February 11, 2013

Ireland thrown a lifeline

Posted in Sunday Business Post · 204 comments ·
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Let’s be clear about what happened last Thursday and the implications of the deal. In the short run, it’s positive, but maybe not so later on.

For the record, let me put my hands up and say I never expected the ECB to acquiesce to such extended maturities, which are very positive for the cashflow of the country over the next few years. So, in terms of cashflow management, this was an excellent move. I very much underestimated how much the EU would move on this.

We have negotiated what is called in finance a ‘balloon payment’. There are no payments, bar interest, for the first while, and then all the payments are due in a balloon payment at the end. This is when the once-sick country has left intensive care, has recovered and is strong again.

This type of arrangement should actually be called life-support financing. It is not that rare. When a bankrupt company is being kept alive, it is normally for the benefit of creditors who refinance and accept something back tomorrow, rather than nothing today.

The odd thing about the deal is that Ireland was both debtor and creditor. Therefore, we kept ourselves alive to prove to others, such as the ECB, that we are indeed alive. We are stretching out payment to ourselves from ourselves.

We are celebrating a deal with ourselves, and will pay ourselves from our own pockets to prove to others – who are neither creditors nor debtors in this deal – that we are still alive. It’s like being put on life support where the drip goes from one arm to the other. Unusual, don’t you think?

Let’s gain a bit of altitude above the din of backslapping to see what is happening. The article will be split three ways. First, what exactly happened and why? Secondly, what does it mean right now? And thirdly, what might it mean in the years ahead if growth is lower than is considered normal?

Usually, when a company is liquidated, the assets and the liabilities are added up. If the liabilities are greater than the assets, the company doesn’t try to borrow from someone else to pay the difference. It folds. The assets are sold and the money is divvied up among all the creditors. That’s it.

The spoils are governed by well-understood corporate finance rules where there is a hierarchy of most-deserving creditors. In the case of a bank, depositors might be termed ‘trust creditors’ or ‘creditors in trust’ because they trusted the institution and the system. They could get ‘special’ status and get first dibs on the money. Thereafter, various other creditors get paid out of what’s left.

In the case of the Anglo deal the other day, all creditors get paid, irrespective of the fact that the assets amount to a fraction of the debts. But in this case, the creditor and debtor were one and same outfit, the Irish state.

The Irish Central Bank was the main creditor. It gave money to Anglo and was promised the money back from the state under the promissory note. Had the government not repaid the promissory note, the Central Bank would have had a large loss on its balance sheet.

Would that have mattered to anyone? Actually, no. It would have been lodged as negative Central Bank capital on the asset side of the balance sheet, and there it would stay. The money printed was used to pay Anglo’s bondholders and that was where the story would have ended. This is what a normal central bank would have done. It is the same when a central bank extends money against a security and that security falls in value – the central bank has a dodgy asset on its balance sheet. But who cares?

The ECB cares because the ECB is dominated by the German view of money. This contrasts with other perceptions of what money is. For many, me included, money is a ‘tool’ to be used to move the economy onto a different growth path, to be used to solve problems and to be used to get the real economy – the production and sale of goods and services – going. It is a tool to be used by our Central Bank.

To the Germans, money is not a tool but a ‘public good’, a bit like fresh air or the environment. It must be preserved and protected by laws and rules, which are unbreakable. It can’t be used as a tool to move the economy or to rescue the economy from a slump. This is a deep philosophical difference between the Germans and others.

It is not surprising the Germans think this way. After all, this is a population that suffered hyperinflation and was brought to catastrophe by a man who regarded treaties and laws as little more than pieces of paper. We hear that they are scarred by hyperinflation which, according to the narrative, led to the rise of Hitler.
But frankly, that’s their history, not ours. Yet Irish people are hostage to the monetary consequences of German history, rather than the economic prerogative of the Irish present. It seems hard to understand why the population of one country should be hostage to the historical echo of another country’s experiences.
This unusual Germanic export explains the strangeness of Ireland taking a year to negotiate a deal, stretching out payments to herself, from herself. This is why the ECB is only telling half-truths when it says it ‘took note’. It took note and our lads ‘took fright’.

Now, the short term. In the years ahead, the deal will improve our national cashflow in the same way as financing a kitchen extension or a car on an interest-only loan would improve your weekly cashflow. You hope that your house will rise in value in the meantime, made more attractive by the kitchen, and you hope that there will be no calls on other loans that you might have taken out. After all, you elected to go for ‘interest only’, not just to improve your cashflow, but in order to let you borrow more.
More borrowing is what ‘getting back into the market’ means in plain English.

So Ireland hopes that, over the next few years, there will be no more euro bond/credit problems because we have loaded more debt on ourselves. If there is another shock to the system, the high-yield risky countries with lots of debts – like Ireland, Spain or Italy – will suffer speculative attack, default will threaten, money will flow out and yields will rise. As night follows day, another crisis will occur.

Now, let’s briefly look at the long-term wisdom of debt build up when interest rates are low. We assume that, if we take on debt now, we will be able to pay it and, when the economy settles, it will return to around a 3 per cent annual growth rate. Many regard 3 per cent as being ‘normal’. But what if the new ‘normal’ is 1 per cent, not 3 per cent?

Growth rates are based on labour force growth and productivity growth. According to Forfás, “labour force growth will continue to make a contribution to overall economic growth over the period to 2020, but thereafter there will be a higher reliance on productivity growth”. So where will the productivity come from?
Normally, productivity comes from manufacturing. Productivity in services tends to be lower. Compare a factory worker with lots of machines to a barman. But, in Ireland, manufacturing is shrinking as services are rising.

Services already account for 72 per cent of the economy. This is stuff we tend to trade with ourselves. I buy small stuff from you and you buy small stuff from me. Last year, services accounted for 44 per cent of total exports from Ireland. By 2025, the ESRI projects that “market services will account for 60 per cent of value-added in the Irish economy and in excess of 70 per cent of all Irish exports”.

So, as the economy moves to more services and less manufacturing, productivity will fall, not rise. Another thing which will drag down growth will be the cost of energy. Ireland is now the most oil-dependent economy in the EU and one of the countries most dependent on fossil fuels for electricity generation. Fossil fuel availability will continue to diminish in the future and its cost will rise, dragging down growth.

If the new normal growth rate is not 3 per cent but 1 per cent, and the average rate of interest over the terms of all these loans is 3 per cent, not 1 per cent, what then?

I could be wrong. I was wrong on the maturities of the deal. We might stumble on a productivity miracle. We may have a transformative oil find off the coast. We may receive a million clever immigrants from somewhere, but it’s worth seeing last week’s events in their totality before cracking open the Gewürztraminer.

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


    • Lius

      David,

      Interesting analysis, however all of the probable repercussions of this deal are so far down the road that what we need is a Wizard with a crystal ball, not an Economist with a calculator.

  1. Louis Hoffman

    good news at last!!

  2. cormacmckenna

    Surely you mean productivity GROWTH will fall, not productivity itself. And how does population growth (or decline) impact?

  3. paddythepig

    I’m Irish, and I agree with the so called ‘German’ view of money.

    Does that make me a German?

    Maybe you should revisit your label of the ‘German view of money’ David.

    Really, the only fair statement, is that you have your view of money, and others have theirs.

    • Realist

      +1
      David again is returning to support his government (central bank) to push more money into economy.
      For David money is tool. Is he joking or what ?
      Growth ? Again. GDP one ?

  4. Adam Byrne

    Subscribe – read later.

    • daveyboy

      You’re losing it man…

      • SMOKEY

        No he is not losing it, not yet anyway. Actually he used to “subscribe” at many intervals of the blog, ya’ll are just newbies who dont know that,and while he may be a bit vain at times, good thing for a young buck, he has been seriously consistent.
        SUBSCRIBE!!! And hes a smucking fart young fella too!

        • Adam Byrne

          Sane, vain, consistent and smart. I’ll take that any day of the week, cheers SMOKEY.

          • SMOKEY

            Youre welcome, when you liked my pop up restaurant on Facebook last year and made suggestions about how to use the page, it was the beginning of an odyssey that, while I didnt use your services, I sought out some more locally based, I have learned a lot. So thank you for getting me pointed in the right direction. If you dont already do so you may be interested reading in Seth Godin’s daily blog. Here is the link.
            http://sethgodin.typepad.com/

          • Adam Byrne

            Thanks SMOKEY. I have read Seth’s blog but not for a while. I’ll keep an eye on it again. Regards, Adam.

  5. paddythepig

    When Anglo collapsed, the liabilities owed to depositors was twice what was owed to bondholders.

    The deposit liability was 65.8 billion.

    30 billion was owed in debt securities, as well as 5.6 billion in subordinated debt.

    There is a perception that the depositors were Irish, and that the bondholders were foreign – hence the clamour in Ireland to burn the bondholders. But who knows if this assumption is correct? Were there any foreign depositors in Anglo for example? Would it be possible that there were any domestic purchasers of debt securities?

    This type of insular thinking was absent when the shoe was on the other foot when Northern Rock collapsed; then the clamour was to make sure the Irish depositors would get their money back from a collapsing British bank, and the Irish Government made representations to see this would occur.

    Ultimately, I see no difference between the depositors, and senior debt. At the end of the day, both were just lending money to the bank. In the absense of the promissory note, both should have been burned to an equal degree. That is the fairest way.

    It is popular to label bondholders as speculators, but they are no more speculators that the depositors, who could have put their money into a myriad of different banks. A purchaser of a debt security could be representing thousands of small investors in a pension fund for example. Why should it be the case that they have less rights than depositors?

    • Bondholders who bought the bonds at a discount, should definitely be burnt, you takes your chances…..

    • Realist

      +1 very nice view

      Closer to the government you are closer to the money and privilege to take money first.
      Government, central bank and banks are always there first, then government sponsored “private” companies, then everybody else.

    • paulmcd

      Alan Dukes has spoken of Anglo executives “exceeding targets”. What did he mean?

      I hope he means that they were torpedoing the efforts of significant numbers of bondholders, whether senior or junior, or whether “guaranteed” or not, to obtain compensation from the taxpayer, and saved us some billions in the process.

      In the Irish Independent, page 3 Business Supplement, on Thursday, 13 May 2010 Alan Dukes revealed that Anglo had been an issuer of BEARER bonds and not REGISTERED bonds.

      I found this disclosure shocking for the following reasons:

      We live in a world where good practice demands that all bonds be REGISTERED.

      Anglo management would have been aware that BEARER bonds were made illegal by the US Government back in 1981 to frustrate efforts at tax evasion and money laundering and the use of related offshore accounts.

      Now that Anglo has disappeared, we should be informed by the Central Bank as to how effectively the IBRC stifled or obstructed, in every conceivable way, payments to ALL ‘suspect’ bondholding entities.

      The so-called Guido Fawkes list referred only to international institutions, and I could have compiled it myself.

      Isn’t it ironic to think that individuals or other entities with close business links to Anglo, and owing substantial sums to that bank, might have been refunded tens of millions in bonds through offshore accounts because checks were not adequate.

      What if my name were Quinn?

  6. MichaelStamp

    Nice to see someone with an economic background admit to the uncertainty of the whole business. An unusual expression of humility amidst all the self-congratulations. Hoping you’re wrong, of course, but the logic is sound and that 3% figure is more than worrying. But then sure we’ll all be in our dotage by then anyway.

  7. My take on this article is summarised when David said :

    ‘I very much underestimated how much the EU would move on this’.

    I believe there are a lot more surprises to come and a greater power and mindset exerts that influence that now is beyond our capabilities as civic citizens on this blog . Economists are now redundant henceforth .

    A new Age of the Power of Civil Servants at the Top has emerged that are faceless , untraceable and unaccountable .

