February 9, 2013

No matter how Coalition dresses it up, we cannot afford to pay Anglo's debt

Posted in Irish Independent · 102 comments ·
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First, the good news. Swapping the debt from a promissory note to a long dated government bond will mean that, in the short-term, the State won’t have to find so much money to pay for the sins of Anglo. My back of the envelope calculation suggests that the savings will be substantial. Had Ireland kept paying the promissory note over the next 10 years, we would have had to come up with €30bn in a decade. That’s a huge figure, more than 20pc of GNP. Clearly, this was not on. This new arrangement means Ireland will have to come up with about €5.8bn.

Paying over a longer period is good news for all of us relative to paying the lot over 10 years. But it is not good news relative to paying nothing at all or to extending the promissory note out for a few hundred years. After all, we could have set the terms of our own promissory note schedule had we the inclination to do so.

More interestingly, we could have paid nothing at all, let the Central Bank continue to finance Anglo and positioned ourselves on a collision course with the ECB. The Government didn’t have the stomach for this scrap and so the ECB’s sweetener for taking the debts of Anglo on as sovereign debt is a long-term horizon to pay the stuff.

The ECB has got what it wants. The pesky promissory note, which it never liked, is gone. Ireland has more debt but at low rates of interest.

Now let’s focus on the downside.

There is a massive bubble building in European bond markets at the moment and Ireland’s deal yesterday will feed it. This will blow up as all bubbles do. Debt issued at the top of the debt boom, just like houses bought at the top of the housing boom, will eventually come crashing down because we know that you never make a balance sheet with too much debt better with yet more debt. You make it better with less debt.

Countries with huge debt/GDP ratios — such as Ireland — which add to their national debt in a cavalier way, will default in huge and dramatic fashion. Not unlike the banks that became ludicrously exposed to the property market, countries that become overdependent on these debt markets will find the markets shut off to them in short order.

David McWilliams’ new book The Good Room is out now.


  1. silverbullet

    subscribe

    Wahoooo!!

    • Adam Byrne

      Good man silverbullet.

      Prolific this week David.

    • What a bunch of anoraks we are…. good man silverbullet.

    • Lius

      NO FAIR, I wasn’t watching out for an article over the weekend.

      David must be really pissed that his buddies in the ECB didn’t give him the scoop on this story. Anyhow, his anger is totally justified, the Promissory Note was a makey-uppy IOU which was worthless in any court in the world. Why would we convert it into a real debt? Inda is an EU puppet whose strings are being pulled to line the pockets of big investors.

  2. woodsey

    Yep, moving debt repayment out into the long-term provides immediate ‘wriggle-room’ but to listen to our public representatives’ nonsensical representation of this ‘achievement’ you’d swear that economic growth generating full employment and a reduction in our mortages were all about to strike.

  3. ciaranmg

    So assuming we can’t influence our imbecile, spineless government to do anything about this, what can we as individuals do to protect ourselves or take advantage of the impending bust?

  4. transitionman

    Good on you David Mc Williams your voice is loud and clear against the bullshit of three bedroom houses with 40 yr ……………….

  5. SLICKMICK

    FF – 26 % FG – 25% L – 10 % SF – 18% . Latest opinion poll in IRISH TIMES. The UK Labour party lost 4 general elections after calling in the IMF !

  6. joe hack

    Draghi says

    “The governing council took note of the Irish operation,” he sad. “I’m going to refer you to the Irish government and the Irish Central Bank for the details of this operation which was designed and undertaken by the Irish government and the Irish Central Bank.”

    There was no deal with the ECB, stop saying there was a deal.

    Since the government rushed to liquidate the IRBC we now have a sovereign debt that was never ours this is not good news they have just remortgaged Ireland but now it is written in stone.

    What other country would liquidate a bank at closing time while in a bar at government buildings these were not clever people at work, this was panic.

    “Enlightened Democracies Don’t Bail Out Banks and Impose Austerity” Icelandic President Grimsson Says

    • Realist

      “Enlightened Democracies Don’t Bail Out Banks and Impose Austerity” Icelandic President Grimsson Says

      ha, ha, ha, what a joke statement.
      Politicians are never out of wit.
      They are the same monkeys as ours.
      Iceland just did not have a choice.
      Iceland was begging for bailout funds all over Europe.
      Remember begging ….
      Europe said NO so they bailed out.
      They did not say default firstly to be praised for.

  7. joe hack

    David, I see you got little overtime out of the promise to put us into debt.

  8. redriversix

    Fuck it.means nothing to people on the Ground………

  9. Is it the case the interest (3%) on this arrangement will cost us €840m per year?

    By my estimation the Net Present Value (NPV) by defering payment for 34.5 years means the €28bn is now worth ca. €14bn taking a taget average 2% inflation rate.

