April 15, 2013

A low-inflation legacy ends

Posted in International Economy · 197 comments ·
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It is often the case that we fail to recognise the significance of events when we witness them and it is only years afterwards that we realise that this or that moment was a major turning point. In September 1988, I sat in a medieval hall in Bruges and listened to Margaret Thatcher giving the now famous Bruges speech. The speech was delivered at the opening of the academic year of the College of Europe.

In case there were any doubts before, the Bruges speech served to place the issue of Europe right at the heart of the Conservative party in Britain and by extension British politics in general. It is no overstatement to say that Europe, and British relations with Europe, is still central to the British Tory party, so much so that the present boss, David Cameron, has pledged a referendum on the subject, something that not even Thatcher would have dared.

However, listening to the Bruges speech, I realised the enormity of what Thatcher was starting had evaded me. She was putting the re-establishment of national sovereignty front and centre, and was goading the assembled Europhiles to respond. The other point she made was the one about rolling back the state; and this, it seems to me, was of equal enormity – in a speech that is remembered for Europe and little else.

What if the death of Margaret Thatcher comes at a time of another significant moment, which we might not recognise now, but might yet look back on as a turning point?

I am talking here about the re-emergence of inflation. When we consider the broad sweep of recent economic history, we can see that Thatcher and Reagan in the US set out on a crusade to eliminate inflation from both countries. This crusade, deploying both fiscal policy in Britain and monetary policy in the US, led to a sustained era of low inflation or very low inflation in the English-speaking world. Bond yields declined over the period as interest rates fell in line with prices.

We also witnessed during this low-inflation era a huge surge in the power and prestige of central banks and the elevation of central bank bosses such as Alan Greenspan to almost deity status, for a while at least. And, as is the case with any prolonged period of reasonably low inflation, it greatly enhances the power of creditors over borrowers. In addition, as wages are pushed down, the return to workers falls and to capitalists rises.

This has now reached extreme proportions in the US where wages for the average worker have dropped consistently over the past 30 years. The money that used to go to workers has gone to corporations in higher profits. And as you would expect, this has led to the emergence of mega-corporations that serve to reinforce this trend.


For example, a 2012 study showed Wal-Mart alone was responsible for driving down wages in retail by 2 per cent across America. In rural areas, the impact was more pronounced.


While the average guy struggles in the US, the rich guy just gets richer and richer.


One final effect of the Thatcher/Reagan era of deregulation and low inflation has been a huge increase in financial instability. Indeed the flip side of this price stability is financial instability, boom-bust and banking and credit crises. The central banks of the world have become fixated with low price inflation. As long as inflation remained low, according to the new mantra, credit could expand and expand, which it did and bank lending likewise.


All this money sloshing around is not going into wages, so it has to go somewhere and it goes into assets. This caused assets such as houses to soar in value. We see something similar in stocks, and each rise in the underlying value makes legitimate more lending against that collateral. In time, the markets peak and crash, leaving the central banks to clean up the mess that they largely helped cause by overlooking asset price rises.


The subsequent fragility of the post-crash financial system has led to an unhealthy fusion of the interest of the banks and the financial markets and the policy of the central banks.


It is like a hostage situation – the banks and financial markets are the hostage takers, the economy is the hostage and central banks pay the ransom. The global financial markets scream at the central banker: “If you don’t print more and more money, we will have to shoot the economy and your political masters, the governments, would not like that.”


So the central banks are in a corner. They have no option but to accept all sorts of collateral from the banks in return for cash. In the US, the Fed is making $85 billion a month available to the banks to lend. This is a phenomenal figure and it is leading to a strange situation whereby no matter what happens in the real economy, the financial markets rally.


Last month, the US produced fewer jobs than expected and the markets rallied on the certainty that the Fed would print more money. The month before, the US economy produced more jobs than expected and the markets rallied on the expectation of better profits. So it’s a case of ‘heads I win, tails you lose’. Why? Because the Federal Reserve is eliminating risk by printing as much money as practically possible.


But what if the US economy is changing gradually? Could we go from low inflation to stagflation (inflation and low growth) to hyperinflation without the nice bits in the middle, which are strong growth and a healthy increase in wages?


American household borrowing is rising again, which suggests that the long period of deleveraging is over. With interest rates at close to zero, and billions available to the banks to lend, it is not hard to see what could happen next. The US has 40 million teenagers and 40 million twentysomethings. They are surely not going to accept lower and lower wages in the face of higher and higher profits.


When the pendulum swings, who will notice it?


What if the Fed is overstaying its welcome at the bar of easy money? What if it is still looking over its shoulder at the deleveraging cycle, just as a new inflationary one is emerging? The last time the US Federal Reserve kept interest rates so low for so long was in the early 1970s under the stewardship of Arthur Burns.


This was followed by a long period of stagflation and ultimately double-digit inflation, setting the scene for the arrival on the stage of Thatcher et al.


History suggests that all eras come to an end and are superseded by something totally different. Maybe we are going into an inflationary world and we just don’t realise it yet. Indeed the death of Margaret Thatcher last week may not just be the end of a person, but could be the end of the era she engineered. Watch US economic data closely over the coming months for signs of the big switch.


Just like the Bruges speech, which signalled the beginning of a 20-year war in British politics that will end with Cameron’s referendum, the recent developments in the US economy could also be a major turning point, one that could usher in a new era of higher inflation all over the globe.

 

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  1. miec

    Excellent article – I have just realised I am first to post.

  2. miec

    What I can’t understand with the above economic model is this; surely all corporations and large scale businesses still depend on consumers so if they are squeezing everyone via wages at some point, which it appears is coming soon, people won’t have anything left to spend except for the absolute basics.

    • michaelcoughlan

      Hi,

      You are 100% correct in your analysis. The reason you are perplexed is that you have a conscience and can see the self defeating nature of the observation. The sociopaths in charge don’t care because they have no conscience. They will have milked everything for all its worth until it all collapses into insolvency at which point it will be off to the gated community in the Bahamas and leave all the trailer thrash to fight it out for loaves of bread.

      Look at it this way; Hitler kept killing every last Jew he could get his hands on right up until the point where a Russian paratrooper kicked in the door of the Fuher bunker and put manners on everyone inside! He wasn’t bothered about the self defeating nature of his policies was he?

      There is NO LOGIC AT ALL to any of the way it works. It is purely PSYCHOTIC.

    • redriversix

      and “they” shall control the absolute basics. What’s happening to Europe and us is what happened to Latin America from the 50s to the late 80s…

      and we are letting them take over…who is really in charge ?

      find that out and we are almost there…sure as hell is not our “Government”

    • If the planet was suffocating tomorrow they would look upon it as an opportunity to profit from selling manufacturing licenses for patented breathing apparatus

      • michaelcoughlan

        Hi,

        That planet IS suffocating. It’s called greenhouse gas. The response of course is PSYCHOTIC; “let’s keep the tree huggers in their place so we dont lose money on cleaner but more expensive methods of production”.

    • This is an excellent point. I ask myself questions like this all the time but am afraid to raise them in case I sound naive.

  3. Reality Check

    Once Nixon dropped the Dollar link to Gold, inflation really started to take off. Also the official inflation figures are meaningless as the inputs used in the figures are changed to suit a political agenda (the appearance that everything is rosy).
    http://the-great-retirement-experiment.com/Products/Index%20Manipulation.htm

    What also needs to be considered is that total money supply is in large part due to the loans made by banks. If banks aren’t lending then inflation isn’t a factor. When banks starts lending again then inflation should take off.
    The other side of the inflation argument says that (US dollar) inflation can be stymied by selling treasuries to counteract the increased supply.
    In essence the FED and Central banks believe they can control things.

    • michaelcoughlan

      Hi,

      David’s article has indicated where inflation is taking place. In my view it’s a huge factor and the article says so also. It’s in the hedge funds. The hedge funds are driving up the price of the indices based purely on their belief that the Fed will keep printing money EVEN THOUGH the underlying fundamentals are showing that things are getting worse not better.

      The penny dropped with McWilliams himself some months back when he said in an article that the European Bond markets had decoupled from the underlying fundamentals with decisions to buy bonds being based on whether the ECB would keep printing money or not.

      “The other side of the inflation argument says that (US dollar) inflation can be stymied by selling treasuries to counteract the increased supply.
      In essence the FED and Central banks believe they can control things.”

      Selling treasuries to who? If you knew you would be paid back in devalued scrip would you buy treasuries? Why do you think China is buying gold and settling its international debts in bi lateral trade and gold?

      I don’t think central banks can control anything. If the huge unemployment problems in the world are evidence of success then I don’t subscribe to that idea.

    • Nixon dropped a lot more than the dollar

  4. BrianC

    Inflation deflation stagflation are only symptoms and nothing more.

    http://www.perfecteconomy.com

    • This somehow rings true

    • From the above link and many other places and ignored by the bloggers here and by Mcwillians too. There is no need to look further than the central Banking system for the cause of the current collapse.

      This is the first time I have been angry at reading McWilliams. Most of the article is cods wallop. Assumptions and misinformation. All the evidence has been on this blog several times but most ignore the plain truth.

      Well it is your problem and you will suffer the consequences.

      “Whenever destroyers appear among men, they start by destroying money, for money is men’s protection, and the base of a moral existence.”

      Ayn Rand

      “The end of democracy and defeat of the American Revolution will occur when government falls into the hands of the lending institutions and moneyed incorporations.

      The Bank of the United States is one of the most deadly hostilities existing against the principles and form of our Constitution. The system of banking is a blot [defect] left in [unsolved by, and unfortunately tolerated by] all our Constitutions [state and federal], which if not covered [eventually solved and revoked] will end in their destruction. I sincerely believe that banking institutions are more dangerous than standing armies; and that the principle of spending money to be paid by posterity is but swindling futurity [on the greatest possible scale].”

