May 9, 2013

China could learn from us as it heads for massive debt crisis

Posted in Debt · 270 comments ·

It is hay fever season again. I know it is because my eyes are streaming. I look at my son and see that I have passed on the nasty hay-fever gene to him too as he struggles with puffy eyes, itchy throat and constant sneezing and wheezing. For the next while, we’ll be watching the pollen count like hawks, but the hay-fever season will pass. It always does.

The horrible blocked-up feeling we hay-fever sufferers have to endure comes in without warning, stays right through the Leaving Cert and hangs around for most of the summer. At least we can comfort ourselves that it is seasonal.

A few years ago on a visit to China, I suffered the same allergic-type symptoms. But there was no pollen. It was pure industrial pollution. This type of pollution is not seasonal and as the Chinese economy slows down rapidly, one of the permanent legacies of the 30-year boom is mass environmental degradation.

China has had the mother of all booms, which lifted incomes dramatically but left behind debt, political corruption and massive environmental mess. Like Ireland, when the economy falters, China will have to a deal with a huge debt burden and the Communist Party will face a significant battle for political legitimacy as the dodgy deals of the past 10 years come into view. Writing from China in 2010, I suggested that even though America then was on its knees suffering from a huge post-boom hangover, which people compared to the 1930s, it was China that might come to reflect Steinbeck’s ‘Grapes of Wrath’.

In 2010, China was booming like the “Roaring Twenties” in the US; clubs were opening in Shanghai, people were borrowing for flashy cars, luxury goods and high-end apartment developments. All the while, millions of poor workers flooded into the cities looking for work.

Yesterday, I hopped into a taxi and the driver was a polite young man from Shanghai. We got chatting and I asked him why he was here.

He laughed and stated bluntly: “China is over”. His friends back home were up to their gills in debt and the prices of their apartments – which they had paid small fortunes for – were falling. Does this all sound familiar?

It should sound like a similar playlist to ours, because China is about to experience a massive credit contraction, leaving not ghost estates but ghost cities and millions, not thousands, in negative equity. This development will have significant ramifications for the entire globe. It will not reverse the big trend of more and more of the world’s economic activity moving to Asia. Nor will it change the fact that China will overtake America as the world’s biggest economy within a generation; but it will make the ride bumpier for all of us. After three decades of annual economic growth averaging around 10pc, growth has slowed to 7.7pc. In China, retail sales growth last month slid to 12.6pc from 15.2pc at the end of 2012.

This does not sound too bad, but as we saw in Ireland, economies where there is a lot of debt, can move from rude health to extreme fragility very quickly.

China continues to have one of the world’s fastest-expanding economies, but annual growth rates are now half of the 14.2pc in 2007. Demand for Chinese goods abroad and breakneck investment at home have since slowed. Like Ireland, China could be facing an investment-led slump, where the massive and reckless investment of the boom ends up not being used.

Politically, this change is having significant impacts. The Chinese top brass are altering their behaviour as they look forward to a post-boom world.

In a recent official visit, President Xi Jinping stayed at a small hotel in Hubei Province. His humility is contagious. After all, mimicking the boss is the best way to keep your job in one-party dictatorships. Reports from China indicate that to avoid appearing flash, lower-ranking officials are suddenly shunning five-star hotels. The new austerity is deflating luxury markets for art, entertainment and clothing.

According to a recent ‘Wall Street Journal’ account, Louis Vuitton and Hermes products are being sold second-hand by people who need cash quickly to pay huge debts.

The mainstream press in the West (and many of the mainstream economists) have not picked up on the transformation and are still raving about China.

They have not twigged – even after everything that has happened – that a country with the world’s largest foreign reserves can actually experience a debt crisis. So even though China holds $3 trillion in foreign reserves (largely in US Treasuries) its internal debts are estimated at a menacing 20pc to 40pc of its economy. This is an enormous range and could be anywhere from $1.6 trillion to $3.2 trillion!

Apart from possibly more Chinese taxi drivers in Dublin, what would a sharp slowdown in China mean for the world? First, the Chinese property market would slump, and then the banking system would implode. This will force the Chinese government to divert enormous resources into propping up the banking system.

The prices for commodities all over the world will continue to fall because, without Chinese demand, who will want all the world’s commodities? In addition, those countries that supplied China with technological know-how and capital goods, such as Germany, will see its export growth slow sharply. Likewise, international trade will slow down around the world, leading to fewer industrial orders.

This will imply that the growth forecast of the EU, which has always been hopefully optimistic, will slip from here. On the plus side, this implies that the austerity agenda, which is already in retreat, will be knocked back further, not just here, but all over Europe.

Politically it remains to be seen whether the Chinese Communist Party will survive a slowdown in growth. Having replaced the Maoist slogan of “equality for all” with “prosperity for all”, if they don’t deliver on the latter can they fall back on the former?

Expect lots of change coming from the East – possibly before the next hay fever season is upon us.

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    • Adam Byrne

      Me too.

    • michaelcoughlan


      Thanks for this important observation. regarding “the prices for commodities all over the world will continue to fall” Maybe or maybe not.

      If hedge funds can borrow money so cheaply to speculate with is their any chance we will see the same decoupling of indices and bond markets from underlying fundamentals?

      I’m sensing an enormous collapse in the FTSE, S&P, DOW, NASDAQ etc.

      Kaiser said it recently in his video Mr Wang (millions of Chinese housewives) are insuring against this by investing in bullion coins.

      They know from the 1950′s grain shortages what can happen when politicians get in control of the means of production.

  1. Lius

    Sounds like there might be more than the economy changing in China, could we see something like the Arab Spring starting? The Falun Gong who were behind the Tiananmen Square protests have not hone away.

  2. Puschkin the Black and White Cat

    The global economic system is very unstable, I always believed a “black swan” would appear. This is a possible candidate.

    The old J.P. Morgan (?) wisdom “buy land God ain’t making any more” , seems to be the root of Irelands and now the world’s economic problems.

    The root problems (of course) are even deeper and concern mans wish to enslave others.

    Example of slavery, Irish state and semi-state (Civil Service, ESB, Aer Lingus, Board Na Mona, TSB, AIB etc) , huge (60% of end pay) guaranteed pensions, guaranteed by my work, while my own pension is now almost zero. I paid over 15% of my entire income for 30 years, and it’s now worth 3,400 euro per year. My sister who never paid more then 5% per year of similar income will reap a pension of 46,700 per year. My advice to my childern, don’t be mad , don’t be a slave , be a slave driver, join the Irish state machine.

    I’m sure this happens throughout the world.

    I effect I am a slave, I work long and hard to provide a living for others while they deny the same to me. Of course, like a well oiled machine you cannot see the mechanics without deep research.

    This in turn leads to the property madness that is sweeping the world.

    • Eireannach

      The property madness sweeping the world is the great unwashing jumping on board with the ultimate pyramid scheme, the ultimate get-rich-quick scheme, with home ownership ‘security’ an extra promise to reel in the max. number of suckers.

      The people of the world are uneducated suckers. What more proof do you need than the lemming behaviour to scamper onto the property ladder?

      When I was young, we called it the ‘rat race’. There was an implied derogatory distain for the ‘rats’.

      I have never lost my distain for the ‘rats’.

      As Bob Geldof sang, in a more clued-in era: ‘It-it-it-it-it-it’s a rat trap…and you’ve been caught!’

      • Eireannach

        That should read ‘the great unwashed’. As in, the vasty deep of rats, scamping blindly, following each other’s tails.

        No, I will not apologise for calling YOU LOT rats! Bob Geldof didn’t put on kid gloves when he wrote ‘Rat Trap’.

        Punk rock – tell it like it is. Tell the rats they ARE RATS and to hell with their bitter biting and nibbling response, that’s what punk is all about!

        • bonbon

          Hey, Punk, the banks went crying for national bailout’s and bail-in’s, fully clued up on finance and statistics.

          But punks always do that in the end, don’t they!

          • Eireannach

            The people bailed out the banks because they didn’t want the tumult and turmoil of bank failures.

            So the banks suckered the people a second time, this time pandering to the people’s desire for no tumult, no turmoil.

            the public could have chosen the tumult and turmoil as necessary to destroy the predatory bankers, but the bankers psychologically read the public right – the public chose business as usual, in other words, save the banks to sustain the lie that things can ‘recover’ from the ‘down turn’ after a little bit of tidying up at the banks.

            The people/public don’t want the turmoil of bank failures, so the bankers have suckered the public by playing to their fears this time, instead of their greed during the boom.

          • bonbon

            The “people” that bailed out the banks are in the position where they could have and should known the catastrophe they are causing. The banks HAVE failed.

            Glass-Steagall is the way to handle this – FDR made sure banks opened for normal busined after a holiday with the investment arms severed. Those who bailed out DO know this. Do not try to sell the fear bullshit. That is a Goebbels Big Lie.

          • breltub


          • michaelcoughlan


          • bonbon


            The Iceman cometh, takes the life out of the booze, does’nt it?

    • michaelcoughlan

      “The old J.P. Morgan (?) wisdom “buy land God ain’t making any more” , seems to be the root of Irelands and now the world’s economic problems”

      Not correct. Dreadful government policy and self serving bankers are the ones causing te trouble. The ordinary consumer has a large share of the responsibility also.

      • bonbon

        But all of your chosen guilty in fact believed in J.P.Morgan!