    Over the 15 years from 2038 to 2053 the country will have a debt repayment schedule which will have to pay back the equivalent of €14bn + interest. Let’s assume the same interest rates as above and the repayment will be in the orger of €1.45bn by my estimation.

    I’m 44 and should be retired by then, if not dead or as close as, but you can bet your bottom dollar that the younger generation who will be in power and who will be paying the taxes to pay this back will not be so generous with the state pension given what is being done right now. My generation are not in power neither is the generation behind mine and were the one’s who are going to have to pay for all of this.

  10. ObsessiveMathsFreak

    The ECB has got what it wants. The pesky promissory note, which it never liked, is gone. Ireland has more debt but at low rates of interest.

    I am not certain that this is the case. Again, I see no evidence that the ECB has actually agreed to this deal.

    On Wednesday last, the ECB explicitly said that they would need more time to examine the Irish deal(three weeks I believe). On Thursday, Mario Draghi issued the meaningless statement that the ECB had “taken note” of the deal.

    The ECB has not yet accepted the deal.

    The Government’s statements and the credulity of the media on this have confused everyone. People are running about, clapping themselves on the back, congratulating the government on a done deal, but the deal has not yet been done.

    My fear is that a terrible upset in in store in about three weeks times when the ECB finally makes its decision.

    • joe hack

      “Draghi issued the meaningless statement that the ECB had “taken note” of the deal.”

      It was not meaninglessness it meant in political Expedient words that the ECB had nothing to do with this so called deal. The Irish government acted unilaterally there is no deal

      • Realist

        ECB will be buying these government bonds either directly or indirectly taking them as collateral sooner or later.

        They took the note that these 30-40 billions of bonds will be on their account mostly through collaterals from Irish banks, assuming nobody will want to touch these bonds with the barge except Irish banks, Irish pension funds and some other believers.

    • Realist

      “The ECB has not yet accepted the deal.”

      ECB is accepting Irish bonds as collateral, so they just took a note that 30-40 billions of bonds will be coming to their vaults soon.

      I see no way for ECB to do anything about it.
      They are anyway owned by the governments for the interest of governments.

  11. redriversix

    ECB neither consent or object to this “deal”

  12. The ‘Enarchy’ ( Ecole National Administrif ) framed the patchwork .

  13. hibernian56

    Firstly a “deal” means there was a discussion of terms in the first place, this appears not to be the case.

    Secondly, the fact that they rushed the poetry reading leprechaun back from being put on a pedestal (ha) in Italy to sign this “deal” without ANY proper debate or consultation with we the peasants makes me think yet again there is more to this than meets the eye.

    Over indulged, ill-advised, unqualified politician puppets being forced to sign this INTO LEGISLATION why? For who’s benefit? The politicians certainly don’t care, they get a hansome payoff either way. Perhaps some of them have now secured a nice position in some obscure European gravy train.

    Look at Bertie in the International Forestry Fund, trying his best to get his greedy little hands on Coillte for his puppet masters. Thats approx. 8% of the land in the state.

    This “deal” is certainly not in the interests of we the peasants. As Davis mentioned, its now signed in stone, so the bond holders are safe now.

    Another dark day in the history of this potato republic of ours.

  14. joe hack

    THE IRISH GOVERNMENT ACTED UNILATERALLY

    THERE IS NO DEAL we are being lied to…

    They said that acted because of a leak, who knows, they also could have been worried about David Hall attempts to have the courts rule that their promised notes.

    It may be brinkmanship but I don’t believe they would stay up to late to do that nor are they that clever.

    What part of no deal is difficult to understand THERE IS NO DEAL what they did was print money in breach of EU rules.

  15. joe hack

    THERE IS NO DEAL

  16. joe hack

    THE IRISH GOVERNMENT ACTED UNILATERALLY

  17. joe hack

    THE ‘DEAL’ IS A LIE (POLITICS IS AN ART FORM)

    There is no deal it is the sheep within the media that are following the lead of noonan and co. They are picking up on the word “deal”.

    Unknown to some within the media they are installing “deal” in our psychic as fact.
    There are very few journalists in the media most just copy and paste and then add a personal opinion and they believe what they are told and what they read from other writers. Lazy!

    The result is a headland like this “deal on promissory notes is massive boost for down-at-the-polls coalition” now Noel Whelan is ether mendacious as there was a ‘deal’ or he is an idiot but if you read his diatribe you might realize he is a spin doctor for Kenny and co.

    He is definitely not a journalist if he was he would know there was no ‘deal’ so his opinion is read by the plebs and they do the sheepish thing and accept his opinion as a fact some people will be quoting him and regurgitation his lack of facts as factual?