    • ….A new Age of the Power of Civil Servants at the Top has emerged that are faceless , untraceable and unaccountable ….

      Yes, the signs of the auhoritarian age are on the horizon since long, and ultimately were manifested in the ESM. More to come, for certain!

      • Tony Brogan

        And behind the civil servants lay the government and behind the government lay the financial powers and behind them lay the financial banking families, the elites. Peel back the veils to find the puppet masters.

      • Dorothy Jones

        schuldenkrise-monetaere-staatsfinanzierung-in-irland-12060497

  8. Tony Brogan

    “The odd thing about the deal is that Ireland was both debtor and creditor. Therefore, we kept ourselves alive to prove to others, such as the ECB, that we are indeed alive. We are stretching out payment to ourselves from ourselves.”

    i have seen an analysis that that says the promissory note was written at 8% interest. but this interest is paid to the ICB. The Irish central Bank makes a profit on this but profits are returned to treasury (the government) and so the effective rate of interest id 0.75% effectively per annum.
    The bond exchanged for the note is wtitten at I recall about 3% and this is also to be paid to the ICB and the prifit returned to government. But because of the way the bond is drawn it results in an effective rate of 1% per annum. This is a 33% increase in the cost of the financing.

    The main advantage to the deal is that it is not to be repaid until much later as you explain.

    David, can you please explain why we go through these gyrations of charging ourselves interest and then repaying profits etc.

    Why not dispense with the central bank. Issue money from treasury debt free and pay off the debt and it is gone.

    • Realist

      If they get rid of central bank the government’s only way to get money will be taxing.
      Their easy way of financing through inflation/bond selling/debt will be gone !!!!!

      People have no clue how much they are robbed in non-tax way. I call it just simply “inflation tax”.
      Everything else government does is called “distribution tax” as they distribute money around per their will once they collect taxes.
      Both “inflation tax” and “distribution tax” are economy worst enemies.
      Both should be 0 or close to 0.

      • Tony Brogan

        not at all. Read the last sentence, and it is clear that any government can issue currency from Treasury.
        Debt free and no interest. Simple it is done.

        no need for a CENTRAL BANK.

        i have presented this before several times. With the debt paid off and no interest ot pay it is likely easy to reduce income tax to zero,
        People get an effective payincrease of 15-40% that would result in a splurge of buying and the economy takes off. To keep the treasury bills “honest ” the repeal of the legal tender laws is essential. People are free to use any money agreeable between the parties. Also essential to introduce silver coin as money as describe at http://www.tonybrogan.com
        all people have a choice to save in silver or spend in silver and protect thenselves from inflation with inflation proof money.

        • Realist

          I was more thinking of once the government default on debt nobody will be willing to borrow it again to them.
          But looks like you have some way of paying debt, unsure how to be honest.

          This is your last sentence:
          “Issue money from treasury debt free and pay off the debt and it is gone.”

          Would you explain this sentence please ?

          We are both for getting rid of central bank and fractional reserve banking, but you need to explain it to me more clearly.

          • Tony Brogan

            First of all , start with the premise that money is available in many forms. We are used to state issued money, issued by central banks under license.

            All money to be money must act as a medium of exchange or it simply is not money.

            Some money is better than other money. All manner of things have been used as money. Bales of tobacco, dolphins teeth, Counch shells, pieces of paper and metals, to name just a few.

            Most societies have decided that the most superior money is gold and silver. In addition to acting as a medium of exchange it is a store of wealth and is easily divisable, easly portable, is fungible, does not decay, is relatively rare and not easily counterfeited. I sure I have missed a couple of other properties but it is not germane to this discussion.

            Paper currency was produced as a convenience but represented the specie (bullion) one for one. Paper notes were fully convertable to bullion.

            The government decided this was an easy way to tax the subjects of the realm and so a paricular currency was mandated a nation currency by Fiat (decreed law).

            Government and bankers conspired to issue many more paper notes than there was bullion to back them. Now all notes could not be redeemed. Just the first to arrive. Here is inflation induced by printing too many notes.

            We are where we are today with no metal or substantive asset backing the notes at all. Because the bankers were persuading the politicians, bankers interests infiltrated the banking system. They were put in charge of the money (bullion) and given the monopoly to issue government money. They also designed the system where all paper notes are issued at debt, so as the amount of money increases so does the size of the debt. So all the bailout money adds to the debt.An increase in the amount of money increases the debt outstanding.

            It is still possible for anyone to have their own money and trade with it. Stores issue coupons that can be used to redeem for goods. Kilkenny issues ‘Marbles” that can be spent in Kilkenny stores and pubs. etc.

            It is easy for a state to issue currency from treasury. A state can mandate that treasury money be the state money and that the central bank money will be phased out over a short period of time and replaced with the “new currency”.

            All outstanding debt owed by the state with central bank money will be replaced with treasury bills of equal monetary value one for one.

            As the treasury can produce these bills at virtually zero cost there is not debt attached to them and not interest payment. They are simply backed by the full faith and assets of the state.

            Now the amount outstanding on the national debt is paid off with treasury notes. Therefore it no longer exists on the books and there are no further payments required or interest to pay.

            There are a couple of other things to cover. Foreign peoples may not want to accept this new currency in payment of goods. However Ireland is earning foreign currency as there is a surplus in trade. This foreign currency can be used to pay for the imports.

            There will be no problem within the country as the new corrency is fully exchangeable for the old, so business as usual.

            There is still the problem of the printing of currency in excess which causes inflation . To counter this the legal tender laws would be repealed and people allowed to use any money they wish in trade. People could use dollars, pounds, euros silver, gold or anything else they mutually agree to, if they do not like the new treasury money.

            So the state will at the same time monetise silver coin. Values will be maintained at 20% plus of the world spot price as accounted for in the new currency. People will have the option of saving in silver if they wish that will be inflation proof. It will be this open competition in currencies that will constrain treasury from printing more currency than required.

            The national debt will be paid off, taxes reduced and a sovereign national currency used. Trade wll be with whomever agrees as is done currently.

            Taxes would be reduced and even elininated. The income tax act could be repealed. There will be plenty of money to pay the state bills without income taxes.
            If you want more discussion or information email me tony@tonybrogan.com. I welcome your objections as discussion.

          • Realist

            Thanks Tony,

            I understand what you are talking about clearly.

            I agree that competition of money to be used as legal tender will move the nation to the sound money (gold, silver most likely).

            I see now, you want to return the debt and not default on it.
            This is where I see the problem.

            You are saying you will pay it with the new money.

            “Foreign peoples may not want to accept this new currency in payment of goods.”

            But this is exactly the problem. It is not possible to pay out debt without real assets.
            I do not think there is enough gold to print money they will accept to be paid out.
            Also they might not want to be paid out when they agreed to get high interest rate on our bonds.
            You need to issue new bonds and replace old bonds with the same maturity and probably the same interest paid to parties.
            If not you are defaulting in some way.

            Also, who, where you get this to be the proper thing to do ?
            Will this cause practical issues as currency needs to freely flow both ways ?

            “So the state will at the same time monetise silver coin. Values will be maintained at 20% plus of the world spot price as accounted for in the new currency.”

          • Tony Brogan

            Hi Realist
            You almost have it.

            “Foreign peoples may not want to accept this new currency in payment of goods.”
            ThiS is for goods being bought by Irish and so other currency arrangements can be made . no problem.

            “But this is exactly the problem. It is not possible to pay out debt without real assets.”

            but paying off the debt is different.
            1. Revoke odious debt. do not pay it.
            2. Pay off legitmate debt, and do it with the new currency. It will be accepted because it will be that or nothing.

            A lot of the bond holders will be glad to get money now rather than wait. Ireland has no need to borrow again on the bond market with treasury bills available at no cost. They do not require anything to back them, the existing currency has nothing. The government will run a balance or surplus budget from now on. There will be some austerity as all government employees of any nature will have income reduced and set at the mean average for the community of eurpeans nations. An independent accounting firm will be hired to ascertain the payment/wage levels.

            “Also, who, where you get this to be the proper thing to do ?”
            it came to me in a flash of brilliance. You can quote that legendary economist , Tony Brogan.

            “Will this cause practical issues as currency needs to freely flow both ways ?”
            Nothing I can see. happy to consider if others see a problem

            “So the state will at the same time monetise silver coin. Values will be maintained at 20% plus of the world spot price as accounted for in the new currency.”
            Yes exactly. Based on the proposal by Hugo Salinas Price that is under consideration by the Mexican congress.
            I spent a week consulting with Mr Price in Mexico and went over a proposal for ireland and it is honed and polished. It has beem presented on this blog three times now I believe without objection or criticism and can be viewed at http://www.tonybogan.com .I am happy to post it again.

            Now getting this implemented will be the real difficulty but first the people need to be educated to the possibility and then the pressure can be put on the politicians. It is achievable in short order.

            We will call the bill. Honest Money for Honest People. Any politician opposing it is obviously not honest!

          • Realist

            Thanks Tony.

            So, to be clear you want to default in some way, is not it, as you are not going to favour original terms of bonds.
            That is totally fine with me as you do what you need to do when you cannot pay it out.

            While I am totally to move forward we should not assume it is easy and no discussion should be needed.

            What is against what I learned from multiple books and articles from Austrian economists is this:
            1. Setting the price is wrong, e.g. 20% above the market price of silver
            2. Giving the government minting business will not work long term.
            3. Why silver coins and not gold coins too, in parallel for example

            For me the transformation of commodity into coin shapes which are deemed most useful by buyers and sellers for mediating their exchanges should be performed by private mints competing for profits in a free market.
            Only total separation of government from the supply of money will benefit us.

            Why would anybody trust defaulters with their 20% above market price minting ?

            If you have the link to the properly laid down plan or name of the book supporting you and Price I would be glad to read.
            Did you cross check your plan with any prominent austrian or sound money economist ?

          • Tony Brogan

            Realist, try this link for silver monetization
            If it does not work then send me email and I will forward to you by email

            http://www.tonybrogan.com/?m=201302

          • Tony Brogan

            Hi Realist, thanks for questions.

            1. Setting the price is wrong, e.g. 20% above the market price of silver

            This is a monetary value for domestic use. It would apply to only domestic trade and not international trade. It is explained in the posting. all silver coins should not be fixed in value. That is, no assigned value such as 10 euro, or ten dollars. The coin should have just the weight and quality of the silver. Such as one ounce of silver at .9999 fine.
            Coins usually have a value stamped upon them for monetary use. This is an error. for example. The Canadian Maple leaf coin is stamped as $5.00. That was ok when the silver was valued at 4.50 an ounce or less as the coin would circulate as money. Once the value of silver went above $5.00 then those coins were hoarded and went out of circulation.

            to keep a coin circulating the Monetary value must be above the silver value. So the proposal to have the monetery value rise as the silver price rises (inflation protection) but the monetary value will never fall. This stabilizes the function of the coin as a monetary unit.
            After a period of time people will start to price goods in ounces of silver and silver would then be a true currency and established. If other countries moved to the same money then there is now a true international currency (Money) based upon the weight of the metal and its quality.

            2. Giving the government minting business will not work long term.

            Ther are already several respected mints that issue coins acceptable around the world. All these coins are proposed to be monetized in similar fashion. Therefore it will not matter which coin you use as long as the weight and quality are trusted. Mapleleafs, eagles etc.
            So there is already competition in minting and of course any one can mint a coin. It will be up to the market place to accept or reject.

            3. Why silver coins and not gold coins too, in parallel for example

            Perfectly possible but one thing at a time. Gold coins can be monetized similarly. BUT monetization of gold bullion in bars is not required as it is already traded. Fiat currency of any place is measured against the weight of gold and trade settled accordingly.

            For me the transformation of commodity into coin shapes which are deemed most useful by buyers and sellers for mediating their exchanges should be performed by private mints competing for profits in a free market.

