October 4, 2012

Now all the stages are set for bloody battle of suburbs

Posted in Irish Independent · 260 comments ·

A NATIONAL debt crisis, such as the one Ireland is now suffering, tends to follow a four-stage pattern. We see these stages playing out in every episode of national bankruptcy — whether in Latin America, Asia or Western Europe. In Ireland, we are moving towards the third phase.

There is no escaping this pattern because the mathematical corollary of a housing boom is a debt bust. It is only a matter of time.

Now those suggesting that the endgame will be debt repudiation are taking the flak. But it will happen.

Let’s briefly examine the four stages of national bankruptcy.

The first phase is rapid: highly leveraged banks go bust alarmingly quickly. This leads to massive state intervention to prevent a bank run, political upheaval and inklings of just how deep the mess might become.

The second stage is a period of unusual calm. The remedial action taken by the State calms things down, banks don’t collapse, there is no run on the banks and the economy settles in to the grinding reality that falling incomes and too much debt don’t mix.

During this period, vested interests, powerful “insiders” in society, move to protect themselves. Supposedly binding agreements are signed. Likewise, the banks do deals with debtors in the hope that they can postpone the day of reckoning.

The second stage leads relentlessly to the third stage, also slow, where gradually the “outsiders” — people with too much debt, traditionally working in the private sector or with small businesses — go bankrupt slowly. In the UK these people have been called the “squeezed middle”. Here they should be called the “squeezed outsiders”, caught in a vicious embrace of falling incomes, rising taxes and negative equity.

In any estate in the suburbs there can be two families which on the surface look identical — same houses, same cars with 2005 registrations, whose children go to the same school — but once the hall door closes a very different reality faces each family.

The “insiders” rest easier, not without worries but without valium. If they are “outsiders” the parents are likely to be awake in the dark. Ultimately, for the outsiders, the more taxes rise, the less they can spend and the more the economy stalls.

Despite the lowest interest rates in living memory, the number of mortgages in difficulty is now running at 11pc and likely to grow. Yesterday the EU published evidence that Irish households suffered a 9pc fall in income from 2009 to 2011.

The incomes and wealth of “squeezed outsiders” are now being looted to keep the “insiders” — who may live across the road — from paying their share.

Insiders are those with a stake in society, access to state power and the ability to protect themselves, as a sub-group, from the recession.

There are insiders on both the left and the right. On the right, the classic rich insiders are bank bondholders and members of the well-paid professional services class, who are still in positions of power. Insiders on the left are those who seek to protect themselves, whether they be trade unionists who cling to restrictive practices or senior public servants who seek to pay themselves far above counterparts in bigger countries.

In our third phase of national bankruptcy we are seeing a struggle between the unprotected “outsiders” and the protected “insiders” for the last slice of the national pie. This is playing out on the streets of our suburbs.

The evidence of the squeezed outsiders is everywhere. We have seen a 200,000 fall in the number of people with private health insurance. Similarly, the number of people able to afford private pension provisions has collapsed.

The number holidaying abroad fell from 53pc in 2010 to 39pc in June 2012, according to a survey carried out by MyHome.ie.

A KBC/Irish Independent survey on childcare costs shows that the average cost of childcare for one child stands at €1,100 per month, whereas the average mortgage repayment is €913 for those aged 25-44. If you have two or more children, it can go as high as €2,000.

When you drill a bit deeper you see that the reason the mortgage repayments are lower is that tracker mortgages — 400,000 of them — understate the real cost of borrowing because they are subsidised heavily. Even still, 10.9pc (83,251) of mortgages are now more than 90 days in arrears. What happens if that subsidy changes?

A Friends First survey in August showed that one in five of those with pensions have reduced or stopped contributing to it.

MORE than a third (34pc) of people without a pension have not thought about how they are going to fund their retirement. This is obviously because they have more pressing financial problems. And of those trying to pay into a pension, 21pc are currently unable to meet their financial commitments. Over half of participants surveyed felt less optimistic about their personal finances for 2013, compared to 2012.

Ultimately, when the squeezed outsiders have nothing left to give, we will reach the fourth phase, when those “insiders”, who used the period of calm to protect themselves, realise that they can’t escape.

They realise that their lifestyle will also be hammered and this is when, politically, it all kicks off, and the consensus fractures.

  1. Adam Byrne


  2. gizzy

    I think the article is very accurate and sums up the current situation.

  3. Eireannach

    Even when it “all kicks off politically”, there is nothing any politician can do to make things go back to the way they were.

    Lower commerical and residential property prices, lower salaries, a totally wide-open market into the EZ and EU – for those positioned to avail of these opportunities, the vista is better than during the Celtic Tiger.

    For those who have huge debts from the Celtic Tiger era, and hence little spending power, the vista is awful, but then it was always destined to be, as those who never believed in the property bubble insisted all along.

    It’s been the same story for 4 years now – those with Celtic Tiger era massive debt levels are in trouble and it’s getting worse and worse. For new SMEs looking for cheaper staff, rents, etc. it’s getting better and better.

    • Eireannach

      For new SMEs it’s not getting better and better if you’re relying on the spending power of the Irish public. Forgetaboutit – the Irish public will have no spending power for a decade.

      But micro-brew your own craft beer or flavoured liqueur or make artisinal cheese for the EZ/EU market, and your cost base is at an all-time low.

    • Grey Fox

      You are correct Eireannach,
      “Even when it “all kicks off politically”, there is nothing any politician can do to make things go back to the way they were”
      The exception is Debt Forgiveness, this is maybe the only option available to level the playing field somewhat.
      I am and Outsider!!
      My standard of living is eroding at an exponential rate!
      As Stephen Donnelly said in the Dail today,
      ” There is a 67 billion transfer of funds to international banks and private investors which Ireland was the conduit for, Ireland did not get a Bailout!

      • Deco

        The ultimate insiders are the Anglo Bondholders.

        Not a mention of who they are. Not a mention.

        What do you do when your taxes are given over to a collection of gamblers, and the authorities are more secret about what is going on than the Church of Scientology addressing where their money goes.

        The EU is beginning to function like a cult. Loads of absurd secrets that people are not allowed talk about.

  4. Howya

    The article understates the defaulting mortgage problem. At last count there were approx 170,000 mortgages that were either in default or had re-structured (i.e. because there was a problem). There are approx 775,000 mortgages in total – thus 22% of mortgaged households are in some form of trouble.

    • Grey Fox

      It is also worth mentioning that of the 67 billion Ireland is supposed to be bailed out by: if this had been routed thru the 775,000 mortgage holders while it is on its way to the banks and ultimately the private investor’s/ bondholders! it would have reduced every mortgage by approx 86,000 euro. A rather crude version of Debt Forgiveness, but effective none the less, I am simply making the point that we could have gotten so much more bang for our buck instead of simply handing it over!

      • Eireannach

        Oh if only Grey Fox, if only! It’s a tragedy, or perhaps just a farce, that we chose to save the banks, not the overstreched public.

        But the decision is made, sadly. We took this path in the fork in the woods, and we’ve progressed quite far down it. Whatever other options we have, we can’t dwell on what might have been if we had take the other path.

        We didn’t take the other path.

        • bonbon

          And the banks are not saved, they cannot ever be. The only result was austerity for ordinary people.

          In other words the path taken led nowhere. Now what does an explorer do when that happens? Most of the paths in history led nowhere, yet here we are in spite of all that. It will be called the Path of the Soldiers of Destiny in the history books for the kids. Very bad pathfinders indeed.

          Carving another path is now on, for the future.

    • molly

      In trouble to me is not having enough to feed your family,yes there are a large number of people in mortgage trouble but that’s only scratching the serface and in all the people who work and are broke ect and the picture looks bleak .
      This is the part that our government can’t get into the tick heads,can’t wait till December to see how much this government have not learned about treating its people.
      For a bunch of school teachers they need to go back to school.

  5. DavidIreland

    It will require an act of real political courage, integrity and sacrifice to get Ireland through this crisis.

    Those in power need to slash their pay, expenses, pension entitlements and other costs to maybe slightly above average industrial earner level. Then, from this high moral ground, they need to set about slashing and burning the economic lard and arrogance from everything that moves in this economy – all the stuff that is preventing its growth: sky-high professional fees, crazy rents, obscene state pensions etc. Naturally, they need to look after those who can’t look after themselves. Done right, everybody except complete wasters and arrogant parasites would win.

    There is a way to do this and they need to spell it out. They need to tell everybody to get on board or get out of the way. They need to forget about being re-elected – although they probably would be anyway.

    I hoped the last election would do the trick, what a disappointment.

    Ireland is crying out for a new political party of real patriots prepared to take this on.

    • Grey Fox

      Again I agree, there is a myriad of small groups springing up all over the country, again they all have specific goals and area’s of concern they are highlighting, what is needed is a grassroots catylst which will amalgamate these groups, taking account of their individual purposes, ( all of which are very commendable and generally relating to the economic crisis we are immersed in).
      I am sure we all visit these various sites,
      Anti Eviction Taskforce
      Awaken Groups
      Ballyhea Protests
      All these groups need to be organised and prepared for the next general election at the latest or we will simply get more of the same and the Outsiders will move further Outside and will be joined by more and more of the people who think they are Insider’s.
      To repeat a quote from the last article:
      First they come for your money!
      Then they come for your house!
      Then they come for your children!
      Then they have your future!
      Nobody wants to be Outside, but more and more people are becoming comfortable outside and some no longer want to be inside, this has widespread ramifications for our country both economically and socially as we move forward.
      It is time to organise, it is time for a serious show of feet on the street, we need to see 100,000, 200,000 or 300,000 bodies on the street outside the Dail with a clear message that the current status quo is simply not acceptable, how we do this? I do not know because we are not a good nation at protesting, the last big demonstrations I can remember in my lifetime was the PAYE marchs in the 70′s and this was organised in a large part in conjunction with the Trade Unions, unfortunately the Trade Unions are now Insiders and have also lost the moral ground to even claim to represent any workers, even Labour has collapsed and succumbed to the Insider mentality and they were traditional the workers choice for representation so we are left with a massive disaffected segment of the population who have NO representation!

      • +1 I agree 100%

        200,000 on the streets would put the shits right up them and their reaction would tell us exactly what they are made of. It’s about time we knew

        Question is. Are we capable of it

        The unions are insiders and can’t be trusted any more than the government. I find this very disturbing and it’s not healthy

        Are the Irish capable of having a quiet revolution. If not then I fear for this place

        • bonbon

          As I have seen, the unions are legit, but the panels and boards at the top rarely show the mettle of labor.

          Why is this? Partly a complete loss of belief in an idea, a principle such as powers of labor encouraged to increase, instead resorting to psychological social engineering. At a demo recently, I petitioned the speakers with megaphones to run with a clear list of urgent requirements – a tv camera was there- they simply did not fathom that that appearing on the News would have major impact. Instead they resorted to social slogans, all harmless. The only result was labor feeling sorry for them selves. This could be deliberate infiltration, probably is. To see it at work, how an entire union can be rendered placid, is so bad, you start to find out how this is done, its roots, real homework.

  6. Direland

    We do need a New Politicl Party devoid of the current class of Politicos – they are generally useless with a few exceptions.
    I agree that “Insiders” have protected themselves to date but thier day of reckoning is coming fast !
    Many figures are deliberately distorted by the Government such as “Unemployment” ( downwards) , Debt to GNP ( downwards) ..etc – this bunch just hoped global factors would change things here miraculously by now or before the next election in 2016 … it won’t happen – this is a big recession and will be very long.Stephen Donnelly was 100% correct , the Euro 64B “given” to Ireland made it’s way straight back to German/French Banks to prop them up.
    The coninual lack of any progress by Howlin is an absolute disgrace , Public Pay for the “Mandarins” ( unaccountable , invisible , unelected REAL Government)and thier obscene tax free expenses are beyond belief – see how they cling on for dear life to these.
    Personally I am not convinced “We” , as a Country , will do what is necessary.We may continue as a “subsidiary” fiefdom of the EU going forward. The “Government” were fools to believe anything from Europe – we are being treated the same as a Customer of the ECB as smaller Customers of the Domestic Banks are – ie we are being raped slowly and repeatedly.

