April 1, 2013

Our recovery and the Cyprus domino effect

Posted in Sunday Business Post · 201 comments ·
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Judging by the outraged reaction of Ireland’s stockbrokers – the publicity wing of the Department of Finance – Moody’s decision not to upgrade Ireland and keep us on a negative outlook was nothing short of scandalous. This indignation, in a week when we saw retail sales fall for the fourth month in a row, house prices fall for the third straight month and bank lending stall, seems a bit excessive.

 

Although, that said, I admit to feeling a little bit sorry for the Department of Finance because it would be nice for them if the rating agencies would acknowledge the seriousness of the government’s intent to turn the economy into a large debt-servicing agency. In this pursuit, the mandarins will not be deflected no matter what the cost to the local economy in terms of output, sales and employment.

 

So why, after so much pain, did the rating agencies not reward Ireland with an upgrade? After all, the promissory note deal – notwithstanding the long-term impact on the debt burden – has reduced substantially the amount of cash that will have to be taken out of the economy in the years ahead. A similar deal is also in the offing for other bailout-related government debt.

 

In addition, while the economy is relentlessly weak, it has not fallen off a cliff in the past few months, and surely the stabilisation, along with the fall in bond yields, could be acknowledged by the ratings agencies.
Isn’t the central policy aim of ‘exiting the bailout’ still on the cards?

 

Here is the rub: exiting the bailout depends on the financial markets’ appetite for risk in Europe. If the appetite for risk wanes, Ireland – which is perceived as a poor credit risk with too much debt, not enough growth and dodgy banks – will simply be too risky and money will flow into Germany.

 

This is already happening because the Cyprus deal – which imposes massive haircuts on large depositors – is likely to become the ‘template’ for future bank bailouts.

 

If you were a large depositor in Spain, what would you do? You would move your money out of the country before the capital controls imposed in Cyprus are envisaged in Spain, imprisoning your money. Delay and it will be too late. You won’t be able to move it.

 

Obviously, the EU is vigorously denying that this might happen, but when there is even the faintest risk, surely the best policy is safety?

 

The Cypriot debacle has led financial markets to have a second look at the banking systems of Malta, Estonia and Slovenia – all small in overall terms, but outsized in comparison to each individual country’s economy. And, of course, what if it doesn’t stop there?

 

Think about the following: the Cyprus banking sector was too big at eight times GDP, so what does that make Luxembourg, where the banking system is 24 times GDP?

 

Of course, unlike Cyprus, Luxembourg isn’t referred to disparagingly as a ‘tax haven’ for hot money. Could this possibly be because the big depositors who have their money parked there happen to hold German, not Russian passports?

 

Quite apart from the eurozone’s banking woes, there is the little problem of the recession.
Undergraduate economic students could have told you that the likely outcome of fiscal tightening and a strengthening currency when the banks are broken and money supply growth is faltering would be higher unemployment and lower output. But, then again, they don’t ask undergraduates about economics, they leave policy to people that believe in the ‘confidence fairy’ who will, like the Easter Bunny, arrive out of nowhere to sprinkle presents, yummy chocolate and the confetti of economic growth – and all will be well.

 

But all is not well. In France, jobless claims have risen for 22 months in a row. Not surprisingly, money flowed out of France into Germany this week as evidenced by the spread between German and French bond yields widening to 0.75 per cent up from 0.5 per cent two weeks ago.

 

But even in safe-haven Germany, unemployment was widely predicted to fall in March by 2,000, but it rose by 13,000.

 

Meanwhile, in Italy, the leader of Italy’s Democratic Party, Pier Luigi Bersani – whose left-of-centre bloc won the most votes in February’s parliamentary elections – said that he would not try to put together a government.

 

Bersani also said that only an “insane” person would want to run the country in the current environment. This rhetoric is hardly the stuff of the political decisiveness that might usher in a sustained period of financial market tranquility.

 

In short, the eurozone economy is a mess, without any growth strategy and characterised by severe mistrust between the countries of the northern core and those on the periphery. The weakening of the German economy ahead of its elections in September implies that the tolerance for any more bailouts is extremely low.
This, in turn, implies that if any of the small countries mentioned above endure a banking crisis, the ‘template’ will have to be depositor haircuts because there will simply be no other money being made available.

 

Without some new positive economic development, it is likely that money will move from the periphery and risky countries towards Germany. This means that bond yields in the periphery are likely to rise again.
Where does this lead the political strategy of exiting the bailout?

 

There are two ways of looking at this. The first is that these economic developments will make exiting the bailout more difficult. The logic of this is straightforward enough.

 

In contrast, a second – more political – view might also be that, given the importance to the EU of a ‘success’ in Ireland, exiting the bailout on time may be facilitated by another politics-driven debt deal. Such a move could lighten the financing burden in the immediate years ahead. This would be the only environment where you could be confident that the government’s core economics strategy might work.

 

If the first view prevails and there isn’t the risk appetite in the markets and bailout fatigue dominates in Germany, it will provide a mighty headache for the coalition, which has put its entire credibility on exiting the bailout. If it doesn’t succeed because of adverse events, what is the price for the coalition staying together? If there is no market/sovereign reward for all this austerity, people will rightly ask, what’s the point?

 

Taking the events of the week in totality, you would be advised to be healthily sceptical when our spindoctors tell you that the Cyprus deal has no impact on Ireland. The channels through which policy in one country affect another in the euro are many, varied and not always obvious.

 

On a lighter note, I’ve just noticed that the first name of the new Cypriot Central Bank governor, the man charged with bringing financial tranquility to the island and who promised that this week’s capital controls would be ‘temporary’ is, wait for it, Panicos. How about that for getting lost in translation.


  1. redriversix

    Morning David

    May I be bold enough to point out a slight mistake..? very good article but you inadvertently typed “publicity wing of Department of Finance”…instead of “Propaganda wing of the Department of Finance”..

    Very happy to point this out and always glad to be of any assistance during these great historic times & witness the fledgling rise of the Fourth Reich.

    Hope you had a very happy Easter and had plenty of chocolate.

    Barry

  2. redriversix

    Oops My bad..!

    Morning Adam………….Subscribe..!

  3. redriversix

    May I also take this opportunity to wish our Dear Friends in North Korea a very happy Easter and to assure they have nothing to fear from America as North Korea HAVE weapons of mass destruction so their will be no fear of any military action.

    Also like to congratulate Dear Kim on his score of 42 shots and 4 hole in ones during yesterdays pan-Korean Golf classic.

    So,rest assured N Korea you are fine,I know your dear leader has seen “Team America” many times but to assure him that this was only a school education video available to those Schools south of the Mason-Dixon line.

    Hope your basketball training with Dennis is going well.

    RR6

    • Deco

      Maybe we should send over our current Minister for Foreign Affairs, to mediate. He was in a political party in the 1980s that sent greetings to the Kims.

      Might be able to arrange a golf match in Druid’s Glen with a host of Irish celebrities, bankers, politicians and the like. And Kim can win.

    • Sounds like you were reading the star or the sun

  4. Dorothy Jones

    http://www.independent.ie/business/irish/cyprus-effect-on-deposits-is-negligible-aibs-duffy-29165087.html
    Well with the day that’s in it you would be forgiven in thinking that this was some kind of ill-humoured April Fool joke, but no: Overpaid AIB CEO says ‘Cyprus effect on deposits is negligible’ Not funny lads.

    • redriversix

      Morning Dorothy

      Hope your well and had a good weekend..?

      Duffy is so detached from reality it is no surprise what him and his banking friends say.

      The poor,unemployed and the middle class have been thrown on the scrap heap so Banks can pick over their rotting carcass.

      As for the children,elderly,sick and disabled..? nobody cares !

      Banks have not suffered from this financial crisis and have profited greatly from it so their is no incentive to “solve” or end this “Financial War”..Why would they…? cheap money..good pay..Governments across the World protecting them at every turn..?

      Like the “War on Terror” this financial crisis is here to stay.

      Peoples rights are slashed
      Health service slashed
      education slashed
      workers rights slashed
      Underemployment on the rise
      No full time jobs..just short term contracts
      Wages cut..hours increased

      All excellent for government & big business.

      Banks Failed and receive massive bailouts while the Banks charter quietly slipped through the Dail last Thursday Night damns people in debt to a life of penal servitude.

      But what has happened..?

      Meath-East By Election….60% do not vote…37% vote Fine Gael…over 33% vote Fianna Fail..

      This tells me to look after ourselves , our families & those that ask for help and who are trying their best…the majority of the people ?…well.., we just have to “let them go”…….

      People do not have to suffer , but FEAR is all persuasive and few will break free from it.

      Have a great day Dorothy,you have a great heart, don’t give it away too easily..!

      Peace

      Barry

      • Dorothy Jones

        Hiya Barry

        Overpaid insiders like David Duffy are what they are, just no getting around them.
        Working away this week, sunny day here. Enjoy the Bank Holiday :) D

      • Puschkin the Black and White Cat

        Well said !

        Bertrand Russell wrote of his distaste of “Nice People”. I was elated when I found Russells vindication of my thoughts. Since childhood I’ve always hated “Nice People”.

        Check out Bertrand Russell and his essay “Nice People”.

        No Pasaran

        http://www.youtube.com/watch?v=cFa0LpT2OHU

    • gizzy

      Dorothy he also admitted it would take a long period of stability for them to turn the corner and this is one of the ‘Pillar Banks’ on which we are to rebuild the economy ha ha ha.

      • redriversix

        Hi Gizzy

        AIB appointing receivers to business yet they are the ones who should have been put in to receivership years ago…losses still greater than value of Bank…..

        • gizzy

          Yeah Hi Barry

          They get to judge whose business is viable. It is mind boggling. I worked for them for ten years through, fx overcharging, fee overcharging, dirt scahdals, ICI and on and on. Horrible culture that is rewarded by this State.

          • Puschkin the Black and White Cat

            Gizzy

            I worked in the Irish bank(s) from 1985 to 2000 (3 of them). Man what can I say, the wheels come off in 1988 after the “big bang”. Then the “project managers” appeared and any skills they had were replaced by bluster and nonesense.

            They implemented “expert” systems, man it makes me laugh, it was like monkeys after finding a tin opener.

            We (the Irish nation) were like the natives in America selling New York for 237 brightly coloured stones !!!

            Any “wise” people in the banks were relaced during this period with “dynamic” “motivated” “go getters”, we just played bullsh*&%it Bingo.

          • paddythepig

            Beware the bean counters.

            This is what you get when you can booze your way through college, cog your tutorials, get the same predictable questions every second year on your exam paper to which you supply the stock regurgitated answer, overseen by on aggregate a bunch of lazy, overpaid, out of touch wasters.

            At the end of the process, you get to put put on a gown, and a funny hat, and you can call yourself educated. You can do feck all at the end of it, but bean counting is a good way to bypass this limitation.

          • bonbon

            I presume you mean Maggie’s London City “big bang”? Well the fallout certainly landed in Dublin, did’nt it?

            That was shortly before German re-unification and the geopolitical Euro push by Maggie and Mitterand. It sure looks like the City was preparing itself.

      • Deco

        People forget that Anglo is not the Irish bank with the highest number of scandals to it’s name.

        From Pillar of society to Pillar Bank.

  5. Tom Crowley

    There is a bank run out of Europe into Asian banks not Germany. BRICS are dumping the Euro. Serious money cannot have faith in ECB anymore. I would suspect that we are a short period away from capital controls across EU. The debt that can’t be paid won’t be paid quickly meets the interest on the debt can’t be paid. There is no growth there will be no growth. Make up our minds if you wish to remain trapped in stasis waiting for the equivalent of the Easter Bunny. I read a short story over the weekend on the descent into the chaos of WW2, I see inaction now waiting for the Easter Bunny might well lead people regret not going to that march, not paying the property tax. Read about Cyprus this is how it will happen here when the ECB decide they no longer need a best pupil and we can now return to the glorious markets.
    The people of Ballyhea and Charleville went to Brussels last week the observation Diarmuid O Flynn had was
    ” Over-riding impression from visit to EU parliament in Brussels? Power at the moment rests with the ECB. Pols are not our hope, people are”

    You are the people what you do determines where this leads.