            Yes, but not to exclude national mints already in existence.

            Only total separation of government from the supply of money will benefit us.

            Not quite. Government must repeal the legal tender laws that would allow all citizens to choose which money the prefer in which to do business.
            BUT government is not prohibited in having their own currency in which to administer the nation’s affairs.
            To collect taxes there would need to be a Bureau de Change operating that said what the different money exchage rate is for the government currency. All people then pay the same taxes levied in the common currency, the government money.
            Similar to now. You convert your bonds or stocks to currency to pay taxes.

            Why would anybody trust defaulters with their 20% above market price minting ?

            The coins will circulate around the world at the world price for silver. It is only in the domestic economy that the monetary value would be set in the domestic currency. So for example, a person in France can obtain coins at french pricing and travel to Ireland and spend the coins at the monetary vaue within Ireland. This will be an advantage to them as the coins will likely be obtained at a discount to the Irish monetary value. That discount will not be 20% as there are premiums to pay to buy silver coin in your own currency. Current premiums are about 6-7%
            So the difference will vary but likely not more than 10-15%. This would result in an influx of coins into ireland as bullion is not protected from downswings in pricing but the monetized coin in Ireland will never drop in the monetary value assigned in Irish currency.

          • Realist

            Thanks a lot Tony,

            I appreciate your answers.
            I need to be honest this is a hard topic to fully grasp easy as I am not a proper economist in profession, but I am learning all the time.
            I am sure sound money will come to fruition sooner or later.
            At that critical point I am sure all academic and practical world will help making it the best possible.

            There are too many free books about sound money with all kind of different proposals.
            You must be aware of all practical problems with it as people will start questioning you with more blatant reasons than me.

            I like Hayek’s book describing some possible practical issues with sound money while of course advocating it as any other austrian economist:

            http://mises.org/books/denationalisation.pdf

            Also Mises recommendation about sound money:

            http://mises.org/books/Theory_Money_Credit/Part4_Ch23.aspx

            At the end there is no perfect solution with sound money, but it is the best next alternative to this corrupt system we have at the moment as Mises points out:

            “Cynics dispose of the advocacy of a restitution of the gold standard by calling it utopian. Yet we have only the choice between two utopias: the utopia of a market economy, not paralyzed by government sabotage on the one hand, and the utopia of totalitarian all-round planning on the other hand. The choice of the first alternative implies the decision in favor of the gold standard.”

            Good luck with it Tony and all of us.

  9. DarraghD

    I just have to laugh at the “kitchen” analogy! I mean if you borrowed for a kitchen or a car, at least you have a tangible asset on the other side of the balance sheet, to show for the debt, so say for example you have a house viewing to sell your house (in the case of a kitchen!), the buyers can look at the nice shiny modern kitchen and see a bit of value in it!

    To bring the analogy back to the current subject matter, it would be like borrowing 20K from the Credit Union, for the purposes of digging a big manky hole in your back garden and making something like a slurry pit out of it! There is no tangibility associated with the investment, it stinks to the high heavens, just like the Anglo debt does as it sits in the middle of our economy.

    Yes, interest only makes sense for a struggling household, BUT ONLY if you accept that the debt was yours to pay from the outset! Once you depart from principles on that front, then you have serious relationship problem on your hands in my opinion.

  10. Grey Fox

    David,
    What choice did the ECB have, really!
    Ireland is not the problem, Spain, Italy etc..are
    We are the posterchild.
    My biggest fear is that Ireland will begin to recover with any significant changes to the financial sector, it will become business as usual and we will commit the same errors again.
    Fractional Reserve Banking is bad enough but as anybody who knows me will agree, my big bugbear is Securitisation, this source of Bank funding is the absolute, most insidious, corrupt and downright wrong method of capital raising by Banks which has ever be devised, removing the risk in any transaction from the Bank will, without exception lead to unsafe expansion, we have seen it here and all over the world, the hunger of investors for new, bigger return products most of which are built on sand is greater than ever, witness the Securitisation Conference which took place in Las Vegas just recently where everything and anything which has the hint of a scheduled future payment is talked about. When all is said and done, and it is business as usual again for the financial fatcats and whizzkids, our fearless political leaders will bang their chests about the great job they have done passing our billions of debt down to our children and grandchildren, the thousands of Irish families who have and will be Evicted from their homes, probably the only little bit of security they believed they had in the cruel world, and with their sense of well being shattered in the process, how great will we feel then!
    Most won’t care, they have gone beyond caring, they are selfish and care not a jot for their fellow man.
    I when to the austerity protest in Dublin on saturday, not to support the Unions, which I now abhor with contempt for the betrayal of the ordinary Irish worker, how dare they, with there 5-6 times average industrial wage salaries, pontificate down at the workers of Ireland, (the few that are left), I walked with the Anti Eviction Folks at the front of the march to protest the Unions, and what did we get? abuse and assault from an Gardai Siochana! our fellow countrymen, we marched with dignity and quiet resolve in the face of adversity, we were told as much as, our protest was not near as important/relevant as the bloated unions, we were pushed and shoved and kicked by the men sworn to protect us, were we breaking any law? NO did we act with honour? YES WE DID
    If we were a PR Company chasing a lucrative contract and we stole the march on another competitor to get our message out first and loud, which is what our small group did on Saturday, we would be lauded by our peers, no so the case last saturday!
    When will the people of this country wake up and stop being led around by the nose by Irish politicians, European Politicians, Technocrats, Bankers, Regulators etc etc…. they are preparing to walk us into the next disaster which will benefit them and their cronies. Make no mistake about it

    • Realist

      Unions, .. bunch of mupetts working for government interest, for socialism.

      When I saw that little girl with “Tax the wealthy” slogan I was reminded of Atlas Shrugged book.
      If you never read it you should.

      What they should put is “No more taxes” (shrink the government) or “Tax cronies” (those that took money by state grants and privileges).
      All Unions can come up with is “Tax the wealthy”.
      So, who is going to provide jobs, be entrepreneur with knowledge, invest capital earned over long period of time into the production, …. ?

      • bonbon

        Ayn Rand, Objectivist was Alan Greenspan’s lover. Greeenspan is an avid Atlas Shrugged follower. He shrugged off Glass-Steagall.
        Kaptur Floor Speech Hits Greenspan and Repeal of Glass Steagall
        “Go back to the 1990s. Read Alan Greenspan. A great advocate of ‘rugged individualism’ and Ayn Rand, right? Just drive ‘em into the ground! Make all his friends rich! JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley – it’s an interesting group of characters up there that took America to the cleaners.

        “They took, and outsourced our jobs. Now, they took our home equity. And now, it’s getting so bad, we even have a bill that’s going to take food away from about 350,000 women and children. Now who’s fault is that?”

        • Realist

          Anything you touch Bonbon you turn on its head :)

          First of all Ayn Rand will most likely despise Alan Greenspan and what he did lately after she died.

          While Greenspan might be good guy before, once he entered FED he started behave fullishly.
          This is what politics and central bank do to you, you need to accept things and work on it, and why not while you are getting so much money and power in return.
          You become LIAR and pretend you are not and that everything you do is honest and proper to save the world.

          I am certain bonbon, you are politician as you can so blatantly pervert the truth.

          And will Glass-Steagall save Northern Rock or nationalization of AIB and other Irish losses ?
          Of course not, so stop harassing this forum with GS anymore.

      • Dilly

        I couldnt believe it when I saw that child. The poor brainwashed kid never had a chance. The unions killed the company i worked for in the past. They completely destroyed it. Unions were founded to help workers, but somewhere along the line they turned into cannibals.

        • Realist

          Exactly.
          Unions are no good to the society.
          As Bastiat pointed it is hard to see what is unseen.
          Wages are lower due to unions and their crazy redundancy package deals as companies incorporate all these employee protection crap into their calculations (except the government who does not earn money really).

          They only care about their own interest while propagating socialist ideas.
          As I lived in communism and socialism I just cannot grasp it really why capitalist countries are still fond of such guys :)

  11. Delphic Draghi

    Draghi is an Alchemist and an adherent to Code Napoleon and the Jesuit Order of Things .

    He is a Perfection in his art and prophetic is his disciplines .

  12. Tony Brogan

    Introduction of Parallel Currencies

    There has been a lot made about the ‘cashless society’ in media, but this cannot fully happen until there is a cashless currency.

    Every revolution needs a good crisis in order to germinate its seed. The cashless revolution is no different. It should be abundantly clear by now that the global financial meltdown has been engineered at every juncture of its unfolding by the very private central banks who expand and contract the money supply. A dollar or euro collapse will trigger a global economic crisis, which is a prime opportunity to introduce the next phase. In the summer of 2012, at the height of the European Central Bank (ECB) ritualistic raping of the Greek economy, financial expert Max Keiser, alongside Mexican billionaire Hugo Salinas Price, traveled to Athens to promote the idea of a silver Drachma as a parallel currency to the ever-failing euro. In theory and in practice, this parallel currency was ‘sound money’ for individual Greeks and would allow them to retain some say in their financial destiny, and also allow them to accumulate real wealth. It should have caught on. But this great idea did not go down well with media moguls and technocratic elites loyal to their overlords in the ECB, Wall Street and the City of London. Still, too many people remain unaware of how money is created, entered into circulation and how their private central banks control inflation, and Greece is no different.

    Watch this clip from Greek television:Max Keiser and Hugo Salinas Price.

    http://www.youtube.com/watch?feature=player_embedded&v=DZb3AZvTZe8

  13. Irish PI

    Whats a “Gewürztraminer.”
    As a German I’ve never herad of this word??

  14. transitionman

    David you taking my comments into your intelligent head. I will sign off for awhile.
    Hope you make it to the 2yr Birthday Party you got invited to..
    ” Ireland is now the most oil-dependent economy in the EU and one of the countries most dependent on fossil fuels for electricity generation. Fossil fuel availability will continue to diminish in the future and its cost will rise, dragging down growth.”

  15. Realist

    Very nice one Tony.

    If the government knows that sound money(s) is better and more beneficial to the economy they will introduce it. And this is the problem as it is against the government interest to control everything.

    So, how to break that vicious circle. How ?

    • Tony Brogan

      Needs a politician to introduce a bill to stimulate debate. Or Media to promote.Or both.
      Needs receptive ear. Most ears are blocked on this blog.David’s head is full of Keynes fiat stimulus depreciating inflationary currency. No room for silver parallel currency.Will not even talk about it.

      • Realist

        Exactly, but not seeing it until they get to their knees again.
        But with bonbon and others lurching around will we get the chance after it, or we need to wait for another authotarian idea :)

    • bonbon

      The German bankers and a lot of politicians in the Bundestag are all Hayek-ians. Even the FDR, critic of many bailout moves, are essentially Hayek-ians.

      This stunts their understanding of reconstruction. Which is very annoying as the Marshall Plan was only possible with the methods of FDR’s RFC. What is unbearably irritating is that exact same idea was presented by the Frierich List Society Dr. Lautenback and by 2 trade unions (W.T.B Plan) in 1932, rejected by the govt, bringing in Hitler because of the joblessness. Some here mention 1923 (hyperinflation) but the Tiger gaps in knowledge are suicidal.

      Today a Greenback Pound, which the UK already called for, and a Marshall Plan especially for the Med. Hayek’s golden throttling grip on German elites is blocking this.

      • Tony Brogan

        You mean it is all Germany’s fault , this finacial morass. Bad Germans should have party hearty more and more. then good times for all. Well well , who would have thought that.
        Germans thought that they were fine and did not need a Marshall Plam Mark 11

        • bonbon

          I’m afraid the ambiguities of the English language have got the bettor of you.