      Thomas Jefferson

      Do you get the message. Do you know why it is relevent. Do you know why the central banks must be destroyed. do you know why the rich get richer and the poor poorer.
      Do you know that government agencies distort the truth. that the reported inflation rate is 6% lower than actual rates. do you know why why the standard of living is 45% of what it was in 1967-70.
      all the reasons have been posted time and again.

      Do you know about the Presidents group on working financial markets aka The Plunge Protection team. It is why the stock market rises on low volume and lousy business. Do you know why gold and silver are trashed. Did you know that 500 tones of paper gold was sold today in the space of an hour. 15% of world production. All by illegal naked shorting under the care of the regulatore who turn a blind eye.

      Do you know why you do not see and know the answers to the above.
      Because you listen to the likes of Mcwilliams who pump you full of garbage information and you believe he is an oricle.

      Today I went to a farm cooperative where I will help out for a while. I met a lady , the mother of 2 kids who had just arrived from Churchill Manitoba on the shores of Husdon Bay.

      While we planted seeds in flats we chatted. Well what a joy to find another who KNOWS what the hell is going on. All the above affirmed. People are slowly awakening to the truth she said.

      “Not on the McWilliams blog,” I said, “There they are too busy playing local politics and scoring points against each other, and sometimes out right lying,to see the truth and the few that do see the truth have left in disgust of the majority.”

      Sad really.

      • michaelcoughlan

        Hi,

        “Did you know that 500 tones of paper gold was sold today in the space of an hour. 15% of world production. All by illegal naked shorting under the care of the regulatore who turn a blind eye”

        Well done Tony. Couldn’t figure out who had enough gold to drive down price. No gold exists at all. This proves McWilliams point though. It’s a last desperate attempt by the scum to stave off hyperinflation. Some cu&t did something similar with bit coin.

        I am just waiting for the dust to settle to LOAD up on gold.

      • michaelcoughlan

        I know the American Republic is dead Tony. I haven’t lost faith yet in the American people though.

      • bonbon

        Come on Austrian student, quote Andrew Jackson. I mean to omit him is mystifying.

        Instead you quote Alan Greenspan’s mistress, Ayn Rand. Sir Alan did indeed shrug, probably sees himself as Atlas. Look at the result!

        We can discuss the “economics” of Ayn Rand if you wish. How about it?

  5. 5Fingers

    I am dreading the deluge this article will generate of messages from gold evangelists/ boiler rooms. Do these people not realize that it will be forcibly taken away from them by nutters who will use a concocted framework of laws to support their case.

    The key to understanding DMW articles is to make note of the underlying irrationality (or psycho selfish rationality) and lack of common good that exists. What is even scarier is the global grip and immediacy of access these individuals have of our lives. We are in an era push button optimization of people and resources and the loonies have control. It is global and it supercedes all national laws. The only law protecting us now are really only 2-3 centuries old maritime laws. Democracy is merely a localised management mechanism which can be tweaked and twisted by bond markets and FDI promises.

    Not good.

    • Cassandra

      Dont worry, after last week’s price action the Gold bugs had their wings pulled off.

      Gold is going lower, potentially a lot lower and is a sign of selling the house jewels to survive. Therefore, all asset markets beware.

      Bond markets are about to get creamed, and sorry David I don’t agree that this will be due to inflation it will be due to deterioration in the trust in the sovereign.

      Inflation is still a long way off. Deflation rules.

      • michaelcoughlan

        Hi Cassandra,

        You are in for the shock of your life. GSucks announced some time ago that gold was going lower. And so it happened. Guess what though? There are people on the opposite side of the sell order (ie people buying) and if McWilliams is accurate don’t you think that GSucks would want the gold lower in price so that THEY CAN HOOVER IT UP FOR A PITTANCE AND MAKE A KILLING WHEN HYPERINFLATION TAKES OFF!

      • Adam Byrne

        Gold bugs – totally deluded dreamers.

  6. crazy cat

    So, was there any custard pie throwings with the meeting of the finance ministers in Dublin then?

  7. joe hack

    David Well holly God! the big picture long term Society “Big Society Cameron” “No Society Thatcher” mixed messages from the Tories?

    But David is looking into the future via the past so that must mean he has come to the conclusion that that Thatcher was a moron and that the money system as is, is inherently flawed, at least that’s what i get from David fine piece of work above.

    Low wages means the majority cannot spend therefore there are less jobs.

    The Thatcher/Reagan way will only create short term fixes in certain circumstances.

  8. joe hack

    I am bemused by some here that laud Thatcher complain about the unions and then later moan about there employment condition!

  9. lff12

    I’m a bit perplexed at the article because the idea that there has been no inflation over the last 10-15 years is a heavily manipulated myth. Indexes measuring it have been shamelessly tweaked to indicate low inflation where in reality the opposite is occurring. One of the reasons I left my original career for a better paid one was because rents in Ireland doubled between 1997 and 2000 and doubled again over the next 2 years (they only stagnated in 2002 once the government put a cap on the “landlords dole” i.e. “rent allowance”). Yet official inflation rates didn’t show this occurring – the headline rate was something like 6% pa, even where that was consistently steady, it didn’t show a 400% rent hike in 5 years.

    This is being debated in other countries as “baskets of goods” often create misleading results that distort the impact of some changes. For example, here we will see major loss of purchasing power at certain income levels due to household charges and property taxation. It will disproportionately hit higher earners who are more likely to own more property, but because it is based on declared asset values, those on “lower incomes” – which will still be above average earners as average earners were gradually priced out of home ownership during the so-called “boom”. So there is actually a whole class of lower impacted earners who are less bothered about property taxation because the impact on them is indirect (i.e. they will pay their landlords share via installments over their rental year).

  10. redriversix

    Heap a country in debt

    Government has continually rolled over National debt fueling a boom & bust cycle.

    Sell our State assets

    demolish the middle class

    Privatize everything

    criminalize the working class,unemployed,the sick & the infirm….

    Reduce your rights…reduce standard of education

    Enslave the uneducated to cheap debt

    Increase banal television

    It is a economic War..now on a much broader scale…hiding in plain sight.

    Remember “Ireland is the finest Aircraft Carrier of the coast of Europe”

    60% of people did not vote in Meath East…Translate that to A National scale and the I.M.F / World Bank will soon realize ,no one cares or will lift a finger to demand change..

    Watch our resources being sold off…watch you future encumbered with debt before you are born

    Watch the rise of the “American Empire”

    Banks/Finance Houses shall get stronger as Countries lose their independence and their democracy or the pretence of Democracy…

    Watch for the Bond Bubble Collapse

    “so don’t buy what you don’t need or you will end up selling what you really need”

    Wake up. ! protect your family…do not wait for permission to do what’s right for you

    A Dystopian future beckons

    Have a nice day..!

    • Deco

      Being asked to select from a collection of pretenders is at the root of the problem with low turnouts.

      The media, only cares about pretenders. And business only trusts pretenders, because pretenders forget about the electorate the day after the election.

  11. michaelcoughlan

    When I read this article in the SBP David I found myself catching my breath and then the thought occurred to me that you must definitely have a twin who writes for you on occasion because you go from the banal to the brilliant in only seven days. This article is both prescient and seminal.

    I would even go so far as to say it should be mandatory teaching on the Leaving cert curriculum. Further more it could be used to segregate the students into two groups as follows. The article could be presented to every student and then each student would be asked to give their opinion. Those who think it very good should be encouraged to go into business. Those who think it incomplete or not subscribing to standard economic theories should be encouraged to enter the academic field in the Universities. Both careers are necessary and both have a huge part to play in ensuring that we parents do what’s right for our kids going forward.

    “They are surely not going to accept lower and lower wages in the face of higher and higher profits”

    In the modern world of maximise profits I would go further than that statement. The same model will apply as that used by the Mullingar motor mouth. The jobs will be dumbed down to the level where the only people that the sociopaths in charge will seek to employ are semi literate teenage trailer trash who will be recruited and fired over and over again. This will ensure they never attain any sort of material wealth or economic clout at all. It will also ensure they are kept subservient.

    “When the pendulum swings, who will notice it?”

    Thank God you have David!

    This article is a clarion call to those of us who see the light to act and save ourselves. We can do nothing for the blind. Moreover for me personally it scares the living shi%e out of me because we are looking into Dante’s inferno. This is because there is no such thing as a free lunch in economics. If the US is so bankrupt and hyperinflation takes off how do you think they will balance the books? You remember David the story about a floppy haired economist playing monopoly with his child teaching him what militarised paper economy is?

    Well here it is in reality;

    My bond market is rising based on the ability of my central bank to print paper. I am sitting on the world’s biggest military and the world’s biggest stock pile of nukes. Since I am living way beyond my means as indicated by the various deficits I am running the only way I can eat my lunch is to force EVERYONE ELSE to work fro less or sell their raw materials to me for the price I SAY SO.

    Militarised paper economy David.

    God help us all.

  12. joe hack

    “We see something similar in stocks, and each rise in the underlying value makes legitimate more lending against that collateral.”

    What would a seven year old make of that statement?

    Does this not define how unintelligent the money system is?

    A group of nuts value money based on their mood or their drug habit?

    • michaelcoughlan

      Hi Joe,

      Intelligence has nothing got to do with it. It’s so short term and a zero sum system all the participants know it’s expanding only because of extra currency sloshing around.

      They will just look for patsies to carry the can when it all goes to shit. Those patsies are the various Sovereign states and taxpayers of the world.

  13. She was an Iron Lady and still is and her death is liken to the fall in the price of commodities too including Gold .Although she was never a Gold Finger she did sparkle as a Leader and James Bond would gladly have loved her as a Spy had she been one.

    Like in her death Gold continues to fall and all the way down .