  7. Steaf35

    +1 …..now the only new party I can see @ the minute is the Irish Democratic Party; Is there any 1 else out there? Various groups must unite under a common umbrella have any effectiveness!

  8. michaelcoughlan

    Hi Dsvie,

    Excellent Article, human dimension therein once again. Can’t be faulted. Weary inevitability to the whole cycle. Inwinder if it will end in revolution?


  9. Philip

    This article sums up the comments of the more negative commentators here for the last 5-6 years.

    I think we are 6 months if not earlier from a stage 4. The thing is, I am sure DMW is not the only one seeing this. So what preparations are the insiders going to make other than a grab and scram?

    • bonbon

      I mentioned the DDR at the end, below. But your raised a good point. Take the larger picture for a moment. The last signature at the end of the DDR SED party, was to sign over the state debt of about $450 billion DM on a 1-to-1 ratio. Kohl accepted this out of fear of some kind of bluff from Mitterand about Berlin remaining under 4-Powers, and he had absolutely no plan of what to do!
      Now see what the doomed British Empire has done – signed over even more worthless paper. Exactly the same reaction to a bluff that the world would end if that paper was not honored. That bluff started with 9-11 – endless war since.

      Actually the world will not end when we call the bluff.

      So on the home front, the insiders can bluff – call it. Some are holding worthless “assets” that decisive action will render void – they are void anyway. Efforts to convert them to “gold” will be amusing to watch. They will realize finally those “assets” cannot be saved despite assurances from London and Wall Street.

  10. Philip

    I was in the Aran islands a few weeks ago. This time of year they are prepping for winter and next to no tourists or ferry crossings. The atlantic makes things challenging at this time of year.

    I asked if they found the winters a bit long and tedious being “trapped” out here. The typical response was winter came and went too quickly. They really enjoyed their own company. This solidarity (and I am asking we view this in a mor=st positive manner), made me see what is so bloody wrong in the “mainland”.

    Makes me wonder if maybe we need strong local government, community solidarity and weak to non-existent central government.

    • Grey Fox

      I would find it hard to post an argument to your comments, most people I talk to are in total agreement with the ineffectivness of any form of Government in Ireland at this time,.

  11. bonbon

    Gerry Adams voices his agreement on the principles of Glass Steagall

    Following his address at the launch of Museam An Ghorta Mór at Quinnipiac University, Gerry Adams fields a question from Executive Intelligence Review’s Matthew Ogden on the subject of Glass Steagall. His answer illustrates Sinn Fein’s agreement with the principles of a Glass Steagall separation of banks as reflected by their policy of “burning the bondholders.”



  12. Philip

    Hope DMW is bloody wrong about the “bloody” bit. Is societal breakdown the only way forward out of these messes?

    As a culture we have left a lot of thinking to a few folks. The way out is to think about making uncomfortable changes. If your and insider, the walls will be torn down. If your an outsider, maybe you have a better chance afterall because you are already in that frame of mind.

    Might I recommend a visit to the Aran Islands. This says it all…One Policeman for 3 big communities. A friend of mine had to visit a GP – best experience he ever had with the medical profession. Maybe we need to see who we really are before we can progress.

    Oiche Mhaith agus coladh samh.

    • bonbon

      An té nach bhfuil láidir ní folair dó a bheith glic.

      Be smart, do not play the bankers game of dog-eat-dog.

      Serve them their own dog-food worthless paper. Sure gives Royal Canine another twist!

    • There are many advantages to being an outsider if you disregard money. If you get used to not having it and having to worry about it then your mind is free to focus on more important things such as personal integrity and staying sane

      There are no jobs and you’d need to be insane and start a business but we on the outside appear to be screwed while there are much more of us than them

      The inequality is so glaring and embarrassing that it can’t continue. James Reilly is doing a great job reminding us what a corrupt little shit hole this is and that they have no intention of stopping unless they are locked up to get their minds right

      I was pleased with what you said about having a head start. I’ve had years of a head start and could not imagine coming in from the cold to sit in the canteen at 10 every morning listening to parochial small talk

      A visit to the Aran islands sounds good. I might get out there sometime

      • Grey Fox

        I agree with you Pauldiv that being an outsider may well be the best place to be especially when money is not a large part of your daily motivation, but this should be a state of existence which is arrived at voluntarily, the crime in Ireland is that the thousands of NEW outsiders have been dragged kicking and screaming to the door and beaten up before being unceremoniously kicked outside, the damage is immense and the crime cannot go unpunished!

      • redriversix

        “Free your mind,your ass will follow”………!!

  13. bonbon

    I think a case of a closeby country that went through a convulsion (when the entire elite had no Plan B), the DDR, is highly relevant. Just imagine the uncorked hatreds that could have broken out over the Stasi and its informant network, the insiders being the cushioned elites with their luxurious holiday resorts and mercs, and the people. The danger was so evident, a commission was set up to prevent either settling accounts on the streets, or using the Stasi files for further oppression and blackmail. President Gauck, now, was then head of the Gauck Commission to prevent civil war.

    That is one side of the coin. The other, was every attempt to rebuild, reconstruct the Comecon after the ravages of bankrupcy and default was stopped in the most brutal fashion, including assassination of Deutsche Bank chief Herrhausen and Treuhand chief Rowedder. Both had committed to recovery along the lines of the post WWII reconstruction, not only for the DDR but neighboring Poland first! Since then Deutsche Bank became a casino world-class. Who benefited?

    We must learn from this, rapidly.

  14. Cy hendrix

    Given the various endgame scenarios,Is there a political entity within this country capable of managing an endgame scenario.I fear not.I believe that politicians from all political persuasions have failed the country, both those in power and in opposition over the last 15/16 year period.It is now becoming more and more obvious to some that political might in this country in the face of the most serious crisis since the foundation of the state is nonexistent.The default/crash scenario,call it what you like, Is it seems inevitable yet the political will to prepare for it or even recognise its existence as a real possibility is not there.Debt forgiveness seems to be the only way forward to create ‘regeneration platform’,however that would create so many new ‘problems’ the likelyhood of a second bailout is more and more real.This is not going to solve any of the debt issues.We need a planned, managed default scenario solution and we need it sooner rather than later.A lot of people are going to suffer and it is going to be tough for all those involved.The alternative?.. There is no alternative.( I am always pesimistic on a Thursday.Its the day I realise I cannot pay my way and like a lot of people ,it hurts)

    • whatamess

      Debt forgiveness seems to be the only way forward to create ‘regeneration platform..’ – Beautifully put !!

      “however that would create so many new ‘problems’” – It can’t get much worse Cy and not being able to pay your way is like a festering wound eh….What did Al Pacino say in that final scene of the “scent of a woman” movie …” but there is nothin’ like the sight of an amputated spirit…there is no prosthetic for that !”


      • Cy hendrix

        He was wrong. In time of need we seek the support of our family,friends and neighbours.The recent high profile case of that poor young woman murdered in Australia and the response from her community is an example of the existence of the spiritual prosthetic.The apparent indifference to the national crisis by the political parties on the whole is exemplified by their continued point scoring,nit picking ,coupled with a climate of idealistic rigor mortis.These are unique times and the problems we face are unique,and they need to be viewed as such.The prevailing ‘something will happen and it will be all right’ attitude is rife.They are going to have to realise that at some point after passing the ball back and forth for so long now…someone is going to have to shoot!. This is a national emergency ,unprecedented in our time and we are devoid of any political leadership and that is why the national spirit is so low and sinking as each cut is inflicted.How bad is the controlled default scenario? What truly do we have to lose? Break out the fava beans and chianti….I like my bankers and bondholders rare.

  15. Good article. Nice and simple and based on fact. Condensed information with clarity is what we need as opposed to reams of newspaper waffle and useless talking shops

    Today there is rioting in Greece and government are impotent to act. That is why democracy had been suspended while technocrat runs the country. People are putting kids into care because they can’t afford to look after them. The horror stories coming out of Greece and Spain are awful

    However I suspect there are plenty of right wing economists and commentators in Ireland who are rubbing their hands in glee at the prospect of it kicking off here

    Milties followers are nasty little men who should be taken into care and kept safely out of the way of society

    This article makes me think of Miltie pleading with Pinochet to let his thugs out on the streets. And loving every minute of it!

  16. Tony Brogan

    “There is no escaping this pattern because the mathematical corollary of a housing boom is a debt bust. It is only a matter of time.”

    Sounds almost like Von Mises? The inevitable result of a debt based boom is a bust.

    Recognition of the problem is the first stage to the resolution of the problem and the road to recovery.

    • bonbon

      There is a mathematical problem there, hidden, that needs recognition. It is what Riemann thoroughly overhauled with his dissertation. Maths has not been the same since, and most economics clings to algebraic a-priori method, not just von Mises.

      A lot of the conclusions are caused by the inadequate maths taking on a life of its own. Riemann showed that we must leave that dept for physics to deal with the real world.

      This is the reason one may claim not to follow von Mises, passionately, yet helplessly end up doing it. The feeling of helplessness, TINA – there is no alternative , is an induced spell.

      • bonbon

        And that helplessness gave us the Chicago Boys Pinochet and Operation Condor. Who said bad maths is not dangerous for your mind?

      • Realist

        Who are those economists please not basing their knowledge on mathematical constructs?
        I know only one school that is called Austian School of economics, of which von Mises is one.
        von MIses and austrian school is fighting induction for 100 years now.
        MAthematics is still dominant to explain why government needs more money to employ more people and bring us out of this crisis.
        You still hear GDP should grow arguments, like if we double all money on this world everybody will be wealthier.

  17. Tony Brogan

    When you drill a bit deeper you see that the reason the mortgage repayments are lower is that tracker mortgages – 400,000 of them – //_understate the real cost of borrowing because they are subsidised heavily.// Even still, 10.9pc (83,251) of mortgages are now more than 90 days in arrears. What happens if that subsidy changes?

    I do not follow this statement. Those on tracker mortgages are not subsidised to the best of my knowledge. They pay the rate asked. How are they subsidised? Do you mean that the rates are artificially low because of central bank manipulation. Do you mean that the borrowings from central banks are added to the taxpayers national debt which all pay for.This is not a subsidy in the sense that the tracker mortgage holders receive money directly to offset the costs of the interest. What do you call it if the central banks or the market demand higher rates, is it then a consumer tax on the property buyer?
    Confusing and somewhat divisive.

    • Beaver

      They are subsidised because they pay interest rates as low as 1.25% on their loans when the cost to the bank of raising money is 3,5%. The difference is currently being paid by the taxpayers, a subsidy to tracker holders. Tracker mortgages are one of the effects of Celtic Tiger lending recklessness. If you have one, congratulations but remember whose paying the bulk of your interest for you.

      • KD

        Sorry Beaver,
        I have to row in here. Tracker mortgages are NOT as a result of the Celtic Tiger – they are as a direct result of the single currency and the Irish Central Bank not being able to set interest rates. Just because the banks fell for the euro dream doesn’t mean we shouldn’t be precise. And, yes, I have a tracker mortgage, but I voted NO to the SEA and Maastricht. For once I seriously regret being very right!

        • pablos

          I have to row in here, I supported the euro and those agreements. I was categorically against the craziness during 2000-2007 and I hate what it was doing and has done to Ireland, the avarice and the hubris. Sure the Euro didn’t help, but the West was awash in money. Do you really believe if we had the Punt that things would have been much different?
          BTW: I agree with George Soros, either the Germans leave the Euro or Ireland has to and quick. I have been following David’s blog now and am stupefied how stupid our elected officials are. Reading the Irish news from abroad, I see no impetus from them whatsoever (excepting O’Reilly – Health is such a sink), they are like ostriches with their heads in the sand. We need a new Republic.

          • bonbon

            Still agree with George Soros after reading the dossier below? This is the very Golem that engineered the Euro, a character simply outside most people’s radar.