        J.P.Morgan was chosen by Pecora’s Commission precisely because of this kind of “common sense” liberal “peoples opinion” that led to 1929 and the credit crunch until 1933 when FDR opened the door to the New Deal with the Glaass-Steagall banking act.

        Exactly the same is now happening.

  3. Eireannach

    Now, DMcW posters….

    …imagine the Chinese equivalent of Joe Duffy’s radio show.

    …imagine countless Chinese calling in, complaining about how they are finding it so haaaaard to pay for the Mr and Mrs BMW and Merc the couple bought last year, how the bank won’t give them yet more debt to help them pay off their existing mountain of debt, and how the banks are at fault for giving them money to buy Louis Vuitton handbags, holidays in Europe, family outings to the Chinese Disneyland, private tuition for grinds and gymnastics lessons with the top teachers for little Li or Xi, pushed on by pushy parents.

    Would Irish people listening to that radio show (dubbed, I suppose) have any sympathy for the cry-baby stories of bankrupt nouveau riche Chinese, all Louis Vuitton handbags, high heels, DKNY salaryman suits and spoilt, pampered kids?

    I think not! Lessons need to be learned here, by the Chinese themselves.

    Now you can see experience how our fellow Europeans, and many fellow Irish, feel when they hear the same cry baby stories of the fallen nouveau riche of the Celtic Tiger.

    You know the ones – the banks are at fault, the banks made us do it! – you know who you are!!

    • Puschkin the Black and White Cat

      Greed made me do it,
      Big fat ignorant greed made me do it,
      Thick moronic one-upmanship made me do it,
      Low self-worth made me do it,
      Empty joyless selfish life made me do it,
      Endlessly looking at Manchester Palace playing Chelsea Rovers made me do it,
      Having no interests made me do it,
      Never having read anything more than the Sun made me do it.

    • bonbon

      Well just let us see if China bail’s out the banks and causes a massive disaster.

      That is a particularly transatlantic “tradition” is’nt it?

      China follows FDR today, of course the banking lobby will try to subert that.

      The real impact on China is the transatlantic collapse. That point seems yet again to be entirely missing in DMcW’s lead.

      So let’s show China we are not the disaster we have destined for ourselves. FDR and Glass-Steagall now! Hamitonian Banking, which China can fully appreciate.

  4. 5Fingers

    Sustainability and balance. Seems we cannot get these right – ever. We seem to flip flop from one extreme to another. Boom/Bust, Export oriented/ Import Oroented. The idea of every economic region being capable of being self contained to a “reasonably” large degree does not seem to exist. You can see the collapse…Example, US collapses to Asia which collapses and bring down export oriented Germany which collapses Europe and so on.

    Now, I can see Glas Steageall being waved around the place suggesting it can all be done by fixing banks. And the metallists will be telling us that we need a trustworthy “currency”. Even our host will suggest now and again that a little monetary tweak might be needed.

    Frankly, I think any old system will work. A tool is a tool is a tool and you work it. The bit that is missing every time is political acumen and leadership. The next few years will be putting the onus on leaders to put themselves forward. If they do not, we will be led by the faceless technocrats and their civil servant acolytes and with lobbying and influencing power of the moneyed few, that is a real and terrifying prospect.

    • bonbon

      Where does “balance” come from? Some liberal statistical theory, any old one like the current one perhaps? Life does not follow such dogma, nor humanity either.

      Where does “sustainability” come from, Dr. Schellnhuber’s Optimum Population Trust perhaps where the stated intention is a “sustainable” 1 billion? That is the current intention running the plainly genocidal policies under the guise of “finance”.

      Glass-Steagall is an intervention against the intended genocide, concentration camps, collapse all peddled in the cause of “sustainability”.

      So put this theme forward, not just any old theme.

      • 5Fingers

        Glass S was an FDR thing. You need leadership. All else is waffle. All your philosophical references need leadership. GS without leadership is like a car without fuel.

        GS can do nothing of itself. No process, science or mechanism or philosophy of itself does anything. You need people with balls. Not wafflers and keyboard warriors who hide behind websites and blogs like many of us here and talk absolute crap.

        • bonbon

          You are a master of followship, following generally accepted opinion. GS has already exposed the pathetic followship of generally accepted opinion.

          So dump generally accepted opinion, study GS up, look into what it means, think and discuss it. Think with your mind, not bol*locks!

      • michaelcoughlan


  5. woodsey

    Not certain it’s only the Chinese (or any other nation, for that matter) that needs the ‘lessons learned’ approach. These are lessons learned at your granny’s knees. Never trust salesmen bearing the nuclear holocaust of derivative ‘gifts’. Had our natural talent for greed not overtaken our lessons learned, we’d have all been a lot more comfortable than we are today.

  6. el vampiro

    Eireannach- you say that the people of the world are “uneducated suckers” or “rats”. Does this not mean that you need the educated decision makers to create an environment in which the “uneducated suckers” cannot get such easy credit and destory themselves and the economy? It`s hard for the “uneducated” to turn down half a million in easy credit especially when it becomes the norm. The Irish government created an environment where ‘everybody is doing it so it must be the right thing to do’.

    • cooldude

      Correct observation. What we experienced in Ireland is a classic boom bust bubble which occurred in the property market. This bubble was promoted by the government and the property porn media but the biggest single factor involved in that bubble, and all bubbles, is easy credit due to an expansion of the money supply. This goes right back to the tulip bubble in Holland and the South Sea Island bubble in France. The one ingredient that is always present is an expansion of the money supply way out of kilter with the actual growth of the economy. This produces the easy credit which always causes a bubble, which is a misallocation of money, to occur.
      In this era of centrally controlled money that is constantly expanding at virtually zero cost it is inevitable that bubbles are created. This is the fault of our system of central banking and fractional reserve commercial banks and the ordinary people are just the victims in this scam. It is true that most of us are uneducated in how these bubbles are created because the economics that is taught is mainly supportive of an expansive money supply and the boom/bust cycle it creates. There is another form of economics which correctly identifies the causes of these bubbles but it is shunned because it calls for competition in what we use as money and an end to the franchise central banks have in the creation of money.
      An interesting book which discusses all of this is Paper Money Collapse by Detlev Schlicter.

      • Eireannach

        That’s a nice philosophy, Cooldude.

        Right now, somewhere in the world – let’s suppose Mongolia, where a mining boom is happening – banks are lending hand over fist on any and every property.

        Should you and I, Cooldude, go to Mongolia and borrow, say €500,000 each to get on the ladder in Ulan Bator, speculate to accumulate, and then when it goes pear-shaped, and we can’t pay for our Mercs and BMWs, we can plead that it wasn’t an investment property, it was a ‘home’, and anyway, we were ‘victims of the bubble’.

        Let’s hit Ulan Bator and blag €500,000 because we have a philosophy that absolves us of responsibilty for our role in destroying wealth. We have a get-out-of-jail excuse, a cheeky chutzpah philosophy of ‘victimhood’ because the evil bankers gave us €500,000 each. We’ll plead we are their ‘victims’.

        Of course if it doesn’t go wrong, we won’t thank the bank, we’ll claim our success was our own doing, not cheap credit’s doing.

      • bonbon

        We’re back to the Austrian School again are we? There we find opposition to the one action now, Glass-Steagall to regulate banking and dump the synthetic debt, starting massive reconstruction. In otherwords the Austrian recipe claims a clear discriptive “observation” while in reality blocking every attempt to dump the disaster.

        Too clever by half, Mister von Hayek or Schlichter.

        • Tony

          I have a feeling that the proponents of Austrian School don’t support bailouts of bust banking institutions. Regulations don’t work if you allow the regulated to be involved in the writing of the rules.
          Personally I don’t think a Glass-Steagall type regulation would have changed anything here in Ireland. Weren’t Irish banks operating within the rules laid out? Contrary to Bertie’s insistence, the failure of Lehman Bros. didn’t cause the bust in Ireland. It simply led to the drying up of the credit lines our banks were so reliant on.
          A true free market approach to the whole system would have kept the banks in line more than any rules. As long as a banker knows that his contract provides for him when he screws up, that the government will bail out the institution and so ensuring the continuation of that contract, their behaviour will always be bonus oriented as opposed to having concern for the customer or even the institution. Let banks fail when their executives behave recklessly, and let smarter institutions pick up the crumbs. Loan books will be bought and sold for pennies on the euro and the carcass of the bank left to rot. massive write downs would follow with the loan buyers still making their desired huge profits. The real probability of not getting that golden payoff and inflated pension will focus the mind of any banker anywhere in the world.
          What we have today is as close to free market consumer banking as we’re likely to get. Variable rates no longer “track” the central bank rate. One bank isn’t so keen to lend in order to pay off the debt to another. The €400 million of debt written off in the last quarter reported on news today, shows that there is some small recognition of inability to pay. Write off and move on. That’s how the free market works when not interfered with by so called regulators.

          • bonbon

            So Ireland is an island, totally independent of the entire transatlantic collapse underway? I’m afraid that line does not sell anymore.

            Lehmann etc happened ONLY because of the repeal in 2000 of the one regulation remining from FDR. With Travellers just before, moves were afoot to repeal this and as Sandy Weil of Citigroup said, he smashed it. Wall Street and London, those who really do know, are perfectly well aware of what Glass-Steagall means for them, your opinion aside.

            Free-market banking now, are you completely skewed or what? Bail-in as Draghi policy is “free-market”?

            Well actually you may be right, without Glass-Steagall they are FREE TO DO WHAT THEY WANT.

            Lets take their toys away, they can freely play monopoly in the rubber room.