    THE KENNY CREW MADE A PROMISING NOTE INTO A SOVEREIGN DEBT; WE HAVE NOW BEEN FURTHER ENSLAVED BY OUR OWN GOVERNMENT.

  18. george

    “Deal or no deal?”…that is the question. And also what is the real meaning of it?
    .
    In my opinion Iceland’s political courage, has left Ireland as an example of total submission.
    .
    In this country we keep paying the politicians and top civil servants, top public sector workers, and private professionals in the state apparatus, the highest salaries, fees, pensions and conditions, in the EU. And the highest rates for unemployment, and child benefit, even for people that doesn’t need it. Most of it being financed by the taxes of people that are totally indebted, (that soon will have to pay Property Tax, and Water Charges), and outrageous Council rates for small and medium size business; while big corporations, financial institution, and the privileged rich, have ways and means of paying very little of it.
    .
    In today’s Irish Times/Ipsos MRBI poll, Fianna Fail is on top of it.
    .
    I ask myself… Is there really any hope for Ireland?

  19. ouldbegrudger

    The so called deal(Not) while being morally offensive in itself, is only a stepping stone in a series Dail blunders that have spanned 3 decades. This from a government that was electorally mandated to do the exact opposite. Our fate is sealed. It does’nt really matter what our pollys get up to now because the action has already moved elsewhere. The other PIFIGS (Yes,I put France in there) are going the roll-up the EURO anyway. Tis worse its gettin….

  20. Tony Brogan

    “My back of the envelope calculation suggests that the SAVINGS will be substantial. Had Ireland kept paying the promissory note over the next 10 years, we would have had to come up with €30bn in a decade. ”

    No savings David, Just deferment. Misleading use of words

  21. Tony Brogan

    “But it is not good news relative to paying nothing”

    And why do you not SAY that it SHOULD be nothing at all? That it is ODIOUS DEBT, and not the responsibility of the people to bail out private enterprise.

  22. Tony Brogan

    “No matter how Coalition dresses it up, we cannot afford to pay Anglo’s debt”

    No matter whether it can be afforded is not the issue.
    The truth is it is not the peoples debt in the first place and it should be revoked,
    Your headline suggests it is a legitimate debt. It is not.
    When are you going to say so?

  23. Tony Brogan

    “More interestingly, we could have paid nothing at all, let the Central Bank continue to finance Anglo and positioned ourselves on a collision course with the ECB”

    The central bank refered to is presumably the Irish central bank.
    In which case you imply that a debt of the ICB is not to be paid by the people. This is incorrect as you know. You were a central banker. All funds issued by the central banks are owed by the the government as a bond outstanding as a national debt.
    It is to be paid by the people..

  24. Tony Brogan

    “that you never make a balance sheet with too much debt better with yet more debt. You make it better with less debt.’

    Agreed.
    And yet last week you were advocating more debt as a solution.

  25. Tony Brogan

    “Countries with huge debt/GDP ratios — such as Ireland — which add to their national debt in a cavalier way, will default in huge and dramatic fashion. Not unlike the banks that became ludicrously exposed to the property market, countries that become overdependent on these debt markets will find the markets shut off to them in short order”

    Totally correct.

    Where is the plan to be rid of the debt?
    Would you not revoke this odious debt just discussed?
    Would you not abandon the Euro and creat a non debt currency issues by Treasury.
    would you not use this new currency to pay off the existing legitimate debt. So now the country is debt free.
    Would you not tell the banks that the money given to them is required to be returned and they have 90 days to comply.
    Would you not forclose on the Banks if they did not pay. Would you not seize all the bank property both chattel and real.
    Would you not sell all this property to recover the debt.All real property sold .
    All the bank mortgages sold to the highest bidder.
    Would you not provide the right of first refusal to all mortgagors? That they have a one time opportunity to purchase their mortgage back at market value.

    Would you not agree that then the country would be debt free? With an easily balanced budget with the likelyhood that income taxes of all kinds would be abolished and unnecessary.

    Would you not agree that the people would go to work and that the economy would recover?

    Would you not agree that with such a sovereign currency that there would be no requirement to buy bonds and thus the country is free of the cares of ther bond market?

    Would you not agree that the the legal tender laws be abolished, that people could choose which money to use?
    That silver coin be monitized to keep the choices open for the people. That a free market in money would keep the monetary system honest?

    What is there not to agree with in the above?

    Do you have any better proposals? Given a choice who would not vote for the above?

    • bonbon

      Here is a much better proposal.

