May 2, 2013

What Germany's football success tells us about the eurozone crisis

Posted in Euro · 158 comments ·

Last night we saw not just a football match between two great teams, but two very different cultural, social and economic models battling for supremacy. On one hand we had the frugal but brilliant Germans of Borussia Dortmund, on the other was the free-spending (and also brilliant) Real Madrid. This was a battle between the local, academy-based Dortmund, and the international, chequebook-driven, Real.

The contrast between the footballing model of Real Madrid and Barcelona or the English clubs of Manchester United, Manchester City or Chelsea, and the model of Dortmund and Bayern Munich goes to the heart of differing views about the general economy.

Germans are very proud of their Bundesliga. Nowhere is that pride more justified than in Munich, where Bayern Munich, the most successful German football club, reigns supreme. Bayern is a proper club, with a wonderful history. It won the German league at a canter. It has great players and an open, attacking and exciting approach to the game. Bayern recruits local talent, so the heroes on the pitch, from captain Philipp Lahm via playmaker Bastian Schweinsteiger, to striker Thomas Muller are all local lads from the famous Bayern youth academy.

The club is well run, its new stadium, the Allianz Arena, is an architectural gem owned by the local municipality, which rents it to Bayern and its rival, Munich 1860. The 70,000 capacity stadium cost €340m to build and is used every week. The contrast with the Aviva stadium couldn’t be greater. The Irish stadium cost €410m to build, holds fewer people and is used much more rarely.

Financially, Bayern operates well within its means, much like the German economy. Its accounts are perfect and the players are paid well – but not extravagantly. Bayern is all about tradition and continuity; planning meticulously from youth development all the way up to the professional first 11.

T-mobile, the local telecom company, is the main sponsor. The club is owned by the fans and operates like a tight co-operative. Bayern’s manager is a former German international. If it were a country, it would be running a massive current account surplus with the rest of the world, have a huge savings ratio and low inflation – not unlike Germany!

Real, in contrast, is everything Bayern is not. The club is debt-financed. It is sponsored by the mega-wealthy Emirates Airways. While the majority of fans are Madrideros, the team itself is deeply cosmopolitan. Real also carried debts of nearly a quarter of a billion euro last year.

If Real were a country, it would be running a massive current account deficit. It would borrow where it could and be prone to higher inflation – a bit like Spain!

The contrast between Real’s approach and Bayern’s is not just one of finance and economics, but is the story of the European economy.

German football, like the economy, is better managed than any other. Unlike in Spain, for example, German teams are not allowed to go into debt.

Clubs must be financially accountable. A full set of documents must be submitted each year before a playing licence is given. It is exhaustive, covering assets, receivables, cash and bank balances, liabilities and provisions, current overdraft facilities, loan commitments, projected and current profit/loss statements, and cash inflows and outflows.

These documents are judged by the German football league. All clubs must inject money into a fund to make sure that if a club does get into difficulty, even after all this scrutiny, it won’t go bust. No Bundesliga club has experienced an insolvency event since the league’s creation in 1963. By way of comparison, there have been 92 in the top five divisions of English football since 1992.

Ticket prices are kept low: around €10 a game. The fans feel real ownership. The Bundesliga is the best attended of the big football leagues in Europe, with an average attendance of 45,726 in 2010/11 – 10,000 more than the Premier League.

Germans believe this is the secret to German success. Good management and aversion to debt. Certainly not the approach of the free-spending, profligate Spaniards. When we look at the economies right now, it’s hard to disagree.

Germany is booming. Unemployment is the lowest in a generation, exports to the rest of the world are motoring, wages are rising and property prices are inflating in the big cities of Hamburg, Frankfurt and Munich. In a recent poll, 86pc of Germans said they were happy with their standard of living.

In contrast, Spain is on its knees. There are more people on the dole in Spain today than there are citizens of Denmark. House prices are collapsing, money is flooding out of the country, because local people believe Spain will experience a massive banking crisis like Cyprus.

So it looks like game, set and match to the Germans. But from the European perspective, things are not that simple. The German economy needs Spain just as much as Spain needs Germany. Similarly, the frugal German soccer clubs need free-spending Spanish clubs.

Without free-spending, debt-financed, brash Spanish giants like Real Madrid and Barcelona, Bayern would have nobody to play with. There would be no Champions League. Put simply, without the huge spending of the likes of Real, the Germans would have no competition to play in or against.

Similarly, when we look at the European economy, without the periphery buying their goods, the Germans would have no one to play economics with. They’d have to play with themselves. Every creditor country like Germany needs a debtor country like Spain. Every budget surplus needs a deficit to finance, and every current account surplus needs a current account deficit. In the same way, every Bayern Munich needs a Real or Barcelona – otherwise they’d have to content themselves with day trips to Leverkusen.

This is Germany’s dilemma: it needs Europe and the rest of the eurozone to keep spending if it is to remain economically dominant. And this is why, despite all the lecturing and hectoring, Germany will write a big cheque to bail out the periphery. It knows this, and the games Germany is playing right now are just an exercise to minimise the cheque it will ultimately have to write. Otherwise, the recent economic data that reveals the first signs of a possible slowdown in German industrial exports will become entrenched – and no one in export-led Bavaria or Dortmund wants that.

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  1. mcsean2163

    Bullology. Savers need bankrupts? C’mon….

  2. Hi Mcsean

    I think you may be getting the wrong end of the stick. It has always perplexed me why savers think they should get yield for choosing not to take risk. For savings to generate income, someone else has to use those savings to finance an invesment and thus create a going concern which yields profit and dividend for the original saver. But as you know lots of investments go bust, leading to bankruptcy. That’s the risk. So yes, savers do need bankrupts if they are to get yeild, its all part of the game of capitalism

    That’s my point.



    • Lius


      I agree with you that the savers need lenders and the sellers need buyers, but you are way off the mark about somebody needing losers like Spain and Greece.

      If the borrower does not re-pay the loan the saver is just financing someone else’s lifestyle with his savings. If the buyer does not pay for goods then the seller is doing the buyers work for free.

      This is just like your Argentinean theory, FLAWED

      • Hmm.. Well, isn’t the point here that the Germans are effectively lending to themselves, or to use your words, financing their own lifestyles? What flows out via Deutsche Bank flows back in via BMW and Mercedes.

      • michaelcoughlan

        Hi lius,

        Hedge fund managers short selling govt debt in their zero sum transactions need losers like Greece and Spain. The more damage they can inflict on those countries the bigger the bonus.

        Remember conscience does not exist in the hedgefunds world.


        • Lius

          My point is that financing looser like Greece and Spain is basically a runaway social welfare system, a total drag on the productive economy / society.

          Social welfare must be kept to a minimum otherwise there would not be enough coming from the productive citizens to feed the total population, just like any balance sheet.

          That is why David is wrong about Germany needing Spain & Greece, soccer is a different ball game altogether.

          • michaelcoughlan


            It’s not social welfare which caused the problem it’s corruption. Whether it’s in banks Greece or Spain.

            Gsucks sold greece derivatives designed to fail according to some articles. I don’t know for sure but it’s ver plausible considering all the law suits they have had go face. Moreover the hedgefunds industry is TWENTY times the size of the worlds GDP which will wield alog more destruction on humanity than socialism gone wrong.

            I agree with your point thought that state spending must be kept in check to prevent social spending strangling the economy.



          • Lius


            You are missing my point.

            I’m comparing Germany needing unproductive countries to fund as much as Countries need unproductive citizens to feed, too much of either is unsustainable.

            There is a point of equilibrium, a balance that must be achieved.

          • Lius

            My point is that Germany can’t run a current account surplus with itself!

            Why do you think I believe Argentina is a poster boy for anything? All I pointed out – in blizzard of misinformation – was the fact that the default and devaluation was followed by nine years of strong GDP growth.



    • ShaneH

      Quote “So yes, savers do need bankrupts if they are to get yield” only providing that a savers money is being borrowed in the first place. Your ignorance of money creation is only matched by your inaptitude or stubbornness to accept the fact banks don’t lend they create. Banks are not intermediaries between savers and borrowers as your articles constantly suggest. You have recommended reading Steve Keens “Debunking Economics”, do yourself a favour and reach out to Steve and ask him to explain money creation for you.

      David you really do yourself and your readers a great disservice by not only failing to understand the nature of money, but by perpetuating a fallacy on how money and banks work. This in turns makes many of your articles and conclusions meaningless.


      • Lius


        I understand money creation, I just don’t agree with it.

        That is the root of the problem, money should not be “created”, money should be an IOU for goods, services and physical assets which can be exchanged for other goods, services and assets.

        Banks should only lend money that savers put on deposit having obtained the money in exchange for goods, services and assets. When money is “created” it eventually must be burned as there are no goods, services or physical assets to back it up, i.e. it is worthless.

        Creating money is the same as letting people create (make) their own casino chips, gambling with them in the casino and then cashing them in for real money. The casino would be bust in a week no matter how high the house take was. Nobody would be buying chips from the casino with real money and whatever real money they started out with would soon be gone.

        That is where the global economic system is at right now, a casino stacked full with worthless chips and no real money to pay the dealers, rent and electricity.

        • ShaneH

          Hi Lius,
          I agree the privatisation of our money supply is at the root of the problem. This along with a few other systemic issues is never part of mainstream discourse. And the reason these issues are not being discussed is also at the root of the problem i.e. economics.