        • michaelcoughlan


          • cooldude

            One measure that would definitely help would be to make the directors of banks personally liable for any losses that bank makes. This would curb their reckless risk taking and keep them in check. This idea that these institutions are not allowed to fail has to stop. If they mess up let them be liquidated and let the directors be liable for any losses. This would put a halt to their massive bonuses.

          • bonbon

            I’d watch the word “liquidated”, the inebriated here might take it too literally!

            Write their losses off whether the directors like or or not. Saddle no-one with synthetic debt – dump it. It’s worthless anyway.

    • Eireannach

      During WW2, soldiers on every side were raping women. That didn’t make it right, el vampiro. Just because it became normal is no excuse for joining in the madness.

      And yet…the Germans, after the war, pleaded that NAZI race murder was normal, and that the NAZI party ‘made them do it’. It didn’t wash with the rest of Europe. Finally, the Germans underwent a profound reappraisal of their own irrationality, their propensity for mass insanity.

      The result of that psychologically harrowing self-reflecting is the solid, highly realistic German people of today.

      But the Greeks, Spanish, Irish, etc. are still back where Germany was in the 1950s ‘oh, the banks made us borrow the money, the banks shouldn’t be tempting us, it’s our parents’ fault (ie. government, smooth-talking TV economist cheer-leaders, bankers). These parental figures ‘told us it was ok to do it’, so we are not responsible for our actions.

      • bonbon

        You seem to have forgotten, conveniently, the Nürnberg Tribunal. The defense of those in the position of power was defeated by “they could have and should have known” the effects of their actions. Remember those in the positions of power were hanged for this.

        So those that unleashed the bubble, and then those that bailed it out or in are in the position of power to have known the effects of their actions. They wrote the ESM Treaty with eternal unaccountibility by process of law. That alone is damning evidence that they knew, for a Nürnberg Tribunal II.

        Now we are waiting fro you show some at least some disdain for those in the positions of power in banking, politics who could have and did know and fully intended the effects of their actions.

        • Tony

          I think this is the first of bonbon’s comments (ever) that I didn’t TUT at.

          • bonbon

            And Nürnberg occurred after 1933 ONLY because FDR’s economy was in a shape to defeat fascism precisely because of the totally opposed approaches to finance.

            Hitler’s approach, Schacht-ian, admired by Keynes, Hayek, and Friedman, is catastrophic.

            Hamilton’s approach used by Lincoln, FDR, JFK, is fundamentally opposed to fascism, and gives all monetarists a real bad day. It should be clear why.

        • Eireannach

          Well Bonbon, I say hang the bankers, hang ‘em high.

          But the public doesn’t want to hang the bankers.

          The public are going back to FF in their droves.

          • bonbon

            Let FF adopt the best policies and spurn the liberal junk. They could if they show some principle, not tactics.

            The “public” want a functioning economy with jobs. And the only way to deliver that is what we propose.

            The ghost of murdered Glass-Steagall is behind the curtain at every party strategy and tactic hugger-mugger now.

          • michaelcoughlan


      • Grey Fox

        Something wrong with you Eireannach! You maintain it is nobody’s fault except the individual and everybody should be so fantastically educated as your good self, that we should not listen to our parents or grandparents unless they are right! and we are supposed to know they are right! we should not listen to to any of the people we have been continually educated to accept as authority on matters important, I do not know what age you are but to a twenty year old embarking on life, marriage etc… they do not have the benefit of hindsight, you appear to be beating your chest about your perfect choices in life and remonstrating everybody else for not making those same choices, if it is kudos you are after that is not the route to take…how’s the business going? by the way….

        • Eireannach


          I’m close to signing a deal with the largest coach company in Dublin and their partner in Belfast. We’re going to hammer out a broad suppliers agreement deal for 2,000 tickets/month, 4 coach tours daily leaving Dublin and Belfast.

 is still password protected until HBO agree to the use of their trademarked name. They have tacitly supported me so far, but not explicitly. So the two few weeks are crucial RE: the name. If I can’t use the name, I’ll use a second choice, but we really want to use the name.

    • Tony

      The environment that needs to be created is one in which the “uneducated suckers” are not that at all. How many of us received any kind of formal financial education? Maybe learning about finance, instead of the drivel that the cultural slant our education system provides, would be more beneficial to the “great unwashed”.
      My father is 73 years old, was self employed for the 35 years before he retired and while he understands that the banks borrowed to lend, he still thinks that banks primarily only lend out customers deposits. Fractional reserve is lost on him. When I gave him a brief explanation of it, he called a friend and asked him about it. Your man said he’d heard something about that in the last few years. That man worked for a bank for 30 years.
      My neighbour works for a bank and has done so since she left school. She’s at the coal face of debt collection at the moment, having spent most of her career in a secretarial role. She doesn’t understand when people scream down the phone that “you bastards make money out of thin air”.
      A regular class in financial studies would go a long way to helping all of us “rats” ensure that we had some idea of what the hell is going on.
      But then schooling wasn’t designed to educate us in the real ways of the world. It was designed to train us into systems (time keeping, obedience, regular hours etc.) that would prepare us to go to work within the bigger system (time keeping, obedience, regular hours etc.), not to inform us or help us to think for ourselves.
      Is it any wonder, when people saw what was needed to fund a decent pension, that so many fell for the property push?

      • Grey Fox

        Great comment!

        • cooldude

          Henry Ford once said that if people understood how money was created there would be a revolution in the morning. Great comment because we need to understand how this scam works to benefit the 1% and to rob everyone else.

          • Grey Fox

            A web of deceit, lies and fraud on an unimaginable scale, as every day passes it becomes more and more difficult to detach from the scam, the deck is so stacked against with compliant and persistent promotion by government and the Judiciary. Any of the many individuals confronting the financial despots in the Irish Courts are true heroes whether they are doing it out of necessity or not. They deserve our unqualified support. The Darcy’s, Burn’s, Freeman’s etc etc….

  7. bonbon

    Chinese and American Dreams: Christopher Lewis

    May 7, 2013 (LPAC)–Chinese President and Party Head, Xi Jinping, has taken up the theme of the “Chinese Dream” of economic, social, and political progress in China, erasing the echoes of colonial humiliation dating back to the Portuguese in Macau.

    The Global Times, a publication of the CCP, asked an array of Chinese and internationally known experts about relevant aspects. They included retired American Ambassador Charles W. Freeman; Wang Huiyao, director general of Center for China and Globalization, a think tank based in Beijing; and Christopher Lewis, “an expert with the Schiller Institute in Germany.”

    Christopher, asked to comment on “the differences between the Chinese dream and the American dream,” answered:

    “The American dream was the vision of Abraham Lincoln, Franklin Roosevelt, and John F. Kennedy and Martin Luther King, and today is that of Lyndon LaRouche. These great leaders have fought for human dignity, and three have paid with their lives for it. Unfortunately with the assassination of former president Kennedy, the dream became a nightmare of unending wars and a financial dictatorship by Wall Street and the City of London.

    “The Chinese dream has also had great visionaries like Sun Yat-sen and Deng Xiaoping. These great leaders had a vision for the development of China and the World. President Xi’s Chinese dream can be a dream for all Chinese to ‘reach for he stars’ and have a productive life, living in peace.”

    • bonbon

      Both China and Ireland were humiliated by British colonialism – remember the 3 Opium Wars.

      We have Arthur Griffith and China Sun Yat-Sen who died a couple of years after Arthur Griffith.

      It is a shame neither of these great names are today mentioned in humiliated Ireland.

      China has rediscovered Sun Yat-Sen.

  8. Looks likes David is ahead of the game again. I can’t help but note that China has huge amounts of debt to add to the huge amounts in America and Europe. Everywhere you looks there’s debt and yet if banks lent out other people’s deposits there’s no way this could be the case.

    Of course banks create the money they lend and hence every euro, dollar, yuan etc. has a matching debt. Why are economists surprised that economies have debt problems?

    • bonbon

      Why is banker debt foisted on national economies? Why did their speculative shenanigans suddenly get a FDIC deposit insurance guarantee?

      Only because Glass-Steagall was repealed in 2000. Re-instating that makes most of the debt void – it is gambler losses and they eat (digital) crow – yuk!

      Hamiltonian banking puts Credit in the hands of the nations, not private firms. Banks then are chartered to manage it, but the key point missed by all (digital) monetarists, is the massive reconstruction of the rubble heap called the economy must be priority number 1.

      • StephenKenny

        All this Glass-Steagall stuff is just really an appeal for effective, and enforced, financial regulations.

        You can have all the laws you like, but without any enforcement you may as well not have them .You can break the banks up as much as you like (Glass-Steagall), but if they all have shareholders and limited liability, you may as well not bother.

        There is no will to do this, and there is no will because people don’t know why. It’s all complicated, super-clever people, funny names laws and regulations – it’s all somewhere else and looked after by sombre suited experts.

        The more we rant, the further away our goals go. With all this ‘Glass-Steagall’ stuff, might almost make you think that the Bonbons are working for the opposite of what they claim.

        • bonbon

          33 pages of legislation too complicated? What utter rubbish! Dodd-Frank as you should and do know is 700 pages and no-one can read it!

          So drop the “stuff” you are on, it is poisonous monetarism.

          Trying the populist “stuff” has only one result – overdose!

          • StephenKenny

            Complicated? What makes you think Glass-Steagall complicated?
            As one of you may know, Glass-Steagall was repealed after they stopped enforcing it. Just so you don’t get confused again, this means that the cure-all Glass-Steagall was an in force law, they stopped enforcing it, so it had no effect, so they repealed it.