    On the date of the burial of this Iron Lady it will fall on the eve of the 7th Day before the next full moon that will take us further on the next path to the forthcoming Moon Wobble peaking on May 7th .

    The 18th April will ignite the beginning of a new phase where ‘ being stubborn and a stiff back’ will bring trouble .Those are the words of thought to bear over that time ahead of all of us until 26 th May .Thats a long time for a Theatrical Performance .

    What will happen to Gold in the weeks ahead ……ask Tony Brogan …if he can continue to repeat his Mantras as before .

    • michaelcoughlan

      Hi,

      I think gold will continue to drop as it is a very liquid item. If McWilliams is right then GSucks timing of gold going lower could be an attempt to force out weak longs and pounce when stagflation/hyperinflation takes off.

      Time will tell. It’s worth remembering no one should have more than 10% of his/her savings in gold and if you believe McWilliams dollar averaging into a falling market is a viable investment strategy.

    • joe hack

      Strange thing about the value of gold it is valued in terms of fiat money therefore this makes Gold as valuable as sand in desert.

      But there is worth in work needed to feed oneself on spuds
      So I propose a spud index after all the price of the spud has reached ‘record’ levels, inflation has already started, but I fear GM intervention might undervalue.

      I remember in the 70s there was a campaign by some break the spuds cartels due the expensive price of the spud at that time so people turned to rice which created an explosion in rice sales and now it has be a common staple.

      The message here, prioritise what you value

    • bonbon

      Wow what an epitaph! Resuscitating this Golem has become a national sport! In Britain and by West Bits! A real display of self-flagellation!

  14. Adelaide

    Thatcher. The folly of monetary policy, then and now.

    Recently watched an old BBC documentary ‘History of UK Monetary Policy”, By mid-70′s UK economic policy makers realised the futility of ALL their past efforts. They threw their hands up in despair and had the humility to admit that they were clueless as to how the UK economy functioned. “Keynes was dead!”

    Then along comes the ‘Monetarists’, disciples of Milton Friedman. Their solution in a nutshell = Reduce the money supply, downsize government and liberalise the market place.

    Thatcher latches on to this ideology and becomes PM. She and a cohort of ardent believers adhere to this policy rigidly for the first two years of the first term and against all ‘scientific’ expectations it is an utter disaster. In fact it produces a new phenomenon, ‘stagflation’.

    Thatcher drops the ‘Monetarist’ policy and dismisses Friedman as a ‘theorist’. From then on her only ‘economic’ policy is to break the unions and privatise their sectors.

    The UK economy continued its slow decline.

    What was interesting was what seemed to be the most obvious, it being summed up at the end of the documentary. The UK, starting from the mid 50′s, slowly and steadily, simply stopped making ‘stuff’. From automobile, aviation, engineering etc every type of output/production declined and ultimately disappeared.

    The Monetarist policies failed and before that the Keynesian policies failed simply because there was no tangible economy for them to be applied to.

    One of the disillusioned ministers summed it up.

    “We fannied round for thirty, forty years, obsessing about inflation, deflation, scratching our heads about stagflation. When all along the factory floors were closing, our education standards plummeted and our workforce became unskilled and rather useless in any real terms. We took our eyes off the ball as they say. Now what do we have? We stopped being fit for purpose and all the money in the world will not fix it, because money is not the solution, money was a distraction, we fell for it, distraction that has proved to be fatal.”

    • joe hack

      Great stuff:

      If don’t have make anything you have noting sell well done Adelaide
      Those skills are now lost to two major players Germany, who supply China with some machine technology they in turn make everything.

      The USA, UK and the rest of the EU exported work and with it money and skills now lost -small mined- short term – quick buck- thinking.

      Oh we can sell cheaper if we make this widget in china – yes for while – but who will have the money to buy, since you have just exported the work and the wealth.

      The message here, prioritise what you value

      • Adelaide

        I spent a brief period in Shenzhen city, China, in the mid 90′s on a logistics project re: a chain of factories producing parts for a certain phone. Dante’s Inferno would be paradise compared to the hell on earth I witnessed there.

        The point I’d make is that there the complex production of electronic products is so atomised into hundreds of ‘Blue Peter’ baby steps that in these factories there are hundreds of tables with ‘peasants’ huddled round each one doing a single unskilled task. By this arduous process the ‘hi tech’ product is assembled and is the official means by controlling unemployment. Using machines or skilled workers would be counter productive, as long as the workers wages were cheap enough to compete with the alternative of automation in the West, then so be it. People revolt, not machines.

        When I hear about skills being lost to China I always envisage those Dickensian conveyor belt of tables.

        ps I used the term ‘peasants’ neutrally, as they were illiterate rural migrants living in the factory dormitories on one year contracts in the most abject conditions both inside and outside of these inhuman factories.

        • joe hack

          Yes, but part of the point is that your farming pheasant has moved on up and is now the engineer. the 90s cheap labour has moved on and the last of the more sophisticated skills are just about left in Germany another visit the China might confirm that.

          The Chinese have learned in a monkey see monkey do fashion but they are fast learning to make their own products and soon will be on par with the west and why would they not?

          Unlikely but If the Chinese share their manufacturing skills/tools with the Russian, a panther will be let loose as they have know how in other areas -Thatcher / Reagan polices was A case of throwing the baby out with the bathwater.

          You point to a big flaw.

        • Adelaide

          I saw something similar in China and agree with your hell on earth description. Your earlier quote from a former UK minister is very telling. Thanks.

          Best

          David

        • I spent time in Taiwan working in an electronics production facility for 3 months. The people I met were humble and peasant like. Engineers who were smarter than me used to dream of owning a car

          I went to a facility in China for a few days and it stays with me today. It taught me not to grumble

    • I like the third sentence ( just paraphrasing and thinking aloud) :

      Along comes Freidmans’ archers offering ready made but untried solutions in reasonably stable western democaracies – de-industrialisation, de-unionising, reduced money supply, privatisation and deregulation.

      All to clear the way for an idealistic concept known as the ‘free market’ conjured but by academic three card trick merchants (salaried and pensionable by OUR money) who either have no concept of real life or are so psychotic that they should have been caught in early childhood and banished to Flannan Isle to be taught by the brothers on how to be humble and less of a destructive ignorant little twat

      Thatcher knew only a watered down version of Friedmans’ ideas would be acceptable in Britain (she was a realist) and as if to prove it they instigated the miner’s strike to test Friedman’s theories either as am academic exercise for turure reference or for the bloody minded satisfaction of sorting out those they labelled Terrosists (Mandela) or The Ememy Within (The Workers)

      Forty years before those workers were heroes because they put up with all kinds of sacrifices to keep the power on on behalf of freemason kings fighting wars amongst themselves and taking everyone down with them. They patronise us by promising to build a land fit for heroes and yet within decades we are ‘The Enemy Within’

      Who do these fucking people think they are?

      The mass graves are still visited and flowers are lain. Even after all these years. It mystifies me how a proud nation with such an illustious past even puts up with Maggie Thatchers, Dodgy Daves and other slimeballs waiting to take up the baton fuelled by the ignorant sentiments of tory driving cabbies and lager louts with sloaney accents. Fuckign horrible people so they are. Where is the gratitude. These assholes were buying council houses and calling the rest of us losers because we wanted to keep our country

      They can fight their own jolly wars next time. Assholes

      In her first two years the rapid destruction of British society was progressing at breakneck speed and the social vandalism was particularly vicious for those who lived in towns relying on one of two key industries. I left school in 1981 and it felt like everything we knew was being taken from us by malicious forces. Maggie and the Tory mob were the public face of these forces

      That British people could do this to other British people was the biggest shock of all. After that we became a nation of wankers and today dodgy dave and his thugs are the worst tories of all. Probably worse than sister Maggie

      Rule Britannia. A post industrial shithole with a culture they truly deserve.

      • bonbon

        How do you mean “untested”? Lord Maynard Keynes’ methods were tested by Hjalmar Schacht in Hitler’s Germany, and Friedman’s methods were tested in Pinochet’s Chile.

        In 1846, British subjects were tested for population reduction, quickly, and Trevelyan took a holiday in France until it blew over.

        Now Britain’s Obama wants war with Russia and China. Still surprised?

        • I know about Friedman and South America. Friedman tried to talk Thatcher into dishing out the same sort of medicine in Britain but it was not possible and she told him ‘look this not just any third world country where you can just march in all guns blazing”

          But still she wanted a riot. The miners agreed to reforms at four meetings and on the fifth meeting both sides found common ground and agreed a solution

          Thatcher said no and declared war on her own people.

          The question is why?

          And next time you address me show some respect and don’t sound so superior because I can assure you you are in no way superior to me friend

          • bonbon

            Let’s have a look at the answer to that “why question”.
            First the letter to Hayek, posted here recently, and there the full explanation of Lord Harris also posted here.

            It is strange people continue to wonder – is it perhaps an effort to rehabilitate the Golem? The good Lord clearly explains why.

            DMcW has had TWO Thatcher Themes in a week – she was definitely not superior in any way, so what is going on?

          • Cheers. I will think about that.

            Maybe Dave is feeling sentimental about the old girl?

  15. Deco

    Alan Greenspan – the world’s first celebrity central banker. The media lapped up his every word. The media obsessed about Alan Greenspan “keeping his powder dry”, and “issueing an upbeat statement”, and “underscoring confidence in the markets, etc…

    And guess what folks – it was all a pile of nonsense.

    Greenspan was a messer.

    Interestingly enough, the Old Schitzo on D’Olier Street (in every way a hypocrite) was paying homage to Jean Claude Trichet, and Greenspan at the same time. Trichet was welcomed, and always given positive accolades.

    Before Trichet, we had Wim Duisemburg. I remember an article in the IT calling him “Dim Wim” because he kept interest rates higher, thereby keeping the Eurozone more stable, even if it was bad news for the politicians. Well, anyway, “Dim Wim” was too good for the job.