          Economics in general have failed us; their pseudo science is the equivalent of the “Snake Oil Salesman”. Their outer veneer is that of a hard science, with their computer models, quantum physic type formulas, presenting their work to the world as being as important as the discovery of the double helix in DNA, or Newton’s discovery of gravity. But when you scratch under the surface what you find is truly alarming, as a work of science fiction it would be almost too fanciful. But believe me when i say that economics as practiced taught and implement in government policies around the planet today is as phony as the bank of Sweden prize that honours its achievements each year.

          A conservative estimate would say that at least 90% of the so called experts failed to see this latest crisis coming; the majority of the minority who did recognised the classical bubble still don’t understand the role of banks, credit and debt in the economy and in creating and fuelling the so called “business cycle”. The fact these people still are in jobs is disturbing, that they are still driving policy and advising government is profoundly unjust and criminally immoral and that they are still using the same failed system and models is beyond words.

          I heard Michael Somers on with George Lee on Saturday. Now this guy is one of the people that is held up on a peddle stool. He would be recognised as an expert on financing and banking. How else could his obscene wages be justified? He is now sitting on some of the banking boards as a non executive director. His role is to serve the public interest. At one point on Saturday he described banking as (maybe paraphrasing a bit) “banks take in money from savers, hold on to a little of it and loan out the rest”.

          It is people like these that government and the general public listen to. His understanding comes from classical economics, which he and every other banker, economist, politician and journalist will preach. The fact that it is factually incorrect means nothing. And yet how farcical is a role to look after the public interest in something he clearly does not understand? We then have people like David McWilliams who a lot of people see as championing the cause of the man on the street. Someone who takes a different view from the mainstream. And too give him some credit; he is trying to make economics more accessible to the layman. But when you fail to understand the most fundamental part of the economy i.e. banks and money, then most if not all your conclusions will be wrong as they originate from a fallacy.

          What is it about the human condition that on one hand creates a world of possibilities and hope, while on the other hand condemns so many of the population to immense suffering and abject poverty? And in the case of Ireland much of it is self imposed. The EU for the last 6yrs has been consistent in being wrong with just about all their actions and predictions. Indeed most of their actions or inactions have made things worst and yet over that 6yr period the people of Ireland has given yet more power and control to the EU. And sadly that sums up our position today, absolutely hopeless. Maybe at some point in the future they will be a changing of the guard. Manfred Max Neef in the book “Economics Unmasked” does highlight the fact that there are more young people coming through economics today who are not willing to accept facts without some sort of empirical evidence to back them up, that economics should put peoples “well being” ahead of GDP. But ultimately this may only ever be realised the after the passing of this current generation of economists, as their dysfunction view of the world dies with them.


    • breltub

      “It has always perplexed me why savers think they should get yield for choosing not to take risk.”
      So you are basically admitting to not really understanding the purpose of capital in capitalism, nor the risk of keeping money in the bank, nor the risk of currency debasement.

      As for saying Germany cannot run a surplus with itself. There is not one single country in the Eurozone anywhere near surplus when all debt, including private debt is included.

      Take a look at this..In short

      “Despite a small general government budget surplus of EUR 4 bn German debt increased again in 2012….EUR 81 bn arose from stability measures due to the sovereign debt crisis that are not relevant for the Maastricht deficit but count towards the debt-to-GDP ratio. The rest is due to increasing debt of the Bund and some Länder and municipalities.”$NAVIGATION&rwobj=ReDisplay.Start.class&rwsite=DBR_INTERNET_EN-PROD

      All that accounting is, is smoke and mirrors!
      This whole business analysis and comparison of countries through bogus debt/GDP ratios is just pointless in my opinion!

      You wouldn’t believe the Irish dept. of finance or Central bank. Why would you believe a foreign one?

  3. Reality Check

    I disagree David, Interest on cash/money is just the time value of money.

  4. Reailty

    Ah jaysus, wikipedia? According to wikipedia I have three kids, worked as a banker (never) not an economist (always) and believe that Milton Freidman is God!!

    Regarding the substantive issue, who puts a value on that time? How is it quantified? Its just an opportunity cost concept which in itself is a derivative of present investment returns. Or at least that’s what I understand it to be.



    • Adam Byrne


      I agree with your understanding.

      Money is just a tool, it has no inherent value.

    • Reality Check

      David, That’s what a non-central bank controlled rate of interest would do – find the time value of money. Because as you know the future is uncertain. Anarcho-Capitalist Hans-Hermann Hoppe has written very well on this.

    • bonbon

      DMcW, I was wondering for a while about that Wiki Milton “God” bit.
      The Good News that idolatry (including Mammon), is rejected?
      Now how about dumping Hayek et al. while you are at it, clean the Temple of the money-changers (paper or metal)..

      Hamiltonian Credit subsumes the simple “my” money, “your” money mantra.

      Germany was not built from absolute rubble from 1945 onward’s with someones savings. A totally different policy, proven by FDR’s RFC in the 1930′s, applied as a Marshall Plan, rejecting Dawes and other idiotic British feudal ideas, and managed by the great banker, Abs, shows what we need now.

      A Marshall Plan for the South, the Med, instead of a monetarist concentration camp is the clear option for Germany to push – it has direct experience.

      And of course Glass-Steagall now as then opens the door!

      • 5Fingers

        Now, there is a very good point and it begs the question would a Marshall Plan for the south ever have worked? I think not.

        The Teutonic way needs serious examination. Nuff said about quality etc. But they really really do make the best of anything that moves. And their beer ain’t half bad either!

        Pity about their liking for Jedward and Hasselhoff tunes. That also needs careful examination.

  5. michaelcoughlan

    Good morning,

    “Germany will write a big cheque to bail out the periphery”

    I don’t think so and your article even says so. You say they are looking to minimise the cost of bailing out the periphery. If they want these clubs to keep spending they wlouldnt be bothered about minimisation of costs would they?

    Germany will leave the euro.

    “Without free-spending, debt-financed, brash Spanish giants like Real Madrid and Barcelona, Bayern would have nobody to play with”

    Of course they would. They play against teams like themselves regularly in germany.

    “Every creditor country like Germany needs a debtor country like Spain. Every budget surplus needs a deficit to finance, and every current account surplus needs a current account deficit”

    No they don’t. They need spainish teams to spend from savings and not from debt. They need partner countries in Europe to do the same. Even if Germany pulls out of the Euro the Germans will respond to the increasing cost of goods exported by producing truck loads of goods and services priced at a level affordable to consumers in the rest of Europe. They could also establish manufacturing plants in thenlower cost locations.

    I really really enjoyed this article. It helped me understand that getting involved in the coop in Limerick is a very good use of my

    Thanks very much for this article.


  6. carpetcrawler

    I know you’re only using it as an analogy but for a true rip roaring belly-laugh into football/big business gone mad and bad have a read about Ireland’s favourite football team: Rangers FC ( in liquidation)
    And for even more fun, start following the fortunes of its start up/off-shoot : Rangers FC !

    • Carpetcrawler

      Interestingly Rangers journey from bankruptcy offers the precise model that Ireland should use with our creditors. ‘Gers aren’t as stupid as they look. They now have no debt and still huge revenues and will be challenging Lennon et al in jig time.



      • carpetcrawler

        True. Rangers did burn their own ‘bondholders’. But those bondholders were average suppliers and the British Tax payer (HMRC) who ironically Rangers fans give undivided loyalty too !
        Also, I would contest the view that its the ‘Gers’ who will be challenging . If a PLC is liquidated, they are gone, dead, finished, over. If someone buys the assets of the carcass, as far as I’m concerned they are a new club. They may well be challenging soon but it ain’t Rangers FC (in liquidation)
        As for challenging in jig time…….I suggest there will be another ‘insolvency event’ before we see the quasi-Rangers back in the Champions League. Care to wager ??

  7. ToffeeFan1

    Just on a footballing point, Barca live well within their means, they are owned by the fans too and really should not be compared to Real Madrid / Chelsea / Man City who all live beyond their actual income. Any sign of you making any more t.v shows David ? I would love to see an in-depth look at what next for the housing market from NAMA properties to Council Housing Lists to homes in citys and rural parts of Ireland, Is Everything just left in Limbo until the debt write downs kick in ? Keep up the good work David !

  8. 5Fingers

    Your presentation of the German Psyche misses one key factor. This would be better illustrated by showing how they built the the Bayern club and made it sustainable. There was no debt or risk involved AT ALL.

    To suggest that a sustainable culture should somehow hitch itself keep the unsustainable cultures rolling is simply silly.

    The Germans want structural reform and lots and lots of it. In Ireland and the other peripheries it has hardly started AT ALL.

    The trick to German thinking is their profound grasp of meaning and ownership and how it relates to economic growth. They know how to get growth with no extra monetary push.

    • michaelcoughlan

      “They know how to get growth with no extra monetary push”

      Exactly. They think for the team “Germany’ first and they are not greedy bastards. Remember national socialism………?

      It was napoleon who said “all that history is, is a set of lies agreed upon”

      No one will convince me that Germany “lost” the war.

  9. CitizenWhy

    Just a wee point. The worker-owned cooperatives of Spain, some very large, are the only bright spot in that economy. They have been making profits and hiring in the thousands. Modest thousands, but hiring.