  6. Puschkin the Black and White Cat

    This “thing” is not over.

    Even Murish McFuchlacain Chief Officer in the Department of Finance ( 310,000 pa, A+ in hounors Irish 1976 , speciality Peig Sayers , owner of 10-20 rentals ) can’t change what is going to happen.

    Herbert Stein ( quote from Wiki says it all ).

    Stein was the formulator of “Herbert Stein’s Law,” which he expressed as “If something cannot go on forever, it will stop,” by which he meant that if a trend (balance of payments deficits in his example) cannot go on forever, there is no need for action or a program to make it stop, much less to make it stop immediately; it will stop of its own accord. It is often rephrased as: “Trends that can’t continue, won’t.”

    They won’t try fix it !, well , it will fix itself.

  7. Deco

    Ah yes, Panicos. We don’t have any Panicos figures in the DoF. We have smooth talking, extremely suave, totally confident, all knowing geniuses who provide calm and reassurance, just as the whole thing falls apart.

  8. Deco

    A few years ago an Irish author wrote a book about how the EU was going to be a success because it had so many laws. And these would be administered on everybody. I smelled not only a rat, but an awful lot of nonsense.

    It was all about the glorious unbeatability of the Big All embracing Theory approach to life. Just have one collection of bureacrats in charge, drawing up a law for every eventuality for the serfs.

    It does not work. Nobody asked the obvious question.

    What if this approach means that you have one policy that is flawed, applied on a wide scale, with no evidence of a better theory. The EU has resolved this. There will be no have hearted approach to implementation. There will be no opt-out clauses. Opt-out clauses are the greatest evil threat to the system. In reality they are a threat to the authority and moral righteousness of the pretenders who are pretending that they know what they are doing.

    ECB interest rate policy is the most glaring example of failure. But ECB interest policy is the result of the other failures. The EU central law making policy has created an environment whereby economic growth occurs in spurts as a result of asset price speculation run ups, and easy financing. Then it comes unstuck, and a mess is left behind for years.

    That book about the greatness of the EU as a cental lawmaking body, is the type of hubris that precedes disaster, and humility. But do not be surprised if there will be a litany of failures along the way, in every possible realm of policy from bananas to water pricing to EU Foreign policy initiatives.

    • molly

      Where is that author now is he a government td or a banker retired on the big wad or maybe there’s a book part two.
      Called shite won’t flow up hill.

    • bonbon

      I think you might like to see this book review The Alchemists on WaPo.

      The description of the BIS bunker is good.

      • molly

        Yes very good I am building a bunker as we speek .

        • bonbon

          i meant the Bank of International Settlements very own bunker where the worlds mot “powerful” central bankers meet. That BIS was to settle the WWI Versailles war reparations imposed by Britain. Its chief, Hjalmar Schacht, became Hitlers Finance Minister.

          Quite a nasty history has that bunker indeed. Interestingly the book author claims it is not part of Basel, Switzerland, but a bunker without a state. Those bankers are above all states, in otherwise they are Empire.

          Another note by the author – the insiders call it “Bahl”. I think that*s very much like the Babylonian god Baal, the same as the pre-Christian Celtic god Bel who liked to claim human children sacrifices.

  9. joe hack

    Moody Swings – The Euro Is In Its “Flowers”.

    Meaningless Over Rated – Rating Agencies. The people have lost out to greed and the fundamentally flaws in constant growth capitalism.

    Ah! Money and the Moody Swings, it just goes to prove it’s not real. (Money)
    If all the IOUs leave the E-Zone who cares they are not ‘creditable’ IOUs if I wrote an IOU for a couple of trillion it would be as credit worthy as any banks might be, at least you may get some work out of me.

    David, I hear the Irish Times is looking for a piece of the Business Post – it seems from your above article you have upped your game, are you advertising for a job with the IT/BP.

    I may be back to haunt this article some more yet…

    • Joe Hack

      If the Irish Times buys the Post, I will probably get the bullet. They are very pro present policies and all the Euro codology – hardly on the same side as me on this!

      Best

      D

      • michaelcoughlan

        If you do David it will just be one more badge of honour. One of these days Suds is going to declare you one of the biggest toss pots ever and then YOU KNOW you will have it made!

      • Deco

        David,

        We will follow you.

        Any newspaper that publishes the opinions of Dan McLaughlin, and Austin Hughes relentlessly through a creidt binge without noticing that it is all nonsense, has already made a fool of itself.

        It would be a pity to see the SBP get “domesticated” by the pretender on D’Oliers Street.

  10. molly

    People might say what’s the point.
    What is the point, the point is when something is clearly not working for years stay at it and make people suffer as much as possible.
    Cost of living is up .
    Income is down.
    Crime is up.
    Health is down.
    Government life style is protected and up.

    • molly

      Government expences are index linked so when certain things increase they are covered are you.

      • molly

        Kenny is surprised at some of the wages payed in RTE,is kenny trying to deflect from his pay and expences.

        • Deco

          If EK is in shock over the money that is being wasted, then why doesn’t he do something about it.

          He is the boss. As Harry Truman stated “the buck stops here”. EK needs to sell RTE off, and cut out the sucking they do from the state and the people.

          TG4 can remain in place for public purposes. It would be 95% cheaper. And it might be 95% better as well, in terms of quality.

          • molly

            EK looks after himself and his cronies and avoids talking about his governments wages like its a no no,the police don’t police themselves or do they.

    • Ultimately there is not much point to life. We kid ourselves.

  11. Pat Flannery

    David: What would you have Germany do? Water down the Euro some more? Make no mistake, inflating a currency, as you constantly suggest, is like watering down soup in a famine.

    You talk as if the British and American economies are doing fine. They are not. The Sterling and the Dollar are so watered down that the oil producing nations are getting nervous – they are being paid in watered down soup.

    I wish you would look at the broader global problem of disappearing currencies and the debilitating effects of zero interest rates instead of this constant Euro bashing.

    Writing about it has become a full employment scheme for “celebrity economists”. We need a real debate, not this race to the bottom in the game of “I told you so”. Let’s try to help our governments figure out the best policy choices rather than always sniping from the tall grass.

    • Hi Pat

      What exactly do you mean by the expression a “celebrity economist”. I am always puzzled by it. What defines it? Is it a complement or an insult?

      Best

      David

      • michaelcoughlan

        Hi David,

        I think he was only pulling your chain.

        regards,

        Michael.

      • It’s a convenient label. No-one can define it but they like the sound of it. That is why the lottery is called ‘Lotto’ and not The National Lottery

        You have to make up catchy slogans when you are selling. People are simple at heart and those who are paid to write headlines know this. It’s all bs

        I would take it as a compliment personally as it could be worse. The internet can be a nasty place for journalists, commentators and even celebrities

        It would be an interesting exercise to spend the last ten minutes of the lunch break writing a witty little ditty clearly outlining the characteristics of an offended and puzzled man of prominence

    • bonbon

      There is no policy choice Pat. Only splitting the banks, no wiggle room, no “but if this, but if that”. That’s what goats do – butting all the time.

      And the confusion on money holds sway – DMcW is no exception. This is why it is urgent to brush up on Hamilton, not easy, but very refreshing.

      And remember Irish-American Matthew and Henry Carey helped to define this economics, that Lincoln put into action with the Reconstruction. FDR later applied this, and DMcW recognizes it, with the RFC. In fact DMcW worte about Mathew Carey here.

      Arthur Griffith, founder of the sovereign Irish Republic, spread that American System of Political Economics with his United Irishmen.

    • I agree. Every time I hear the word recovery I laugh. It really is a cruel joke these guys are playing on us. Most journos think we thick as sheep. The tripe they spew is toxic and does society far more harm than good. There is not an honest one among them. They are intellectual whores who work for the highest bidder and they don’t have any self respect

      Never trust anyone who writes for money

      This is not just an economic war we are facing here but an intellectual one. This is a war for hearts and minds and so far corporate fascism is winning backed up by their friends in the media and in political circles

      It has been estimated it will take 3 Trillion to get American infrastructure merely up to scratch. Much more if they want to actually advance it and become state of the art

      They are 17 Trillion in debt and can’t pay their way. They will just have to rob it!

      The American Govt like all Neo Con governments don’t give a fuck about their own country or their own people. They will let it fall apart and sell the reconstruction work off to private contractors rather than do what is right

      They are constantly screwing their people to pay for wars of plunder where private companies like Blackwater and Haliburton cream off insane profits from their impoverished taxpayers and the sale of natural resources from the countries plundered

      Mass murder and nuclear pollution are just ‘collateral damage’.
      These people are maniacs and they will stop at nothing to make a few billion

      The UK has a total debt to GDP ratio of 900%

      Both countries are crumbling shit holes full of misery and enforced work schemes. ‘Work Sets You Free’ was a recent Ian Duncan Smith mantra. The same mantra was positioned above the gates of Auschwitz. These people are very sick puppies indeed

      Pride comes before a fall and there are many in this country who are on the way out and some of them are despised.

      You’ll always get the stupid ones who clamour for tickets to the RTE Toy Show or whatever the fuck they call it.

      I see you are pulling David’s leg and he fell for it. I reckon he was just off guard today.

  12. Pat Flannery

    I think it is meant to distinguish between those economists who search for answers to economic problems and suggest choices to policy makers rather than those economists who do what celebrities generally do, play to the crowd, look for attention and self-promote. Which are you?

    • So Pat all my – practically alone – warnings that this was going to come crashing down from 2000 on as the bubble grew and grew was the work of a celebrity playing to the crowd? Which crowd was this? Please clarity.

      • Pat Flannery

        The crowd that always want to hear bad news. Armageddon predictions and conspiracy theories are always crowd pleasers.

        Other than your 2000-2007 “crashing down” predictions what government policies did you propose to Bertie & Co. during that time to avoid bank failures? Maybe I missed them.

        If so we could certainly use your best advice about now to avoid the “crashing down” you are currently predicting – the collapse of the Euro. Sound economic policy choices could have avoided the Irish banking crisis – unless of course you enjoy seeing your dire predictions coming true.

        • joe hack

          I predict the clock will stick six tomorrow and the day after and the day after etc.
          I thoroughly agree with you that people are getting off on rubbishing Euro for the sake it.
          Over the top conspiracy theories abound, It’s hard enough to arrange going out for a point of Guinness with a friend never mind trying secretly take over the world, I don’t think they are that clever.

          Fear rules the world and always has people follow a leader the cure for this Stockholm syndrome is education.

          In general events dictate actions or reactions of course there is always the pinky and the brain, tomorrow I predict they will try to take over the world again That’s of course if they may have not ended up in a Monsanto lab

        • paddythepig

          Bertie and co weren’t the best of listeners, remember that the ‘cribbers and moaners’ were told to go commit suicide. No amount of advice would have stopped them driving the bus over the cliff.

          • Pat Flannery

            I agree with you that “No amount of advice would have stopped them driving the bus over the cliff” and that Bertie’s suicide remark was unfortunate, for which he later apologized.

            But I continue to wonder why David’s powerful colleague Liam Collins at the Sunday Indo,
            was so dismissive of Morgan Kelly’s “tabloid scholarship” while tolerating David’s “celebrity economist” writings. Was it because David was helping sell Indo newspapers while Kelly lived off the “bloated campus of UCD”? Never forget the role of money.