          • michaelcoughlan

            Hi stephenkenny,

            “they stopped enforcing it, so it had no effect, so they repealed it”

            This is the most important observation I have seen on the board. You maywell spend your time banging your head off a wall convincing bonbon of this point. With the corporate physopaths in charge of the worlds financial and corporate entities it makes no difference whether glass stegal gets reinstated or not they will simply ignore or circumvent the laws that suit them.

            Look at Iraq: no weapons of mass destruction and 500k dead “eyerackkkkieees” from a war fought on a fabricated charge.

            Bonbon can stay pissing into the wind for all the good it will do.

          • michaelcoughlan

            Should read don’t suit them.

          • 5Fingers

            Well articulated Mike and Stephen. It makes all of Bonbon’s post utterly pointless. People have asked Bonbon for the meat. Nothing except waffle and never grasping the fundamental nettle sitting on the top of the manure heap (currently made of unenforced laws and regulations) which is fundamental leadership.

          • bonbon

            You DO know, and SHOULD know that ,”stopping enforcing” it meant the merger of Travellers and Solomon. See this nice article. Wall Street spent $350 million to “stop enforcement”, and Sandy Weil of Citi, self described smasher of Glass-Steagall, deliverd the coup de-grace. wants it forcefully back in legislation.

            The sheer sophistry of your argument, liberal at its worst, is simply circular logic. Incredible, but it does dupe some, just like Trackers did. Are ye at it again?

          • StephenKenny

            Yes, that’s right, that is precisely the point. The thing that they got rid of was the regulatory system, without which any laws that they do or don’t have are irrelevant.

            If you really want to go on about something, I suggest you try something along the lines of “equal justice for all”, or one of those.

          • bonbon

            Put the legislation back, simple as that. It worked, is easy to comprehend, and very clear.

            Then without loosing a single day, get on with the reconstruction using Hamiltonian Credit.

            Morality pantomines are for the birds…

      • michaelcoughlan


  9. bonbon

    DMcW, I must wonder what you are up to. Referring to the report How London, Wall Street Backed Japan’s War Against China and Sun Yat Sen by Mike Billington. we have a quote from Liang, arch enemy of China’s Sun Yat-Sen :

    Like Mazzini, Liang admired, above all others, the British Parliamentary system and the Anglo-Saxon race (“a race greatly endowed with the spirit of independence and self-reliance—the Chinese must learn from the Anglo-Saxons”).

    Taken from Tang Xiaobing, Global Space and the Nationalist Discourse of Modernity: The Historical Thinking of Liang Qichao, 1996.

    Is the lead a parody of British colonial operations, or is Ireland now dragged yet again into imperial scheming? I’d wonder at those close who mooted this theme for sure.

  10. Deco

    China is not finished. They made mistakes. The issue is how will the fix them. Will they do like most of the Western World, and pump the populace with positivity on the Orwellian crowd mind control device ? Will they do like Japan, France, the UK and the US, and borrow and stimulate ? Will the do like South Korea, Malaysia, Taiwan, and Thailand, and burn the malinvestment ?

    I reckon that we are underestimating China. Forget the overestimation hype from the “news” media, over recent years. That is all designed to encourage the Chinese to buy overpriced rubbish from the West, and thereby make a “statement”.

    China is changing within. Labout productivity is going upwards, and this is following a trajectory followed by other Asian dynamos. Real estate booms and crashes were seen in South Korea, and Taiwan on their trajectory upwards. Chinese infrastructure is world class. And it is making China super efficient.

    China will pull through this crisis.

    The EU, on the other hand is finished. Two lost decades since the Maastricht Treaty. Two failed currency experiments. Countless countries bankrupt. Many dysfunctional labour markets. An awful lot of nonsense. Countless EU summits that are more likely to create problems than they are to fix them.

    The major feature about the West that people cannot see, is that it is in a massive intellectual hole, and it will only get out of it, as a result of massive ruin, turmoil, conflict and misery. The scale of the delusions in the West are immense, and the commitment to continue them is massive.

    At the end, Western Civilization reached a pinacle, and the declared unconsiously that it wanted to rediscover serfdom, so as to enrich itself with the experience.

    • Eireannach

      +1 Deco

      Even a recently as the early 80s, punk bands would aggressively lambast anyone who was a sucker for something as cravenly selfish as bourgeois property ladder climbing and money-for-no-productivity property equity.

      The extent of the scampering rat race since the early 80s is impressive. Basically, 90% of Ireland, the UK, America, Australia, etc. expect to remain middle class with no deeper strategic plan than to buy a house/houses which will go up in value and give the owner free money to spend of tat and sh*te of every conceivable description.

      But the disgrace of the West is less property investment errors and more, much, much more the howls and whimpering of people when it’s pointed out to them what a bunch of spineless suckers they have been.

      They have become so soft and lacking in dignity, that they are clinging to the ‘bankers gave me money, I’m a victim!’ narrative, seemingly without any sense of shame and self-disgust.

      They don’t even have the decency to inwardly reflect and think ‘OMG what was I doing?’ They want a tax-payer bailout, like the banks. They basically are little banks! Instead of recoiling in disgust, they want the same specially pampering and treatment that the banks got, because ‘they’re worth it’.

      • bonbon

        The S*x Pistols tried to rehabilitate Belsen, I heard. That’s Punk character is’nt it? Someone on this blog tried that line not too long ago.

        So why try to rehabilitate punk’s? To claim the massive economic disaster is their “own fault” to the legions of unemployed?

        You are on a short rail to rehabilitating the Camps, with that Punk banner above the Gates :

        “Welcome to the U.S.E – work makes you Free”.

        • moneydoesnotmatter

          You heard incorrectly if you heard that the sex Pistols tried to rehabilitate Belsen Bonbon.

          • moneydoesnotmatter

            Holidays in the sun.
            A cheap holiday in other peoples misery
            I don’t wanna holiday in the sun
            I wanna go to the new belsen
            I wanna see some history
            ’cause now i got a reasonable economy
            Now i got a reason, now i got a reason,
            Now i got a reason and i’m still waiting
            Now i got a reason, now i got a reason to be waiting
            The berlin wall
            Sensurround sound in a two inch wall
            Well i was waiting for the communst call
            I didn’t ask for sunshine and i got
            World war three i’m looking over the wall
            And they’re looking at me
            Now i got a reason, now i got a reason
            Now i got a reason and i’m still waiting
            Now i got a reason, now i got a reason to be waiting
            The berlin wall
            Well they’re staring all night and
            They’re staring all day
            I had no reason to be here at all
            But now i gotta reason it’s no real reason
            And i’m waiting at the berlin wall
            Gotta go over the berlin wall
            I don,t understand it…
            I gotta go over the wall
            I don’t understand this bit at all…
            Claustrophobia there’s too much paranoia
            There’s to many closets i went in before and
            Now i gotta reason, it’s no real reason to be waiting
            The berlin wall
            Gotta go over the berlin wall
            I don’t understand it…
            I gotta go over the wall
            I don’t understand this bit at all…
            Please don’t be waiting for me

          • bonbon

            Check again – there is even a lyric with the title, for phone ringtone download! The hapless have not checked what they are listening to! Or maybe they have.

            The British movement tried this, but not surprising.

            Some are trying to rehabilitate Sir Oswald Mosley’s U.S.E – work will make you free, for all to see.

            Between you and me, that is the U.S.E.

      • Deco

        Nice to know that somebody is using them.

        Because the West is downloading itunes, and voting in X-factor with a lot of intensity, while the same clowns get re-elected predictably.

  11. bonbon

    A lot of talk about China, and no-one making any effort whatsoever to talk about China. Sun Yat-sen is the key. The battle between Confucianism and Legalism, best explained for us collapsing transatlantic’s here is the dynamic that gets lost in London’s statistics.

    Sweeping liberal opinions, which look quite humorous seen from China with its very long memory, are typical of ex-Tigers.

    To claim an “intellectual hole” is really a personal statement of choice, a liberal limp hand-waving excuse. The same excuse for making no effort whatsoever to talk about China.

  12. LKSteve

    Great article, immediately I am compelled to search for ‘China Crisis’ on Spotify, what a great song. Haven’t heard it since the eighties. Economics is good for something after all (only joking) – always enjoy your articles David. Hopefully your predictions of doom in commodities are off the mark as we are entirely exposed here in Aussie

  13. Eireannach

    We cannot change other people, Bonbon.

    I can’t change the bankers’ behaviour.

    I can’t change your behaviour, and get you to talk about something other than Glass Steagall for a change.

    We can only change ourselves, our conditionings, our attitudes, our behaviours, our expectations.

    If the masses of the people changed themselves, bankers could no longer prey on them, nor politicians with false promises, nor Hollywood marketers, etc, etc.

    If the masses of the people think the problem lies outside of themselves, that they do not need to change inwardly, their behaviours, attitudes, etc. then we will have learned nothing from all of this suffering.

    I want an end to needless suffering, that is why I repeat, again and again, that we are all unique individuals with unique identities and that we must use our own personal powers to think for ourselves.

    My personal STYLE of making my point is by jamming the cry baby signals of the whingers, who think the problems lie outside ourselves, in politicans or bankers or the usual easy targets.

    I repeat, again and again, that the problems lies within our attitudes and behaviours – our minds and choices – and not outside.

