is something society does not encourage. It threatens the herd and the hierarchy. We all know our place and try not to think too much for fear of discomfort. “Conventional Thinking” is what is killing us.

      History and archeology is cluttered with examples of civilization culls. It was because success prevented any outside the box thinking. Culls were due ultimately to an over reliance on one commodity. Another characteristic of these culls was that the unfortunate civilization started to put up walls or have the concept of being inside or outside a city wall or a grouping.

      This brings me to City of London. Fact is that it worked and worked well. It had a long run for many centuries and it has created a sizable contented minority which thinks it knows what is what. Byzantine & Roman Empires, the Mayans, the Khmers and so on – got wiped out cos they all had their heads up their stratified societal asses. This is the first time Humans have gone Global and we simply lack or do not want to entertain any ideas that will affect our position on the status quo.

      Not really trying to agree with anyone, but what I see being stated is that City of London

      • Philip

        …City of London derived a solution that worked well for many centuries. But the resulting society is probably more dangerously self-destructive than ever before. I do not believe that Obama, Bernanke or their controllers are trying to cull. They may know that this may be inevitable and that to try and stop it means curtains for their way of life. Now, that I can believe.

        • bonbon

          It is not popular to believe this, not a pleasant chat item at the pint. But When did popularity ever claim truth?

          People can and do believe it, and are at the point, as Enda rolls back history, of simply blurting it out regardless of ridicule.

          Bernanke maybe terrified and mesmerized at the same time, the “radical revolutionary” is a bunny in the headlights. I think Ben smells something really bad underway, but his dramatic act will not deter.

  26. michaelcoughlan

    When Iran gets hit by Israel it’s going to kick off an enormous world conflict because Iran won’t roll over like Iraq. The Israeli leadership are currently trying to get the Americans to state openly the limits the US will tolerate regarding Iran’s nuclear capability because it’s looking for an ally to stick up for it after it”s airfarce knocks out the nuclear installations.

    No one in the world has ever been asked to debate the strategic aim of the attacks on the world trade centre in 2001. The tactical aim was to slaughter as many civilians as possible. It only met with (relative) little success as (only) 3000 civilians were slaughtered. Had the attacks happened an hour later or so the death toll could possibly have reached 50000 or so as both towers would have been fully populated.

    The strategic aim was to draw the US into attacking the middle east which it has done and now they are heading for Iran. So the Iranians have been preparing for this for a decade. The leadership of the people who attacked the towers are trying achieve an enourmous conflict in the middle east where they believe the great Satan will meet his end. Since this is their grand plan I don’t see Iran et al rolling over anytime soon and it will be god help the Israelies if the hit Iran also. When you are dealing with leaderships on both sides who are as ideologically driven as those of the US, Israel, or Bin Laden’s outfit none of them are going to hive a shit about how many ordinary people get blown to pieces.

    Gold and self sufficiency really is the only way to go for the foreseeable future.

    • cooldude

      Some excellent posts on this article and I am going to end renew my two pence worth to see if I can contribute. Firstly Michael you say ‘the strategic aim was to draw the US into attacking the middle east” which I believe is correct but the big question is whose strategic aim was it. There is a school of thought which suggests the forces behind this terrible atrocity was not Iran but some sort of coalition of Mossad and the neocon element of the Bush government. The neocons produced a paper a couple of years earlier which called for Iraq, Afghanistan, Libya, Syria and Iran to be taken out in that order. They clearly stated that “a new pearl harbor” would help speed up these plans. Suddenly their pearl harbor turns up and they instigate their war of terror on the muslim countries of the middle east killing millions of innocent people in the process. Was this all just a coincidence or was it a false flag event staged to give the excuse for the subsequent illegal invasion of Iraq? . Until a proper enquiry is done on 9/11 it is not possible to say but there are so many holes in the official version of the event that it simply does not stand up to any serious level of critical investigation. If you want to study any of the unexplained contradictions in the official version the collapse of WT7 is perhaps the most obvious event which shows that the official version is not only implausible but scientifically impossible.
      The current excuse being used for attacking Iran is that they “might” soon have a nuclear weapon. Well firstly the intelligence in Iran was a mile out and secondly Israel are up to their eye balls in nuclear weapons and are threatening to use them yet the US says nothing about this. These are dangerous times and it is important to focus on facts.

      • michaelcoughlan

        Hi cooldude,

        The US is in Afganistan for the same reason the Soviets were there during the 80′s. The oil produced in the Caspian sea flows in pipelines through afganistan and other countries onto the arabian gulf.

        The mujihadeen kept blowing up the lines costing the soviets a fortune in export revenue so the soviets went in to put manners on them. The mujihadeen ledership knew that the soviets were bankrupt from their space race with the US so they knew if they could get the soviets to invade and pin them down in the mountains the cost would destroy the soviet union and of course the mujihadeen were proved correct.

        Those same fighters looked at the US in recent years and see a country with huge deficits for decades and guess what? The got the same idea. Draw America into the hills of Afganistan and bankrupt them there. Same idea with Bin ladens outfit in the middle east hitting the twin towers to provide the catalyst.