            Also, David should admit that he got his property bubble predictions directly from the IMF in 2000. Yes, that imminent body predicted everything David predicted as early as 2000 and the IMF continued to be his source down until the actual crash. David was in a unique position as he was one of the very few people who read such exalted sources as IMF reports.

            While I applaud him for being so informed I am not sure that he gave due credit to his IMF source. It would have helped if he and Kelly had quoted such higher authorities as the IMF our ultimate disciplinarian. Who knows, maybe Bertie & Co might have actually listened to “tabloid scholarship” and “celebrity economists”.

          • paddythepig

            Late late show 1999, David McWilliams calls the irish property bubble.

            http://m.youtube.com/watch?v=rRfMO6agqGQ

            Are we discussing now who called the bubble first? I do think David deserves some credit for his stance.

            I bet David learned something from putting a 24 month timeline on the crash. We all know the one about markets remaining irrational longer than you can remain solvent.

            I can’t comment on Liam Collins, as I never read the indo, I think it is a rag.

          • Pat Flannery

            paddythepig:

            I am not trying to detract from David for being first and consistent on recognizing the bubble. He was right all along.

            What I am saying is that decision-makers such as Bertie might have listened to him more if instead of holding himself out as a unique seer, which he delights in doing, he pointed out at the time that the IMF had reached the same conclusion. I don’t think Irish people understood that.

            I think David was more concerned with making a name for himself than he was about getting official action. In fact the more they resisted him the more certain he was of eventually becoming a unique seer when all the time none other than the IMF were reporting the same prediction.

            He made a name for himself but failed to give his predictions the gravitas they would have had by quoting the IMF, our ultimate nemesis.

          • FSinnott

            Then why didnt bertie listen to the IMF? He claims nobody warned him. but lots of people warned him. there voices were frowned out by the journalists and media the self proclaimed experts. Oh and bertie only apologized after it was pointed out to him how crude and crass his “suicide” comments were.

      • grinderman

        David as a economist you are supposed to predict what has just happened , not what will happen in the future .

        Keep going , who cares what somebody on a blog says to you ?

    • Deco

      Pat,

      Please don’t include Dan McLaughlin, Austin Hughes, or various other bank or real estate mouthpeices in term “celebrity economists”.

      The might be celebrities. They might even be able to produce articles in the self proclaimed paper of record (comic).

      But their useless predictions have disqualified them from being economists a long time ago.

  13. Pat Flannery

    So that I might avoid doing to David what I am accusing him of doing to the Irish Government, sniping from the long grass, may I suggest two elements for our debate?

    1. What would any of us do if we were a large pension fund manager trying to manage our risk?
    2. What would we do if we were a political leader worried about losing support?

    The markets are dominated by (1) and (2) is political reality. The battle therefore is sound money vs. political suicide – pensioners require sound money while their children require jobs.

    It is in fact an inter-generational dilemma. Finding the right balance between preserving the value of money for those who saved for their old age and submitting to cyclical bubble economics for the young, is the problem of our age.

    How do we find that balance? Without blaming it all on the Euro?

    • bonbon

      Forget the British “balance”, equilibrium mantra. This is pure Adam Smith.

      Instead take the American approach, sever, shear the banks of synthetic debt – FDR. Then use Hamilton’s method of national credit, and take a hint from Lincoln, when faced with an even more serious problem.

      I thought you were in the US for a while?

      • Pat Flannery

        I am. There is no precedent for our current crisis, on either side of the Atlantic. Adam Smith, Hamilton or Lincoln would be as perplexed as we are.

        We need new thinking. The “brightest people in the room” brought us to this dangerous precipice. Who is going to stop us going over?

        Predicting the collapse of the Euro ad-nauseum is not a solution. Our governments need actionable options.

        That is why I am trying to goad David into new thought territory. We need all shoulders to the wheel.

        • bonbon

          Lincoln and Hamilton faced much worse, and were not perplexed, quite the contrary.

          The new thinking is ready and available, starting with Larouche’s Triple Curve to arrive at the 3-point recovery plan. Glass-Steagall, not new, must be re-instated, not wiggled around. Then massive projects such as NAWAPA 21, the Shannon Deep Harbor, Eurasian Land Bridge and a Marashall Plan for the Med – all enabled by Hamiltonian Credit.

          Take a tour of the new thinking of NAWAPA XXI – the map flyover and the sheer scale of the water and Power systems is genuinely American. The Eurasian Land Bridge spanning Rotterdam to Alaska, is majestic.

          Action now though with Glass-Steagall to open this dam of waiting programs.

        • paddythepig

          There is no money based solution. Instead, the focus needs to come off money and currencies totally, and instead needs to focus on innovation, science, engineering, education, essentially creating new goods and services that really enhance people’s lives that people actually want to buy. Money supply would only grow in tandem with this true produced growth, and there would be no need to inflate any asset class to provide the illusion of wealth.

        • bonbon

          As far as I know DMcW is a follower of Milton Friedman.

          http://en.wikipedia.org/wiki/David_McWilliams

          http://www.davidmcwilliams.ie/2006/11/19/friedman-the-free-thinker

          That sounds like Chicago School to me.

    • Pat

      There is no balance. This constant search for balance leads to appeasement of all sorts of vested interests and very little progress. We have a way out of this. It is either the Finnish/Swedish model 1992/93 or the Asian Crisis and recovery 1997-1999. All these examples involved massive devaluations of the currencies of the countries involved.

      This is why the Euro is a problem. My beef with it is purely based on economics. So a leader should lead and quit this bizarre project and the fund manager should (a) buy domestic equities geared to exports which will go through the roof on a devaluation this is for his growth (b) buy some foreign currency because you can never guage how low the new currency will go and (c) buy some short maturity government paper such as T-bills which will sky-rocket after the devaluation bcs the liquidity conditions will ease.

      Best David

      D

      • bonbon

        No mention of the Argentine model? Burning the bondholders is unavoidable, so split off the liability. I know Argentina is being attacked by London “vested interests” for this, but that is guaranteed.

        You are right, as we have said since 1992, the Euro cannot work without political unity, and you can imagine what would happen now if that was imposed!

        To clean up this bizarre mess a leader must lose no step in instating a credit system for massive development. That means well thought out programs. And they are ready now for the get-go!

      • Pat Flannery

        I agree with you that massive devaluations are inevitable but why not do it all WITHIN the Euro jurisdiction? Why add to the chaos by destroying a major currency?

        Bad as the Baltic and Asian Tiger collapses were they did not have to destroy an existing currency. Nobody knows what would happen if we destroy the Euro.

        As for the fund manager’s current dilemma, you would put him in an even worse risk position. You would make his head spin in a casino of currency uncertainties. It was exactly such currency uncertainty that destroyed the Asian Tiger economies and provided the rationale for the European common currency.

        Oh my, we do have a problem. You are one of our best and brightest. Please think again about this. Try to imagine a solution WITHOUT collapsing the Euro. The clock is ticking.

        • joe hack

          we follow the herd like wildebeest do, we allow deference to run our world without taking responsibility.

          Even those who are employed to know do nothing and then there are those that know only too well that people follow the herd and they with this competence to lead, lead us towards the “expert” opinion – we defer – we assume they must know what they are talking about- after all they have a degree in economics etc. but the emperor has been seen to be naked again.

          Pat there is over 7 billion of us it is unlikely that the answer to “the money” crisis will be solved here or in the Irish business Post.

          I’m in favor of the punt but the Irish people are afraid of a challenge,They they crave they heard.

          Regrettably the issue will be solved in the euro zone it will take more than the voice of one person.

          To bring about change and a pace a catastrophe may need to happen since it looks like we will remain in the euro. The banking union is the only solution at present.

          Politically it is hard to swallow but the crisis is making that more palatable for the general population.

        • bonbon

          The Euro is destroying itself, it was meant to. The plan of Sir Oswald Mosely to impose a U.S.E. is now doomed. That is the key insight.

          Asserting sovereignty now is the only way to avoid the end of that failed “experiment”.

          Why in the name of all that’s sane, are you trying to rescue the bizarre construction? Have you a vested interest? Its gone!

      • michaelcoughlan

        Well,

        This is very enlightening. Maybe you should be goaded more often. This is the first projection of thought ahead of the curve I have had the good fortune to read since I started posting here. New territory again because this projection is tempered with real politick.

        Leaders won’t lead David in a small shithole debt servicing country like Eireuba. The advice for the fund managers is excellent I am sure but I am not skilled enough to offer objective analysis in that regard. Any chance you might offer such forthright advice for Joe average citizen?

        Respectfully and sincerely,

        Michael.

      • David
        I am afraid that devaluation of currerncy no longer works. It is subject to the law of deminishing returns. At this monment ALL CURRENCIES are attempting to devalue against each other. nobody wins as all drop together. The result will be world wide inflation.

        The only way to devalue the currency is to produce more of it. It is called many names and QE is one of the latest.

        The other thing is that once started, the expansion of the money supply can not be stopped without causing a crash. All currency is loaned into existance. That is the method of the central banking system operating today. The interest charged on this loaned currency is not yet produced and so in order to pay the interest, more currency must be produced. This produces more debt, total debt increases, more interest must be paid and so the spiral continues until we reach debt suffocation. That is when the debt cannot be repaid because there are not enough assets and the interest can not be paid because there is not enough output in the economy.

        The banking system is imposing the final solution where all assets are demanded to satify the debts outstanding. This is impossible today and so we see the beginning of the end of the currenct financial system. Your solution worked 100 years ago, even 40 years ago and barely 10 years ago but will not work today.The debts are too big. The derivatives are monstrous. Into the Quadrillions.

        http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/4/1_Sinclair_-_Something_Has_Western_Central_Banks_Terrified.html

        The only solution is a complete breakdown and a new monetary system. This time it will likely be based on gold and silver and it will be imposed by the developing nations upon the rotting carcus of the western industrial democracies who continue the path to destruction following prescriptions such as your proposal.

        Best regards David but it is time for a revaluation of your thinking process re any solutions to the current problems.

        “(a) buy domestic equities geared to exports which will go through the roof on a devaluation this is for his growth (b) buy some foreign currency because you can never guage how low the new currency will go and (c) buy some short maturity government paper such as T-bills which will sky-rocket after the devaluation bcs the liquidity conditions will ease.”

        The fund manager may be (a)alright in equities but only those based on solid assets protected from inflation.
        (b) will not be protected in a foreign currency, as there is no strong one to go to. The problem is world wide, all are being devalued. and (c) When people lose faith in any currencies interest rates will spike and the bonds will bust. Even short term. Earnings on bonds will not keep pace with inflation, but lag inflation.

        The fund manager should invest in farmland , gold and silver, as should we all.

        • joe hack

          Pat won’t be happy as there is a bit of the Armageddon theory in there.

          “The interest charged on this loaned currency is not yet produced and so in order to pay the interest, more currency must be produced.” What would a seven year old child make of that?

          Tony, David is in amongst the herd of wildebeest he subscribes to quick fixes that depend on everlasting growth. He mentions that he predicted the crisis as far back as 2000 however in 1993 I bought a house, in 1996 that house was valued at over twice price I paid.
          It made no sense to me as my earnings had only risen by a few percentage points.
          I predicted a crisis on the basses that I could not afford the house I once could.
          We now know what happened the rush to join the euro and low interest rates meant people could buy houses that were 10 or more above the yearly wage/

          had remained within the our own currency house prices would have levelled in line with my earnings.

          The IOUs are now worthless but the holders of these IOUs want the money back and they want the money back based on the value they had before the crash.

          • The interest charged on this loaned currency is not yet produced and so in order to pay the interest, more currency must be produced.”

            Yes a 7 year old might have troublr there Joe.

            What I meant to say was that there is as yet no currency with which to pay the interest. So as the interest has to be repaid additional currency must be produced to do so.
            A seven year old would likely figure out the compounding effect of this interest and draw the graph which now exponetial is headed upward like a rocket ship.

