April 8, 2013

IMF wakes up, smells the coffee

Posted in Sunday Business Post · 155 comments ·

Is it just me or do you also think there is something strange about the IMF writing reports criticising itself and trying to pass it off as objective commentary? Last week we saw the IMF, one leg of the troika’s rickety three-legged stool, saying that the Irish economy was not performing well under the policy that it, the IMF, was implementing. It stated that the level of unemployment was staggering. What is actually staggering is that they should be staggered – because this high level of unemployment is the result of IMF policy here.

The IMF’s indignation is a bit like the HSE issuing a report criticising the health service and stating it is staggered by queues at A&E.

This absurdist approach (in the sense that it amounts to nothing) to responsibility is made more, dare I say, absurdist by some sections of the media. For example, I was listening to RTE’s Morning Ireland programme where, quite seriously, the interviewers were taking this “report” at face value, asking other experts whether they “agreed with the IMF” rather than asking the obvious question, which is “does the “IMF agree with the IMF”?

It is Mr Beckett, Mr Camus and Ms Lagarde all wrapped into one.

Just so we make no mistake: the IMF is making policy in Ireland. The consequences – higher unemployment, lower growth and a shrinking domestic economy – are the direct result of these IMF policies. If the IMF is worried about the consequences of its own policy then shouldn’t it change it?

Part of me thinks that the IMF has realised that the entire thrust of its economic intervention in Ireland and Europe is unravelling and it is trying to mendaciously lay the groundwork for a tactical intellectual retreat. When it finally abandons its austerity folly it will point to these flimsy reports to claim: “look we were sceptical all along”. If you are shocked by my cynicism just remember that the iron rule of a bureaucracy or an organisation is to perpetuate itself and its power.

Therefore, the key thing for an organisation is to extend its prestige. Somewhere in this orgy of self-preservation the truth gets lost and the story changes to suit the new times.

So, with the IMF, last year’s conventional wisdom “austerity works” becomes, on the back of evidence that maybe this is not true, “austerity doesn’t always work”. This shifting position is a prelude for “austerity only works in certain conditions” and then we will have the complete volte-face. Yesterday’s conventional wisdom and hard-held positions become tomorrow’s folly.

With regard to conventional wisdom, we would be wise to remember the great American economist Galbraith who pointed out that conventional wisdom is rarely defeated by some brilliant countervailing idea which convinces people to change their views, but by the march of events.

In the IMF’s case, the events are the facts, which could have been pointed out by a Leaving Cert economics student: austerity doesn’t work when the banks are broken, interest rates are already low and the debt overhang is enormous.

For years this column has been arguing that we face what is termed a balance sheet recession where debts are so big that the balance sheets of the middle classes are ruined. On one side of the balance sheet there are assets, which have collapsed in value. Yet on the other side are liabilities or debts which are rising, thus the net worth of the middle classes has evaporated.

This means people save what they have. This bears down on the spending and therefore retail sales fall. Up until now the IMF and its pantomime sister the European Commission dismissed these balance sheet recession notions, preferring instead to peddle the notion that the recession was a function of too much government spending. In fact the opposite is the case – the explosion of government spending is the consequence, not the cause of the recession.

Check out the Pauline conversion of the IMF. This is what it is saying now, in a shameless arse-covering exercise. “Household debt remains high, curtailing consumption, and financial distress affects many households. The halving of house prices from their peak has driven a 38 per cent fall in household net worth, the largest fall in the EU.

“Households have responded by increasing their savings rate to about 12 per cent of gross disposable income, from pre-crisis levels below 8 per cent, with about three-quarters of saving used for debt reduction during 2010-12.”

So what do you think happens when savings rise by 4 per cent of GDP? Well clearly consumption falls by the same 4 per cent. And what happens when consumption falls 4 per cent? Well obviously income falls because when you think about it, your spending is my income and vice versa. If you stop spending, I am not earning and if I am not earning, I am not spending and you are not earning, so your income falls. And as income falls, debt burdens rise relative to income even if debts stay the same in absolute terms.

So here’s what the IMF is saying now. Surprise, surprise.

“Debt burdens of many households are much higher, and mortgage arrears over 90 days continue to mount, reaching 15.8 per cent of the total value of mortgages on principal dwellings and 26.9 per cent of buy-to-let mortgages by the end of 2012.”

Oh Lord what revelations! You seriously mean Mr IMF, that when incomes fall there will be debt problems? Wow! How many PhDs did you need to figure that out? Now who do you think will be most affected by the lack of domestic spending? Will it be the multinationals which we welcome but which employ relatively few people to whom the government constantly genuflects or the small businesses that employ the vast majority of us?

Of course it will be the small business sector, which accounts for about half of gross value added and 72 per cent of employment. So the IMF is now beginning to see what its policies are doing. The implication of the slump in growth is that the banks are now in danger of needing another bailout.

Now, if they need another bailout, where will the capital come from? This is where Cyprus comes in. What if the capital needs to be raised from depositors? Are we safe then?

The starting point from the EU is that the Cypriot deal was the “template”. Then the EU backtracked and stated it was a special case. I am not too sure which statement to believe.

However, given the way the IMF has changed its stance, a U-turn from the EU on deposits can’t be out of the question.

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  1. mogrady14

    Nearly 40% labour force on unemployment, one parent(not working),disability payment. This is what emerges from the Government’s 2011 Report on Social Welfare numbers.
    See report http://www.welfare.ie/en/downloads/statsa2011.pdf
    The number of recipients is here as follows:
    Total Widow(er) ,One-Parent families recipient (under age 66 yrs) 216508
    total illness disability recipient 243,416
    total jobseekers recipient 379,973
    total supplementary welfare recipient 34,597
    total number welfare recipients 874,494
    This does not include the unemployed people’s dependants- e.g. unemployed spouses. http://www.welfare.ie/en/downloads/statsa2011.pdf
    See page 30 of this report for the table where I got these figures

    This is scandalous. In the Irish labour force it is nearly as common to be on social welfare as working. Kinda sad nobody in the Government/Civil Service noticed.

    • irishminx

      I noticed, trust me on this. My job has become really tough and it was a hard job to start with! That figure you gave for those on Supplementary Welfare Allowance, I bet that figure of 34,597 doesn’t take into account those on various supplements, like rent, mortgage, diet, heat and many others. Nor would it take into account the Emergency needs payments that are made daily. For example the amount of Gas & ESB bills that are being paid, to families who can no long afford to pay them off in full, due to the high cost of both and the decrease in welfare assistance to Irish families and still the Troika want more cuts!! B******s

  2. mogrady14

    Two further points: I am having trouble accessing http://www.welfare.ie now. Is there a problem with the site?

    I omitted all those on Labour Activation schemes e.g. Jobbridge, CE Schemes, Fas courses.

  3. John.Finnan

    Everyone who has money in the banks right now, needs to be worried about the Cypriot solution.

    Unless the amount you have in the bank is earning more than the potentially 30% you’d lose by such a solution, or the penalties for getting your cash out of the bank amount to more than 30%, then it simply makes sense to get your cash out now, before they take 30% of it without your say so.

    Would this cause a run on the banks? Well, yeah, if everyone did it. But let’s face it, the Irish people are dumb and gullible, so they will for the most part, leave their money (what little they still have) in the hands of these crooks.

    But you, dear reader, should think long and hard about it. But not too long.

  4. Howya

    The sooner we get out from the Troika deal and go back directly to the IMF for bailout 2, the better. There is a better chance of getting a debt write down from the IMF than from the EU.

  5. Dog Bites Tail …or can he ?

    Our Irish Minister cannot bite his tail and the sooner someone tells him that the sooner he will realise he must get out of that spin he has been playing under the baton of Legarde Troika & Co .

    The bureaucracy perpetuating its power over us is ‘ENARCHY’ ie the aluminae of Ecole National Admisistrif of which Legard and all her henchmen carry out their pornagraphic economics on the Irish .

    How often have they watched our Minister pee down his pants into his socks .You will never be told for within the chambers of Les Aluminae the Knights revel in their glory and it is they that control ‘ the march of events’.

  6. conor

    Hi david,
    Excellent article. “there is no so blind as those who will not see” would appear to be a perfect fit for the IMF.


  7. drrkpd

    I have read your articles for years and this is my first comment. How could the combined brains of Europe and the IMF really get this so wrong and try and get out of a recession by creating more recession.?The emigrants from Ireland are not just 20- I am not alone in leaving close to retirement and I will not be the last
    Why do people speak of “low interest rates” – yes low for mortgages as tracked to ECB but my Overdraft rate to PTSB is 14.4% and higher if I go over my limit. My personal loan is over 10% and I have no idea of my credit card rate as I have stopped using it but it bears no
    resemblance to ECB rate.
    Why not write an article about how the banks are still ripping off the ordinary customers with these penal rates??? How do they expect people to repay mortgages when they have such high other debts to the banks?? And do the government wish to return to the poor houses with a Dickensian-style Personal Insolvency Arrangement??