            First he sets up the Euro to grant Mitterand and Thatcher’s demand to abolish the DM after re-unification, and now puts the blame on Germany. A Golem at work. A top operative of the only empire that exists today, the British Empire. The damage is beyond belief. The dossier is now there for all to read.

      • Tony Brogan

        Tracker mortgagaes are available the world over. Usually based on the prime rate which is a central bank lending rate. Called often, floating rate mortgages. sometimes they can be higher than fixed rate fixed term mortgage rates.
        No evidence of subsidy?

  18. Tony Brogan

    “They realise that their lifestyle will also be hammered and this is when, politically, it all kicks off, and the consensus fractures”

    The insiders and outsiders as described do not have consensus currently in my opinion. It is only when all are affected that consensus may be reached? Am I mistaken?

  19. The article mentions the “insiders”. These people that are paid more than their counterparts in other countries.

    I think what we need from our economists is some type of model that shows how much the income of “insiders” is skewed from the European norm and also whether the salaries of “outsiders” is in line with European norms.

    Our salaries need to be benchmarked against other economies of about 4 million people such as Manchester or the Saxon region in Germany. Our head of Gov. needs to be paid the same amount as the person who is the top elected official of one of these population centers. Our teachers, doctors, factory workers, farmers need to be pitched at the same salary levels these people are on.

    However in addition to the above, we as a nation need to engineer the same cost of living index as these population centers.

    It is an act of social and political will to adopt and adhere to progressive taxes and salary expectations. What I mean by progressive taxes is progressively steeper tax bands to encourage lower wage disparity throughout society and heavier taxes on profits from the sale of houses and property.

    That is the only way we can hope to protect ourselves. Our current approach has been fiscally retarded for years and has only served to polarize society.

    • Deco

      If the labour force even had it’s pay benchmarked against is’s (abysmal) performance, then this would be an improvement.

  20. wills

    I do not have anything to add to D’s sensational article.

    What I am going to comment is that the article simply and eloquently reads the situation I see going on in my street too.

    This article is not just a narrative; it is a window onto what is actually happening
    in our society socio-economically in realtime and expressing it in a way everyone can understand it beyond the cover-up!

    Slam dunk!

  21. bonbon

    On debt repudiation, there was 1 blog ago a note on Stiglitz’s apparent sympathy for Ireland, in the press. Some started ranting about Keynesianism etc.. That as usual was not the point. See what Stiglitz is doing with George Soros below. Now I wonder if either of these turn up at Kilkenomics? Well some questions then.
    Even worse if they turn up to “advise” FG!

    Argentine President’s Courting of Soros is Dangerous Blunder

    Oct. 4, 2012 (LPAC)–At a time that Argentine President Cristina Fernandez de Kirchner is subject to increasingly violent attacks from the City of London’s speculative vulture funds, whose reprentatives are threatening to overthrow her government and even kill her (see separate slug), she has committed the dangerous blunder of courting the British Empire’s billionaire speculator and drug legalization kingpin George Soros, whose campaign to end national sovereignty on behalf of wholesale economic plundering in no way differs from that of the “hard cop” vultures.
    On Sept. 25, Fernandez met with Soros in New York, during her visit to the United Nations General Assembly, for an hour- long “open agenda” meeting, in which they reportedly discussed Argentina’s “promising future” in world agricultural production. But, the President reported, “I was also very much interested in hearing his opinion on what is going on in the world.”
    Big mistake. By courting the Nazi-trained Soros, the Argentine President has opened up a gaping vulnerability, made more dangerous by her dependence on Soros’s close ally, economist Joseph Stiglitz, for policy advice. A high-level South American source told this news service that he has personally observed Stiglitz acting directly on Soros’s behalf to sabotage developing sector efforts to restructure and repudiate illegitimate debt, including bringing Soros in for private dinner discussions with developing sector representatives.
    Soros’s Argentine allies, among them top government advisor and former Montonero terrorist Horacio Verbitsky, are also behind efforts to ram the Empire’s drug-decriminalization policy through the Argentine Congress.
    The folly in the President’s thinking was recently revealed by Planning and Investment Minister Julio De Vido, a close longtime ally of both Nestor and Cristina Kirchner and key economic policy adviser. While in Russia on Oct. 1, he responded to London and Wall Street charges that Argentina is closing itself off from the world, by arguing that the President’s meeting with Soros in New York was an excellent example of how she is acting positively to open the country to more foreign contact.

    • pablos

      Thanks Bonbon, I thought this balanced reportage had a whiff of tea party about it – so when I looked it up on google I wasn’t at all surprised. I am absolutely not accusing you of this, but when I see all these tea party crackpots lashing into Stiglitz and Soros, I always wondered how much of it is motivated and/or propagated by their jewish origin and the archetype success against all-odds millionaires. The only tea party with any originality about it took place in Alices Adventures in Wonderland and even they could get nasty at times. America is so polarized, everything from there has to be handled with tweezers.

      • bonbon

        The Tea Party is clueless. Soros is something else. See

        Stiglitz working with Soros is very telling. Soros’s father, Tivador Soros’s book “Masquerade, Dancing Around Death in Nazi Occupied Hungary, Arcade Publications, New York, 2001, is a must read.
        Soros attacked the Lire and Pound :
        “Upon the destruction of the ERM, which set the stage for Maastricht and, inevitably, the Lisbon Treaty, Soros had only this to say: “I’m sure speculative actions have had some negative consequences. But that does not enter my thinking at all. It cannot. If I abstained from certain actions because of moral doubts, then I would cease to be an effective speculator. I have not even a shadow of remorse for making a profit.” He continues, “I did it only to make money. – London Guardian Dec. 19, 1992.

        “Moral doubts” about his job looting empty Jewish homes in Hungary were cast aside at an early age.
        So here we have the main “engineer” of the Euro. Read the dossier and wonder how the Open Society can have any influence in “insider” circles?

    • pablos

      By the way, FG and the people who voted for them, could look much nearer to home for advice, namely Buck Mulligans Dottyville. That lot definitely have GPI.

    • pablos

      I apparently was wrong with the reference to the tea party, it might even be worse than that.

      • bonbon

        See reply on Soros above. There is much more of you dare.

        • pablos

          Bonbon, I have to first admit I was once where you are now. The problem with being a proselyte is that bit by bit the organization starts to do your thinking for you. This is a paragraph (page 7) from the document you posted above.

          “In 1996, Soros reached deeper into the Queen’s underpants and funded ballot initiatives to legalize “medical marijuana” in California and Arizona through propositions 215 and 200, respectively. These propositions made it legal even for children to whip out the bong and receive doses of class one drugs.”

          If you want this to translate well in Europe, then you should advise the organization to tone down the vitriol. To me it reads a bit like the great rage of père duchesne. BTW, is this the culture you hope to save humanity with? What has this in common with classical art and science? To me, it means literally nothing if George Soros himself personally injects babies with tainted heroin or milk swill for that matter, although naturally I wouldn’t approve. British Imperialism (defunct), French Imperialism (defunct too but they just havent realised it yet) and US imperialism – is there a difference other than who does the controlling? Now Chinese Imperialism, if it ever gets off the ground will be a wonder to behold.

        • bonbon

          As this is an economics blog, here is a much more relevant quote :

          The pathetic creature known as George Soros made a willful decision early in life to become the character that he is now: a Golem. A teenager during the Nazi Occupation of his homeland, Hungary, Soros began his genocidal legacy by working for the killing machines that slaughtered 500,000 Hungarian Jews during the Holocaust. Young Soros was given a job looting the properties of Jews under the regime of SS Lt. Gen. Kurt Becher, head of the Waffen SS section known euphemistically as The Economic Department of the SS Command.
          None of this he denies, and even praises. He is backing drug legalization all over the globe, under various cover orgs. The character was formed as shown above. See Dope Inc. for the story of drugs and the British Empire, whom Soros serves. If one wants to avoid published evidence, well and good. That’s the Tiger way. I wonder if the Tiger Way is just dope.

          And the Euro, the cause of all the misery around Europe, was factually, and provably, engineered into existence by this Golem, so it is highly relevant to see what exactly characters the ultimate “insiders” really are.

  22. Good article.

    People keep calling for a new political party. I agree, so let’s do it.

    • bonbon

      “People”? Who I wonder?

      • People here who have commented prior to my own submission for a start. I assumed you may have read others here. Also many who keep expressing same in response to other articles in various media outlets.

        • bonbon

          I remember OWS, and what has happened? The insistence on being vague, that something must spontaneously occur, but in somehow a way that either cannot be known, or must remain so, makes one wonder.
          I hear that a lot from economists of various stripes. In Germany it became clear who was backing Occupy Frankfurt.

          The Sleep of Reason breeds Monsters, as the great classical painter Goya demonstrated. And there are sure some monsters roaming, literally devouring countries. When you see Goya’s Cronos devouring his children, which says more than many a slogan, one realizes great classical art must be part of any revolution or it is doomed.

  23. bonbon

    Not only could Greece become an offshore tax-haven, but also a low-wage “outsourcing paradise”. Are we going to see pacific-style sweatshops just down the road now? Is this what is planned for Ireland ?

    Will Greece Become a Low-Wage Tax Haven Within Europe?

    PARIS, Oct. 4, 2012 (Nouvelle Solidarité)–French economist Gabriel Colletis, a highly qualified source on Greece, keeps warning of all the evils which will come upon that nation if the Troika policies are not stopped immediately. In a longer analysis published a couple of weeks ago, he outlined five possible scenarios of evolution of the Greek crisis. All of them go from bad to worse and include the possibility of a fascist coup, except for one, in which Greece would leave the Eurozone and launch a real recovery policy. Among the worst scenarios is one that forces Greece to sell all of its public belongings, including the islands. While this has already been referred to before, he warns that these privatized islands could become tax-free havens operating “offshore” (outside the law) and corrupting the mainland through their practices.
    Back from a recent trip to Greece, Colletis fears that in or outside of the EU, Greece is being set up to become a low-wage outsourcing paradise in Europe. Wages have already been cut quite a bit, but next year they would drop to EU400 per MONTH, he says.

  24. Tony Brogan

    A little inflation appears to be a free lunch, lubricating the economy and gradually erasing past financial mistakes. But the nature of the free lunch is that its costs aren’t absent–they’re just distributed broadly. And in the case of low but steady inflation, the broadly distributed costs are borne by the middle class


  25. Beaver

    In Ireland its easy, the insiders have government jobs and pensions or very lucrative ongoing state contracts. There, I think I got all the politicians, civil servants, lawyers and doctors in on one decription.Farmers are another group of insiders because the outsiders pay for the subsidies they get to keep their unsustainable businesses going. DMcW has never, that I´m aware, called for the scrapping of the Croke park agreement possibly because he displays fairly leftist inclinations despite being a consumate capitalist and that would involve attacking the unions. I assume his Dads period on the dole was a sobering reminder that no one is so invincible that they can afford to write off socialism. Regardless David ought to say out loud that the Croke Park agreement serves the insiders only and those who dont benefit from it are being financially raped over a barrel. I dont contribute to a private pension because I can get better returns myself. I also limit my contribution to taxes as I expect nothing from the state. The insiders comfortable little arrangements will collapse when enough outsiders arrange to cut off their funding. I still think thats a gradual process and unfortunately years away.

    • sk19

      Farmers don’t have unsustainable businesses. The only reason they receive subsidies is because of the cartel of factories and supermarkets who won’t pay the prices required by the farmers to make a living. To keep the status quo and to keep food affordable the governments are in collusion with these corporations and are willing to pay subsidies to keep the farmers quiet.

      Personally i think the world is getting to a situation where the farmers might be better off throwing back all these subsidies, not dealing with the cartels and getting properly compensated for all their hard work in working the land. I wish the public would try to research more about the cartels and the bullying that goes on against farmers by these people. Do you ever wonder why you’re paying 7 or 8 times more for your litre of milk from the shop than what the farmer who produced it gets?

      If there were no subsidies you would be paying a hell of a lot more money for your food. I for one would like to see a lot more investigation into collusion between governments and these corporate giants rather than always blaming the farmers. But I believe the government are quite happy to let the public take it out on the farmers because it takes the focus off their own involvment. Educate yourselves more on the subject!