        I dont believe that the buildings in the 9/11 attacks were brought down by conspiracy other than the aircrft hitting them. I studied construction management and the reason the buildings collapsed was because the fires weakened the steel structural elements causing one floor to collapse onto the one below it etc. World trade centre 7 collapsed because the fires were allowed to burn out of control and the same thing happened to that building.

        About 6 months or so after 9/11 an Isralei spy was outed in the pentagon. Perhaps he kept vital information from the authorities.

        With regard to the pentagon I dont believe an aircraft hit the building. I dont know or have any ideas what did though.



        • michaelcoughlan

          I forgot to mention that the neo cons dont care that the US state is so bankrupt because they see big government as an enemy. If it all collapses into bankrupcy for them so much the better as all the assets they have a lien on for all the freshly printed notes will be transfered to them when the inevitable defaults occur.

          Beranke dismisses Irving Fisher’s debt deflation observations at the expense of millions and millions of dead and starving human beings all over the world. Like all of them he only see’s what he want’s to see. And like all of them it’s only when he himself is the one stopping a bullet with his chest that the penny will drop with him. I hope that he lives long enough to realise how his view of the world is about to unleash unimaginable levels of suffering in the world.

        • cooldude

          Hi Michael, thanks for your reasoned response. Your belief is the official version of what occurred to these buildings and is known as the “pancake effect’. That means that one floor after another gave way and they all collapsed on top of one another in a heap. If this scenario had occurred there would have been a number of floors piled up at the bottom after the collapse. There was just a mound of rubble. Also after tests of this scenario were carried out it was estimated that it would have taken over 90 seconds for each floor to give way individually. Both towers collapsed in 9.6 seconds which makes this pancake theory scientifically impossible. I know this is a very difficult and emotive event and is one I avoided looking into at depth for over 10 years. Unfortunately the facts related to it make the official version scientifically impossible on a number of issues. Here is a video in which many eminent architects and engineers discuss the technical issues with the collapses and how the official version of events is scientifically impossible. These guys have over 25,000 years of experience of high rise steel structures between them and are some of the leaders in their respective fields in the world. By appearing in this video they have ruined their chance of ever getting work from the US government again so it took a bit of guts to explore this event from a neutral scientific angle and try to ascertain the full facts. Finally the ability to think critically and to review facts in an impartial manner is not “conspiracy” as the mainstream media like to term it. It is just applying normal scientific analysis to a very horrific event and to reach some logical conclusions. Unfortunately this method of critical thinking is deliberately discouraged in our education system but it is the correct method nonetheless.

        • bonbon

          9/11 is still covered up by Obama. The only source of doubt on the Pentagon, is Thierry Meyssan’s tract.

          A quick check shows he is Reseau Voltaire, the French DSE leak channel, which got into the obfuscation act after 9/11.

          The important things to remember are here

          People died, and the complicity is here detailed. Obama has done a much bigger cover up than Bush. Is this the reason :

          Obama’s Harvard Education Was Sponsored by Senior Advisor to Saudi Royal Family

          Sept. 17 (LPAC)–Barack Obama was closely associated as early as age 25 to a key adviser to a Wahhabite billionaire member of the Saudi royal family, Prince Alwaleed bin Talal, who has financed organizations in the U.S. which have been linked to terrorism.
          In a videotaped interview in 2008 on New York’s all news cable channel NY1, Percy Sutton, the former Borough President of Manhattan, revealed the unusual circumstances about his first encounter with the young Obama.

          — There is lots more, too long for here, but the best way to express what is going on is that 2m poster with the ‘stache. It catches like nothing else exactly what we face.

    • Adam Byrne

      The Americans would be nuts to attack Iran. The Iranians will NEVER give up. It will be the rock that American perishes on.

  27. michaelcoughlan

    Hi Philip,

    Forgot to mention apartheid, Pol Pot and year zero, thenpenal laws etc.


    • Philip

      Those were acts of execution. Not a conspiracy.

      • bonbon

        Pol Pot is from the Sorbonne in Paris. The ideology is embedded in an economics theory, so not a conspiracy as such, but far more deadly. I quote this :

        One of the former leaders is Khieu Samphan, a 79-year-old economist with a doctorate from the Sorbonne, who was Cambodia’s nominal head of state when the Khmer Rouge implemented its plan to radically transform the country’s society and economy.

        Since he was one of the chief architects of the Khmer Rouge project, some observers have argued that Khieu Samphan’s 1959 doctoral dissertation, “Cambodia’s Economy and Industrial Development,” foreshadowed the radical agrarian nightmare to come.

        As Sophal Ear, an expert on post-conflict reconstruction, explained in a study of Cambodia’s economy that discusses Khieu Samhan’s dissertation, after the Khmer Rouge took power in 1975:

        The economy underwent massive restructuring; all money was virtually banned and banks were closed. Markets were all but destroyed. All who had lived in the cities were now to work in the countryside…. The leaders of the Khmer Rouge movement, Saloth Sar (better known to the world by his nom de guerre Pol Pot) and Sorbonne-educated economist Khieu Samphan, to name but two, sought to recast Cambodia anew…. The Khmer Rouge’s goal was simple: the rustication of an economy.

