September 27, 2012

Prepare for titanic struggle as Draghi turns euro into lira

Posted in Irish Independent · 252 comments ·
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WELL that didn’t last long, did it? The financial market euphoria, which greeted the announcement that the ECB would buy bonds in unlimited quantities, has melted away. In its place, the realisation that Europe’s economy is weakening quickly is puncturing short-lived optimisms.

Yesterday, we had more evidence from Germany that business confidence is ebbing more quickly than anyone anticipated. The IFO index of businesspeople’s expectations about the future has now fallen for the fifth consecutive month.

The rolling recession, which started with the collapse of Lehman, initially affected highly leveraged countries like Ireland, Iceland and Greece, then mutated into a slump in Spain and Italy and it is now moving in a crashing wave to the core of Europe. Affecting France at the beginning of this year, it is now being felt in the industrial powerhouse of Europe, Germany.

Until recently, China’s demand for German exports — particularly heavy machinery, which Germany excels at — kept order books healthy. But now Chinese demand is not there any more as its exports and economy weaken. The real fear in China is that it will prove to be the mother of all property bubbles, which will burst.

This is its own fault because, as money flooded into China, the revenue from its exports should have caused the Chinese currency to rise. But the Chinese didn’t allow this to happen and they allowed the local money supply to grow, providing cheap loans for speculation on property. Now the result isn’t just ghost estates, but entire ghost cities of unsold apartments.

All this is having an impact on Germany. The economy that was once a powerhouse may well prove to be regular after all. The slowing in Germany will cause a renewed crisis in the eurozone because Germany, as well as being an exporter, is an importer and France and Italy are her main clients.

As always happens when there is a slowdown, the least competitive supplier loses. This will put the spotlight again on Italy and, for the first time in the crisis, on France.

If growth stumbles again, the inconsistencies in France will become more evident. France is a country which has been running a budget deficit for years, but in recent times it has also been running a current account deficit. Of more concern is that France is a country that has proved itself incapable of even the most modest reforms to its labour market. This inflexibility will prove to be highly damaging if it has to seek ECB assistance (as Spain will definitely require and Italy is likely to need). In short, France is Europe’s Achilles heel and, next year, we should expect more financial fireworks as the French bondmarket is sold by investors.

This cyclical slowdown is coming in a German election year when the hostility between the German Bundesbank and the ECB’s Italian leadership will be difficult to conceal.

You know the world is in a strange phase when the Pope is a German and the head of the central bank is an Italian. But just how Italian, is now dawning on many in Germany. Make no mistake about it, Mario Draghi is turning the euro into the lira because he realises that in order to survive, the euro needs to look and feel much more like the lira than the Deutschemark.

Whatever the Germans were expecting when they reluctantly gave up their Deutschemark, they sure as hell weren’t expecting the lira. But this is what they are getting.

As growth wanes, open war is likely to erupt between the Bundesbank and the ECB in a philosophical as well as economic confrontation.

The Germanic view of money, exemplified by the Bundesbank, sees money as a ‘common good’, protected by treaties and laws and it is a common good that no government or institution owns: the economy adapts to money, not the other way around.

The alternative school of thought, exemplified by Mario Draghi, views money as a tool: the state or institutions have a responsibility to use money to achieve desired outcomes, such as full employment, or economic growth, or saving the euro.

Thus we are set for a titanic struggle in Europe and the trigger for this struggle will be a crisis in France, where faltering growth will force it into an economic adjustment, which the country is simply incapable of effecting.

Europe’s economic problems are: too much debt, too little growth and a lack of coherent political leadership.

None of these issues has been addressed by what is in effect monetary financing through the back door announced by the ECB two weeks ago. These problems will resurface in 2013 and, when they do, expect the next move from Draghi in 2013 to be printing of more money as the gradual but unambiguous “lira-isation” of the euro continues.

This is good for us because our major trading partners are Britain and the US, so anything that weakens the euro is good for Ireland. In addition, the bank debt deal will be supported by Draghi and we should play to this audience and for his affection in the months ahead.

But the question for the euro is how long Germans will tolerate the debasing of a currency that they intended to be as least as strong as the Deutschemark. In the past few days, the financial markets are suggesting that the Germans will not remain sanguine forever.

In the next few weeks, economists and analysts at large banks and pension funds will be locked in meetings trying to figure out what is likely to happen next year and how to position their funds accordingly.

Looking at the recent numbers, we are likely to see recessionary conditions in core Europe in 2013. Before the end of the year, Greece will need another bailout and Spain will be bounced into an IMF/EU programme.

But the big story for 2013 is likely to be France and the row, in a German election year, between Germany and the rest as the euro morphs from a mini-Deutschemark to a mini-lira under the eye of Mario Draghi.


  1. Philip

    Events are unfolding at an exponential rate.

    IN A WORLD OF UNDERPRICED RISK, WHAT COULD POSSIBLY GO WRONG?

    http://www.eugenelinden.com/news7510.html

    And behold the mouse trap fission effect.

    We are screwed.

  2. Nice though somewhat depressing prediction for next year.

    I’ve a gut feeling that if the Coalition here can get any iota of a “feel better factor” moving, that we could well be into a snap election come next Autumn. Particularly if they can play the Big Bad European Bogeyman card.
    Which seems likely because the further this rumbles on, the less likely we will be of any significance as a “Poster Boy” and even less likely to get any relief on banking debt.

  3. Adam Byrne

    subscribe.

  4. Adam Byrne

    Let the Germans go. They still refuse to take any responsibility for the reckless lending of their banks. Haven’t they ever heard of due diligence or co-responsibility of the lender?

    If they want their precious currency, they can have it. As far as I am concerned, money is but a tool. People are far more important than abstract ideas.

    By ‘Germans’ and ‘they’, I mean their government and financial institutions etc. I may no distinction among people on the basis of so-called ‘nationality’.

    • Adam Byrne

      ‘make’ no distinction…

    • bonbon

      See below for what is up with the SPD – moves towards Glass-Steagall – Trennbankensystem. This will intensify as Draghi does what DMcW rightly point out, a Lira-ization. Even this faltering step now drives the banksters wild with horrible attacks on Steinbrück, following the same treatment which drove President Wulff from office.

  5. bonbon

    Gensler Says LIBOR Still Being Rigged

    Sept. 26, 2012 (LPAC) — London Interbank Offered Rates (LIBORs) are {still} being rigged, and should be ditched and replaced by other interest-rate measures, said Commodities Futures Trading Commission chairman Gary Gensler to a conference at the European Parliament on Sept. 24. Gensler’s CFTC was already investigating the biggest international banks’ rigging of LIBORs in 2008, and was part of the $540 million settlement compelled from Barclays Capital on these crimes in July.
    It has become clear that at least 8, and perhaps 15-20 big banks were deeply involved in rigging the LIBOR rates to increase the “skim” on their derivatives trades, manipulating the derivatives markets in the process to the extreme detriment of municipalities and other bond-issuers and investors worldwide. They also manipulated their LIBOR rate daily “submissions” to improve their prospects for governmnent bailouts in 2008-09.
    This has been characterized as an “illegal global bank cartel in restraint of trade” and as the worst of all the crimes of the “banksters” in modern history.
    Gensler surprised the conference by citing “reams of data” which show LIBORs still being manipulated despite intense publicity of the 2005-08 crimes, denunciations, and scores of resulting lawsuits from those who lost while the banks’ derivative departments won.
    Since the interbank lending markets have been dead since the 2007-08 crash, Gensler said, LIBOR is “a benchmark rate lacking observable underlying transactions”, and therefore easily — almost automatically — rigged in favor of derivatives traders, etc. He proposed dropping LIBORs entirely in favor of interest rates actually being used in lending and bond issuance.
    At the same time, documents have leaked from one of the banks, Royal Bank of Scotland (RBS), wholly owned by the British government, showing wholesale attempts to rig LIBORs by that banks’ traders and desk officers in Europe and Asia as recently as mid-2009. The documents were reported and partially published by Reuters and Bloomberg News.

  6. bonbon

    German Social Democrats Go for OECD Model of “Bank Separation”

    Sept. 26, 2012 (EIRNS)–Former German Finance Minister Peer Steinbrück briefed the SPD Bundestag group yesterday, and the press today, on the results of the working group on financial reform over which he presides, and the question has been whether the Social Democrats will finally take notice of the ongoing struggle for Glass-Steagall in the United States and internationally. At many public events and other political occasions before, Steinbrück had avoided making any specific reference to Glass-Steagall, and also yesterday, he did not make that reference, but instead openly endorsed the OECD proposal for “separation” under a common roof, which is similar to the recommendations made by the Vickers Commission in Britain.
    The relevant section in the 30-page paper which Steinbrück presented yesterday, speaks about banking separation only in one half-page paragraph, which states the following, after otherwise useful references to the broad sentiment in the population that the banking system and practices are unjust, and after stating that the LIBOR affair was criminal:
    “Looking at banks with complex business activities, it is difficult to determine for an outside person whether a transaction is inside trade, a reinsurance deal or caused by a client’s order. Therefore, at these banks the deposit and loan branch shall be protected in a second separation step from this grayzone area of deals in investment banking. The necessary protection of the deposit and loan branch must not go so far, however, as to prevent big banks from fulfilling their servicing function for the real economy at full range…
    “The holding model of the OECD offers a way to implement the separation of these operative branches practically. According to this model, loans and deposits, investment banking and other branches are being pursued as legally and economically independent daughter firms with banking license in a holding company. The inhouse trade can be dropped completely, or continued as an independent investment firm… The holding itself is banned from carrying out transactions of its own. It serves the purpose of making base capital increases and to pass these on to its subsidiaries.”
    This, the SPD claims, will create “transparency” and protect banking branches from crises in other branches sweeping over. Furthermore, Steinbrück calls for the creation of a EU200 billion banking consolidation fund on a European level, to be paid into by the private banks. Steinbrück also wants a ban on OTC transactions and food and commodity derivatives trades that are based on credits exclusively and/or have no link to a real economic business, and are done merely for the purpose of speculation. The paper is not likely to mount into a legal initiative of the SPD for the time being, though it is designed to be incorporated in the party platform for the September 2013 national elections.
    The Steinbrück paper is widely attacked by the private banks, and although even Michael Kemmer, vice president of the German banking association, said a week ago that the banks “might be able to live with something that goes under the same roof,” there apparently is justified fear among bankers that even this paper, which does not go for a full separation of banks, could serve to strengthen the real Glass Steagall dynamic.

    • bonbon

      This from a few days before :

      Steinbrück Getting Wulff Treatment, Even Before Saying Anything About Bank Separation

      Sept. 24 (EIRNS)–Tomorrow, Tuesday, former German Finance Minister Peer Steinbrück is expected to brief the Bundestag parliamentary group of the Social Democrats on the results of discussions in an SPD task force on financial market reform, including deliberations on a banking separation. Even if one assumes that the SPD would not go for the real and full Glass-Steagall, what Steinbrück is touching on is definitely an issue profoundly disliked by the private banks.
      There is a déjà vu in that: German President Christian Wulff, who dared to address the fact in August 2011 that no political and regulatory conclusion has been drawn since the outbreak of the crisis in 2007, all of a sudden faced a mainstream media witchhunt of (unproven) charges against him of corruption and embezzlement affairs, that drove him from office in January 2012. Well, all of a sudden too, Steinbrück is faced with the beginning of a mainstream media storm, led again by Germany’s mass tabloid {Bildzeitung}, over a fundraising letter then Minister Steinbrück wrote on the official stationary of the German Finance Ministry in 2006, trying to raise EU1 million for some chess championship plan. Will Steinbrück stay firm on the banking separation issue (however limited his announced paper may be), or back down now

  7. mjm2000

    I think the current government will start to fall apart, it already started last night with the resignation of the junior health minister, they have played the goodie goodie card in their naivety and it hasn’t worked, they don’t understand the German physic well what should we expect from the Taoiseach he’s a teacher after all. But who will take there place the far left? i think we should take our chances and revert back to the punt, there is also the possibility of a monetary deal with the UK which is the way i think it will end anyway, the Euro had failed it’s that simple, no surprised it’s a currency without a government?

    • bonbon

      The only problem with that argument is the chain of British banks totally ruined, RBS, Northern Wreck, Barklays… the list goes on. London is at the center of the Euro, they “own” it. The largest Euro Bank, Spain’s Santander, is part of London’s Inter-Alpha Group. That is the blindspot. So making some kind of a “deal” is out of the sizzle into the fire – not very smart. Better to burn the bondholders and watch who goes hysterical.