            The biggest bubble of all time is of course the debt bubble and it too will burst. When it happens it will not be the end of the world but of the financvial system as we know it!! :-)

        • bonbon

          “The only solution is a complete breakdown and a new monetary system.” That is exactly Austrian School luminary von Hayek’S “I’d like to see a crash before I die” (citation available on request). Hayek et all would like a complete breakdown, sacrificing 6 billions of persons to achieve their aim, exactly what is going on. This is literally a murder lust against the billions who need a functioning economic system now BEFORE genocide!

          This is why we must impose Glass-Steagall immediately, it is that or mass murder.

          • your comments are deranged

          • bonbon

            You proposed a complete breakdown as a solution. That is not only deranged, but an open call for mass murder. Do you not realize what you said?

            von Hayek had the same murder lust, with a wink, that is today openly touted, no wink at all.

            Whether you know it or not you are proposing genocide, and must be held accountable.

          • without a miracle new source of energy that’s also cheap, no-one can stop Collapse, so it’s irrelevant whether or not that prospect gives some folk a hard-on. your terraform dreams and Siberian land-bridge stuff is fun, but about as realistic as the idea that antibiotics won’t fail completely if we don’t stop feeding them to ruminants. just sayin’!

          • bonbon

            That’s the twisted Royal Decree, with something lost in translation. Brutish declarations that nothing can stop their planned genocide reminds me of a certain gate with a sign over it.

            Come on, dump the West Brit kow-towing. Its disgusting.

  14. David,

    Great analysis but as you know I am very pedantic about all things to do with the monetary system. In writing ‘the ‘template’ will have to be depositor haircuts because there will simply be no other money being made available.’ I get the impression you feel that some institution will have the money ‘confiscated’ from depositors.

    In actual fact the money that was in people’s accounts won’t exist once the levy is applied.

    As Martin Wolf recently noted, ”Most euros are, in fact, the liabilities of banks.” and when the banks reduce their liabilities the money supply drops by the same amount. I think this is a hugely important point because the Cypriot economy is short of money and the ‘solution’ in this case is to cancel money out of existence.

    • bonbon

      What? You don’t know what a G-SIFI is?

      You will soon. The Bank of England and the U.S. Federal Deposit Insurance Corporation jointly authored a paper published on Dec. 10, 2012, titled “Resolving Globally Active, Systemically Important, Financial Institutions.”
      They are going to snatch on a global scale – the Template !

      And the hugely important point is to break the banks by function, dropping the synthetic “liabilities” – THEY will cease to exist.

      Beacause of serious negative growth, there IS a physical econopmic liability which will be made up with Hamiltonian Credit systems. AFTER Glass-Steagall applies the shears.

    • I notice Colm McCarthy did mention that the Cypriot depositor’s money won’t exist after the levy is applied but as far as I can see this was the only acknowledgement of this very important point.

      ‘The money supply is cut directly through the depositor haircuts’.

      Many commentators called it as tax but the Government won’t have the money after the levy is applied. No one will.

      Others called it theft but of course no thief will have any extra money, the Russian money launderers included!

      The full article can be read at:

      http://www.independent.ie/opinion/analysis/colm-mccarthy-plan-b-came-too-late-to-put-the-genie-back-29165173.html

      • bonbon

        So tell the depositors that no-one stole noe nonexistant money from their accounts, so nobody is liable for grand larceny.

        A good defense for the average lawyer, but as JP Morgan found out, Pecora was not so easily fooled then.

        Time for a Pecora Commission, and Glass-Steagall, and send banksters to very existant rubber rooms where they can holler their innocence to the walls.

      • Paul
        The depositors money(currency) is an asset and will continue to exist and will be in the hands of the bank. This is not a loan being paid off which would have resulted in the currency being redeamed.
        I think you may be in error in this case.??

        • Hi Tony,

          The only monies that the banks could consider an asset are cash or central bank money.

          So either their ‘Cash in hand’ account or their ‘Reserves’ account would increase if they received money and neither happen under the Cypriot levy on deposits.

          All other money is recorded as a liability of the banks and when the banks reduce their liabilities the money no longer exists. I’m very sure on this.

          • Well Paul
            Lets get specific on an individual case.
            Mr A deposits 500,000 in a bank.
            Bank freezes money so Mr a cannot withdraw.
            Bank takes money and puts into own account.

            You are telling me that this money actually evaporates and no longer exists.
            How?
            Why?

  15. michaelcoughlan

    Hi everyone,

    You know what really terrifies the bejaysus out of me in all of this is the thought that in order for representative democracy to work you must have the rule of law.

    The case in Cyprus has proved that rule of law (property rights) has gone out the window. What Pandora’s Box is being opened up now? I am asking a very serious question as McGurk has an excellent article adjacent to David’s in the SBP and it is showing us a truly frightening spectre. Ultra right wing fascists’ and ultra nationalist groups popping up in Europe.

    As for capital controls David what about human controls? Does anyone really think that the politicians couldn’t stop people leaving Eireuba? Think again! My Uncle is 87. Just after world war 2 and well into the devastation wreaked on Ireland by Dev’s economic war with Britain all the young men like him were forced to sign on at the Garda station’s so that the authorities could keep an eye on them and prevent so many of them from leaving that the state would fail.

    I sh%t you not.

    As for Ireland leaving the Euro? What’s much more likely to happen is that Germany will leave it and we will stay in. Then when the Euro halves in value against a new German Mark the scum bags in the Dail will be able to say “well we didn’t touch your deposits did we” even though in reality it will have the same effect as if they confiscated 50%.

    Your advice for Jo average David is Paramount.

  16. Bamboo

    Old age pensioners and the long term unemployed have their spending habits and their bank accounts scrutinised by government bodies for the last two decades in European states with high sophisticated social welfare systems. The implementation of the Big brother culture has been there for some time. It started off with something innocent but it is now your very own neighbours who are telling tales. The same way we have now an anti or prevent insurance fraud campaign.

    Examples:
    Single old age pensioners are not given the chance to share a meal to cut the costs. Old age pensioners who buy bigger quantities of groceries in the supermarket or butchers have to be vigilant they don’t get caught and are doing groceries in different places.

    Single unemployed people can’t afford to start a relationship or they may end up with a cut in their social welfare payment or loose it altogether.

    The Long term unemployed have to report every single week to social welfare and show evidence of jobs they have applied for and above all show bank statements to justify their expenditure. Any financial gifts to help out someone like birthday presents, some money to help out celebrate Christmas, etc can only be done with cash. If you do an online payment, then this will be detected by social welfare.

    For the extreme long term unemployed, they will come to your house and are (by law) allowed to ask how you get that TV, sofa, computer, etc. Yes, You have to produce the receipts. If you buy second hand then you also have to give evidence.

    This is of course in a society where they have the resources to implement a big brother system. On the other hand the very same society also provides jobs and courses to the long-term unemployed. There are also public transport schemes that provides a service to these people to travel for free simply to make all this possible.

    There are plenty pretend bobs and courses but it gives people a very important sense of being part of society instead of sitting at home and watching soaps. (You may find FAS courses are useless but there are courses in these countries like Silence for beginners and intermediates, Roof slate counting (beginners course only), interior design, knitting, hovering, architecture, etc)

    So if you think we are in a bad place, think twice.

  17. 5Fingers

    David’s articles are becoming more critical by the day as Europe grinds to a halt. But then, the world is grinding to a halt as well. The recession is everywhere. Ireland will be in recession with or without the Euro simply because the slowdown is global – mind you our size is so small that any business sent our way (from a global perspective) will always have a disproportionate benefit.

    Standing back, I’d say what we are looking at is a large systems global collapse – kind of like the Ulster Bank problem last year. But let’s not be technological here. I am talking about our institutions are just too big with too many incompetents bubbling up to the top. Ever noticed how many people are sanctioned or fired for incompetence? Keep looking – it’s difficult. Because the resulting rubbish at the top of all of our organizations are what is running the place.

    Fundamentally, when you have professional generic administrators running businesses and systems that had their origins in entrepreneuralism or other sectoral deep expertise, you are looking for trouble – particularly if genericism can be reduced to running an operation merely by numbers – aided and abetted by other banking numerologists (and believe me a lot of financial gymnastics is no more than that – note how few real economists have been in our Dept of Finance when this place collapsed – although personally, if you lack the maths training of a qualified masters in engineering who has a career gun to their head that if a system collapses or a building crumbles or a plane falls out of the sky, I think you should never be let near a calculator let alone a computer). I speak of accountability – measurable and often and visibly sanction-able.

    With all the mergers (ever noticed any splits recently? …nothing much from here) and the illusion of control and integration of all these institutions created by our Internets and Clouds and what not, you can see they become detached from reality on the ground. It is no wonder investment banking is utterly detached from the real economy – these guys take their cues from the high ups of big organisations all over the world – people who have been nepotised and cronyised to the top. There goes accountability and any correction systems you can imagine – all nicely covered off with health a safety disclaimers and the usual (nice and PC secular of course) ethics sign-off. The trouble is you can plaster over cracks all you like, but if the root cause is not addressed – trouble will come worse than ever before.

    I can see the argument for splitting banks. I think you need to split up any mergers made in the last 30 years as well in any systemic organisations – government and non-gov. We need to fragment quickly before the large system takes everyone out.

    I see the argument for dumping the euro and any other artificial systems of unity which has not been expertly engineered. The EU was expertly engineered by the fear of war. The Euro was a poorly designed scale of economy play. I can see the attraction for gold in these times as it is independent of the lunacies of institutions.

    I am not against institution. But we do need accountability and competence at a scale that works and we need to calculate what such a scale can be (an area of thought that is still seriously underdeveloped). What I see going on is not so much a conspiracy (how I wish that were true!!) in action but a large systemic collapse in play brought on by an increasingly unresponsive systems which no longer knows how to properly read feedback from the ground. We are trying to solve huge problems with the mindset of village locals (elites) who are fed garbage info of the world via 16 inch screens that say only what they what to hear.

    • bonbon

      Great to see you are thinking of splitting banks. That will keep bankers honest and allow real bankers to really function as they would wish to – managing credit for massive projects (many spin-off’s will occur). What would make a banker happier?

      Begone with the monetarism, that system itself that is doomed, a trainwreck. To see what a deadly grip this has on the mind, step well aside for a moment and view it from this perspective.

      • 5Fingers

        I am for big projects as well. But I am wary of programs. The latter is a core sickness I have seen in Europe for decades and indeed the US. For example, the moonshot was a project with aims, objectives, time etc. A space program is a talking shop.

        One forces a result and creates spinoffs. The other invites ideas of spinoffs via a work program that might lead somewhere.

        One holds the project aim as the value driver. The project is temporary and will evaporate once mission is complete. The other holds the institution which runs the program as core and will hang on irrespective of relevance.

        Lobbyists love institutions and programs – why?. They usurp the nature of project (time limited & goal oriented & answerability) and replace with strategy/steering groups/ expert groups who are immovable and suffer no sanction irrespective of the real circumstances. Once you understand this, you understand the increasing levels of apathy, anti-statism and general distrust of anything organised by “experts”.

        • bonbon

          Instead of pushing apathy, a Tiger passtime, notice that the machine you posted that on would not exist without Apollo – the entire chip industry in fact.

          Progress is endless, each mission completes and inspires the next in an unstoppable leap. Except of course an Obama, pushing imperial apathy (so its not just Tigers), and war. Apollo was always aimed at the moon and mars.

          In other words, either an unstoppable future, or war with the latest weapons- extermination.

          “lobbyists” today are simply Wall Street swindlers – they spent $350 million to repeal Glass-Steagall. Lobbying for the next mission such as NAWAPA, Constellation is lobbying for the future.

          • 5Fingers

            Ah, your are ascribing too much intellect to where there is little or none.