    Change ourselves inside, and ALL the politician and banker problems vanish by themselves.

    • 5Fingers


      It’s called leadership. Most us needs to grow a pair. Each of us has to be a leader. It is hard and it is frightening.

      No amount of legislation/ regulation will ever overcome the manipulation thro’ fear that can be exerted merely to suit those who wish to preserve the status quo.

    • bonbon

      Have a look at the Adam Smith decree below, your entire post is much more elegantly stated there.

      But that was in the 1700′s !

      How such quaint “moral sentiements” have sway today is truly shocking.

  14. China either becomes a super techno cyborg swarm tooled up for leanand green GDP or it will go to war with Japan to disguise its’ failure to move up the added value food chain.

    as ‘onshoring’ returns the next wave of semi-robotic robotic production to America and Europa in respnse to Peak Cheap Oil, the factories of the Pearl River Delta either re-tool for a self-generating internal Chinese economy and civilisation or those released from Foxconn by drone iDevice makers will riot.

    China’s biggest challenges are Water and Energy: unless they becomecsuper efficie t with both they will fail . thecadoption of a western meat intensive status diet is unsustainable as is the communist-capitalist culture jamming since 1979.

    China has provided one last hurrah for pre peak cheap oil capitalism for corrupt western corporations and banksters. presumably this was all factored into the geo-political game plan of allowing Nixon in?

    Orwell remains the guide. noeliberal international capitalism is ending as Fortress America shapes up. Globalisation will swing into violent reversal. Europa willbe convulsed as these energy based economic realities unfold.

    i’m in London which is still shopping and banking central . but it’s no different to Tokyo 1989. or Dublin when i was there in 2007 and everyone said i was mad to say it was all coming crashing down .

    the Dyson Airblade is about the only product of interest i see amidst oceans of designer bling and tat. when the FIRE economy on the island of Britain also implodes like it has done on the island of Ireland, one hopes the politicians of both islands have some vision and gameplan now that China seeks to gain access to Iceland,that other Atlantic isle of wonder. however,the rise of UKIP suggests there may be a convulsion on this island rendering the survival straregies of Enda moot. if his leadership has a strategy and is not just firefighting, that is .

    I guess China would be delighted to gain access to the fall of Europa via the IFSC’s Canary Dwarf once it no longer has utility for an ex-EU City of London? or a post-Euro Wall Street. wonder who did the centuries long geo-political scenario plan in Dublin before the fateful decision to join the Euro was made……was China part of that long term planning??

    just musing…

    • forgot to add Demographics to Energy and Water/Food/Soil issues . will China get old before it is rich enough to manage a demographic crisis from one child policy?

      and for a communist country they have very odd health care provision as in Your Money Or Your Life. and no respect for contract law or intellectual property rights . hardcto see any threat unless they have another cultural revolution and finally stop mimicking western values such as those of Marx and Adam Smith . Confucious and Sun Tzu. Art of War. economics is war by other methods etc

      • 5Fingers

        Aging Demographics a problem?

        Bring in the Clones…

        • that’s what Japan is doing with robot home help machines in preference to allowing mass immigration of young people from the Philipines!!

          China has laws to enforce young to take care of old as Confucian value system breaks down under pressures of modernity.

          no one wants to live in smog ridden chinese cities : ask Jim Rogers – the biggest fan of China . he lives in Singapore to save his daughter’s lungs….says it all


    It would seem that the savings rate in china is an unprecidented 50% of gross income.

    This is a major difference between the east and west. China has room for more consumer demand internally and will be less reliant on western demand.

    China is accumulating gold at a speedy rate on a national basis. It is estimated to be growing at well above a 1000 tonnes a year, but China hides the true figures and the rate could be double or triple that 1000 tonne PA.

    Chinese citizens are ascrambling in aquiring gold for personal savings. Supply is running out.

    These two factors alone will ensure the chinese have the resources to move into the next phase of the world economy as the current fiat currencies inflate to oblivion.

    The current world demand for physical bullion is estimated to be as high as 4-5000 tonnes a year more than mining production. Where is this gold coming from. It seem to be from the leasing and surrepticious sales of western central banks gold, and the liquidation of gold from hedge fund investment and from Exchange traded funds such as GLD which dropped by 250 tonnes this last couple of months.

    This rate of asquisition cannot be sustained as the bullion will not be available to buy. Then there will occur the mother of all squeezes on the gold market and bullion will not be available at any price at all.

    As the world economy resets it will be apparent that those with the gold will set the rules. Together India and China account for over 50% of world demand.

    Do not worry about China as it will be setting the rules going forward.

    I would like to see a more in deapth analysis of china by DMW rather than a stimulated thought from a chat with a cabbie.

    • 5Fingers

      In times of crisis, the ones setting the rules are the ones with the biggest bombs. Hard to buy an environment.

      China also has a major issue with corruption. Gold is the tool of sustained bribery – it’s the means of operating outside the “system”.

      The are always several prices… One with a receipt and tax receipt, One for cash and soon…one for Gold. At a global level, I could see how we might be seeing more of the latter.

      • Simply golf asserting itself as money.
        china does not have a monopoly on corruption, that belongs in the central banking system of all nations.
        The country with the most experience of paper bank note inflation is china. Hence the affinity for gold as money.

        Mrs Wang is doing what you should, but will not, and only deride. Time will tell who is correct.

        My bet is on the Chinese.

        To say that gold is is the tool of sustained bribery is nonsensical. Anything can be used for a bribe. Gold is the only honest money there is. You are the ones who have been bribed by the inflationary policies of the ever inflating fiat currency.

        • 5Fingers

          Gold is for the narcissist who cares little about anyone else or their environment. Chinese environment and demographics an their liking for gold? An unfortunate coincidence or a culture driven by inward looking gold driven moral values?

          Corruption? Come on!!! So you when was the last time you had to pay a bribe in Canada.

          • You do not read what is written and you have a complete lack of understanding of gold in the role of money.
            you do not understand the endemic corruption contained in the present central bank fiat debt based money system.

            You are ignorant and it shows in your comments.
            You demonstrate that you have no clue about what you comment.

            The whole monetary, politican system is one bribe after another and payoff to the crony.

            You would be a better person if you practised gold based morel values. The gold based monetary sytem enforces accountability and honest behaviour.It prohibits excess and profligsate behaviour.

            Add the doctrine of real bills to a gold based monetary system and the economy would recover over night.

            That is the lesson we will shortly learn from China. Suggesting that China need learn from us is the height of impertinence fostered by an equal amount of arrogance; Attitudes in plentiful supply on this blog.

          • bonbon

            Gold plated morality? Now that’s a good one. Incredible.
            This is getting even more like Mandeville by the post.

            From gold not only springs forth economy, but now morality, virtue? Spontaneously and unknowable for the ignorant of course?

            We stare in awe for the next magic trick.

  16. joe hack

    DmW you sound a bit like an ambulance chaser in search of the next fatality if everyone was of like mind humankind would live in stasis, this maybe a good thing, but we are not build that way, most HOPE for better.

    3D printing is a new industrial tool that will revolutionise manufacturing and building construction. Raw materials will play bigger role as these machines will eat up more resources, the need for human labour will reduce and those that sit on raw materials will have more control along with those with the biggest gun, but HOPEFULLY “money” will become redundant.

    3D printing along with Grapheme technologies is now happing we are at the beginning of a new industrial revolution.

    So what will come from this new cocoon that is now coming to full term a new awaking can happen fast and we may not need death and destruction to get there.

  17. joe hack

    China is not a rich country and is not comparable to Ireland there a very few lessons the Irish could teach China these ancient people don’t need lessons from us.

    According to the world bank 2012 Ireland is the 14 richest country $42,000 per-capita in the world, we have not got a clue when it come living an austere life while China is 93rd richest $9,000 per-capita.

    We are the elite

    • Deco

      “We” is an iclusive term including large corporations that hove evry bit of revenue they can into this island for tax purposes – so that they pocket it themselves.

      GDP per capita as a statistic is a massive delusion for most people in this country.

      And it is even more absurd, whenever we are borrowing like crazy to prop up GDP.

      Ireland’s GDP figures are legitimately dodgy and useless. with many well resourced corporations pushing them up, because it is in their interest.

      China’s are just manufactured by a crude state system.

      What’s with the “we” business, kimosabe ?

      • joe hack

        I Like;

        Your points have two sides a Chinese mans point of view and an Irish mans

        So to does the we “Ireland” or the them “The China”

        “Ireland’s GDP figures are legitimately dodgy” if that statement is fact it might apply to china too and that would mean a poor man in china may live on 5 times less than a poor man in Ireland. The poor man in Ireland is an elite when compared to a poor man in china but worse the poor man in China Sweats for the poor man in Ireland

        Don’t blame a person you are a person.

        • Deco

          Less. MNCs deliberately maximize the scale of the activity through Irish subsidiaries. This is for tax minimization reasons. For their own interest.

          But that has nothing to do with the wage that most people can earn, when the economy is not borrowing vast sums of money.

          In effect, for those of us working every day, the GDP statistics are irrelevant nonsense. They mean nothing. They are massaged anyway. And the state is able to outsource the massaging of the figures. Which explains why FF/GP/FG/ILP all are in favour of inward investment, even if it created only ten jobs.

          Because it props up the ponzi scheme which has gone broke.

          The Chinese don’t have the ability to outsource the job of increasing upwards their GDP stats.

          The whole economic stats nonsense here is a joke anyway.