    Worker owned do not extract excessive profits. What profits they make are saved in reserve, or distributed to the workers, or used for local improvements in services or infrastructure, or all three. In recessionary times the worker-owners have the power to adapt, even by reducing wages, if need be. But they, not absentee owners, make the decisions.

    A well balanced economy needs frugal family owned businesses not dedicated to reducing labor costs (as in Germany), investor owned businesses, entrepreneur owned businesses, and many worker-owned coops. Germany has this mix. Plus, prudent banks. The German banks were prudent in Germany and absolutely reckless in lending abroad, Ireland as an instance. Perhaps the willingness of the German government to scrutinize and regulate the way they behaved in Germany had something to do with it. So let’s add a toughly regulating government, not a government of special favors based on social back slapping as in Ireland.

    Germany is most dependent on the United States. One,, for direct imports or manufacturing products for sale there or opening regional sales and service operations for sales made in the US. Second, for the relentless drive of feral US corporations to export jobs to low-labor cost countries like China (the equivalent of slave labor available). China is now Germany’s biggest customer, but can be that customer only if US corporations export jobs there. By the way, I visited Inner Mongolia (a Chinese province) and many foreign companies, mostly European, manufacture there and pay decent to high wages. The products manufactured there require semi-skilled and skilled labor.

    OK, David, you mentioned that Germany wants structural reform. Just exactly what structural reform? You brought it up so you need to spell it out. What does Ireland have to do? What does Spain have to do?

    • michaelcoughlan

      Great post,

      The Limerick coop being established takes inspiration from the mondragon model in Spain plus others.


    • michaelcoughlan

      “not dedicated to reducing labor costs (as in German”

      Very very important statement inkeeping with McWilliams “my spend is your wage”

  10. Germany loves risk capitalism, so long as someone else carries the can when it goes tits up. Remember Hypo Depfa and Ireland’s near death experience? Germany accused Ireland of not being a team player gor not bending over to take one ‘for the team’, ie- the german pension funds who’d been whoting and gambling in the IFSC ehilst the Irish financial regulatory system was acting as Herman’s concubine-fluffer-cute hoor; except thry weren’t as smart-arse as they thought….now their children are to reither spend their lives as debt parons or make the same “lifestyle choice” as my mom and dad and emigrate.

    OR someone might forment a revolution to restore Sovereignty…….

    Germany destroyed football with their paranoid “play not to win but to avoid losing at all costs” …it’s just more post-Weimar PTSD. on the pitch and in the boardroom: the Germans play it safe. It’s only in the bedroiom where they let rip, but with a language ideal for sex mayhem. Lol!

    Brazil 1970. BRIC & BRITS rule “soccer”
    1994 USA ad breaks. Houghton. My first child is on the way…

    Irish folk used to hate on football as part of an anti-Brit dashfor freedom. Last weekend i gave up trying to count the Man U shirts in Dublin….how muh German money is in the corporate progit fest that is the Premier? More hypocrisy?

    My first 45rpm is called “Give us back The Beautiful Game” It’s an anthem to and for the abandoned idustrial class from whom tge game emerged in resppnse to the ruling class attempt to foist rugby alone on to the Tribes rather than allow hybridity and creative destruction. It’s an anthem to the dead at Obrox, Hillsboro and elsewhere and to those who fought for justice.

    It’s a song to my childhood, to the factory-navvy-builders who realised they had been told a load of GAA lies about “the Brits”. Outside my terraced house the tide of weekend warriors would swarm towards St Andrew’s a nd my dad could send 4 lads out of a busman’s wage. From this the Zulu Warrior-King of the Bonobod arose and with the ultimate terrace anthem he would later unite the scattered Tribes of two Wondrous Isles. Think “Riverdance on the football pitch”

    Alan Kenefick- you’re good man but no match fir Brummieboy! (wink)

    Starbucjs nr Gretna Green 11:00 2/5/2013CE

    “to the turnstiles,to the stands
    to the ……. give us back the Beautiful Game”

    tbc- Hillsboro Ibrox Munich Air Disaster Mix
    2014 Rio Copa Mundial-George Best-Dennis Law-Jack Charlton Dance Mix

    ps: Gunter Netzer! German culture will re-emerge Franz Beckenbauer
    was a tactical strategic genius but was jealous of the mercurial Gunter N. Germany is jealous of the cultural mosaic in these isles, let’s hope to a balance, take the hit fir malinvestments and allow Paddy to come off the sub’s bench.

    • 5Fingers

      Of course they love risk capitalism! They cannot believe that their are idiots out their who buy into it. No one ever said they were not opportunists. They’ll shoot fish in a barrel or take candy from a baby if that is what is offered.

      “play not to win but to avoid losing at all costs” – yup … dull and boring and effective.

      Exactly what is your point? The Germans merely assume things are difficult from day 1. That is their style. So when it really turns out easy, can u blame them for going nuts.

      • Germans love “insurances”. Everyone is insured up the wazoo for almost every eventuality. Process and precedent dictate all actions. Risk are not to be managed they are to be neutralised. That’s my Germany experience to date at any rate, and you’re right, its dull, but effective for the most part.

        Which really makes me wonder how exactly Udo in Deutsche Bank was convinced to go nuts.

        Not a critique of your point, which is well made, but the question is an interesting one.

      • i don’t blame them. i think they need help and support. they mostly have it right with apprenticeships, efficiencies of production and supply chain logistics, innovation in engineering and project management (isn’t SAP German originally?)

        But “Germany Is Not The World”. I studied the culture and they do take risks when they drive on the Autobahn. i’d hate to see them become a pariah nation yet again for causing a deflationary catastrophe due to “hard money” paranioa and applying pure engineering principkes to the complexities of geopolitics. it won’t end well, plus it’s hypocrisy givrn the carry on they get up to covertly in The City and ISFC.

        hope you’re well. now get off this blog and become even more efficient before Angela finds out we’re wasting time and realises that you,me and most everybody thinks life is purely about economic Teutonic efficiency. i bet she plans an efficient window for sex and gets really annoyed if it takes too long or someone untucks the sheets meaning the bed will have to be remade in the morning

        sorry-to all of ye-i’ve now linked sex with Angela Merkel in your minds…..”don’t think about Angela the Pink Elephant next time you’re after a ride and a rasher…..Lol!!!

        • 5Fingers

          No disagreement at all there. The cultural mosaic of these Isles is beyond question and the Teutons have no idea what is going on. But, we can figure them out. That’s the difference.

  11. michaelcoughlan

    Off topic but very important:

    It Can only be a matter of time before the dollar hyperinflates. Tony brogan people ARE listening to your message!

    One wonders what will happen the euro if the dollar goes tits up.

    • All currencies fail at the same time in a race to the bottom. Competitive devaluation is the name. Anything you can do I can do better applied to the production of debt based currency.

      There is only one money that can not be devalued like fiat paper.
      Get some while you can. There may be a price quote but none available in a store near you.
      The physical market is on fire with delays in delivery reported from days to a month or more. Premiums are raising and gold is in backwardation.

      Davids lack of comunication on the production of money is outrageous. He calls himself and economist. Open your eyes and your mind ,David.

      We have a warm spell , the last few days at 20 plus, 25 today. Getting my Hawaii suntan, here at home, 3 months early.

      Michael, I am investigating the operation of a local farm cooperative, here on Saltspring. I have moved on to a farm and showing them how a 70 year old can out work anyone with a shovel in hand. Badly organised here but trying.

      Tell me what is your understanding of Permaculture?? Seems like a modern version of hippie idealism to me!!

      • michaelcoughlan

        Hi Tony,

        If you are going down the self sufficiency veg growing route the handy way to do it saving labour and your back is to grow your crop in raised beds three foot high in a poly tunnel.

        Permaculture etc are concepts which are fine but are more focused on purist pursuits than the practicalities of producing food for the family. An excellent book is titled the vegetable and herb expert. The coop model is to ensure a more equitable distribution of wealth but still is a for profit business so you still need capable and hardworking staff around you.

  12. markodxb

    I stated the same sentiment as this articale in comments following your ‘end of austerity/opportunity…’ article last week.

    but in writing cheques for everybody else will Germany/ECB continue to print more currency and thus devalue the currency. I know this may be good for some but continued printing of currency will bring inflation and that opens another whole host of problems. if the ECB devalues the currency too much will other central banks be reluctant to extend debt to the ECB. I am not an economist but does this not sound like trouble.

  13. cooldude

    I liked the article David but I think you are behind the times in thinking “bail outs” are still the order of the day. The new “template”, to quote the European Finance Minister, for banks in distress is to be the “bail in”. In this scenario the savers will lose up to 90% of their savings in the event of a bank getting into difficulties. I don’t think either you or a lot of the posters here are fully aware that this is now central bank policy in ALL the G20 countries. Cyprus was not some isolated case but is very much the blueprint of how the ECB will deal with banks who are in trouble. This definitely includes all Irish banks despite Boucher’s obscene pay last week. To keep money on deposit in an Irish bank you would need to be getting at least 30% interest not the measly 1-2% on offer. Here is an article by Sprott Asset Management which explains all of this quite clearly

    • Hi Cooldude
      If the posters here do not know the bailin rules for the G20 they are not reading as it has been posted at least twice before.

      Keep posting the truth Cooldude. Some one besided Michael might latch on to the reality one day.!!!!!!!