    • gizzy

      The Banks now have no option but to rip off their ever shrinking customer base. They are not viable and are flailing around for survival. There are no overseas income streams, no cross selling, no significant new lendings so they do the only thing they have left increase interest for their existing customer base. It is not sustainable. They are not viable

  8. Adam Byrne


  9. onq

    Great to see your return to form David. Worth posting the link to this all over Facebook, Twitter, LinkedIn and Google+

  10. irishminx

    I am so cross with the Troika/Irish Government/Banking sector et al, they are so corrupt that ordinary decent Irish people cannot see that they are screwing us right, left and center! I have no doubt they will come after our savings. See this………


    And I quote………..

    “The CEO of Unicredit Federico Ghizzoni said yesterday that it is “acceptable to confiscate savings to save banks.” He said that the savings which are not guaranteed by any protection or insurance could be used in the future to contribute to the rescue of banks who fail and that uninsured deposits could be used in future bank failures provided global policy makers agree on a common approach”.


  11. You’re so right. The IMF’s main reason for existence is to bring countries round to the type of economy recommended by Milton Friedman, Maggie Thatcher etc. whereby they should privatise everything, sack as many civil servants as possible, reduce the salaries of the remainder and in the process have the multinational vultures pick over the bones for any profit to be made. Maggie said “there is no such thing as society” so why would the IMF worry about unemployment except to shed crocodile tears.

    • nothing to do with Milton friedman or Thatcher.
      All to do with the aim for world domination of the eletes who control the current banking system. They just love it when we fight among ourselves and obscure this basic fact.



  13. cooldude

    Good article David. Deposits are now definitely in play and are now viewed as a source of funds to keep the banks afloat. In Cyprus the situation for depositors is actually worse than has been reported. For those with over 100,000 they have lost roughly 20%, had another roughly 20% converted into bank stock which is now of very low value if you can sell it, and have the remaining roughly 60% paying low interest but not able to be withdrawn and no idea when it will be. For those with under 100,000 the max that can be withdrawn is 300 a day and again no idea when this will change.
    This is definitely the “template” to be used not just here but all across the western banking world. The motto from now on has to be “caveat depositor.” To think it can’t happen here is simply ignoring the new reality although many people will simply choose this route.
    Here is Reggie Middleton having a look at Irish banks and he doesn’t like what he is seeing.


    • Grey Fox

      Reggie Middleton is spot on! and could go a lot further…
      Can we rephrase “Caveat Depositor” and replace all references to depositor’s with “Lender’s” ? for that is essentially what a depositor is….

      • cooldude

        You are correct. As soon as money is deposited with a bank it becomes the property of the bank. Until now it was general policy to pay this money back on demand but the new “template” is the bank can and will do whatever it wants with “it’s” money. Under fractional reserve banking all banks rely on trust and now that this trust is being openly reneged upon they will come under strain very quickly and the “bail in” solution will spread quite quickly.
        Italy and Spain look very likely candidates to be next although we won’t be far behind. The 100,000 thing is just really a smokescreen to try to pretend this is somehow justified but the capital controls mean that these savers will not be able to access what they thought was their money. If you think it will never happen here get ready for a shock. This is for real.

        • Now Paul Ferguson maintains this stolen money disappears.
          It seems to me that it is correct that a deposit technically becomes the property of the bank. The depositor merely has a paper claim as you indicated for a similar amount plus any interest payment agreed upon.
          In this way the deposit is now an asset of the bank and part of the bank reserves.
          If this is correct, the stealing of the deposit is simply a way for the bank to stop the diminishment of reserves as it does not actually add to the bank assets.
          So although the depositor may see their savings disappear the money still exists as it it still in the hands of the bank.
          Only if the bank uses the money to pay off a debt would the money no longer exist.

          I hope I have this right but please correct me otherwise.

          If one wonders why few understand the fiat money system it is because it seems to be, and in a way is, smoke and mirrors lacking substance.

          • Hi Tony,

            I think I see the source of the confusion. When I think of money I now think of the accounting entry i.e. bank balances, as opposed to cash.

            But you’re right that if you deposited cash with a bank the cash is considered an asset of the banks and your bank account will record the corresponding liability which the bank has to you.

            If the bank goes bust then the cash still exists as an asset of the banks and the creditors would be paid from this cash in turn.

            However, only 3% of euros exist as cash. The other 97% exist as the banks’ liabilities which are the sum total of our bank accounts and there’s no way that the 3% could lead to the ‘deposits’ which form the other 97%.

            As you know most of these ‘deposits’ originate from the banks ‘lending’ money to borrowers. They type a new balance for the borrower as if the borrower has deposited cash. Hence the bank gains a liability. They record the borrower’s debt as their asset.

            We use the banks’ liabilities directly as money for over 99.9% of transactions by value.

            In the case of the Cypriot levy on deposits the banks would lower their liabilities to customers and lower their ‘Bad debts’ account. Two accounting entries would decrease and the money that was recorded in people’s accounts won’t exist anymore.

          • True , the money disappears from the depositors account but it still exists as an asset of the bank.
            And the bank does not have to lower the amount in the bad debt file as any bad debt is not affected by this manouver.
            Net result is depositor looses the results of past work and effort accrued as represented by the savings(currency)while the bank retains the asset.
            In many cases this would mean the depositor has been robbed of the fruits of a lifetime of labour.
            Sounds like forced slavery to me when we set aside the numbers and see what the figures represent.
            The bankers will reduce us all to economic serfs.

  14. dwalsh

    Good article David.

    I think it is likely that this IMF report and the media presentation is setting the stage for the Cyprus model to be applied here.
    Very soon there will be articles from elite shills about a possible ‘bail-in’ being absolutely necessary.
    Eventually there will be an announcement that regretably they have to confiscate some part of our deposits and savings in our banks.

    That is where this is going. The Cyprus model will be applied here.

  15. redriversix

    This,I believe is the I.M.F / World Bank plan all along……look at the failure rate of the I.M.F & World Bank in “projects” they have been involved in before…it is staggering.

    Third World Countries.

    I.M.F offers “loan” of money.

    Money used to “improve infrastructure and utilize natural resources.

    International Contractors brought in to “win contracts”

    Governments use I.M.F “loan” to pay contractors

    Country gets deeper in debt while “contractors” take a percentage of Resources,Oil,Gas,Water,power,Forestry & mining.

    Easy Money keeps flowing to Government,top 1% get rich while the rest of the country becomes poorer.

    Eventually so much debt ,Country cannot pay…I.M.F says “don’t worry about we will take a bigger percentage of your resources in lieu of payment”

    Then Country is offered security to improve stability.

    Check out “afri-com”.

    Iraq,Libya and Afghanistan had no dealings with I.M.F.

    Iraq has massive Oil reserves..U.S tried to get Saddam to “play ball” with them for 10 years..Saddam told the U.S & I.M.F TO GET LOST.
    Saddam begins trading Oil in euros instead of dollars.

    U.S brings democracy to Iraq.

    Saddam was a scum-bag but he was Americas scumbag.

    Gaddafi was a dictator , but was forgiven by U.S & Britain.

    “Alleged Libyan Lockerbie Bomber” freed on compassionate grounds when ,at the same time ,large international Oil Company wins contract to drill for Oil…….So far.so good..?

    Gaddafi announces plans for Libyan/pan-African Central Bank & to trade Oil in African gold Dinars..!

    Libya invaded..Gaddafi killed.

    Don,t need to remind anyone regarding Afghanistan,but do your own research and see exactly how much Gas etc is in Afghanistan.It is a very wealthy Country.

    How much is Ireland Inc worth ?

    What are our Natural Resources..?

    Do some research,the above is not a conspiracy theory..it is fact.
    It has been going on for years, Eisenhower in 53 even warned about the growing threat from the “Military industrial Complex” being one of the greatest threats to the U.S.

    Banks & Banking are right at the coal face of all these military/Financial decisions and if you think that this is bullshit and
    if you think that the present plays by the I.M.F are solely for the good of this Country…you are sorely mistaken.

    China uses money to gain access to Countries Natural resources…America uses the promise of security and stability along with Democracy to gain access.

    Like the war on Terror their will be no end to this Financial War as their is no incentive to end it and too much money to be made….as for people….we don’t matter….”they will do what Government tells them to do”…so much easier when you have a dumbed down society who are too worried about debt and surviving than challenging the Status quo.

    Great article David..

    Have a great day all and remember to put yourself first…hard to look after anyone else if you are unable to look after yourself…..!