            The Apollo program never led anywhere or developed anything of merit once the moonshot delivered. It turned into a bandwagon and produced an elephant called the shuttle.

            Another example – the EEC was a fantastic single purpose exercise that then created a commission to run it and it in turn became a gravy train for retired or failed technocrats which made the EU and the rest is history.

            There is no mystery to any of this. No need to blame imperialism (the essence of program) or investment banking (yet another bandwagon of derivative fame from the original intent).

            Make not mistake, NAWAPA would be destroyed by the same incompetence. Once one good headline item creeps in, it’ll cripple itself.
            I say again, there is something odd about scale and the human psyche which leads to instability.

          • bonbon

            I see you are a stringer for the banks! Just what they need to get away with their swindles, with their “intellect”.

            What kind of a subservient shoe licker, like you, has the right to pave the way for the Greenie and Bankster genocide now in full swing?

            Your Beppo railing against intellect leads straight to Robespierre’s Guillotine – he put the greatest scientist of the time, Lavoisier FIRST through the guillotine.

            Begone Beppo, back to your circus, prancing like a clown railing at the human race like a garden leprechaun, a “Giftzwerg”.

          • you’re on form tonight, Bonbon! “Beppo – begone!” Hilarious, like a Harry Potter curse. I’m loving it.

  18. redriversix

    I am continually surprised by commentators and bloggers insisting that “their way” is the right way to deal with a financial crisis that no-one has ever experienced before and the complicated ways they go to explain their view is right.

    The only way I see or saw it is perhaps too late but still stands for the next Country facing financial catastrophe.

    Banks who are bust should go Bankrupt..just like every other business in the world.
    The first loss is the hardest…
    Enshrine water tight regulation on the “New”Banks and the subsequent financial system.

    Shareholders lose…Bondholders lose… depositors get their money back subject to whatever max guarantee was in place at that time.

    Where applicable issue civil / criminal charges against those responsible and move on.
    Fire any civil servants who were aware or should have been aware of questionable trading practices.

    Open new Bank.

    Etc etc etc.

    The way this crisis has been handled is clearly not working..we stagger from one crisis to another until the word crisis loses all meaning.

    The conclusion I draw from this is that the priority is to Protect the Euro firstly and Bankers secondly at all costs…, protection of the Euro is not working , only Bankers are clearly benefiting from the poor leadership of Countries and their EU bosses….and this will not last as their is no sound business foundation to these weak attempts by leaders to solve this crisis.

    Conclusion.? “They” were NEVER supposed to solve this crisis..just LOOK like they WERE/ARE trying to solve it.

    So the next stage has to be a explosion/collapse of the Bond market ,then a Large scale War is needed to fund the theft of natural resources.

    If we did a survey of Countries in the Bailout programme ,I wonder how many have lost State Assets or are in talks to sell assets and natural resources..?

    The people of Europe and across the World do not come in to the equation as they will “take it or leave”

    So just take care of yourselves and your families and , if possible help those that ask for help..Do not wait for Government to give you permission to do whats right.You are leglly & morally obliged to look after those who are dependent on you.Do Not Forget That.

    This is no longer a financial crisis ..,it is a new way of life.

    Do what you can..while you still can.

    Have a great day

    Barry

    • molly

      God grant me the serenity
      to accept the things I cannot change;
      courage to change the things I can;
      and wisdom to know the difference.

      • molly

        Do you ever feel powerless over what is clearly unfolding in front of your very eyes.
        This government like other governments in the EU seam to be singing of the same hymn sheet.
        Some how they want to stick with what they see as the way forward and it feels like they will stick at this course of action until they run out of time at our expense.
        Yes we can in some small way protect our family’s ,but this will not be near enough.
        We are heading in the direction of becoming a third world country,when you rape and pillage a country’s resources what are you left with.
        One big white line rich on one side poor on the other.

      • bonbon

        To paraphrase Fintan O’Toole, BANKSTERITY is unacceptable. That can be changed with Glass-Steagall, which he has not realized yet. Wisdom is knowing the future this means.

        And that no animal ever had, we are fundamentally, totally different, from any other species. Green economics, whether a Royal Decree or from the Pulpit, is not just unacceptable to us the human species, but a genocidal crime against us.

        Still serene?

    • paddythepig

      Don’t kid yourself. If the loan losses are big enough, everyone including all depositors will be on the hook. That’s why depositors need people to pay back what they owe.

      It’s dreaming to think we can all welch on our loans, and simultaneously keep our deposits.

  19. redriversix

    Hey Molly

    don’t despair,The rich always become soft while the poor become more resilient.

    That serenity prayer keeps a lot of people going.. whether they are religious or not..it is a excellent mantra…I only found it when I was in the gutter…kept it with me ever since , and that was 12 years ago.

    Protecting your Family is all that counts..once you realize that..you can reach out to those who ASK OR SEEK help…..Trust me , I know what I am talking about

    Every day is a good day…just some days are better than others..!

    Have a great day

    Barry

    • molly

      I was in the gutter but was looking up at the stars.

    • bonbon

      The “serenity” prayer is straight Adam Smith’s, British East Indie Company edict to subjects :
      “To man is allotted a much humbler department …. Nature has directed us to the greater part of these by original and immediate instincts. Hunger, thirst,the passion which unites the two sexes, the love of pleasure,and the dread of pain, prompt us to apply those means for their own sakes, and without any consideration of their tendency to those beneficent ends which the great Director of nature intended to produce by them.”

      —Adam Smith – Theory of Moral Sentiments —1759

      That kind of imperial decree is sending civilization into the gutter, for a much reduced population. Reciting such mantra’s on the way to the cull is not good politics, nor economics!

      • 5Fingers

        “Necessity is the mother of invention”
        Versus
        “Creation is the Divine Nature of Man”

        Years of experience have demonstrated to me time and time again that results come from learning to listen in the former and that nothing ever came of the latter which did little else except spawn waffle shops that indulged ultimately aimless exercises.

        • bonbon

          And what was the “necessity” to go to the moon? The daft idea that progress oozes from tinkering is quite common among Tigers, a sign of the times.

          Mission oriented science driven economics is what in fact made the, now being destroyed, world you grew up in. Where do you think the chip industry came from – the sand that includes silicon?

          There was no need to fly, it was a dream for millenia! Motorized flight did not evolve from birds, nor from immediate necessity.

          Now putting aside the WallStreet and Greenie policies that simply cannot fathom creativity, lets get on with progress on a massive grand scale. Being meek for Adam Smith is fine for some, so endearing. It even gets votes!

          • 5Fingers

            Oh there was a lot of necessity and derivative necessity as well.

            Moonshot – Cold War OneUpManship
            Flight – War
            Microelectonics – Reliability and weight

            All above were evolved from different paths of discovery to meet a need at the time. The body of knowledge did not explode out of nowhere in any of the above.

            Anything else?

          • bonbon

            So Apollo “evolved” from war? Permanent war, as Mazzini, Britain’s puppet, proposed then, is the mother of invention?

            Now back to reality. The mission of JFK is what these industries “evolved” from. Forget that fraud Darwin, we are totally different from rats or Dino’s. Some look back in awe at such, but let’s tolerate their smelly idiosyncrasies from a very safe distance, preferably outside the rubber rooms.

  20. spitting blood

    It Frankfurt’s way or Labour’s w,…wait,,,,,,,………..
    http://www.youtube.com/watch?v=Kpr2zaXvb4M..

  21. Colin

    ‘House Prices falling for the third month in a row’……. did anyone contact Pravda RTE or The Paper of Record to shatter their wet dreams?

  22. http://news.goldseek.com/GoldenJackass/1364601600.php

    Read the above and cast your eyes to a wider horizon. See the Euro-Asian alliance through the collaberation of China and Russia with the BRIC, Pulling in Germany (who now looks East and abandons the Euro)
    Look for mega pipelines for energy and mega infrastructure projects for trade and commerce, Look for a new monetary system to put aside the US dollar reserve. Look for such monetary system to be backed by gold used as the final settlement of debt. Look for US treasuries to be spent on the above as US reserves are unloaded igniting high inflation in the US etc. Look for the development of infrastructure in Africa to enable resource extraction and trade all funded outside of the US sphere of influence.

    Sample of Jim Willie’s comments are below

    “THE CHECKMATE

    A checkmate is in progress. It has four important elements.

    1) The established Eurasian Trade Zone joins the massive Asian continent with a significant portion of the European continent, where three quarters of the world population resides. The trade zone has no visible presence or participation by either the United States or United Kingdom.

    2) The BRICS Development Fund will control a giant sum of $100 billion. It will eclipse the role of the Intl Monetary Fund. The fund will facilitate numerous infrastructure projects. However, its other feature will be the shocker, as its core is transformed into Gold bullion. The conversion of USTBonds to Gold will nail the coffin in the isolated USDollar, a topic of Jackass scribbles for the last full year.

    3) The flow of USTBonds will be from China to London, for financing the foundation of the Eurasian Trade Zone on its energy backbone with brisk energy flow. The collateral for large loans is to be USTBonds, as is repayment for loans to be USTBonds.

    4) The transition from Yuan-based trade settlement via the numerous Swap Facilities in barter trade with key nations, toward Gold trade settlement via the BRICS fund that will feature a gold core, will launch the new Gold Trade Standard. It will not be a banker dominated currency type of Gold Standard. It will instead be a trade settlement Gold Standard that bypasses the hegemony of the Anglo-American banking system, the SWIFT rules, the FOREX gaming, and the IMF/World Bank harlots that harbor insects.

    • 5Fingers

      How long would it take to organize that in a manner that would not have every swindler working their one angle. It’d be like flies to the cowshite in a hot sunny day and long before any benefit would be extracted, there be little left for the real projects.

      This view of sudden benevolent human self organization is optimistic to the point of naivety. And who will organize this “New Gold Trade Standard” – Quis custodiet ipsos custodes? comes to mind. I mean if the original banking guys loose their jobs, will the CVs being sought be so different? You will need experience at this stuff – oops! same old faces again…such a small world really!

      • Did you read the whole essay? This is not surmised but what is currently happening. Read the complete essay and then comment.

        • 5Fingers

          “Many features of the trade zone will be worked out”…Ah sure that’s only a minor detail. It is polemical writing which tries to draw deep significance from recent events as a basis of support. Humans have a natural tendency to draw pattern from nothing – that does not mean anything will ever emerge.

          • bonbon

            Take some time to read von Hayek’s 1983 interview, icon of the Austrian School, parading here in garmentless hubris – I’d like to see a crash before I die

            There von Hayek calls for an “international agency” to “police for free-trade”. Not so hidden eh?

            Interesting aside, Keynes, that other poodle of the London School of Economics, paraded for a Totalitarian state to apply his Grand Theory economics. The two poodles, scrapping all the time, are actually British imperial lap dogs!

          • 5Fingers

            You are saying the public spats were all a show?

          • bonbon

            In Keynes’ case, the lipstick was not just show!

          • Well, you may be correct but I do not think so.

            Observe the trade arrangements being made and the adjustments to the currency used in that trade and the overall agreements being made between nations.

            look at the currency flows internationally and the movement of gold as an asset. See who buys and who sells. See the nature of the buying and the manner of the selling. See the disconnect between the paper markets and the physical market.

            The essays are not polemic opinion but observed events. This is from the physical world of trade and commerce and not the world of academic debate.

          • @bonbon “n Keynes’ case, the lipstick was not just show!”

            You’re not…you’re not saying Keynes was a shirt-lifter as well as the Shakespeare of Economics, are you? OMG! A homosexual economist, somebody call God to rain fire and brimstone. So that’s why the world economy is fcuk’d. The Gayz!!! Hey, Bonbon (very Alpha Male name there..) what’s the Larouche take on minority sexual sports? Is it ok to have a bit of man-on-man action whilst building the land bridge to Siberia from Shannon, or is that a bit decadent and Keynsian? I shouldn’t mock your amateur hour innuendo, as the closest you’ve ever come to sex is probably your fist whilst one-handedly typing comments onto Larouch.ie. You got any pics? No face-pic, no date. You on Grindr?