      The Euro was flawed from the beginning in 1992 – Maastricht. It was, with no doubt or wiggle room on this, the price for German Re-unification. Mitterand, Thatcher imposed a no-DMark yoke. Ireland played into this geopolitical insanity and voila!

      Now Draghi may prove just too much. So far the mainstream and gutter press have backed up the huge Euro lie and are looking to blame Kohl even! Here is a horrible lying article :

      http://www.independent.ie/opinion/comment/madeline-chambers-merkel-turns-to-former-mentor-kohl-to-sell-europe-to-germans-3236065.html

      How long will the lying go on?

      • positron

        According to Wikipedia, this is the full list of the “Inter-Alpha Group of Banks” (source: http://en.wikipedia.org/wiki/Inter-Alpha_Group_of_Banks)

        AIB Group, Ireland
        Banco Espírito Santo, Portugal
        Commerzbank, Germany
        ING Group, Netherlands
        Intesa Sanpaolo, Italy
        KBC Bank, Belgium
        Nordea, Denmark, Finland and Sweden
        National Bank of Greece, Greece
        Royal Bank of Scotland Group, UK
        Santander, Spain
        Société Générale, France

        AIB, Nordea, National Bank of Greece. LOL.

        • bonbon

          Founded within months, by “Jake” Rothschild, of Nixon repealing Bretton-Woods, opening the door to the derivative snowball collapsing at a bank near you.

          This very discreet crowd, very withdrawn, only in the shadows, are at the center of every financial explosion.

          Now I wonder who are those famous unsecured bondholders?

    • Tony Brogan

      There is a way out of the financial mess enveloping all countries. It can be done by an act of parliament by a soverereign state. It is outlined here by Hugo Salinas Price and as presented by my self in other shorter statements in this blog.

      Please take the time to read and then study and analize the proposal. It is presented for an English audience in relation to the pound but is adfaptable to any country including Ireland. Infact it will solve the debt problems of the irish state and resolve many of the problems of the indebted Irish citizen.

      Read on
      http://www.plata.com.mx/mplata/documentos/images/Hugo_Salinas_Price_London_2011.pdf

      • bonbon

        I have looked quite a lot for any sign of Price’s view on PLNHO, the hydroelectric plan for Mexico’s deserts and agriculture. Nowhere do I see even a hint of an approach to the physical economy. Correct me if I am wrong, but he seems to part of the problem ( an extremely wealthy part).

        • Tony Brogan

          Yes you need a radical correction. He works for the betterment of the common people and not an international cartel allied with the central banks.
          The fact that he is wealthy is irrelevant. He is wealthy because he gave the people what they wanted to buy.

          • bonbon

            Still no reference to the physical economy whatsoever. This silence on that matter is deafening. PLNHO means water power and food for people, green deserts. Sure the cartel of banks will never ever finance that. He alone with all his personal wealth could neither.
            So it is up to the Mexican political leadership to do this, breaking with the cartel.
            Not a whisper, yet on this matter, I believe.

  8. bonbon

    After selling the ESM, FG now is told it will only address future problems, not from before it goes into effect!

    http://www.irishtimes.com/newspaper/breaking/2012/0926/breaking16.html

    This is the kind of revelation that can change everything.

  9. Beaver

    Australias losing steam too. Chinese stopped ordering and more important paying on time for iron ore. Wait til all the Ozopaddies arrive back to Mammy and bankrupt the dole system.

  10. cooldude

    This article is a complete contrast to the previous one which posed the question of whether the excessive currency creation being undertaken across the world will lead to the money becoming poisonous swill. This article fully endorses this currency debasement and even says it will be particularly good for Ireland. Well is it swill or is it the best thing since sliced bread? Well Jans Weidmann, president of the Bundesbank, is very strong in his view that excessive currency creation can turn into a nightmare for everyone involved. In a recent speech he gave entitled Money Creation and Responsibility he spent most of his time telling the great tale of German culture Faust. In Faust the emperor, who is in severe financial stress, prints excess amounts of paper money. As usual with this type of thing everything is rosy for a while and the state can get rid os it’s debt. Then inflation sets in as usual and the monetary system is destroyed. He goes on to praise the classical gold standard as a monetary system which could not be easily debased.
    This is not the type of guy who is going to lead his country down the very dubious path of currency debasement. If, as is suggested in this article, excessive currency creation leads to full employment and economic growth then surely Zimbabwe would be the most prosperous country in the world. The reason it is a complete mess is because this Krugman style neo Keynesianism simply brings no benefits to the people. All it does is keep the insolvent banking system afloat and allow those at the top to gain more control and power.

  11. Joe R

    “Whatever the Germans were expecting when they reluctantly gave up their Deutschemark, they sure as hell weren’t expecting the lira. But this is what they are getting.”

    This is generally contrary to what was spoken about hereabouts in the past in relation to the Euro and Germany’s economic performance; you jave argued that the Germans have been benefiting export-wise from a Euro that is weaker than any German Mark would be. You described the Germans as getting a free lunch with the Euro.So weaker was good for them.

    This line of argument you use here isn’t backed up by international monetary trends.

    A gradually weakening dollar has meant the Euro was been gaining strength in relation to many global currencies. The crises in Europe, both political and economic which have been going on a few yaers now have had no visible negative effect on the Euro. The Dollar has been weakening on the other hand. The movement of the dollar is central for global trade and debt, not the Euro. Peolp have a bigger worry that is the Dollar.

    So, I can only presume you are expecting new Eurozone inflation then to wipe out the value of the German savers Euros?

    But inflation has averaged at 2.5% across the euro over 10 years. Or in Germany in the same period it is something like 2%, despite all that has gone on?

    When is this high inflation going to occur? And how?

    • bonbon

      Germany remembers 1923. Time to look it up. Draghi and Bernanke have both opened the sluice-gates to pay an impossible debt. Then it was Versailles, now it is derivatives. hyper-inflation is guaranteed if this is not changed.
      The ironic thing is the attack on the Lire was used to justify the breakup of the EMS, for the Euro. Draghi personally removed the Glass-Steagall type of regulations in Italy. Maybe he is reacting to the fearfull specter of Euro breakup?

      • Joe R

        It is not 1923, Bonbon. It is 2012.

        For someone to remember 1923 economically they would need to be 100 years old. For someone to equate 2012 to 1923 they would need to ignore a lot of history.

        I do not need to look up or mention elementary history, I would take it as ‘read’for almost everybody reading here. Do you need to use put-downs? How does such help your argument, if you have one?

        Also when hyper-inflation dosen’t occur what will you be saying then?

        • StephenKenny

          First of all memory can be familial and social: the attitudes, way of life, and media, of your teachers, parents, and grandparents provide input to our views of the past

          Secondly. Inflation will kick in when markets are allowed to find their levels – currencies, interest rates, commodities, etc. i.e. when the cost of things in currency notes is allowed to reflect the things to buy and the amount of currency available, globally, to buy it.

          It will all be about interest rates.

          • Joe R

            Sorry, I am I right understand this collective German memory therefore started only in 1923? And before this Germanic attitudes to money did not exist? Were they just like the latinos blowing money left right and center?

            And the seperation of 1945 – 1990 and then reunification didn’t impact in any way on that?

            And when did the Irish collective memory start – 1848 – I suppose? We never ate potates again after that did we? Our collective memory said dependency on potates = possible famine. Right?

            This is a rubbish theory.

            As for this “global” notion of vast unification of all pricing theory – that is is just ridiculous.

          • StephenKenny

            Using your straw man argument is a bit pointless – or as you would say ‘ridiculous’. Only you mentioned German collective memories starting in 1923, and only you mentioned latinos.
            Since it’s impossible to say when a people start, so it is impossible to say when a collective memory starts.

            Group memories are effected in the same way that individual’s are. The Thirty Years war, for example, killed 1 in 3 Germans, plagues more than decimate populations. These events leave effects in popular culture – nursery rhymes, for example, often reflect such things. European mythology is all about stories based on real events, and mor importantly the effects of those events.

            The world’s central banks have been synchronised for five years – it’s clear from what they’ve done, and they also clearly state it. This will end. When it does, interest rates will rise. Then watch.

            As for this “vast unification of all pricing theory” you mention, I have no idea what you’re talking about.

        • bonbon

          Animals cannot remember things past not conceive of the future. We can. In Germany, 1923 is a palpable issue, even no one alive today lived through it.

          If hyperinflation does not occur, it simply means someone changed histories course. And that can happen. The way to do it is immediately implement Glass-Steagall now. Obama does not seem inclined to even conceive that the President can do this. He actively wants that course to continue. Bernanke has desperately tried to buy his re-election.

          Of course the first to be hit will be the poor. And there will be clever explanations why they have to grin and bear it from the rich, as at Clintons Global Initiative this week in NY.

          • cooldude

            What we are experiencing now is stagflation. This is inflation of around 10% in essentials such as food, gas and petrol combined with deflation in non essential luxury goods and goods bought with leverage such as houses and expensive cars. This is a nasty little combination especially with the extra taxes for the bank debt.
            If the currency creation really goes into overdrive, as seems to be the plan, this could easily turn into more extreme inflation and depending on how that is dealt with even hyper inflation. The only personal protection from this present situation and the possible future scenarios is to exchange a significant portion of your savings for assets that cannot be debased such as gold and silver. Unless there is a major sea change, which isn’t very likely, we are heading towards a serious currency crisis which will coincide with widespread sovereign defaults.

          • Tony Brogan

            Another voice for Stagflation.

            September 26, 2012

            There’s No Engine For Global Growth Pt 3 (the US)

            The following is excerpt from a recent issue of Private Wealth Advisory. In it I outline why the world is entering a stagflationary disaster. To find out more about Private Wealth Advisory and how it can help you crush the market… Click Here!

            In the last few days we’ve assessed how both China and Europe are no longer engines for global growth.

            So what about the US?

            By all counts, the latest ISM (a measure of manufacturing in the US) was a complete and total disaster. In August the ISM hit 49. Anything below 50 is considered a recessionary rating.

            However, things are even worse below the surface. The ISM is made up of several components. Its Production component is back to May 2009 levels. The New Orders component is back to April 2009 levels.

            And worse of all, Prices Paid is up to 54, up from a reading of just 39 in July.

            In simple terms this tells us that inflation is hitting “lift off” in the US at the very same time that we are entering a recession that could be on par with that of 2008. And with corn and soybean prices at or near record highs, we could be on the verge of a stagflationary disaster combined with a food crisis at the very same time.

            We get additional confirmation of a major economic contraction from corporate earnings. Recently we’ve seen earnings forecast cuts from Fed Ex, Bed Bath and Beyond, Proctor and Gamble, Adobe, Starbucks, McDonald’s and more. Indeed, when you remove financials, S&P 500 earnings FELL year over year for 2Q12.

            This is hardly indicative of a strong economy. The fact a record number of Americans are on food stamps doesn’t bode well either. And the Rasmussen Employment Index indicates worker confidence is at levels not seen since the FALL OF 2008!

            All of this, combined with the following:

            1) Median income today is lower than it was during at the end of 2009 (when the recession supposedly ended)

            2) The percentage of Americans on food stamps has increased from 11% to nearly 15%

            3) The average unemployment duration has increased from 30 weeks to nearly 40 weeks

            4) The civilian employment to population ratio hasn’t budged

            5) Industrial production has yet to exceed its former peak (a first in post WW-II “recoveries”)

            And this has happened despite the Fed’s massive intervention in the markets/economy.

            To whit, the US Federal Reserve bought roughly three quarters of all Treasury issuance last year. Let that sink in for a moment. Roughly $0.74 out of every $1 in debt created by the US in 2011 was bought by the US Fed… not by the bond market, not by foreign countries, but by our own Central Bank.

            Despite this massive intervention, the ECRI (which is a much better predictor of recessions than the National Bureau of Economic Research or NBER) believes that the US re-entered a recession in June.

            And this is happening at a time when inflation is soaring due to the Fed’s money printing/ loose monetary policies. Agricultural commodities have risen some 20% since the last recession supposedly “ended.” Over the same time, Oil has risen by nearly $30 per barrel.

            So… the Fed has engaged in record intervention in the market and economy. Despite this, the US “recovery” has in fact been a total dud: we’re officially back in a recession. And inflation is hitting lift off.

            This means the US, like China and Europe, is no longer an engine for global growth. Combined these three regions account for 55% of global GDP.

            Thus, we are in a very frightening situation… that of stagflation: the combination of low or no economic growth combined with higher inflation.