    So we seen Trichet take the helm. Like Pee Flynn, Trichet found that once you become somebody important in the EU Imperial structure, the media forgets your past.

    For a while there we were in the midst of the “cult of the central banker”. (did I spell that correctly).

    And they were in awe of asset markets. They served the private bankers. And the media, taking it’s cues from the advertising revenues, nodded in approval as Sir Alan, and Tricky Trichet messed around with interest rate policy.

    I have a suggestion. Paddy Power’s chief mathematician/bet maker for the next head of the ECB. He is about as well qualified as Greenspan or Trichet.

    Because that is what the job now entails…..encouraging people to gamble.

    And now you know how Western Civilization broke up it’s economic stability.

  16. “It is like a hostage situation – the banks and financial markets are the hostage takers, the economy is the hostage and central banks pay the ransom. The global financial markets scream at the central banker: “If you don’t print more and more money, we will have to shoot the economy and your political masters, the governments, would not like that.”

    It is the ordinary workers who pay the ransom not the central banksters,

  17. Adam Byrne

    Subscribe.

  18. Thather, may she rot in hell.

  19. 5Fingers

    There are 2 types (and maybe many more) of inflation. Cost Push – Increased union wages of the wooorkers, Higher Energy costs. And Demand Pull – prices rise because I am rare and I am worth it :)…Gold, Specialist knowledge and soon food and water.

    Thatcher/ Reagan were gunning the cost push inflation. Fix the unions, fix those troublesome oil companies and so on. And while we are at it make credit cheap irrespective of demand – start derisking credit and with that, bank and financial gamblers were tied to the hip.

    Demand Pull is scarcity driven/ Malthusian. This is where your hyperinflation will be problematic. The last 30 years or so has seen huge advances countering the Malthusian effects via better production techniques and outsourcing (which drove the BRICS to some degree) and cheaper energy and lower credit magnified the effects.

    We now have a situation where cost push inflation is zero and is indeed negative. Demand pull could rapidly rise for a number of reasons. Sharper rises in fuel costs, sudden breakdown in supply chains coupled with a dearth of breakthroughs to allow people maintain their currently unsustainable lifestyles. And if you think Gold will save you…think again. When supply chains break, you go from 21st Century to 19th is no time flat along with the health and services implications of that as well.

    As I said earlier, the whole thing is driven by nutters. That they will get creamed in the process never s occurs to them at all. Maybe it is a good thing we have a limited lifespan and cannot cause too much damage as a result.

  20. Pat Flannery

    I happen to be in New York today where all the talk is about the Fed moving away from QE, less fear of inflation and a general flight from precious metal. Perhaps the word hasn’t reached Dublin yet. David may have his history right but the future is decided in the big markets and they are going the opposite direction from David.

    • Hi Pat

      It is precisely because the market herd is obsessed with deflation at the moment that I sense we are at a tipping point. You are right; the sell off of commodities, the massive QE etc are all indicators of deflation but when we see conformity to such an extent, it is important to see things from another angle. As I said in the piece, watch US data carefully. I could well be wrong – but I could equally just be early!

      All the best
      David

    • Deco

      If we look at what happened in the 1970s, we see wild swings in many markets, especially commodities, in an inflationary environment against a backdrop of massive debts.

      The debts currently are even worse. Interest rates are much lower, still.

      But high debt loads, have a tendency of driving up interest rates (Japan Government Bonds excepted).

    • michaelcoughlan

      Just curious.

      Were any of them talking about the various deficits etc. or how the country can continue to fund itself when it’s living beyond it’s means?

  21. Cracking article to be bookmarked and read again. Thought provoking stuff from the wee red haired laddie today. Wonderful

    • bonbon

      Cripes, Maggie was red-haired too! At least the “Not the 9′ o’clock news” claimed.

      • Cripes. Not heard that word in years. Jings, Civvens and Help Ma Boab

        David is the Jimmy Johnstone of economists and has red hair and the spirit of Johnstone in him. He is in a class of his own and when it comes down to it he is one of us whither we recognise it or not. Whoever ‘we’ may be

        He does and says things people don’t expect and he is not intimidated by the tall strong defenders of the forces from Mordor

        He does not lie down easily and gets straight up after a bruising tackle. Just the sort of stuff we need around here

        And our imaginations turns back to 1970 …

        175,000 are packed inside Hampden today and the noise and wind is simply just incredible. Players are shaking with nerves and jostling for calm in the storm and after four minutes Johnstone is brought down on the edge of the box!

        Penalty to Celtic!

        Up steps McWilliams to take the kick and the huge silence is burst open in a rapurous sea of joy railing from the Celtic slopes. Oh what a scene and what heartbreak for Rangers

        I told you this little fella was going to be nippy today

  22. dwalsh

    Thatcher was an agent of the economic revolution we know as neoliberalism. It is rooted in the lust for power of reactionary plutocrats and the ideology of crank rationalist economists.

    The crank economists were the likes of Von Mises and Von Hayek and their American disciple Friedman; all supported by plutocrats such as Rockefeller.

    Ostensibly their inspiration was a reaction to totalitarian forms of socialism; but in fact neoliberalism goes far beyond and is nothing less than an assault on society, the nation state and civilisation.

    As Maggie bluntly expressed it “There is no such thing as society”.

    Most of us know and experience society as a network of cooperative relations in which our individual personhood is rooted and developed and lived. We instinctively know that we cannot be a human person at all without society.

    Our sociality precedes our individuality.

    But to those who created and promote neoliberal ideology there is only individuality. Society is nothing more than an aggregate of individual self-seekers competing to maximise their own benefit. What most of us experience as a network of cooperative relations is to them a system of bilateral contracts among atomic self-maximises.

    For most of us civilisation is a cooperative human creation which expresses and supports human development. To the neoliberal civilisation is a resource to be exploited for personal power, prestige and profit.

    Here is a quote from one of them which expresses it very well:

    “Let me tell you what you are up against. You are up against people like me. I know exactly what my company is doing and what devastation it is causing to thousands of lives. I should know; I am running it. I know and I do not care. I have decided I want a grand gold-plated lifestyle and the perks and jets and houses that go with it and I will do anything – bend the law, have people “removed,” bribe local governmental officials – you name it – to get what I want. I know too that none of my shareholders care a rat’s ass what I do or how I do it, providing I deliver and keep them swimming in cash.”
    (Andrew Harvey; The Hope – 2009)

    This is the world-view of the clinical sociopath; but the ideologue or dupe is just as dangerous. I suspect Thatcher was an ideologue; not a clinical sociopath. She was a fundamentalist. Neoliberalism is a fundamentalist religion of markets and money. It is also the natural expression of the psycho-emotional pathology known as sociopathy.

    • michaelcoughlan

      terrific stuff.

    • bonbon

      Let me tell you what ye are up against, those simple “greedy” straw dogs not.

      You are up against an empire determined to reduce the population to around 1 billion, manageable with a new much-shrunk financial system. They make no secret whatsoever about this.

      Now that is just a little bit less cozy than the usual chain-rattling melody, don’t ye think? Whether the savage you refer to knows this or not is irrelevant. The modern Trevelyan’s will take a holiday as in 1846 waiting for the cull “to blow over”.

      So face it, either we impose sovereign Glass-Steagall on their banks, or die in very large numbers.

      • dwalsh

        Yes…Thatcher was only a convenient tool for them. She may have been driving policy but darker forces were navigating. The real power in our world lurks in the shadows behind the puppet thrones.

        A process reform like Glass-Steagall is certainly necessary but hardly sufficient to save our civilisation.

      • Straw Dogs is an appropriate visual reference to the minds we are dealing with I am afraid

    • joe hack

      I like

      I read somewhere that some believe Mick O’Leary has Chutzpah

      Chutzpah
      Greed
      Sociopath
      Narcissist

      • bonbon

        The Yiddish word derives from the Hebrew word ?utspâ (????????), meaning “insolence” or “audacity”. That is a good thing if directed against the empire. I’ll bet Alexander had chutzpah.

        As long as O’Leary does not direct that against his stewardesses and pilots fine. When he asked pilots to double as stewardesses, they offered him a miniskirt. So far I think he took that with humor….

  23. bonbon

    A lot of readers are struggling to “define” Thatcher, perhaps in a vain “rehabilitation” dash? Here is the definition :

    Lord Ralph Harris, a former president of the Mont Pelerin Society, who was, for decades, the executive director of Mont Pelerin’s main think-tank, the London-based Institute for Economic Affairs (IEA).
    Asked what generated the Institute of Economic Affairs “reforms,” including privatization, which swept Thatcher’s Britain, among other places, Harris replied, “There is this outfit called the Mont Pelerin Society. It was started in 1947. The Mont Pelerin Society created the IEA, ‘Thatcher’s think-tank,’ but we were running long before Thatcher. We weren’t Thatcherites, but she was an ‘IEA-ite.’ ” From Thatcher’s Britain, Harris said, these ideas spread around the world. The most honored Mont Pelerin-ite, Harris emphasized, whom the Queen dubbed one of only 60 “Companions of Honor” of the British Empire, was its seminal thinker, Friedrich von Hayek.

    So it is clear, Royal “Companions of Honor” have imposed imperial economics, whether Hayek, Friedman of Thatcherite. The Mont Pelerin Society is the crossroads of this entire cabal. And the ideas did spread as far as Pinochet’s Chile. Austrian School icon Hayek, British subject, lectured at the London School of Economics.