        That blog clearly evidences Adam Smith as the source, but leaves out too much.
        For the economics that leads straight to Pol Pot see
        Mike Billington’s The Sorbonne, Khieu Samphan, and the ‘Pol Pot International’
        P49… has a point for point expose of Pol Pot “economics”.

        The priests of academia, in this case Sorbonne, make suggestions, hints for OTHERS to carry out, and then claim errors of execution. That cannot be tolerated anymore. It gave us Pol Pot, as the Chicago School gave us Pinochet.

        This is why “conspiracies” just do not truthfully respect reality.

  28. michaelcoughlan

    Hi Tony.

    Your point of view can be very easily achieved you know. All people and companies have to do is barter their goods and services. No currency no money involved at all.



    • Hello Michael,

      Do you think that instead of those Septic Tank Taxes
      and Home Taxes and Water Taxes, (that have suddenly turned half the population into criminals) that if I just offerred instead the contents of my septic tank?

      Would that be barter?

      Actually would’nt it be an inspired protest?

      Can you imagine the 1000′s of those special parcels arriving at the Dept of Environment or to local council offices?
      And everybody there afraid to open the post while not one member of the public would mind paying for the stamps?

      Sure the Post Office would clean up!


      • Tony Brogan

        Back in the late 60′s the Premier of the province of BC decided to have the farmers pay their taxes at the same time as everyone else. 30th April. They had a deferement to 30th Sept as that was when they knew what was earned from harvest sales.
        The farmers protested by loading trucks of grain and reported they were on their way to pay the taxes in kind. It would be on the legislative lawns within 48 hours.

        The law was repealed within 24 hours.

    • Tony Brogan

      Hello Michael

      Yes but it is very inefficient and takes us back 15,000 years.
      Money as a medium of exchange is indispensible for a flourishing economy.
      The amount of money is irrelevant as it is not consumed in any transaction. It acts as a catalyst to enable the transaction and then moves on to the next transaction.
      It is however important that the money used not be tampered with. no increases or decreases in the amount of money. That meams not easy to counterfeit. does not rot or decay, Acts as a store of wealth or an accounting of past labour accrued. Is readily divisable and relatively rare.
      Only gold and silver have all these characteristics.
      It is not my idea. It is proposed and used by the majority of people or was until the central bankers had their way to their exclusive benefit.

      • Tony Brogan

        There has to be enough money in circulation that there is no premium demanded to obtain it. Then money production can cease.

      • dwalsh

        Lets not put our civilisation back 15,000 years.

      • bonbon

        Metal worked in a long epoch of very low relative population density, a world where 7+ billion just was not in their sights.

        We have exponentially moved to planetary action now, a change that most have not adjusted to, especially the ancient oligarchy which is trying to roll that back.

        Our command of principles, while still extremely mild and not extended, needs a completely different type of banking, which Alexander Hamilton had the genius to identify – a Credit System, not monetary. The distinction is lost on monetarists, but the deafening silence in that “Chicago School Revisited” IMF report last blog, and almost all proposed economics tracts, to me reveals they know exactly what Hamilton (and Arthur Griffith) did.

  29. Adam Byrne

    My Daddy’s funeral in the morning guys. He died Sunday, looking forward to a massive day in Kenny’s Bar in Lucan, his spiritual home. He will love that we are having an all day session there after the ritualistic formalities. Two beautiful caring Indian nurses were in the room with us on Sunday when he passed, kind of negates the whole nationality / sovereignty / discrimination / immigration / racist shit that people espouse on here. Even Colin (my friend) is more open minded that some of the lefties in that respect. Anyway… I appreciate all that I have learned and experienced on here in the last 3 years and anyone, including David, who wants to come in for a drink tomorrow in Lucan is invited, thanks for listening, my posts on here are usually more personal than the Economics freaks, but I am always listening and learning and that may eventually be to all your detriment, Good Night ‘Ireland’ (is that what they call this geographic space?)

    • padser

      God bless you, Adam. Honour your Father well & may he rest in peace.


    • mediator

      Sorry for your loss Adam, Rest in Peace.

    • Dorothy Jones

      I am very sorry to hear Adam, please accept my condolences and may he rest in peace. Best Dorothy

    • Philip

      I offer my condolences to you and family.

    • Adam, very sorry to hear. Look after yourself. I went through the same three years ago and it can take time.


    • Good luck Adam. All the best.

    • Colin

      Adam, Sorry to hear about your loss, and very humbled to be referred to as your friend. See you in Kilkenny for a pint!

      …speaking of lefty liberals, do you notice how many of them seek state pensionable jobs (quango industry take a bow) and even permanent employment in the private sector (banks take a bow)? For me, owning a pension fund makes you a complete capatalist, as you are putting money away to be invested with a large return from the sweat of the brow of others. Yet, we have many many lefty liberals who refuse to enter into retirement without such an arrangement in place, how bizarre is that? well, not that bizarre really, as lefty liberals are only a bunch of hypocrites.