  14. so many typos! iPod touch sucks. or i need a new pair of glasses. or both.
    In philosophy and art German culture was set to rival Shakespeare before the Nazis destroyed it all. It’s probably the loss of Jewish Genius that’s the problem: it needed the Diaspora to potentiate and accelerate the original primeval forest culture. perhaps Turkic Kultur will liven things up on and off the pitch once the racism withers away.

    Loads of Germans came to Britain to join the multicultural mix-even ending up as Royals .

    Kraftwerk try and do “funky” but they’ll never get jiggy unless they add to the precision with some real emotion.

    Peak Cheap Oil and BPR Robotics mean the entire world will be chasing Germany’s efficiency short and Long Tail but without some new paradigm there’ll just be vast output with no functioning economies able to buy – unless Germany is planning to say bye to Europa which should cause an interesting reaction in Paris

    Angela Merkel is a physicist, not a philosopher. She’s out of her depth. When the world’s pension funds implode due to lack of yield Germany will wake up and realise you can’t keep the Rules the same to suit their fear. Wait till the USuk move the goalposts! or maybe the next great economic. revolution will come from Berlin? Doubtful-answers don’t arise if you can’t even formulate the question, or if you think you have all the answers to begin with

    “when the facts change i change my mind-unless I’m a German physicist who thinks The Economy is subject to just laws of science and maths rather than also foibles of human nature.

    typos! OCD Grammar Nazis- come and get me!!!!!!


    Relative to it’s size, france is the biggest underachiever in euro club football, 1 euro cup in 55 years ! German football is a duopoly, English sides have contributed 5 different CL finalists in the past 6 seasons. Normal service will be resumed next season,Chelsea and MU Wwill reach the semis. German sides have few fans outside their 83 million population, can anyone name 5 other German teams ?

  16. Dr Bill

    What of recent evidence and articles that the German people are getting the property bug will low interest rates not just fuel a property bubble in Germany in the short to medium term?

    Best regards.

    • Dorothy Jones

      Of course there’s a property bubble in Germany. It’s in Handelsblatt every second day. and the FT Germany:
      Type in Immobilienblase Deutschland into the old searchbox and you’ll reams of articles on it over the last year or two.
      But you know it’s real for sure when the Banks and Estate Agents are denying it. Here for a laugh in English:

      Bundesbank board member says no German real estate bubble

      Low intereset rates coupled with fear of the Euro future have sent prices in Munich and Berlin and Hamburg skyhigh. They#re calling it ‘Betongold’ : gold concrete. Banks have loosened lending practices and there are lots of TV series about rich real estate dealers. Advertising property is about as ‘property porn-ish# as you#ll get here, with potential yields often exaggerated.

      I live right beside Hafencity in Hamburg,one of Europe’s largest building sites and Queen Bee property bubble.

      Lots of articles such as this have been already written about it

      • bonbon


        Funny how the Irish property porn press neglects to mention this Reeperbahn of a bubble.

        The German banking system is destroyed by the Euro, hardly a surprise. Hypo turned the Quays into an Irish reeperbahn, after all.

        This kind of banking has nothing to do with reconstruction, the KfW, Reconstruction Credit Institute, as originally intended.

        Time for a KfW for Europe, a Marshall Plan. Enough of Queen Bee parading!

        • Bamboo

          Still I don’t understand why there is always a comparison in all these property bubbles made between Ireland and another country (Germany for example). Irish property bubble is purely based on structural irrational stupidity, no common sense, rose coloured glasses syndrome and people fooling each other by hyping up the prices, and giving property pornographers a free party. Houses are badly built in the middle of nowhere, far too small for the average family, idiotic planning laws, hardly any amenities, lack of regulations, etc, etc. The people who wants to live in Ireland are mostly the Irish themselves and there is a genuine believe Ireland is the ultimate centre of the universe and worth investing your living savings into property.

          Compare most of this to Germany – then I think there is no way you can compare.

          • Adam Byrne

            “there is a genuine believe Ireland is the ultimate centre of the universe”


          • Adam Byrne

            When actually, it’s a shitehole.

          • Dorothy Jones

            It used to be a rental society but not any more. That’s changed dramatically over the last 5 years. People were buying off plans from ca. 2 years ago. And now entities are buying buildings with patent failures just to stay on the ladder….so you see.

          • Bamboo

            I bought a second hand camper van in Germany about 10 years ago. It was not easy. I needed to have a German bank account, and to have a German bank account I need to have a permanent address. This account is to make all the payment for tax and insurance as it all has to be done online. I believe in Ireland if you want to buy a car you all you need to have is money. One thing is true – you can’t buy rubbish in Germany. Anyway, I bought the thing in the end as I was able to sort it all out.

            As I realized Germany was coming out of the East Germany “crisis” I decided to look into buying a little property. It was near Trier in a place called Konz where they have the best of both worlds. People get their petrol, alcohol and cigarettes and other essentials in Luxemburg and lived and worked in Germany. Or just live in Germany and work in Luxemburg. Apart from that – it was a beautiful area.

            Anyway, I chickened out as I realized that I could buy a whole apartment block for the same price as my dead ordinary semi D in Ireland. A German Bank (can’t remember the name) was willing to give me a mortgage at the time and the estate agent even visited me in Ireland. (a so called friendly visit)

            I then of course knew there was something fishy here. The tax that one had to pay made it not worthwhile at all.

            I thought buying a car was extremely difficult. But buying property – you ain’t seen nothing yet. This was ten years ago.

            How is it like today?

          • Dorothy Jones

            Buying property in Germany as a foreigner these days….They’ll make it easy peasy for. Lots of this sort of stuff as per this link in English around from Real Estate Companies; step by step guide to purchasing real estate.
            How to purchase as; associated costs, yields etc etc. Oh and of course they’ll do it for you for a fee:


          • Bamboo

            Thanks Dorothy,

            No way I’ll do anything like that anymore. It was a waste of my time at the time as I had no money anyway. The best I could do is a second hand camper van which I sold off again with a loss of course.

            The thing is that plenty of people were able to get a mortgage but just not enough to buy anything in Ireland. That is why places around the Mediterranean and worst of all Bulgaria are kicking in to get the cheaper deals.

            These properties in these places are priced in such a way that people from Northern Europe and especially England and Ireland were able to afford. Then, If people still don’t have the money to buy property there is always the option of purchasing an expensive car or a nice trip around the world.

          • Dorothy Jones

            Yes lots of changes here alright. Ah well, best to just try to enjoy the days without getting too caught up in it. By the way, if you need another camper Deutsche camping van anytime just let me know :) :) D

  17. Dr Bill

    Yes this is something that they should be concerned about. My journalistic mate Tom Molloy who is half German wrote a great piece in the Indo on this a few yeeks back after a trip trip to Germany.



    • Dorothy Jones

      Of course there’s a property bubble in Germany. It’s in Handelsblatt every second day. and the FT Germany:
      Type in Immobilienblase Deutschland into the old searchbox and you’ll reams of articles on it over the last year or two.
      But you know it’s real for sure when the Banks and Estate Agents are denying it. Here for a laugh in English:

      Bundesbank board member says no German real estate bubble

      Low intereset rates coupled with fear of the Euro future have sent prices in Munich and Berlin and Hamburg skyhigh. They#re calling it ‘Betongold’ : gold concrete. Banks have loosened lending practices and there are lots of TV series about rich real estate dealers. Advertising property is about as ‘property porn-ish# as you#ll get here, with potential yields often exaggerated.

      I live right beside Hafencity in Hamburg,one of Europe’s largest building sites and Queen Bee property bubble.

      Lots of articles such as this have been already written about it

      • Dorothy Jones

        Double post sorry…blind without the glasses these days

        • Adam Byrne

          So is there going to be a monumental crash as well Dorothy or will the Germans be able to engineer the proverbial ‘soft-landing’?

          • Dorothy Jones

            I dunno Adam but I am surprised no commentator has picked up on it at home after all this time. Writing on the wall. And nope, I don’t think it’ll be a soft landing at all.

        • 5Fingers

          You know, I think if people’s jobs become uncertain and savings are looking like they are worth nothing, they could be tempted with a “certainty bricks and mortar” and “be a Landlord to supplement your income”. That said, it is primarily a rental based society and laws around tenancy and upkeep of property are very well policed. I would suspect the property boom may be more commercially focused.

          • Dorothy Jones

            It used to be a rental society but not any more. That’s changed dramatically over the last 5 years. People were buying off plans from ca. 2 years ago. And now entities are buying buildings with patent failures just to stay on the ladder….so you see.

          • Dorothy Jones

            Ah sorry for the double posting again. And this time I had the glasses on..

  18. Yin and Yang

    The energy of the flow of this article is a parallel to the art of Yin and Yang .

    Who are Yin and Yang ? They have to be Germany & France who else ?

  19. joe hack

    Would not disagree with the premise of David analogy BUT Da daa, the planet has 7 billion peoples of which only 317 million live in the euro-zone minus Germany 80 million = 237 million which leaves 6.75 billion potential German costumers outside of the euro-zone.

    The ‘brics’ are good customers of Germany!

    The question might be how good a neighbour is Germany; to paraphrase the Hulk or should that be David Banner ‘You wouldn’t like them when they get angry’
    I don’t question that Germany is in favour of the euro but they may want to renegotiate the terms and conditions for other member states and they are in the driving seat, its Frankfort’s way, or our own way. Its Frankfort’s way-The Irish people have made that decision every time they were asked to vote on the EU and they voted all things EU / Euro so, who do you blame? We don’t have to be in the Euro-zone, do we, but if we are in, we run with it or get out.