  24. bonbon

    A lot of readers are struggling to “define” Thatcher, perhaps in a vain “rehabilitation” dash? Here is the definition :

    Lord Ralph .Harris, a former president of the Mont Pelerin Society, who was, for decades, the executive director of Mont Pelerin’s main think-tank, the London-based Institute for Economic Affairs (IEA). Asked what generated the Institute of Economic Affairs “reforms,” including privatization, which swept Thatcher’s Britain, among other places, Harris replied, “There is this outfit called the Mont Pelerin Society. It was started in 1947. The Mont Pelerin Society created the IEA, ‘Thatcher’s think-tank,’ but we were running long before Thatcher. We weren’t Thatcherites, but she was an ‘IEA-ite.’ ” From Thatcher’s Britain, Harris said, these ideas spread around the world. The most honored Mont Pelerin-ite, Harris emphasized, whom the Queen dubbed one of only 60 “Companions of Honor” of the British Empire, was its seminal thinker, Friedrich von Hayek.

    So it is clear, Royal “Companions of Honor” have imposed imperial economics, whether Hayek, Friedman of Thatcherite. The Mont Pelerin Society is the crossroads of this entire cabal. And the ideas did spread as far as Pinochet’s Chile. Austrian School icon Hayek, British subject, lectured at the London School of Economics.

  25. Sorry guys off topic – directly but maybe not indirectly.
    Can somebody give me an assessment of this “attack the tax” group and their special purpose vehicle?
    Read on;

    We got an interesting question from a Cork Woman on Saturday.

    At the last “Attack The Tax” talk in Cork, a Woman asked us “Why are the national media/press/tv not covering what we are teaching People?”. To be honest we cannot answer that question on behalf of the media (just to note: local media have and do give us some cover and we welcome more).

    We suspect that the State probably have too much control over national media, and do not want what we are teaching People about the Law to be widely known. It would not make very good PR for the State and Puppet Government when they are dealing with the EU/IMF or the Troika, to have too many People educated in the law, especially as they say in Cork, when the Politicians are such “a bunch of langers” (sic).

    When we set out to educate ALL the People of the Island, we resigned ourselves to the fact that the national press and media would not entertain or welcome us with open arms. We decided at the outset, to concentrate and focus on getting to meet and talk directly with the People. Eventually ALL of the People on the Island WILL KNOW THE LAW and the TRUTH. Then People can decide for themselves, what they want to do.

    We are relying on ourselves, and now the good will and effort that the People of our Island are obviously prepared to make at a local level, to share and educate each other about the LAW. If the media/press etc. decide to come along for the ride, they are welcome, and if not no matter.

    Equally ALL the People are welcome to this information and the LAW, and we mean all of the People of the Island. We are hiding nothing, and sharing everything.

    As we stated in Cork; “We are non-partisan and we do not discriminate, between the People that have or have not declared, and People that have or have not paid” … the Household Charge and Property Tax are ILLEGAL and UNLAWFUL, and we legally and lawfully demonstrate this, at the TALKS. IN OTHER WORDS: YOU WILL KNOW WHAT WE KNOW.

    To that end, if you would like a copy of the actual Presentation we use at the talks, please do email us and we will either send you a copy (pdf) of it, and or direct you to a link where you can download it.

    It is pretty self-explanatory. If you do have questions about it, please get along to one of the talks and ask us, or simply email us, and we will answer you as best and as soon as we can.

    All we ask is that you share the presentation and the attached YouTube links with ALL your family, friends and community as far and wide as possible.

    http://youtu.be/OGRUM5wX9RY

    The Household Charge First Hearing.

    http://youtu.be/pi5VbJDTRdE

    Property Tax Debate With Revenue (Part 1).

    Please feel f**e as always to send to a friend.

  26. Sent to me by a friend today.

    Chinese advice to 50-Year olds and above – Insight to others…..

    WHERE YOUR LIFE STAND HERE ON EARTH: (Translated from the Chinese version)

    Because none of us have many years to live, and we can’t take along anything when we go, so we don’t have to be too thrifty…

    Spend the money that should be spent, enjoy what should be enjoyed, donate what you are able to donate, but don’t leave all to your children or grandchildren, for you don’t want them to become parasites who are waiting for the day you will die!!

    Don’t worry about what will happen after we are gone, because when we return to dust, we will feel nothing about praises or criticisms.

    The time to enjoy the worldly life and your hard earned wealth will be over!

    Don’t worry too much about your children, for children will have their own destiny and should find their own way. Don’t be your children’s slave. Care for them, love them, give them gifts but also enjoy your money while you can. Life should have more to it than working from the cradle to the grave!!

    Don’t expect too much from your children. Caring children, though caring, would be too busy with their jobs and commitments to render much help.

    Uncaring children may fight over your assets even when you are still alive, and wish for your early demise so they can inherit your properties and wealth.

    Your children take for granted that they are rightful heirs to your wealth; but that you have no claims to their money.

    50-year old like you, don’t trade in your health for wealth by working yourself to an early grave anymore… Because your money may not be able to buy your health…

    When to stop making money, and how much is enough (hundred thousands, million, ten million)?

    Out of thousand hectares of good farm land, you can consume only three quarts (of rice) daily; out of a thousand mansions, you only need eight square meters of space to rest at night.

    So, as long as you have enough food and enough money to spend, that is good enough.

    You should live happily. Every family has its own problems.

    Just do not compare with others for fame and social status and see whose children are doing better, etc., but challenge others for happiness, health, enjoyment, quality of life and longevity…

    Don’t worry about things that you can’t change because it doesn’t help and it may spoil your health.

    You have to create your own well-being and find your own place of happiness.

    As long as you are in good mood and good health, think about happy things, do happy things daily and have fun in doing, then you will pass your time happily every day.

    One day passes without happiness, you will lose one day.

    One day passes with happiness, and then you gain one day.

    In good spirit, sickness will cure; in a happy spirit, sickness will cure faster; in high and happy spirits; sickness will never come.

    With good mood, suitable amount of exercise, always in the sun, variety of foods, reasonable amount of vitamin and mineral intake, hopefully you will live another 20 or 30 years of healthy life of pleasure.

    Above all, learn to cherish the goodness around… and FRIENDS…

    They all make you feel young and “wanted”… without them you are surely to feel lost!!

    Wishing you all the best.

    Please share this with all your friends who are 50 plus and those who will be 50 plus after some time.

    • redriversix

      Amazing Tony…fantastic piece..should be shared everywhere.

      Have a great day..

      Hope your well..?

      Barry

      • Hi Barry

        Thanks, I am pleased it came my way that I may pass it on.
        when I am over this summer I hope I can get a while to pass some time with you and others as friends.

        Keep in touch

  27. “However, listening to the Bruges speech, I realised the enormity of what Thatcher was starting had evaded me. She was putting the re-establishment of national sovereignty front and centre, and was goading the assembled Europhiles to respond. The other point she made was the one about rolling back the state; and this, it seems to me, was of equal enormity – in a speech that is remembered for Europe and little else.”

    Sounded good to me. I have been aware of the movement to one world government tyranny since the early 1970′s. I could see it, taste it and smell it. Britain gave away the store to join the EU. Abandoned all the trade relationships with the Commonwealth and replaced it with the bureaucratic nightmare out of Brussels. The only smart thing they did was to retain their own currency.
    Thatcher was about smaller government, more freedom and not the suffocationg state of big government epitomised by the EU.

    • bonbon

      Still evading the well documented fact that the Euro is the direct result of Thatcher’s and Mitterand’s demand that re-unified Germany abandon the DM. So Thatcher is the cause of the current EU debacle.

      It is amusing to see Cameron trying to leverage this in some way…

      And therefore the best way to start to deal with this is for Germany to return to the DM, but certain banks must be “prepared” for this by splitting them.

      • Quit the crap bon bon.
        The only thing being evaded around here is your common sense.

      • Why are you responses adversarial rather than collaberative.
        you have to prove others wrong and denegrate and demean.Then you pronounce with reference to this or that historical person.

        I have tried to agree with some of your musings but you do not respond. I have asked several times for an answer to a question but you refuse to reply. You insist that others are folowing some philosophical path as you go into reams of quotes from past notables.

        It is impossible to have a conversation with you as you are always scoring points.

        Must be from a most insecure mind. Come down off your perch bon bon and scratch around with the rest of the flock.

        As I said, nobody is trying to evade anything.

        • bonbon

          You mean you are losing points. Too bad. You picked the wrong horse. Not my fault.

          Choose a better economics, and simply accept the documented facts of Thatcher’s extremely destructive policies including the Euro. And the devastatingly destructive Austrian School dogma must be rejected.

          The insanity of that addled minister is quite simply beyond rehabilitation.

  28. http://www.shadowstats.com/alternate_data/inflation-charts

    Inflation took of in 1971 when Nixon went ogg the gold converability standard. look at the above for the real inflation rates plotted since 1982

    inflation is not about to start it has been readily apparent and staedily growing for 30 years.

    Study it David. Several here have talked about it and posted it several times before before. Ignorance is not a valid excuse any more . You have the stats. If you do not agree, directly challenge John Williams and then tell us about your conclusions.I believe John Williams as his stats back my own experience.

    • bonbon

      Study the Triple Curve, and see what is about to be unleashed – hyperinflation beyond anything most can imagine. No one has experienced anything like this, so you cannot rely on the past. It looks like DMcW has got a whiff of fear.

      • Why don’t you explain what the triple curve actually says bon bon. Put is out in lay man’s terms so the rest of us can understand because I sure as hell do not follow the gobbledegook and even if I wanted to study it I have to find the time to research it.

        Seems to me at this point that someone invented it to give the impression they know what they are talking about.

        Is there anyone other than bon bon who knows what this triple curve actually denotes? It is symbolic misticism to me at the moment.

        • bonbon

          The only mystic here is the goldbug. The dazzling gleam, Oh! the wealth oozing from the metal. Actually Hayek formalized that mysticism, precisely put by Mandeville, the author of the Hell Fire Clubs in Ireland.