      I don’t have a pension. I task myself to look after myself. In fact, I hope to be still working when I’m 75, but maybe not putting in 70 hour weeks like I am these days.

    • Just saw this Adam,
      My sincere condolences to you and your family!

      “Ar dheis Dé do raibh a anam”

    • coldblow

      Adam a chara

      Ni maith liom do thrioblóid.

  30. bonbon

    Ron Paul: We Must Learn Our Lesson!

    Sept. 18, 2012 (EIRNS)–Rep. Paul ends a post on
    today by noting: “Currently, the U.S. is actively supporting
    rebels in Syria that even our CIA tells us are affiliated with
    al-Qaeda. Many of these radical Islamist fighters in Syria were
    not long ago fighting in Libya. We must learn from these
    mistakes and immediately cease all support for the Syrian rebels,
    lest history once again repeat itself. We are literally backing
    the same people in Syria that we are fighting in Afghanistan and
    that have just killed our ambassador in Libya! We must finally
    abandon the interventionist impulse before it is too late.”

    • cooldude

      Good post Bonbon and all of it fact. This so called Free Syrian Army is composed of mercenaries, many of whom are Al Qaeda, who were put together by the CIA to overthrow the Assad regime. This group don’t seem to have much popularity with the general population and are mainly a bunch of blood thirsty thugs. It’s very difficult to get unbiased coverage of this conflict as the mainstream media only report from a CIA sponsored point of view.

  31. dwalsh

    @ Tony Brogan

    Gold is not money….it is a commodity.

    As you would put it; “go get a proper definition.”…1c.1.TmFyND5V_nQ

    As a commodity, gold is a useful investment in times like these for people who want to preserve monetary wealth.

    • StephenKenny

      It’s a poor definition – it is a definition of currency, rather than of money. Money is simply any medium of exchange and store of value. Gold is not wealth, but it is money.

      In closed societies – islands etc – money has been all sorts of seemingly weird things, my favourite being conche shells on some south pacific island. Obviously, that would only have developed in a place that had conche shells, not too many new ones appearing every year, and conche shells that are quite tough.

      Gold has been pretty good over the centuries – it’s failure could be said to have destroyed the Spanish Empire. THey brought back so much from South America that it’s value was badly debased, and the economy simply became unbalanced through huge increases in the price of some things. Having gold no longer meant that you were rich, which played a part in the breaking of the structure of Spanish empire.

      • dwalsh

        I think the definition is accurate Stephen; in the sense that it is what I mean by ‘money’. Money properly is a token system; a utility to facilitate the transfer of commodities and services.

        As you point out any commodity can be used as a store of wealth; and any object can be used as a money token.

        I distinguish between the two; between money and commodities. Others here confuse and/or conflate the two. That has been common practice since antiquity.

        Fetishised commodities have been used to accumulate and store private wealth since civilisation began. And that system of the concentration of private wealth has been an essential means for the development of the ruling system of oligarchy which still dominates our world.

        Gold is the wealth of oligarchs; not of ordinary humans.

        My contribution here is to challenge this relic of our barbarous past and suggest that we now face a radically new situation that requires us to rethink economy and money altogether.

      • Philip

        Certainly as a short to medium tactic, Mr Brogan may be right because Gold will inflate in price as the printing presses roll. Then again to take an extreme, my skills as a Neurosurgeon to save lives are also probably more valuable and I can command any price from the highest bidder in whatever way I want.

        Knowledge is the real currency and with it power. Fools will be parted from their Gold. Is that not the point at the end of the day?

        The real currency is knowledge of how and who you know to get things done. Some is handed down and kept exclusive to a few. Gold may help, but ultimately we all have to pay those who hold the keys to access.

        We need mass knowledge sharing and we need to give it all away without clutter and all need to do it. Internet has failed – it is cluttered. Governance as it stands today will have you shot or locked away. Status quo and the need for that special education will mean you keep competitors out rather than compete with them.

        • dwalsh


          Yes Tony is right in the “short to medium tactic” of a world plunging into depression and possible monetary and economic collapse. Gold is a viable commodity store for the preservation of monetary wealth….for those who have such.

          I agree completely with your point that the primary wealth of a nation is its mental and knowledge capital invested in its population.

          Ultimately human capital is the underwriter of the entire global economic and monetary system. That is why it is literally criminal that the monetary system is the private possession of a tiny elite.
          It is literally a form of chattel slavery. They propose to own something which by any rational estimation of human rights is not theirs to own.

          The round of world trade agreements being imposed on the nations of the world today involve the commodification of knowledge and the locking down of education and knowledge capital into a patent system of private ownership.

          Now some will say this is all happening accidentally with no forethought or strategic intent on the part of the actors involved. I dissent. They know exactly what they are doing.

        • bonbon

          “my skills as a Neurosurgeon to save lives” of the rich, the highest bidder?

          Hmm, those skills were likely attained from a nation’s intent of education for all, not “the highest bidder”.