  23. I could not find a way to link this so had to copy and paste. Follows my view point that money is private property that has been commandeered and abused by bank and state. A freeman has a free currency, all else is slavery. Credit and usuary must be banned. A reversion to real capitalism is required.
    ———————————————————————-

    Expropriate the Banks, Abolish all Fiat Money, Outlaw Credit and Interest

    Hans Schicht

    Since 1998 I have published about 40 essays on various Internet sites containing opinions and comments on world finance, politics and precious metals. Nearly all of them can be found on my web page http://www.hans-schicht.com .

    In 2009 I stopped publishing, because I had nothing more of substance to add. And besides, I wanted to dedicate my remaining energies of my advanced age to my great interest: a new view into the Cosmos. However, in the light of the crescendo of the present global crisis and the questions about its roots, I feel called upon to add here still one last essay.

    Expropriate the Banks
    Abolish all Fiat Money
    Outlaw Credit and Interest

    It is incorrect to speak of Capitalism in general terms: here are two kinds of capitalism:

    Natural Grassroots People Capitalism, competitive, based on free flowing money with intrinsic value, gold and silver, where nobody can fool around with and

    Oligarchic Slave Capitalism,
    where money power dictates from above. It is based on credit, debt, interest and fiat money. It were the Banks that changed the world from People to Slave Capitalism.

    Everything today is financially controlled from above. There is hardly any difference left between present day capitalism, socialism or communism. The latter two make use of the same financial controls as our so-called capitalism. (look at China!)

    Natural Grassroots Capitalism flourished in Europa till the fifteenth century. The greater part of the money circulated under and was held by the bourgeoisie, the people. The king only possessed a minor part.

    After the Pope in the 15th century decried that debt and interest collection were no longer a sin, paper certificates of credit and debt began to circulate. These, with time, turned into fiat paper money, and led up to the birth of Banks. Relative to the growth of the Banking Power, natural capitalism declined.

    Over the years the Banks obtained privileges: Permission to extend credit to third parties up to 12 times their own capital or more. Permission to run a Central Bank with the exclusive right to emit currency for the State against bonds, the proceeds of which the Banks monetize for their own benefit.

    If one puts all the wealth of a country into a basket and licenses a third party, the Banks and Central Banks to create additional money outside of this basket in ever increasing amounts, than, over time, the Banks will be able to buy the whole inventory of the nations wealth basket with the fiat money they are creating themselves out of thin air. And that is what happened.

    Seducing people and State to go ever more into debt is the Banker’s livelihood and policy. Not only with intend to increase their earnings on interest from money, not even theirs, but with time to acquire an ever growing share of the nation’s and people’s wealth with their relentlessly advancing Wealth Transfer Machine.

    This has been the story of the last three hundred years. Today, by deceit, the Banks own and control the people, the government, the industries, the infrastructures … you and me, all and everything! All that based on falsely acquired legality by stealth.

    Banks have grown like an evil cancer virus and have taken over the world. They should be eradicated together with all their fiat money, debt and credit.

    Von Mises concept of Capitalism does not go far enough. Whatever the good intentions of a gold standard and gold discipline, the vile Wealth Transfer Machine will continue operating as long as there will be credit and debt creation. And the money will keep on flowing from the people to the financial top.

    Contrary to ruling concepts, the world does not need Banks. Banks are but enslaving parasites. The only useful jobs Banking could be used for is maybe payment collection and money transfer. But even there, modern electronics can do a far better job by means of new software that combines public with private keys where the account owner can manage his own, personal accounts. But the Banks have blocked all such competing developments.

    And as for guardians of people’s wealth, forget the Banks! Who has not lost (all) his money and assets through them! The Banks will only bring new structured investments into being, when they can make money through them.

    Any person or company with a healthy competitive product should be able to grow without soliciting bank credit by financing out of profits.

    As an example: I personally know the history of the ascend of a small family enterprise in Central Europe that made soap, cooking fats and candles. Providing people with basic hygiene, food and light. It grew from an in-house family enterprise in 1865 to 8.000 employees in 1907 without ever having taken up a bank loan!

    Healthy Capitalism grows from the ground-up. But the Banks killed natural capitalism. By credit pushing, easy money and directing the money flow the Banks have:

    - Killed grassroots entrepreneurship, favoring mega-enterprise – Caused unbridled population growth, split-up the family life,

    - Distorted economies and natural growth patterns,

    - Seduced governments to get into debt far out of proportion, – Forced the governments to constantly increase taxation,

    - Enslaved mankind through credit pushing.

    - Instigated and financed wars.

    Modern slaves are not in chains, they are in debt.

    And to keep the people in their slave-pens, the Banks invented “money laundering” as an excuse to control people’s money and assets ever more. Whereas the Banks themselves are partners in crime in big-scale criminal laundering,

    - the people have to pass through border controls,

    - have to declare with each transfer from where the money originates,

    - are limited to maximum cash transactions and are

    - forced to buy gold and silver through the Banks, ( that bribed the authorities into ceding them the exclusivity of precious metal and forex trading).

    That is the way of herding the people into their iron web.

    -Show your identity card, -Declare where the money comes from,

    -Give a banking reference,

    -State your yearly income, all that for buying or selling just one single gold coin!

    Re-introduction of the gold standard alone is far from the solution to the crisis and restoring people’s liberties. Re-establishing the unhindered, free flow of precious metals as currency between the people is the way to go in restoring people’s liberty and survive financial collapse.

    Where have the old time street coin shops of the West gone? Where have the gold traders like Deak Pereira, Exprinter and Safra (murdered in Monaco) gone? Forced out by the Banker’s iron grip on government policies and decisions!

    The Middle East with its Souks, gold rich India and all countries, where the people hold the gold, will be much better equipped to survive the coming financial collapse than the bank-enslaved Western nations.

    Bankers control everything: de interest rates, the allocation of credit and credit worthiness, the flow of capital, exchange rates, people’s assets and accounts, the markets and so on.

    There is no free capitalism left in today’s world. Todays capitalism is pure Oligarchic and does not deserve the name of capitalism any more.

    To expand their power into infinity, Bankers use financial spider-webbing: Through taking up anonymous share participations in third financial institutions, which in turn are again invested in a next line of institutions, and so ad infinitum, they have grown into almighty ruthless global financial conglomerates.

    No privilege has opened the door more to cover up their financial crimes than the concession obtained by stealth to change from shares and bonds on name, as used to be, to untraceable bearer shares and bonds.

    Because of spider-webbing interlinking and anonymity in share ownership, the real powers behind the scenes stay undetected and have a free hand to play their hideous games. That should change!

    Like the world abolished physical slavery a hundred fifty years ago, so should the world now radically abolish all debt and financial slavery,

    - Expropriate and liquidate all banking and related institutions and put the confiscated assets in public trust to be sold off and the proceeds used to reduce taxes. (But never never allow the government and the politicians take over the Banks. They would still make a greater mess off finance than all the Banks did ever before. And besides that, they could even appropriate the Banker’s blueprint of financial control for their own use. And by adding just a few details on to it, like pulling all cash out of circulation and introducing a one and only State credit card loaded with full personal details for the people, they could make it a perfect instrument to run an Orwellian society.)

    - Go back to what nature provided as money: the gold, silver and copper, where no human being can fiddle around with. But not as a gold standard, but free flowing between people in espece. – Declare a world debt cancellation day for people business and governments alike, same way as happened one hundred fifty years ago, when all physical slavery was abolished with one stroke of the pen.

    -Declare all interest, debt and credit illegal.

    - Put the financial vultures behind bars:

    When millions are driven into eternal debt slavery through the financial manipulations by only a handful of Bankers does not that count as crimes against humanity?

    As long as the present, totally unworkable and criminal fiat system continues, the banks will be the only beneficiaries, by sucking in more and more interest on debt and by taking advantage of the further depreciating currencies.

    All that talk-talk in Euro-Disneyland by brainless and confused negotiators, that have not the slightest idea of what is happening, and are manipulated by conniving Bankers, is a wasted TV-show. The longer the mess lasts, the longer will the banks keep on making money and pull the world down with them into the abyss. Let us cut all ties with the fiat world before it is too late!

    Worldwide debt forgiveness at the stroke of the pen is the only way out of the current ongoing mess. There is no other solution. And if not, then the world will slide into the abyss and not recuperate for hundreds of years.

    Only a radically clean new start, as soon as possible, will enable the world to avoid centuries of hardship and the total enslavement of humanity into an ant society.

    The world has to go back to basics:

    -no more debt, credit, bonds, interest or fiat money

    -only gold, silver and may-be copper as money

    -no more Banks and financial institutions

    -share certificates only on personal name

    -no share holdings of one company in another

    -only transparent markets published on the net

    -no short selling, options, futures or derivatives

    -all trade in cash only against product or service -no more credit-cards, only instant debit cards on one’s personally managed private accounts.

    -no more cash, gold or assets carry or pay restrictions for ordinary people.

    When in the 15th century the power hungry Church overstepped its mission of guidance and began putting the fear of God into people’s minds instead of the love of God, terrorizing the people into mental enslavement with the purpose of growing its worldly power ….. Then the people reacted by ransacking the churches and by destroying the false icons and statues.

    And so the time will come, not far away, that the fury of the people will see through the falseness of the terrorist threat and the money laundering lies, brake all financial shackles, ransack the Banks and vassal government institutions, and destroy and burn all the software and computers enslaving the people. May be on the way lynching a few Banksters and their government cohorts.

    Only after braking free from the Banker’s debt shackles, only then will the world be able to start afresh, growing and prospering from grassroots, from a people base, not any longer directed from the top.

    But as long as such does not happen the world will be destined to slide ever more into misery. Hans Schicht

    2nd April 2013

    http://www.hans-schicht.com

    Copyright 1999 – 2013 Le Metropole Cafe. All rights reserved.

    • cooldude

      Great post Tony. There is no other way out of this mess. Look at the success of Bitcoin which is an internet currency which avoids the use of the banking system totally. Since the Cypriot crisis the value of Bitcoins has gone up over 100% in nearly all central bank controlled paper currencies. It has become particularly popular in Spain and Portugal because these countries obviously think they are next in line for the new ECB “template”. Who knows who is next and the Irish banks are far from out of the woods. The truth is all commercial banks are very close to becoming insolvent due to the high levels of leverage employed. Once you deposit money in a bank the bank becomes the legal owner of the money and the depositor becomes an unsecured creditor with an IOU against the bank, This IOU can be converted to stock or simply repudiated as is now the new norm.

      This is a final wake up call. Banks are dangerous places for peoples financial health. The only decent innovation from modern banking is the ATM. Everything else, and I mean EVERYTHING, is fraud, deception, robbery both overt and covert, and complete disrespect for the people who use their services. Vote with your feet and let these criminals know we are not taking their bullshit anymore. Non compliance with criminals is the only way forward.

      • Adam Byrne

        I’ve worked with digital currencies for almost 15 years and you truly are deluded if you think Bitcoin, or any of the other online currencies are going to save mankind – the same goes for gold. There are deep structural and cultural problems in Western Civilization and it doesn’t matter what ‘currency of the month’ you use. Unless the real problems are not tackled, then there will be no change. As an aside, who have you got guarding your gold and Bitcoin certificates? (I do have Bitcoin myself as it happens but it’s just another arrow in the diversified quiver).