          Right now Hayek-ians dominate in Germany. Even those staunchly against the ESM etc. Which blocks yet again the concept of FDR and Lautenbach’s unique approach. So we have a Marshall Plan for the MED firmly on the table to bring the eerie a-historic numbness to debate. Hayek does have that effect, not noticable to those so numbed.

          So Glass-Steagall to open the door to a new Marshall Plan. Glass-Steagall opens not just zombie banks to function again as banks should, but zombified “true believers” to actual, hesitant at first (understandable considering the drug, stronger than horse tranquilizer in the meat), to debate.

      • Realist

        I wish they are and that Germany (if not Ireland) reverts to deutch mark backed by gold.
        At the moment no central banker is Hayekian as I see no sound money anywhere and I see no less government but more.

        I wish one country revert to sound money and show the world how to be successful without money printing machine. This still does not mean people of that country need to work hard and be competitive.
        The other prerequisite is the small government and less taxing of course, otherwise no gold will help it.

        Hayek recognized this, together with other Austrian economists. The key is less government (less taxes) and sound money (no inflation and government control on money).

        • Tony Brogan

          Hayek recognized this, together with other Austrian economists. The key is less government (less taxes) and sound money (no inflation and government control on money).

          {:-) 100%

  16. rebean

    I dont care anymore what happens in ten years. I want cash in my pocket now so I can pay my mortgage and raise my kids. Thats the bottom line . We are all fed up with austerity and debt and most people want to get on with their lives. For example your article on Mammils last week. I am a budding Mammil and I notice that it is a frame of mind as much as everything else. It comes from the hard lesson of wathching investments and shares disappear into some ass*oles bonus from shorting shares etc. People have realised whats important, their health !
    Also there needs to be less waste and more prudent shopping etc. All the things your grandmother told you were true.!!

  17. Abraham Golden Calf

    He destroyed it with Stone . Same is likely to happen again .

    Stone is The New Law ……….Ethics etc.

    Price of Gold has begun to FALL .

    In another world Tulips …withered .

    • And The Pope Abdicates ……Moon Wobble 14th

      • cooldude

        I have to say John Allen you really do not have a clue about gold. If you look at any long term chart of gold, or silver, against ANY paper currency you will see the exact same thing. Roughly a 17% increase year on year over the last twelve years in gold and a 20% increase in silver. If you want to go further back gold was $35 dollars an ounce in 1971 when this ludicrous experiment with floating unbacked paper currencies started. It’s over $1650 today and will rise an awful lot higher in the years to come to reflect the incessant creation of new currency units by all the central banks across the globe. This is the very reason that Russia and China are buying these metals in exchange for their rapidly depreciating US dollars as quickly as they can. They know the US $dollar is being seriously debased and they want out. After one day of a manipulated takedown for no apparent reason you suddenly decide gold has the same monetary status as tulips. You are the tulip along with your ridiculous moon wobbles. unless you can back up your lunatic statements don’t bother with your rubbish. If you want a wager on whether gold hits $2000 or $1500 next I am ready and willing to take you on. Let David give the winnings to a charity of his choice. Come on and back up your ridiculous moon wobble statements and lets see who is right or wrong.

      • North Korea …explodes the Bomb

      • Lightening strikes the Vatican Basilica

  18. 5Fingers

    David, the weakness in the your view of money as a tool is that it is ONLY ok to borrow to invest PROVIDED the resulting growth exceeds the interest. This is the very basis for buying shares, equities and bonds – the return.

    Could Germany’s view (for whatever reason it happened) have averted this crisis, had it been adopted more widely throughout in the EU and the US. It is interesting that the more Teutonic of the EU (NL, Austria, Denmark and Scandinavian countries) seem far less affected – I refer of course to another more plausible effect if Calvinist Versus Catholic cultures with the former’s tendency to build wealth from earnings rather tan borrowings. The Teutons always know where the money comes from. And before I get attacked for being sectarian or racist, I think there are similar groups in all countries but in lower concentrations.

    I am OK with money as tool provided it is given the respect it deserves and is properly maintained. Money/ Cash whatever is the oil the lubricate day to day comings and goings. But we need new oil – new wealth…not old recycled rubbish (borrowings) that will cause a catastrophic stall.

    • Well said . You are not raciest when you speak of profits v borrowings to wealth creation.

      • Actually you can also use this example to compare the Calvinist Iclanders and the Roman Irish when comparing why the Icelanders thought it fit not to pay monies due to banks that they did not owe and the Roman Irish acting like serfs/ slaves to honour all the bad debts of banks created by outside gamblers .

    • Realist

      +1
      Looks like only for governments and Davids of this world (typical representation of modern economist, central banker) is true that borrowing (credit growth, spending) is more valuable than saving (they call it thrift as should be spent).

      I am really getting sick of articles that want to inflate our heads with ideas that consumption through borrowing is driving economy. I am just waiting once more to hear from David that somebody’s spending is somebody’s income and to puke.

      • Realist

        David,

        I cannot believe you are hiding behind this guy.

        Keynesian + Monetarist together.

        This sums up the article:

        “What makes this policy so powerful is the combination of fiscal spending with monetary expansion: Keynesians can enjoy the former; monetarists the latter. Provided the decision on the scale of financing rests in the hands of the central bank and it, in turn, looks at the impact of the policy on the economy, this need not even generate high inflation, let alone hyperinflation. ”

        Martin Wolf who said in 2008:

        “Yet, in current conditions, monetary policy will be insufficient. This is a Keynesian situation that requires Keynesian remedies. Budget deficits will end up at levels previously considered unimaginable. So be it.”

        So, did it help from 2008 till 2013 what Martin Wolf supported and what heppened ? NO for a sure.

        Despite trillions of dollars that central banks worldwide have pumped, he is still talking the same crap.

  19. Adelaide

    A Quick Question: are the Irish local authorities / county councils / state bodies registered as Public Companies? They appear to be so in the UK.

    My friend is fighting the legality of a fine. Sorry for the tangient.

  20. Stiofan

    David, reference your personal view concerning the nature of money as a tool. I interpret that such an unconventional view is purely personal.

    Common theories of money describe specific qualities: store of value, fungible units, medium of exchange and so forth. A new interpretation includes “debt as money”. I’ve thought of this as anti-money and nega-money. The debt load of the western world is now the basis of the money supply, which we understand to be manufactured from thin air (maybe why the Germans feel it is a public good). A problem seems to have emerged with the very idea of money, in that it is no longer based upon anything tangible, any sort of value or collateral and is more or less, technically, worthless. Money based upon liabilities rather than assets is a remarkable historic event.

    As it’s a little shocking to cope with such an idea, I’d prefer to feel about money as I did when I was a child. The German idea of having money based upon assets is appealing. I find the idea of the ICB creating money out of a vacuum to be inconsistent with my future wellbeing. (Just in passing, German hyperinflation was well over before the Fuhrer got the keys to the Reich. Can never quite understand the appeal of fantasies and the way they trump facts.)

    There is clearly no way the country can ‘borrow our way to prosperity’. I can’t get comfortable with the idea of ‘debt as money’. I can’t really buy into ‘kick the can a bit harder like’. In my own life I can’t use my debts as money. It seems strange that my republic (yes, it is mine and ours generally) should try this trick. If our money represents nothing of value we are heading in the wrong direction. If you pop by to paint my house and I pay you with my debts you will perhaps walk away feeling that the account is not settled.

    Money may be a tool for all I know, but it has to be backed by an asset. Debt is not money in my world. Our money is backed by the wind. The ICB has to rethink its position.

    Here’s a link to some Kilkenomics folk http://www.youtube.com/watch?feature=player_embedded&v=sd72VTs0phk

    • george

      The euro in Ireland doesn’t have its real value, since our politicians, top civil servants-workers, decided that they were going to pay themselves more, than people in other Europeans Countries. The consequence of it, is that our economy is totally distorted, and we end paying more for everything than in other countries, even for social welfare.
      .
      According to the Sunday Times, a consultant in an Irish hospital gets 181.000 euro a year, against 91.000 euro in Britain, and 100.000 euro in Germany. And probably the similar differences exist with teachers, and other top PS workers, and fees for professionals, as accountants, and solicitors.
      .
      The reason of why everything is more expensive here is clear, but very little is done about it, and my guess is that the top people in the Public Sector has a common interest in doing as little as possible, and are playing for time, so we can exit the troika’s control mechanism, and go back to the bond markets, so they’ll have less pressure to bring their salaries, conditions, and pensions, in line with their counterparts in Europe.
      .
      To tell you the truth, I can’t wait for a federal Europe!

  21. Adam Byrne

    The main aim of this country should be to generate 100% of our energy needs through renewable, non-fossil fuel sources and export any excess. We should be world leaders in this industry.

    We should also be producing way more food. Take a train ride west and just look at all the agricultural land lying idle.

    Of course, ideas such as these require vision and strategy, whereas the parasites that run this country can’t see past the next election and the lining of their own pockets.

    Therefore nothing progressive will actually happen and we’ll carry on in mediocrity for the next 100 years of the state, just like the first 100.

    • Adam Byrne

      People here prefer get rich quick schemes as opposed to getting their hands dirty with hard work.

      • Deco

        The phrase “something for nothing” applies to be sure. Too many people aiming for “something for nothing”.

        The essence of a ponzi scheme is that it promises “something for nothing”. Those that time their exit at the top get “something for nothing”. Those that don’t get “nothing for something”.

        The ECB is subsidizing this by means of it’s low interest rate. The media is cheering it by on, because the beneficiaries are buying advertising space. And the politicians are supporting it because they are in need of a “stimulus” so that go on the Bill Clinton tour of self congratulatory nonsense.

        You can tell that an economy is using debt as a means of expansion, when the debts just keep mounting. Eventually they become too large. The solution is default. But this will not happen due to politics. The well connected will make sure that the political system serves their needs.

        If only we invested in renewable energy or in energy storage instead of the prestige projects like the Savoy Hotel, and big investment programs in Chicago, and Dubai.

        But….the thing is….central bankers were subsidising those projects….they were centralizing urban real estate overdevelopment. On a vast scale.

      • joe hack

        I like lots…

        I Have solution to Ireland energy needs – we get all those dudes in there MAMIL gear on bicycles with the back wheels all linked to generators we would then have free electricity, a healthy work force and more work making bicycles.

        The benefits are enormous particularly in healthcare savings, less imports and healthy environment.

        Every adult would have to sit on a bike for eight hours a week as part of an national service and work at their jobs for(if they have one) 31 hours while on the bike they wont be using electricity that another big saving.

        we could have all sorts of schemes to suit peoples holiday plans etc.

        Perfection

        • george

          Guys It is a good idea, but what about putting the heads of wind generators or similar devices, flat in public parks connected to the grid, and have volunteers and people in social welfare, giving some time to push the propellers around?

          • Adam Byrne

            Good one george.

          • Adam Byrne

            Apart from lots of renewables – wind, hydro, geo-thermal, solar etc., we should also build one nuclear power plant to serve the whole island (and again, exporting the excess) with state of the art technology, safety and waste management. Again, we should be leading the world in this with the natural advantages we have. It would also give a massive boost to the sciences at 3rd level.

            But will it happen? Will it f**k. Myopia rules here.

          • joe hack

            George must work, well at least for now, if we get the unwaged to do that we will have to feed them more ,its fist law thermodynamics and it looks like horse is of the menu for the mo, it may be quite expensive as there will most likely be a increase in the price other meats , a shortage.

            NO get the people that travel up and down Enniskerry every Sunday there blocking the road and the gas guzzling Sunday drivers are a pist at them so it a win, win, an offset against the gas guzzlers and none get run over.

          • Deco

            The option to follow in respect of Nuclear is “Thorium”.

            And the location ? It should be built in Dublin. Seriously. If it is close to the main population centre, then you can be certain there will be no screwing about with respect to plant safety.