    • irishminx

      I read this not realising who wrote it and then thought it sounded familiar :)) Hi B, hope you and yours are well? Thank you for the welcome x

    • cdivision

      You sum it up pretty well. Eisenhower appeared to wise up to them late on, Kennedy saw what was going on also but didnt survive long enough to really challenge them. Consistently since then we’ve seen US administrations fall further and further under the control of the military/industrial/financial cabal. Atomic bombs dropped unnecessarily on Japan….Cold war exacerbated and prolonged by US arrogance and belligerence, and very nearly wiped us all out in 1962… freely elected governments overthrown all over the world to protect US interests…4 million killed in Vietnam/Cambodia… agent orange, depleted uranium, enough nukes to destroy the world many times over. Over half a million killed in Iraq. For what exactly? Democracy and freedom? Our security? Or could it be that we are now ruled and controlled by some of the worst among us, whose insatiable lust for power and wealth sets them against the common good, and the very survival of the planet. Sometimes the hardest thing to see is the elephant in the room.

      • redriversix

        Thank you Cdivision..

        from your post I deduct you have quite a grasp of real history and real goals of the Elite cabal who are intent on bringing about a new draconian way of life for the many ordinary people of this Blue planet.

        We witnessed the fall of communism…now we live through the collapse of Democracy.

        Best of Luck for the future


        • cdivision

          and to you Barry.

        • MidasMoney

          Hi Red,

          We are not living through the collapse of Democracy. Our democracy is an illusion. We are living in an Oligarchy. Not specifically an Irish one; these boys are global, operating out of USSA and UK principally. For more colour on this, read this article by Catherine Austin Fitts; http://www.dunwalke.com/

          She really has the skinny on how Crime Inc has taken over government. As Mike Ruppert said, the Third Reich didn’t end, it just changed venue. The whole Ponzi is approaching its high noon, as the BRICS position to ditch treasuries and the dollar;

          You can’t build a house on sand, and you can’t build an economy on crime and fraud, nor on too big to fail and too big to jail. The criminals have taken over and they have hollowed out many western nations. This SPIRALLING DEPRESSION we are in, aka “the great recession” is not being addressed because to do so, our political servants would have to resolve the insolvent global ponzi banks. The problem is, our political “servants”, don’t actually serve us. They serve the international power elite, of which the banks are perhaps the greatest destroyers, and subversives of democracy through pimping politicians. Brace yourselves, the fall will be staggering and when it reaches bottom, if we haven’t destroyed ourselves in a new world war, the power will have shifted East, and the Western hegemony will be at an end.

          • redriversix

            Morning Midas

            Spot on Midas..!

            I type “We are witnessing the fall of Democracy” so as not to “startle” the every day readers of this blog.

            I believe Democracy to be long dead…too many examples to go in to here,but I agree with you fully.

            False flag operations….

            Nazi’s helped to escape by the Vatican after WW11.

            German SS units taken in by the French Foreign Legion after WW11 and used to great effect in IndoChina.

            Nazi scientists whisked away to the U.S before the Soviets could get them.

            The fourth Reich is alive in some powerful minds.

            Question;”How many N.A.T.O /U.N troops were killed in Rwanda in the early nineties..?

            Answer; Zero

            Why; ? The only export Rwanda had was Asthma..!!

            Have a great day


    • Good shooting RR^
      a bulls eye with every shot.
      You are a champion marksman on the points above.

      All policies are designed to destroy the western industrial democracies by all means. Social policies, as well as monetary and financial policies.

      I see it , feel it and smell it. It is particularly odourous since the 1970′s

    • dwalsh

      Absolutely right. None of this is accidental.

  16. michaelcoughlan


    A number of different thoughts crossed my mind when I read this article in the SBP so let me start with the first which is;

    I am staggered that you are staggered that they are staggered! It’s almost like David McWilliams doesn’t trust or believe David McWilliams. For so long you have been consistently accurate and now that the whole thing is panning out more or less as foretold by you, you are staggered? Last year you used the words “I am 100% certain” that this whole ECB/EMF/Troika nonsense will be a failure and now that it is unravelling you are staggered? Very Bizarre David. A report some months ago said that for every €100 cut we do €150 worth of damage to the economy and no one bats an eyelid.

    Next thought.

    The article starts off benign enough but becomes increasingly angry. It’s almost like you are getting really fuc*ed off (having once again being proved accurate) that the frustrations of not being taken seriously is driving you barmy. Well guess what? No one in the establishment takes you seriously. That’s your greatest badge of honour. They don’t take Prof. Kelly seriously either. He like you has been consistently accurate and said that Prof Honohan has made the greatest error ever made by an Irish Civil servant in his approach to the whole debacle. Prof Kelly has said that we must ring the ECB take out the eraser and where it says creditor on the various documents write owner. Problem solved. Will that happen? No. It won’t.

    Next thought;

    The idiosyncratic image came into my mine of a floppy haired economist leaving the shower and reaching for his underpants to realise that they no longer fit. It’s not the middle age spread causing the problem however. The floppy haired economist lost his politically virginity last year and this year he is starting to grow a pair. Hence the need for bigger underpants. I deduct this from the fact that your commentary is increasingly pointed and angry, THANK GOD. You were goaded last week David by Pat Flannery into giving a response to what should in actual fact be done and you went off on a solo run about what a hedge fund manager would do in the circumstances. I implored you to give your thoughts as to what an ordinary citizen should do and you didn’t respond. I don’t know why; maybe you sense the threat of a backlash from somewhere so it appears the time isn’t quite right for new underpants.

    Final Thought.

    We live in a financial tyranny where our political establishment has abandoned us and our kids to our fate. It’s not a place we haven’t been before. In fact it has defined us as a race from centuries of Imperialism to decades of self miss-rule we never have been able to believe that the people who rule us have anything other than their own agenda to serve. With regard to your article David let me make you aware of what none other than George Soros himself thinks of the whole thing writing in his book “The credit Crisis of 2008”. It’s in the section called “Setting the Stage” just after the introduction and just before chapter 1. It’s the second last paragraph on page no. XXIV. I am quoting verbatim;

    “One cannot escape the conclusion that both the financial authorities and market participants harbour fundamental misconceptions about the way financial markets function. These misconceptions have manifested themselves not only in a failure to understand what is going on; they have given rise to the excesses which are at the root of the current market turmoil.”

    I sincerely hope this post helps in some way.



    • cooldude

      Michael George Soros is just another elite scumbag. As a child he betrayed his own people and acted for the nazi’s helping them identify Jews. As a speculator he is deeply connected with the elite banking set and is a frequent bilderburg attender and is involved in other elite organizations such as the council for foreign relations. His so called success is just using his insider knowledge of how the system works to profit from it. Never created one thing in his low life. The root of the “current market turmoil” is the banking system and it’s exclusive franchise on the creation and misuse of the debt based fiat money we are forced to use in our daily transactions. This guy just profits from being an insider at our expense. Now Steve Jobs was a man who had a vision and brought his vision to reality for the benefit of his fellow man. Quote from people like him and not elite insider scum like Soros.

    • dwalsh

      What a stange creature Soros is. He admits the global financial system is criminal and destructive; and continues to take advantage of it and commit crimes daily. It’s like he has a split personality; one half being a sociopathic predator and the other a guilty conscience.

    • The silent rage is so palpable you could slice it with a blade.
      They stitched up the working classed decades ago and now the middle classes are getting humped

      They are coming back and it’s middle class asses in the bacon slicer now. This tells is that there is someone up there after all

      Now the thick middle classes are beginning to realise where there pensions come from

      You can have your pensions or contribute to your grand children’s future cancer by turning a blind eye

      It’s a simple call

  17. michaelcoughlan


    I think I got this from a previous so it may belong to another poster if so thanks. It really is a very good piece of work.

    The banker’s guide to owning it all;

    1. Become majority lender in an economy of people with assets you want.

    2. Encourage indebtedness by loaning generously while securing on assets of interest.

    3. Loosen lending standards until the assets you seek to capture are attached.

    (this makes the economy debt dependent)

    4. Once debts are significant for the bulk of the population, sharply tighten lending standards. <– Economic shock – Onset of deflation

    5. Backstop losses with public guarantees if possible. This is gravy if one can get it.
    (Fannie and Freddie guarantees, for example)

    6. Permit default 'without risk' on the assets you wish to seize to maximize wealth transfer.
    (Stall foreclosure, stay repossession orders etc.)

    7. Stall the economy to maximize default positions and deplete private liquidity. <– We are here

    8. Successively ratchet the economy downhill, while bettering secured positions.

    9. In a series of large actions, seize all security for default. Target the assets of greatest interest first.
    (This deals a heavy economic blow and can help cause the ratcheting required for step 8.)