          Constantin Gurdgiev have given a very good sundering of the entire racket. It is all about encouraging the sheep to queue and get shorn in the various shopping centres.


          Tune out, become sceptical, and you will find your freedom.

          • Feck it Deco you’re right as always but I came to the opinion that our old sod has a bit of a way to go before it gets the act together.
            Quick example.
            UK MP and wife go to jail for fiddling speeding points.
            Irish lawmakers don’t go jail for anything, including misquoting David McWilliams, thereby causing a bit of sovereign debt bother.
            We would seem to be quietly quite happy with the D&C treatment{Divide&Conquer to be clear} so long as the boat is not rocked. That being the case, since 300,000 of our best have left in last 4 years, I’m parking the change plan and settling into mise amhain.
            Let them off. They can reap what they sow.
            With the greatest respect.

          • 5Fingers

            My key issue of mega complaint as lack of accountability by our politicians. They can break laws, not pay taxes and hardly anyone is touched among them

          • joe hack

            What are you talking about – I am simply pointing to the perceived wealth of China in relation to the article above. It’s time to grow up, move away from pseudo conspiracy theories and a vote against mentality, anger management might be worth considering, the ‘I mad as hell’ attitude fixes nothing you’re taking out context nonsense.

  18. joe hack

    For those who have not heard, Washington State USA has recently passed two controversial social reforms into state law.
    They legalised gay marriage and marijuana.

    The fact that both were legalised on the same day makes absolute sense according to the bible which states; in Leviticus 20:13 “If a man lies with another man they should be stoned

  19. tomahawk

    glass seagulls may have their place but that base human nature called greed is the ultimate culprit to most of the ills discussed.

    • bonbon

      Amen, from the new post-Church pulpit. I am impressed with the influence the Church had – now everyone wants to be a Bishop preaching virtue. Just before everyone wanted to be a Soros, preaching philanthropy.

      Is it not time to deal with the economy?

      The new Pope has got it exactly right :
      Pope Francis Exposes Slave Labor Driven by Financial Profits

      “Work is fundamental to the dignity of a person. Work, to use an image, ‘anoints’ us with dignity, fills us with dignity, makes us like God, who has worked and still works, who always acts.”

      Correct me if I am wrong, but this is the first time the Church was so clear on jobs. Now see the pure evil of unemployment all across Europe.

  20. molly

    The Irish voter reminds me of someone buying a used car.
    Most voters will only vote for main stream party’s ,much the same as only buying a used car of a garage and not a private seller.
    Some voters will only buy from private sellers who tend to sell at a lower price and will only vote for independents in the elections .
    The 3 main party’s have proved to be very disappointed and useless is it about time the public gave the independents a turn at running the country and they must have a referendum each time there’s a serious thing that effects the Irish public.

    • Deco

      and then there are the car dealers….
      enda the road….
      you will Givemore and get less…
      Mickey Martin and the car that did nothing between 1998 and 2011….
      Gerry’s armoured cars….

      • Adelaide

        The party political system is an antiquated artefact from a bygone era wedged to a pass-its-sell-by-date monetary system. The present “crisis” is a transition period and whatever evolves and comes out the other side will most definitely be rid of those two systems, that’s the optimistic version, the pessimistic version, well, like Fonda to Hopper in Easy Riders, “We blew it”, on an epic global scale. Shudder.

        So my eyes glaze over whenever I hear “The government should..” or “The banks should..”. I do my pro-active bit to foster the optimistic evolution, after all, it only takes the behaviour and ideology of the “tipping-point committed 10%” of the populace to conform the majority to their behaviour and ideology. 10% is the magic number, and I’m on the good guys’ side.

  21. Just had time to pick up on this article which, in my opinion as a contributor here for a number of years now, is quite seminal.
    The economies of scale between Ireland, Iceland or for that matter, any other Western European country, Germany included, going pear shaped pales into insignificance when social upheaval on a level expressed in this article is actualised. The renowned social and economic Historian, Duncan Ferguson, I am sure, will reference this article sometime down the line.
    Ireland has been a microcosm.
    The failure of

    • Contd. Democracy is that the fat and grease of the worst excesses have been allowed to rise unchecked. Thus this dogma has now failed, as with every dogma over time, purely because of the inability of the most fort right and powerful professors of the dogma to resist self aggrandisation and personal self reward.
      Corruption in otherwords.

      It might be one thing to keep 4m people fed a diet of absolute buinniocht in check, as with our little island, but to pull the same stroke on what is verging to be half the worlds population wont work at all.
      Simply because the have the trigger population to invoke the classical tenet ” you can only fool some of the people,….,..,..,…”

      • 5Fingers

        You are referring to the fragility of homogeneity (one crop failure takes it all out) coupled with the inherent uncontrollability of very large systems and populations (unstable equilibrium becomes more so with increased numbers). These are well known system issues in any field of science/technology.

        Let’s hope it is not too homogeneous or that populations are not too totally aligned in the one wrong direction.

      • bonbon

        You are in fact proposing genocide, whether you know it now or not, parroting both Prince’s Royal decree to reduce the population to less than 2 billion. You should have known what you are spouting. Now you do.

        We can feed double the worlds population, greening deserts, better hybrid plants, with massive programs. Stopping all use of food for burning in your SUV is a start.

        So dump the green genocide and get on board, we have work to do.

  22. joe sod

    china has done the easy part of economic development, cheap manufacturing and rapid industrial development. Now comes the hard part can China produce high value products and services that the rest of the world wants to buy, china still has no world class companies like apple, samsung, toyota or bmw. It does not respect intellectual property so is unlikely to produce one.

    • Li Shufu . Geeley cars-buy up patents re-rool re-engineer Volvo line.

      Lenovo computers

      but can’t think of much innovation,though that’s probably in the military sphere….

      • bonbon

        Odd blindness there. Never heard of the manned space program? Where should I start – I know! The earth is round!
        And greening the Gobi, levitation trains, nuclear power…

        I know about Apple’s tax evasion with Foxconn, don’t worry.

    • 5Fingers

      I’ll throw in Huawei, Baidu – all global players. In Solar Panels, there’s a 15bn Euro trade war with the EU about to warm up.

      Innovation? I dislike that term. Expresses invention in a garage mentality so linked to the US. These guys are teamers. They are crack project managers. Military training in organising projects is 2nd to none. Seen it at first hand.

      They said the same about the Japanese. Japanese started making stuff reliable and the rest is history as they say…

      The chinese may become the world’s infrastructure builders. India will be the worlds makers of anything for 100th the price of anyone else – may go bang lots, but hey!! at that price who cares.

      • joe sod

        yea fair points, but it still amounts to chinese corporations producing existing technology more cheaply than western or japanese companies. The fact that china is the biggest producer of fake products stemming from its lack of enforcement and respect for international patents and copyrights. “made in china” is ok for electronics or even cars, but what about pharma , biotech, or even consumer staples, in these areas “made in china” means do not trust. Some of the worlds biggest corporations like coca cola, nestle etc are in consumer staples. But in these areas the chinese reputation in food or in pharma means that chinese brands will not be trusted. The jury is still out on whether china can be like japan. I dont think it can because of the reasons above and also because it is too big and still controlled by the communist party

        • 5Fingers

          It’ll be interesting how that Solar PV panel trade war might pan out. The low pricing is actually good for the EU market that is trying to push this stuff and may lead to more derivative investment locally. On the other hand, if EU companies who make this stuff are being hammered 2 things can happen…Innovate out of their cul-de-sac and made China’s cheap stuff irrelevant or trade wars which screw up everyone. Personally, I think China will need to box clever on this one. Look, they make speak mandarin and have a different style of Government, but many are at heart like Irish midland small farmers well able to haggle and invent their way out of trouble. No shortage of brains.

        • bonbon

          The very idea of Solar panels shows brains unhinged. And That has spread to China. Without gov’t subsidies these cannot work, too inefficient for an industrial society. Just watch those being cut everywhere as the financial disaster bites.

          The hysterical fit Merkle had over Fukoshima, group craziness actually has not gripped either Japan nor China. Greeny energy must fail and end like the housing bubble.

          Worse than DMcW’s Dublin Bus tracker-genius’ are greeny smarties.

          • joe sod

            i agree, unfortunately this is another area ireland is rushing headlong into without thinking. The proposal to construct wind farms in the midlands to satisfy british green energy agreements. The same old vested interests as during the building boom are lining up on this one namely local councils, landowners and developers aided by a compliant government. The whole green energy movement is driven by subsidies, this is worthy of an article in its own right

          • 5Fingers

            Looka here sweety, u know not about this buis. I bet u could not tell a watt-second from a hole in the ground. I u could, u’d not be so dismissive. This is a very precision business. just because it makes for few headlines or little hype does not mean it is not going places.

          • bonbon

            The point of greenie energy being unsatisfactory has not to do with the absolute amount of energy, but the density! The advantage of coal,petro,nuclear is a stepwise progression of energy density. The result of turbines is a massive cabling problem, to do what – increase the density. Have you noticed?

            Coal compressed over millennia, but uranium quickly in the supernova, is a free density bonus. Better still is fusion or anti-matter for later…

            So now go back to the drawing board and do some more honest calculations.

          • 5Fingers

            Another non-sequitur.

            All very well having high energy density if all you can get out of it is mostly waste heat and a few percentage points of energy for real work.

            Keep digging….

          • bonbon

            Start cabling, yo’ll be at it until the cows come home, and the firm will be long bankrupt before you are finished.