          • george

            sorry shoul read fool not “full”

        • george

          Guys the future is in photovoltaic panels for the production of electricity, and as always the Germans are ahead of everybody else in the sector. Even ahead of Spain that has a sunnier climate.
          .
          For an average house in Ireland, you need 24 panels on the roof (approximately a square meter each) and with VAT and installation, at the moment it comes to around 14.000 euro, guaranteed for 25 years. Regarding cost It’s at least 1/3 cheaper for domestic use than wind turbines, that contrary to common believe cannot be installed in every site.
          .
          The world leaders in it are Sharp, the Japanese company, with the European headquarters in Hamburg and factories in Britain, and Italy as well.
          .
          I would keep away from nuclear energy in any shape or form…why the Germans and the Swedes want out then? Remember Chernobyl and Fukushima !
          .
          I wasn’t joking about wind turbines on the flat pushed by people. If it would be an efficient way of producing at least some electricity, wouldn’t it be great to offload some of the cost of social welfare. I would do it, if asked to do so.

          • bonbon

            Have a look at the state of the solar folks, across the transatlantic they are going bankrupt and having their fat subsidies stopped. Scientifically all “renewables” cannot work, it a the new bubble. As with the housing Tiger bubble, people again do not see the swindle. dot.com’s, housing, renewable greenie mania, to bond bubbles. Every time people are swept along. Time to get off the magic carpet.

            Japan is a lesson for Germany, after the Fukoshima hysteria flooded and washed over the EU. How will Merkel “manage” the turn – she is called the Zik-Zak Kanzlerin after all.

            Britain’s BNFL is doing wellm and with big projects. Sir David Attenborough, Al Gore and Dr. Schellnhuber can go back to the swamp with the mudflappers. We have a future to power.

          • george

            Bonbon David Attenborough is a full?
            Next thing, you’ll tell me that Victor Shaulberger and Nikola Tesla were too!
            And that the Germans are a bunch of wankers, with no strategic vision. And the guys in the BNFL know best than everybody else.
            .
            The only thing that is scientifically proven without a doubt, is that if the atomic energy bubble goes seriously wrong, there won’t be a future to power!
            .
            In the twenty first century, apart of eradicating greed from the economic system, we have to adjust our rate of procreation to the meaningful use of earth’s limited natural resources, and time. If not even nuclear energy will be useless, and we’ll finish with the earth and life in it, before we even have a chance to settle in Mars!

          • george

            Sorry should read fool not “full”

  22. Deco

    Ireland is not being thrown a lifeline. Rather Ireland has been given a prop to keep the PAYE taxpayers paying the bill for the rich.

    The objective of this is not to Ireland. The objective of this is to maintain the pretence that all is well in the sovereign debt market in indebted, inefficient, badly governed, wasteful state systems in Western Europe. If this pretence is maintained, the the policy of the working people bailing out the rich, will continue.

    This is merely the latest chapter in a game called “kicking the can down the road”.

    The only hope in all of this is what has been outlined by Noonan. The Irish side has assumed money printing from the ECB. The northern Europeans have assumed that there will be no money printing. Unless middle income working couples in Western Europe decide to popping kids out at a scale not seen since the 1950s, there will be money printing. There will be inflation, because that is the only way that the state systems are not going to pay the bills.

    There is a need to discuss the labour market in Ireland, and in particular the third level sector and the vocational training sector.

    The Irish education from age 18 onwards is producing large quantities of people who have to go to Australia and Canada to find jobs. The same sector is also producing quantities of graduates for the wrong areas. There are not enough technology graduates and too many arts graduates. There are also not enough technician level graduates in the technology sector. And there are far too many people employed in the civil service relative to the rest of the state sector. There are imbalances all over the place.

    As regards efficiency, there is a massive efficency problem with respect to the way that freight is moved in this country. At the same time the truck drivers cannot even make a resonable way. The award for underachiever of the decade must be given to Irish Rail in respect to rail freight.

    • Deco

      Eventually, the one child policies pursued in certain other EU countries will cause money printing to meet the social commitments, and that will be the bailout of the Irish PAYE taxpayer.

      Kicking the can (thirty years) down the road.

      Eh…don’t tell Gunther.

  23. molly

    Bonds are a form of gambling they normally offer a good return for your money something like putting money on a horse ,not to eat just to win.
    If I put money on a horse and it does not win do I get my money back plus xtra I don’t think so,I get nothing.
    Now why do bond holders get there money back plus there promised win fall,it’s so farcical is almost funny.
    Who’s fooling who ,how this is allowed to happen is unreal.

    • george

      Molly it works like it. Powerful people in the system like Banks, big Corporations,and powerful elites, get behind weak politicians, to tell us little debtors, that everything comes down to the market system, so we can’t have partial debt forgiveness, neither they can pay an extra cent in taxes.
      .
      But when they gamble our savings in speculative investments, and lose everything, they demand the socialization of their debts. So basically we are screw twice, by rotten money lenders and politicians, with no social conscience.

      • molly

        Yes it’s just one big lie ,where’s the change (the new way of doing things).
        I am sick to the back teeth of the whole lot of them,lets say there was an election tomorrow who would you vote for,when one looks at the choices one is not spoiled for choice.
        The way we are screwed now is the low to middle income earners will have no pay rises for years,but the cost of living is going up and up.
        So the government should make it law that there is no cost of living rises while there are no increses in pay ect ect.
        The government can’t have it both ways ,so scrap water and property taxes and any other hidden increases that some pompous gobshite on telephone number salary decides to heap on the people who can’t pay.

        • molly

          Remember all the big shots driving Bentleys and even staring in tv shows talking down to people,mister big Celtic tiger madness I want a helicopter I want it now and I want my own tv show,I want to stand there with my silk handkerchief rubbing the bird snot of my grill.

  24. joe hack

    Gewürztraminer with Shergar’s sounds nice maybe with some fava beans- sautéed of course with a little bit-butter.

    I will try to be a little prophetic and predict that the cost of meat (meat other than the equine verity) will gallop up in price rapidly in the coming weeks.
    The lack of horse meat in our food chain will cause the price of the weeks shopping to escalate exponentially.

    We already know that this is happening and even “Da Deal” (code named ‘Project Red’ I hear) will not offset a massive jump in the already increasing costs of the weekly food basket.

    The amount of horse meat now being removed from shelves across the EU will have a big impact after all animal juices are used in all sorts of food processing and not just in the burger or the lasagne.

    Prophetically speaking wage deflation along escalating inflation ‘the burger index’ will increase our recession faster than a promise kept, now copper fastened and in enshrined on Irish birth certificate.
    It won’t be long until we have the hundred year mortgage as is the case in Japan and in the USA, 50 year mortgages are becoming common.

    Money is a tool of the capitalist used enslave from birth to debt I wish we were more like the German with respect to money, but no, the capitalist will exploit, have their fun, then charge those they exploited and when that well runs dry they will exploited the unborn.
    (I am guessing which side of the abortion debate they side with, seriously!)

    For the capitalist out there, short term put your “tool” money in pork bellies or beef, long them expect horse meat to be back on menu again, this time it will be a delicacy , if you get the timing right, you, Prophetically speaking will (making) be KILLING , maybe try nursing home meat ‘Soylent Green’ is coming to a super market.

    In future we may cracking open the Taa with Tripe, Pigs tails, or a Ginnets leg and maybe spuds with skins on if we are lucky and don’t catch the blot the future is blight as we are now Bonding with Bondage.

    Prophetically speaking Gewürztraminer will not be on the menu in the 99% of households and rising.

    Money is a tool of bondage it is not a servant if only we had been Teutonic with David’s TOOL and kept the tool shed clean and tidy, if!, with self regulation the tool shed is always in a mess as no one is responsible everyone has the keys!

    The ECB/EU better work fast to put century on guard otherwise with the “deals” the tool shed will be empty and David’s tool will go soft.

    Ginnets Rule Ko

  25. gizzy

    Did anyone watch the Irish Nationwide programme. Now that IBRC is liquidated certain people will never be in the witness stand to testify as to who know what in government circles.

    How could kpmg which wrote a report in 2000 about bad practices in Irish nationwide continue as external auditors while the loan book multiplied using the same bad practices without blowing ten whistles,
    Their reward the liquidation of IBRC which incorporates Irish Nationwide.

    You couldn’t make it up.

    Then the revelation of the Ernest and Young Report into the Nationwides practices as if it was news when the dogs in the streets knew it was going on.

    Oh the same Ernest and Young who were so shocked by the findings in Nationwide because Anglo Irish which they audited would never have carried on like that

    Argh the most incredible cover up and that was the best RTE could do go after Fingleton He was what he was in plain sight for years An investigative programme should have looked the links to politicians and others.

  26. Tony Brogan

    From LeMetropoleCafe

    “Ireland gets reprieve on promissory notes: While somewhat overshadowed by the ECB meeting on Thursday, Ireland did manage to finally strike a deal to replace the €31B it pledged in promissory notes for defunct lenders Anglo Irish and Irish Nationwide during the height of the debt crisis. Under the terms of the deal, the government will exchange the existing promissory notes that have an average duration of between seven and eight years with new bonds that have an average duration of 34 years. The first principal payment on the new bonds will not occur until 2038 (the last will be in 2053). In addition, the average interest rate on the new bonds will be a little over 3%, below the 8% charged on the promissory notes. This is expected to reduce Irish borrowing needs by €20B over the next decade. As part of the deal, the Irish central bank has agreed to sell some of the bonds each year to private investors. It will sell a minimum of €500M by the end of 2014, at least €500M a year from 2015 to 2018, at least €1B a year from 2019 to 2023, and at least €2B a year from 2024.”

    Who will be foolish enough to buy these bonds at par.
    seems to me that after the bond maket busts which it will the country will be able to buy them back from themselves at half price!!!!Very clever these Irish.
    How to make odious debt less onerous!

  27. Tony Brogan

    “For many, me included, money is a ‘tool’ to be used to move the economy onto a different growth path, to be used to solve problems and to be used to get the real economy — the production and sale of goods and services — going. It is a tool to be used by our Central Bank.”

    Well at least you have the courage to nail your colours to the mast , David.

    You are an operator of the greater fool theory. You wish to inflate the money supply one more time on the basis that finally it will work this time. That is what using money as a tool implies. You believe in mucking about with the money system to achieve desired outcomes in the economy. So the alternative is to stop the printing or reduce the money supply and accelerate the inevitable bust.

    Is your economics training and your central bank grounding so solid that it overcomes your common sense?
    When are you going to give your head a shake and see that it is this mucking about caused the problems in the first place.
    Not only that but you jet around the world on speaking engagements propagating this bloody nonsence just as you did at Kilkenomics. You , David are a major source of the country’s problems if you continue to advocate this opinion. Keep printing David, it is bound to work sooner or later. The faster you print , the sooner the bust and the better off we will be as we will get it over with.

    When are you going to advocate a sound money system and the removal of the central banks? Never, is my guess. We are doomed. So you know better how to operate the economy than the thousands in the market place.What arrogance.

    So what is your proposal as a solution to the current problems? I have been waiting for months to get a hint, but nothing so far except this meddling with the monetary system.

    The fact you support the use of a central bank with all the endemic corruption it contains is downright disconcerting. You tactly support the bankers agenda by supporting the central banks. You betray your friends, neighbours , your countrymen, and the world.

    When are you going to return to the sanity you were born with.