    10. Transfer asset ownership, but retain prior owners as renters where possible.

    (This reduces public lashback and helps maintain the asset for resale)
    11. Once the bulk of assets of transferred, write them down to leverage the public financial backstop.

    12. Buy up as many remaining assets on the cheap as possible. Hide this action.

    13. Hyper inflate to destroy the external claims on wealth. <– Onset of hyperinflation
    (This destroys treasuries, gov't bonds, currency. Ensures free title on new assets. May cause war.)

    14. Stabilize the currency or devise a new one, resume lending at a reasonable pace. Sell the assets back, secured of course, at your chosen price in new currency.

    Hyperinflation is only a risk to the wealthy if the population has the assets.

    Make note of that statement. It is key to timing the shift from deflation to hyperinflation.

  18. redriversix

    On another point…

    Your bank accounts will have a further levy placed on it…which is , of course… theft.

    Government will continue attempts to marginalise & criminalise the unemployed,poor & sick and portray us as a drain on society which in turn will create further social divide.

    Banks will need a further bailout..probably around 20 billion..Ireland is still in recession , unemployment still growing…

    No sign of Recovery not now & not while present policies are in place.

    So..look after yourself and don’t wait for someone to help you..be prepared and know where you stand.

  19. redriversix

    Just a few poinst regarding the large number of Irish directors of off-shore companies.

    It must be realized that Dublin’s IFSC (International Financial Services Centre) is one of the largest “Tax Havens” in the world. Most of the “directors” mentioned are actually “straw men”. I.E. part of the professional service offered through the IFSC. The following is an excerpt from the CIA Worldbook on the Irish economy:

    Debt – external:

    $2.352 trillion (30 September 2011)
    country comparison to the world: 9
    $2.283 trillion (31 December 2010)

    Yes believe it or not 2.353 Trillion Dollars are “managed” there.

    To further explain this situation I attach an article for your perusal.

    This is the tragedy that is the Euro. As in Cyprus these “centres” have been allowed develop with the full knowledge of Berlin yet they take no responsibility. Should Dublin’s IFSC “go down” the way of Cyprus it will take London with it because they are joined at the hip. John what we are seeing here is a full scale economic war and I am astonished at the speed of “developments”.

    In addition I attach two brief published articles of mine written many years ago.

    How the IFSC ‘HQ’ became shadow of its intended self
    Financial centres such as the IFSC formed a major part of the “shadow banking sector”, which has been blamed for the current crisis. Photograph: Bryan O’Brien
    OPINION: Study of 46 treasury management firms at the IFSC found that 39 reported no fixed assets and that median employment was zero, writes JIM STEWART
    RECENT DISCLOSURES in The Irish Times (Carl O’Brien, “More global firms moving here for tax reasons”) have again drawn attention to several “tax-haven” type features of the Irish economy. These are: effective tax rates which are likely to be lower than the nominal 12.5 per cent rate; ease of incorporation; and “light touch” regulation. Light touch regulation was once seen as a key aspect of Irish economic policy. Former EU commissioner Charlie McCreevy said in New York in 2005: “As finance minister in Ireland I saw what great entrepreneurial energies that a ‘light touch’ regulatory system can unleash.”
    What is perhaps less well known is that, by law, the financial regulator was required to promote the development of the financial services industry. Considerable resources were devoted by the regulator to “meeting and greeting” prospective regulated entities – instead of to the overriding need for adequate regulation. Aspects of this policy have now changed, particularly in regard to regulation. But the broad thrust of economic policy remains the same.

    The most recent Finance Act (2010) widened some tax reliefs and introduced several more of direct benefit to multinational companies and to firms in the financial services area. The cost of several of these changes have been described in a Department of Finance Report on Tax Expenditures as low or minimal; the cost to other exchequers is not quantified, while employment gains are either not identified or are vague. One of the changes was stated to make Ireland more attractive as a location of “head office” operations. Costs are estimated to be minimal and no employment gains are identified.
    The Guardian reported in February 2009 that the “head office of several firms who claimed to have moved to Dublin, were either empty or the office of accountants”. My study of 46 treasury management firms of the over 400 located at the IFSC found that 39 reported no fixed assets, median employment was zero, yet they were highly profitable and had median financial assets of €643 million. This is likely to be a feature of many IFSC type activities – large assets but minimal employment. Total foreign investment in Ireland in 2008 amounted to €2,300 billion. The IFSC accounted for 72 per cent of this. This is over 13 times the size of foreign direct investment and approximately 11 times GNP.

    Another aspect of Ireland’s tax-haven type features – light touch regulation – has led to other difficulties. Financial centres such as the IFSC formed a major part of what has been called the “shadow banking sector”. Paul Volcker and others have argued the growth of this sector is a major cause of the current crisis. The “shadow banking” system consists of non-bank financial institutions such as securitised investment vehicles and hedge funds that borrow short term and lend long term. The IFSC is a major centre for administering hedge and other funds in Europe. In 2008, 8,000 funds were located in the IFSC, with €1,560 billion of assets. Yet the Irish financial regulator has been quoted as saying in 2007 that the Irish regulator had no responsibility for entities whose main business is raising and investing in funds based on subprime lending. These financial institutions are subject to risk and uncertainty. One source of risk arises from liquidity but in contrast to banks, non-bank financial firms did not have access to central bank lending facilities but relied on interbank lending for liquidity and as a source of funding. Once this market collapsed, those financial firms dependent on the inter-bank market as a source of funds either found that the cost of funds increased dramatically or were unable to raise funds at any price.
    Part of the attraction to managing hedge funds from the IFSC is that the regulatory requirement of a stock market quotation can be met. The Irish Stock Exchange states that the exchange has “standards of regulation to stockbrokers and listed companies which are acknowledged to be among the highest in Europe”, and as a result the exchange is recognised as an appropriate regulator from “the market authorities in many jurisdictions including Japan and the United States”.

    In spite of these stated high standards, many of the funds that have collapsed in value because of liquidity difficulties are listed on the Irish Stock Exchange. The collapse of the subprime market in turn led to large losses at subsidiaries of two German landesbanks (Sachsen Bank and WestLB) as well as IKB, located in the IFSC. The largest and potentially most serious losses occurred at Depfa Bank, an Irish-registered bank located in the IFSC which became a subsidiary of Hypo Real Estate in 2007. Losses at these banks required large amounts of state aid from the German government. It has been reported to have led to a request from the German government to the Irish Government to assist in the bailout of Depfa Bank.

    Hedge funds quoted in Dublin are often managed in London, some administrative functions may be performed in Dublin but domiciled in a tax haven/low-tax regime. All three funds announcing a closure on one day (March 18th, 2009) were managed in London, quoted in Dublin but domiciled in a tax haven. Lansdowne Partners had seven funds consisting of 148 sub funds quoted in Dublin and all but one were domiciled in the Cayman Islands. Rab Capital had seven funds and 23 subfunds quoted in Dublin, 19 were domiciled in the Cayman Islands, three in the Isle of Man, and one in the British Virgin Islands. New Star had three main funds and eight subfunds quoted in Dublin and all were domiciled in Bermuda.

    While Ireland and other countries may oppose moves towards tax harmonisation, it is likely that at EU level, a limited form of corporate tax harmonisation or tax co-ordination will be introduced. It is also likely that intra-firm financial flows will be subject to greater scrutiny. EU bodies will be far more active in financial regulation.

    Many EU countries have announced reductions in corporate tax rates. In Germany corporate tax rates will be reduced from 39 to 30 per cent in 2008, and in France it is proposed to reduced corporate tax rates from 33 to 25 per cent. General reductions in corporate tax rates reduce the relative attractiveness of low-tax centres especially if it is the case, as in the UK, that effective tax rates are lower than nominal tax rates. It leads to policies (as in Ireland) to enhance fiscal incentives by, for example, allowing unused tax credits to be refunded in cash, thus narrowing the tax base further.
    In the short term, changes in tax regimes raise issues for economies dependent on financial centres or low-tax regimes as a key component of economic strategy. But longer term, tax-haven type activities are unlikely to provide a basis for a diverse, skill-based economy. Such activities may attract an increasing share of resources in terms of talented individuals working on tax and regulation avoidance activities and in terms of State agencies and legislators ensuring tax and other legislation facilitates the operation of low-tax, low-regulation type activities. Such legislation may in turn unintentionally diffuse to the wider economy.
    As a result of the economic and financial crisis, a new political economy is emerging within the EU. Competition for investment via low tax rates and light touch regulation may no longer be an option.


    • Puschkin the Black and White Cat

      Very good , enjoyed that.

      During a debate in our local pub last Sunday, I described Intel’s operation in Ireland as “Box Packing” while dressed in Star Track theater costumes.