      UK Column: Glass Steagall or Collapse — Go to a “Greenback Pound”

      The June issue of the UK Column, published periodically in the UK, leads with a report from co-editor Mike Robinson titled: Financial System Continues Collapse – Opportunity for Optimism. After describing the hopelessness of the bailout process in Europe, and ridiculing the propsal of Bank of England head Mervyn King, and Chancellor of the Exchequer George Osborne’s insane call for “bolder action” in bailouts, Robinson says that the collapse of the real economy since the time of Maggie Thatcher can only be reversed with Glass-Steagall and “massive reinvestment in basic economic infrastructure.” He adds: “This should be seen as an opportunity rather than a disaster,” by putting “several million” people to work in productive jobs.”

      As to the complaint that “there is no money,” Robinson references the American system of credit generation, calling for a “system of national credit, a Greenback pound.”

      • Tony Brogan

        Osbourne as far as I can tell never mentioned Glass Steagall but only elctric ring fencing that will be enforced if necessary. Not to mention that there are regulators who do not act and laws that could be acted on today to close these banks. It is all BS and talk to appease the masses and totally useless.

        Your American system is the Rochschild central banking system of the new world order aka the same old financial cabal. Your celebrated Privy Council working for the British (stiff upper lip and all that chaps) Empire. Well done Lord bon bon Rothschild. or are you a latter day Lord Haw Haw.

      • Realist

        How will GS prevent Northern Rock ?

        Northern Rock went bust despite being a retail bank with no investment arm.
        How ring fencing would have prevented that?

        Instead, we need to make bank failure safe, not making them safe by taxpayers money !!!!

    • bonbon

      So now we have a real choice, not dictated by the EU Commission nor by monetarists.

    • joe hack

      Yes I would but i would not expect to get a height price for anything, well you know the highest bidder in your scenario may only recover a tiny % of “money” but it would end the slavery and that is something working for as opposed to being enslaved to a “money”

  26. CitizenWhy

    Suppose forfeign corporate interests bought up these new Irish bonds. Could they push a deal that the Irish government swap assets (oil fields, for instance) for the bonds?

  27. joe hack

    Explainer: What happened last night? Why was IBRC liquidated? What happens now?

    http://www.thejournal.ie/ibrc-liquidated-promissory-notes-ecb-debt-deal-786031-Feb2013/

  28. Tony Brogan

    Good example of what happens when government uses wage, price and currency controls.

    http://www.reuters.com/article/2013/02/08/venezuela-currency-devaluation-idUSL1N0B8BWZ20130208

  29. setanta

    IT’S REALY,REALY SIMPLE,HOW TO SOLVE THIS (SO CALLED)DEBT PROBLEM THAT WE THINK WE HAVE.WHERE IN THE WORLD DID ALL THIS MONEY COME FROM THAT ALL WESTERN COUNTRY’S HAVE TO PAY BACK,WITH INTEREST???
    THE ANSWER IS VERY SIMPLE AND NOT A LOT OF PEOPLE KNOW IT.DOES ANYONE WITH HALF A BRAIN THINK THAT PRIVATE INVESTORS,I.e,A GROUP OF HUMAN BEINGS WHO HAVE TRILLIONS TO BAIL OUT ENTIRE COUNTRY’S ???
    IMPOSSIBLE,THE CENTRAL BANKS,INCLUDING THE INFAMOUS FEDERAL RESERVE IN THE GOOD OLD USofA,JUST CREATE IT ON A COMPUTER SCREEN.IN THE OLD DAYS,THEY PRINTED IT ON PAPER NOTES,BUT NOW WITH PLASTIC AND THE LIKES,IT’S JUST COMPUTER GENERATED NUMBERS.NOW HERE IS THE BEST BIT,”ALL”CENTRAL BANKS ARE PRIVATELY OWNED!!!
    PLEASE DO NOT TAKE MY WORD FOR IT.PLEASE GOOGLE IT OR YOUTUBE IT FOR YOURSELF.THIS WILL MAKE EVERYONE WHO FINDS THIS TO BE FACT,VERY,VERY ANGRY AND WILL REALISE THAT THIS WHOLE DEBT/RECESSION THING IS A COMPLETE FARCE AND JUST A GAME OF CONTROL TO THE BILLIONAIRES WHO OWN EACH CENTRAL BANK.
    PLEASE GOOGLE THIS AND PASS IT ON.

    • Tony Brogan

      Of course it is the banking catel created by Rothschilds et al. Yell it from the rooftops but even David Mcwilliams does not “GET IT”

      Post the above on every article. Maybe one in a thousand will take any notice. but one is an improvement!
      Ban the central banks
      Ban fractional reserve banking.

      • bonbon

        I think a lot actually do “get it”. The Privy Council to which you refer to as the “Rothschilds”, serves the Crown, the British Empire. Many are simply afraid to say that. Canada is a Crown Dominion, Ireland is not.

        Of course then the question arises why the London School of Economics who owns the Austrian School tries to wiggle around this simple fact.