            This is an extremely dangerous combination. And investors need to prepare for it in advance if they want to maintain their portfolios.

            On that note, I’ve recently detailed four special inflation investments designed the profit from stagflation. These are unique investments that will outperform even Gold and Silver as inflation takes off…

            Case in point, two of them are up 8% and 10% last week alone. And I expect all of them to be much higher in the coming months.

            To find out what they are… and take action to prepare yourself and your portfolio to face the coming Inflationary Storm, I highly recommend taking out a subscription to my Private Wealth Advisory newsletter.

            To learn more about Private Wealth Advisory and find out more about our Special Inflation Portfolio comprised of extraordinary inflation hedges that 99% of investors don’t even know about…

            Click Here Now!

            Phoenix Capital Research

            Reply

          • bonbon

            Inventing weirder and weirder words (stagflation) to explain away serious deficiencies in economic thinking, will only get stranger. It is a sign of intellectual bankruptcy.

            Much better to correct the fatal deficiency, and no funny words need be invented. The Triple Curve, yes all 3 potential motions are operating simultaneously. Hyperinflation of financial aggregates was already overtaken by monetary a while back. That we all know, and monetarists of all stripes concentrate on that, having amputated the physical economy, which is in a catastrophic collapse, curve number 3. The weird words begin because some try to measure that 3rd curve in monetary terms and come up with the sheer stroke of genius “simultaneous inflation-deflation” with one Causing the other! It is very, very tragic that models are clung to, even as the entire situation was never before accounted for – it never happened like this before.
            We have now the correct metaphor, because it also shows the correct way to act :
            Separate curve 1 and 2 – that’s commonly known as Glass-Steagall. But immediately stop and reverse the physical collapse- that is Public Credit put to use.

          • Tony Brogan

            Animals can remember the past and learn from it. e.g. Elephants can remember in drought conditions where to go for water if there is another drought. There are many other examples.
            you are a little too arrogant when it comes to demeanining animals and others too.

            Your ignorance knows no bounds

            Stagflation refers to? – Yahoo! Answers

            answers.yahoo.com/question/index?qid… – United States

            2 answers – 2 Oct 2010
            Top answer: 3. Stagflation is a combination of stagnation and inflation. The economy shrinks (a recession) and inflation rises at the same time. This was first …

            You exhibit intellectual deficiency. I have stronger words for it in the vernacular.

            You need to correct your own fatal deficiency.

          • bonbon

            Elephant economics may be a subject for Ph.D these in Economics today, and graduates with honors! Monkeying around with economics seems to be a favorite pastime here in colonial Europe and the Transatlantic, and indeed we are seeing an ecology economy in motion.

            We move rivers, as a choice, instead of dying waiting for rain.

            Time to put human beings back where von Hayek, Keynes and the WWF Royals just can not tolerate, in creative economics.

          • Joe R

            Stagflation is close on 50 YEARS OLD as a word.

            From Wikipedia and well referenced -

            “The portmanteau stagflation is generally attributed to British politician Iain Macleod, who coined the phrase in his speech to Parliament in 1965.”

            References are from the offical record of the British Parliment, and also here from various dictionaries – http://dictionary.reference.com/browse/stagflation.

            So Bonbon, what do you think of that hip young English band The Beatles. I like that first ablum of theirs – Rubber Soul the fresh sound of 1965.

            Groovey baby!

          • bonbon

            The very un-Shakespearean word “Stagflation” just goes to show that the downturn began after the murder of JFK, and continues ever since. What is going on now is totally outside the ken of McLeod. The Triple Curve is a much more modern, from the 1990′s, metaphor, and has real economics in it, not merely observational descriptive monetarism of the British variety.
            The Triple Curve subsumes Glass-Steagall (from 1933- wow), and the RFC both well tested principles of FDR and used for the German Reconstruction. None of these metaphors of action originated in Britain.

          • Tony Brogan

            Douche LaRouche

          • bonbon

            “Stagflation” comes from the Stagflat-landers! Now I got it! Flatlanders see the world in a very weird way, from our human space-time point of view. Amusing scurrying in flatland, what?

          • Realist

            Bonbon
            “Time to put human beings back where von Hayek, Keynes and the WWF Royals just can not tolerate, in creative economics.”
            Putting totally different, opposing people, into the same basket just does not help anybody on this site.
            Hayek – free market decentralised economy, power to consumer
            Keynes – centralised economy with central banking, power to the government

        • Cooldude, Tony, Stephen, Joe R.

          Evening. What you say cooldude about can not be debased is questionable, and history has examples, just “remember” ;) 1542-1551, known as the Great Debasement.

          What happened was that a civilization had evolved very far without the use of money as such, but had large amounts of silver and gold, the Incas. 1532, Pizzaro lands in Peru and the genocide begins. A few years later in Europe, including the Brits, a long period of Inflation struck, lasting around 100 years from 1540-1640. The reason was the massive impact of gold and silver from the Spanish colonies in America and the disproportional increase in population that was not matched by economical output.

          1542 Henry VIII debases the coinage of England. and later legalized interest charge on loans and around 1560 Elisabeth I dealt with the debased coinage.

          It was the time of Thomas Gresham – Gresham’s Law – which still seems to be valid stating that “bad money drives out good.

          Today, with the mining riots in Africa, that might just be the beginning of a larger riot in Gold production, scarcity will drive the price even higher, and one can not but wonder about the situation. Was it stirred on purpose by forces with bigger interests?

          Complex matter.

          Best
          Georg

          • Tony Brogan

            Yes Georg, the discovery of so much golda9in south America was the only example in recorded history.

            currency debasement takes place as did the Romans by diluting the content of the coin but it is the hardest of all moneies to do to and certainly not as easy as paper.
            As the annual production is 2700 tones and the total mined gold thought not to be more than 180,000 tones then a change in the annual production figures is inconcequential on a percentile basis.
            Notwithstanding the above gold and silver are by far the best matials to use as money.
            Europeans think so as today the price of gold in Euros reach another all time high of E1379/ounce.

            Best regards

          • cooldude

            You are correct in all your facts George. When the money supply suddenly grows much quicker than the goods and services being produced inflation is a certainty. The sudden supply of money from the new world produced this effect. Gold supply is increasing at a rate of roughly 1.5% per annum and despite huge expenditure and all the modern technology this rate is fairly steady because the grade of rock is constantly falling and the easy stuff has all been found. Actually from a supply/demand perspective silver is an even more compelling story. There is only 1 billion ounces of above ground silver available in the world compared to roughly 5 billion ounces of gold. This is the lowest amount since the middle ages and is due to the massive industrial demand in areas like solar and high tech products. Historically the gold/silver ratio was always around 16-1. That is it took around sixteen ounces of silver to buy one ounce of gold. This occurred in every civilization from the Romans onwards and was very consistent. It also corresponds roughly with their availability in the earth. The ratio at the moment is 50-1 and seems to be moving back slowly towards it’s historic ratio as this intrinsically worthless system of money starts to fall apart like all previous attempts. Therefore you have a metal which has an even longer tradition as money than gold and which is five times scarcer trading at less than a third of it’s historical value in relation to gold. The name for money and silver is the same word in over twenty languages eg argent and the Chinese word for bank is literally silver shop. This will not continue and when people realize how scarce silver actually is this ratio will close to a price much closer to its historic ratio. Basically George this is a tip to buy some silver if you want to preserve your purchasing power through the currency crisis which seems fairly inevitable.

          • Cooldude,

            Thanks for the tip.

            My personal goal is to preserve happiness most of all, and neither silver nor gold play an essential role in that.

            I also wonder, say you want to make scrambled eggs. Now, who is better off?

            The man who has a bag with silver coins, or the man who has a bunch of chicken producing eggs. One can not eat or drink silver or gold, and what for a funny term that really is if you think about it, “purchasing power”.

            Of course, we all know how the story goes. The man with the chicken tells the chap with the silver that he has no need for his silver, and tells him to bugger off, then prepares his scrambled eggs, while the chap with the silver hires a few with guns, got back and then shoots the guy with the chicken.

            ;)

  12. gizzy

    Our government’s lets see what happens approach is unravelling quickly. If the current period of pain resulted in some major restructuring of how the country is run and organised the pain may be tolerable. But there had being no change and no sign of change despite the endless embarassing waffle.

    Europe not just the euro is falling apart with police and army being used to control the populace in Greece and Spain. We meanwhile are being controlled by spin from people who do not even know what they are spinning.

    I do not belive all this is part of some great control conspiracy maybe it was but it looks now like it has all just spiralled out of control and none of the americans germans chinese or anybody else really doesn’t know what to do.

    Our lads will just do more of the same because that’s all they know.

    • bonbon

      Reality, the physical economy will not allow them – it is pushing them into a region they have not the slightest inkling even existed. When and if they try to act, a vacuum of advice from “experienced” economics will not mean the slightest.
      Still then a lot of economic baggage will be sent flying out the window. They might of course throw out the baby with the bathwater.

  13. Murder in the Banks by DraghiN Beths

    Is this a Devalued 5 million Deutsch Mark Stamp I hold

    Hitlers face towards my hand ?

    Come let me clutch this useless toilet paper

    I have thee not and I see thee still

    Art thou not ,fatal vision ,sensible

    To feeling as to sight , or art thou but

    A Dagger of the Printing Press of the ECB , a false

    creation from a DraghiN Brain ?

  14. Tony Brogan

    What you can do for yourself while your government waffles

    Those of you that want a correct analysis of what is happening and what to know how to help themselves may be interested enough to invest an hour and listen in.

    http://www.successcouncil.com/live_presentation/recording.php?cid=

  15. Pat Flannery

    This is not just a European problem and will not be overly affected by France or even Germany. It is a world asset price problem.

    The only thing that is keeping hyperinflation at bay worldwide is the current tacitly agreed policy of maintaining the value of bonds artificially high in order to prevent a global collapse of asset values. Maintaining high asset values acts as a tax, sucking spendable income out of the economy.

    Many homeowners are paying one-third to one-half of their incomes on negative equity mortgages. A worldwide recession is thus the cost of keeping hyperinflation at bay because of the current asset bubble. The real estate bubble has not burst it has merely been redenominated in bonds.

    The awful dilemma therefore is that if current policy were reversed and asset prices were allowed to find their own level there would be an avalanche of freed-up consumer demand that would swamp most currencies sending the world into deeper recession.

    The truth is that Germany too has lost its sovereignty in this new world. It would have happened even if it kept its Deutsche Mark.

    It is becoming more and more obvious, that no one country, not even America, can unilaterally devalue its assets, most of which are held in the form of bonds. Every public sector pension system in America for example would immediately collapse if there was a massive bond sell off.

    We have already passed an event-horizon that we don’t fully understand. All we know for sure is that there is no going back. A global problem requires a global solution. It is time for a new Bretton Woods.

    • bonbon

      And a New Deal. The first US politician that says that (and means to deliver) will get votes. Would’nt it be crazy if a GOP’er took a leaf out of FDR’s book?

    • bonbon

      The Euro corset is preventing resolute action, as was intended by Thatcher and Mitterand who demanded an end to the DM.
      And now maneuvering room is at a premium. That corset must go. Under a Bretton Woods, the DM will do just fine. And Germany is the worlds leader in Reconstruction, knows what to do with Public Credit, the KfW action based on FDR’s RFC.

  16. bonbon

    As politicians are pushed into a domain they never experienced before, look how quick things can change.

    http://laroucheirishbrigade.wordpress.com/2012/09/27/the-inevitable-resignation-of-roisin-shortall/

    There is no normal predictability anymore, and any forecast must deal with this.

    Imagine a snap election and Gerry Adams as Taoiseach and EU president!!!

  17. molly

    Germany is being played and in some way Europe is trying to pull the wool over Germany and its about time German people changed there leader ship .
    In someways the German people are being lied to the same way we are.
    Ireland needs the USA ,UK,? So why are we paying bond holders back and in the process destroying our country FOR MOST PEOPLE not the chosen few.
    If we had not payed the bond holders would USA An UK turned there backs on us????
    We the Irish people are being sold down the river for what ?
    For who’s benefit ?
    Ask yourself the way we are being brought who stands to do ok out of it and than ask yourself who stands to be affected the wrong way .
    Now ask yourself am I the fool to be played like this .

    • Tony Brogan

      For who’s benefit

      For the elite families that control the central banking system and thus the financial szystem around the world and thus the countries.
      It is the banksters who indebt the people , force austerity and break the nations toward authoritarian rule.
      They want to control you and the world.