          Every economic question being answered with “chink-chink”, and Hayek’s Friedman “nudge-nudge” “wink-wink”, meaning an international police force to enforce “free-trade” fools no one after Thatcher’s Pinochet.

          To Pinochet the General Welfare was “gobbledegook” and also to Thatcher.

          We know what you are talking about.

          • You ooze bon bon and the matter does not glitter.Slime and innuendo.

          • moneydoesnotmatter

            Another great response bonbon. You are getting better by the day.

          • Ye see yon birkie, ca’d a lord?,
            Wha struts, an’ stares, an’ a’ that;
            Tho’ hundreds worship at his word,
            He’s but a coof for a’ that:
            For a’ that, an’ a’ that,
            His ribband, star, an’ a’ that:
            The man o’ independent mind
            He looks an’ laughs at a’ that.

  29. “This crusade, deploying both fiscal policy in Britain and monetary policy in the US, led to a sustained era of low inflation or very low inflation in the English-speaking world.”

    We were lied to and the inflation rate is and has been between 5-10%

  30. An hour of labour today buys 45% of what it bought in 1970. notwithstanding an increase in wages 7-8 times higher than the were in 1970.
    This is the result of inflation having pushed prices 15-20 times higher.

    “This has now reached extreme proportions in the US where wages for the average worker have dropped consistently over the past 30 years. The money that used to go to workers has gone to corporations in higher profits. And as you would expect, this has led to the emergence of mega-corporations that serve to reinforce this trend.”Blame the banking system.

    Inflation is generated by the central banks and the monetary system. The inflated money supplied goes first to the banks (huge profits on the dirivatives casino then losses bailed by the taxpayer then huge profits and bonuses again) then to the crony capitalists closest to the bankers and seats of power. The worker gets the crumbs.

  31. “And, as is the case with any prolonged period of reasonably low inflation, it greatly enhances the power of creditors over borrowers. ”

    What a pile of BS. Infered is that high inflation is great for borrowers.

    It is not low or no inflation that enhanses the power of creditors over borrowers, it is the contraction of a boom that follows a period of high inflation like we have just gone through. Remember the Dot com bubble (inflation) the housing bubble (inflation). How can you suggest that inflation is just about to rear its head.

  32. “All this money sloshing around is not going into wages, so it has to go somewhere and it goes into assets. This caused assets such as houses to soar in value. We see something similar in stocks, and each rise in the underlying value makes legitimate more lending against that collateral. In time, the markets peak and crash, leaving the central banks to clean up the mess that they largely helped cause by overlooking asset price rises.”

    YES David it is called a credit explosion. A boom caused by borrowing.
    The inevitable result is a bust as it is based on an illusion.
    It is called inflation caused by the central banks as deliberate policy.

    How can you ask the central banks to clean up the mess. As you say, they caused it. Their money is bound to cause it again and again. What is it you do not get about this. All central bank money is loaned into existance as is commercial bank money.
    I have gone over this 20 times. Everyone is suffering from debt suffocation. It is the way the system is designed. Can you not see this. Do you wear shades all the time.

    The central Banks work for their boss. The money masters. The elite bankers the rothschilds et al. They do not work for us. why would any solution offered benefit the people. Is it not as plain as the nose on your face, David, that the central banks work for them selves and their shareholders. Hello, hello, is there anybody home/

  33. It is like a hostage situation – the banks and financial markets are the hostage takers, the economy is the hostage and central banks pay the ransom.

    The central banks pay the ransom my arse.
    The central banks charge every last penny to the taxpayer.

    The central banks are a criminal institution. They are licensed for theft. They steal the assets and the work of the people and syhpon it to their bosses. You know those rich guys the elite bankers.

    The central bankers you worked for David. They are the crooks that need closing. You have been duped if you think they are the good guys.

  34. Just like the Bruges speech, which signalled the beginning of a 20-year war in British politics that will end with Cameron’s referendum, the recent developments in the US economy could also be a major turning point, one that could usher in a new era of higher inflation all over the globe.

    The referendum may not finish anything.
    Likewise inflation has been with us since the Federal reserve but particularly since the closing of the gold window in 1971.
    ow we finish where we started with the real inflation graph from John Williams http://www.shadowstats.com
    http://www.shadowstats.com/alternate_data/inflation-charts
    n

  35. just in case there are those who think I sit on the computer all day or gaze at gold bullion or some such thing I would like to report that there were some lovely events in my life over the last 72 hours.

    I have spent an hour chatting with my son about economics and being put staight on anumber of issues. Then we talked about his purchase of a comdominium that closes in May and how he will be in a good neighbourhood for friend to visit. He has a lovely nature.
    He talks of getting married and having a family but no prospects in sight.He will need a good strong girl who can work and handle a stay at home dad as he has a physical disability.

    I visited my daughter who is studying for an exam that will allow her as a nurse to work in the operating theatre; how she goes out for a run and bakes this and that.

    Then I talked to my son in law as he showed me the latest engineering reqirement from the building deprtment of the local council. They are landscaping the back garden with a froggy pool and a stream fed by a small pump and rainwater saved in huge containers buried. strange rules required.
    His tech job for a herb and spice local company goes well.

    Then there was an hour chat with a German friend in Helsinki via Skype and we discussed his past career in Australia and Lord howe Island. and the plight of the gold market this last week.Hen wife. is moving back to Canada here in Julywith his cuba

    Yesterday was the turn of me and my crew to be the race committee. We had fun studying the wind and tides expected and deciding an appropriate course. Then we did the countdown and started the race exactly on time to the second. We had to take a note of all the participants and then be there at the finish line to record the times and results on the sheet as the boats finished. The last an hour and a half behind the first.

    It was a lovely sunny day with a light breeze.

    Then to the club house for a snack and a glass of wine and to chat and talk with the assembled. great fun.

    Today I cycled to the ferry terminal all of 3 km away and took the ferry to Salt spring Island. Then cycled to the farm known as Ecoreality. There I met new people chatted and had a light lunch and then went to the new greenhouse to put tiny lettice seeds on tiny seed beds for propogation, chatting all the while and a couple of preteen kids wandered in and out asking questions.
    The I cycled back, to a return ferry and back on my boat.i cooked up a good meal and had a glass of wine.

    Thursday I return to the farm and clear out a modest room where I will be able to put my “stuff” and I will be able to potter around the 44 acres and be involved in helping out.

    Past life involves farming with the attendant skills. I can shoe a horse (farrier) use a welder in a rudimentary fashion and I am a skilled labourer. (comes in useful at aged 70 to be able to do thes things). I can milk a cow, ride a horse, drive a tractor build a hay rick or stack, muck out a stable, dig a ditch or build a fence and generally help around.

    My boat is not far and I will go for a sail every week.

    It is my sisters 65th this July and she farms in Devon and there is a surprise party. My elder sister who has the same birth date but eleven years earlier will visit from New Zealand and my eldest sister is not too far away so it will be a family get together as I will be there. I have a neice being married in June and so I will hope to get there too. Looks like a plan for a couple of month visit if I can and the bike comes too I hope.

    I coached at the Sooke boxing club on friday and the tree frogs were ribbiting away in the meadows as I went past. Coaching is fun as I impart some pugilistic skills but best of all is to see the change in an unsure bullied youg kid as I teach self defence and personal respect for oneself.
    It is rewarding to have a parent tell me of the positive effect I have had on a child or youngster. Yes I still get in the ring. It keeps me humble and gives me execise.

    Enough for now. Life is good.((My assets are depleted 20% so far this year but there is a long way to recover before the end of the year. ) I hope to see my friends amoungst you sometime this summer.

    • michaelcoughlan

      Hi Tony,

      Thanks for the insight on a life being lived well. As it so happens I sm also getting involved in a coop movement here in Ireland.

      Your best days are ahead. Don’t waste too much time trying to convince people who wont listen. You will come accros as too dogmatic. Look again at the video by Bill Sill called the secret of OZ. There are some very useful insights there regarding gold.

      • Thanks Michael.

        My chat with the lady on the farm was agreeable.
        It is known that a small event can cause a large one. Which is the final snow flake that set off the averlanche.

        I work on the principle that I only have to make aware two people to have an immeasurable effect. I tell two people , who tell two people who tell two people and so on.

        There will be thousands of unbelievers but there will be the one here and there.

        It is worth while to appear dogmatic to the masses while being a prophet to a few!!!!!!!!!!It is not for me that I subscribe to this blog. It is for those I can reach and help.

        Being in a public forum leads to being corrected by others and causes a thinking and evaluation process to occur.

        Truth will out.

        Tell me about your coop experiences sometime. It is difficult for me as an individualist to contemplate such endevours but I am.

        • wish I could edit my own postings. spelling and gramatical errors appear even after reading through two or three times before posting “Avalanche”
          Thanks to all for the tolerance of such.

    • dwalsh

      You have a rich life indeed Tony.
      Thank you for sharing.
      All the best to you.

  36. Six highly technical points which suggest this is a man of considerable intelligence indeed and a soliloquy to finish. Simply marvelous and lovely of you to share these insights with the Irish Brothers Tony. The chaps will find it riveting and I look forward to all their considered responses

    I am off to bed and hope that I dream that I am 16 again and that Olivia Newton John wants my very bones

    Goodnight and god bless you Brogie. Keep earning the right to wear those number 3 shorts

  37. 5Fingers

    One thing I do firmly agree on in DMW’s article is that we could enter a new economic paradigm by virtue of an event. However Thatcher’s passing as the start of a HyperInflation episode is more correlative than causative.

    One thing I have been watching this year is that for a lot of the developed northern hemisphere we have had a late Spring. Fodder is all but gone, growing is at least 6-8 weeks behind schedule and couple that with what I said about supply chains earlier, we could be in for a spot of bother on the commodities market.