        It is clear now we are dealing with Empire. Alexander Hamilton’s method of national credit systems countered the British Monetarists of all stripes. So the issue is now clear.

        • cooldude

          Bullshit as usual Bonbon. Here is an article examining the Bank Of International Settlements which is the central bank for the central banks worldwide. surprise surprise it is a private organization of unelected oficials who are above the law. If you don’t believe it readon

          http://theeconomiccollapseblog.com/archives/who-controls-the-money-an-unelected-unaccountable-central-bank-of-the-world-secretly-does

        • bonbon

          I know about the BIS, founded to manage the Versailles I treaty looting, that led directly to WWII. The head of that BIS was Hjalmar Schacht, later Hitler’s Economics minister. Schachtian economics today is called “austerity”. Schacht, though present, was not questioned at the Nürnberg Tribunal.
          The BIS does indeed publish derivative figures, 6 months out of date. That is a long time in the collapse.

          This BIS is a key component of the British Empire since WWI. It is the bank of bankers.

          The Inter-Alpha group of banks founded by Rothschild is now being bailed out. Just have a look at the members.

          • bonbon

            And by the way that Schachtian economics was praised by Milton Friedman.

          • Tony Brogan

            But you do not deny that Hamilton and his central Bank was a Rothschild and by your definition a member of the Privy Council working for the British Empire you decry. So which side are you really on Mr bonbon Rothschild

        • Tony Brogan

          As usual you confuse the points made with reference to historical figures. You make statements that are open to personal interpretation with the result that your intentions are interpreted in diffent ways by different people. You obfuscate.

          Your self named privy council aka the elite finaciers or the Rothschild’s work for no-one but themselves. Your references to the “British” empire are tiresome and bigoted and racist and irrelevent.

          Your pairing of the LSE and the Austrian School is incorrect and irrelevent again. More twists and distortions and more akin to point scoring than anything of substance.

          Proposing the use of Hamitonian banking is giving us more of the same. It is an established fact and easily obtained information that Hamilton married into the Rothschilds family. It is a fact that he followed the Rothschild bankers plan of national insolvency and banker control of the state.He was a Rothschild agent. His bank was in fact a CENTRAL BANK in the modern form and designed to remove controls from government to a private Cabal. It was was the forerunner , the ancestor of the Federal reserve and a child of the Bank of England.

          Because of the above FACTS and your continual promotion knowing these facts I declare you a Rothschild, bonbon, and as such an enemy of the state and the people.

          Enjoy your time in the sun Mr Rothschild

          • bonbon

            Its very strange that subjects of the Royal Dominion of Canada are unaware that the Privy Council, including some well known figures, actually are running the Commonwealth. And that Privy Council did invent the modern derivative snowball in 1972 just after Nixon broke Bretton-Woods. And the original “central bank” was the bank of England, modeled on the Bank of Amsterdam. All of this is well known. The structure of British finance was well known to Alexander Hamilton, better than today it appears, so the US Constitution Credit Clause is designed directly counter to the Empire, then and now.

            So, as UK Column writes, a Greenback Pound for the UK is immediately required, after of course Glass-Steagall (aka electric ring-fencing) for the banks. Then we can get on with reconstruction. Ireland can relate very well to such a move as well. Relations with neighbors will improve dramatically.

          • bonbon

            Von Hayek was employed and lectured at the London School of Economics. That’s pairing enough, would’nt you say`?

            By the way it is interesting that the LSE, of the Fabian “round table” included Keynes, and Keynes, Hayek, Friedman all praised Schacht’s nazi economics.

    • ouldbegrudger

      You are right but what to do? They really don’t teach this stuff in schools or university. I recently had the “Money Mechanics” conversation with an Economics graduate and she thought I was a “conspiracy theorist” (a nut). It is a 300 year old secret that must be preserved in order to maintain the status-quo. I believe that the internet is changing the game but for most people this truth is too uncomfortable, a bit like 9/11. Both “conspiracy theories” are so problematic, when it comes to formulating a response, that good old denial kicks in. David kind of lost me when he asserted on his otherwise excellent TV series that the Celtic tiger had been financed by Chinese savings. The truth is that the supply of fiat currency is essentially infinite with hyperinflation being the primary risk. Were we to entrust the issuance of currency to Dail Eireann this country would end up like Zimbabwe in short order. I expect another year or two will see a solution of sorts come out of the BIS (http://en.wikipedia.org/wiki/Bank_of_International_Settlements) but we will have to suffer way-more pain before agreeing to whatever global tyranny they propose. What to do?

    • aidan112

      ,”ALL”CENTRAL BANKS ARE PRIVATELY OWNED!!!

      Below is from both Dail Eireann and Annual Report:

      Under the Central Bank Reform Act 2010,
      the Central Bank reverted to a single entity
      governed by a ‘Commission’. Responsibility
      for the management of the Bank is vested
      in the Commission which ….is appointed by the Minister for Finance.