      • bonbon

        As Merkel’s “scientific advisor” Dr. Schellnhuber, Commander of the British Empire, CBE, decorated by the Queen personally for this, openly declares, they want to commit genocide on a scale that would make Hitler blush. The target is 1 billion. Add in the illustrious speakers and sponsors at Clinton’s Global Initiative in NY this very week – they want and “end to population”. Whether those “superhuman” banksters know this or not is irrelevant, they are part of the culling machine.

        We had this in 1847 in Ireland! We were culled once before. We know how and why it was done! See the link above on Gerry Adams at the Gorta Mor conference in the US. See this link for what they intend to do to us all :
        http://www.davidmcwilliams.ie/2012/09/24/old-lessons-still-relevant/comment-page-1#comment-124098

        That’s the complete picture. Monetarists prefer to concentrate on money, control of money, sound money, gold money, paper money.

        • Tony Brogan

          There is no reference to culling. no reference to one billion as the goal for population.

        • cooldude

          Bonbon I think you are right on this subject. This is all tied in with the UN initiative Agenda 21 and is aimed at a strictly controlled population who will loose all freedoms. That is why control of the money supply is so important to these elites. They use their vast profits to control the media, the education system and basically all facets of how we receive correct information. Global warming, which they have now changed to climate change, is most likely mainly a scam as grapes were grown in England during Roman times and those guys didn’t emit much carbon. It would seem, and I am no expert, that this planet has natural cycles of warming and cooling, which are probably related to the sun, and that this has very little to do with their flawed models. The climategate emails make it very clear that if you want to keep your funding in this area that you have to support their model no matter if the facts say otherwise. Perhaps the reason for all of this was an excuse to introduce carbon credits which is the first global tax. Anyway a very murky area and a very dangerous crowd. The David Icke website covers this crowd very well if you are interested.

        • molly

          There has always been mad men in power or positions of influence all through history,it’s a wonder we still have a planet left .
          It amazes me how many people can be fooled by the very people that they should trust,would you trust what’s running things in this country.
          My wife thinks that the Irish politicians have politics in there blood ,maybe some have.
          So why do they not take on board what people are really saying to them.
          When a politicians have there clinics and say 50 people call in and 40 people say we can’t live on what we take home in wages,then why does the same politicians go into the dail and vote in budgets that will make things even harder for the very people who voted them in ,in the first place.
          The only answer is they must be thick or a Moran or something more sinister .

      • molly

        maybe Ireland could be put up for sale and we could become slaves for our new masters and we could star in the Irish version of roots,yes master I be a good dog master.

        • Tony Brogan

          I can see you were born for the stage , Molly :0)

          • molly

            Ireland’s dept can never be payed back ,even if Ireland was the size of the uk we still could not pay it back.
            Put all this on a country that just keeps adding to its dept mountain it’s like giving a child a no limit credit card and told to spend.
            That’s what we have elected to run the country ,we replaced one party of children with another two party’s of children and handed them the country’s future and them the people that voted for them stuck there heads in the ground.

          • Tony Brogan

            Agreed
            It is why the proposal for a choice of silver coin as money should be implemented. See posting re Hugo Salinas Price.
            Plus, remove the central banks, ban fractional reserve banking. Repudiate odious debt.

          • Adam Byrne

            Again, all very well in theory Tony. Like the 10 million plus words I have read on here over the years. Great ideas from good people. But no robber baron / corrupt politician / banker wanker is EVER going to implement any of this stuff. NEVER! NEVER! NEVER! Do you hear me guys. NEVVVVVVVVVVERRRRRRRR HAPPEN! That’s N – E – V – E – R! You are all pissing in the wind. The only way things are going to change now is if they are all strung up. Full stop. Hope you are enjoying your holiday Tony.

          • Tony Brogan

            Hi Adam
            You may be correct. I feel like I am pissing into the wind, on this blog, many times.
            You at least can take a personal initiative and do something for yourself.
            Yes I am progressing from heathrow to Ashtead to Southampton to Bruton to Taunton and today cycle to Exbourne near Okehampton.
            Wednesday I get the sailrail trip from Exeter Station, via holyhead and end up in Wicklow 13 hours later for a reasonable L50.
            Then I’ll be able to visit you and buy a pint or a coffee.
            Must get breakfast and be on my way. It is a 6 hour day and the loaded bike is 85 lbs. Slow up the many hills!!
            All the best Adam

          • Adam Byrne

            I am off the drink till Christmas Tony as I have a lot of work to do and I just had my 40th birthday and buried my Dad within two weeks of each other, so there was a fair bit of drinking done then! But a cup of tea and a spot of lunch sounds great! Keep me informed of your movements once you get to Ireland!

          • Tony Brogan

            Will do Adam and I look forward to a chat

          • Adam,

            was just about to say happy b-day when I continued reading… events as these, very rapidly brought me back to the really important things in life. I think they have a way to “lift the fog” and put things back into perspective. Life is precious, everyone is unique and nothing exists twice. Take your time man, deep reflection does take a while to digest. – Pax tecum

          • Adam Byrne

            Thanks very much Georg!

          • Tony Brogan

            Thank you Georg.
            Adam, My thoughts are with you.

        • Dorothy Jones

          That’s good Molly!

  18. Joe R

    From the Irish Times today – that 2011 annual report of the Comptroller and Auditor General;

    “The value of the National Pension Reserve fund decreased by 41 per cent last year to €13.4 billion.”

    And;

    He concluded: “I am disappointed at the range of findings in this report because it shows that things are not getting better and that the reform process is not delivering when it comes to ensuring that taxpayers’ money is handled with probity and efficiency.”

    http://www.irishtimes.com/newspaper/breaking/2012/0927/breaking27.html

    Of course this is in stark contrast to Enda’s recent support of the public service’s implementation of the Croke Park agreement and why they should get thier raises.

    http://www.rte.ie/news/2012/0910/ibec-croke-park-agreement.html

    It is all a farce!

  19. “You know the world is in a strange phase when the Pope is a German and the head of the central bank is an Italian.”

    That’s a good one David. Previously I have had suspicions that you are really a superficial fellow but that betrays some insight.

  20. lar

    In the nineteen sixties and seventies, when technology was growing up, it was often said that technology would solve the worlds ills by making more abundance, shorter work weeks, and less toil and struggle. Robotics and computers were supposed to make life better for everyone.

    Our financial system has no mechanism to distribute wealth created by technology to the common good. In the current model, a robot, or a human slave’s work can never feed the person it replaces; it can only increase the profits of the company that uses it. This causes a redistribution of wealth from the ones that were doing the work to the select few that have a financial stake in the company.

    We have made profound advancements in our ability to care for ourselves as a community but there is no way for us, as a community, to reap the benefits. We would have to break the rules of our financial system to do that. There is no financial instrument or incentive for sharing wealth.

    In the current economic crises, the problem is not lack of resources or skilled labor. The problem is not lack of markets, or any other functional issue. The problem is conformance to a financial structure that is uncontrollable, irrational, out dated, and totally susceptible to the mechanistic thinking of greed and fear

    • The future is here, it just hasn’t been very evenly distributed yet.

    • bonbon

      Not correct. The reasoning is monetary. Let me explain. The Triple Curve : here

      http://www.larouchepub.com/lar/2002/2903trip_curve.html

      shows why. Look at the Physical Economy plunge into the abyss – That is after 35 years of brainwashing out of manufacturing, progress in powers of labor. There IS a very serious shortage of engineering to handle the huge reconstruction to reverse that plunge, after we put the system through Glass-Steagall. We will have to run a kind of Carnot crash-course to spread engineering very fast among the idle 20′ers who desperately want work.

      We do not have near enough nuclear engineers for the power requirements of 7+ billion today. We need to move rivers, vast amounts of water and very large cargo shipping will turn up in Shannon – that deep harbor just better be there.

      Agriculture – we need vast areas, now desert , to be replanted, irrigated, and new hybrid grains. Vest mineral resources in Siberia will become productive goods. Transport alone is a jaw-dropping challenge.

      Have a look at what a young guy, Lazare Carnot, did in an existential crisis

      http://american_almanac.tripod.com/carnot.htm

    • Tony Brogan

      It appears that the advent of inflation fueled by the excess printing of money allows those close to the action and in favour reap the benefits of the added money while those futher down the pipeline se no benefits from the extra money added but only the inflation.
      The favoured increase their buying power and the others don’t.
      The rich get richer, the poor poorer.
      We must close the central banking system, bank fractional reserve banking and issue private commodity money for the people to use that will prohibit inflation or protect the owner of the coin from it.

  21. padser

    Hey Tony,

    Gold strike in south county Wicklow, some where around Avoca. The company IMC, reckon there’s 1 million ounces.

    The operator commented – A few more strikes like that and we could show the IMF the door.

    • Adam Byrne

      In your dreams padser. That’ll be flogged off for a couple of brown envelopes and a bedroom extension. The elites have no interest in sharing any kind of wealth in this country with us mere plebians. Tall posts, short ropes needed.

    • Tony Brogan

      Hi Padser
      you don’t need a gold strike to show the IMF the door. Ask Iceland. Just needs guts and the people behind the action.
      A gold strike in Wicklow will add to more exploration. Perhaps to high paying real jobs too.
      The Irish government should abandon the Euro and set a national currency tied to no one else. Then agree to buy all mining production at worlg spot prices, and then mint coins with a monetary value and use those coins to pay for the gold. As the monetary value of the coins will be higher than the spot price there will be a profit or sovereignage which will be held by the government and used to back the national currency.
      Read the Hugo Salinas Price posting for full details on how it can be done. It is the way out of the crisis and practical too.

  22. bonbon

    Green Light for Imposition of Nazi “T-4″ Program in Portugal

    Sept. 27, 2012 (EIRNS)–Portugal’s National Ethics Council for the Life Sciences (CNECV) has given the green light for the Ministry of Health to ration medications issued by the public health service, in order to cut those whose lives are deemed “too expensive” to maintain. Responsibility for this monstrous decision lies with the European Troika, as well as the Portuguese government.
    Asked by the Ministry of Health to issue a formal opinion on the “ethics” of financing decisions for HIV retrovirals, cancer medications, and biological agents for rheumatoid illness, the CNECV was ready with its answer: “the world financial crisis” requires that the Health Ministry “can and should ration” treatment, on the basis of “cost-benefit analysis.” Huge cutbacks in the public health service budget for medications “are clearly established … by the Memorandum of Understanding signed with the European Commission, European Central Bank and IMF,” which had already insisted that expenditures on medications be cut by nearly 1/3 by October 2010, the CNECV wrote in its opinion.
    The CNEVC specified that what is under discussion, is not simply restricting new expenses, but cutting services currently being given; and furthermore, that such decisions are not limited to the immediate treatment categories addressed, which they treat as merely a “pilot program” for broader cuts to come.
    The logic of the Portuguese decision, imposed by the Troika, is no different than the health care law of Barack Obama, in strictly following the logic of Adolf Hitler’s “useless eaters” policy, which started as the T-4 program, deciding whose lives were not worthy to be lived, and grew into the ovens of the Nazi concentration camps, as the Nazi regime’s economic and financial situation worsened.
    The murderious implications of the decision were recognized by leading institutions. The spokesman for the Episcopal Conference of the Catholic Church in Portugal, Manuel Morjuao, asked: Do we now have “second- and third-class citizens, who can be gotten rid of?” The head of the Doctors’ Association (Ordem dos Medicos), Jose Manuel Silva, called the CNECV opinion “inhuman… Are we going back to Ceausescu’s [last Communist head of state in Romania--ed.] head of stateprinciple that the cheapest patient is the dead one? Who is going to ask the patients who wants to give up living two months longer because it is expensive to do so?” Margarida Martins, president of the AIDS support NGO, Abraco, denounced the idea that someone should decide which patients have the right to live or not.

    • Deco

      The obsession with pleasing the gambler-bankers has gone overboard. Portuguese civil society will be given no choice but to rebel against the local cliques who want “more you ROPE”….

  23. Paris75013

    The economic situation in France can only be described as explosive. Spent a few weeks in Ireland in August and I honestly feel that things are a lot worse here in France. 3 million unemployed (real figure is about 5 million). Debt will be 91% gdp in 2013. Salaries are low and working people can no longer live on what they earn.

    A ‘Michael Moore’ type documentary on what life is really like living here would be frightening to look at.

    I know more and more French people who are looking to emigrate.

  24. Deco

    John Maudlin, commented that Japan is a bug in search of a windshield, due to it massive public sector debt.