      • bonbon

        In Germany Aldi’s method of driving the dairy farmers into the ground was exposed very publicly. Farming is a business where one season with no income caused by weather, ultra low prices, bankrupts very fast.

        Switzerland has often said that if Brussels decided policy there the entire Alps would be emptied in 1 year. Trying to “level the playing field” there is a murderous policy. So the EU is kept well away. The bottom line is the world needs much more food, there should be no subsidized fallow fields. And farmers must have access to the latest machinery. Converting huge parts of the failing auto industry to farm equipment for Africa would put them on 24h shifts for years! No vehicle worker need be thrown out on the street.
        The EU in its current ideology will not take that step.
        So put it on the table, make it unbearable for them at every turn. This is “intervention”, not leaving the agro-industrial economy to its own devices.

        Now the most vicious evil policy of all – burning food potential in the car, bio-fuel. Ask any proud food producer how much is going for this? It is so crazy, Michelle Obama’s kids school meals calorie limit – LoCal- means more calories for the auto! Sheer insanity.

      • pablos

        Hear hear, if it is cheaper for impoverished africans living on the land to buy powdered milk than keep a cow themselves, there is definitely something wrong. Food prices are set to double again in the next twenty years. Industrialized agriculture is at fault here. BTW, they expect future great food shortages worldwide due to new resistant strains of wheat rust etc. So stay in farming if you can.

        • bonbon

          Pol Pop believed in non-industrial farming, closed Universities, sent engineers to harvest rice by hand. The Agrarian dream of Paris Sorbonne Economists.
          Sure things are wrong – Monsanto is perversely debasing the Green Revolution, paptenting non-fertile seeds. Without intensive research into better seeds billions will starve. Stopping that research either by cost-cutting, or divisive patents, is systematic genocide.

          Burning food potential in cars is greenie genocide.

          “They”, insiders again, fully intend food shortages to empty the planet of 6 billion people. This “they” say outside their “insider gatherings”, no secret there. You just have to listen to their words.

    • Tony Brogan

      Croke Park Agreement–Wikipedia

      The agreement (formal title The Public Service Agreement 2010-2014) was signed on 6 June 2010 by ICTU. Against a background of layoffs and pay cuts in the private sector, the government agreed not to impose public sector layoffs or further public sector pay cuts.[2]

      In return the public sector unions agreed to call no industrial action, and to cooperate on wide scale reforms of the public sector aimed at increasing efficiency, flexibility and redeployment and at reducing cost and headcount.[3]

      According to the Implementation Body, as of March 2012 headcount has been reduced by 28,000 and the annual pay bill has been reduced by €3.1bn.[4] Over 7,000 public servants have been redeployed.[5]

  26. Puschkin the Black and White Cat

    Have a laugh.

    Amid this serious situation we can always depend on the government for a good laugh.

    From the Gathering web site: (The Gathering Ireland was launched by the Irish Taoiseach, Tánaiste and Minister for Tourism in May 2012 and is being supported by Fáilte Ireland and Tourism Ireland)

    Of course they even have an office a few managers more advertisements on RTE etc. So this is what they come up with more travel more money for civil servants offices rented from the “insiders”.

    God I’m sickened by this, rubbish, nonsense.

  27. gizzy

    I think we need to recognise fear when we see it. Those running the country are afraid. They don’t know what to do. They are not some kind of powerful insider grouping. They are worse they are a frightened insider grouping. They are being bossed by Europe, despised by the public and preyed upon by advisors. I include the permanent government in this. All the years of a cushy lazy existence has not prepared them for this so they do what alot of people do in that situation. Hang on for dear life. It doesn’t matter if someone else drowns there aren’t enough life jackets to go around any way.

    • coldblow

      Arguably some of the worst excesses of history were motivated by fear. And greed of course. Then there’s hatred. And irrationality (witch hunts). I’ll stop there I think.

      • bonbon

        The only real thing to fear is fear itself, the kneeshaking strength sapping nameless horror. FDR knew this.

        I think you are right about the “insiders”, they are totally bewildered, without the slightest idea of what to do. They should take a holiday and let others deal with it. They must be in terrible shape when they leave the “good room”, after all the suave accented platitudes wear off. They waited sooo long for power, now they got it!

        Greed for power, hmmm? Seems Nemesis has his say.

  28. redriversix

    Morning all

    Re; Debt forgiveness..you do not need permission,it is very simple.

    Put your hands together,bow your head slightly,face direction of mirror…Done ? ….okay

    Now recite the words…. “I forgive you”

    “and man looked upon mirror and declared “this is good”…..now ,go forth and do what is important today…..


    • molly

      The concept of the Jubilee is a special year of remission of sins and universal pardon. In the Biblical Book of Leviticus, a Jubilee year is mentioned to occur every fiftieth year, in which slaves and prisoners would be freed, debts would be forgiven and the mercies of God would be particularly manifest.
      Maybe our government might take this to the troika .

  29. Dilly

    Irish media ramming property down our throats on a daily basis. They couldnt even be bothered reporting on the situation between Turkey and Siria the other day.

  30. Johno

    I work for a bank and part of the banks collection team is based in the same building as I work, and the bank is certainly gearing up for mortgages arrears/default. They have recently taken on 22 new staff for mortgage collection and rumored to be looking for same amount before christmas. All on 6 month rolling contracts so when its all over they can just let them go.

  31. Afternoon from the lovely Stansted Airport:)

    Thanks for all the comments. I am really delighted with them on this topic which may well be one of the only true issues in our country and all over the world in the years ahead.

    All the best


  32. coldblow

    The insider outsider thing is a big issue and goes beyond the PS of course. If you look at fairness in the round you have to take into account, in no particular order, personal responsibility, responsibility for the crisis, wealth (earned, accumulated, inherited), each person’s own character (eg intelligence, low cunning, conscience, ability to sell, hustle, identify markets, network, lie, intimidate etc) and background (eg education, social supports – be they family, political, party, the GAA or the local ODC ‘criminal community’).

    You also have to realize that the insider outsider thing has been there since the foundation of the state (and before) and that the state was set up to protect the landowners, the professionals and the wealthy. (As I recently noted (again), Lee divided them between the possessors and the performers.) Grotty said that there would be trouble if the money for welfare ran out or (I think) if the emigration safety valve were to close.

    So it’s everywhere and everyone is affected to some degree, be it willingly or not, aware of it or not.

    If I might say so, I think some of the comments here a little naive in their expectation that the outsiders will get their day. In particular, the media have played a crucial role and any ‘discussion’ will take place on their terms. I can’t see, in Ireland of all places, a reasoned dispassionate national debate ever leading to a rational, fair outcome. History does not have many examples of this happening, to put it mildly.

    Irish decision making reminds me of Konrad Lorenz’s observations of crows. They have different calls, I think, for flying away from where they roost and returning there. When they have been away from their roost for a while and it’s time to return more and more of the birds make a particular kind of call, expressing this homeward-bound feeling (Stimmung) and some of the birds will rise into the air but after circling a bit land again until the next attempt is made. Lorenz said it could be excrutiating to watch as it could go on for hours on end, until finally the whole flock rises and flies home.

  33. molly

    The insiders and the outsiders that says it all , is this very problim that the government should be trying to help .
    Instead they make things worse why?is it because the government are the insiders.
    Do insiders protect insiders I would think so.
    So the con is comming full circle , greed and the feeding trough .
    The outsiders must be in the majority , so why do we sit back and believe the lies and the crap.
    Do we now live in a dictatorship , is this what we voted for ?

  34. dk1210

    whats everyone worrying about? Isn’t our fearless leader on the front of Time magazine, shur in a month or so we’ll be grand.

    • molly

      Revolt comes to mind worried be very worried ,we the workers are the ones who will be expected to pay for the piper,well I say F the piper.

  35. Philip

    I for one and not interested in a new political party. Certainly not one which is based in Dáil Eireann – one of the most non-representative governments in Europe if not the western world. No wonder we have insiders. We are a lobbyist’s dream.

    I want strong local government. I will gladly pay taxes (property or otherwise) to them. I want Dail Eireann only for the president, constitution and maybe security. The offcie of taoiseach should be demised and replaced by a proper presidential role and a senate with teeth.

    I look at suburbia and you know what? the planners who let a lot of it be built should be ashamed of themselves. I see that development in Longford that is being demolished to protect the health of residents it has had its work stopped because a few birds were found nesting in the derelict buildings. Central Gov has no interest in its citizens. Coveny and his “secret” email saying Govenment must be more secret – in this climate of an over excitable media…what does that mean? Sheer unadulterated patronizing attitude to the Irish Citizen.

    Suburbia is weak because it was never there. It was just a bunch of dormant dwellings and the local TD was underworked – except to those who worked for their own selfish ends via clientelism. You only have to look at the powerlessness of the PTRB, the mess left of management of apartments and other community shared areas, the power developers still seem to have to be essentially unanswerable and untouchable.

    You know, I always wonder, if we had proper local government, would this housing nonsense ever have gotten legs. A good hefty local property tax (6-8k for a 3-4 bed property) could have encouraged people to keep their money in their pockets and make the best of their communities.

    I want no new parties thanks. I know who I can trust locally and I would prefer to let them get on with the job – after all…the Pub might might be the last place they want to go to after a day’s work.

    • pablos

      Proper local government, I wonder what that might look like, as local councils were about the most corrupt thing going, probably for ever but at least since the 80′s. Whats needed are laws against abusing the public trust, for a minor infringement a spell in the stocks perhaps, so the outraged citizens can vent their spleen, for more serious offences, the little window aka the national razor. Redmond and Haughey were only the top of the mountain.

  36. sk19

    This article reminds me of a speech given by CS Lewis to a graduating class in the 1940s ‘The Inner Ring’.

    There’s always been insiders and outsiders in every society, even in communist states. And there always will be. You’re kidding yourselves if you ever think we’ll live in some sort of utopia where life is fair and everyone gets what they deserves. Unfortunately this is the lie which is fed to our young from an early age.

    It’s brutal out there and the insiders will fight to the death to keep what they have. It’s all about survival of the fittest.

    • molly

      Insiders are in the minority but then so was hitler and look where we are being taken for a very long ride by the government and there cronies.

    • pablos

      A much abused phrase ‘survival of the fittest’ although I agree with the rest, there will always be insiders, the trick though would be to keep the insiders from solidifying. The public have to empower themselves. I believe that the market when it functions properly has the wherewithal to add to this. The obsolete societial structures of the past ought to be swept away to encourage enterprise and competition. Right now, we have to face up to the current reality and train our youth to be fit enough to emigrate and succeed. This will not be the brain drain of the past but the brain train as it is known in Asia. The nation will benefit in the long-term.

    • coldblow

      Very good link. A friend of mine got into the ‘inner circle’ at university and said that all the other students looked at him and his friends with envy. He said there was nothing there once you got inside, just looking out at the rest.

  37. molly

    If you must break the law, do it to seize power: in all other cases observe it.

    • bonbon

      “Et tu Brutus”, Caesar said to his brother as the 12 sunk their knives into him. So the Roman Empire was formed, giving the world Nero and Caligula, Caracala, among others. Lucky, and pure luck it was, they never invaded Ireland. Instead the 4th Roman Empire did.

      • molly

        He borrowed large sums of money to ensure that the entertainment he provided was the best money could buy. He put on games and festivals for the people. As a result, he became very popular with the poor of Rome – a considerable part of the city’s population. He also courted the friendship of Rome’s richest man, Crassus.
        The past can come back to haunt.
        Maybe the school teacher government copied Caesar .

        • molly

          When a citizen of Rome ran for office he had to pay his own way. He could easily run into debt, as Julius Caesar did. Bribery and feeding one’s clients some of whom accompanied the candidate on his daily rounds .
          How the past can become the future?