      The sole shareholder of the Bank is the Minister
      for Finance.

      The Central Bank’s surplus income is payable to the Exchequer in accordance with regulations made in accordance with section 32H of the Central Bank Act 1942.

      However this is an interesting side note “The Central Bank is independent in the exercise of its functions”

  30. Tony Brogan

    http://www.newswithviews.com/Neill/steven105.htm

    Almost daily Americans are treated to a new set of sound
    bites as the last set wears thin. From Romney’s “47%”
    comment to these headlines “Republican Party in Disarray;” “Hurricane Sandy, Storm of the Century;”
    “Sandy Hook;” and “Fiscal Cliff,” we are inundated with sensational stories meant to distract, marginalize, push
    an agenda and keep us from looking behind the veil. One
    has to wonder if as many Americans would still be asleep
    if instead of nonsense headline’s the media were to
    print the almost weekly bank scandals?

  31. nostramartus

    I know David doesn’t approve of schadenfreude but the documentary ” The Queen Of Versailles “,
    http://en.wikipedia.org/wiki/The_Queen_of_Versailles
    , actually manages to encapsulate the boom to bust experience of the mega rich. There is a huge disconnection from reality between many of those involved in the property game and the ordinary person who really suffered, not just losing private jets and mansions once worth 100 million dollars.

    The attitude of most property owners is reflected by David Seagal’s genuine belief he was too big to fail, he played for time against the banks like our own billionaires and lost. Watching each stage of the billionaires downfall and rationalisations as all his advisors disagree with him becomes more educational as he retreats and complains about electricity bills.
    By the end of the documentary he concedes he expanded too quickly and borrowed too much cheap money, the arguements about the banks making him an addict and their poor business acumen have become irrelevant and he knows it.

    With every second commercial property in our cities empty it reminds me of most Landlords complaints that commercial rates are too high. B+Q’s actions might prove to be a template to finally force rent reductions, which will allow the economy be rebuilt from the ground up.http://www.ft.com/cms/s/0/d5be92b8-6bc6-11e2-a17d-00144feab49a.html#axzz2KSFZ1up5

    Whatever happens in the markets, ignoring the issues that can be resolved just draws out the pain.

  32. Tony Brogan

    http://truthingold.blogspot.ca/2013/02/state-of-collapse.html

    “The Government is irrelevant except to the extent that it’s used as a vehicle with which the truly inside elite are raping everyone else. That and to continue funneling printed money to more than 50% of the population in the form of outrageous entitlements as a means of keeping the masses sedated. Just read through this thorough analysis of RomneyObamaCare: Must Read Link

    The biggest problem with our country is We The People. We stand idly by while the politicians and business leaders confiscate our wealth. We watch with disdain, yet with full acceptance, as more and more Americans pile onto the “entitlement” payroll: 8,830,026: Americans on Disability Hits New Record for 192nd Straight Month: LINK”

    Could be any country in the western world these days.

    • Deco

      There are some government ministers who are doing such an awfully incompetent job with their responsibilities….that they should be retired and put on disability allowance.

  33. bremlin

    In the next 40 years it is inevitable that the Euro cannot be an optimal currency zone for all of its members and the current problems get worse. Tensions are beginning between France and Germany and will most likely get worse. What happens if the Eurozone begins to disintegrate and Ireland leaves? It would be one of the first candidates to leave. As there is no legal mechanism to leave the Euro surely that would be the time to renege on such debt. Does last week’s charade remove room to dump the promissory notes in such circumstances?

  34. PisforPaddy

    David, do you envisage an Irish default? If so, over what timeframe?

    What would be consequences for the average person? A lot of people have put their lives on hold for 4-5 years in order to see this thing play out, should they hold tough for a while longer?

    Default, at least in the short term, seems like an absolute economic meltdown, savings wiped out, exiting the euro, day into night scenario, but it would seem more likely now given the astonishing level of debt facing the country, bit surprised that we haven’t had more of a fallout from the mortgage arrears scenario.

  35. Deco

    The EU.

    Thou shallt not vote.
    Thou shallt not vote no.
    Thou shallt not read journalists that write about EU corruption and incompetence without being berated.
    Thou shallt not be sceptical of centarlization of power, lest you be called a Euro sceptic.
    Thou shallt borrow and stimulate the economy.
    Thou shallt pay the rich their money back.
    Thou shallt support resource wars.
    Thou shallt aim for the EU average.

    and….

    Thou shallt not default.

    • bonbon

      And the 10th : thou shallt not split the banks with Glass-Steagall.