      Laughed when I saw Eddie O’Conners extimates of 40,000 jobs in the “Midland Wind Farms” could be actually 2,000 over 6 years , if and it’s a huge if, it happens. The 40,000 was intened (I think) to include all jobs of which 2,000 would be Irish jobs.

      Check out Irish Times today (link below). The name Michael Mouse comes to this cats mind.

      See this and laugh till you cry:


    • joe hack

      Very good Micheal,

      Most of that money is now part our Debts; was is it Berlins job to oversee our economy was it not Ireland’s creative accountant Bertie who was part master mind behind the IFSC following the inspiration set by Thatcher(1981 onward I remember waking through those derelict landscapes later I worked on the fist major building at the IFSC in 1990 i still wonder what they make there that is of use) – we now produce less hardware than ever ie we make nothing worth buying.

      David posted a chart from the BBC (a year or so ago) which showed how much that is our debt. 390,000.00 euro per person


      If Germany had told us we can’t there would be cry’s of Germany the dictator as is the case now.

      The west exported manufacturing during the Reagan and Thatcher era now that expertise is lost but we have accountants adding the debts. they broke the unions and broke manufacturing in search of cheap exploitative slave labour in the east. but we still have accountants adding the debts.

      Ireland needs to learn to be responsible for itself

  20. Beaver

    A fine piece of spleen venting. Feeling better now David?

    ECB apparently planning to lower interest rate next month despite the fact that it doesnt make the banks lend. Here it will further weaken the banks because half their mortgages are trackers on which they are making a loss. Let the IMF figure that one out. The banks or the borrowers? – Draghis choice…

  21. [...] light of that, this piece by David McWilliams on the IMF coming out against its own policies is [...]

  22. CitizenWhy

    Huge unemployment and increased poverty are the results of IMF policy everywhere. Impoverishing people to benefit a few elite families and banks is what the IMF exists for. Sometimes it encourages environmental degradation for a wee portion of its debts to be paid. The debt never ends.

    Read “Confessions of An Economic Hitman” by John Perkins if you really want to know what the IMF and the World Bank do. It’s available on the web as downloadable pdf.

  23. 5Fingers

    Who are all these guys with over 100K in the bank? Indeed, who are all these guys with much more than perhaps savings to allow buying winter fuel, school books etc. etc. They can rifle my bank account all they like and are entitled to keep what they find. The people who are all hot and bothered about depositors savings must be extraordinary wealthy – top 5% of the people in this country in fact.

    If a deposit is a fund – a multi billion/ trillion one what’s wrong with skimming a few bob off that? Are we all to become indignant suddenly.

    On the IMF report, what is evident is an internal row is breaking out. It was all right when the IMF were screwing up in 2nd and 3rd world countries. After all is was an Anglo Saxon WASP organization dealing with bushmen (yes, I do think the whole thing was racially and culturally biased). No one cared. But now that they are supporting 1st world economies (how Ireland got that badge needs questioning by the way!). Maybe internally, they have become a tad too international and racially exotic and detached from their former roots – lines may get redrawn again.

    I see it very simply. In our rush for PC driven global tolerance and good will to all we have embraced the multi-cultural/ etnic thing in such a huge hurry without realising the massive incompatibities in our value systems and our sense what what is fair play or what is legal. This has started to disrupt a whole series of social contracts in the 1st world and the smart alecs are cashing in big time with no care for the consequences.

    The backlash is starting and I think the IMF internal wrangles are just a symptom of it. We will shortly see same in Europe and it’ll make the Democrat/Republican bipartisan rows look like storm in a teacup.

  24. CitizenWhy

    We live under Neo-Liberalism. Western democracies were founded tom protect the ownership classes (merchants, plantation owners). That’s what liberal means, the protection of the ownership classes, that is, the owners of large assets.

    Under nNo-Liberalism the highest moral obligation is to maximize shareholder value, that is, reward investors, the most cherished of the ownership class.

    Aside from criminal justice, our legal system exists to protect and advance the sacred rights of large property holders: the big owners of the means of production, the big owners of land, the big owners of physical resources such as energy, the big banks, and the big owners of financial assets. That’s what liberal democracy means: the dictatorship of owners, with some civil and justice rights thrown in.

    Liberalism = little or no government interference with private ownership, including ownership of people (slaves, migrant workers, wage slaves, debt slaves).

    Neo-Liberalism: the same as liberalism but with everything privatized, that is, all the functions normally performed by government. The IMF specifically is chartered to advance and enforce Leo-Liberalism.

    Liberty/Freedom = ownership

    Pursuit of happiness = acquiring ownership

    Equality = Freedom from government interference, the right to sell your labor

    Democracy was founded by a merchant/plantation class to serve their interests. The democracy created by these classes that has quickly evolved into a corporate plutocracy.

    So don’t complain that democratic values are being eroded, or that corporations are betraying what democracy was founded for.

  25. gizzy

    None of it is surprising. I’m not sure its a conspiracy ( I may be naive) but just the centuries old mix of greed, stupidity and moral bankruptcy. Barry your info is fascinating.

    (Note any journalist going to investigate how many politicians got loans from Irish Nationwide that will disappear with liquidation. I heard a prominent Fine Gael TD had a ten year interest only loan from them.)

    • redriversix

      Hi Gizzy

      I wish it was a conspiracy theory…perhaps my conclusions are incorrect ?….I sometimes wish I took up stamp-collecting instead of Military History and Modern History.!!!!.but alas I cannot turn back the clock.

      However…information,both positive and negative is of vital importance to people so they can make positive decisions regarding their choices in protecting themselves and their Families.So negatives can be made positive by people being informed of the real state of the economy and making proper decisions based on fact rather than hope.

      But I endeavor to remain positive,one day at a time..!

      Gizzy,if you have time lookup some History times in our lives..i.e. “Gulf of Tonkin” incident which led to LBJ escalating the Vietnam WAR..”the Chicago boys” etc etc..you will be surprised what you find especially about the World Bank and their track record in “investing” in “third” world projects….projects which have a failure rate as high as 80%..!!!

      Have a great evening


  26. David,

    It’s great when after arguing a point someone influential writes about it so well done that you now have the IMF supporting what your column has argued for a long time.

    With this in mind I hope one day you may acknowledge that there’s less money during a recession because money is canceled out of existence through loan repayments. Under ‘normal’ circumstances banks may create money through loan to replace that which they delete through repayments. However during today’s recession loan repayments are greater than new loans and that’s why there’s less money in circulation today.

    I take you point that people save rather than spend but the destruction of money is obviously a hugely significant detail. Perhaps you’ll write about it next time.

  27. Talking about the IMF as if they have made a mistake in policy that they now wish to correct implies the controlers of the IMF are not very bright. It is blatantly obvious to the great unwashed that the IMF enforces policies of destruction.


    It is time to recognise that anything to do with the modern (last 300 years or more, since the formation of the Bank of England) banking system enacts deliberate policy to impoverish the majority to the benefit of the banking eletes.

    The total system of control is wrapped in the paper parcel of the fiat debt based money system. We have reached debt suffocation and all our assets are being stripped from us before our unbelieving eyes.

    None of these organisations, the IMF, BIS, any central bank, and all the offshoots and foundations and educational establishments funded are for the benefit of any people anywhere except the money masters, the elete banksters, the handful of controling families who want it all.

    We are the stupid ones who refuse to see this and acknowledge what is happening.

    Wake up, It is all deliberate policy, not a mistake in sight. The truth is staring at us in high beam. We are the rabbits frozen to inaction and being run down and blinded by this simple fact.

    • CitizenWhy

      The official mission of the IMF is Neo-Liberalism – the privatization of government functions and assets. This results in great wealth for a few, poverty for many more. It also encourages/enforces the selling of national assets (such as energy and for tests) to pay off a small portion of a countries debt. But the debt never ceases.

  28. ——————————————————————————–

    No Paper Is Safe From A Bail-In: FSB

    Jeff Nielson

    Ever since our governments perpetrated the Cyprus Steal roughly three weeks ago (the first of their “bail-ins”), I have been exploring the ramifications of this crime. My apologies to readers for any redundancy since then; however it has been necessary to cover this subject in a methodical manner in order to precisely and conclusively illustrate that:

    The Cyprus Steal was a premeditated act, plotted (at least) 18 months in advance; which included warning the Big Money to move their wealth out of harm’s way

    Many/most other Western regimes already have their own “bail-in” rules firmly in place

    The entire premise of the “bail-in” (i.e. confiscating money from peoples’ accounts) is flawed and fraudulent; meaning there could never be any rational or legitimate reason for this policy – making it a simple act of theft

    Having established each of these points in previous commentaries; it’s now time to bring this analysis (in general terms) to a culmination: pointing out that the “bail-in” rules already in place do not merely contemplate stealing from bank accounts, but rather stealing any/every kind of paper asset from “the financial system more widely.”