          Strange version of the WMA 1948 Declaration of Geneva :

          “I will not permit considerations of religion, nationality, race, party politics or {social standing} to intervene between my duty and my patient”

          A nation committed to a future, quickly realizes education and teaching for all social standings is the key. This is not some “charitable information sharing”, a neo-con version of education, like the neo-con “governance” version of Government.

          Typical neo-con swindles leave everything necessary to progress to “charity”, and pump billions into banks and firms. You can “compete”, but be charitable! Charity can take care of the ill, the health service is for the healthy (rich). Touching sentiment, indeed.

  32. dwalsh

    @ Jimmy R

    I argee with most of what you say in your last comment jimmy.

    I would add this.

    Collapse is only inevitable if their diseased system is maintained blindly to the end. Collapse is possible….maybe even probable….but it is not necessary.

    If humanity generally can wake-up sufficiently from the media trance it is in and recognise the disease, then the purging of the system can be managed in a rational and humane multilateral reorganisation and reset of the global monetary system.

    The main problem with the current system is that it is in private hands and run for profit.

    • Philip

      “The main problem with the current system is that it is in private hands and run for profit”

      100% agree – but you are neglecting a few sad realities.

      Ultimately all government or any form of control system (benevolent or otherwise) has at its base the interests of the few. No matter where you look cronyism and nepotism always dictates that pace.

      Right now, if Bernanke is printing dollars, the middle east needs to be controlled to ensure petrodollars do not loose their purchasing power.

      • dwalsh

        Yes….corruption is the heart of the problem; and will be a problem for any system of governance we implement.

        This does not mean we should abandon governance, in the sense of organised civilisation, as the anarchists suggest; only that we must be realistic and build-in checks and balances; and real democracy.

        • Philip

          Right now, if you are comfortable and part of the sizable contented minority, proper governance will not take place. This is for me the crux of the matter. How can you wake people up?

          Articulation of the problem and action on same is what we are up against. In the globally interconnected world of so called common language and media, the inertia we face for any change you suggest is monumental at every level.

          • dwalsh

            Agreed….The realisation of rational humane governance is a monumental challenge. I presume you dont suggest we just throw our hats at it.

          • Philip

            No. But I am currently too stupid to imagine ideas to get around it. I know this sounds cliched, but I think it is down to the power of one. We all have to change – maybe a monumentally fceked up pension plan for the vast majority of the “contented few” might shake things up a bit.

            I can understand the US mad hat republican view of big government. I do feel unrepresented and I do feel I am paying taxes for nothing and more now than ever before.

            There has to be a tax/ representative revolt without a center or we are sunk.

          • dwalsh

            Like you I understand the reactivity that spawns the various anarchic proposals; and is being harnessed by the Corp elites (eg the Kochs) to manipulate people into demanding their own serfdom….which is what the “US mad hat” tea party libertarianism etc really is.

            And like you I too feel completely inadequate to the momentous mess it all is. Who was it said ‘become the change you want to see in the world’; but I’m not sure that’s what you mean by the power of one.

  33. martino

    This article has provoked some very philosophical, and, instructive responses from contributors. Some very good posts made and not a slanging match in sight.

  34. michaelcoughlan

    Hi cooldude,

    Thanks for the video link which I will look at later. In life you find what you look for. The twin towers took well overban hour to collapse not 9 seconds which was only the final catastrophic failure sequence. If thousands of tonnes of building hit the street from half a kilometrr up st 120mph your not going to get a stack of concertinad floors you are going to get a huge amount of pulverised dust. Until more proof of a plane hitting the pentagon is made available it is only then I will
    believe the story.

    Looking forward to the video and thanks.


    • bonbon

      Seems like the 4th plane was meant for the Capitol Building, but downed by passengers. It is said that would have caused Martial Law.

      Of course one could wait for evidence. A tanked plane at that speed is simply a bomb.

      This was all warned about at Ashcroft’s hiring months before. A Reichstagsbrand was clearly expected and publicly posted. It failed, so we can expect more (Benghazi was 9/11-2). This is the reason Obama has now got his finger on the thermonuclear button.

  35. gizzy

    Interesting to see the contrast between the hard line being taken in regard to the property tax and that of the reduction of public service allowances.

    The next budget will attempt to spread the pain accross so many headings no one group will rise up in rebellion.

    Public service allownaces dealt with now two months in advance, trade unions bought off again. Simple formula for lulling population into self ruin.

    • Harper66

      fully agree re: public service allowances.

      However the time has now arrived were it will be impossible for both lab and fg to agree on cuts with out effecting each other support bases. It is this that will bring down the government.

      Quinns comments re:clare Co Co was nothing short of scandalous.

  36. michaelcoughlan

    Hi everyone,

    To understand the mindset of the scumbags on both sides railroading the world into war in the middleast you must understand the parable of the frog and the scorpion.