      All carved in stone, in the sands :

      I met a traveller from an antique land
      Who said: Two vast and trunkless legs of stone
      Stand in the desert. Near them, on the sand,
      Half sunk, a shattered visage lies, whose frown,
      And wrinkled lip, and sneer of cold command,
      Tell that its sculptor well those passions read
      Which yet survive, stamped on these lifeless things,
      The hand that mocked them and the heart that fed:
      And on the pedestal these words appear:
      “My name is Ozymandias, king of kings:
      Look on my works, ye Mighty, and despair!”
      Nothing beside remains. Round the decay
      Of that colossal wreck, boundless and bare
      The lone and level sands stretch far away.
      – Ozymandias from Percy Shelley

  36. Deco

    The whole deal is not driven so much by economic objectives, as it is by PR objectives, and short term budgetary objectives.

    Don’t underestimate the ability of the Irish state machine to get rid of any short term improvement in it’s cash flow.

  37. And what will precipitate the bond bubble bursting? As with the horse/beef/dog smoke and mirrors farce, what else is smouldering out there that we don’t know about? It seems to me that Anglo hasn’t gone away at all. It’s just morphed into a more debt fuelled ogre thinly veiled as the Central Bank of a little principality with GNP(real value)less than some of the banks/bondholders that maintain it on life support. As David says, what happens when the first of these lenders/loansharks blinks and gets the international financiers equivalent of a twitchy bum?
    It is in someones interest to make a killing by precipitating an ECB collapse. In agreeing to accept what was the private debt of Anglo is now Irish Sovereign debt only adds fuel to the firestorm brewing.
    For once I hope David is wrong. However, if this article is as prophetic as I know it to be, there will indeed be hard times ahead of scarcely believable proportions.
    The question is, instead of debating what is happening in front of our eyes, what do we do to protect ourselves from the fallout when Armageddon becomes a reality?

  38. joe hack

    IRELAND HAS DEFAULTED.

    THE IRISH CENTRAL BANK HAS PRINTED MONEY IN BREACH OF ECB/EU REGULATIONS

    THEY MAY HAVE DONE WITH THE NOD OF THE ECB SIMILARLY TO SOME OF THE GREEK DEFAULTS

    THE ECB COULD NOT HAVE APPROVED THIS IRBC LIQUIDATION THIS IS WHY THE GOVERNMENT TOOK A UNILATERAL DECISION TO LIQUIDATE IRBC

    AN EMERGENCY LIQUIDATION? ARE NOONAN AND KENNY CLEVER ENOUGH TO CONSPIRE MAYBE THEY HAD HELP?

    THE CONSIQUINCES FOR THE EU/ECB ARE OBVIOUS IF ONE COUNTRY CAN BREAK THE RULES AND BLIND IS TURNED OR MAYBE NOT SINCE.

    DRAGI SAYS THE ECB HAS NOT SANCTIONED THIS SO CALLED DEAL A DEAL IS SOMETHING DONE BETWEEN TWO OR MORE PARTYS THERE WAS ONLY ONE PARTY INVOLED IN THE LIQUDATION OF IRBC

  39. joe hack

    IRELAND HAS DEFAULTED.

    THE IRISH CENTRAL BANK HAS PRINTED MONEY WHICH IS IN BREACH OF ECB/EU REGULATIONS.

    THEY MAY HAVE DONE WITH THE NOD OF THE ECB LIKE THAT OF SOME OF THE GREEK DEFAULTS.

    THE ECB COULD NOT HAVE APPROVED THIS IBRC LIQUIDATION AS IT WAS IN BREACH OF REGULATIONS THIS IS WHY THE GOVERNMENT TOOK A UNILATERAL DECISION TO LIQUIDATE IBRC
    AN EMERGENCY LIQUIDATION? ARE NOONAN AND KENNY CLEVER ENOUGH TO CONSPIRE MAYBE THEY HAD HELP?

    THE CONSEQUENCES FOR THE EU/ECB ARE OBVIOUS IF ONE COUNTRY CAN BREAK THE RULES AND A BLIND IS TURNED OR MAYBE NOT – DRAGHI SAYS THE ECB HAS NOT SANCTIONED THIS SO CALLED DEAL.

    A DEAL IS SOMETHING DONE BETWEEN TWO OR MORE PARTIES THERE WAS ONLY ONE PARTY INVOLVED IN THE LIQUIDATION OF IBRC.

  40. joe hack

    “When Patrick Honohan asked by RTE about the status of the remarks made by Mario Draghi that the ECB had taken note of the Irish operation, Mr Honohan said the important point was that the ECB did not object to what was proposed by Ireland.”"”"