    Perhaps a better indicator is to watch insurance risk. Over the last few years OECD countries seem to offer poorer and poorer returns. Clearly, while the market may seem derisked financially and money is available for free, there is increasing unwillingness of insurance companies to insure against what is starting to become a trend (bad weather, bond crisis, you name it) that finally calls the bluff.

  38. redriversix

    The deposit insurance fund that is contributed to by Banks & credit unions which would be used to guarantee peoples deposits up to 100,000 euro in the event of a banking failure……….is “short 1.5 Billion EURO..!!

    This was in a small piece in the Sunday Business Post.Today is Tuesday and I have not heard one piece of commentary from the media.

    How serious does it have to be to get for people to realize how serious this is ?

    Mr Elderfield did not have to waive is 100K Bonus on announcing his resignation from Central Bank Of Ireland …so what is exactly going on in Central Bank world.its not good whatever it is…?

  39. All very well giving a great speech, but what if Thatcher had, instead of merely goading people she didn’t trust, actually tried to achieve something of note in Europe?

    Whatever about her legacy in the Cold War, anyone considered as formidable an opponent as she seems to have been, could have, for example, killed the euro project before it got off the ground? Wouldn’t have took much doing.

    • bonbon

      Thatcher STARTED the Euro project to take away the German DM. That was her price for re-unification. Look at the result of the insane policy! Cameron is indeed doing a pirouette !

      Amazing the naivetee of the islands!

      Even more apparent, as the banks raid the country.

      • Germans didn’t give a monkeys what Thatcher thought about reunification (not much) as once the septics were in okay with it, nothing else mattered.

        She was going around “goading” people for a living while France and Germany were doing deals.

        • bonbon

          Oh they do. They know they are being “asked” to pay for the entire Euro fiasco, so duck!
          SZ, biggest Bavarian press, this weekend had a very clear headline – savers will be forced to pay for bankrupt banks.

          Have you any idea what that means?

          The Euro will break and with it the entire short-legged packet of lies that started it.

  40. he prices in gold and silver as demoninated in your local fiat currency reflect the inflation in those currencies.

    As the PTB want you to think that inflation is low, they do a couple of things.
    They manipulate the basket of goods so reflect lower prices. they make seasonal adjustments and thay make what are known as hedonic adjustments (substitutions). you can see the result of this by following http://www.shadowstats.com as already posed twice above . This will show the real rate of inflation at about8% currntly. somewhere in the range you suspect is true from your daily pricingof those things bought.

    They then attack the barometer/thermostat/standard of measurement.
    This is essentially the gold price. It despite ridecule and disparagement is the standard measurement for the value of all goods and currencies one against another. It is the consistant yardstick. It does not change but all other goods and services are measured against gold.

    Yesterday 500 tonnes of imaginary gold was sold into the market in minutes. There was no physical gold sold at all as liquidation for cash only what was asked for by increasing numbers of buyers. Consequently physical gold and silver is getting in short supply.
    Reports are appearing that gold and silver is not available except at increased premiums which reflect something closer to the true price.

    for example

    http://silverdoctors.com/gold-run-there-is-not-one-single-ounce-of-gold-available-for-sale-in-bangkok/

    Do not be deluded by the banksters and fraud artists who want you to supply them with all your assets and revert to their useless constantly inflated paper trash. It will be yet again more valuable as a fire for heat than to spend on fuel. More vulauable as wallpaper or toilet paper than money.

  41. molly

    Crow park is dead ,how soon before your savings are raided.

  42. molly

    Maybe labour might pull the plug on this crap government or will labour go down with the ship.

  43. Extract from a Bill H posting at The Metropolecafe site on gold

    I tried to “be nice” in my piece from last night talking to those who worry about price. What is now happening is exactly what I spoke of, you must count ounces because “availability” is going away right here and right now! After the closure of the COMEX and LBMA doors there will be no availability and “price” will be meaningless. Your ability to protect yourself is right now for all intents and purposes being eliminated.

    • bonbon

      Gold and savings will be impounded, expropriated. So what now?

      Time to fight, not run (with heavy bags of metal).

      • And what , pray tell are you going to fight with.
        Leaving the central banks in charge as you propose is the route to slavery. Then we will have you ordering another massive project like building a pyramid using the 100′s of thousands of unemployed financial serfs.

        Rather individual freedom and decisions made by each for their own benefit resulting in the common good. We will not need a massive government work project paid for by paper credit vouchers.

        • joe hack

          It used to be like that in the dark ages – individual common good – you need to factor in the human condition in to your logic – you might be good sort but the other “free individual” might not

          • People will not succeed if they do not benefit others. Thus the many decisions taken by people at large result in the production of goods and services supplied at the best cost and service. So is society benefited as a whole.

      • So you stand aside and agree and allow government/bank theft of personal property. You are already intimidated and coerced by these agencies.

  44. Time for an appropriate quote from Gold Wars

    Hi Bill:
    You’re right. What a day.
    Time for a quote from “Gold Wars: The Battle of Sound Money”, by Ferdinand Lips
    published 2001. Page 142: What Are Central Bankers Really Up To?
    “No normal businessperson would purposefully act in such a way as to depress the price of his most valuable asset. Hence, central bankers ought to know better. And they probably do know better. They also know perfectly well that their display of fighting inflation is for the benefit of a gullible public. What central bankers are really interested in is the continuing efficacy of their respective banking systems. These arrangements allow banks to garner enormous revenues, . . . provided the fiat funny money systems are sustained. To continue this unearned and undeserved bonanza, gold money, which would be the people’s choice in a free market, must be disparaged, destroyed and eliminated.”
    There’s nothing new under the sun.
    It is indeed another “Gold War.”
    Respectfully,
    Edward Ulysses Cate

    • bonbon

      If you want to fight, which is actually doubtful from the display of gold coin-flipping, take on the banks with Glass-Steagall – split them in half. The functioning dept., with some competent bankers are thus relieved of the casino. And they will have plenty of work handling the massive Hamilton Credit programs for huge development.

      No need for Hayek’s international police force (Friedman’s wink-wink), sovereign nation-states can handle the problem when they cast relics of empire aside. Iceland and Argentina show the way.

      • moneydoesnotmatter

        Hi bonbon.
        Excellent as usual. Glass-Steagall is the way forward.(or a more modern updated version)
        Can you tell us a bit more about the triple curve?.

        • He has been asked to explain many times but seems incapable of even acknowledging the question let alone providing an answer.

          He suggests that Glass Steagall will be applied to central banks but will not explain how.

          He does not explain how G/S will remove fractional reserve debt based interest bearing money, that is currently suffocating the economy.

          He does not explain how a Hamilton central bank issuing credit (loans at interest) is different from the modern central banks.

          To the best of my knowledge he has never answered one question put to him.

          Maybe you will have better luck.

          • 5Fingers

            The thing to note about the triple curve is that it is 3 separate curves which are seemingly unrelated. They are seemingly correlated but not causally linked.

            The arguments you put forward on money printing and reserve banking and the horrors of CBs etc shows the causal link between Financial and monetary aggregates. And sure enough, as the money issuance/ derivative machines spin up, they cannot go backwards because financial performance is now linked to monetary manipulation.

            The problem is the lack of causal integration in people minds to the real economy. It is a problem DMW has as he seems utterly at ease with the idea of monetarism to drive finance which he sees as in lock step with the real economy. And who would blame him? Look at any financial control system interlocked with a manufacturing / logistics system, you see the money flow as the goods flow. What is missed though is that actual value as measured in human terms. Larouche has a stab at this by using the concept of output per square kilometre – by so doing is attempting to derive a value which a “martian” could measure were it to zoom in from space to measure our economic output.

            What has happened is that financial aggregrates were once only linked to physical economy. But this has a problem if you are trying to grow because share holder value (ultimately an idea) got to lock down human economic value. In other words, the shareholders and gold holders could define human value when in fact theirs was a very limited world view. Fractional reserve banking allowed expansion of human value.

            As long as retail banks and deposits worked and fractional reserve rules were applied – them bank grew because the real economy grew.

            Enter investment banking and insurance against risk and a whole new set of pressures came into play. Long story short, if you did not make use of funny money, your competition did to wipe you out and with that the hyper competition short termism and export of national income. Monetarism merely fanned the flames of hypercompetition and with it margin grab to the cost of all other value. When you start only chasing margin, human value starts to fall off and with hyper competitoon, diminishing returns and further dwindling of human output and that explains the collapse of the physical as the monetary takes off and hence the need for Glass Sea Gulls.

          • StephenKenny

            As described in the so-called ‘Gresham’s Law’ – ‘bad money drives out good’.

            “Any sufficiently advanced technology is indistinguishable from magic” Arthur C. Clarke.

            Economists seem to have been promising us, and the politicians and their avid followers enthusiastically supporting, that they have invented a magic machine that, with the deft twist of a few knobs, will keep the economy booming forever.

            We used to have common sense to deal with that – “if it seems too good to be true, then it probably is”, and “there’s not such thing as a free lunch” – but we’re now much too modern and sophisticated. We believe in magic.

        • bonbon

          The Triple Curve is a a metaphor – one can start with the chalk on the blackboard with maths, but the meaning gets lost. Have a look at the graphics at the link.

          The 3 totally connected actions are a single paradigm – to attempt to push one curve will push the others along their trajectory. Crazy money printing is driving the physical economy into the abyss. This is why some call it “bank-money”, no credit appears in the economy, but it is looted.

          The Triple Curve also shows exactly how to intervene in this seemingly hopeless train crash.

          The physical economy needs urgent reconstruction, priority number 1. That means a type of credit that is NOT bank-money, but can be issued for major programs designed to drive the economy off that train wreck. But banks that need to manage that must be free of the driver of that Triple Curve, which is in fact derivatives, toxic synthetic debt. Glass-Steagall has this principle, and Hamilton’s Credit Clause the reconstruction principle. We have seen both in action at various crises.