    A frog is standing at the side of a fast flowing wide river preparing to cross when along comes a scorpion. The Scorpion asks the frog for a lift on his back to which the frog responds that if I give you a lift on my back you will sting me and I will be paralysed and drown. The scorpion responds that if he stings the frog he too will drown so why would he do it? The frog accepts this explanation and swims out with the scorpion on his back. Half way across he feels searing pain from the scorpions sting and just before they sink into the abyss he asks the scorpion why he did it? The scorpion responds ‘I can’t help it it is in my nature’ just before the both drown.

    It’s the same with a kleptomaniac who can’t stop himself robbing. In the war about to be fought in the Midfle east the only thing both sides know is that it is better to die than let the other-side prevail. The trouble is if it were the frog and scorpion it would be like saying every fish in the river will be poisoned at the same time because the fall out from this will be the deaths of 100s and 1000s of human beings. And when the US is lamenting it’s dead years from now do any of you think any mention will be made of all the ‘collateral damage’ I didn’t think so because with all the blanket coverage we received recently about 9/11 was any mention made of the 150000 or so ‘Eyeraackkies’ who have been the collateral damage so far.

  37. The debate is becoming more introspected and philosophical I think because many people have recognised that the system and it’s immovable power is greater than themselves. Anyone questioning person who was around in 1950s Ireland would have recognised the same feelings of helplessness each of us face internally when viewing through sad eyes an external system that seems so awesome in it’s capacity for evil and self destruction that you feel it will never be toppled

    People are waking up and proof of this can be seen on this blog as many posters lived though these times and been searching for answers about all kinds of intellectual and spiritual matters. They have been torn up by the roots and left by the roadside fluttering in a cold wind metaphorically speaking

    It is good be outside in the cold because it makes you think and question. It also teaches us that there is no point in seeking solace in wealth, religion or being chained within the polite and stultifying mental prisons of political parties or organisations of any shade of gray. We are the outsiders. We are The Searchers

    I greatly enjoyed the article and the posts. They made me feel human today

    • coldblow


      On Friday I (re)posted a few extracts from the likes of Crotty, Joe Lee, Ó hEithir and a Dutch travel writer (Carolijn Visser). Coincidentally all of these pieces dated from the mid-80s. Crotty was obsessed with the economic basis for what he judged to be an ‘iniquitous society’. Lee’s terms for insiders and outsiders were covered by the possessor ethic and the performance ethic. Ó hEithir was an eloquent sceptic. Visser was a working class girl who as a kid was obsessed by the Top40 and saw how her and her kind were patronized by a Lou Reed-listening middle class intelligentsia.

      As a society since then we seem to have become even more confused about what the issues are.

      Look at Michael Hudson’s website and he clearly makes the point that all this stuff was what the intellectual debate was all about how to deal with the problem of economic rent. Under the cover of the modern economics profession everyone seemed to have been looking in the wrong place (or to have dropped off).

      Lastly, why should one not seek solace in religion? Isn’t that what it’s there for (at the very least in any case)? What do you base this assertion on?

  38. Philip

    Ever get the feeling that there are a lot of end games starting to be described in the above comments. Lot of darkness everywhere – even in David’s own articles. And add this…

    China and Japan
    Iran and US/Israel
    Print baby print
    Funny Weather

    Debtors revenge indeed…but will they be able to savour it? When this finishes, I fear we may need to forgive a lot more than mere monetary debt.

    • coldblow

      No more than any other time over the last four or five years. My guess is that the PTB will introduce ‘unpopular but necessary reforms’ when they judge that the penny has finally dropped with the majority about the mess we are in. My hope is they might act sensibly and fairly, but they haven’t done too well on that score so far.

  39. At a press conference today TDs for the United Left Alliance announced plans to launch a public campaign of resistance to property tax and austerity.

    “Our society and our economy will be crushed unless we stop this austerity juggernaut with a mass movement of people power on the streets. Building such a movement will be our priority over the coming weeks.”

  40. Who creates money in the normal run of things?

    If it’s so extraordinary for the Central Banks to be creating money then I’m surprised this question isn’t being asked.

    It is the commercial banks which normally create the money supply and they do so as they issue loans. Hence the reason why there’s so much debt in the economy. Hence the reason why, economically speaking, we can’t support our elderly while of course we have all the real resources to do so. An adequate money supply, one which is rarely deleted through loan repayments, would negate the need for pensions in the first place.

    • bonbon

      “Money supply”? What exactly do you mean? Any amount of money can be printed at will. So it is an irrelevant distraction, a monetarist delusion.

      The real question is Credit. Alexander Hamilton defined Public Credit as the acting principle of a national Treasury. Credit for internal improvements, such as the TVA, Shannon Scheme, Shannon Deep Harbor, Transaqua (Chad), NAWAPA XXI (North America), PLNHO (Mexico), Aral-Arctic Canal (Russia), Oasis Plan (Israel/Jordan), and the Eurasian Landbridge from Rotterdam to Shanghai. Add into that the Transrapid 480kmh backbone, 6000 GW power-reactors, desalination, Gobi Greening (China), Kra Canal (Thailand). And NASA, and solar near space infrastructure (Curiosity), manned exploration, true Green Agriculture with new hybrid seeds (rice), an end to biofuels.
      And to vector all this new high flux-density energy research to as a side-effect reduce those long-lived radioisotope “waste” to fuel.