      • pablos

        I wish Rome had invaded Ireland properly and brought true civilisation to the Celts. Had that happened we might have been able to make an even bigger splash after the European dark ages than we did. It is argued that some Roman and Greek scholars found refuge in Ireland after the Barbarian conquest, John Erugena was fluent in Greek when he arrived in France, his arguments reflected the positions of the early Christian Church. Who knows maybe we would have been able to contest the later conquest more effectively. There was undoubtedly a Celtic Golden Age, but I suspect it was followed by many centuries of stagnation. Roman and Greek culture would have made it glorious. The fictional Buck Mulligan was right when he said Ireland needed to be more Hellenic.

        • bonbon

          As I said the 4th Roman Empire, Britain, designed on exactly that, did invade. It was officially declared in 1763, yet became before that treaty, as the the Venetian Party took over. Shakespeare was already in conflict with the Venetian Party before. Venice was the 3rd Roman Empire. That Party created the Bank of England, the central bank model followed everywhere. Teddy Roosevelt turned the US Treasury into such a central bank, the FED, to prevent the US National Bank, developed by Alexander Hamilton to counter exactly this process.

          So your popular suicidal wish was granted – Ireland found out what all empires do, in 1847. And central banks are at the center of the bailout – we are being forced to bail out the 4th Roman Empire! So now you have the chance to do something about it.

  38. michaelcoughlan

    Hi David and tony Brogan et al,

    I have been reading all the posts for some time now and always come away dismayed when the topics degenerate into a conflict between public sector and private sector bickering. NEITHER are the enemy. The insiders McWilliams is referring to are the scumbags at the very pinnacle of the organisations organising the rot. Can we please
    stop falling into their divide and rule strategy!

    Tony brogan I just read on the Internet why Gordon brown dumped so much of the gold in the bank of England and can see a similar situation about to happen again. Basically gold speculators had borrowed at 1% the bullion, sold it and invested the proceeds at 5% with the intention of buying back the gold to repay the brokers they borrowed it from. Big problem was that the price had increased to a level where these same speculators would lose a fortune and brown was left with no option but to dump gold to drop the price so that the speculators could cover their exposure. Basically he transferred the gold wealth of the British people to these speculators to “save” the financial system. Same thing could happen again

    Hi David, any way you slice the cake these people who operate these organisations and carry trades are paid in my view to destroy everything they touch in the above example they completely undermined the bank of England. Sooner or later people like you are going to have to put meat on the bones of article like these to help the people because our politicians will only roll over just like Gordon brown.

    • cooldude

      Hi Michael, I am sure Tony will have his as usual brilliant answer but the fact is ALL western central banks were complicit in the sale/loan of their gold including our own. We have 6 tons of gold which is held in of all places the poxy bank of england which we spent 800 years trying to get away from. Not only that but this gold has been lent out on “investment purposes” ie. never to be seen again. You see Michael according to the IMF regulations central banks are allowed to lease out their gold to third parties but also hold this now departed gold on their books. This is all a scam and the official figures for gold ownership by central banks are all a scam. On an interesting note is that all the central banks (bar our own nitwits) are busy adding to their reserves. Also the BIS, who are the real top dogs, have raised gold to a class one asset along with their dodgy currencies. In other words the real top dogs are preparing for a new currency standard in which gold will have a senior role. The last 40 years will seem like a blip of stupidity in monetary history. Unless this is all planned of course but sure that would be conspiracy stuff and nobody believes that stuff???

    • Tony Brogan

      Sorry michael I posted in error a little lower

    • bonbon

      They want to put gold on the bones of articles like these. I begin to think of Tutenkamoun’s embalmers, all that gold for the next life.

      We living breathing moderns, do not like being embalmed. We need progress, not a death cult.

      • bonbon

        Hmm. Considering the well known secret of the ultimate, insiders, Freemasonry likes to hark back to Solomon’s Temple and the Late Egyptian Dynasties (mason’s being “house” builders, eh?). One could say those pyramids were one hell of a housing bubble!

        That would be too facile. From those “houses” came astronomy, the mother of number, with which Imhotep designed them. Yet the priesthood Ammon insiders who murdered Tutenkamoun and his father Ekanahton, knew they were doomed, could not change. So they, or a faction, blessed the Ionians with a gift.

        This is an “insider” tale – but here is the epilog. There is available an interview with the Duke of Kent, World Freemason chief himself. Which brings us right back to the problem of whose system we are bailing out, or embalming.

        • bonbon

          Now today, the Financial Times published on July 4 2012, a full page call for Glass-Steagall. A faction of the ultimate insiders has realized the alternative is doom. This reminds me very much of the ancient faction of Ammon, knowing their certain fate, trapped in smothering customs, embalmed in the past, somehow got a “lifeboat”. Then it was Ionia, Greece. Today it is Benjamin Franklin’s USA.

          It is impossible to overestimate the importance of this “insiders” message on July 4.

      • Tony Brogan

        In line with your usual questions, who are ‘they’?

        None so blind as those who refuse to see.
        Still got your blinkers on bon bon
        It is the west getting rid of their gold who have the death cult.
        The emerging market nations embrace the use of gold and silver as money and will be the renaissance of the world economy.
        The economic power of the world will pass to those with the gold as it always has.
        Together with that will pass the political power and influence.
        Europe is in a state of decline against the advent of the Asians.
        Gold is the stabilizing influence on financial transactions that limits excessess of the bankers.
        To compete and survive as nations we must remove the central banks, Ban fractional reserve banking, and implement the honest commodity money of gold and silver.
        Perhaps it will be implemented at the time of a debt jubilee for a fresh start. Phoenix rises from the ashes of the gold and silver smelter.

        • bonbon

          Straight from the Temple of Ammon. Take the really long view on this. Gold is an embalmer for a dead economy. It is not that Ammon was a death cult exactly, rather they transferred living to the next world. Their culture died then, and they knew it but were incapable from within of stopping that.

          That “phoenix from ashes” stuff is Sombard’s creative destruction, Nietzsche pure and simple. The insiders who promoted that for the last 35 years are having a major change of tack. Do no promote their now “on-hold” policies that they themselves know will ruin them.

          • Tony Brogan

            Your historical knowledge often gets in the way of your common sense.
            Your comments above, are to me incomprehesible bs.
            Your constant quoting of legend, myth, and ancient cultures’ religions means little to me as I look at the where’s and how’s of today’s world and compare with actual past history of the topic of money, power, gold and silver.

            I know there is a power elete but they are not direct descendents of Rome as you allege.They may be similar to some in the past but not the same. Unless your can show direct lineage it is all a speculative hypothesis. Learning from the past is useful to try not to repeat mistakes or to enhance benefits, but to assign a statement from such as myself to a philosophy that I know nothing about is a thorough waste of time.

            It would be more useful if you came off the accademic perch to join the rest of us out in the sunshine in the pasture. Usually those sitting at a great height only succeed on shiting on those below. nothing else is achieved.

          • bonbon

            Ye quote long history, just not long enough. Gold fascination goes way back to the Tombs of the Kings, a favorite “insider”, if you get my drift, subject. Its use for embalming, its eternal value, its unsullied splendor smacks of the Ammon cult. In fact some “insider” clubs, if you get my drift, have embalmed bankers on display!!! No joke!!!

            Time to jump about 5000 years to the present agro-industrial, 7+ billion planet with all its challenges, and not head off over some “insider”, if you get my drift, golden horizon.

            The Valley of the Kings, stuffed with gold, is a tomb.

          • Tony Brogan

            It is precisely because of the abandonment of the disciplines of gold as money that we are in the state we are today.
            I go back a little further than 5000 year.
            some truths are eternal.
            A peoples’ burial habbits are but an incident along the road.
            Lenin is embalmed too. What of it? Was he a phareoh.

            The application of gold as money will herald the dawning of a new golden sunrise, appearing over the horizon to illunimate the world. There is likely a reason for the expressions a golden sunrise and a silvery moon. There is likely a reason Olympians are awarded gold and silver medals for excellence. There is likely a reason ‘star’ students get a gold star for the best of results.
            gold and silver are embedded in our culture for a very good reason. Do you deny the thousands of years of physical evidence that gold and silver provide.
            This time is different, seldom applies and will not in this case.
            Our financial ruin has all the same reasons as the collapse of the Roman empire and others before it. Moral decay, corruption, debased currency, wars of deception, collapse.
            We learn not from history!!
            Gold is the eternal money throughout.

          • bonbon

            “Gold is eternal”, straight from the Valley of the Kings, a huge Tomb Bank stuffed with gold. I am now convinced this is from a Lodge and their fascination for Masons. And all Lodges are run by the Crown, as the Duke of Kent said in that interview which proves well worth the read.

            Secret societies, claiming purity, are the very root of corruption. Ireland is riddled with them, and there is no way to claim the “insider” consensus was not made there. If Lodges go to war on policy, the Crown benefits.

            I think it is time to look harder at the entire gold approach.

          • Tony Brogan

            Again you talk total rubbish

  39. tony_murphy

    No need to worry about an Irish revolt..

    Most people are in a Trance/Zombie state. They haven’t a clue what’s going on. And they won’t find the answers in the mainstream media, but they are quite happy consuming that old rubbish anyway

    The government would probably just up the fluoride dose in the water if they thought anyone was about to start to use their own brains

    • Tony Brogan

      Hello Michael
      Basically that is the spin offerred, and you are correct in seeing that as read.

      However, one has to ask why the gold was able to be borrowed by the “bullion banks” at such a low rate to begin with, and why the money was used to buy US treauries.

      The simple answer, to support the US dollar, and to simultainiously drive down the price of gold. This was the essence of the ‘strong dollar policy’ and it has continued until the recent past, probably to 2010.

      Why drive down the price of gold?

      Gold is the canary in the gold mine. It is the resolute indicator of inflation in paper fiat currencies. If the economy falters, the dollar weakens then the price of gold appears to rise and give the lie to the expressions from the bankers and politicians that all is well in the economy. A rising gold price says it isn’t.
      The bullion banks would never lose a fortune as they were complicit in the scam and had the nod from the central banks that the gold could in fact not return (it was after all already gone and sold into the market) and a settlement, if actually made. in cash.
      In fact Barrack gold has already claimed immunity from law suit on the basis they were enacting government policy.(Barrack a gold miner had one of the largest short positions in gold untiol about 2005, to help drive the price down. Their shareholders must have been commotose.
      This was good business for the bullion banks as they were guaranteed a 2-3% margin on a pile of cash.

      Bullion banks leased gold in large quantities from central banks. A one year lease. bullion bank sells the gold into the market. invests proceeds in US treasuries. gold price down, US dollar up!

      This has been happening for years as well as direct sales from some banks.
      Most people in most countries view gold as the peoples money and become upset if they see it sold.
      Sales did not take place for this reason, but leases drew no attention. gold swaps then took place between nations and many countries stored their gold in London or New York.
      Any country could asked by the US to lease gold and the US could borrow another’s gold and lease it out. There is enough circunstantial evidence that this was going on and it is documented by GATA. It can be reviewed at http://www.gata.org.

      Leased gold still belongs to the lessor (the owner of the gold)so it was still accounted on their books.As the leased gold was sold on the market it arrived in other central bank vaults (chinese, russia, etc.) and it was accounted for there too. A new form of fraudulent double accounting system.

      It is now uncertain how much gold the western countries still have as in addition to leasing activity there were outright sales of gold as allowed under Bretton Woods. The amount allowed to be sold per year was restricted to about 500 tonnes per year. From 2000 to 2008 this appears to have happened regularly. Since 2008 the amounts decreased until in 2011 and 2012 there is no selling of western gold but now central banks are net buyers of gold.

      In 1971 the US had alleged to have 8200 tonnes and the western banks about 32,000 Tonnes in total.

      Because of the secrecy and lack of audits nobody knows how much gold is left.
      Annual demand was steady at 4000 plus tonned p.a. and now increasing and mining supply was around 2500 tonnes and may have increased to 2800 tonnes last year. Scrap sales have added some but it appears the central banks supplied a steady 1000 tonnes a year into the market so over 12 years that is 12000 tonnes of sales plus what has been surrepticiously leased.
      The west will be lucky to find 10,000-15,000 tonnes left. As uncle Sam was looking after , as custodian, gold from other countries, it is possible that gold is gone.