    Move on…

    If people are/were fully engaged in their society they may have voted differently?

    • 5Fingers

      How positively awkward….

    • michaelcoughlan

      “I don’t question that Germany is in favour of the euro ”

      Germany favours the euro so long as the Euro serves Germany which means Germany favours Germany.

    • bonbon

      Not a single Euro treaty from Maastricht was ever put to any German voters. A gang installed that poisonous Euro. Maggie and Mitterand were the mafiosi who threatened Reunification unless the DM was dumped, the most successful currency ever. Sir Conor Cruise played willing leprechaun for that gang.

      If Tiger people did a little homework, bluster would not be needed now, would it? And the bluster is sounding very Conor Cruiser !

    • Adam Byrne

      They’d need to have some grey matter to be engaged, and grow a pair but that’s not the case around here – both attributes are missing. And have been since the inception of the so-called ‘state’. 1916 – 2016 RIP. Let’s hope the next 100 years are managed better, it couldn’t be done any worse – that’s the only consolation – or could it? I’d say David will the Taoiseach by 2016, haha.

      • bonbon

        You sound like the grave digger :

        “Has this fellow no feeling of his business, that he sings at grave-making?”

  20. Dorothy Jones
    That’s funny. There’s a smug article here from Süddeutsche from last year comparing Uli Hoeneß Bayern Munich manager saving with the squander of Euro clubs aand comparing it to the Euro.

    That was before his current tax evasion scanday. He now protests that there is any link between his Swiss Bank Account used for Tax Evasion and the Club’s finances….and that he has had an addiction to heavy gambling.

  21. 5Fingers

    Look, the primary snag faced is that productivity and the need for labour and hence individual income growth has been well and truly decoupled. You can increase productivity and will a hell of a lot less people in any sphere of activity.

    The Germany have played the productivity game very well and exported enough efficiently enough to offset the decoupling effect which has withered a lot of other economies. Economies wither simply becasue there are no jobs. Inject money and all you do in increase productivity but no jobs. It’s as if Germany happens to be luckily enough positioned to not be affected as other nations.

    Maybe Germany is an disaster waiting to happen. But not for the reason you think. One thing I do see is that they are very clear about human enhancement rather than machine replacement simply because they have a pension time-bomb of an increasingly aging community. They treasure their human resources and acquired skills. Knwoledge waste is abhorred. Contrast with the peripheries where people/ youth are mere commodities.

    There is now increasing evidence that forcing/ encouraging machine enhanced human focused productivity exceeds pure machine activity. Sort of puts a new slant of “knowledge economy”.

    • 5Fingers

      I suppose what I am saying is that we are no position to lecture Germans morally or technically when they really have a lot to teach us. What for example can the periphery teach us. Answer – what not to do.

    • Adam Byrne

      They’ll have one machine soon Philip that will do all the work in the world. We all better get busy filling our leisure time.

      • 5Fingers

        Jaysus, then we are truly in the doo doo…But as Bill Gates often said, you need to wait until version 3 before it works properly. So maybe we do not need to panic.

  22. molly

    So from the sound of this we should model our country on Germany .
    Only problim with this is our country is corrupt to its very core.
    The new way of doing things became the wrong way of doing things.
    The banks run the country the same way the church use to.
    Change is coming only problim is the change is working back wards.

  23. joe sod

    so the EU and the euro has resulted in spain, greece etc becoming countries that are no longer productive and are acting like social welfare dependants ( i mean in economic terms from a european perspective), but how can this be, spain is a post colonial power just like britain is, so why is spain not more like britain?, maybe latin america is where spain should be looking to rather than europe. It is strange that the EU contains several post colonial powers, i dont think these countries can be contained in the EU in the long term. It is also strange that the biggest country in the EU is Germany but never really had colonial ambitions except in Europe. So The EU was formed essentially as a peace keeping agreement to stop european countries from ever attacking each other again. In this it has succeeded but has this union stopped Europe from advancing and allowed others such as the US and China from dominating global affairs. I think europe should be having a bigger say in the middle east and africa to prevent the rise of islamic fundamentalism. it is also strange that germany even though europes largest country and economy is silent on these issues.

    • CitizenWhy

      Germany had colonies in Africa, which it was forced to give up, confining it to seeking colonies in Europe.

      Any country that wants to get involved in the Middle East must be willing to intervene militarily. Why bother when the US is so eager to do anywhere? Like many others, Germany feels burned by what the US did in Afghanistan and Iraq.

      Post WWII germans faced real starvation.The Marshall plan flew in loads of money to get small businesses started to meet the needs of a population living in bombed cities, without money, without things to buy, millions displaced fro their homes in the east.

      Desperation, plus their ability to stoically endure and organize, plus the huge piles of cash from the US, plus the determination of the conservative (but social democratic in their own way) Catholic politicians to build a new Germany closely linked to the rest of Europe to prevent any future Hitler plus the survival of many of their large corporations enabled them to rebuild.

      With the dominance of Catholic politicians it is no surprise that most economic development occurred in Catholic and high church Lutheran areas. German banks and corporations were also allowed to hide huge cash reserves in case a socialist government confiscated the corporations and banks. The cash reserves would be used when returned to private ownership. A very small number of Germans knew where all the capital was hidden, at least one of them a Catholic cardinal.

      • michaelcoughlan

        Hi citzenwhy,

        I am facinated with the catholic and lutheran conection. What books etc are written on this subject re prosperity follows strong ethically based policies leading to prosperity?

        The mondragon coop in Spain flourished after a catholic preist instilled strong social values in the people involved.

        • CitizenWhy

          Konrad Adenaur exemplified and was the leader of the Catholic politicians. A Bavarian. A good bio of him will cover much of the points. His desire, representing the sentiment of the new power people in Germany, to unite Germany to the rest of Europe is well known.

          Saying Catholic and high church Lutheran is another way of saying the south of Germany, which at that time was another way of saying US occupied Germany, where most of the Marshall Plan money went. High church Lutherans cross themselves, use crucifixes, and kept the Mass at the time of the Reformation. You find them in southern Germany, where Catholics are also concentrated and dominant. I am not sure that they were in with the Catholic politicians but they benefitted from everything the Americans and the Catholics did.

          Southern Germany was rebuilt by the USA, the local politicians, the stoic people, the bankers (Frankfort, in the south), the CIA and the Vatican. Any good history of post-war reconstruction in Germany would cover all this.

          I mostly know these things from families involved (I grew up in NYC). Plus some Catholic clergy (high school teachers of German).

          As for the hidden reserves I imagine this topic would be covered by any history of banking in Germany. When US banks started acquiring banks in Belgium and Germany US auditors kept finding deeply hidden large cash reserves. I knew the people in charge of auditing at a large NYC bank. They were shocked at the “dishonesty.” I explained why this was so and that hiding the money was considered an ethical obligation , not an ethical lapse, and that the hidden money was known t a select few, so it was not entirely hidden. The US still feared a socialist takeover of southern Germany. So did the Catholics in Germany. The post WWII Christian Democratic Party (mostly Catholic) was a US backed movement aimed at stoping socialist takeovers by delivering a middle way, social democratic unions and social benefits. Not a conspiracy, just shrewd political organizing. “Socialist” takeover might include national socialism or communism. The fear was real. Not only had Hitler prevailed but in 1919 the Government of Bavaria was taken over first by syndicalists/socialists and then by Communists. In Austria the Catholic Center Party chancellor, Dollfuss,who had successfully resisted a takeover by Hitler and his supporters, was assassinated by the pro-Hitler people with the collaboration of the socialists/communists who hated his conservatism. The Catholic leaders of Bavaria and the south were well aware of all this recent history.

          Ireland was actually affected by the communists takeover in Bavaria. The British feared that its unions would foment a socialist revolution through open rebellion. The British unions were fascinated by stories of the Limerick Soviet (hyped by the media beyond what actually happened, making it look more menacing to capitalists than it actually was.) But the syndicalist idea – form one big union, hold a general strike and then take over ownership of the means of production – was still well understood and popular among workers in Britain and Ireland. The only protection, the British establishment felt, was the army, the lowers officers of which were mainly UIster Protestants. An Army unit in Ulster mutinied as a warning to keep Ulster in the UK.

          The Catholic response to syndicalism/socialism/communism was strong unions and social benefits provided by governments that also made their first priority the protection of private property rights. Some catholics went farther and formed successful worker-owned coops in Basque country in Spain and in central Italy. They still thrive. And you make a very good point about first instilling strong values. A catholic priest at the time would base the Catholic social teachings principles of solidarity and subsidiarity on the four cardinal virtues: prudence, justice, fortitude and temperance. Also known as the Stoic or natural virtues. The instilling of prudence never took hold in Ireland. And justice covered personal integrity and honesty. My farmer relatives in Ireland in the west, and later in the Midlands and Dublin, were instilled with these virtues, with a local clergy also inclined to them as well. They have prospered and could have made big killings in the recent real estate boom in Ireland but they thought the whole thing an imprudent and dishonest phenomenon and sat it out. They are very prosperous and have always held off from politics because they believed it corrupt and totally lacking in virtue. Plus they had backed Collins, not participating in the Civil War, but backing Collins, not liking DeValera. One reason they liked Collins was his belief that at least some of the Democratic Programme needed to be implemented at some point. They were and are essentially conservative Social Democratic in their political beliefs. My mother remained convinced that the union of church and state in Ireland would totally corrupt them both. This was before the scandals broke. She was glad to get out of Ireland because she felt the republican cause – a secular state – for which her family had fought and suffered was betrayed. She was a devout Catholic.