            Meanwhile tell the remaining Irish tax-payers the will foot the bill for this to light up British homes.

            In Germany this has now become clear the total cost of the greenie mania. Just watch what happens next.

  23. Truth is, the people don’t need banks or governments at all. Governments and Banks are hallmarks of societal failures, masking the truth about where ultimate accountability should lie, with the individual, raised to know these things, the knowledge passed down from one generation to another, so that those people might remain free, and living apart from the serpents.

    Arizona lawmakers pass bill making silver, gold legal tender.

    • michaelcoughlan

      Hi Tony,

      This is a good post. I emailed Bill Still with the following idea and he responded saying it was sn excellent idea. I received no further emails.

      You build a vault and fill it with coin. Say 1oz silver coins. Ordinary citizens buy the coins which are credited to their account. They are then issued with a debit card to facilitate transactions. What they have done is swapped their fiat for something tangible and workable.

      When I emailed Bill I suggested the coins in the vault should be legal US tender WHICH HAS BEEN ISSUED BY THE MINT and not the FED. this would mean each citizen would be giving up his interest bearing FIAT for
      interest free government money (coins). These mint issued coins could be backed with gold and you would not be contravening any laws as you still would be using government issued tender.

      • joe hack


      • Hi michael , yu are on the correct tack. In past threads there have been detailed proposals for the way to monetize silver coin. .
        It can be spent as you say by using a debit card in amounts small enough to be useful to the penny, as in hundreds or thousands of a gram.

        See if you can access from
        Monetizing silver coin for Ireland. any country can do it of course.

        The best is a private vault system for storage out of the banking and government grasp. Couple that with the real bills doctrine which provides a for a source or form of ready cash and the economy bursts into action with zero inflation and real growth.

        • bonbon

          “The economy bursts into action”, in Hayek’s spontaneous unknowable way? We know where that comes from, Bernard Mandeville’s Fable of the Bees, as Hayek himself repeatedly said. Any Irishman who falls for this wild-eyed mantra needs to know Mandeville ran the Hell-Fire Clubs right across the landscape, the very same magician, now trotted out of the stable as an economist.

          Why do let yourself get pilloried on this well documented subject over and over again?

        • Adam Byrne

          Total rubbish.

        • Adam Byrne

          I meant the silver delusions (not Mr. bonbon’s post – although Mr. bonbon’s stuff is probably rubbish too – I haven’t read it, I delete all his posts at this point).

          ‘out of the banking and government grasp’ does not exist Tony, in this day and age. It’s the banks and the government that need to be reformed in their entirety – fumbling around with silver coins in a greasy till is not going to do that.

          Do you honesty think that anything is out of their grasp as things stand?

          Gold – tequila, delusion. Silver – tequila, delusion.

    • 5Fingers

      Those with the most coin can call all the shots at every level.

      Exactly what has changed here for the better?

      • joe hack

        “Exactly what has changed here for the better?”

        Michael and Tony will be in control so you might consider sucking up to the new masters.

      • michaelcoughlan


        The US government remain the issuerer and each citizen remains the owner of their portion of currency. The vault is only for storage and to ensure that the coins would not be tampered with as they would not physically be in circulation merely the account of each person would be debited or credited up to their total value.

        • 5Fingers

          First you want no government and now the government will be the insurer and minder. Will ye goldbugs make up yer collective minds!

          • michaelcoughlan

            I never said I wanted no government. using govt issued coin gets around the problem that the government would be very suspicious of you if you stop using govt issued legal tender. I agree with buffet that gold dosent do anything except sit there BUT when your a billionaire you can afford to take an enormous hit on your stash of cash. Gold remains an excellent TOOL to facilitate trade. The real wealth resides in the capacity of each INDIVIDUAL to acquire a skill and add value to a good or service which can be traded with other individuals of like mind. If gold is used as the medium for the excange of value it cuts out the need for glass stegal or the physopaths in the FED because they will be excluded from the process entirely.

          • The government will not insure or mind anything.
            Legal tender laws , however, must be repealed by government and that allows the existing coins to be monetised in the millions already in existence.

            money is private property taken by government because of the power able to be exerted on the subjects.

          • bonbon

            I think you will call next for Hayek’s “international force” to ensure this happens. And Hayek did wish for this.

            Then we are back to totalitarian world gov’t to “protect freedom”. A bit of a conundrum, what?

        • joe hack

          They have small government in Somalia and big government in Norway you can take your gold plans to Somalia I sure you would be welcome you could buy your own army to protect your stash.

          That way you can build a exemplary society but be careful tony may have bigger army and may turn on you so I suggest you “take him out” first.

          I think the correct word ‘murder’ but i just want to sound cool like Obama.

        • joe hack

          The US government? Why the USA

          • michaelcoughlan

            Because the FED is privately owned. Gsucks is one of the owners. Since the dollar is the worlds reserve currency all nations have to sell their currency and buy dollars to trade internationally. Remove the fed from the dollar and all other countries will follow suit.

        • coins could circulate but bullion bars would not but still are money.

          • Adam Byrne

            Did you hire that private army yet Tony to protect your gold? What are you paying them with? Can you trust them? Do you think I’d be able to track you down to take it off you if the shit hit the fan? If I paid the guards more would they favour me over you? How much can you carry if you have to go on the run?

            That’s all worst case scenario stuff and me and you are friends Tony and I’ve no intention of robbing you, no matter what, but I’m sure you get my point.

            Gold is just an element with unusual properties. We dig it up and put it straight back in the ground. Even if we went to some sort of gold-based economy, the powers that be would find some way to control it. Gold is not the salvation of man. We need to reform human society civilization in its entirety, from the bottom up, root and branch, then things can really change from the better.

            Goldbugs are just as deluded as Mr. bonbon and his Glass Steagall.

            Glass Steagall – tequila. Goldbug – tequila. Nonsense both of them.

          • Adam Byrne

            Actually Glass Steagall makes more sense than gold does, but Mr. bonbon repeating it ten thousand times for his own agenda is not going to make it happen.

            Marlo Stanfield: You want it to be one way.
            Security Guard: Man, I don’t want it to be —
            Marlo Stanfield: You want it to be one way.
            Security Guard: [losing temper] Man, stop —
            [pulls himself together]
            Security Guard: Stop saying that.
            Marlo Stanfield: But it’s the other way.


          • bonbon

            It took $350 million to repeal it, and it will be put back in spite of the paid-off politicians and lobbying.

            Or maybe you are suggesting we need $350 million to put it back?

            We have reality on our side, a reality starkly evident by the day with the U.S.E, a catastrophe. The USE is the way it is, is going the way of “Work makes you Free”, and is doomed. I think it’s a no-contest.

    • joe hack

      show me a society that functions well without a government particular today with 7 billion people.

      Your inviting tribalism, drug lords, golds lords, oil lords etc. when you have non governmental society ask those that live in your vision how is working out for them.

      • bonbon

        The Helmand Opium Society, a favorite of the endangered ethnics brigade, makes record profits without a government. Blue Helmets make sure of that.
        Sure George Soros wants to legalize drugs, it preserves a way of life, bless his philandering wallet. Mr. Blair promotes “governance”, government gets in the way of proper GDP statistics. The IMF insists Bolivia include cocaine production in its GDP, it’s an agricultural product, after all. President Morales chews it in front of the camera at the Vienna drug conference – sure it is only a local tradition.
        Charming community, what?

  24. SMOKEY

    Taxi driving is the least of our worries. That said the Chinese are known to be terrible drivers but no one is a worse more careless driver than Paddy so that could be a good thing.
    What all of you are missing is when they flood Ireland and live six to a room and start crime gangs, that the Eastern European scum will have to oust the local Paddy scum and then the Chinese scum will have an all out war with the Eastern scum, this aint gonna make you happy.
    Control your borders now or in less than a generation you will not only be buried without a coffin, in a shroud will be the new law, but Chinatown without borders is heading your way.
    Not to mention tuberculosis and the like.
    Dont get me wrong, youll never see a Chinese beggar, too industrious for that, but you will see a Chinese Taoiseach, Martin Yan!
    Good luck with that.

    • 5Fingers

      Countless invasions to Ireland. All became as Irish as the Irish themselves. We are BORG. Resistance is futile.

      The Irish are slowly taking over the world. Gombeens everywhere. That explains everything.

      • bonbon

        Are you saying the 78,000 who emigrated in 2012, a lifestyle choice Noonan said, are going to take over the world?
        That would mean FG are going to run the world!
        Enda is not up to it.

  25. nickcol


    I know this is a platform to comment on David’s great commentary but I just thought I’d throw a comment up here to let you know that there is an Android app out now that updates when David has published new articles. It also tracks a lot of other top commentators including Max Keiser, Peter Schiff and Gerald Celente to name a few. It is available in the Play Store and is called ‘Offstream Media’.

    Hope you like it!


    • bonbon

      Hope the robot Android does not choke on Glass-Steagall, maybe get a wretching fit of Java (sorry Android) stack-dumps. It better be 64-bit!

    • bonbon

      What worries me is the monetarist daily dose has turned most to Androids, some even golden!

      Surely DMcW deserves a human audience? Then don’t dole out monetarism!

  26. 5Fingers

    Given that the amount of debt issued has resulted in so much extra economic activity and also given the fact the so much remains unpaid due to lack of current income/ savings in many of the western economies, could China be the one location to buck this trend as a result of their massive deposit and current income surplus.