      Gordon Brown made a big noise about selling the gold, advertising the event. Done in a fashion to drive down the price before the event, jawing it down, and then selling as the lowest price possible. Result Browns Bottom.

      The IMF said they would sell gold and ventured they would sell 400 tonnes to have the funds to support the poor people of the world. They do not appear to actually have any gold but promises to supply by certain countries. China was attenting to negotiate a lower bulk sale price for the lot when India slipped in and bought 200 tonnes at the going rate and said they would take the rest. No more was offerred and the gold cartel was set back by the increased demand.

      Since then the gold cartel, central banks, US gov and allies have been reteating to ever higher prices as the physical demand exceeds the physical supply.
      Other means are employed to pressure the price down or not let it rise from the demand.

      E.G. The ETF GLD states it has 1200 tonnes of gold. If the prospectus is read in detail it is observed that the fund need hold no gold at all. It may invest in paper gold instruments, and it enploys custodians, and sub, and sub sub, and sub sub sub custodians who are not audited. Nobody knows if the gold is there and it is not allowed to be proven. Chances are that there is enough to allay a run but there could be as little as 20% there of bullion or say 250 tonnes.
      So people invest in gold thinking they will add to the demand but do not know there was no gold purchced on their behalf. Thus the price is lower because of less demand. People and instutional investors are finally realizing the risk and withdrawing funds and trying to buy physical gold.

      The custodian of this fund is HSBC who happens to be the largest gold short in the world, so your custodian wants the price to fall while the cusomers want it to go up. Some conflict.
      The same can be said for JPMorgan and the silver fund SLV.

      So Michael. There is bugger all gold left in the West and what is, is needed and retained unless the ECB gets their hands on the gold of the Austerity cases in europe.

      The US dollar is defended at all costs by assassination and war. Saddam said he would sell his oil in Euros–Bang, bang. goodbye Saddam.
      Ghaddafy said he liked a pan African gold dinar and he was cooked for dinner. Libya had 132 tonnes of gold and no central bank. That gold was used to suppress the price. The first act of the Libyan rebels before the war ended was to form a central bank. –go figure.

      Russia, China, India, Iran, arabians, Viets, etc. demand physical and there is not,enough supply.

      Prices are driven down by the paper market.
      Jeff christian of CCM group stated that the London Bullion Exchange had only one ounce of gold for every 100 ounces traded daily.
      A situation like Brown offering 200, 500, 1000 ounces of gold to drive the price down wold be snapped up to be bought by the chinese, Russians or Indians to name three.
      It is not going to happen,

      The gold price is going to 3500 then 5000 the maybe 10,000 an ounce, as it is the only way to reconcile the debts accruing and accrued. The more that fiat is printed the higher the value of gold goes.

      How high? Ask the Germans, Ask the Zimbarbweans, as their currency went to zero. Infinity is the answer.
      Silver has 500 industrial uses and supplies are used up. historical ratio was 14-1. We will likely see 10:1 or 1000 ounce silver.

      The end game is nigh. We are at the point of no return.
      Do not argue amonst yourselves but take steps to protect yourself.Purge your own debt, buy what you can get hold of before there is none to be had.

      Do not listen to the naysayers or smarties Michael. Get what you can while you can. It will be volatile but buy and hold. It is your insurance for the future. AA few ups and downs are par for the course.

      I am in Greystones a few days and I can cycle a radius of 50 km for a chat. So if you want a get together for an informal bit of fun. Low cost, water is fine by me, or a coffee or beer, whatever.

      Best regards

  40. redriversix

    Morning All

    “TIME Magazine”

    next copy.

    “How hunger no longer exists in the third world”

    “Buying Property on the moon”? Apartment or semi-d ?

    “Why German P.M Merkel decided to cancel all debt with immediate effect and implement non-profit Banking across Europe”

    “Jamie Diamond becomes C.E.O of Trocaire”

    “Economist David Mcwilliams joins Iranian Rock Band,TIME asks about Touring in America”

    “TIME investigates..”is REHAB for quitters ?”

    “Pope admits Catholicism “only made up after a few beers”Bible only written to pass time,Priests demand 6 weeks redundancy” Applications to Scientology and Fine Gael party soar.”We Ask why..?

    Remember for all the hard hitting investigative journalism TIME Magazine is available from your local newsagents……but for fuck sake ,don’t buy it

    TIME MAGAZINE “paper doesn’t refuse ink”

    • molly

      What I want to know is where are we heading,most people I speak to seam to think things here are going to get even worse.
      The same people think this government is very poor at running the country,now with the budget coming how much worse can things get.
      It’s all very well saying look after your family first,but it things get worse its surly going to get harder to look after your family.
      How much worse can things get?
      The warning signs are there but how much worse can it get.

    • Grey Fox

      +1 thanks RR6
      I get the seriousness of your comment but you still managed to put a smile on my face, job done! cheers

      • redriversix

        Morning Greyfox

        For a while their I thought people’s sense of humor and gone the way of the Dodo

        How are you today ? hope all well

        If we start allowing circumstances to eat away at who we are every hour of every day..,we are truly beaten..instead of getting ulcers,we should be giving ulcers..!

        In the immortal words of Socrates……..”fuck em and the horse they rode in on”

        As “PATTON”said “I don’t want to hear about anybody dying for his Country,you make the other dumb bastard die for his”

        How about that coffee some time ?

        Have a great day


    • bonbon

      Strange omission there – Enda’s Poster Boy mug in the tradition of Il Duce Time Mag Covers in the 1930′s. Time Mag never refused Wall Street ink.

      I say buy a crate-full and carry them on the marches going on now. Put the Time Mag cover of Il Duce beside, held up for all to see, with a banner : Eoin O’Duffy was known as the Green Duce!!!

      Why be diplomatic?

  41. Tony Brogan

    Determining the value of gold


    When considering whether gold is a value investment, one needs to first recognise that gold does not have a balance sheet, management team, price-earnings ratio or any of the other things one needs to analyse before making an investment. Also, gold does not generate any cash flow, so it does not pay a dividend. We can therefore conclude from these observations that gold is not an investment. Indeed, it is something different, which means that normal investment analytical techniques cannot be used to determine gold’s value.

    Value of course arises from an item’s usefulness, and gold is useful because it is money. Though only used as currency these days in a few places like Turkey and Vietnam, gold is still useful in economic calculation, or in other words, measuring the price of goods and services.

    For example, when the Maastricht Treaty was signed in February 1992, one barrel of crude oil cost $19.00, €15.95 (Dm 31.30) or 1.67 goldgrams. Now it costs $91.79, €71.27 or 1.61 goldgrams, which makes clear that not only is gold useful in communicating prices, it preserves purchasing power. Gold has been useful in these ways for over 5,000 years, so it is logical to assume that gold will remain useful for the foreseeable future.

    Some say that the gold price rises and falls, but they are grabbing the wrong end of the stick. It is the purchasing power of national currencies that rise and fall. Here is an analogy to make this point clear. When standing in a boat and looking at the shore, it is the boat (currencies) — and not the land (gold) — that is bobbing up and down.

    Currency fluctuations occur in the short-term, but over the long-term, a currency’s purchasing power is continually eroded from inflation and other debasements inflicted on it, as is clear from the example above showing changes in the price of crude oil. There is, however, a subtle but more important point to make here.

    Gold does not create wealth. It cannot possibly do that because it does not generate cash flow. Remember, gold is not an investment; it is money, and these two things are entirely different. So when the price of gold rises, wealth is simply being transferred from people who hold currency to people who hold gold. This wealth being transferred already exists. It is wealth held in the form of purchasing power.

    Lastly, is gold good value? This is a question that each of us must answer by ourselves because value is subjective. But to me the answer is clear. Gold is indeed good value because it is a useful money, not prone to the problems perennially plaguing national currencies.

    Further, gold is good value because it is not over-priced, a conclusion that can be reached by simply considering supply and demand. Even though the gold price has been rising this past decade, the supply of national currencies is being created much faster than the supply of gold. Second, the demand for gold understandably continues to rise as it offers a safe-haven from the ongoing turmoil of the interrelated bank insolvency and sovereign debt crises that have been riling national currencies. These crises have not ended, so I expect this supply/demand relationship will continue. Therefore, gold will become more highly valued in the months ahead, meaning that its purchasing power will rise.

    At some point in the future, which cannot be predicted, gold will become overvalued. Its purchasing power will exceed historical norms. To give but one possible example, maybe a barrel of crude oil will only cost 0.50 goldgrams or less. When that moment arrives, it will be time to reduce your gold holdings to buy undervalued investments or to purchase some consumer goods with your savings, which is the gold you are accumulating now while it remains undervalued. I suspect that we are still many months, if not years, away from that event because gold is far from being overvalued.

    Tags: gold price, inflation, sound money

    Author: James Turk

    • bonbon

      Strange tract. Measuring gold’s value in fiat currencies seems a contradiction. In hyperinflationary times gold would then have enormous value?

      Use it for embalming, send it to the next world with some Pharoah. There it will be safe in Maat. The Tomb of the Kings was the ultimate gold bank.

      • Tony Brogan

        You have it backwards as usual and you do not understand the function of money in an economy.
        golds value is not being measured. Fiat currencies are being measured by the yard stick of gold.

        Ridicule is a function coming from a mind without proper argument. You have no legitimate argument, just derision which you often use to belittle others.

        Your mind is embalmed by LaRouche and more’s the pity for that.

        When hyperinflation occures golds value as money is constant, it continues to buy what it used to while the inflated currency diminishes to a zero value.Like 10 million for a loaf of bread whereas it still takes a fraction of a gram of gold for rhe same loaf.
        In Zimbabwe recently it cost billions for a meal but the same meal was a mere flake of gold in a pan, as always.
        As always gold as money protects against the ravages of inflation. You will need some, so do not delay or when you finally do decide there will be none available at any price(in fiat currencies, that is. “In hyperinflationary times gold would then have enormous value?” is a correct statement in terms of the amount of fiat required to obtain gold)

        • bonbon

          How exactly is a fiat currency measured by a golden yardstick? By its weight? You always quote gold “value” in Dollars. How can metal be a yardstick, unless that ruler is made of gold. Do you measure the thickness of a wad of notes in golden microns? Or is more of a rule of thumb, a golden thumb?

          Measuring economic productivity, healthcare, energy, with a golden ruler, seems to me very odd, symptomatic of typical economics today . Maybe we could weigh wheat harvests against gold ingots? Or weigh future Eurasian Transrapid net in gold bars? Can the yardstick even measure itself?

          • Tony Brogan

            “How exactly is a fiat currency measured by a golden yardstick? By its weight?”

            Yes, exactly. By its weight in pure form. It takes 1366 units of euros to get one troy ounce of gold.Cheap, I would say, as likely this time next year it will take perhaps 1390 Euros to obtain an ounce of pure gold.Or more.
            Yes, you can weigh wheat harvests against a given weight of gold. Exactly how it works.
            No ‘yardstick’ measures itself as you well know.
            Gold is the measure against which all else is compared. It is the standard.
            Now I begin to see a glimmer of understanding, bon bon.
            Economic activity is recently measured in fiat currency, a distorted measure because of inflation, devaluation of the currency.
            Gold is a better measure as it is not subject to inflation. Rather it measures economic activity after accounting for inflation.
            Economic activity measured by gold shows we have been in a long term depression as many Irish people know.
            Yes the measure does act as a yardstick precisely because it is made of gold. nothing else works as well.

          • Tony Brogan

            perhaps 1390 Euros to obtain an ounce of pure gold.Or more.
            Should read—- 1600 Euros

          • molly

            Food and land to grow food will be what’ a person needs to survive you can’t eat gold.
            In the aftermath of any situation the most valuable commodities are going to be food, water, clothing, other things that human beings need for their immediate survival.

          • bonbon

            Again, a “fiat” currency, being entirely imaginary in value, how can it be measured by gold? The “value” of gold seems always to be cited in $ or Euros. A cup of coffee in 1923 for 1 billion Reichsmaks was a valuable asset then?