    The language used is unequivocal, the intentions beyond doubt. Why is it so much easier in retrospect to point out a “crime” plotted (at least) 18 months in advance? Because the bankers put out “policy papers” the way most people pass wind. Few if any of us have the luxury of wading through the endless pages of these documents merely to separate “hot air” from more of their devious (and illegal) plans.

    It is now clear that the “centerpiece” of this planning is a policy paper issued by the Financial Stability Board in October 2011, entitled Key Attributes of Effective Resolution Regimes for Financial Institutions. The relevant language is spelled-out in Section 6:

    6.3 Jurisdictions should have in place privately-financed deposit insurance or…a funding mechanism for ex post recovery from the industry of the costs of providing temporary financing to facilitate the resolution of the firm. [i.e. continuing to prop-up insolvent banks]

    Obviously the only possible way in which deposit insurance could be a “mechanism for ex post recovery” is if these bankers/governments are stealing from peoples’ bank deposits. However, lest anyone holding bonds, pension funds, or other (paper) financial assets has been lulled into a false sense of security in thinking that only bank accounts are at risk, Section 6.5 should instantly torpedo that complacency:

    6.5 As a last resort [the expression the Banksters began using back in 2008 when they began all this monetary insanity]…some countries may decide to have a power to…recover any losses incurred by the state from unsecured creditors or, if necessary, the financial system more widely. [emphasis mine]

    The “financial system more widely” means any bank account, any bond, any pension, any equity; or more simply any paper one has in any financial institution.

    Who/what is the “Financial Stability Board”? It is a very exclusive club. How exclusive? You can only join if you’re a Western Central Banker. It is the (official) voice of Western central banks, and thus it is above the mere “laws” enacted by our subordinate governments.

    How do we know the authority of these central banks is supreme to the laws governing the Little People (i.e. us)? The central banks themselves make this unequivocally clear. When we have the audacity to even suggest an audit of our financial system, they (and their apologists in the Corporate Media) tell us it “threatens their Independence.”

    If the central banks are Independent, what does that make our governments? That’s right, the Dependents. As a tautology, they can’t both be “independent.” And only one entity in this relationship is allowed to say to the other “no, I won’t let you do this.”

    However, if even this tautological argument doesn’t convince readers that central banks are above the Law; our Puppet Politicians make this explicitly clear in official documents, such as the Canadian Budget. Mark Carney, Governor of the Bank of Canada and Chairman of the Financial Stability Board decreed that “bail-ins” should be the new law for the Little People of Canada.

    Prime Minister Stephen Harper heard. Stephen Harper obeyed. From page 154 of Canada’s 2013 Budget:

    …The Government intends to implement a comprehensive risk management framework for Canada’s systemically important banks. This framework will be consistent with reforms in other countries [i.e. the Cyprus Steal] and key international standards, such as the Financial Stability Board’s Key Attributes of Effective Resolution Regimes for Financial Institutions, and will work alongside the existing Canadian regulatory capital regime. [emphasis mine]

    In case any Canadians weren’t sure whether this included stealing, Prime Minister Harper erases any ambiguity there (in the Budget’s next bullet-point):

    …The Government proposes to implement a “bail-in” regime for systemically important banks.

    Still not convinced that the central banks are our Financial Overlords, entirely above the law; who regularly tell our subordinate governments what to do? Let me introduce you to the Bank for International Settlements (BIS).

    The BIS is the “supreme” (Western) central bank: the central bank of/for other central banks. It is located within the geographic boundaries of Switzerland, but it’s not a part of “Swiss territory”. Instead, it is its own sovereign soil – virtually identical to the above-the-law status of the Vatican within the geographic boundaries of Italy.

    No “Swiss authority” (police/political/military) is allowed to set foot on “BIS territory” without the written permission of one of two executives within the BIS. It is completely immune to any/all Swiss law. Or put more simply, it’s also “independent.”

    In a somewhat less-lofty context, the BIS is known as the lynchpin for the $trillions in money-laundering in which Western Big Banks engage every year mostly drug-money or terrorist-money. These Big Banks are caught engaging in their money-laundering on a now virtually weekly basis, and thus the routine is painfully familiar.

    No banker is ever even arrested, let alone charged with a crime. The bank itself is never required to even admit wrong-doing; no matter how many $billions are involved, or how many times the bank has previously been caught money-laundering. The “fine” is inevitably some fraction of 1% of the actual quantity of money-laundering. It is such a pathetically microscopic sum that we can’t even call it a “cut” in return for our governments being the junior-accomplices in this organized crime.

    Our Big Banks are nothing but a crime syndicate. The central bankers are the Mafia “dons”. This Crime Syndicate has now issued a decree to our Puppet Politicians that they wish to engage in a new form of crime, and to simply change our laws (the laws of the Little People) so that their stealing is now “legal.” The politicians have obeyed.

    When I wrote How Your Bank Account Could Disappear back in July, 2012; it was in specific response to the even less-legal, more heavy-handed “bank robbery” which had occurred in the “MF Global” heist. I pointed out at that time that ¼ of Wall Street executives had already confessed to believing that crime was a way of life for Big Banks.

    At that time, I summed up in general terms the only attitude which any rational individual can have when it comes to entrusting any of their wealth to this Crime Syndicate:

    What the large financial institutions of the 21st century have taught us (through the cruel “lessons” of their serial crimes) is that there is no one in the world whom you can trust less with your money than a banker.

    • bonbon

      See my post very recently on a book review of The Alchemists.
      The B.I.S is described in intimate detail. This is the Versailles Treaty Gold bank headed up by Hjalmar Schacht who became Hitler’s Finance Minister. Schacht, while attending the Nürnberg Tribunal, was never cross-examined, which tells a lot about the BIS.

  29. bonbon

    DMcW holds out some hope for the IMF changing its spots. Yes, it may, but the predator still remains. It is trying to pave the way for a new SMALLER financial system, dumping the totally un-bailable junk, BUT squeezing credit for the few, only. This would result in genocide beyond most comprehension.

    We need Glass-Steagall in its original sovereign form, not in reverse like the bail-in is, nor in murderous intent as the financial elite are now paving the way for. That is why Hamiltonian sovereign credit systems are inseparable from GS. A glance at the Triple Curve should show even the most stubborn, what this means!

    If you thought the IMF was a problem, you are now on alert for this move. Do not be caught blindsided! Do not attempt to pave the way for this, the worst possible bankster prank yet.

  30. “Portugal considering paying workers and pensioners in treasury bills – WSJ
    The WSJ, citing sources, reported that the Portuguese government is considering a plan to pay public workers and pensioners one month of their salary in treasury bills rather than cash.”

    Well here comes the debt free Treasury option for money. Where have you heard that as a potential solution??

    Side step the central Bank fiat currency and the associated usurious debt.

    I’ll bet it will not happen. There will be not too subtle threats offered for consequences if tried by the Portugese government.

  31. Soon it will be the US deposits being stolen!!

    Economy Will Implode-Jim Willie
    8 April 2013

    By Greg Hunter’s USAWatchdog.com

    Dr. Jim Willie of GoldenJackass.com says powerful forces around the globe are working to do away with trading in U.S. dollars because of massive money printing by the Fed. Dr. Willie says, “The world makes a reaction, and what they have done is create, slowly but surely, a U.S. dollar alternative for trade.” Dr. Willie’s sources say precious metals will be used to back a new currency and predicts, “The gold price will be $7,500 to $8,000, and silver will be between $150 and $250 per ounce.” This will be a disaster for U.S. Treasuries, and Jim Willie says, “All these Treasury Bonds will be sent back to the United States where they can choke U.S. bankers . . . they cannot refuse them.” Dr. Willie predicts “the economy will implode,” and he says, “I don’t believe we’re going to see garden variety powerful inflation. I believe, instead, we’re going to get large widespread cut-off of supply chains” as foreigners simply stop accepting the dollar. As far as dollar assets inside the U.S., expect widespread confiscation. Dr. Willie contends, “When the losses from the debt write-downs come, I see tremendous national wealth lost because private accounts are really just bank assets.” Join Greg Hunter as he goes One-on-One with Jim Willie, Editor of the Hat Trick Letter.