    David is telling us that France will go that way too. He is correct in his assessment. France is unreformable.

    The country that gave the world the spoiled brats revolution in 1968 is now heading into a mess. Every time there is any effort to rein in the borrowing, there is a tantrum in France. France is living beyond it’s means. It is heavily dependent on the Common Aggricultural Porgram, and a range of state subsidies for “protected national champions”.

    Now, the French are correct concerning the importance of solidarity and community. But the French themselves also allow too much nonsense also, with an oversized state sector. And then we have the FIRE sector in France. The French FIRE (Finance, Insurance, Real Estate) sector is massively exposed.

    Trichet’s low interest policy from the previous decade is causing the FIRE sector in France massive problems.

    • bonbon

      Notice how Japan is now in a row with China over a few rocks in the ocean? Notice how they tried to please Europe stopping nuclear power (now reversed).

      Now looking at France, will Hollande go after Syria or Iran? After all France helped Obama to destroy Libya.

      Today that means, you guessed it.

      Much better to go with progress. De Gaule’s Europe of the Fatherlands, Monet’s Schumann plan.

      The 1968′er cultural turn occurred after the murder of JFK by exactly the same elements that tried 5 times to kill De Gaulle. The only beneficiary of this is today’s Brutish Empire. After all Robespierre was trained in London for his role in the Terror. That we have from Edgar Alan Poe, good intelligence.

  25. gizzy

    listened to John McGuinness about the civil service.
    A POLITICIAN SPEAKING OUT WELL DONE.

  26. padser

    a question, if the Bretton Woods System, was a means of international monetary control etc. and it also being a response to the economic effects of WWI WWII, and with emphasis also to allay military conflict between Countries….Have the elements of it’s (otherwise) failures exposed the World again to the latter effects I mentioned?

    • bonbon

      Bretton-Woods in 1944 was FDR’s motion for post-war reconstruction. Nixon repealed it in 1971. But withn weeks of FDR’s sudden death, Truman started its take-down to follow Keynes who had been repeatedly repudiated by Dexter-White at that hotel conference.

      Within months of Nixon’s repeal, the Inter-Alpha banking group formed, which is being bailed out today. see above for its members. Bretton-Woods fixed currency exchanges, essential for long-term reconstruction, which we need now urgently. It was only possible because of the 1933 Glass-Steagall FDR intervention into banking.
      We are exposed to sheer hell far beyond 1933, now. On a huge scale. We have the lesson of the 1930′s, we know what worked and how.
      The Triple Curve linked all over here, is the modern metaphor for this. It has the motion for action to be taken, not just descriptive. I am sure FDR would be pleased.

  27. dwalsh

    @ Tony

    re your last reply in previous article

    It’s not at all the same.

    The demand for profit would be absent; and the credit would be going to production. These two together would produce entirely different economic outcomes than the current privately owned system which currently refuses to invest in production.

    There is a virtual capital strike, with respect to production, in the West at this time.

    Our political elites are in thrall to private capital; this is why they are supporting the current system. Therefore the moral hazzard problem you mention….ie dont let politicians near the money….is already fully active; and not in the interests of the public; but in the interests of private capital.

    Naturally in any money system there needs to be controls. These ought to be the responsibility of the treasury or Dept of Finance; etc.

    Money is founded not on gold etc, but on the nation’s human capital. It is therefore the rightful property of the public.

    Money it is part of the civil commons.

    • bonbon

      Very good. Excellent in fact.

    • Tony Brogan

      “Money is founded not on gold”, But gold has become the money most favoured by mankind.

      You are correct. Money does not belong to government.It is private property. We need to reclaim it. government should enhanse the private ownership of money.

      • dwalsh

        Hi Tony

        The monetary system is public property. It is not private property.

        It is the prerogative and responsibility of the government to manage the monetary system on behalf of the public – not to hand it over to private profiteers.

        • Tony Brogan

          The current monetary system is public property given over to private hands to operate for their own benefit–as you say profiteers.
          Money is private property and not owned by government.Or at least it shouldn’t be.People should be allowed to own money as private property. This is different from control of a monetary system by private entities.
          Properly, any monetary system should be owned by no one but operate by concencus.

      • dwalsh

        NB

        Just as you conflate money and gold; which are not the same thing; you also conflate money and wealth; which likewise are not the same thing.

        • Tony Brogan

          Not true
          Money has its own definition and properties.
          gold has the best characteristics of money and so makes the best money but is not the only money.
          Money is not wealth although the best form of money can be also a store or wealth as is gold.
          Money is essentially a medium of exchange. holding money enables one to decide when and where one wants to realize the wealth or spend the money.or invest the money etc.Good money must be trusted, have no counterparty like a fiat bank note does, be fungible or easily divisable, relatively rare unlike fiat paper money, and be difficult to replicate, be transportable for a high value for a low weight or volume..
          Wealth of course can be any number of things and gold is one of them.

    • Tony Brogan

      What tried to indicate was that there is no diference in the effect of the government issued money compared to the debt money currently issued except the matter of debt(which is significant, no doubt). I asked a number of questions in my last post none of which are addressed.

    • bonbon

      To clarify this before we get into some kind of ridiculous “wallet” argument, Public Credit, issued with the intention of the Nation to internal improvements in cooperation with other sovereign nation. In other words Hamiltonian Banking, will be monetized by the treasury, with savings deposits protected by a FDIC. Glass-Steagall prevents them being used as today.

      The national infrastructure is the general possession of the nation’s people, so cannot be sold off to private interests, such as the ESB, DB, BR, etc. To sell this off giving people money instead is the last word in sheer robbery. Being told to be patriotic and buy shares in DT, Eircom, sold at a fraction of its worth, is an incredible affront. Still, people fell for it because of the money fetish.

      So control is not the key factor, rather Public Credit for a mission. Controls are now urgently acutely needed to put a stop to this breakdown, a serious problem.

      An economy is not founded on money, gold, silver, even capital, rather mental capital, as Arthur Griffith clearly identified the swindle of Adam Smith. From inert money, gold, dead lump-capital, springs no economy as if by magic. What springs from this mindless circus is exactly the casino we have today.

      • Tony Brogan

        No rediculous argument from me.
        You still refuse to deal with the issue of going off the gold standard that allowed unlimited credit even while Glass Steagall was in full fledged glory.
        The boom of the late seventies and the bust of 81 happened despite G/S.
        It happened because the restaints inherent in the use of gold as money were unleashed in 1971 just as they were in 1913-1920′s
        You will solve nothing using the bankers dream of paper money issued in any form by anyone unless back by real money 100%. Paper money is and will be inflationary.It will continue to rob the people of their sweat and toil, savings and pensions.

        I dare you to demonstrate how Hamiltonian banking actually works. You do nothing but refer to it. How does it work to do what you say?

        The mindless circus you reference occured because of the lack of the use of gold not because of the use of gold as money.

        BTW please define capital as well?

        • bonbon

          Mindless economics, as von Hayek promoted, delivers exactly the result seen today. The reactions of Draghi, Bernanke are truly mindless, as their training dictates. Whether Keynsian or Hayek, mindless is the motto. Adam Smith defined that, fully referenced previously.
          Arthur Griffith, the founder of Sinn Fein, and the first President of Ireland, showed the fatal flaw in Adam Smith’S “capital”. From “lump” capital never an economy sprung. Only from mental capital of a nation does a modern economy result. And the future which directs economic motion cannot even be sensed yet, but known it can be, by the mind.

          Alexander Hamilton defined all this very well, and FDR put it into action (opposed by Wall Street). His policies defeated fascist economics (supported and paid for by Wall Street). Hamiltonian banking has been under repeated (British) attack since Andrew Jackson. We need to convert the Federal Reserve into a National Bank of the USA. Glass-Steagall is the way to do this.

          • Realist

            Bonbon,
            You are in essence saying this: people are stupid and mindless??
            Hayek expressed himself clearly that information about economy is not in our finance minister’s mind, nor government, nor central bank statistics, nor any other central body.
            It is impossible to control the economy from the central body of any kind as economic information is dispersed over millions of companies and billions of people’s minds, what to do, what to produce and what to buy.
            Socialistic system failed hardly in 1991, Keynesian system with central and fractional banking will fail sooner or later too.
            And I hope after that we are not going to see zombie ideas not different then already failed in your most ridiculess Hamiltonian ideas.
            What is driving economy is changing human mind of all of us, what is the next on our priority list, bread, butter, milk, car, house or whatever.
            How hard is to understand that.
            Get rid of your utopist god’s illusion about there are somebody smart up there (central bank, governemnt, Hamiltonian bank, ..) to tell us what is good for all of us.

        • bonbon

          Nixon broke the Bretton-Woods standard in 1971, fully referenced by me here is numerous places. That fixed-exchange system worked very well enabling the post-war reconstruction, but under attack by the British all the time. Bretton-Woods refuted every attempt by Keynes to impose British policy. Bretton-Woods enabled Hamiltonian banking for a while. Truman, on FDR’s sudden death, started Keynesian motives. We know how Bretton-Woods worked, Germany understands how that worked. In fact Germany in 1932 had a Lautenbach and WTB plan almost identical to FDR’s, but rejected there then. And then put into action in 1948. Tragic.
          Now we have the 3-point plan of Bank separation, Public Credit, and Reconstruction. We are at 1932 again on a massive scale. We must not make the mistake of Brüning, Pappen, Hindenberg, Schroeder this time around.

          • Tony Brogan

            The post 1911 gold standard was not a proper standard. It was a quasi standard.
            The reason it failed was BECAUSE or the fixed standard.
            no flexibility allowing changes in national economies to not be accounted for. Exchange rates and pricing of currencies fixed to gold did not accomodate for changes in economies and distortions became embedded.
            In 1944 the US dollar became the ‘reserve currency’ in which world goods were priced and not gold. It allowed the US to print money with abandon to supply the world with currency. It allowed the US to run a constant trade deficit. As trade deficits were still settled in gold the US gold supply was run down from 20,000 tonnes in 1945 to 8200 tonnes by 1971.
            That is why Nixon refuted the contract and told France to go home without the gold they had come to collect.
            All this time Fractional Reserve banking was in full swing allowing bankers to make huge profits on invented, ficticious money loaned into existence.The amount of total money was constrained by the gold standard (quasi standard still retained) that limited the amount of currency issued by the central banks to the chartered banks. THe central bank printing was regulated by how much gold was held.
            When Nixon abandoned the gold standard all together , effectively all countries came of as all were fixed to the US dollar.
            Then began the free for all in central bank largesse fully authorized by the politicians as deficit financing became the order of the day.
            All currencies (nearly all) float against each other with no standard to measure them against except the relative performance of other currencies.
            Inflation is now a world wide phenomenom induced by every central bank issuing more and more currency.
            As all this currency is issued into existance as a loan it means that the the economies and the people go further into debt the more currency is printed or issued.
            It is an exponential debt machine designed by the bankers elite ruling bloodline families to enslave and emesh all.

            There is no point in attacking the symptoms. The root causes must be changed.
            There is no hope for this to be changed until the people are educated. The chances of that are limited.

            We are at the end game in time where the debts stifle all.

            Central banks must be destroyed, closed for good.Fractional reserve banking must be repealed and outlawed. Money must be returned to that which humanity has found to be the best in the past. Private money as private property, fungible and acceptable world wide.

            A canadian gold or silver mapleleaf is acceptable the world over. There is always someone who will cash it or trade for it wherever one goes. Far superior to the fiat paper money acceptable only at the point of origin.

            All countries should adopt gold and silver as money. This money would be usable the world over as a truly international currency.

            bon bon is correct in one respect. This is not a game but a deadly struggle for survival. The elite families will kill at random to maintain the current fiat system that allows them to control the world.

            Freedom is never attained, it is always being constantly struggled for!

          • bonbon

            The Breton-Woods conference was for post-war reconstruction. It enabled remarkable recovery from a short definitive war. Truman dropped those bombs after FDR died bring us the nuclear terror age. Yet even Truman could not stop the momentum. So we know how to rebuild and finance that, we know how the New Deal worked. We know what to do now. None of this comes from monetarist recipes (gold v. fiat). Economic cooperation on a huge scale is a priori, not simple accountants arithmetic.

          • Tony Brogan

            And it laid the foundation for the mega inflation of 18% and interest rates of 23% 1979-81

        • Tony Brogan

          Repeated

          “I dare you to demonstrate how Hamiltonian banking actually works. You do nothing but refer to it. How does it work to do what you say?

          The mindless circus you reference occured because of the lack of the use of gold not because of the use of gold as money.