          So it is metaphor of the catastrophe, and most importantly the the way to deal with it in one graphic.

          No magic involved, metaphor is how we think, or used to before the practical banksters took over. There is a scientific principle here, driving economics to a higher platform where value cannot be simply compared to that of the previous platform.

          Everyone says $14 out for every $1 invested in Apollo. What most miss is those Dollars were NOT the same! Monetarists will try to either convert $1 to gold or paper of both platforms, and miss the entire world in the process.

  45. ‘’So the central banks are in a corner. They have no option but to accept all sorts of collateral from the banks in return for cash. In the US, the Fed is making $85 billion a month available to the banks to lend.’’

    I know the above paragraph is for the readership but just to confirm that central banks can only really create central bank money but this can never leave the central bank’s balance sheet and so it’s not in circulation.

    The €85billion is not ‘available to the banks to lend’. It may put the banks in a better position to create bank account money which is in circulation but they have to be confident in a willing debtor for this to happen. This is fundamentally very different from the central bank first creating money which is further lent on by banks.

    The ECB has confirmed this recently:
    ‘’Central bank reserves are held by banks and are not part of money held by the non-financial sector, hence not, per se, an inflationary type of liquidity. There is no acceptable theory linking in a necessary way the monetary base created by central banks to inflation. Nevertheless, it is argued by some that financial institutions would be free to instantly transform their loans from the central bank into credit to the non-financial sector. This fits into the old theoretical view about the credit multiplier according to which the sequence of money creation goes from the primary liquidity created by central banks to total money supply created by banks via their credit decisions. In reality the sequence works more in the opposite direction with banks taking first their credit decisions and then looking for the necessary funding and reserves of central bank money.” Vitor Constancio, Vice president of the ECB (2011)

    “It is a fallacy to make a mechanical connection between the creation of central bank liquidity and a rise in the money supply. The liquidity we provide to banks is used in the markets where banks lend to each other. It does not automatically increase credit or money in the economy – and so does not automatically lead to price pressure in the economy.” Mario Draghi, (2013)

    ‘’There is no evidence that the monetary base or M1 leads the cycle, although some economists still believe this monetary myth. Both the monetary base and M1 series are generally procyclical and, if anything, the monetary base lags the cycle slightly’’. Kydland & Prescott, Federal Reserve Bank of Minneapolis, (1990)

    • joe hack

      “The €85 billion is not ‘available to the banks to lend’. It may put the banks in a better position to create bank account money which is in circulation but they have to be confident in a willing debtor for this to happen. This is fundamentally very different from the central bank first creating money which is further lent on by banks.”

      “”but they have to be confident in a willing debtor”"

      central banks creating confident banks leading to lending to willing debtor…

      is that the not effectively creating debt money

    • michaelcoughlan

      Hi Paul,

      The €85billion is not ‘available to the banks to lend’

      The €85bn PER MONTH Paul. PER MONTH!

      It may well be the case that the Central banks are issuing money in the manner you say but you have missed a very very important point. The reason there is no liquidity and the need arises in the first instance for the €85bn per month is because the previous loans aren’t being paid back. This is because they were never lent to businesses that were using the money to create wealth. They were lent to businesses that were making profits from speculation. In other words the capital wasn’t allocated correctly which is the prime reason for a decent banker to exist in his job in the first instance.

      Do you remember when Seanie Fitzpatrick gave himself €75m to buy an oil well in Nigeria? What did Seanie know about the oil Industry? Nada! Misallocation of capital or WHAT? The €85bn Per month will not be paid back to the Fed even though they only see it as a stop gap measure because there has been no reform of who the money gets lent to and all that extra money sloshing around on the central bank’s balance sheet has been borrowed into existence the interest on which has to be paid by taxation of the citizens.

      Your treatise only confirms this reality. What isn’t obvious to you is that the feds policy is making matters worse because the cun%s in charge are back speculation on the various indices driving the levels to new heights IRRESPECTIVE of the underlying fundamentals. Whilst inflation isn’t trickling down to the street level as quickly as it should it certainly is playing out in the hedge funds world.

      The knock on effect is that instead of inflation rising as a result of the ordinary man in the street having extra cash in his pocket to spend on the same amount of goods the inflation is rising because the cost of raw materials will rise as a result of the cost per unit being driven into the stratosphere by some hedge fund manager or other. Spare me the shite about commodity prices collapsing because that will always happen just before hyperinflation as the ordinary Joe has no other way to raise cash only to sell the family silverware. (Remember David the good room and your Granny storing her silver teapot and knives and forks etc. You hardly think it was for eating your supper do you? If you saw granny selling the teapot for the value of it’s silver content wouldn’t you be worried how grannie was going to pay for your dinner when the money raised from the sale of the teapot was spent?).

      The article is Prescient and Seminal. No question about it. It is in fact terrifying. I’ll say it again.

      God help us all.

    • 5Fingers

      Paul,

      In nuts a bolts terms, we know there is little confidence there to borrow among those who can and those that want to borrow are desperate. So in essence, we have a double whammy as far as cash availability is concerned. Creating money will simply not happen becasue that particular show is well and truly over and that is what a lot of the people here are forgetting. They have well described how we got here. But we simply do not know how to move on.

      Were confidence higher or debt levels much lower, the CB stimulants could be allowed to work.

      I think the excesses (sudden money availability by whatever form) in the early 2000s created distortions that racked up unsustainable debt levels and at the same time wrecked the economy as margin chasing forced hypercompetition and hyper aggregration of economies of scale at the expense of local economic activity. When the latter fails, you can throw as much confetti as you like at it, but it’ll remain dead as long a debt and despair are so high.

    • bonbon

      Your comment does go a long way to explain the total credit freeze for the physical economy.

      The cure for this suicidal situation, is to first split off the units that are using this bank money to speculate, let them continue with no guarantee of any kind. They can keep the useless “bank money”.

      Then in the same long weekend, institute Hamiltonian Credit with national sovereign commitment. Ready must be the major programs, middle and small firms will have too much to do. This is a science driven approach to economy not casino-driven. This takes some adjustment for honest bankers – they are simply totally inexperienced.

      I notice you have repeatedly tried to clarify the money situation with much patience. I try to clarify the economic situation and what must be urgently attained.

      It would be good to hear your viewpoint on Glass-Steagall – taking the money problem headlong on, and rebuilding the shattered economy.

  46. “Democracy Is Coming To The U.K” as well as Anarchy, of course! LOL! So, the Police didn’t cave in to the Thatcher Memorial Mob.

    I have just listened to “I Vow To Thee Maggie- Westminster Abbey Remix” by the Tone Deaf Neoliberal Choir. Enough.

    Time for a drive to the very heart of England and to put the torch to my very own Neoliberal Funeral Pyre:

    http://news.uk.msn.com/uk/protesters-turn-back-on-coffin?ocid=binganswers

  47. cooldude

    Interesting comments on where this $85 billion goes every month. As far as I know, and correct me if I am wrong, most of it is used to buy mortgage backed securities and other types of toxic sludge off the commercial banks who receive full value for these securities even though though their market value is usually less than 50%. In other words this is newly created money, created at zero cost, which is used to keep the commercial banks solvent so they can pay themselves exorbitant bonuses without creating anything of real value. This comes as no real surprise as the real function of a central bank is to protect and help it’s shareholders who are the commercial banks. These guys don’t give a shit about the real economy and the 47 million Americans on foodstamps they only care about keeping the ponzi scheme ticking along and making sure the bonuses are paid. If they really wanted to help ordinary people why not just send a check to each family every month and bypass these toxic banks altogether? The reason is because this QE is simply about providing funds to the commercial banks to be used in pure speculation without any benefit to the real economy. The banking system and it’s sole franchise over what we use as money is the problem. The only way to stop them is to allow competition in what we use as money and to let all these insolvent banks go broke and be replaced. Anything else is just pissing in the wind.

    • Wills

      Excellent comment.

    • “QE is simply about providing funds to the commercial banks to be used in pure speculation without any benefit to the real economy”

      That is what it looks and sounds like to me and these people produce absolutely nowt, zilch

      The financial industry is a huge piss take and one has to ask the question : ‘why do these people exist and why is there so many of them?’

      I watched Gladiator last night and was wondering if we could pull in extra revenue at Croke Park by feeding them to the prisoners. It would sell out every night and Inda would look magnificent as the chanting crowds chant ‘kill, kill, kill’ as he plays for the cameras in taking an inordinate amount of time deciding whither the striken banker or hoodie is to be shown mercy

      If you are going to have a dictatorship then at least have a proper one.

    • bonbon

      Some have tried to “compete” with these toxic behemoths. Good luck to them.

      Much better to assert sovereignty OVER them, split them and get on with reconstruction on a nation-scale, massive, cooperation. Those that would like to be “free” and dodge can go ahead and try.

      The Ausrian School recipe fails mises-erably when faced with economic reality.

  48. “Economics are the method; the object is to change the heart and soul.”

    Margaret Thatcher.

    #ThatcherReaganNeoliberalEpicFAIL!

    More coal on that fire, Maggie?

    http://upload.wikimedia.org/wikipedia/commons/thumb/a/ae/Reagan_Thatcher.jpg/300px-Reagan_Thatcher.jpg

  49. No, we are not all Thatcherites. Some of us never drank the neo-liberal Kool-Aid. Nakedly vain opportunistic propaganda prat, like a trapped rat, he lashes out, ignoring the IMF instructions to sack pasty faced George Osborne. Pathetic man. I will bring your alabaster statues crashing down…

    http://www.independent.co.uk/news/uk/politics/we-are-all-thatcherites-now-david-cameron-leads-tributes-to-margaret-thatcher-and-defends-funeral-costs-8576206.html

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