      To attempt to “explain” how all this emanates or oozes from “money-supply” in some hinted-at unknowable (except to a few of course) way is pure delusion.

      The future does not ooze from a “money-supply”; it in fact decides our actions now. Quite the opposite of the deluded IMF.

      • By ‘money supply’ I mean M3, the total amount of money in the economy.

        i.e. The numbers in everyone’s current and savings accounts plus the cash in the economy.

        It is the lifeblood of the economy and if there’s an adequate amount of it we can get all those things you listed done. If there’s a shortage, we can’t. So obviously how the money supply is created and what form of money we use is important.

        • bonbon

          There is M1,M2,M3, the last exponentially increasing, but the derivative nominal debt as hypergeometrically increased. At the same time there is a physical economic breakdown accelerating in ratchet step.

          This is a kind of Riemannian shock effect, a highly nonlinear geometry.

          Without rendering that derivative snowball null and void, the point of Glass-Steagall, nothing can be done about M3, which is a measure within a catastrohic system anyway.

  41. michaelcoughlan

    Hi Everyone,

    I’m not a conspiracy theorist BUT……….


  42. michaelcoughlan

    Hi everyone,

    Final thought for the night. It’s 9.40pm Wednesday evenining. When the slaughter kicks off in the middle east all of you reading the blog will be delighted WITHOUT even knowing it. Know why?
    McWilliams told you in the article. The currently worthless pension plans will recover in value AFTER America balances the books by transferring Iranian wealth to it’s own balance sheet. You won’t be told that part only the bit about your pension going back up in value!

    Sweet dreams boys and girls tomorrow you wake up men and women.

    • bonbon

      You are completely crazy. You are not living in the 21st century. A nutcase.

      If Obama is not stopped we face a 60 minute extinction. Sorry to rain on your dreams, but mastery of fire has reached that point. It is way beyond fairy tales. Bernanke’s action reflect this, and cannot work.

      Do not delude and mislead, Obama is ready to go for it. This is the real problem.

      DMcW only mentioned a fleeting glimpse of “horrors”.

      This makes the wallet look just a little less important.

  43. bonbon

    Greek Opposition Leader Calls for Debt Moratorium

    Sept. 17 (EIRNS)–Greek opposition leader Alexis Tsipras of the Syriza party denounced the government’s new austerity policy at a press conference at the Thessaloniki International Fair, yesterday. He ridiculed the government’s claim that it is winning more time to implement the austerity, saying, “all it will do is make the rope with which we hang ourselves longer. What is important to us is that we do not continue down the slippery slope of disaster.”
    While warning that if the government implements the additional EU11.5 billion in cuts it will have “little chance of longevity,” he said his party would be ready to govern the country “tomorrow morning. “Calling the three-party coalition government the “trinity of bankruptcy,” Tsipras said, “I did not come here to speak to you about yesterday. I came to speak about tomorrow. I came to invite you to plan and create together the Greece that we envision, to rebuild Greece, ridding it … of the memorandum of destruction and replacing it with a national plan for the developmental and productive restructuring of our country.”
    He then laid out his party’s “integrated reconstruction program,” which included the creation of a social welfare net to address the developing humanitarian crisis; policies for the rapid reduction in unemployment; guaranteeing social services and infrastructure, with an increase in state funding for training, health care, and social protection; ensuring the country’s supplies of food, medicine, and fuel; developing public transport, especially rail, throughout the mainland, and ensuring transport to the islands through the creation of a “social-public” shipping company and strengthening shipping through the signing of a national agreement with the shipping sector and shipowners.
    He called for Greece to stop being a guinea pig for neo-liberal experiments and become instead a model for progressive solutions across Europe. His party would annul the memorandum and renegotiate the loan agreement. He would then implement a moratorium on interest payments of the external debt
    for a specific period of time and write-off a substantial part of the balance and its repayment with a “growth clause … precisely as the case with Germany in 1953.”
    Tsipras claimed that tax revenue could be increased through a progressive reform of the taxation system, the establishment of a full and completely electronic property registry and the reorganization, modernization and staffing of the tax offices with specialized personnel.
    He proposed the establishment of a public bank with the specific task of financing businesses.
    He reiterated that Syriza was against the sell off of state property

  44. bonbon

    China Attacks Fed’s QE3: Will “Cause Repercussions to… Monetary Systems”