  32. Soon it will be the US deposits being stolen!!

    Economy Will Implode-Jim Willie
    8 April 2013

    By Greg Hunter’s USAWatchdog.com

    Dr. Jim Willie of GoldenJackass.com says powerful forces around the globe are working to do away with trading in U.S. dollars because of massive money printing by the Fed. Dr. Willie says, “The world makes a reaction, and what they have done is create, slowly but surely, a U.S. dollar alternative for trade.” Dr. Willie’s sources say precious metals will be used to back a new currency and predicts, “The gold price will be $7,500 to $8,000, and silver will be between $150 and $250 per ounce.” This will be a disaster for U.S. Treasuries, and Jim Willie says, “All these Treasury Bonds will be sent back to the United States where they can choke U.S. bankers . . . they cannot refuse them.” Dr. Willie predicts “the economy will implode,” and he says, “I don’t believe we’re going to see garden variety powerful inflation. I believe, instead, we’re going to get large widespread cut-off of supply chains” as foreigners simply stop accepting the dollar. As far as dollar assets inside the U.S., expect widespread confiscation. Dr. Willie contends, “When the losses from the debt write-downs come, I see tremendous national wealth lost because private accounts are really just bank assets.” Join Greg Hunter as he goes One-on-One with Jim Willie, Editor of the Hat Trick Letter.


  33. Clare Leonard

    Interesting reading see link, especially page 8 = (19)


    I believe the western world is now ready for the total collapse of the shadow banking

    system, which will in turn bring down the main street banks.

    Canada is ready for a bail-in, New Zealand, Spain,

    UK- USA etc. etc.



    When one considers that the Irish Central Bank is just a branch office of the ECB,

    it is very unlikely that they have anything to do with the Irish decision RE. BRIC’s.

    Do you remember the government brought out special tax relief for those doing business

    with the BRIC nations, I think two budgets back.

    It is also very unlikely that any Irish Punt is being printed by them,(as mentioned in the above link)

    if that were the case the whole of the ECB would be joining the new

    “Bretton Woods agreement” ==== the BRIC new world bank,

    which will replace the IMF.

    I am not saying that that is impossible, but if that were the case THAT would

    be a real game changer. Would the Irish CB leave the ECB, I think not.

    No==It all adds up to Ireland joining the new BRIC world bank linked to Sterling.

    Sterling could be devalued by anything from 30/50% which means Ireland faces hyperinflation and poverty.

    Perhaps the queens visit was just a side show.

    That is my reading of the situation.

    I may well be wrong.

    Yet again we do not have the courage or understanding of the international monetary system to stand on our own two feet.

    Perhaps another wonderful opportunity missed.

    I find Putin the most interesting just now, he has given the Russian people 3 months to bring home their money.

    He no doubt thinks the collapse of the system after 3 months is within the power of Russia and China.

    He may well be VERY WRONG.

    The USA may find the courage when their back is to the wall to bring the dollar down themselves.
    My bet=== watch out for rising Gold and Silver prices and rising interest rates, within 8/10 weeks.

  34. A fine article with barely concealed rage and frustration. You are back on track after a small hiccup

    Rage and frustration is common today because the world has clearly gone insane and trying to feel normal in a sick society is unhealthy. It can kill us if we take ourself and our places in this world too seriously

    Even great men have their frustrations and it pleases me to know this. It’s just that their worries are different to mine

    Mortgages, savings, health plans, investments etc are a major source of stress. Especially if you lie awake at night and worry over losing them

    You come into this world with nowt and you leave it with nowt

    There is no point worrying all the time especially when you know the answers

    • bonbon

      Maggie left this world with a legacy of I.E.A rabid neo-liberal belligerence.

      It really does matter what one does.

      Animals come and go with nowt, neo-liberal imperialists would have us all bestialized.

      • They won a few battles but lost the war. Collective humanity always over-powers individualism and no man is an island. The collective will hound them out, eventually, if it is to survive and we humans are great survivors

        There are no bad animals. Just bad people that need to be re-trained and told to sit and stfu

      • Ae wee rant by Mr.A.Banter
        C/o flat number two, the old Co-Op Buildings.
        (Not the big yin but the two wee yins (there are two you see))

        Anyway It’s the smaller of the twa (the one with the red letterbox and the broken window to the the right of the door) It’s the one covered in cobwebs and manky windaes

        Corner ae Coopers Well Street
        (Near The Dolphin Bar)
        (Six miles as the craw flies from El Paradiso)
        (within sight of the Govan cranes)
        (sixth tenths o a mile from the auld Govan ferry)
        Partick Cross
        Glasgow Toon

        Anyways. I’ll be in the Dolphin Bar punting gold if you canny find the hoose

        In that case then jes search fur me on fcuckbook or the twitter thingy a’right?

        Mention Social Welfare and you are incommunicado

        Failing that then I’ll gie ye ma phone number if ye pass a few security qustions. Last resort

        Capiche bro. Got it

        She taught us many things. Taught us how to grow up and stop whineing. I hated her but I see where she was coming fae. Shopkeeper tae Prime Minister. Not to be trifled with

        I looked in the mirror she held and didn’t like what I saw. Battle lines. I’d already had enough o that shite to last me a lifetime but Maggie decided to storm the barricades on her own. We were still traumatised from WW2 but Maggie felt that more war was just the ticket to see us on our feet again

        As someone whose family perished in war I did not find this appetising. For obvious reasons.

        She was a fan of Joan or Arc but not as romantic. Pity

        What the world is like and what it feels like to listen to nauseating jingoistic knob-eads every time you visit your local. Pretend tories and misled unionists who all need a doze of poverty and a good seeing to (if they were not such awfully terrible prudes). Life’s little essentials

        Life was made to seem simple. Gather all you can and fuck the rest. Not

        If they had more money and more sex they would have been ecstatic but instead they turn into vinegary bitter sour old belligerant tories foaming at the mouth. What a way to retire indeed. When I turn 65 I intend to be vigorous like a newly fermenting ale kicking to life inside a bottling bucket

        It’s the last thing that will go in me and thank bloody god. This lot would rather we became sterile at 25 and spend 40 years anaesthetised with fear and debt. Hang that for a game of sodjers. It’s lunacy. Better to let go and be happy and thank god that you were not a cunt

        She made us fight and woke us up from our slumber. Only problem was that we were too deep in slumber

        We need someone like her today in Ireland. Someone who is going to take action and not just talk about it. I’d rather face Maggie than Enda because at least with Maggie you knew where you stood. Enda is a store manager. Another intellectual lightweight in a suit

        We have plenty of jingoistic knob-eads in Ireland too before you start getting your dry and overly starched and bleached knickers in a twist

        Trouble is most people in Ireland when they are on tv look like wet arsed tossers who need to visit the toilet and wipe their cracks. Thatcherism turned us into consumers who ‘only want a larf’. That is why where are no programmes like World In Action today. We lost our way and walked right into it

        This is why The Lowry Tapes are shunned by RTE and why you all sit doped as they fill your unthinking stupid heads with the Angelus from ‘RTE Religious’. Ffs

        Intellectual meaningless junk food everywhere.

        Some working class Glaswegians bought their council houses at a discount and started supporting England! How lost and fckued up can one get?

        She even had some men (I should have known better) convinced that actually had sex appeal. I know. I know. Stop laughing

        If she opened a bdsm dungeon it would have been a goldmine with all those middle aged men who fantasised about her. Wierdos

        How to label a freedom fighter a terrorist. How to kill a community and hate your own brothers and sisters. How to be a hardman killing 323 sailors heading home from a battle zone when they were well outside the red line

        She was all about hatred and it is impossible to mention Maggie in the same sentence as the word hate

        Buller, Buller Buller!

        Half of those people like nothing better than slumming it with commoners and even sleeping with them. Their lives are awfully boring and that is why they tend to stumble into scandals involving awfully dodgy adventures that strangle them in the middle of the night in lonely low london dungeons

        I know. I’ve lived among them and screwed a couple of now prominent ladies in the days before fuckbook

        The Oxford and Glasgow lefties are alright actually when they are not playing to the gallery. Especially when you are sitting in a snug reminiscing about old times exchanging stories about our varied and chequered backgrounds

        Would I party with them. Certainly. Would I vote for them. Would I fcuk.

        She is gone now and the memories are bitter sweet. In the end I felt sorry for her.

        I won’t be buying a party pack. I’d rather show more class than become a facebook and twitter moron. I block both diseases from my browser :-)

        See you in hell Maggie old girl

        And yes I would a black tie if only you could convince me and others that you didn’y intend so much harm

        It’s far too late though

        Because you shamed us all (not in my name) it is worth while celebrating that fact you are turned to dust

        God rest ye

  35. joe hack

    A song for Thatcher by Elvis Costello

    “Tramp the dirt down”


  36. bonbon

    Instead of Glass-Steagall, the Dodd-Frank and Volcker Rule, leaves the central financial crisis problem, derivatives, basically untouched. With all the Euro drama, some have forgotten, papered over, buried, downplayed, gold-plated, and drowned out, what this is all about.