          In Ireland the unions, previously inclined to the syndicalist idea, ceded leadership to the middle class nationalist Sinn Fein in return for the Democratic Programme, signed in 1919 by the first Dail the same day it declared independence. The Democratic Programme was subsequently forgotten. Collins wanted to implement some of it but could find no money to do so. DeValera was not interested, either out of political belief or pragmatism.

          Pardon the lecture. But much of the significant history of the big issues in beginnings of the Irish state and in post WWIII Germany have been forgotten. There are many opposing ways to look at those issues and interpret the times but that discussion/debate does not really happen. Many would disagree with my interpretation but it would be hard to find anyone to have a conversation about these things.

      • the role, scope and influence of the Holy See city-state is so vast both historically and currently that it amazes me how little serious research has been done.

        for good and/or bad this absolute monarchy/global social media -financial corporation still effectively polices the policy framework of the EU and UN in key areas. From The Irish Gulag to Liberation Theology, the span of The Magisterium is profoundly troubling. Thank goodness for Henry V111 and Luther. The First Irish Republic was a satrapy of both Germany and the Holy See, hencemy call fir a new reset.

        5Fingers: augmented human/machine production is the big story ‘going forward’ (sic) Drones. Amazon warehouse. Kraftwerk wrote The Man Machine to predict German economic supremacy but without Italisn design genius, german prowess is pointless. Most human activities are not ‘economically efficient’. I will never get a ROCE from my kids, their love for me is neyond maximising utility. Germany almost destroyed The Beautiful Game: if they don’t stop negating their inner Goethe, they will destroy the world economy pursuing “efficiency”

        Germany needs to be expelled from the euro and eu if needs be, if it fails to desist from mercantile opportunism.

        the rules are from philosophy, ethics, history and politics: any Economic model just reflects and enshrines the culture/kultur. it was ever thus. nothing new under the sun from ancient Babylon to Wall Street & The City of London, which i think is what bonbon is trying to say. Michael Hudson has kindly mapped this out to save me time.

        “dun on the Tyne is all mine, all mine”

        train to Nottingham in search of Robin Hood. Prodijig live on stage in the Sherwood Forest. LOL!

        • sun on the Tyne. do ihave time to drive to Lindisfarne island befire train to Nottingham and back via York- the grand ole Duke of …..

          German property:

          as the EZ EU starts to be overtly Funny Money threatening bail-in beyind Cyprus , are Germans doing what the British always did to survive central bank perfidities: “an Englishman’s home is his castle” and a histirical bulwark against inflation. when the ghost estates are bulldozed i guess the same will apply in Ireland .

          UKIP fun and games in UK local elections, looks like we/they are going to divorce Europa. so Paddy, what will happen to you/me/us? Interesting Times. I love the Isles of Wonder. not a subject of a German Queen Elizabeth and not a citizen of the Roman-Franco-German Hibernian satrapy that is/was The First Irish Republic of 1916-2016.

          As Bjork sang “Declare Independence!”

  24. Half price of a half price on NAMA sale

    Reported on

    NAMA to sell Irish loan portfolio to Starwood consortium: The Irish Independent noted that the National Asset Management Agency (NAMA), Ireland’s bad bank, has agreed to sell its first portfolio of commercial property loans to a consortium led by private real estate investor Starwood Capital. The paper said that Starwood will purchase the loans, which have a face value of €810M, for €200M. According to Reuters, NAMA had applied an average discount of 57% when taking over €74B of risky bank loans following its creation in 2009. However, it did not disclose what it paid for specific loans.

  25. Deco

    Australia, the FF party of Australia, and why the party is over….

    China does not need as much iron ore as previously, or coking (steel making) coal. Australia is highly leveraged, and streched to the limit with debt and over inflation. The Aussie politicians have once again misruled the country, and put the “feel good factor” (reminds you of Ahernism) before long term survivability of the country.

    This will soon be Noonan’s biggest headach, and Irish people make a “lifestyle choice” that is contrary to the one he wanted them to make.

  26. bonbon

    The British Empire’s New Concentration Camps

    Youth unemployment of Europe, USA, with maps from 2008, 2012, showing the horrific development. This is the Empire’s method to destroy Nations.

    Have a look at the maps and graphic. This is now, today and on a massive scale.

    • michaelcoughlan

      “Should we not do as Franklin Roosevelt did, and stop the tide of fascism with Glass-Steagall and related economic policy measures… before it is too late?”

      The article in the link above ends with the above question. The answer is no we shouldn’t because we would be wasting our time.

      Even though glass stegall is proven to work the idelogues in charge are pursuing their own agenda. That means calling for the
      reinstatement of Glass stegall is idiotic.

      It’s better for really intelligent people who can understand the realpolitick of what is going on to create something new which is beyond the control of the idelogues.

      Those idelogues are no different to you in one regard which is: they are blinded by their ideology which they assume to be superior the same way you are blinded by your commitment to a proven policy utterly unworkable in the current circumstances.

      When the penny drops with you you will prove to be an enormous force for Change and leadership because you will be demonstrating leadership instead of supervision by operating in a completely
      New environment outside your comfort zone and ahead of the curve.

      Why you continue to waste your very considerable talents and energy on your unworkable suggestions isn’t something I can comprehend but I’d say sooner or later the penny will drop for you and when you have your epifhany it will be a pleasure to witness. In the meantime it’s very sad to see you mis direct your talents.

      Best regards,


      • Adam Byrne

        Yeah, Mr. bonbon needs to get on with it and deal with the world as it is, not as he wants it to be.

        Nothing wrong with aspirations but saying something 10 millions times is not going to make it happen.

        Maybe he needs to stage a coup, or run for election and become a TD – maybe he’s a TD already – who knows?

      • bonbon

        Remember Dachau.

        Roosevelt was definitely pursuing his own agenda, Humanism, against fascism which was not defeated by “wasting time”.

        You sound like the residents, then, denying the smoke. Exactly the same behavior is now evident from (ex)-Tigers.

        There is a concentration camp right near where most holiday.

        It was pointed out first by Portuguese Poet and presidential candidate Inside the Southern European Concentration Camp

        • michaelcoughlan

          Hi Bonbon,

          I am not like residents in a concentration camp and I am not in denial of the challenges facing all of us.

          Your posts as ALREADY taking on much more poise and are a lot more weighty because if you were still barking up your Glass Stregall tree I wouldn’t have known about this development in Portugal. Something similar happened in Greece where a Greek patriot who defied the nazis and now in his 80′s said something similar.

          Thanks for this new direction you have embarked on. My eyes no longer glaze over when I see your name at the top of the post.

          Best regards,


        • bonbon

          Glass-Steagall is what stopped that fascist development then, and the only way to stop the concentration camps now. FDR showed how. No wiggle room there.

          Refusing to promote Glass-Steagall now is literally opening the gate to the camps. That simple.

          But Europe being the disastrous cultural mess it is, awaits the USA again to take the lead. That’s what is all about. And Obama is personally the only real obstacle, so appreciate the immense crux!

          • michaelcoughlan

            “Glass-Steagall is what stopped that fascist development then, and the only way to stop the concentration camps now. FDR showed how. No wiggle room there.

            Refusing to promote Glass-Steagall now is literally opening the gate to the camps. That simple.”

            This is the last time I am going to respond to you. Enourmous European armies stopped the and concentration camps not glass stegal.

            The coop in Limerick is being established from capital which won’t be borrowed from banks. It makes mo difference therefore whether glass stegall gets implemented from the coop’s perspective or not. It’s the same with any business or soccer team or country which is what McWilliams is saying in his article. No borrowings means no bank dependency which makes glass stegall an irrelevancy.

            Let go your prejudice. It’s crushing the life out of you.

          • bonbon

            Glass-Steagall was the only way the US economy was in any shape, and it showed what that meant, very quickly. FDR rebuilt the US from disaster only because the banks were split, letting the other things be done. By 1936, FDR knew war was inevitable. The rest is history.
            Now make history, promote Glass-Steagall instead of wasting time on money tiddlywinks which is what Europe does. Fascism is a European “tradition” of Rome. Break with it.

            The concentration camps of the south now are a start reminder that fascism is on the march again. This is not a soccer game, do not be ridiculous, and FDR did not base his successful intervention on soccer money tiddlywinks!

  27. bonbon

    Draghi Announces New Derivatives Bubble

    May 2, 2013 (EIRNS)–ECB President Mario Draghi announced a whole series of monetary expansion steps today, described by someone as “a new economic paradigm.” First, the ECB cut the main rates of a quarter of a point, to 0.50%, Second, the rate for marginal lending was cut from 1.50 to 1%. Third, the ECB will maintain its main refinancing operations at least until July 2014. Fourth, it will explore ways to revive the ABS (asset-backed securities) market, which “is dead.”