            Economic productivity, today cited in the insane GDP monetary fudged statistics, cannot be measured in metal terms, nor fiat term, but just in physical-economic terms. Staying away from monetary yardsticks, metal or fiat, should be the lesson of the day, what?

          • bonbon

            And how is metal supposed to measure the value of the Shannon Deep Harbor, or the Eurasian Landbridge, and NAWAPA XXI, all of which are of the immanent future? I can imagine a Euclidean LSE Prof saying cut a meter of gold, and measure the length of track, or depth. From these numbers then it looks simply ridiculous to even try.

          • Tony Brogan

            Everything you mention is imaginary bon bon.
            Nothing you mention has any value. It is a figment of your imagination. Vapid statements of deliberate obtuseness are not useful.
            Act like a moron and get treated as one!

            Hello Molly
            Nobody wants to eat gold although colloidal gold has remarkable benefits as does colloidal silver.
            Quite right to have land and ability for sustinance. of course one can’t eat land either but both land and gold are tools for survival. They are the wealth of the ages. Land does not make good money as it is static and not transferable or portable but it is wealth. Gold can not be used to grow things as can land but it is also wealth but money too. It has fungibility and is portable. when times are such that the land must be abandondoned then gold is transported and used to start again in a new land.Gols can be converted to whatever you want, not so land unless it is sold and the value converted to gold.
            Best regards Molly

      • Tony Brogan

        “Some say that the gold price rises and falls, but they are grabbing the wrong end of the stick”

        bon bon, you are grabbing the wrong end of the stick!!

        Read James Turk’s piece again and then again.

        • bonbon

          Ah, so now we have an absolute, metal. A touchstone from which all else springs forth. It seems to me magicians are hitting that gold floor with a staff (Harry Potter?) expecting all good things to simply pop into existence. Seems to me impossible.

          Read Newtons Alchemy (for 100 years under wraps) to see the similarity to this carry on. Even Newton admitted to Hooke that spooky “action at a distance” was a sham. Economcs-at-a-distance, is a sham.

  42. michaelcoughlan

    Hi Tony brogan,

    Thank you for your response. I still feel a correction is possible but agree with you for medium and longterm. The reason I am reticent is because the 1 day moving average is crossing the 5 day moving average over and back for quite some time now not allowing the price to penetrate 1800/oz indicating an enourmous fight between bulls and bears. Therefore some one some where still has plenty of the yellow stuff to dump at 1800/oz. When I see penetration and support above 1800/oz only then will I add to my position.

    Really enjoy your posts on this issue.



    • Tony Brogan


      There is no doubt that there is a battle royal ongoing. Ferdi Lips described it in his book Gold Wars.

      The bad guys do not want to use the real thing to put on the market as it will be snapped up by the physical buyers.
      They use the paper futures market and leverage to drive the price down. They buy short contracts. They are trapped by the physical buyers who now use the practice against the the cartel. They wait for the price to drop and then step forward to buy more physical.
      There is even a suspision that some of the physical buyers use the paper market themselves to drive the prices down and then buy physical.
      The bullion banks going short at the cartel and government behest will be protected as long as they remain useful as TBTF. When they are no longer useful there will be the mother of all bank collapses and a new financial order will arrive out of the blue, having been planned and organized for years. (just like the Federal Reserve was.)
      So there is a floor under the price placed by physical demand while the top is in place by the cartel to get their man into the Whitehouse. After the Nov election there may be a reteat again to the next 1% level. Just under 2000. Then by the new year it could go to a new world pricing in US dollars. it is already in a world record price in Euros reflecting the devaluation of the Euro over the last few months.
      Buy on dips at any time Michael. 20-20 dollar variances may or may not show up in the Euro.
      Canadian dollar is stronger this week and so showed no gain on a $12 US gain and then a $15 loss agaist a $10 US loss.
      The cartel and the central banks are now buyers of gold and sooner or later will drive the price up rather than down to establish their control and monetary power.
      Two years from now any changes in the price will hardly register as a blip on the graph!!
      Good luck.
      I look forward to buying you a pint.
      Thanks for your affirmations.

  43. Harper66

    Surely it is time to put the gold standard and glass steagall debate to bed for a while?

    Every thread finds its way back to these issues regardless of the theme of the article.

    This site has served as a great source of information on a wide variety of topics for years and unfortunately due to a couple of posters this is no longer the case.

    • Tony Brogan

      Sure , no problem. What would you like to discuss?

    • Dorothy Jones

      Harper, I gave up talking. Walked last Sun in protest against 1bn€ AIB bond repayment Mon 01 Oct behind Diarmuid O Flynn.

    • Dorothy Jones

      yes +1

    • bonbon

      The theme is “insiders” and “outsiders”, this time around. I raised the issue above of the ultimate “insiders” and “outsiders” – care to comment?

    • bonbon

      The Austrian School have a recipe for the future. Glass-Steagall followed by Reconstruction and Hamilton National Banking is a much better one. That does not include the recipe the British Empire has – 1-2 billion after culling.

      People are already arguing about what to do after the present system. The discussion has moved ahead. Providing a list of the crimes of the current operatives is one thing, entertaining, but the future is something else.
      Every thread finds its way to the future. People are simply sick of the shenanigans of the doomed epoch. That is normal – that is what drives economics. Some insiders know this, Sandy Weill for example.

      DMcW divided the pie up into insiders and outsiders, but how about into those looking at what the future must be and those that only look to the past? To deny a huge number of people any future is what is driving the civil unrest all around. That is to deny the very humanity of masses of people. A crime against humanity.

      Look at Enda on Time Magazine as someone getting in the way of the future, like Time Mag’s cover of Il Duce before. Eoin O’Duffy was known as the Green Duce. Poster Boy indeed!

    • Joe R

      I did a rough count of the comments on this thread.
      This is comment no.200 for the record.

      Of the 200 comments up to this one I put it at 55+ for BonBon, and 45+ for Tony Brogan. That is a hundred or a half between the two of these 2 posters.

      About 30 other mainly regular posters including the blogs author share the other hundred posts, so that is about 3 each.

      Tony B is arguing his corner it seems to me, which is exhaustive, given the ludicrous badgering he has encountered in reply to his basic posts. I bet he will give up like many others – that would be normal.

      For the record too, I would like to say that my initial posts here (years ago now ) on this blog started as a form of mental release for me, back then, from the economic insanity of what was unfolding in Ireland, and in particular to me. The interaction here encouraged me to do some reading and the blog and its posters became useful for me in examining and understanding what I was reading privately. It helped me to refect on things I was picking up elsewhere, I suppose. Over-time I have moved on a bit so posting or the debate here no longer interests me so. Plus McWilliams is repeating himself a lot, this article is an exception though.

      But thanks to all the posters on here. Well nearly all.

      Right now, however, I can see why anybody trying to post now as I did then with an aim of learning somethung would give up at the solid wall of Glass-Seagall and the Austrian school being thrown at them.

      • bonbon

        There is a war on, sonny. Just in case you thought this was the “good room”. A lot of china, brittle egos, can get broken.

        If you think this is entertainment, well just say that to the people of the country who know instinctively its war.

        Time for reflection, counting posts, on the “good sofa” in the “good room” is a luxury about to be blown out the window. You do realize what FG is doing? Or maybe you are of the “insider” consensus that DMcW refers to above, about now to get hit by these policies?

        • Joe R

          A bit of early morning Monday blog badgering to get the week off to a good start there bonbon?

          Listen to the rhetoric in the reply – there is a war on, no less. Then I am refered to as “sonny”, then there is attempt to place me on the negative side of supposed McWilliams created divide? What lunacy is this? A pathetic attempt at whipping up a group backing for your ridiculous comments.

          You are of a brigade here, the la Rouche brigade, you are marching to war! Simply preposterous.

          And I need no validation from a sweet that does not name itself.

  44. Dorothy Jones


    Taste of Untouchables Shane Ross; extract of same tomorrow I think in news.

    • coldblow

      Hi Dorothy

      I started reading this yesterday in the Sindo but I gave up half way through. I must go back and finish it as you need to know as much of the tedious detail about these people as possible AND commit it to memory.

  45. redriversix


    Good Morning..!


    • Tony Brogan

      Lovely day here in Greystones RR6.
      I have a place here for a few days and can travel wherever the mood takes me. Played golf at Bray course and yesterday cycled down around Bray to see the country. Hundreds of people on the promenarde and lots of children too. A joy to see the happy smiling faces.
      A couple of guiness wentdown well at the pug last evening and plenty og people in a good mood. Sports tv’s all over with rugby here, soccer there and the track infront.

      Happy to visit with you anytime. Just say the word

      • bonbon

        Some of us like to work, not for gold. How many were playing golf? How do the green fees compare to Canada? In Germany they are prohibitive. Lots of US fly in to play at Lahinch, and helicopter to Ashford Castle. All important deals are made on the fairway.

        “No rest for the wicked”, as the man said!

        • Tony Brogan

          Well there were three of us together and as we played we decided that the only solution was to invest in gold and more so in to silver.
          It was agreed that the currencies of the world would be debased to nothing by the inter alpha group and the last thing standing would be gold and silver.

          It is only the second time I have played golf in 20 years and I was very happy to be invited at last into the inner circle where all the deals are made, as you say.

          I have no idea what the green (i hate that word) fees were as I was gifted the occasion. Yes I have been bought and paid for. I wait with great anticipation for the chance for a helecopter trip to the next round. It is a great way to look down on the masses.
          We definately need more golf courses. Very educational places.

          I’ll put a good word in for you bon bon. You would gain great insights as you putter around.

          • Colin

            bonbon would make a great caddie I’d say…. giving advice to the player on all class of things from wind movements, to shrubbery, bunkers & water hazards. And I’m sure bonbon can check the numbers at the end and make sure tis all tickety-boo.

          • bonbon

            The insiders are circling the caddies! I’ll bet the putter is solid gold, it gives the ball that bit of extra oomph! Better, silver shaft, and solid gold. That gets through customs nicely?


          • Tony Brogan

            I always leave three golf balls hanging from my bag. I am always open for business especially if some one needs cash to buy me a round at the office ..I mean bar.. and they leave me with their golder putter. It does make a nice ping. I always like the sound of sound money.

        • bonbon

          I meant USA tourists, not “US” !

          If I was on that fairway, more sods would have been flying than golf balls!


          • Tony Brogan

            Well in a good Irish tradition I used a couple of Mulligans!

            Leave the sodding to others. I prefer to create divots which are repairable! Mostly I create airshots which leave a perfect turf untouched. I did hit a few good shots which will allow me to return in anticipation of improvement.

            Most of all, the air was clear, the views lovely, and the company enjoyable.

      • redriversix

        Morning Tony

        “well I never ….a Canadian in Greystones”..!

        I don’t live to far from where your staying maybe we can hookup for a chat tomorrow afternoon..?


    • Tony Brogan

      Nice to meet with you RR6. We will do it again. a couple of days notice and a location and maybe we will get a couple of others.
      I think I will plan for Kilkenomics. I’ll look for a B and B
      where is the venue—in the town center? If you want to split some room costs I am game.

  46. bonbon

    Spain is ahead, the “consensus” of the insiders has broken.

    The 25S Movement in Spain Considers New Protests Against Budget Cuts Debate

    Oct. 6 (EIRNS)–The Coordinadora 25S (25S Coordinating Group) intends to convene a new protest to surround the Congress of Deputies (lower house) during the expected general debate of the draft law of the State Budget (PGE) for 2013 to be held in the Congress in Madrid during Oct. 23-25.
    This was confirmed in statements to Europa Press by Feli Velazquez, a spokesperson for the Coordinadora 25S, who said that, even though the group’s first call on September 25, from which the group 25S takes its name, resulted in 35 people being detained and at least 60 injured, they will continue to take to the streets and demand the resignation of the government and the beginning of a constitutional process around Congress.
    “Of course, people are losing social rights but they are also losing their fear, and this is demonstrated by the number of people who have taken to the streets,” Velazquez said, adding that 25S intends to continue demonstrating in subsequent calls. On the details of the call, such as the date and time, Velazquez explained that the Coordinador 25S will call an assembly of members and supporters on Sunday, October 7 in the Buen Retiro Park, next to the Palacio de Cristal, at 11 a.m.