    April 8, 2013 (LPAC) — The April 5 Wall Street Journal reports the that the Commodity Futures Trading Commission (CFTC), headed by Gary Gensler, has stopped writing and proposing “swaps” regulations for the Dodd-Frank Act, due to its “internal divisions” in the Commission.
    CFTC, which at first led other regulators in announcing Dodd Frank rules, hasn’t voted on one since last July. With Dodd-Frank a derivatives Dudd, Wall Street broker-dealers have moved to create new, “modified” derivatives products, says the Journal, forms of CDS and interest-rate swaps, to which the CFTCs earlier rules won’t apply! They’ve also created new, unregulated exchanges for derivatives, so that the government-created exchanges recommended under Dudd-Frank won’t be used (should they ever start operating).

  37. grinderman

    Debt , debt , debt . Who is the next domino to fall etc etc ? The Euro clearly does not work work . Ireland likes to think that it is important but really it is just the ruling elite in Ireland who wish to maintain the status quo who are afraid of the unknown . The ECB considers a small indebted nation on the fringes of Europe while the Irish think that they are master dealmakers at the centre of Europe .
    Speak to anybody in government and they will tell you that we are economic wonders because we have the likes of Intel , Apple , pharmaceuticals . The reality is that we are a tax scam and nothing more .

    Leave the Euro and try to get some of that glow from Iceland and move on . The Euro is over , anybody who has any kind of savings in European bank or let alone a Irish one is completely nuts .

  38. 5Fingers

    More good news from Iceland. More growth – 3 successive years now. Debt issues nearly sorted. There must be red faces all over the place.

    Can PhD degrees be revoked? Priests can be defrocked. Electrician Delighted…what can you do with Economists? Demon-itized perhaps?

  39. Elderfield Knows Better

    ‘Only leave the field when you can get praised and allow memory testify to that with your legacy’ .He is a wise man and lucky him he can leave The State too in a blink of an eye to return to his world unblemished and unnoticed .His timing is good and for a personal good reason .

    A Mouse smells when the Cat is arriving and is gone when it does .His visible chattels are modest because that is his plan that is all he wants us to see.

    The Time of Dantes Inferno is arriving and the wise men are leaving The Isle of Eireann .No Voice No Leader is left any more and the soul of the Nation is decimated .

    Manifestos no longer have any currency and were never delivered by any brave Irishmen in recent times of financial chaos when it was deemed appropriate to do so .

    The TIME is arriving …….The End is nearer …….The Vortex is deeper ………The Darkness is ……here.

  40. SeeTheTrees

    Lets hand out a few awards then…..

    The Cypriot Bankster were top class.

    A sampling of the accolades that the global finance community bestowed on the Bank of Cyprus during its six-year trek into insolvency. Starting with the bank’s 2008 award for best bank from Global Finance Magazine, the trail of tributes continued in 2009 and 2010, when the bank received quality recognitions from The Banker magazine and JP Morgan Chase. Even as late as 2012, with the bank’s shares down 98% from their all-time high, the Bank of Cyprus still received a 2012 private banking award from the internationally renowned financial journal Euromoney.

    The Bank of Cyprus website described its bookending tribute from Euromoney this way: “This is yet another major international distinction which confirms the successful path taken by the Bank of Cyprus Group, placing it among the world’s top financial institutions offering private banking services.”

    A picture paints a thousand word.

    Search chart on Yahoo Finance

    Unfortunately all the awards in the world , nor the highest paid politicians, and elite civil servants can stop the unmasking of the incompetent peasants when a crisis hits.

    This is when you discover whether you have leadership and competence in positions of authority.

    Never forget.

    2007 Ireland debt to GDP 25%, 2013 120%.

    Well done lads.

    But he is a “nice fella”.

    Lets vote Fianna Fail in again.

    So it appears that maintaining Social Cohesion (sure, we are all so nice) is more important than burdening our grand-children with the previous generations debt, and making them pay for the pension of our much awarded and prized financial regulator who retired with an extra wheel-barrow of gold as a parting gift.

    Ah, sure something will turn up to pay for their schooling, health-care and pensions.

    It always does.


    Let them eat potatoes.

    Is that a green shoot I see.

    Oh, no not at all.

    That green shoot was seen in 2010, or was it 2011, …. or it was last year… sure they were all taking about it then…
    It must have been 2012….

    Extend and Pretend

    Kick the Can down the road

    kick something else very hard….. I think

    But lets all hold hands and be ever so nice to each other and hope for the best…

    “and dont be talking down Ireland….”

    If we all pretend and smile… we will fool them all…Europe, US, the world…

    we will be back to the good old days of Charlie McCreevy, when we can lecture Europe again about how to run the richest economy in world.

    Ah….The secret sauce of our success ….. Our truly inspirational Political Leaders.

    Merkel will come paying homage to Enda on his Schrine in Mayo..

    We’ll get Bertie back from his world lecturing tour and put him on top of the IMF…. maybe merge IMF with the world bank so he can run both….

    The world will need McCreevy then.

    It has to be ECB for him. (Didn’t Charlie hand out a few awards to the Spanish Bankster during his tenure as a EU commissioner ??).

    Draghi will gladly step aside and perhaps work under Charlies wings to get a little sprinkle “Charlie gold dust ” (or is it dandruff)……

    and Mary Tanaiste, she needs to come out of retirement for the Secretary-General of the UN job.

    The world needs her.

    All that world-wise and diplomatic polish surely can resolve the issues in N. Korea, Syria and Iran. The word I get from NY is that Hilary Clinton would gladly come work with her. The prestige would no doubt help her in a possible run for the US presidency. Pres Hilary could then have a direct hot-line to Mary to seek advice.

    Bla bla bla…..


    STOP being NICE.

    Punish you politicians.

    They are not NICE.

    They are INCOMPETENT.

    ARE and WERE.

    How did you think it was going to end….in YOUR TEARS and not THEIR TEARS.

    Get real.

    Ireland is “a laughing stock”.

    This and previous generation of politicians are idiots.

    Irealnd will be a case study of what not to do.

    It is time for change.

    Find the facts.

    Dont listen to the mainstream media.

    Hunt for information.

    and ACT.



    STAND-UP and STOP being SO NICE

    • 5Fingers

      We will vote Fianna Fail again. Make no mistake. They will be back before you know it.

      Anyway…What Ireland needs to be doing now is investing big time in Apple before Samsung (in S Korea) is nuked next week. That way we can pay all our debts off and then some.

      More wacky ideas are welcome.

      Incompetence is a function of the collective vote at the end of the day. Blaming IMF or prescribing solutions with respect to Gold, Sea Gulls and the like are a complete waste of time. The sad fact is that we are slaves to circumstance 100%. How we ever got labelled as a 1st world country is a complete mystery to me. Even more or a mystery is the 25% number that IMF says is news. It was always like that – except originally more of them were paid. Now we have a bunch of them in Dail Eireann still doing zero and creaming it. At least you have to credit the Bankers for being Bankers. Their manifesto remains constant.

  41. coldblow

    An excellent article, David. I agree that the IMF are now trying to dissociate themselves from their own policy. This was all predicted (here) years ago.

  42. Clare Leonard

    My Thanks to
    Jim Sinclair’s

    SIGNATORIES to the document which proposes that creditors of financial organizations, the depositors, carry responsibility to “bail in” bankrupt organizations.

    Members of the Cross-border Bank Resolution Group

    Swiss Financial Market Supervisory Authority

    Federal Deposit Insurance Corporation Banco Central de la República Argentina National Bank of Belgium

    Commission bancaire, financière et des assurances, Belgium Banco Central do Brasil
    Office of the Superintendent of Financial Institutions, Canada Commission Bancaire, France

    Deutsche Bundesbank
    Bundesanstalt für Finanzdienstleistungsaufsicht, Germany Banca d’Italia
    Bank of Japan
    Financial Services Agency, Japan
    Commission de Surveillance du Secteur Financier, Luxembourg De Nederlandsche Bank
    Banco de España
    Sveriges Riksbank
    Swiss National Bank
    Swiss Financial Market Supervisory Authority
    Bank of England
    Financial Services Authority

    Board of Governors of the Federal Reserve System Federal Reserve Bank of New York
    Office of the Comptroller of the Currency
    Office of Thrift Supervision

    Federal Deposit Insurance Corporation

    European Commission European Central Bank (ECB)

    Financial Stability Board
    Offshore Group of Banking Supervisors

    Bank for International Settlements
    Financial Stability Institute
    Secretariat, Basel Committee on Banking Supervision

    The backpedalling and denials which have emanated from just the same bodies that signed on to this Cyprus template is because it was used in Cyprus, revealing its existence ahead of time. This was constructed for the next large banking problem and not for slamming an island tax shelter like Cyprus. Here is the undeniable template to confiscate deposits with legal grounds. Clearly if this was expected by any public, few would carry large balances in any bank. This should answer clearly the question, can central planners do really stupid things at just the wrong time and wrong targets?

    Thanks to Jim Sinclair for this information;

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