      • whatamess

        -1

        “You betray your friends,neighbours etc etc ……”

        a little strong in fairness Tony…BETRAY ??ugh! waaaay too emotive and not your norm ( your passsion is admirable but know when to take a deep breath ..)

        i agree with you Tony regarding central banks and i’m also very very annoyed that DMW won’t ‘denounce’ such practices/institutions,but he won’t be ‘bullied’/harassed into it ( and no you’re not a bully i hasten to add,but you’re coming across badly to me and you never do normally )

        It’ll simply take as long as it takes for DMW himself to overcome his level of CONDITIONING …we won’t underestimate conditioning

        it sounds to me that you’re being unnecessarily provocative …sorry and i’m a fan of Tony Brogan ..really…but your passion is giving you a blind side.If you make your point ( a very relevant one re:central banks and banning fractinal reserve banking etc and perhaps CRUCIAL to move forward in a constructive way! )and DMW doesn’t respond , then that’s that…simples.Of late ( aside from your very interesting and valuable contributions )you’ve been even resorting to again attempting to provoke the HOST that you will reprint the same articles over and again gain until you get your answer….c’mon Tony

        if he wants to respond,he will ( whenever he decides and if that’s not suiting your timeline,it begins with ‘t’ and ends in ‘f’ :) Don’t put so much ‘stock’ in DMW’s opinion is what i feel…

        he’s simply not ‘there’ and will have to be dragged ‘there’ …his last few articles have been amateurish at best let’s face it …but he does provide this forum to say what we want and we do and i’m sure he reads it…that’s enough for me and that’s why i don’t get as annoyed when DMW does what he does..sometimes avoidance yes and absence of dealing with the “meat on the bone” issues ….maybe he himself is coming to terms with the fallacies of his beliefs(maybe not !)

        how long is a piece of string (for DMW and any of us )…it takes time

        • Tony Brogan

          Thanks for your evaluation and comments. -1 is a new rating{:-)

          Fair comment. BUT I do believe that the process of ever expanding printing of money is the basic problem and printing is supported by David as I understand his position. Unlike the rest of us he has obtained a position of respect, which I too repect, and indeed applaud. It is not easily obtained and requires talent, grit, and determination. These are all admirable qualities that do not allow for deterrents to stand in the way of David’s success.

          This are the same qualities that do not easily allow for a revision of position or change of thinking. It requires a stronger notice to such a character.

          When an individual of persuasion and character travels the world propagating his beliefs then he is exposed to greater scrutiny. Some of that will result in disagreement.

          I mean no offence on a personal level but observe the effective result of such action. David wants to do the right thing by others as is amply demonstrated. I would not be able to communicate this to you without his forebearence. He would not be involved in all the other myriad activities that promote well being if he were not a valid character with the best interests at heart.

          Sorry if I came accross as too passionate and strongly worded but it was deliberately provocative on my part and I still believe I made a valid point.

          Thanks for this forum David.

        • Whatamess and of coures, Tony

          Have a reda of a very interesting piece by one of the best economic writers on the pitch these days, Martin Wolfe of the Financial Times. It sums up my general view more eloquently than my “money is a tool” description.

          http://www.ft.com/intl/cms/s/0/9bcf0eea-6f98-11e2-b906-00144feab49a.html#axzz2Knovuipp

          Best and again thanks for all the comments,

          Best

          David

          • Realist

            David,

            I cannot believe you are hiding behind this guy.

            Keynesian + Monetarist together.

            This sums up the article:

            “What makes this policy so powerful is the combination of fiscal spending with monetary expansion: Keynesians can enjoy the former; monetarists the latter. Provided the decision on the scale of financing rests in the hands of the central bank and it, in turn, looks at the impact of the policy on the economy, this need not even generate high inflation, let alone hyperinflation. ”

            Martin Wolf who said in 2008:

            “Yet, in current conditions, monetary policy will be insufficient. This is a Keynesian situation that requires Keynesian remedies. Budget deficits will end up at levels previously considered unimaginable. So be it.”

            So, did it help from 2008 till 2013 what Martin Wolf supported and what heppened ? NO for a sure.

            Despite trillions of dollars that central banks worldwide have pumped, he is still talking the same crap.

          • bonbon

            That reference seems to support the Wiki assertion that DMcW is a follower of the Chicago School of Milton Friedman. The article mentioned is basically about Irving Fisher’s Chicago Plan posted here by Ferguson numerous times.

            The question is why the silence on FDR’s New Deal and Reconstruction Finance Corp, which actually and factually succeeded? The IMF attempts to revive Fisher’s Chicago Plan betrays an eerie ahistoric approach. The silence on FDR is now reaching a crescendo, as their efforts fail catastrophically.

          • Tony Brogan

            David, I have read Martin Wolf’s essay twice now to see if I relate.

            I am afraid I see the cause of the problem then being offered as the solution. Throwing gosoline on the fire I think you relate to.

            Basic problem , David , unaddressed is the debt based fiat money issued by the central banks.

            There are two problems.
            Money supply can be added to without retriction after the “gold window” was closed by Nixon in 1971. All the Graphs show this exponential surge in fiat money.
            This new money ids all loaned into existence and charges interest.

            Take the US alone. More money has been issued in 5 years (2008 onward) than in the previous history of the US. Shown by the Graphs.

            This means that the deby on the federal government and the people doubled from that alone in the past 5 years. True interest rates have halved but that is why there is any semblance of order left.

            Debt is debt. It is amply demonstrated that adding more debt at a time of retraction in the economy is the road to ruin. people are at the end of the debt tether. There is no more rope to let out, no more green grass to reach.

            Marin Wolf’s policy is to issued yet more unlimited central bank fiat money. That is yet more debt. This is your policy David too. You will swamp the people. no more debt can be taken on board or absorbed. No more interest paid.

            On the one hand , David, you call for debt relief and on the other a policy on blanket indebtedness.

            Your policy has, and will continue to bankrupt the people. It is not just the US, but all nations bar a handful, are subject to the same issuance of fiat debt based interest bearing money.

            Your policy is also bankrupt. Devoid of any redeaming feature.
            That makes your mind devoid of any solution except a bankrupt one.

            There have been other proposals presented that do not involve the use of such policy yet you remain silent on these issues. You appear to not think about them or want to discuss them right or wrong.

            It is time to open the mind to alternatives as the current policies are leading to the destruction of civil society and the breakdown of western civilization. We have followed a bankrupt idealogy for too long.

    • whatamess

      -1

      “You betray your friends,neighbours etc etc ……”

      a little strong in fairness Tony…BETRAY ??ugh! waaaay too emotive and not your norm ( your passsion is admirable but know when to take a deep breath ..)

      i agree with you Tony regarding central banks and i’m also very very annoyed that DMW won’t ‘denounce’ such practices/institutions,but he won’t be ‘bullied’/harassed into it ( and no you’re not a bully i hasten to add,but you’re coming across badly to me and you never do normally )

      It’ll simply take as long as it takes for DMW himself to overcome his level of CONDITIONING …we won’t underestimate conditioning

      it sounds to me that you’re being unnecessarily provocative …sorry and i’m a fan of Tony Brogan ..really…but your passion is giving you a blind side.If you make your point ( a very relevant one re:central banks and banning fractinal reserve banking etc and perhaps CRUCIAL to move forward in a constructive way! )and DMW doesn’t respond , then that’s that…simples.Of late ( aside from your very interesting and valuable contributions )you’ve been even resorting to again attempting to provoke the HOST that you will reprint the same articles over and again gain until you get your answer….c’mon Tony

      if he wants to respond,he will ( whenever he decides and if that’s not suiting your timeline,it begins with ‘t’ and ends in ‘f’ :) Don’t put so much ‘stock’ in DMW’s opinion is what i feel…

      he’s simply not ‘there’ and will have to be dragged ‘there’ …his last few articles have been amateurish at best let’s face it …but he does provide this forum to say what we want and we do and i’m sure he reads it…that’s enough for me and that’s why i don’t get as annoyed when DMW does what he does..sometimes avoidance yes and absence of dealing with the “meat on the bone” issues ….maybe he himself is coming to terms with the fallacies of his beliefs(maybe not !)

      how long is a piece of string (for DMW and any of us )

      • Realist

        “You betray your friends,neighbours etc etc ……”

        It is actually true in at least economic sense.
        Whoever aims in inflating money and nurturing government is basically robbing people of, betraying, … and some of those robbed are most likely their friends and neighbours.

        As Economic activities are contributing to the proper level of educational and other activities word “betray” is actually very nice word.

        Anybody aiming in preserving this robbery, even by only influcencing others, is betraying all robbed people, including your own children !!!!!

      • Tony Brogan

        Actually my good whatamess. I am becoming frustrated at the lack of debate on any substantive issues.

        We see what is happening.
        The bankers own the governments.

        governments have given sovereignty to the central banks

        The central banks strip the people of there earnings
        and some people can not see the truth. They need time to get around to it.

        On reflection I am with Realist. My original description was absolutely accurate.

        I would have a little more tolerance if Kilkenomics was a little more balanced so here is a list of people that will attend free of charge.

        Bill Murphy, Chris Powell, Hugo Salinas Price, Eric Sprott, Bix Weir, Max Keiser(repeat), John Embry, Andy Hoffman, And there are others I will add to the list as time passes.

        • bonbon

          No sign of debate here, merely a recipe. The debate starts with Glass-Steagall, and it should stay civil, even if the implications for Austrian School’ers is a nervous breakdown.

          That strange “Ayn Rand” “rugged individualism” quails at the implications of nations intervening directly as FDR did very well. National credit systems as Alexander Hamilton outlined are essential now and the way out of the trap.

          • Tony Brogan

            You who refuse to answer any question put to you or explain your rationale, who sneer and mock others are now become a preacher.
            you still refuse to discuss why you back a Rothschild
            agents policy, and want to use a central bankers policy similar to what has ruined the present economy.
            Glass Steagall has been debated and dismissed as failed policy, being offered again to allow the banks to continue their predatory ways. No solution.

          • bonbon

            Interesting dabate there? von Hayek, Friedman have been exposed as fascists, admired the economics of Hitler’s Schacht, as did Keynes.

            We can go over that again for a refresher on economics. Glass-Steagall brings out these rather ugly truths of the Austrian School. Debate should bring this into the discussion, the roots of fascist economics, and the falacy of monetarists such as Keynes, Hayek and Friedman.

            Alexander Hamilton’s genius with Credit Systems forces this onto the table.

            The Legacy Of Friedrich Von Hayek: Fascism Didn’t Die With Hitler

            As you can see economics is a vital issue, almost never touched upon, for these very reasons.

          • Realist

            LIES’s by BONBON are:
            1. Hayek is Monetarist
            2. Hayek is Fascist
            3. Todays economy is Austrian economy
            4. Glass-Steagall will fix the financial problem
            5. Ayn Rand individualism causes FDR intervention

            Only politicans can generate such amount of lies in such a short response as you did above.

            I am sure you can prove it as we people are stupid and irrational by your standard.
            Of course you are belonging to omnipotent being and not us so you can explain it all so clearly.

          • Tony Brogan

            Another socialist rant from LaRouche PAC
            consider the source of all these accusations
            There is no measured account.

          • bonbon

            Hayek, Friedman and Keynes are now thoroughly exposed in public for that they are. Any student attending economics classes with this information, to show true independence, must confront their professors for explanation. These icons are the cause of the wallowing and utter inability to deal with the crucial economics issues. This began with the famous denouement of Prof. Abba Lerner, a leadng Keynsian, in 1971 at Columbia Uni, by Larouche, where the Prof blurted out “if the social democrats in Germany had listened to (Hjalmar) Schacht, then they wouldn’t have needed Hitler”. From that moment the game was up.
            We find Hayek, Friedman, Keynes all praising Hitlers economics.
            Case closed. Guilty as charged.

          • Realist

            Hayek cannot be put in the same group with Keynes and Friedman.
            They all preached totally different economic schools.

            Hayek is nothing to do with Hitler’s or any authotitarian economy. He was preaching total opposite, free market capitalism.

            You are nothing but just a LIAR still.