  47. bonbon

    Here is an “insider” society, the Mont Pelerin Society of F. von Hayek, dubbed “Friends of von Hayek”, Austrian School :


    See the photo’s on that link : Milton Friedman, von Hayek, Karl Popper, von Mises.

    How anyone can try the trick of denying the Milton Friedman Chicago Boys (who gave us Pinochet) link directly to the Austrian School, is beyond me.
    Popper turning up there is very revealing.

    These photo’s are from 1947, just after fascism was defeated world-wide. Interesting how stated Aim #3 :
    “The redefinition of the functions of the state so as to distinguish more clearly between the totalitarian and the liberal order”.
    It was clear in 1947 to everyone what totalitarianism was, and along comes this Society, “neutral”, to redefine the role of a state? It seems to me they did not expect fascism to be so quickly defeated, for them a serious crisis.

    • bonbon

      Thatcher’s economics comes from this Mont Pelerin spinoff, the IEA :


      It is now no surprise that Pinochet was invited to Britain before his ouster, by Thatcher.

      Von Hayek’s 1944 book The Road to Serfdom (the title was an inside joke) set the tone for the “Conservative Revolution” which the new society championed–that of a return to feudalism: “We shall not rebuild civilisation on the large scale. It is no accident that on the whole there was more beauty and decency to be found in the life of the small peoples, and that among the large ones there was more happiness and content in proportion as they had avoided the deadly blight of centralisation.”

      Von Hayek cynically denounced the nation-state as “tyrannical,” even while he called for the establishment of a one-world empire: “An international authority which effectively limits the powers of the state over the individual will be one of the best safeguards of peace.”

      One-worldists are using FG as a reason to push their agenda, which just happens to be the same as FG’s, the destruction of the Nation-State. What perversity!

      • Tony Brogan

        Bon bon you are either lazy, a propagandised drone or a duplicitous lier.

        Here is the full quotation from Hayek and all will see that that for some reason you twisted the quote to suit your purpose. A little knowledge is a dangerous thing and you feed us just enough to make yourself credible.

        Here are Hayek’s words in full.

        What the United Nations should have, but did not, become — and a warning against “world government”:

        We shall not rebuild civilization on the large scale. It is no accident that on the whole, there was more beauty and decency to be found in the life of the small peoples, and that among the large ones there was more happiness and content in proportion as they had avoided the deadly blight of centralization. Least of all shall we preserve democracy or foster its growth if all the power and most of the important decisions rest with an organization far too big for the common man to survey and comprehend.

        Nowhere has democracy ever worked well without a great measure of local self-government, providing a school of political training for the people at least as much as for their future leaders. It is only where responsibility can be learned and practiced in affairs with which most people are familiar, where it is the awareness of one’s neighbor rather than some theoretical knowledge of the needs of other people which guides action, that the ordinary man can take a real part in public affairs because they concern the world he knows. Where the scope of the political measures becomes so large that the necessary knowledge is almost exclusively possessed by the bureaucracy, the creative impulses of the private person must flag. I believe that here the experience of the small countries like Holland and Switzerland contains much from which even the most fortunate larger countries like Great Britain can learn. We shall all be the gainers if we can create a world fit for small states to live in.

        But the small can preserve their independence in the international as in the national sphere only within a true system of law which guarantees both that certain rules are invariably enforced an that the authority which has the power to enforce these cannot use it for any other purpose. While for its task of enforcing the common law the supernational authority must be very powerful, its constitution must at the same time be so designed that it prevents the international as well as the national authorities form becoming tyrannical. We shall never prevent the abuse of power if we are not prepared to limit power in a way which occasionally may also prevent its use for desirable purposes,. The great opportunity we shall have at the end of this war is that the great victorious powers, by themselves first submitting to a system of rules which they have the power to enforce, may at the same time acquire the moral right to impose the same rules upon others.

        An international authority which effectively limits the powers of the state over the individual will be one of the best safeguards of peace. The international Rule of Law must become a safeguard as much against the tyranny of the state over the individual as against the tyranny of the new superstate over the national communities. Neither an omnipotent superstate nor a loose association of “free nations” but a community of nations over free men must be our goal.

        He is a positive advocate of a free man within a free state in harmoneous relations world wide. You will have no argument with that.

        – Friedrich A. von Hayek, The Road to Serfdom, (1944; Definitive edition, Bruce Caldwell, ed., Chicago: University of Chicago Press, 2007), 234-235.

        • Tony Brogan

          Sorry I misplaced my last comment as it should be under the Authorship and not before it.

          He is a positive advocate of a free man within a free state in harmoneous relations world wide. You will have no argument with that.
          And place at the very end as my comment

        • bonbon

          Sure! An advocate of world government to limit elected ones in nation states. Exactly what we have in Europe now. With technocrats and mini Duce’s destroying the nation-state from within and without. Pure von Hayek.

          And pure Keynes, an advocate of world government and a Bancor world currency. Only the most decadent could possible fail to realize why these 2 apparent “opposites” simply disagree on the way to world government. They both represent the British Empire.

          Attacking the “totalitarian” post World War II states, while proposing an “international authority” to limit them is pure perfidy. It is the Mont Pelerin Society Big Lie.

          Makes Goebbels look like an amateur!

        • Joe R

          Tony – for you.

          Regarding L LaRouche — from Wikipedia, and well referenced;

          “LaRouche organized the network as a series of news services and magazines, which commentators say was done to gain access to government officials under press cover.[18] The publications included Executive Intelligence Review, founded in 1974 and known for its conspiracy theories, alleging that Queen Elizabeth II is the head of an international drug-smuggling cartel, and that the 1995 Oklahoma City bombing was part of a British attempt to take over the United States.[19]”


          And if you want more here is p.84-95 of Conspiracy Theories in American History: An Encyclopedia, which features Lyndon LaRouche and his followers.


          ( by Rausch, John David (2003), “Executive Intelligence Review”, in Knight, Peter, Conspiracy Theories in American History: An Encyclopedia, Volume 2, ABC-CLIO, p. 245, ISBN 978-1-57607-812-9 )

      • Tony Brogan

        Thatcher broke the backs of the unions that had Britain in a vicious economic vice running the country for their own ends.
        She went to far with the Poll tax but it is arguable that she created the bases for the economic properity of the next 20 years.
        Unlike the politicians we like to complain about today, she made decisions and carried out actions. Someone I could vote for. You knew what you were going to get. she was voted in and voted out again. Similar to the national hero Churchill who also made decisions and took actions. Not all correct, but appreciated by the people non the less.

        And what was the reason Pinochet was invited to Britain?

        • bonbon

          We know what we get with the IEA – Pinochet’s. The link to the Chicago School is now firmly established via the Mont Pelerin Society of von Hayek and the IEA. In other words we are dealing with British imperial economic warfare. Highly duplicious.

          Perfidious Albion.

        • bonbon

          Pinochet was the Poster Boy of the IEA “conservative revolution”. Today we have Enda, the poster boy on Time Magazine cover, exactly as Il Duce in the 1930′s cover – “Happy Birthday Il Duce”. Ironically the founder of FG, Eoin O’ Duffy, was known as the Green Il Duce!

          It turns out Mussolini was in British pay for at least a decade before implementing the British Fabian Communitarianism today known as Fascism. Perfidiously, Fabian is nominally “left”, produced Mussolini, nominally “right”. Thatcher’s IEA and the Mont Pelerin Chicago Boys, oh sooo liberal, free, gave us Pinochet.

      • Realist

        How on earth you can link Hayek, who was the only guy to get Nobel prize for wanting to remove central bank, monopoly of money from state and state influence over economy with FG or any other IRish party.
        Every political party in this country wants to be more powerful, control everything and nobody is giving up on central bank and fractional banking system!!!!!!

        I appreciate bonbon for mentioning Hayek and Austrian SChool of economics as the one I hope to win once we get over this neo-keynesians era.

        • bonbon

          Anyone can read the stuff. “International Authority” is all over the place, as also Keynes’ objective. FG long ago decided to play into Il Duce’s ideology.

          Both Keynes and Hayek proposed World Government, sorry, ehem, “international authority” to “enforce” rules.

          The Mont Pelerin Society of Hayek gave us the Pan-Europe called the EU today. It is no surprise FG’s pedigree leads them by the bit to trot along.

          • Realist

            Sources, links will help here.

            Unsure where are you getting those crazy ideas really.
            You admitted that you did not read 1 book from those people, so unsure how you can write such things.
            Nor you ever presented 1 regarded source, link, ..

            Do you have any moral values at all?

          • bonbon

            Mont Pelerin Society has its own web page – see the mugshots there. The links are all over this page, and the previous DMcW theme. Easy to find with google today.

            One can try and wiggle around but Friedman, Keynes and Hayek’s own words, perverse indeed, but that is the British Way, are damning.

            No more Pinochet’s, ll Duche’s, nor Hitlers – all monsters bred by the British Empire.

    • Realist

      They were friends, but that sometimes does not mean they preached all ideas the same. Are all your friends LaRouche funs?
      Hayek admitted that the two biggest mistakes he made are not to wrote the books and systematically destroy Keynes on everything and Friedman on some things (quantity-theory of money and monetarists theory). He thought Keynes had no relevance as he was not an economist and his opus was a joke nobody could understand.
      Friedman was away smarter and more correct than Keynes anyway: http://www.youtube.com/watch?v=fXqc-yyoVKg

      • bonbon

        “Jack Sprat are no Fat, his Wife ate no Lean. Between them Both they killed the Goat and licked their plates clean”.

        Remember that childhood rhyme? It is a warning to kids not to be the menu in a cannibal cafe. A warning that the public good is about to be devoured.

        Alice was shown a pantomime of the Walrus and the Carpenter, another warning :

        Any teenager can see the lesson here. How is it adult politicians apparently cannot, or have they simply become the characters! Peter Ustinov plays the Walrus here absolutely to perfection!

        “He deeply sympathized as he ate those of the largest size. The carpenter ate only as many as he could get”.

        That’s Hayek and Keynes. Tweedle Dum and Tweedle Dee, the Walrus and the Carpenter. “Friends” who disagreed.

        This is what confuses people, as it is meant to. But then who said war was fair. Tigers have been brought up to believe in Wonderland, Enda goes to Brussels “good room”, as DMcW put it, but must realize it is the Mad Hatter Tea Party, totally bankrupt. In one way it is pathetic, but to see FG trying to emulate their masters is disgusting!

        • Realist

          Would you ever offer an easy answer :)

          Do you realize that most likely nobody understands what you are talking about.
          If we cannot talk with arguments, in simple words what is the point.

          The good thing about you is that people will start thinking and realize who is who here.

          • bonbon

            The good thing is that people will see how fine words of Milton Friedman, von Hayek, Soros, produce Pinochet’s.

            This time around, ridicule, public mirth, will be the only thing they achieve.

            Feudalism is finally over. The British Empire is now doomed one way or the other. It will never be resuscitated. It is completely bankrupt, and every effort, including the British Gold Standard, will only draw more ridicule.

  48. bonbon

    As DMcW says “Now those suggesting that the endgame will be debt repudiation are taking the flak. But it will happen”.

    Debt repudiation, “burn the bondholders”, and Glass-Steagall are exactly the same, but GS goes into precise detail, separating synthetic debt and the types of banking. Physical-economic debt, not monetary but the lack of growth per capita, must be made up with huge programs. Increasing the productive power of labor, and the natural wealth of the nation must be a priority after repudiation.

    In other words the purpose of repudiation, is to have a future, not merely to get revenge on some “insiders” who are not really the insiders.

    • molly

      I might have the wrong end of the stick if we have already payed back the unsecured bonds and we are left paying secured bonds ,than thats like we have done the paying backwards.

    • Tony Brogan

      Then please direct us to the precise detail of GS, thanks.

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