    Sept. 19, 2012 (EIRNS)–When “Helicopter Ben” Bernanke initially announced the Federal Reserve’s program, the official Chinese press took a very cautious attitude. It warned of inflationary effects, but emphasized the possible benefit to China, if, somehow, the measure could actually boost the US economy.
    Today’s China Daily has a far more realistic appraisal:
    “Fed’s new round of quantitative easing will cause asset bubbles, inflate bulk commodities and cut wealth of debt holders.”
    It notes that the new policy is unlimited, since the Fed will just keep buying those mortgage backed securities until labor market conditions improve.
    “The new round of quantitative easing marks one of the most noticeable changes in the Fed’s monetary policy … by the Fed’s decision to bind monetary policy to the US’ economic recovery and promise not to change it before the economic situation improves.”
    But this has no chance of working, “under current economic situations at home and abroad, QE3 will not bring the US the expected economic effects… Instead, it will directly result in the influx of additional liquidity to high-risk assets, bulk commodities and emerging overseas markets, which will fuel asset bubbles and cause repercussions to overseas financial markets and monetary systems…
    “QE3 is said to be aimed at creating jobs, but Fed Chairman Ben Bernanke should be well aware that the discouraging US employment situation is a result of the US’ structural unemployment caused by its industrial structural imbalances…
    “Continuous quantitative easing will increase the risk of the monetisation of US debts and put additional pressures on financing government deficits in the future…
    “There is only a slim possibility of a new round of quantitative easing boosting the US economy, but it will do serious damage to the global economy, and in particular, emerging economies, as part of the huge liquidity will flow to emerging markets in pursuit of short-term profits, which will negatively affect the independent decision-making of their monetary authorities.
    “Subsequent rebounds in the prices of bulk commodities will also cause huge damage to their economic development. The prices of international grain have already risen, and oil prices have also rebounded to a high, which, if unchecked, will bring a new round of imported inflation to emerging economies and add more difficulties to their macroeconomic regulations.
    “Worse, the possible considerable depreciation of the dollar following the new round of quantitative easing will cause other countries to pay for the US’ crisis and accelerate the transfer and redistribution of global wealth, as their enormous dollar-denominated reserves drastically shrink.”
    The author, Zhang Monan, is an economics researcher with the Economic Forecast Department of the State Information Centre.

  45. bonbon

    Weidmann Warns Against Inflation, Likens Draghi to a Fool

    Sept. 19, 2012 (EIRNS)–Jens Weidmann, the president of the German Bundesbank, used a speech at a bankers’ congress in Frankfurt yesterday, to once again voice his strict opposition to the ECB’s planned new unlimited bond-purchasing program. Weidmann said that efforts by central banks to pump money into the economy reminded him of the scene in Johann Wolfgang Goethe’s {Faust}, when “the devil Mephistopheles, disguised as a fool, convinces an emperor to issue large amounts of paper money. In Goethe’s classic, the money printing solves the kingdom’s financial problems but the tale ends badly with rampant inflation.”
    Without specifically mentioning ECB President Mario Draghi’s bond-buying program, he said: “If a central bank can potentially create unlimited money from nothing, how can it ensure that money is sufficiently scarce to retain its value? Yes, this temptation certainly exists, and many in monetary history have succumbed to it.” Weidmann added: “It’s important…that central bankers, who administer a public good — stable money — also publicly justify themselves.”
    Weidmann’s remarks also go against German Finance Minister Wolfgang Schäuble, who over the past weekend attacked him for his opposition to Draghi, saying that these critical remarks were inappropriate and “unwise.” It is known that Weidmann is not the only central banker on the ECB council who opposes Draghi, but so far, he has been the sole “no”-voter there. The unprincipled German government backs Draghi’s new program.

  46. bonbon

    Japan, Too, Increases Stimulus — by a Trillion Yen

    Sept. 19, 2012 (EIRNS)–The Bank Of Japan (BOJ), in what is described as an “unexpected” move by the financial press, increased the size of its government debt-purchasing program by 10 trillion yen ($126 billion). A separate program, to extend credit to banks (on valueless assets), was kept at $25 trillion yen. The bank also extended the duration of its asset buying program by 6 months, from December 2013 to June.
    The BOJ’s actions follow in the footsteps of the European Central Bank and the Federal Reserve to pump up liquidity flows, but its actions are less “exuberant” than the “until hell freezes over” liquidity orgy announced by Europe and U.S. central banks.
    The door has been left open for further actions, however. The bank downgraded its economic assessment, saying that Japan’s growth has “come to a pause” while overseas economies have moved “somewhat deeper into a deceleration phase.” And, because the “the BOJ is emphasizing uncertainties in its outlook,” “Further easing is still possible this year,” Bloomberg quoted Masamichi Adachi, a senior economist at JPMorgan Securities in Tokyo, as saying.

  47. bonbon

    Stiglitz in Spain Displays the Criminal Stupidity that Earned Him the Nobel Prize for Economics in 2001

    Sept. 19, 2012 (LPAC)–Interviewed by Spain’s {ABC} daily during a trip to Spain to present a book of his, the neo-Keynesian Joseph Stiglitz said:
    “Spain will stay in the euro, since the population understands that the price of leaving is too high. That said, it should request a bail-out as soon as possible. Until that happens, money will keep leaving the country and won’t return.”
    “[A banking union] is absolutely necessary if we want the euro to survive. A banking union should have been approved from the beginning of the common currency… It should go beyond mere common regulations, and backstop deposits of all the European banks so that the population knows that its money is safe and to stop capital flight.”
    “The debt should be mutualized [sic] so that the interest paid by the hardest hit countries can be reduced… The error has been in the focus, and in one concrete country: Germany.”

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