        • whatamess

          ok then Tony & Realist ,let’s agree to disagree on the word “betray” but again,let’s “not underestimate conditioning” and let’s not ,after many many requests from contributors here to DMW direct on his own blog, to deal with,again “meat on the bone issues” and DMW’s subsequent silences ,that he is going to change his conditioning because of us here on this blog…if it was gonna happen,it would have happened by now…

          Maybe our host is simply “institutionalised” and cannot throw off his shackles.Maybe he feels the proverbial well would run dry re his writing if he were to face up to the facts that Tony and others here provide him with?

          maybe,actually yes,you are right Tony ( my bad ;)to put the TRUTH in DMW’s face ,but you can bring a horse to water but….

          personally speaking,5 years ago,i believed there was a god…5 years later,i no longer have that belief.I still battle daily with my 40 years of religious conditioning( raised a catholic,going to church/confession,no doubt that god existed etc)so let’s not underestimate conditioning is all i’m trying to say ,cheers

          • Tony Brogan

            There is a time, as Pierre Trudeau said, to go for a walk in the snow.
            I used to say that I was too busy earning a living to figure out how to make any money.
            It is the same thing everywhere. The engine is put into gear and we shovel in more coal. We keep the engine running.
            At some point one has to look out and see if we are on the right track. Others may have swung the points unobserved by us in the engine room and we are now on the wrong track.

            This could lead to an almighty smack up or just in the wrong direction or both.

            It is time for David to get his head out of the engine room and see he is still on the right track. Like it or not his train is loaded with passengers to whom he has some responsibility. At this point I see them being lead full speed into a nasty pile up in which there will be few survivors.

  28. Tony Brogan

    But frankly, that’s their history, not ours. Yet Irish people are hostage to the monetary consequences of German history, rather than the economic prerogative of the Irish present. It seems hard to understand why the population of one country should be hostage to the historical echo of another country’s experiences.

    What do you expect when you hitch your wagon to the German wagontrain. You will follow the directions and rules of the wagon train master. Like going to a public school or signing up in the armed forces. You do as they tell you or else.

  29. Tony Brogan

    This is an absolute must read for anyone wishing to see the result of inflation on our standard of living. Also the result of globalism over the last 40 years.

    It will also provide you with an idea of what is to be done to recover.

    http://www.gold-eagle.com/editorials_12/nielson021113.html

    • Realist

      Nice one Tony.

      This is from article:

      “This has left these aforementioned morally/intellectually/economically bankrupt governments with only one option: the printing press. In Europe, in answer to the “Euro debt crisis”; we have “unlimited bond-buying” (i.e. monetization of debt). With all these nations being massive debtors; ipso facto, unlimited bond-buying means unlimited money-printing to finance those purchases.”

  30. Tony Brogan

    It is our governments we need to fear

    http://www.paulcraigroberts.org/

    • Realist

      Government is essentially the negation of liberty.
      It is the opposite of liberty. It is beating, imprisoning, hanging.

      Liberty and Property, p. 19

      What the incompatibility of war and capitalism really means is that war and high civilization are incompatible.

      Human Action, p. 824; p. 828

      The existence of the armaments industries is a consequence of the warlike spirit, not its cause.

      Human Action, p. 297; p. 300

      What basis for war could there still be, once all peoples had been set free?

      Nation, State, and Economy, p. 35

      If you want to abolish war, you must eliminate its causes. What is needed is to restrict government activities to the preservation of life, health, and private property, and thereby to safeguard the working of the market. Sovereignty must not be used for inflicting harm on anyone, whether citizen or foreigner.

      Omnipotent Government, p. 138

      • bonbon

        Das Kapital or what? I wonder what bible you refer to?

        • Realist

          Total opposite of your favourite author bonbon :)

          It is Mises himself of course:

          mises.org/books/quotablemises.pdf

          I am finding so many inspirational quotes in that book.

          • bonbon

            Bible thumping has moved out of the church to the money changers I see.

            Also very outdated. A lurch to a “golden age” with a much reduced population. Very similar to von Hayek.

            War has been used by the oligarchy for about 6000 years, but documented since Troy by Homer. Yet Mises has not realized things have changed. War has become impossible simply because of thermonuclear weapons, a lawful development of the use of fire, what sets man apart from all known species. In other words we have reached the end of the use of war by increasing our power over and withing the universe. It is now unavoidable for the consequences : total destruction of the biosphere in about 60-70 minutes. And it is inevitable we will control that energy source. An economic issue of huge proportions. In other words war has become impossible not because of “warlike spirit”, but because of the use of creative reason. Einstein’s E=mc**2 is a nightmare for the oligarchy – can they change ? No.

            It is time for us to realize the world has changed – that book is past shelf-life.

          • Realist

            The basic problem is the same, it was 100 years ago and it is now.
            The same economic problem and other problems with government control of everything.

    • Realist

      We see that as soon as we surrender the principle that the state should not interfere in any questions touching of the individual’s mode of life, we end by regulating and restricting the latter down to the smallest detail. The personal freedom of the individual is abrogated. He becomes a slave of the community bound to obey the dictates of the majority.

      Liberalism, p. 54

      The ordered organization of coercion we call the State.

      Socialism, p. 280

      How fine the world would be if the “State” were free to
      cure all ills! It is one step only from such a mentality to the perfect totalitarianism of Stalin and Hitler.

      Bureaucracy, pp. 75—76

  31. Tony Brogan

    Note reference to use of a parallel currency used locally. Also reference to 13 other areas doing the same.
    Ireland could monetize silver as a parallel currency to the euro.

    Report on Lemetropolecafe.com
    Italy:

    Berlusconi ally may seek local currency for use alongside euro: Bloomberg reported that Silvio Berlusconi’s biggest political ally said he may support a plan to create a local currency that could be used alongside the euro in the region on Lombardy. Roberto Maroni, head of the Northern League, pointed out 13 examples in Europe of regional and business groups that have adopted an internal currency. The article noted that Berlusconi leads a coalition running second in the parliamentary campaign with 27.8 support nationally, according to a SWG Institute poll published on 8-Feb.

    • Deco

      Never mind Doherty.

      The people put this clown into government.

      Listen to the words of the current minister.

      https://www.youtube.com/watch?v=5LTCT7QIeP8

      Varadkar says “not anothercent”.

      Varadkar is an asset for the EU and the bondholders. And he is a liability to the taxpayers.

      • molly

        Varadkar and his whole party are liabilities ,how many TDs stood in the dail and knew in there heart of hearts what they where made toe the party line and vote for was not right.
        How many times have you watched on tv or heard on the radio,what some TD was saying and you look in disbelief at what was beening said.
        What’s the line we will protect the poorest in society and then they vote in the compleet opposite and protect the well off in society.
        The domestic market has gone into some kind of survival mode and cash is king why is this,maybe the domestic market is sick and tired of of our government who’s motto should be don’t do as I do do as I say.
        This government and the last government have killed this country and the right way of doing things has been thorn to shreds.
        Trust and fairness and truth are words of fairytail story books.

      • bonbon

        How do you mean, do you want to wallow in it or what?

        You are perfectly free to wallow, but that is a personal choice.

        Wallowing is the other side of the bailout coin is’nt it?

        • molly

          Yes wallow sounds good,if showing up our past and present government is wallowing then wallowing is my way forward .
          A lot of my friends wallow we could set up a wallowing group.

          • bonbon

            Wallowers never mention the future, right? Unable to muster the resistance? Noonan et al have pushed debt to generations ahead, knowing full well wallowers are busy wallowing. Noonan et al have ye covered!

            An empire never exists without the majority reduced to, well, subjects.

  32. Deco

    It is not a lifeline.

    It is a mirage.

    And the indications are that Cyprus is about to get a “bailout” that will expose Ireland’s establishment (“garrison 2.0″) as a collection of gombeens/quislings.

    Remember Ireland invented gombeens before Norway invented quislings. But they exhibit many of the same features.

  33. Peter Atkinson

    Out of the jurisdiction ATM but did I hear right. Renault offering finance to buy a new car now and another new one in six months. This definitely smells of the good old noughtys and the balloon payment scam that ran in Ireland in the height of the credit bubble. Did they clear this offer with the ECB too. Probably rolled up in a few CDSs. Wonder would they throw in a years insurance, road tax and a years petrol too. All I’d need then was a drive way to park it in and a job to drive it to.

  34. molly

    This government wants you and me to pay for water and property and gods knows what else in tax ,well I suggest they rush a bill through the dail to stop paying tax payers money into big pension pots for people who helped destroy this country.
    If this government can rush a bill through to close Anglo over night ,why can’t they rush through a bill to stop paying Blood suckers,unless there is a reason as to why they won’t ,is there something in the past that certain people want to stay in the past .

    • george

      Molly as always you make sense, and you are 100 per cent right!
      .
      Anyway this crisis only show me, that it is the less well off, that has to bail out the rich. And that for some people in power, the end game consist in changing the status quo as little as possible.
      .
      Our politicians and top civil servants, keep paying themselves the highest salaries and pensions in the EU, and few came up front, to say loud and clear, that it is morally wrong, when the Country is at the edge of bankruptcy , and families are being persecuted by the Banks.
      .
      Unless we have partial debt forgiveness for people paying mortgages for family homes, and a reduction in salaries and pensions in the Public Sector, and the social welfare bill, in line with the rest of Europe, that can make the domestic economy cheaper and more efficient; we’ll live in austerity and depression for the rest of our lives. Unfortunately some people at the top, don’t like to give up their privileges.
      .
      If you are looking for courage and imagination, look at what the Icelandic Government did, and pray for a miracle.

      • molly

        Right on the money.
        Some people out there think things will inprove with the deal the government done,I don’t and as far as this current government are concerned they have done this country a great service and all the more reason for them to ride the gravey train on our backs.
        The deal that was do was so serious in the long term that it should have been put to the people and let the people decide .
        The Irish people should think long and hard about who and what they want to run this country in 2 years time,because we give them to much power.
        A government need to govern but when something very serious comes around the people should decide and remember we the people have had to vote on far less important things in the past .

  35. redriversix

    its not a good deal,its a terrible deal.this debt had nothing to do with the people of Ireland,it is private gambling debts ,ran up by Bankers using their banks as private Kingdoms.

    Analysis overcomes the elephant in the room,Bankers continue to do as they will,when they want & how they want.This was and continues to be criminal behavior by rogue Bankers through out the World.

    This will happen again because they continue to get away with it..How many times has A.I.B been bailed out ..anyone ? Google it……..

    Apart from a scattering of lay people volunteers across Ireland,the powers that be do not give one flying fuck about citizens of this or any Country.

    Governments lie,spin,deceive,cheat & cut their way to a big pension..Who pays ?,the poor the,”failed”the sick, vulnerable, elderly young people ,unemployed people etc etc….This crisis is here to stay,just like the “war on terror”

    Their was no deal last week,if you think it was a good deal & if you have the funds , give me €250,000.00, get everyone else on this site to pay it back over 40 years ,David will Guarantee it.

    G.U.B.U

    Barry RR6

    • molly

      Well said and do you know what we deserve it and we will continue to deserve it untill we change our voting habits.
      We can call this current government all the names under the sun but we the people have given this current shower a open cheque book,the same shit different government .
      There’s banana republics out there who are run better then this country.
      What’s the difference between FF, LAB,FG,they all lie ,look after there own.
      It’s war ,war on you and me and the only thing I can do is to keep nibbling away trying to make change happen.
      Irish people who live in fear are like sheep ,that’s why FF are going up in the ratings,they prey in fear like a virus .

      • redriversix

        it has nothing to do with elections anymore.A Taoiseach earns 200K a year,chairman of the N.T.M.A on 850K a year ….Money men & senior civil servants are in charge

        Citizens in history have always been sheep,only a handful every make change and are usually treated with disdain at the time by their own people.

        solutions….?