    Confronted by the {Wall Street Journal} correspondent with the fact that ABS is one of the elements that provoked the financial crisis, and asked whether this means that the ECB is going to create another problem, Draghi expressed his frustration that there is not much else around that the ECB can buy. In the United States, he said, everything goes through the markets, in Europe it goes through the banks; so, there is not much we can buy, he said. At one point he said nervously that the ECB “is not going around throwing helicopter money,” again unloading his frustration because of that.

    When he was asked by the {Financial Times} correspondent whether he is “the last austerity hardliner left,” Draghi alleged, as he had in the past, that governments are the cause of the financial crisis. “After the first stage of the crisis, we discovered that bank capital ratios and government positions [deficit] were not sustainable.”

    He did not say, of course, that “government positions” were created by bank bailouts!

  28. Adam Byrne

    Ooooh I am noticing improvements on the site functionality – thanks David, or Eoin.

    • 5Fingers

      Site feeling much much tighter indeed. Now if ye could tone down the white background as it would save eyes the battery life on a lot of smart phones out there (no joke… 10-20% impact . this site is shaping up to be an environmental disaster!)

  29. David,

    I’m going to give away my true colours here. You cannot compare Man United or even Barcelona or even Real Madrid to Chelsea or Man City. The former three make PROFITS!! (See Forbes wealthiest football clubs). United spent £24m on Robin Van Persie but Bayern paid 25m for Ribery. and a further £25m for Robben. They have just secured Mario Gotze for £37m. There is nothing wrong with spending if you have it. And nothing wrong with debt if you can pay it. United have a falling debt because they can pay it. If anything the former three are more like ze Germans than you suggest and nothing like Chelsea or City who spend recklessly while making losses. Similar to Leeds of the 90′s… OUCH!!!!!!!!

  30. molly

    The church was always hungry for power and power was its down fall.
    When did the church ever go poor or hungry.
    The church stole children and made money out of it, how many people had there lessons Bashed into them.
    When I was growing up school was not a very nice place,it was hell.
    I still have nightmares from 40 years ago.

  31. joe sod

    in ireland the church gets blamed for everything now, it is 30 years ago since the church had any real influence over irish politicians, were bertie ahern , michael fingleton , sean fitzparick heavily influenced by the church, i dont think so. The oliver j flanagans and eamon deValeras are long gone. It is our modern political system that is to blame not the church.We are too fond of blaming demons from the past for our current problems. In the 50s when church power was at its height we blamed the british for our problems then, even though the british had left 30 years before. And at the height of the celtic tiger the media was too busy looking into the planning tribunals concentrated on the 80s and early 90s rather than looking at the planning of the celtic tiger boom when the ghost estates were being built all over the country.

  32. Adelaide

    “Bayern Munich needs a Real or Barcelona – otherwise they’d have to content themselves with day trips to Leverkusen.”

    I’d hazard a guess that most neutrals won’t bother watching the all German Champions League final. Be interested to see the world viewing figures compared to previous finals.

    Maybe I’m being mean spirited but I can’t see Spanish, Greek, Italian, Irish etc football fans watching it because of emotional (economic) resentment. Personally I hope they both lose in the final, although I’m aware that’s logically impossible. Germany Schmermany. Actually, I am being mean spirited. Sheisse shysters.

    • Adam Byrne

      Well, can’t the Irish fans watch in on their 92 inch flat screen TVs, on the Sky Subscription – paid for with borrowed money (from Irish banks who in turn borrowed it from German banks) that they can’t afford to pay back.

      Then they can moan about the poxy Germans who have now decided the credit-fueled party is over and they want their loans back.

      Admittedly I don’t think the Germans should have lent the money to the spendthrift Paddies in the first place, so the defence of co-responsibility is semi-valid.

  33. Adelaide

    “borrowed money from Irish banks who in turn borrowed it from German banks.”

    Which begs the question, who did the German banks borrow the money from?

    • CitizenWhy

      The money was borrowed from the future, Seriously, in traditional lending banking (as opposed to trading banking), in the USA the rule used to be that for every actual $5 you had on hand you could lend out a $100. Where did the other money come from? From the future. The money was lent on the basis that a prudent analysis showed that the money would be used for real business growth and that growth would enable to borrowing business to pay the loan back in installments. The money was more of a paper transfer/line of credit with the real cash value being created in the future by the borrower through increased revenues and profits for both sides.

      Ince trading banking became dominant in New York and London, then traditional lending banking became unglamorous,needlessly risk-averse and mired in what was considered smallish profits and a time consuming decision process.

      In other words lending banking found itself in competition with trading banking for talent, prestige and income. Big business began to go to the capital trading markets to issue stocks instead of taking out loans. So at the big banks’ lending banking divisions decided to be more like trading banking – boldly risk taking, bettors really, looking for big returns, quick decision process, fast returns. So the German banks decided to ignore their risk analysis departments and make huge loans to Irish banks because they bought the Celtic Tiger “story” and believed, or wanted to believe, the Irish banks would make good investments for business growth that would return big profits to the German banks. Silly really, but that’s the story. It turns out that the future became poor and failed to deliver the expected ever expanding business growth.

      • Adelaide

        Along the traditional lines of inter-bank ‘borrowing’ it was the Chinese banks (pre-euro) who lent their ‘boom’ money to the German and French banks, who then lent it to Irish banks. I’m rehashing here an old article of David’s, hope my memory serves me well.

        E.C. Riegel’s dream of a ‘self-issued credit’ economy is beginning to look less dream-like as events unfold. I have yet to read a more convincing alternative monetary model, and the one and only model that could function in the inevitable ‘total labour surplus’ end-game that we are fast approaching this mid-century.

        • joe hack

          The banks don’t lend “money” they create IOU’s the money does not exist until an IOU is issued. The banks don’t need “money” to issue IOU’s. With theses IOU’s the Celtic tiger house buyer bought their properties.

          The German banks that issued the IOU’s to the Irish mortgage lender (AIB Anglo etc.) took the initial risk/ gamble that they would make a profit.

          It turns out due to the bank guarantee and more that the Irish tax payer took the hit for the IOUs based on overpriced tiger proprieties some of these tax payers don’t even own a house and may never have been or may never will in a position to buy a home but yet they have to bail out gamblers.

          In short the banks created the “money”

        • bonbon

          E.C. Riegel apparently took great exception to FDR’s New Deal, the successful step to suppressing fascism.

          E.C. Riegel’s Aggressor in the White House seems to have a fit about FDR’s intention to stop fascism.

          Interesting that Keynes, Hayek, Fisher, Riegel all had “difficulties” opposing fascism. Interesting how incumbents today have the same “difficulties” with Glass-Steagall.


  34. David,

    Every euro has a corresponding debt. If you’re suggesting that countries should kerb their indebtedness, what medium of exchange will there be in the economy with which to trade?

  35. Deco

    Bonbon – don’t annoy use with Glass-Steagal.

    Annoy your politicians. And lete everybody know that Slick Willy disbanded it, in one of the greatest episodes of crookery in modern history.

    • bonbon

      Glass-Steagall annoys the slick incumbents here! Good!

      The only thing that will work is something they will never accept – it gets in the way of their money tiddlywinks. Ye are not grasping what is happening, and even DMcW admits total confusion.

      Now most annoyed of all are the bankers who are going to have to accept their fiefdoms getting a sheep dip.

      So get on board, this is the way forward, never mind what statistics say, nor RTE, nor touchy-feely group-(grope?) think.

      And you fail to mention both Sir Alan Greenspan and Sandy Weill booth taking full credit for smashing Glass-Steagall. Weill had a plaque on his office wall “Smasher of Glass-Steagall”. He now has become a forceful advocate of its reinstatement fully reported by the FT and posted here. The ghost of murdered Glass-Steagall is behind every curtain, Hamlet!

      I hope that thoroughly annoys you – the first step to a better grasp of reality.

      • Deco

        Actually, more than anything else, the fact that you rant endlessly with people who can do nothing about suggests that you are a fool.

        Ever actually phoned up a radio station, or lobbied a public representative on Glass Steagall.

        Why not found an organization to get it re-established ?

        Personally, I don’t have a problem with Glass Steagel. It actually has a lot of merit. But the campaign in favour of it is non-existent.

        Go and get your campaign going, and stop being so miserable.

        Get behind the Direct Democracy idea, and then start a campaign for a referendum on Glass Steagal type legislation. (The politicians can always be bought off by the banks – and the EU is bought up, by the banks). Your only hope is a direct vote on the matter. I can’t see Olli Rehn and shums tolerating it becomming law.

      • bonbon

        All I hear is a pathetic “I’ll do nothing” rant, an incumbent’s plea for someone else to do something. Anything other than what will work.

        And meantime you peddle slick turns of phrases and hope the monetary tiddlywinks will continue. An utter complete ignorance of economics blinded by monetarism makes the Triple Curve the best way to explain the emergence of the European Concentration Camp. That is the physical economic curve while the monetary tiddlywinks goes on. You are really expressing the European utter inability, again, to deal with the same situation again.

        So dump the British liberal cultural pessimism, an imported pest, and get behind Glass-Steagall. Spread this, not a witches brew of clever pessimism!

    • Dorothy Jones

      Wouldn’t bother Deco if I were you with that shower of LaRouche fuckwits who post under the suitably ridiculous nom of bonbon

  36. bonbon

    Sheer confusion, with a mafiosi punchline, that “Germany will bail out the periphery”. Everyone knows now that almost all the football games were rigged. The Euro is rigged from the get-go.