        • cooldude

          Adam the only thing that can save mankind is mankind. What we have at the moment is a bunch of privately owned central banks issuing the only form of legal tender on the planet. This paper money is constantly debased and the same central banks set the interest rates so low that all savings must constantly lose value. In other words they are robbing us day in day out through the monetary system that they have imposed on us. The crucial difference between currency and money is that proper money is not just a medium of exchange but also a store of value. Traditionally precious metals have provided that function and have never been devalued against an unbacked paper system. Today the bitcoin concept is incorporating these values of being limited in issue and through it’s design program it is impossible to have a QE or an LTRO issue in bitcoin because it was specifically designed to be a sound form of money that is not easily debaseable.

          What bitcoin does do and does very well is expose how fraudulent modern banking is. All bitcoin is is a currency for voluntary exchange of goods and services between willing parties without any risk of third party (bank) confiscation of the currency. In my mind it exposes the banks for the corrupt fraudulent entities they are and the fact that this currency has doubled in value over the last few weeks shows the free market in action in the good that is money. We need to take the stranglehold that the bankers have over us in what we use as money. Bitcoin is very much showing how this can be achieved. What needs to happen next is the liquidation of the corrupt, criminal, controlling crime syndicate that is the modern central bank system and the BIS and let people have a choice in what they want to use as a beneficial medium of exchange for themselves and not the parasites who are the modern banking system.

          By the way Adam I don’t have any bitcoin but I that may change in the future.

          • 5Fingers

            Now that I know you have a lot of gold and bit coins, I can target you and steal it and I can get necessary backing to do it. Why? because your worth it ;).

          • Adam Byrne

            I don’t disagree with you on the nature of banks and central banking etc. All I’m saying is gold and bitcoin etc. are not the saviours they are made out to be. If enough people were trading in them, the banksters would find a way to get scamming in those businesses too. It’s human nature and society that needs to change, not the colour of its money.

          • bonbon

            Its “human nature” to swindle? I think it’s an attack on human nature, and it must be legislated with laws that work, Glass-Steagall for example.

            Prisons with rubber rooms for those that need time to recover their human nature, safely away from those who do not need that problem. Liberals can occupy neighboring cells to council their victims.

          • 5Fingers

            And tell me, who will be running the rubber rooms?

          • bonbon

            At feeding time, plenty of horse burgers of course, we would’nt want them going hungry, now would we.

            That’s what running means. Not too difficult, what?

    • bonbon

      This is the intention of Bernanke, Draghi and London, right now, to cancel the existing monetary system. This is well documented here

      The intention is genocide. Leaving the vast majority holding worthless paper can have no other intention than to wipe them out!

      You are on record now proposing this mass murder. It is nothing else, than mass murder to carry out the points you list and quote. The sheer lust from monetary circles to save “their” system at any cost is palpable, slavering, snorting now. It will become even more bestial so the most stubborn will not be able to ignore it.

      • What exactly do you suppose would happen to all the derivitives when your proposed GS splits the banks?

        Do they miraculously dissappear into the either to never be seen again OR as they distruct and collapse do they destroy the current monetary system creating, in your words , the very geneocide you accuse of others.

        I think you should listen a little more carefully to those you disparage.

        THe Austrians have it correct when they state, “The inevitable result of a credit induced bubble is a correspondingly large bust”

        I would note that this is not a wish but an observed indisputable fact. The reason that one would wish to see a collapse before they die is the knowledge that the longer it takes to crash the worse it will ultimately be. The sooner the crash happens the better for all of us.

        “You are on record now proposing this mass murder”.This as stated by youself bon bon is a disgusting comment to apply and a relevation of your state of mind rather than someone else’s.

        You are the Robespiere of the McWilliams blog.

      • bonbon

        Glass-Steagall will instantly relive the world of a few quadrillions synthetic debt – no one needs to pay that.

        That is why we propose a 3-pointPlan – without missing a single step, no goat-like but-butting, Hamiltonian Credit for sovereign massive projects. Really big ones need cooperation of like minded neighbors.

        So the attempt to single out GS is simply a but-butt.

        The Austrian School follows von Hayek – they want a genocidal crash to push their agenda. That is exactly, to the billion, the genocidal policy now being unveiled. It is plain to see the Austrian School of the LSE, is simply propounding the Royal Decree of massive population reduction, mass murder.

  24. molly

    We are going to be asked to vote on same sex marriage and we could not be asked to vote on bailing out banks is the country bonkers or what.

    • bonbon

      That is exactly Adam Smith’s edict to subservient subjects of the Crown, posted above, with a liberal twist. Smith was CEO of the largest world wide firm, the British East Indie Company, complete with its own army, opium and slave trade.

      This is the imperial decree that Ireland threw out in 1921, with Arthur Griffith showing the way. The shiny boot is back again, call it what you will, Troika, ESM, Lisbon. Just say British Empire.

      • molly

        We need people like Ben gilroy,we the people should be asked to vote on major things that can effect us in our every day life’s and our future and untill we get this through this thick basket cast government we are on the road to nowhere .

      • eh? So, have I got this right? O’Bama is a nuclear terrorist in the pay of the Queen, or The City of London, to avenge his Kenyan grandfather’s torture at the hands of British imperialists? Very plausible…

        The Troika are, in fact, not a bunch of dimwit fcuks trying to save a dimwit currency without a treasury to back it, but are in fact also working for the British Empire? Has anyone told Angela Merkel this startling fact? Or Hollande? Your take on Adam Smith is certainly novel, if somewhat challenging to conventional thought. Is the ‘shiny black boot’ some kind of oblique reference to military-corporate quasi fascist solutions to geo-political and economic bifurcations, or is it some kind of ‘booted’n'suited’ fetish motif? You are certainly a very ‘special’ commentator. This site would be bereft should you ever be given a major channel as platform for your insights. Please stay, but perhaps some flow-charts and mind-maps so thicko Brummie plastic paddies like me can keep up to speed ‘going forward’, ahem! [sic] *hiccups, burps, scratches balls, finishes 12th can of industrial cider, etc]

        • bonbon

          The shiny black boot, kissed by many a west-brit, is the same old smelly Empire. Obama is owned, hook line and sinker by this goat-smelling bankrupt succubus.

          It is either split their smelly, bankrupt banks or die. That clear enough for ye?

  25. The indo says different so it must be true David. Sorry me old friend but perhaps you are just out of touch and / or out of time?

    Second-hand home prices soar by 10pc – property price survey

    Not only are they rising David. They are actually ‘soaring’ in the white heat of Celtic Tiger 3. Are you fucking blind man ???

    God the resiliance of these Irish people takes your breath away. Mighty. It’s almost like they are super human and their never say die attitude should be an inspiration to troubled life forms everywhere

    Even cockroaches could not survive such hunger and make a storming comeback in time for 1916 when we will be well sorted and all the world will ask just how we do it!

    Phew. Oh ye of very little faith.

    http://www.independent.ie/irish-news/secondhand-home-prices-soar-by-10pc-property-price-survey-29167229.html

    The biggest clues to what this rabid publication thinks of the general public can be seen on their website. It is shite and it looks and behaves in the same way. It’s not as bad as the tits and bums pub’s but it might just as well be seen in the same light. A rag that is full of fakes

    Now you get a list of nameless articles when you get to ‘opinion/columists’. They really don’t give a fuck

    There are only one or two columnists worth reading so let me at them and bookmark their blog page. But No. I’ve got to look through the post slugs trying to guess which one sounds like it was written by Mr Kerrigan. Tossers cant even get something so simple right

    No structure:

    Title
    Date
    Author

    Who, where, when, why.

    But then it is designed to be a room full of magic mirrors because the more we click the more ad impressions and hence the more income for the rag. Haw haw haw

    And people think this is news. God bless them

    If this is news then it is twisted!

    Second Hand News by Fleetwood Mac
    http://www.youtube.com/watch?v=p6Fdm3-dnr0

    Lay me down on the tall grass

    • Adam Byrne

      I noticed that about the Independent website as well (long list of articles – no indication of who wrote them) – ridiculous in this day and age.

      • Good man Adam and glad you spotted it too

        I found a Site Map link at the bottom of their site and I can now link to Mr Kerrigan’s articles

        I am getting a free read so I can’t really complain about the ads.

  26. Evening All

    Thought some of you may like the following from NYTimes the other day. http://www.nytimes.com/2013/03/31/opinion/sunday/sundown-in-america.html?pagewanted=all&_r=1&

    Best

    D

    • Pat Flannery

      “If this sounds like advice to get out of the markets and hide out in cash, it is.”

      I remember reading his “The Triumph of Politics” shortly after he left the Reagan White House in the ’80s and thinking that he did not belong in politics. I was probably right.

      This is an amazing rant and not very helpful. I wonder if he is not an apocalyptic guy. George W. was, is. He told Bob Woodward that none of it mattered as Jesus was about to come back. Oh my.

      • StephenKenny

        It seems to me that it matters little whether someone says he’s an apocalyptic guy . What seems more relevant is whether his arguments might indicate that he is right. My oh my.

        • cooldude

          I tend to agree Stephen. The guy’s points are well made and always backed by stats. It seems that Pat “can’t handle the truth” as Jack Nicholson used to say. Wall Street is a crime syndicate who control the politicians. The Fed is comprised of representatives of these same criminal organizations and it’s only real role is to represent their interests. This so called goal of 6.5% unemployment is just a smokescreen to take toxic assets off the banks for more and more cash. Privitization of profits and socialization of the losses. Welcome to the modern banking cartel.

          • Pat Flannery

            Cooldude: his advice to “get out of the markets and hide out in cash” seemed very naïve to me. It is like advising us to get out of democracy and hide out in our parliaments. Is not cash an essential part of the markets?

            I agree with you that “Wall Street is a crime syndicate who control the politicians”. But that is our fault for allowing it.

            On a positive note, Stockman’s political reform suggestions are excellent, if they could be implemented:

            “the president and members of Congress a single six-year term, with no re-election; providing 100 percent public financing for candidates; strictly limiting the duration of campaigns (say, to eight weeks); and prohibiting, for life, lobbying by anyone who has been on a legislative or executive payroll”.

            For me, the future lies in consumerism.

            Elizabeth Warren is a far better guide than Stockman. She is stressing something that would work. Consumerism. She is my first choice for the next POTUS.

            Far from abandoning the markets we the consumers need to exert our innate control of them.

      • bonbon

        Reagan did one thing right, he proposed SDI to the Soviets in 1983. Gorbatchev turned it down in 1986. A game-changer demonstrating the military principle of the flank. It was clear when Andropov and others turned their backs on this leap, collapse must soon follow. And it did starting with the Soviet, and now the post-wall Euro as well as the USA.

        Time for a game-changer again!

        • cooldude

          Fair points Pat and I tend to agree with them. Should we as consumers not demand a bit more choice in what type of money we use. Why not let the banker’s money compete with other forms such as bitcoin and let us consumers decide which type we prefer for our exchange of goods and services. Only problem is it would make the banking crime syndicate obsolete and the mafia want to keep running the show.

    • bonbon

      Good one DMcW! Quote from link :
      “The explosion of the housing market, abetted by phony credit ratings, securitization shenanigans and willful malpractice by mortgage lenders, originators and brokers, has been well documented. Less known is the balance-sheet explosion among the top 10 Wall Street banks during the eight years ending in 2008. Though their tiny sliver of equity capital hardly grew, their dependence on unstable “hot money” soared as the regulatory harness the Glass Steagall Act had wisely imposed during the Depression was totally dismantled.”

      It is now being clearly recognized that the repeal of Glass-Steagall had apocalyptic effects. Stockman, author, does support this, and also makes very clear what Nixon did in 1971.

      A very good read, even when NYT has tried to ban Glass-Steagall from its pages. Still, Stockman ends with a really pessimistic “free-market” epilog.

    • Nice link David. As with any analysis from America, I begin by searching for ‘oil’ ‘shale’ ‘energy’. Almost nothing. It’s impossible to understand the current predicaments and possible solutions without firmly anchoring in energy/gdp/gnp efficiencies for whatever comes next. The whole hocus-pocus of the post-war economics voodoo comes from a fundamental misunderstanding of what Keynes proposed with the Bancor (zip it Bonbon!).