    WHICH MEANS IRELAND HAS DEFAULTED TO GLOSS OVER THIS THEY HAVE CALLED IT A “DEAL”

    IT ALSO TRUE WHEN SOMEONE POINTS A GUN AT YOU AND ASKED FOR YOUR WALLET YOU DON’T OBJECT BUT LATER YOU MAY FIND WAY THE GET YOUR WALLET BACK, IF NOT OTHERS MAY USE A GUN AND GO ON THE RAMPAGE, IT CALLED LAW AND ORDER.
    THE ECB IS PLAYING WITH FIRE IF ITALY OR SPAIN DO SIMILAR THEY CAN JUSTIFY IT DUE TO THE PRECEDENCE SET IN IRELAND.

  41. joe hack

    It is time to default on the rest of the banking debts I don’t mind if they call it a ‘La deal’, ‘La deal’, ‘los deal’, ‘the deal’, or ‘An Deal’.

    Just do the fucking default deal now! So we can work for our country and not for its absentee landlords.

  42. bonbon

    “Default” is inevitable, but not the really important point. The problem is monetarists of all stripes are mesmerized by the shenanigans of the banksters, and do not see the physical economy being destroyed with each ratchet. Have a look at the icon at the left, a typical collapse function, and realize what is happening.

    It really is as if someone with a gold watch with large numbers is hypnotizing the hapless. Mesmerizing is easy when people are in shock.

    Realizing what this is actually doing calls for action outside the monetarist game-play. That is why some reall economic thinking must begin, instead of describing the murderous ratchet, or “predicting” some kind of “end-time” nonsense.

    Get the thinking in gear!

  43. paddythepig

    The far bigger issue is the borrowing for running the country. The hypocrites of siptu and the tui were out in force yesterday, shouting and roaring about the ecb, what a shower of yobboes. They should have been shouting and roaring about themselves.

    • bonbon

      Are you saying the trade unions should be banned, as Hitler did first thing?

      The general secretary of the Irish Congress of Trade Unions David Begg said the campaign against the debt burden will continue until the European authorities fully honour the agreement reached last July to separate bank debt from sovereign debt He said there would be no more “stoic little pixie heads” and “no more Mr nice guy”.

    • joe hack

      The Unions did not cause the debt low wages and the lack regulation caused it

    • gizzy

      The public expenditure does need to be addressed but it doesn’t mean they are wrong about the debt separation. It is possible to disagree with someone on one issue without always disagreeing with them. I do not agree the union stance on pay is sustainable but i believe they are right on the debt issue.

      • joe hack

        Austerity does not work and will not it did not work in 1929 it cost the crash if people can afford to spend then those that depend on the spending for work have no work low wages will not fix the debt.

        gizzy
        “It is possible to disagree with someone on one issue without always disagreeing with them.” I agree
        but number of issue is not an issue

  44. 2012DA14

    Astroid will ‘skim’ past the Earth on the 14th Feb,2013…….this is the date of maximum moon wobble impact .

    Will it hit us like Noonans Deliverance in past few days ?

    Will it hit a satellite and will we have the internet as we do have now on this site ?

    Interesting Times Ahead!!

  45. george

    Yes we are dealing with Europe because we were incapable in the first place of doing anything original and fair for ourselves! And history tends to repeat itself, FF is now back on top of the polls, and I wouldn’t be surprise if soon somebody will report seeing a moving statue.
    .
    This deal? is great to maintain the status quo, at least for a little bit longer for all the people in the State apparatus that are getting paid much more in comparison with other countries in Europe, while the suckers have to pay more and more taxes of one kind or another, to sustain their privileges. What republic are we talking about?

  46. gizzy

    Fianna Fail are only back to he top of the polls because it is the way the polls are put. Most people I speak to are pissed of with all the current lot.

    Prof Honohan the guru and the man who is closest to those who run this country the ECB did not sound very convincing in his tone on the clips I heard of him today.

  47. molly

    This country is not run like a buiness and the government does not run this country like a buiness .
    Anglo and co should have been let go under,the same way a buiness goes under if its broke ,anglo was run on greed.
    Anglo was like the big man or should I say the side shown to people was the big man ,like so many for show big men they had not got a pot to piss in.
    It was all borrowed money.
    You owe the bank up to a couple of hundred thousand you can’t sleep,you owe the bank big money the bank can’t sleep.
    The whole system is one big scam and the scam is still going on like a drug dealer when one is taken out another one steps in to replace and so the scam keeps rolling on.
    Monopoly money buts its not monopoly when joe public is asked to foot the bill and in doing so joe public is thrown to the wolves.

  48. george

    Leaving at one side his business or project in Chile, listen to what Jeff Berwick has to say about the world economy.
    ttp://www.youtube.com/watch?v=j8sePb3SHFg

  49. george

    The Bond Apocalypses by Max Keiser, and don’t miss the interview that follows!
    http://www.youtube.com/watch?v=uLx26zr6lsE

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