    DMcW seems to have forgotten that the only bail-out, bail-in, is to rescue banks, which does not work. Just let that get into an election campaign.

    Bringing back the DM, after of course a complete split of banking where no gambling is ever subsidized again, will work. And a Marshall Plan to liberate the periphery concentration camps is the urgently required action immediately.

    • michaelcoughlan

      Did anyone ever tell you that the first sign of madness is to keep trying the same thing and expecting to get a different result?

      Your constant wax lyrical on glass Stegal is going to get you thrown off the board. McWilliams asked you to stop diverting the thread back to glass Steegal and here you go again.

      Your rhetoric is pure unadulterated nonsense. Glass Steegall will only be reinstated AFTER the ordinary people have moved away from the cluthes of the Psychos in charge of the worlds financial system.

      If someone like you wound up in charge Glass Steegal would never be reinstated. This is because you would be still sitting in your ass haranguing the people around you to put glass stegall back in place instead of leading by personal example.

      Poor you.

      • bonbon

        Censoring Glass-Steagall, the only possible action that can work?

        Tat would be Tiger indeed. Utter nonsense, your view of the progress of things. Glass-Steagall did not and will not wait for psychos, nor the hapless.

        Monetarism, the dominant theme of the board, has reduced incumbents to utter helplessness, total ineptitude. It is a disgrace!

        So fight it! Urge people to snap out of it. We have a Southern Concentration Camp again in Europe! This time Europe must show it is capable of avoiding the British destiny set for it again!

        • michaelcoughlan


          “Censoring Glass-Steagall, the only possible action that can work?”

          Your words not mine. I wouldn’t censor anyone. Even an asshole like you.

      • Dorothy Jones

        Wouldn’t bother if I were you with that shower of LaRouche fuckwits who post under the suitably ridiculous nom of bonbon

        • bonbon

          We have great fun irritating seemingly incurable monetarists. It is the only medicine for that terrible disease.

          Have a look at the Mogelpackung AfD: Eurokritik drauf, National-Monetarismus drin. I am sure you have come across it in your travels.

          Careful though – not for the delicate of nerves!

          • michaelcoughlan


            “We have great fun irritating seemingly incurable monetarists”

            I am not a monetarist. This statement alone would indicate to anyone why glass Steegal would never be reinstated as long as you are around. Know why. Instead of getting off your ass and doing something positive to get glass Steegal reinstated all you and your colleagues have time for is hijacking websites like McWilliam’s and irritating anyone YOU deem to be a monetarist.

            The bader meinhoff gang spring to mind ie: if you don’t see things our way you are responsible for what we do to you.

            You haven’t a hope.

          • bonbon

            You are such a monetarist you cannot even see it in the mirror. That is why creative action is so upsetting. Well the first step to seeing the grip monetarists have on the (ex-)Tiger mind is rage.

            The Triple Curve Typical Collapse Function actually brings out the contrast even more effectively to ingrained, or ingrown?, monetarists.
            It disturbs the coin tiddly-winks gong on on the economic rubble heaps.

            Monetarists have hijacked your thinking apparatus!

        • michaelcoughlan

          You are correct. But I am going to try and have one more go. The pity for whoever Bonbon is, is that many of the points made are so important.

  37. StephenKenny

    An interesting article, including a graph on house prices in various countries:

  38. bonbon

    Just in case some are stashing loot “south of the border” :

    Swiss Regulators Confirm that Bail-In Legislation Is To Prevent Glass-Steagall-Style Bank Separation

    May 4 (EIRNS)–The Swiss financial daily {Neue Zürcher Zeitung} (NZZ) featured today a full-page on how the new Swiss bail-in legislation works. The article, entitled “Recovery and Resolution of Systemically Relevant Banks,” by Patrick Raaflaub and Mark Branson, two officials of the Finma (Finanzmarktaufsicht), and says, among other things, that the bail-in legislation aims at preventing separation and protection of certain parts of the bank abroad.

    Swiss banks represent maybe the single largest systemic risk globally, in terms of concentration of liabilities. The assets of the four largest Swiss banks are over 500% of GDP; one single bank, UBS, is 376% of GDP and the second largest, Credit Suisse, 218%. Balance sheets of the ten largest banks are eight times the GDP.

  39. bonbon

    Germany to be the paymaster of last resort? Only an ignoramus refuses to see the Euro is a failed experiment.

    But much worse, the new party, AFD, Alternative for Germany, has metamorphosed and shown its true colors. Formed by professors, none of which forecast the crisis, it is a Mont Pelerin Hayek Austrian School bunch. Their medicine will kill the patient. It is the Hamburg Appeal of 2005 for unbridled free-market and monetarist radicalism signed by AFD founder Lucke and 243 economics professors at that time.

    The appeal stated that “labor costs are a key to overcoming Germany’s weak economic growth.” And further: “The unpleasant truth therefore is that an improvement in labor market conditions is possible only by lowering the wages of those who are already low-paid, i.e., by an increased wage differential. This could be cushioned by longer working hours, reduced holiday pay, or higher motivation.” This “increased wage differential,” i.e., the widening gap between the super-rich and super-poor, has always been the goal of the German neo-cons in the context of the so-called Initiative for a New Social Market Economy, which supported the Hamburg Appeal, as did the financial interests backing globalization.

    Board member Konrad Adam thinks it is a good idea to withdraw the right to vote for the unemployed.

    Roland Vaubel, a member of the the Scientific Advisory Board who is closely associated with the American Cato Institute, is blowing on the same horn; he even had the nerve to cite the constitution of Solon of Athens as evidence that members of “the lowest class” should not be allowed “to campaign for political office.”

    Health economist Prof. Peter O. Oberender : “If someone is facing an existential threat, he should be able to finance himself and his family by the sale of organs.” – commercial trade in human organs!

    As for AFD founder Lucke : “Not all countries should return to their original currencies, but only those that have misbehaved. The others could use the euro, as they have done in the past.”

    With such Social Darwinism, unfettered market radicalism, Cameron is touted as the model.

    The AFD is a sham: It is an anti-euro policy on the outside, but National-Monetarism on the inside. It specifically rejects the role of the state as FDR acted with Glass-Steagall in 1933 establishing sovereignty over banking.

    This is a brief summary of a new report from Germany to appear on May 10 at

  40. BamBon

    In comparison to 3rd world countries is Ireland greedy and exploitative of 3rd world countries, is Ireland part of the “elite”? Are You then part of that exploitation are You the “elite?

    • michaelcoughlan

      “Are You then part of that exploitation are You the “elite?”

      According to John Perkins in his superlative “confessions of an economic hitman” the answer is yes.

      Moreover he offers the solution in the superlative follow up publication “hoodwinked” where he advocates that we
      take personal responsibility for our own
      actions to help prevent this from happening.

      You Won’t see Mr Perkins wasting his time hijacking websites and relentlessly talking through his hole about this issue. He already has done something about it in writing the two books.

      • BamBon

        Michael Insults BamBon – What a strange and intellectual way to answer the question I posed for debate.

        To paraphrase you Michel and also to use your logic; “Mr Perkins” is doing nothing and is talking trough his ‘hole’ via books.

        Your logic Michel has also led me to what is the logical conclusion of your logic, which is; you believe you are more entitled to talk trough you ‘hole’ than others or at least you believe that you can say that other are using a blog site to talk through their ‘hole’ while you and “Mr Perkins” are not but is seems you and “Mr Perkins” have similar thoughts / questions to me.

        Michael your logic must conclude that at least three people are talking through their collective ‘hole’ via web blog and books while doing nothing, what bunch of waffles we are.

        We must included DmW and all the others on here as ‘hole’ taking bloggers and do nothings.

        Or do you believe that only you and are entitled to an opinion or to ask a question.

        • michaelcoughlan

          Hi Bonbon,

          I love when you respond because it gives me the opportunity to show you up for what you really are.

          “you believe you are more entitled to talk trough you ‘hole’ than others or at least you believe that you can say that other are using a blog site to talk through their ‘hole”

          Once again your words. You haven’t a clue what I think because you don’t have the manners to ask me. You then draw your own conclusions with regard to what I think to suit your own warped
          view of the world.

          “but is seems you and “Mr Perkins”
          have similar thoughts / questions to me”

          Do you actually realise how ridiculous this statement is? You are of no importance or significance whatsoever! I don’t care what you think and certainly wouldn’t dream of asking you for even the steam of your piss to quench myself if I was in flames. I can’t speak for mr Perkins but I doubt if he knows you either.

          “the question I posed for debate”

          If you weren’t such a nut case you would understand that this blog does not belong to you, that you are a guest and as such you are not entitled to pose any question for debate. That is the perogative of the owner.

          I sincerely hopes this helps you. Refocus your efforts on glass stegall and lead by personal example.

          • BamBon

            I don’t know who you are but your insults and attitude demonstrates your mindse.

            You should do something yourself and stop telling other what do. There no obligation on you to respond to my post. But my opinion is mine and yours is your welcome to the real world.

            Bam Bon

          • michaelcoughlan


            I mistook your post for Bonbon and i have erred so please forgive my direct nature. If you read the dialogue between me and Bonbon I am sure you will understand.

            With sincere appologies,


  41. Careful Michael
    Bam bon is not Bon bon

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