      There is much to ‘enjoy’ in this brainstorm/cri de coeur, but the idea that a return to some sort of metallic monetary fundamentalism will magic away energy dilemmas is retro-nouveau nostalgia for a past that never existed. There were ‘panics’ in the Silver dollar and Gold nugget eras before Keynes arrived as the Shakespeare of Economics. What’s needed now is for someone to figure out a post-peak cheap oil reframing of the discipline which factors in ‘peak everything’ from metal ores to fish stocks and somehow prevents total collapse.

      Keynes based everything on the notion that today can borrow ‘work/energy/resources’ from tomorrow and repay it by baking a bigger cake. But there’s no gas for the oven.

      It seems churlish to point out that this gentleman, David A. Stockman, doesn’t appear to understand thermodynamic law in relation to economics, but hardly anyone else does, either. Other than myself, and Matt Bellamy, the lead singer and visionary thought-leader behind Devon’s Muse. Oh, and Eric Janzsen over at iTulip.com who also has much of this energy predicament on his blue-sky thinking whiteboard, but sees a Fortress America solution. Not much help to these Isles of Wonder, so we’ll have to figure something out ourselves.

      There will be both Collapse and Singularity. Often in the same society. Haiti and South Korea coming to a European nation-state sometime soon. Cyprus is a terrible portent and the gas reserves offshore make it all the more incendiary.

      It’s all rather apocalyptic, and given the realities of energy, it doesn’t surprise me that the 1% and their Stockholm Syndrome fluffers are up to such shenanigans since Nixon lost the plot. The French were right to forsee a return to times of barbarous relics, I guess: give us your gold…I see philosophical and moral bankruptcy. Economics is no more than the priesthood for the ruling class. I enjoyed the Mayan Amockalypse of Dec 2012, but most people fundamentally misunderstood it’s significance. They had such astonishing gifts in astronomy yet didn’t realise the significance of the wheel..Eric is a great juxtaposition to DMcW’s cuz he does all the wonky charts, but he’s also a great writer:

      “How did the doomers get 2012 so wrong? They spied the Mayan calendar and saw end-times December 21. Less credulous eyes saw the 13th Mayan Baktun, each Baktun lasting 144,000 days, ending on December 21. To the instant that end was followed by the 14th Baktun. This, the new and current Baktun that we are in, will end in another 394.3 years. Then another Baktun will start. On and on forever, as was the Mayan’s philosophy of time.Lesser doomsday scenarios also failed to materialize for the same reason: careless analysis…All of these salubrious trends, taken together, may not be enough to excite the animal spirits into speculative fervor but will be enough to lull investors into the kind of complacency that can later lead to bullish optimism and all of the errors of judgment entailed….”

      http://www.itulip.com/forums/showthread.php/24555-Hope-and-Fear-%C2%96-Part-I-Year-of-Promise-Eric-Janszen?p=248510

      I’m applying to do a Masters in Global Business Ethics at Birmingham University in preparation for becoming World Leader, no longer Pretend. Nothing can happen without a moral awakening, and it heartens me to see John Waters puts his considerable gifts as a writer to use on something other than mourning the loss of ‘traditional Catholic Ireland’, with seriously impressive results. B++ John! Well done!

      Energy. Ethics. Philosophy. The sophistries of the current economic priesthood are bankrupt, the temple is collapsing. I’ll add a new economic and energy paradigm to my ever-expanding ‘to-do’ list. I hope this has been a stimulating contribution to this fascinating thread. Bye now lads, [and the few women who hang out in this online salon]

      regards
      The Pope of Pop. And ‘economics’!

      http://www.irishtimes.com/business/economy/europe/bankers-coin-it-while-debt-burden-grows-1.1342279?page=1

  27. MidasMoney

    Hi David and all,

    Apropos you comments on possible haircuts on depositors, the old saying is instructive; “He who panics first, panics best!”

    As for what to invest in? Surely the answer is obvious? Why precious metals of course; tin(s) and lead, with the brass jacket.

    • bonbon

      Homeland Security ordered 3 BILLION rounds of full metal jacket recently and refuses to explain what use this must have.

      So rest assured, you will be taken care of!

  28. bonbon

    New Zealand Bank’s Computers Already Programmed to ‘Freeze’ Percentage of Deposits for Bail-in

    April 2, 2013 (EIRNS)–The Mont Pelerin Society purgatory New Zealand is so advanced on planning to steal deposits to prop up failed banks, that the computer systems of all NZ banks are already programmed to freeze a portion of deposits in a crisis. New Zealand’s so-called Open Bank Resolution system is explained in an article in the September 2011 issue of the Reserve Bank of New Zealand’s Bulletin, entitled “A primer on Open Bank Resolution”, by Kevin Hoskin and Ian Woolford. It reveals that OBR is not simply a proposal, but is already in place and ready to go.

  29. bonbon

    Cypriot Finance Minister Resigns

    April 2, 2013 (EIRNS)–No sooner had he finished selling Cyprus
    out to the European financial oligarchy, than Cypriot Finance
    Minister Michalis Sarris handed in his resignation, today. The
    reason he gave, was that he was one of the targets of the
    investigating commission tasked with looking into the island’s
    economic debacle. Prior to becoming Finance Minister, Sarris was
    chairman of Laiki bank (Cyprus People’s Bank), which was closed
    down at the expense of the depositors. He is to be replaced by
    Labor Minister Harris Georgiades.
    President Nicos Anastasiades accepted Sarris’s resignation.
    The President himself is accused by media of passing information
    to his relatives, who managed to withdraw EU21 million from their
    Cyprus bank accounts only days before the bail-in agreement went
    into effect.

    Sarris should have resigned for treason.

  30. cooldude

    According to financial expert Reggie Middleton AIB is in deep sheizer and could be the next Laki Bank.
    http://www.zerohedge.com/contributed/2013-04-03/dear-ireland-aib-havent-we-all-learned-problem-insolvency-not-liquidity-

  31. molly

    Can somebody explain how Germany has such a low unemployment rate compared to the rest of Europe ??

    • bonbon

      Lies. Simple.

    • molly

      Ireland can have full employment too…not sure how anyone would be able to pay their mortgage, but that’s just a hiccup along the way to being Germany’s BFF…i think anyone could make a business profitable with this malarkey, although slavery would be cheaper. Or robots! Germany. Kraftwerk. Robots. Wirschaftwudner redux! way to go Angie!

      “Insight: The dark side of Germany’s jobs miracle.

      Anja has been scrubbing floors and washing dishes for two euros an hour over the past six years. She is bewildered when she sees newspapers hailing Germany’s “job miracle.”

      http://www.reuters.com/article/2012/02/08/us-germany-jobs-idUSTRE8170P120120208

  32. bonbon

    Domino effect? BoE and FeD are now switching on plans laid months ago even as far back as Jun 2012.
    Bank of England Assumes Dictatorial Powers

    The game is to assert monetary diktat as they dismiss the old financial system. If we do not split the banks they will proceed. The consequences are unimaginable for most.

  33. bonbon

    Expect up to 80 percent in losses from future bail-ins

    3 Apr.(EIRNS) Bail-in legislation is underway for all of the EU, with member states’ approval planned by the end of 2013, and going into effect in early 2015 implementation. But bail-ins could occur long before, as the case of Cyprus shows.

    • Not to forget all the G-20 countries as well?
      Certainly Canada and new Zealand. I believe it to have been a G-20 resolution last December.

      • bonbon

        I posted on Canada and NZ in the last 2 themes.

        • Canada and New Zealand were posted before you got out of bed a few days ago. Also a considerable portion of your posts this thread were previously covered by others. You have covered GS to death in previous posts and so it would be really appreciated by most if you would just butt out and stop being so rude and arrogant.

    • Above by Jeff Neilson

      “Specifically, there is no possible basis (either in contract law or logic) where bank depositors should be expected to indemnify the reckless gambling of the banks in which they have stored their savings. There is a glaring and inexcusable fiction being pedaled by the mainstream media and our governments here: that bank shareholders (i.e bank investors) and bank depositors (i.e. savers) are somehow equivalent classes of Sheep to fleece in “bailing-in” the reckless gambling and gigantic losses produced by Western Big Banks. They are not.”

  34. Ditto for Ireland–Leave the Euro and implement a sound monetary system

    “Unfortunately, (Cyprus) is the predictable result of a fiat paper money system combined with fractional reserve banking. When governments and banks collude to monopolize the system so that they can create money out of thin air, the result is a business cycle that wreaks havoc on the economy. Pyramiding more and more loans on a tiny base of money will create an economic house of cards just waiting to collapse. The situation in Cyprus should be both a lesson and a warning to America. We need to end the Federal Reserve, stop propping the euro, and return to a sound monetary system.”

    -Ron Paul

  35. StephenKenny

    Just reminded by Pat Flannery’s comment – a very interesting speech given by Elizabeth Warren some years ago, on, essentially, the cost of living in the US:

    http://www.youtube.com/watch?v=akVL7QY0S8A

    • bonbon

      Warren has been disappointing of late :
      In a Feb. 9 interview with MassLive, Sen. Elizabeth Warren was asked “whether she still (as she did during her campaign) believes Glass-Steagall must be revived. Warren said, ‘Let’s see what happens with the Volcker Rule. If it is not adequate to get the job done, we need to think about a new version of Glass-Steagall.’” Warren defined the “job” as “completely separat[ing] commercial and investment banking” — something Obama’s personal invention, the so called “Volcker Rule,” does not even claim to do, as the Senator knows.

      Giving Dodd-Frank “time to work” is obviously silly – time has run out. This is the goat-like but-butting refusal to do the necessary.

  36. joe hack

    The economy has affected people’s health and caused some to commit suicide others are permanently ill while some claim disability yet the banks are been paid and no one is threatening to cut off their disability benefit .

    During the meanwhile the ghost estates remain empty while the state pays landlords rent allowances yet some are now advocating that these estates be knocked.

    When these estates are knocked down we will pay for the demolition and we will still pay rent allowances to landlords while continuing to dole out disability to the banks “money” which they magiced up to build the demolished would be- could be “homes” oh! And those who have not yet been born will pay too.

    To top it all off:
    The IMF says we can’t have health care but we can pay disability benefits to banks for “homes” that lay empty and which will likely confuse future archaeologists.

    • Superb post, Joe Hack. “socialism for the rich, capitalism for the poor”. Enda and his backbone-free jellyfish chums shiver in fear before their Troika/Bond Markets overlords, just like the last shower. Financial Stockholm Syndrome all over the world. This nonsense will end with a whimper from them when the big bang black hole implosion at the end of this 30 year orgy of risk-free gambling on other folk’s money ends. You hear a lot about the poor, feckless and insane draining the public purse from the bully-political class as a distraction hoping I won’t notice as they bend over to take it without lube from their bankster dungeon masters. To have serious politicians in a 50 Shades of Grey submissive humiliation situation is deeply demeaning to the foundational principles of the State. If you’re into that kind of thing (which I certainly am) then it’s for the bedroom, not Dáil Éireann and the House of Commons, Congress and so on. Nation States of the world! Rise up! You have nothing to lose but your chains and the tangerine in your mouth. And the tourniquet around your neck. And the bottle of poppers….

  37. http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/bail-in-debt-practical-implications.pdf

    Bail-in liabilities:
    Replacing public
    subsidy with
    private insurance
    July 2012

    Review by KPMG–cutting through complexity

    This is a proposal touting the bail-in system. It suggests that the depositor may require a higher return on the money deposited if they are liable to have funds seized to use as bank assets.
    No Kidding. Personally, I am convinced to never leave a penny in a bank if I can avoid it!!

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