        • molly

          Yes they are payed way to much,the people in charge police themselves that’s the main problem .
          We need a system where they are payed what we can afford to pay them and they should not be allowed to pick set up or appoint there own policing .

    • joe hack

      True it is grotesque, but not unbelievable, bizarre and unprecedented.

  36. Harper66

    Ireland could not pay this years promissory note installment for two reasons.

    Firstly it would have been political suicide for the government to pay this Promissory note installment.

    Secondly the money is not there to pay this installment.

    So this arrangement was put inplace. Just after the ruling on the Hall case and hours before Shanes Ross motion on paying the promissory note in the Dail.

    Some lifeline.

    • redriversix

      their were two payments this year,one in March and last years “B.O.I BOND” In May,Funny how all the media kept repeating last week about how Decembers budget may be easier.this years budget is in October……

  37. Harper66

    http://stephendonnelly.ie/converting-bank-debt-to-sovereign-debt/

    “On Thursday, February 14, at 1.30pm, the Dail will vote for the first, and possibly last time on converting Ireland’s bank debt into sovereign debt. This is the proposed restructuring of the promissory notes. I am urging everyone to get in touch with their local TD to tell them whether they are in favour of converting debts from failed banks into the debts of the people of Ireland, and to urge them to vote for the people they represent rather than according to any party diktat.”

    Donnelly, one of the very very few TDs of any worth, is also putting forward a counter motion which can be read at the link above.

  38. redriversix

    Simple Solution..?

    Pay no bills,loans,rates,banks for six months.hoard cash..look after your neighbor & protect ourselves..

    Simple, anonymous & highly effective..would it happen..?

    not in our lifetime

    • george

      Yes solidarity and disobedience would work!
      .
      The problem is that the farmers are looking after themselves, and only when they will have to pay land taxes, they’ll remember the rest of us.
      The professionals skimming us, and the top public sector workers getting paid more than they European counterparts the same. Neither the people with inflated salaries and pensions, that can go to Spain four times a year, for a “little break” will care. And if I heard well, a trade unionist said, that property tax and water charges, is a matter for the Government, and they are not going to intervene.
      .
      So at the end of the day, the only ones that will end up in jail or in a mental institution, are silly idealists like us, that want a more just society.
      .
      Ireland is loosing its mystical status by the day, and still we have to cope with the gathering shite, and glorious speeches from delirious charlatans talking about “resilient, courage and solidarity”!
      “Play it again Sam”

      • redriversix

        Hi George

        Speaking of “play it again Sam” I love the piece in Casablanca when Rick stops a couple at the door and tells the Gentleman his money is okay at the Bar but no good at the Tables.the Gentleman protests and says “do you realize I am president of the largest Bank in Paris” ?……..SAM REPLIES ,”like I said,your money is good at the Bar………..! Couple leave disgusted !

  39. redriversix

    I state the AIB plc as registered on the 21st of May 1997 in the companies office and holding themselves as conducting or being willing to conduct the business of banking in the Irish state subject to the statute law and regulations imposed by Central Bank of Ireland Acts of 1941-1989 and Company laws of 1963-2010 and the laws of this Irish state operated a Financial Institution for the periods between 2006- 2007-2008-2009 in contravention of the said laws.
    I state the AIB plc operated without a perfected Banking Licence in contravention of the Central Bank Acts of 1941-1989 and further state the AIB plc on renewal of its legislated Annual Banking Licence with intent materially concealed and dishonestly omitted facts by false and misrepresentation in which to obtain said Banking licence.
    I state the AIB plc contravened its legislated obligation to deposit securities to the Central Bank of Ireland in respect to its loan to deposit ratios and liquidity ratios under the Central Bank Acts of 1941-1989 on renewal of its Banking licence in accordance with statute law. I state the AIB plc with intent recklessly ignored its mandatory obligation to inform the Central Bank of Ireland of Material facts and changes to its status and exposure as a Financial Institution as set forth in the Central Bank Acts of 1941-1989.
    I state the omission of the aforementioned legislated securities and material changes were not reflected in the annual financial records of 2006-2007-2008-2009 by the AIB plc.
    I state the AIB plc with intent contravened Company Law of the Irish State by omitting and concealing its mandatory obligations to produce a True annual financial reflection of its status. I state the AIB plc contravened its Memorandum and Articles of Association under Company law and statute law by issuing a false and misleading set of financial records to its shareholders for the periods of 2006-2007-2008-2009. I state the AIB plc was required by statute law to inform its shareholders of all material changes and exposures to the status of the company as required by law and with intent failed to do so. I seek An Garda Siochana to enforce the laws of this country as set forth in our enacted Constitution dated the 1st of July 1937 and bring criminal charges against the AIB plc its Directors and agents for the breaches and violations of the laws of this state

    Thomas Darcy

    AIB committed Fraud, falsified financial reports, mislead shareholders, violated the laws of this country and obtained a banking licence by criminal actions this statement was REFUSED by An Garda in Howth on the 5th of February 2013.

  40. joe hack

    The Irish Constitution may be one of only few protections left for EU citizens and it may scare some in the EU that one man can attempt to challenge the legality of the promissory note and more.

    Of course even ‘Project Red’ or the so called’Deal’ legality is questionable not just here but in EU.

    ViVa La Republique?

  41. joe hack

    “Ireland thrown a lifeline” more like clutching a straws it would have be better if we had drew ourselves into the deep end and learned to swim.

  42. joe hack

    “Ireland thrown a lifeline” more like clutching at straws it would have been better if we had thrown ourselves into the deep end and learned to swim.

  43. joe hack

    No one is happy about this “Deal” except a disproportionate amount of journalist writing for newspapers at least 90% of bloggers don’t like this “deal”, is it the bloggers or the journalist that are a misrepresentation of the public opinion.

    In less than 22 hours there was nearly 400 comments on the only negative opinion to this “Deal” in IT and at least 90% agreed with Fintan O’Toole opinion he was writing in the so called professional news media.

    Prior to his assessment there was at least five maybe more parachute journalists in the IT that said that this “deal” was good and at least 90% disagreed with them? so it is very unlikely to be personality based anti “Deal”.

    It seems not many agree with David here too even his loyal fan base here don’t seem supportive it must be something in the water in D4 or is it they are not been hit by Debt.

    It could that they need a new high and all the years of depression and debt is bringing them down but now that the opium money is back on the menu the juices are now flowing in Fleet Street. Remember the drug a high is followed by crash and lithium can’t relieve mania, to many high and lows.

  44. joe hack

    Failing a revolution its time to address the stampede of rhinos in dole office…

    The Deficit Jobs Jobs Jobs…

    800,000 Jobs needed I don’t think a perfectly worded CV will do it but Fas will run courses on CV skills, yep its a skill.

  45. redriversix

    18 months unemployed
    44 years old,married ,two children
    my wife is on invalid pension
    home & business gone
    unable to get gainful employment
    excellent 27 year work history
    told by recruiters to “lie”on cv as I have too much experience.
    paid tax,vat & social contributions all my life
    trying to “survive” on €366 per week total.
    Is 44 the new retired age ?

    fuck it,should gotta a job in a bank…….

    • molly

      Scrap heap at 44 more likely and the answer is become self employed,its the only way out or become a TD,I will vote for you.

    • Hell…. :(

      Man, look at other opportunities outside of Ireland asap, there is plenty of scope.

      Ireland has no future left for the next 10-15 years, it is fucked up as can be, and the same old people are steering the boat while the majority rest are doing the “Christy Moore”….obedient shittakers…

      They don’t complain you know… They moan all day long instead!

      Get outa there as soon as you can is the best advice one can give you, this country has turned toxic in many ways. Just my 2 grams of silver. ;)

    • Realist

      I wish you all the best redrivesix.

    • Tony Brogan

      RR6
      You are a man no doubt helping others more oppressed than youself who are your selg berift of worldly goods.
      At 44 a young men yet.
      I at 42 years with a collapsed realestate market and 23% interest rates. Prices down 35% in 8 months. Gone from near retirement to negative net worth of -20,000.

      Not long married in 1981 with 3 babes of 2 years or less I had to regroup after 2 years more hell.I came out the other side.

      When your head is clear your will to prosper despite the odds will carry you forward and you too will emerge the other side.

      I am not in your shoes but I am your friend. You know where to find me if I can help.

  46. redriversix

    BTW,not looking for sympathy,these are just the facts for over 300,000 people today.

    somebody told me once if your looking for sympathy ..its between syphilis & shit in the dictionary…….

    Although I am not as Armour-plated as I used to be…..

    Have a great day,put you & your family first

  47. redriversix

    http://youtu.be/EZMwZbYvJzw

    check it out ..opinion please ?.debt bubble,currency wars,humanity bubble…10 minutes long

    • molly

      I Looked at the utube clip and I wonder does the current government and the centrail bank look at these clips or do they do there home work or do they put there heads in the sand pit.
      How many people for example are caught through no fault of there own in this.
      How do we prepair for this ,I watched my pension go from 180 thousand to a fund of 70000 and was advised by the same company to put the money into a 7 year safe bond.
      Is any bond safe now.
      One keeps getting the feeling that life as we know it is going to come down like a house of cards.
      When I look at Obama on tv he seems to be ploughing along like there’s nothing wrong and our government are doing the same ,like things can only get better,things are not going to get better with the way things are beening run by a long shot.
      Things are going to go the other way.

      • bonbon

        Never mind the tv, Obama is in trouble.
        Dirty Wars Film Traces Obama’s Kill List

        Obama is the obstacle to Glass-Steagall, the only way to give the economies a lifeline as Franklin Rosevelt did in the 1930′s, and Germany failed to do. That lesson was well learned, all banksters are aware of it, to their undying terror. Give them a good scare – just say Glass-Steagall. It is the test.

        • molly

          Obama is not in trouble he was voted in and he will see out another term ,he keeps his fly zipped up and he is to clever and is no fool.

          • bonbon

            Nixon was voted in too. Obama is leading directly to thermonuclear war – that is something most simply do not have any conception of whatsoever. The bailouts cannot work, and the insane lurch to war neither.

            Obama is Nero.

          • molly

            Predicting the Doomsday machine is a hard one to call a lot of the world could be destroyed,I think it’s something that could happen one country who’s a superpower try’s to stop another country from developing a nuclear bomb ,sometimes superpowers get to big for there own good.

          • bonbon

            No, that’s not it. Obama is heading straight for a confrontation with Russia and China, like his forerunners Napoleon and Hitler. This time around it means thermonuclear warfare – over in 60 minutes.

            Keep that in mind with all the rte Iran/Korea shenanigans.

    • KD

      Prof. Albert Bartlett predicted this way back in the early eighties:
      http://www.youtube.com/watch?v=umFnrvcS6AQ

      Pity we didn’t listen to him then!

      Ahhhh .. I’ve said this before a few times here: economists, politicians, farmers, academics, private sector, public sector, etc. all believe in the fallacy of infinite growth. Even you DMW!

    • KD

      And if you have 3 1/2 hours to spare, have a look at Chris Martenson’s “Crash Course”:

      http://www.peakprosperity.com/crashcourse

      He takes “the Economy”, “Energy” and “the Environment” along with the concept of unsustainable growth and neatly weaves them together.

      He is still optimistic (unbelievably) but it hits the spot logically!

      Of course, I’m already a convert since Bartlett!

    • Tony Brogan

      O well done! I commend your pains;
      And every one shall share i’ the gains;
      And now about the cauldron sing,
      Live elves and fairies in a ring,
      Enchanting all that you put in.

      http://shakespeare.mit.edu/macbeth/macbeth.4.1.html

      tis a bankers cauldron boiling with debt, a potion to destroy all who partake

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