          BTW please define capital as well?”
          ——————————————–

          Well how about a couple of answers?

          • Realist

            Tony,
            That socialistic, utopian model of central Hamiltonian banking can easily be demonstrated to not work.
            Just look how socialistic central planning ended up in 1991 in SSSR. Bonbon’s another crazy idea with Hamiltonian central bank, assuming his socialistic friends will chair the same and decide who to give the credit and for what reason, will be another totalitarian form of already seen concept.

        • dwalsh

          It was not going off the gold standard that unleashed the debt tsunami; it was the deregulation of the private financial system which destroyed our economies.

          There is no need of a commodity base value for money (a currency). All that is needed is responsible management of the monetary system. Only a legitimate gov should have that responsibility.

          The mess we are in today was created by unbridled private irresponsibility….and I dont mean the ordinary people conned by the banks and the financial sector into the various bubbles; I mean the private owners of the banking system.

    • bonbon

      Glass-Steagall protected savings from “investor” claws. On top of that the FDIC, Federal Deposit Insurance, all placed by FDR to protect citizens worked well.

      A government committed to “property”, as the Confederate Constitution stated, is not committed to the future, only the already wealthy and powerful. A government of the people, for the people, and by the people, as Lincoln said, came near to extinction until 1863. Before that all governments were for property. FDR showed what a government committed to the pursuit of happiness could do with its use of money.

      What is totally angering posters is the betrayal of FG to protect the property of “unsecured” bondholders, the bailout of private property like Lehman, etc. And some comes along to say the Gov’t must protect the peoples property.

      FG is already doing that.

      • Tony Brogan

        You sure know how to avoid and twist the issues and confuse the subject matter.

      • Tony Brogan

        You do not understand the use of the word property. You seem to equate it to Real Property or real estate.
        Property pertains to all those things owned by an individual. All property including intellectual property must be protected by law. That is a legitimate function of government. Non decriminatory protection from seisure.

        People are not and should not be protected from failure and loss of property through legitimate means. Governments are usurping their powers by seizing private property (tax money etc) and giving to others at their whim (bank bailouts for example)

        • bonbon

          Gov’ts are protecting the private property of banksters today. Life (for the rich), Liberty (no regulations for the rich) and Property (of the rich).

          A Gov’t of the people (1%), for the people (1%), of the 1% (Romney…), is what we have right now.

          This more proof that Life Liberty and Pursuit of Happiness is the mission a nation must be committed to. This why John Locke’s Confederate CSA “constitution” put property first.

          • Tony Brogan

            Minarchism

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            Outline of libertarianism
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            Minarchism (also known as minimal statism) is a libertarian capitalist political philosophy. It is variously defined by sources. In the strictest sense, it maintains that the state is necessary and that its only legitimate function is the protection of individuals from aggression, theft, breach of contract, and fraud, and the only legitimate governmental institutions are the military, police, and courts. In the broadest sense, it also includes fire departments, prisons, the executive, and legislatures as legitimate government functions.[1][2][3] Such states are generally called night-watchman states.

            Minarchists argue that the state has no authority to use its monopoly on force to interfere with free transactions between people, and see the state’s sole responsibility as ensuring that contracts between private individuals and property are protected, through a system of law courts and enforcement. Minarchists generally believe a laissez faire approach to the economy is most likely to lead to economic prosperity.
            http://en.wikipedia.org/wiki/Minarchism

          • bonbon

            I am really hearing CSA echoes. Not surprising that Britain was their only ally.
            The Empire likes to decide “sole responsibility” for its satrapy’s. Our future is unlimited – no Liliputian empire has any chance of minimizing it – short of Obama, their very own, blowing it all up.

  28. molly

    If Ireland’s dept can never be replayed then why does this government keep on limping along and giving the impression that with enough cut backs and enough hardship trust on its people that we can pay our way ?

    • padser

      It certainly looks like a bit of a charade. I think it’s going to be put on the shelf eventually, and then Gov. will sell off every asset we have Oil, Gas, Gold, in the long term, to pay it back.

    • tony_murphy

      It’s not Ireland’s debt.

      It’s the debt of private banks that was foisted unto the people by gangsters (politicians + globalists + banksters).

      The whole debt was engineered by the gangsters in the first place.

      A SCAM

      • tony_murphy

        Just look at who is profiting from it.

        The communists the run the EU, like Barrosso, a Maoist if you don’t mind!!!!

        If people want to live under communism, I suggest the get themselves of to China and take Barrosso, Van Rompuy and Dragi with them and the rest of the gangsters in the EU

  29. Deco

    An interesting viewpoint of the Eurozone, and the fact that the PIGIS are heavily reliant on imported oil and gas.

    http://ourfiniteworld.com/2012/03/05/why-high-oil-prices-are-now-affecting-europe-more-than-the-us/

    Are we in Ireland giving ourselves a lifestyle that we cannot afford, because we do not have access tp hydrocarbons like they have in California, and because we need to feel equal to the best there is in lifestyle purely for the sake of self esteem ?

    • bonbon

      We have a sea of oil, the price is completely hyperinflated. Add in the carbon tax as @cooldude mentioned, the first global tax. We know what to do about that – jump to a much higher energy-flux-density economy. We can manufacture methane then. Oil should be a chemical stock, not burnt. And certainly not food.

      Look at all the scientific results coming in – comets are tarballs, they deliverd “oil”. So how much is biogenic? A give-away is the Helum side industry. Helium has no biological pathway (afaik). It is of cometary origin or even more interesting from deep core nuclear processes. Life uses Carbon, which does not mean it created or sprung from Carbon. A cometary tarball of water and “organics” hitting now would exterminate us of course. So how much “oil” is there deep down? BP tried to go after deep oil, cut costs and destroyed the coast of Louisiana and Florida. What if there is oil at 2 times that depth?

  30. gizzy

    My restaurant closes for last time tomorrow. Turnover down 70% in four years. Eight people signing on on Monday. God bless austerity. Of course its working.

    • Tony Brogan

      Sorry to hear that gizzy.
      A lot of work, hope and aspirations went into that enterprize. It is a sickening feeling to lose a business.

      • cooldude

        I am very sorry Gizzy. This country is turning into a shithole if you want to run a business. There will be no lay offs at your local council. Them boys have it all their own way.

        • Deco

          Valid observation.
          Nepotism and waste from local authorities continues like never before.

          It has destroyed the political process. Political parties rely on “beneficiaries” of state largesse, for canvassers and “troops on the ground”.

          • Adam Byrne

            This is a failed state.

          • bonbon

            Its a failed coalition anyway. How long will it last. Roisin Shortall is the fourth Labour TD, and the second junior Minister, to have resigned the Labour whip since that party entered government.

            Snap elections?

          • Adam Byrne

            Who was the other Labour junior minister Mr. bonbon? Sorry, I don’t follow liar politicians that closely.

          • Adam Byrne

            Just heard Shorthall on the Finucane show that my mother was listening to. When asked if she thought the whole thing was ‘stroke politics’ she just said straight out ‘Yes’. That’s the most honesty I’ve ever heard from an Irish politician in my life, even if it was only one word. O’Reilly has to go, then the rest of them.

    • Adam Byrne

      Sorry to hear that gizzy. Heart-wrenching time.

    • Deco

      Gizzy, sorry to hear that. No doubt “Feta Chesse” man (Noonan) will keep telling us that things are getting better. And the speculators holding Anglo Bonds will get billions.

      The hardest part from small scale entrepreneurs is that after the business folds, they find that their application for social welfare takes forever.

    • SMOKEY

      Me too Gizzy. You have a much sadder story than mine as I only opened in July, never got the traction as each week, I mean literally each week, that passed there sitting at table eating my food, was the latest departure for Aus, Eng, U.S., Dubai etc. telling me they hope they can get food this good where they are moving to.
      Emigration is turning Dungarvan into a ghost town, never mind ghost estate.
      Anyway, I have no complaints. My daughter was not raped and murdered in Australia so its all relative.
      Good luck with your creditors, and if there is any way to keep your credit clean do, not that anyone will loan anyone money, but it may help in future.

    • Dorothy Jones

      Gizzy, I am so sad to hear your news. That’s not right.

    • molly

      Sorry to here that .
      this government are destroying this country and the days of blaming the last shower of tossers are running out of road because they are a carbon copy.
      It’s a pitty you weren’t making food for export this government thinks the sun shines out of exports and the two fingers to the domestic economy.
      The sad part in all this collateral damage is it does not have to be this way.

  31. padser

    Why go back to the Gold Standard, if it didn’t work up to 1971. Do you think the time lapse between then and now (if indeed the right option is a return to the Gold Standard) was like a ‘respite’? Or do you think, we have reached a boundary as we know it? Will we ‘have to’ eternally switch between the two, Standards?
    Or is there a Bretton I, II, III…..?

    • bonbon

      The End of the Line for The Anglo-Dutch System

      http://www.larouchepub.com/other/2008/3513end_of_line.html

      When President Richard Nixon took the dollar off the gold reserve standard on Aug. 15, 1971, he effectively ended the Bretton Woods system of fixed currency-exchange rates. Nixon’s action, taken at the urging of bankers’ boy George Shultz (then director of the Office of Management and Budget), set into motion the creation of the largest financial bubble in history, a bubble the collapse of which is now laying waste to the global banking system and securities markets.

      LaRouche understood this in 1971, and that understanding formed the basis for the creation of an international political movement to organize mankind to educate and defend themselves. LaRouche scored a stunning victory against prominent economist Abba Lerner at a debate at Queens College in New York, in December 1971, in which he laid bare the fascist roots of Lerner’s outlook, and forced Lerner to admit his self-damning belief that had Germany capitulated to the demands of banker Hjalmar Schacht, “Hitler would not have been necessary.”
      ——
      The response from the imperial parasites was immediate and predictable: Never again, they informed LaRouche, would he be allowed to challenge them publicly. Keep your mouth shut and follow the rules, or we will destroy you.
      ——
      Tigers, unfortunately, cannot grasp the the fact that this is war, not a kitchen parlor game to entertain similarly hip circles. Well, the tsunami has arrived.

  32. Dorothy Jones

    https://twitter.com/ballyhea14

    Fair juice to the Ballyhea says no group, marching every week in protest against bondholder repayments. There’s another 1 billion € due to be paid this Monday 121001.

    March tomorrow Sun 30 Sept starting at 11:30am in the Garden of Remembrance. If any of the posters decide to go, I hope to see ye there! Tony, if you’re around, you could ‘slow bicycle’ it :)

    These protests are gaining media traction slowly. NAMA wine lake is a supporter and retweets/writes articles about the actions on a regular basis. Constantin, Stephen Donnelly have joined them before.

    Looking forward to it.

    • Adam Byrne

      Where is the Garden of Remembrance Dorothy?

      • Dorothy Jones

        Adam, 1 Parnell Square, Off Parnell Street. If you have your back to the Spire, with Clerys on your RHS, Pennys/Easons on your LHS, walk to the end of O Connell St, past the Ambassador/Gate [going there this evening] and it’s just there on the rise LHS. Here’s the map, it explains it better :)

        https://maps.google.ie/maps/place?hl=en&ie=UTF-8&q=garden+of+remembrance&fb=1&gl=ie&hq=garden+of+remembrance&hnear=garden+of+remembrance&cid=16964102063797129668

        • Adam Byrne

          Ok thanks, I know the place now Dorothy. Might try to make it, can’t say 100% yet though.

        • Adam Byrne

          I hate going into central Dublin, it’s a dump but this is a good cause…

          • Adam Byrne

            Comment, wouldn’t go, thought it might the word’s ‘sh**ehole’ so I changed in, then the first comment turned up.

          • Tony Brogan

            One for you Adam, from Agora financial
            ————————————-

            The passport, we should remember,” Mr. Mayer continues, “came about as a wartime measure England during World War I. Before 1915, as Paul Fussell writes in his classic Abroad:

            “His Majesty’s Government did not require a passport for departure, nor did any European state require one for admittance except the two notoriously backward and neurotic countries of Russia and the Ottoman Empire.”
            “On Nov. 30, 1915, the British government passed Regulation 14c. It was a temporary measure, they said, a wartime emergency. Yet here we are and the regulation stands. In fact, the whole world has adopted this way of tracking people and keeping them from going here and there without special permissions, stamps and fees.

            “Fussell tells us that the idea of carrying a passport was a shock and something of a scandal when it was first introduced. The passport had to have your picture, your profession and a description of your particular features. You had to describe your forehead, the shape of your nose, mouth and chin, skin complexion and the shape of your face.

            “It is amazing to think, as Fussell points out, that when writer D.H. Lawrence and Frieda Weekley fled England for France in 1912, they just left. No passports. No papers to file.”

            ———————-

            Seems that income tax and passports came in together. Time to be rid of both

          • Adam Byrne

            Cheers Tony, I abhor passports as the symbols of discrimination. Hopefully one day there will be none.

    • Tony Brogan

      Sorry Dorothy
      I’ll not be in Ireland before the 4th Oct
      T

    • Grey Fox

      I will be there!

  33. Tony Brogan

    13 States Now Considering Gold and Silver as Money

    Posted on September 28, 2012

    Backwoods Survival Blog

    13 States Now Considering Gold and Silver as Money:When the governor of Utah signed a bill that made gold bullion and silver bullion legal tender in the state last March, he had no idea of the groundswell he was going to start.

    The Utah Sound Money Act outright flies in the face of the fiat money system, which is the printed money used today; backed by nothing but the promises of politicians…

    … It is not practical for people to carry around heavy gold bullion or silver bullion coins, so the Utah Gold & Silver Depository was created. People can deposit their gold bullion and silver bullion coins there and receive a debit card to make transactions with–just like depositing money at a bank. The prices of gold bullion and silver bullion are based on the closing prices of both precious metals in U.S. dollars in London on each business day, creating the exchange rate used on the debit card.

    Missouri and South Carolina in 2012 are the closest to enacting very similar legislation and creating a gold bullion and silver bullion depository, just like Utah. (Source: CNN Money, February 3, 2012.)…

    … Other states considering legislation to make gold bullion and silver bullion legal tender are Montana, Colorado, Idaho, Indiana, New Hampshire, Georgia, Washington, Minnesota, Tennessee, and Virginia…

    http://fromthetrenchesworldreport.com/13-states-now-cons
    idering-gold-and-silver-as-money/22392/

  34. bonbon

    The Greens: Ever Loyal Footsoldiers of the Empire

    Sept. 28 (EIRNS)–Particularly the German branch of the Green Movement has always been on the forefront of the Empire’s numerous genocidal projects- deindustrialization, population control, European Union financial dictatorship, “humanitarian interventions,” to name only a few. Therefore, it comes a no surprise that Sven Giegold, member of the German Green Party in the European Parliament, was elected as one of two chief coordinators of that parliament’s steps towards the planned EU banking union.
    Giegold claimed yesterday that the banking union is crucial for Europe, in particular the aspect that the plan envisages to expand the European Central Bank’s powers by giving it the common banking supervisory board for the 17 Eurozone members. Giegold wants to tie this ECB unit with the EU’s European Banking Agency, so that tight supranational supervision of about 6,000 banks in all 27 EU member countries were possible. There goes another part of national sovereignty.
    At a Berlin event also yesterday, where numerous speakers voiced criticism of the European Stability Mechanism and the euro bailouts, it was the Greens again who were quite hysterical that Germany might walk out of the euro and “Europe” at the peak of this crisis. At another Berlin event the day before, Green Bundestag member Kerstin Mueller showed striking congruence with Israeli Prime Minister Benjamin Netanyahu’s polemics against Iran. It should also be noted that the Franco-German greenie European Parliament member Daniel Cohn-Bendit was one of the most rabid endorsers of western military intervention into Libya, a year ago. Furthermore, every thrust of the Empire’s financial dictatorship project for Europe finds a fanatic supporter in Joschka Fischer, former Green Party Foreign Minister of Germany, now working out of the Brussels-based European Council on Foreign Relations, an outfit co-funded by George Soros.

  35. bonbon

    Is’nt it interesting how the Greens team up with global finance. Charming bedfellows indeed.

  36. tony_murphy

    your going to get your communist federal europe david

    a central bankers dream realised

    european technocrats and bureaucrats have taken over

    • bonbon

      It is a Green Banking Union that Sven Giegold just said is on the way, posted above. Green finance, something no Communist ever dreamed up.

      It is imperial, oligarchical. Remember Zeus was a Greenie. And that means population reduction.

      • tony_murphy

        bonbon

        The globalists want communism so they can control everything and keep their monopolies – the elites in Russia and China have all they could every wish for. The same model been applied now to Europe and America, a new works order. They want to drag us back to the dark ages. a world of aristocrats and robots, and a few poisoned dumb slaves. technological and scientific tryanny.

        We have to stand up against them, disobedience to them is what is required!

        • bonbon

          I’m afraid that is a tract from the Cold War, totally outdated. Green Finance, the most ancient oligarchical trend is now in full swing. That implicates the only empire now planetwise, the British Empire. As Rosa Luxemburg wrote, Lenin had that communist failure, the blindspot for empire.
          An attempt to drag us back to the dark ages is indeed in swing, a Venetian dark age. The British PRivy Council is exactly the Venetian model – the Queen is a Doge. Venice was the 3rd Roman Empire after Rome, Byzantium. Britain is the 4th, well documented. The Bank of England, and the Bank of Amsterdam were both Venetian projects, now the model for all central banking. It is with this Hamilton and the USA broke, and Ireland too.
          Nation-States, our political discovery to put an end to oligarchism are working, even if attacked from all sides, especially by FG for example.

          Who ever said this was a parlor game?

      • Tony Brogan

        So now you refer to a greek god as relevant to the topic. Back 3000 years.

  37. bonbon

    German President’s Signature Gives Go-Ahead for ESM

    Sept. 28 (EIRNS)–Germany’s Federal President Joachim Gauck yesterday signed the ratification document for the bailout fund European Stability Mechanism, including amendments by the German government that were requested by the Constitutional Court in its Sept. 12 ruling.
    The move came just hours after ambassadors from the 17 countries that make up the Eurozone signed a joint declaration that amended the text of the ESM, designed to make it comply with the court’s ruling. That includes a statement by the German government that Germany’s participation in the fund be capped at EU190 billion ($244 billion). Any increase would have to be approved by Germany’s parliament.
    With Germany, the last of the 17 Eurozone members has ratified the EU700 billion fund, which is now expected to go into force after a meeting of Eurozone finance ministers and the first ESM Board of Governors meeting in Luxembourg on Oct. 8.

  38. bonbon

    Putin: The West Is Reviving the Roman Empire’s Genocide

    Sept. 28 (LPAC)–Russian President Vladimir Putin today, speaking to the provincial leaders of the Ryazan Region, compared the “regime change” policies of the West to the Roman Empire’s destruction of Carthage. “Our partners just can’t stop. They have already created chaos in many territories, and now they are continuing the same policy in other countries, including Syria.”
    Putin reiterated Russia’s policy of contributing to peace in Southwest Asia without imposing policies by force from the outside. “We did warn that prudent action was needed and that it would be wrong to try to achieve anything by force, otherwise chaos would ensue, he said. And what do we see today? Chaos prevails.”
    Putin said the first regime change and ethnic cleansing was Rome’s destruction of Carthage: “I would hate to see the events witnessed by mankind many centuries ago repeat themselves now. The strong countries are trying to push their rules and their moral code on weak countries, without taking into account the history, traditions and religion of a particular country…. The Roman Empire not only seized and occupied Carthage, but also destroyed it completely, killed everyone and sowed salt so that nothing could grow there.”
    He added: “Not only should the good things inherited from European culture be remembered.”

  39. Grey Fox

    Where can one see the actual accounting for Ireland Inc. is it possible to see in plain english income by tax type e.g car tax, vat, tv licence etc and expenditure by type. I firmly believe that if car tax was earmaked for roads we woold have the best roads in the world and if TV licence money was earmarked for RTE only with salaries constrained within that tax take etc… dept of justice, judicary and courts service paid for from court charges and fines etc.. health service paid for from PRSI, at leasy we would see exactly where the shortfall’s occur and adjustments could be made accordingly, it;s time for every citizen to sit up and pay attention, there is no viable alternative in political parties, they are all as bad as each other, FG & Labour have proved this now. It is time for radical change and citizen orientated change, Government “FOR” the people, the european project is dead. turn off the life support there is no brain activity…..

    • Adam Byrne

      Yeah, with the resources and advantages this country has (fish, forestry, great agricultural land, natural gas (possibly), wind, low population density, moderate climate, strategic position, language, cultural ties, etc. etc.), we should be one of most prosperous places on Earth. But we’ve been subjugated and robbed blind since the ‘creation of the state’ (what a joke). Let’s hope the next 100 years are better than the first pathetic effort.

      • bonbon

        That low population density is a direct result of the genocide of 1847. So murdered, robbed, cheated, in that order by the British Empire or its foot-soldiers.

        Tigers tend to think this is a game of darts at the pub.

        • Adam Byrne

          However it came about Mr. bonbon (and I don’t dispute your assertion), it is still an advantage to us at present, albeit one that is not taken advantage of, just like the other advantages aren’t either.

    • bonbon

      Have a look at this map :

      http://laroucheirishbrigade.files.wordpress.com/2011/12/realmapofirelandwitheezkey_nov09_web3.jpg

      Ireland is the 3rd largest country around here. Physcal Economic accounting is an entirely different task than more monetarist book-keeping. It is something not at all familiar to Tigers, nor most elected politicians.

  40. Tony Brogan

    Today my sister drove me out around some Devon side roads as we chatted about this and that. A lovely sunny day with a breeze and cotton wool clouds.

    The country side was lovely. we passed fertile fields and moorland. Large new farm building and many old ones.

    We reached Holesworthy and stopped in a small country town on a Saturday afternoon to do a little casual shopping and look around.

    While in the local butcher we admired the local produce from neighbourhood farms and I decided on 20 rashers of streaky bacon as suplies for the next three breakfasts.

    I asked how was bisiness and it according to the butcher had never been better. he had been in the neighbourhood for 40 years and he knew.
    “How are the farmers doing”,I asked. “Fine” , he said, he had never met a poor farmer yet.Sure they were subsidised but if they could afford L100,000 tractor they had to be doing alright. “Yes, but they are subsidised”, I ventured. “Yes, of oourse , they always have been.”

    Next we found a health food store so I ventured in to ask if they had any colloidal silver. Only a small spray bottle was at hand but they would have the large bottles next week again. They had Krill oil so I bought some.
    “How is business around town I asked, as I proffered the cash note.”Not good”, she said.It seemed she and a partner had started the store 4 years or so ago with a 5 year lease. Things had been good for a while but there has been a steady drop in trade.They were worried about the lease renewal which may put them out of business..
    Warming to the subject with a little encouragement she told me about the idle youth robbing the stores, by breaking the windows. About the police services which had been cut and the police nothing about the problem.
    how it had been suggested that they group with others to get sucurity surveillance cameras and sirens. She seemed doubtful that spending a L1000 each for such a venture would be worth it.
    I was told how the supermarket chain at the other end of town was consuming her business. They gave 2 hour free parking and yet outside her door it was paid parking and fines issued from overly zelous traffic wardens.

    This is a tale of one town. Reminded me of DMW’s taxi driver. but in this case who to believe. May be it is a tale of two economies in the same location. People have to eat. They don’t have to take health supliments so they think. The butcher is in the local economy where all are on a lower wage scale. The health store buys products for resale from outside the local community so pays more and can not meet the lower wage scale of the local economy..

    Subsidies on the one hand and cut services on the other. All play a part.

    • molly

      Sounds like Ireland so we have more in common than we think.
      The protected element versus the joe soaps .
      Mark my words Ireland is being dismantled bit by bit for the pleasure of out new masters.
      By making the cost of living higher and reducing public services,there will be little money for people to spend ,we need this money spent in the country for the survival of the small traders who are in a way the life blood of this country,it’s like starving a plant of water it dies a slow death.

    • StephenKenny

      If it’s the UK, then my advice, at the moment, would be to believe no one.
      Outstanding consumer debt rose from about £450bn to about £1,500bn between the 1997 and 2007 – in 2006 it rose £126bn. It hasn’t risen since.

      Since 2007, government debt has risen by about £650bn.

      The increase in corporate debt from 100% of GDP to 400% of GDP, seems to have too many caveats to take at face value (or not, I don’t know).

      In terms of scale, nothing else really matters. At the moment, the UK is doing what everyone is saying everyone else should be doing – printing and spending.

      For those who are saying “but what about the austerity everyone talks about”, the answer is that there is very little – about 8% of the announced measures have been carried out, and about 75% of the announced tax increases have been carried out. The UK government is spending more than it ever has, with the advantage that everyone is treating it as if it’s being very tough and austere.

      Eventually, one way or another, the UK will have to cut it’s government expenditure by about 15% – the worst cut since the end of WW2. In the meantime we are witnessing a PR campaign which is so effective that you will probably go on believing in ‘Austerity Britain’.

    • Grey Fox

      I was that small business person in that little town except I was in a small midlands village in Ireland, the all knowing county council brought in paid parking ( long since gone) during the boom, I had a small newsagent and space to extend for a small coffee shop which was sorely lacking in the village so I decided I would do everything by the book, I was going to spend 45K on the renovation and change of use of a portion of the building from residential to commercial for the coffee shop, I applied for planning permission which I was given but with a bill for 35K in charges and contributions to the council in particular for additional parking spaces which my additional minor business was going generate a requirement for even though paid parking had just been introduced. The result? paid parking is gone, my business is gone, the receiver has been appointed, the council is not getting any more rates, and the transfer of wealth continues with central and local government complicit in the process, I might add that I am but one in a multitute of small business people who have had the displeasure of this experience along with my family.
      Shame, Shame, Shame on our Public Trustee’s

    • Tony Brogan

      The booms and busts of the business cycle are basically caused by the banking systen of credit expansion and contraction playing the people like a fish on the line.
      In addition favourites are played with the bailouts and subsidies. These are paid for by the very people barely yet surviving and those already busted.
      It is the injustice that rankles.
      Governments should not be in the business of attemting to control an economy. The mal adjustments destroy society.
      Minarchism is what is required.
      http://en.wikipedia.org/wiki/Minarchism

      • bonbon

        Small Gov’mint, not to interfere in the big Empire – the CSA mantra.

        The anger here of most posters is at the betrayal of the Government’s constitutional role for the public good. The FG and FF government’s outright criminal protection of the private property of banksters, even unsecured, classified ones, at the expense of healthcare, schooling, energy. It has become a mini Gov’mint, for the few, reneging on its Constitutional role.
        To propose a liliputian “mini” role, in the face of economic collapse is blatantly suicidal.

        • Tony Brogan

          Small government functioning properly will rid us of the cabal and blatent interference.
          Free the people instead of enslaving them will show a huge boost to the economy.

          • bonbon

            Tht is monetaristic thinking – those 2 exponential curves above in the Triple Curve. Freeing people from that hyperinflating casino, to leave them in abject poverty, enslaved to subsistence, is no liberty.

            http://www.larouchepub.com/lar/2002/2903trip_curve.html

            Looking at the most important Curve, that plunging physical economic curve, shows that massive intervention must occur fast. Intervention of the people, for the people and by the people – in other words peoples chosen national sovereignty is tested on that curve.

  41. bonbon

    Bankrupted by Rigged LIBOR and Financial Fraud? Blame Tony Blair

    Sept. 29 (LPAC)–University of Missouri professor and financial crime expert Bill Black fingered Tony Blair as key to the creation of the crooked speculative financial system whose disintegration has ruined most normal mortals. That’s right: the same former British Prime Minister, now campaign advisor to Barack Obama, who sunk the United States in the Iraq war with his lies, and is now driving for a U.S.-Israeli strike on Iran, the better to start World War III.
    Black pointed to Blair’s role in the financial debacle in an interview with {The Real News Network} this week, in which he cited a recent speech given by Brooksley Born at a University of Maryland conference which focused on the UK role in selling financial deregulation to the U.S. The relevant exchange with TRNN’s Peter Jay went as follows:
    “And here was the key thing that she [Born-ed.] told us, that they used to have good regulator relationships with the United Kingdom, but once the FSA, the Financial Services Administration, was created to be sort of the one-stop regulator doing everything in finance in the United Kingdom, the senior leadership began flying over to America for industry trade association meetings and explaining to the American financial firms that they should relocate to the City of London because they could have much weaker regulation. And, of course, some of them did exactly that. And that’s why it’s no surprise that you’re seeing scandal after scandal after scandal originating in the United Kingdom.

    “JAY: And this was under Blair?

    “BLACK: This was under Blair, and this was one of his big ideas. It was under Blair, and, of course, under Brown, who was his guy in charge of what we would call the Treasury… So this was, you know, really bad and helps explain why as bad as the U.S. is, even more of the scandals originate in the City of London.
    “And then another speaker, who hadn’t had anything to– hadn’t even been there when Brooksley Born was talking, so this was independent, brought up the fact that in what we call initial public offerings, IPOs, which is when you take a private company public and issue shares for the first time, that what they saw there was again the City of London deliberately competing for laxity, saying, you know, do your initial public offering in the United Kingdom, because our rules are much weaker than the Securities and Exchange Commission in the United States. So that was real-world oomph to what we’ve been warning about.”

    • Tony Brogan

      Tony Blair is a lackey if a well paid one.
      The root cause are the elite dynistic families controlling the money and the central banking system.
      Ban the central banks
      Ban fractional reserve banking
      Implement commodity money

      Then the rest.

      • bonbon

        But first assay what you are up against. That central banking system is the British Empire. What I find just a little to pat of Ron Paul, is that he never spells out that and the extent it has the USA in it’s claws, and how this fight goes back to Andrew Jackson breaking the National Bank of the USA giving us Wall Street today.

        Glass-Steagall is a scissor action at exactly this. Nothing will work without that first step. Then of course banks will be empty so the next step, a Third National Bank of the USA is immediately needed.

        National Credit is not a “commodity”. Neither is money as even the Austrian School Irving Fisher said. That idea is straight from British East Indie Company CEO Adam Smith. So back to British Empire again.

        No how!

        • Tony Brogan

          Yes, changes to the current system will be fought to the death. That is why it requires the people as a whole to be educated and aroused in order to get the changes. One politician can not do it.Assassins are employed.

          Money is not necessarily a commodity but most often has been chosen to be so. Out of all the commodities it is prefered to be gold and silver.
          It was so for thousands of years or long before Adam Smith was a twinkle in his old mans eye.

          • bonbon

            Exactly, Smith represents that ancient tradition, pre-industrial. We broke with it, Hamilton before and Friedrich List, not to mention the Meiji Restoration in Japan.
            That is why using thousands of years to back an argument has flaws!

          • Tony Brogan

            You go back 100′s if not over a 1000 years to prove your point but will not accept that with which you disagree.
            You will have to take your argument to the Chinese, Russians, Arabians, Iranians, Indians etc.
            I’ll not argue with them or all the western central banks hanging on to their gold. Demand increases every year and supply cannot keep up. Ditto times 3 for Silver.Central banks are now net buyers as well.
            On this point you defy the world. My belief is you are totally wrong.
            your insistance on maintaining a large interfering government is exactly what the cabal want. Free the people from regulation and the economy takes off.Freedom is not attained through large intrusive government

          • bonbon

            “Going back” is along an exponential curve – the industrial epoch is merely 100+ years. Things have changed in totally non linear, non flatland way. That is why Adam Smith is simply from a long past epoch. If other countries cling to that British colonial (India foe example) propaganda, they will deeply regret it. China has adopted FDR’s TVA-type of approach, even with some elements now causing a housing bubble.
            The currenc tglobal system is indeed finished, over and can never be revived again. We must be extremely wary of all attempts to do this, so when Adam Smith’s mug pops up, it must be openly checked.

        • Realist

          Bonbon,
          You are full of wrong information spreading on this site.
          “Austrian School Irving Fisher” – Where did you get Fisher belonged to Austrian School?
          You should really stop inventing things and start reading and checking your sources.

          • Tony Brogan

            You are right realist.
            I try a rational discussion with bon bon and get nowhere.
            He never answers a direct question and changes the subject on a whim and obfuscates and confuses.

          • Realist

            Cheers Tony,
            Yes, we are fighting bonbon, but it is useless.

  42. molly

    What does that tell you and the many other small business in Ireland , that we are supporting the gravy train for these people .
    Look at the waste, the councils need you money and mine to fund there cushy jobs and if the cant get it from one sorce they will get it another way , the tax you in the poor house way .
    Two man living beside me one a retired plumber the other a retired council employee one has a 12 year old car , the other has a brand new car.
    One has his pension protected and the other had his pension stolen by greedy investors who made a lot of money out of mismanage of his pension. This is Ireland’s future under the past and present governments.
    What a sad bunch of tossers we have running the circus.

  43. Adam Byrne

    So’ The Good Room’ is out on October 25th David?

    • Colin

      Adam,

      I’m trying to contact you on facebook, but I’m seem to have been only able to ‘subscribe’ to your page. How can I email you, just want to chat about upcoming kilkenomics.

      Regards,
      Colin

    • Colin

      Deco, are you on for Kilkenomics? Would be great to meet up with you. Contact me on facebook if you are on for it.

    • Hi Adam,

      Yes its out on the 25th. I am very happy with it. I hope it strikes a chord with readers.

      We have a brilliant Kilkenomics lineup. Out Tuesday or Wed. I think we should all get together for a jar. How things going at home?

      Best

      D

      • Adam Byrne

        Looking forward to both the book and Kilkenomics David. I won’t buy a copy till I get there. I nearly pre-ordered one on Amazon but Colin made the point that we can get them signed by yourself over a drink. Look forward to that. Things at home are fine, thanks for asking, it’s awfully strange though not having my Dad around, but I think of the good times and that’s some consolation. Getting my head down to work too. I’m half tempted to do the Economic Insights course this year but seeing as it’s my last year at undergraduate level and I want to continue on with the first class honours, I will leave it this time. I’m a definite for next year’s course though! See you soon, looking forward to that line up!

  44. molly

    I have a plan to save the state a lot of money that they pay out in social well fair .
    Anybody claiming should be offered a cash sum enough to pay for there flights out of this country and in so taking people of the dole .
    Saving the state money and helping people to get as far from here as possible.
    Who wants to be stuck in a country where the cost if living is out of controll,anyway tge government need the cash to pay there high wages ect ect .

    • Molly I hope you’re being sarcastic. We won’t inherit anything if we continue being meek.

      We’re an emotional people…time to show some anger re Jesus in the temple with the money changers!!!

  45. bonbon

    Forget statistical trends, make them :

    http://laroucheirishbrigade.wordpress.com/2012/09/30/clear-your-desk-enda/

    It is inevitably going to be “burn the bondholders” – known transatlantically as Glass-Steagall.

  46. bonbon

    By the time the book comes out, Enda may have cleared his desk in the “good room”. Then we will see some very interesting changes.

    http://www.davidmcwilliams.ie/2011/11/01/yet-another-golden-opportunity-is-missed

    My granny had a “good room” too!

  47. bonbon

    Paris now.

    Thousands marched in Madrid and Paris, protesting the austerity imposed by their respective governments. While the march in Paris was peaceful, in Madrid, riot police attacked and wounded at least 12 Spaniard protestors who called for the government’s resignation, the dissolution of parliament, and the adoption of a new constitution amid a deteriorating economy and the eurozone’s highest unemployment rate that has hit 25 percent.

  48. Philip

    I entered this discussion posing Eugene Linden’s question – IN A WORLD OF UNDERPRICED RISK, WHAT COULD POSSIBLY GO WRONG? No one answered this question or even attempted a go at it – which shows a profound lack of understanding of what we are looking at.

    Fundamentally, we bet on low risk and we are now being scorched. Insurance companies, banks you name it are running for cover – the bluff is being called globally and all we are seeing is the fallout as governments scramble to retain the traditional means of keeping an economy going and wind out robbing plain ordinary people. This is what is Euro to Lira conversion is all about. This is why pensions will turn to confetti.

    There’s no stopping it and anyone who thinks the existing system will survive another 3-6 months is deluded. But that delusion is understandable given that we have been all influenced by what traditionally credit actually means and how it has driven our consumer systems and which turn has driven the 20th Century economic theories which try to describe it.

    Right now, you cannot make money because it will shortly evaporate as a credit representation. You’d be nuts to save it or try to short for it. Credit – the notion of trust it is supposed to espouse – is now a meaningless term.

    For me, the only thing left is reputation. By that I do not mean how influencing you are or how much of a big noise you are by virtue of the big car you drive or the suits you wear. I mean plain and simply…your known and reported ability to deliver. By that standard, banks, political institutions and the majority of opinion makers (many of whom are economists ;) ) are useless and should be discarded. The need for banks is gone. They once served a role of being trusted 3rd party middlemen as to whether I should trade with a given party. No more.

    I give you a very simple example. I know my barman and he knows me. If I am short a few bob, he knows I’ll sort him out next day or so. Now scale that up and while yer at it, Google Rachel Botsman :)

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