    Could it be said that China’s income and deposits are nothing other than the debt raised by western economies which of their own accord must be recirculated back into buyer nations and stimulate those economies. How this happens – by Chinese Banks who lend and raise more debt which in effect increases the chances of Chinese deposits getting zapped, or by Chinese being big buyers by virtue of Western economies dropping prices big time – it has to happen some way to allow the global domestic economy to rebalance or we in effect will be deleting deposits all over the place to clean up the balance sheets.

    I laugh sometimes when I hear so many people with massive deposits from business due to the last boom. DO they not realise that they only had that business becasue of debt issued. You cannot have it both ways guys!

    I think China is in a similar fix. David says it about Germany spending to save the EU periphery. Looks like China might have to be doing similar at a global level

    • 5Fingers

      China needs to develop softpower

    • michaelcoughlan

      Normally when you have such an imbalance one of two things happen:

      1) there are massive defaults and The assets get liquidated. The banks line up their buddies to buy the assets on the cheap or the banks take complete control of the assets. Fait acompli.

      2) OR the country getting liquidated decides to fight raises an army and invades it’s neighbours or other countries to control their natural resources usually on false pretences irrespective of how manny human beings get wiped out in the process like WW1 WW2 Vietnam Eyeraaaaccck etc.

      • bonbon

        That’s straight from the Tequila glass, or British geopolitician Mackinder so it might be straight single malt.

        You have forgotten things have changed since then – thermonuclear weapons, basic unit 470 kiloton (10 times Hiroshima), have taken the life out of the warmonger’s booze. If used they would remove life from this planet.

        Today, fully aware of this General Dempsey is touring to make sure this does not happen. That leave only ONE option, straight Glass-Steagall.

        • bonbon: you dismiss radioactivity concerns in Germany and Japan from Fukushima as a panic reaction yet here state that use of nuclear weapons would ‘remove life from this planet’. Can you see a problem with your thinking? One of many problems. Your fixation on ring-fencing deposit banking from the Casion assumes functioning non-corrupt governance and oversight, which, had it been in place, would have prevented ‘light-touch’ regulation from creating the bonfire of vanities of last 6/7 years.

          • Adam Byrne

            Nuclear power and nuclear weapons are 2 totally different things Andrew. Using one for everyone’s benefit does not mean you approve of the other.

        • bonbon

          The “concerns” in Germany are that tsunami would hit Bavaria, are easily dismissed as hysteria, nothing more – and by the way the full cost of this fit is now public – just watch what happens next. Psychotherapy would be cheaper.

          Nuclear weapons, are very developed, and in about 60 minutes it would be over. The hysteria fogs the brain and mixes up the two, leads a psychotic lurch to war, and presto, you are toast.

          Now Glass-Steagall, not the loopy Vickers/Liikanen fencing in the Ring sonnet the bankers sing, was murdered in 2000, and the vanities did take off after. Put back the original 33-page law with Preamble. The ghost of Glass-Steagall is behind every discussion, club chat, speech – see the curtain move?

        • There have been several invasions recently and none were nuclear attacks.

          • bonbon

            Right, Israel’s latest caper was scuppered by Russian/Aamerican collusion. No one wants some nutcase to start it.

  27. bonbon

    Asmussen Tells Euro Parliament Hearing, EU Banking Union Will Take Over Troika Job

    May 9, 2013 (EIRNS)–Joerg Asmussen, directorate member of the ECB, told members of the European Parliament in a hearing yesterday, that in his view, the Troika (IMF, European Commission, ECB) was a child born out of the euro crisis moment, which will be replaced by the planned Banking Union and its functions, which he said would be more efficient. Asmussen defended the Cyprus template, including bail-ins, adding that the Cyprus crisis was an urgent reminder to the rest of Europe to implement the Banking Union as soon as possible, including a fully-operational European Stability Mechanism (ESM).

    Some MEPs asked Asmussen what could be done to force the banks to finally start issuing loans for the real economy again, but Asmussen claimed the ECB could not act on that, but only give the money to the banks without being able to force them to pass it on to the economy.

    As Asmussen was speaking, displaying the euro-arrogance for which he is notorious, the results of an opinion poll carried out May 7 on the Internet in his native Germany for the prime time evening TV show “Tough but Fair,” were published: They showed 80.7% in favor of a return to the d-mark, against 19.3% who want to keep the euro.

    • bonbon

      So now we are going to get a more efficient Troika, the Banking Union. Cyprus applied efficiently.

      China should take the Troika to court for human rights abuse!

  28. bonbon

    Statement in Support of Glass-Steagall from Veteran City of London Fund Adviser Stephen J. Lewis

    May 9, 2013 — We quote his statement:

    “The reintroduction of bank regulation along the lines of the Glass-Steagall Act would materially strengthen the US financial system. It would ensure that the banks’ essential function of providing credit to support productive activity was insulated from the risks that arise from speculative financial activities. For the moment, US banks may appear to be recovering from the 2007 09 crisis. But as long as banking and financial speculation remain bundled together, the threat of another, possibly even more damaging, crisis will persist.

    “In Europe, there has been no semblance of recovery. Deepening economic distress across this continent increasingly imperils global growth and political stability. Bank reform is widely acknowledged to be necessary if Europe is ever to return to economic health. But Europe will not adopt the measures essential to set its banks on a firm basis until the US takes the lead. European policymakers do not want to be out of step with the USA on this. A US decision to separate essential banking functions from other financial activities would, therefore, not only be good for the USA, it would give a lead for which the rest of the world is crying out.”
    S.J. Lewis
    May 9, 2013

  29. bonbon

    When we along with the USA pass Glass-Steagall, China will take notice. President Jiang Zemin already told Clinton that the new China took FDR as the model.

    But when asked by a local yokel there whether China was capitalist or communist, Jiang Zemin repled “We are Chinese”!

    So China takes notice, Ireland must too.

    • bonbon

      And goldbugs have a fit that FDR impounded gold and silver after the depression. China’s President Jiang Zemin was a well known student of FDR, and that tradition goes way back.
      The head of FDR’s TVA, Tennessee Valley Authority, the great electrification scheme for the poorest backward USA region, based on the Shannon Scheme here in Ireland, Lilienthal, went to China and helped design the Three Gorges Dam now running :

      So make no mistake, China is taking lessons from the Transatlantic. It Europe breaks with the British Empire, that is.

  30. bonbon

    Never mind some transmogrified “moral play”, China learns from the positive things Europe, Ireland and the USA have accomplished.

    Why is it goldbugs, monetarists turn real economists into a morality pantomine more at home in church? Replacing religion with money, Mammon, perhaps?

    Forget the fake “morality” of “sound money”, icons of pentecostal puritan or charismatic catholic gallops, China is interested in positive lessons to learn, in the Confucian style.

    Give the world more of what European culture did actually deliver in spite of rabid regressives (China has them too).

  31. TerryL

    There is a very good book about the China Production Game, concepts on their thinking, and how their economy works.
    Its called “Poorly Made in China” by Paul Midler.
    Its a little about human nature that is found in all of us, and the big downfall of the current lifestyle, “Greed”.
    Well worth a read.

  32. bonbon

    Now that the imbibers have fallen over their iPad’s, can we talk seriously?

    The blog has a hangover!

    • michaelcoughlan

      “can we talk seriously?”

      Off you go. Demonstrate leadership.

      • bonbon

        When the alcoholic haze clears have a look at the Glass-Steagall updates for leadership.

        • michaelcoughlan

          It’s not reading lessons I need. Even if I read them there’s nothing I could do because im not in the position to change the law. Since I’m intelligent and focused and know this why would I bother my ass?

          • bonbon

            That’ not a very intelligent conclusion. You reject the only single way this is going to be resolved. I’m sure you know it’s the only way, so why reject it?

            To help dispel the Brit pessimism have a look at this American optimism :
            LPAC Week of Action · Day 3, Sacramento, CA

            Now these guys could say the same as you, the challenge is huge. But they don’t!

            It’s just pessimism, it must be dispelled. It is a spell only.

          • michaelcoughlan


            There you go again telling me I reject Glass Steegal when I have told you repeatedly I don’t. More evidence of you psychosis. It’s your blind ignorance I reject.

            What’s going on in the financial world isn’t so much a failure of the implementation or repeal of glass
            steegal it’s pure evil physcopathy.

            If you were in nazi Germany you would be whinging on and on trying go get the nazis to repeal the anti semetic laws. People like me would be in uniform heading for Germany in a bomber. We know it’s only AFTER we have demonstrated leadership that the laws we feel are more just get implemented.

            People like me know that whinging rhetoric is useless in the face of the evil psycopathy of dictatorships
            whether political or financial. So stop putting words in my mouth.

          • bonbon

            Just read the drivel you posted. I have rarely seen such a piece of psychosis, a murderous rageball.

            So instead of grasping at pure evil, be creative! Promote for Ireland a solution now, not after some psychotherapeutic wonder day.

            And drop the Tequila…

  33. bonbon

    After Germany’s prime-time tv ran a poll this week with 80.7% in favor of a return to the DM, against 19.3% who want to keep the euro. That is a big change from a 50-50 Die Welt poll last year. Now a major breakthrough.

    Focus Exposes Quantitative Stealing, Reader Pushes Trennbanken

    May 10 (EIRNS)–Germany’s Focus magazine has exposed the planned European Union “bail-in” scheme as a Cyprus template for the EU aiming at stealing all deposits. Insurance protection for smaller deposits (under EU100,000), which the eurocrats proclaim, {Focus} writes, is just a fig leaf, and ultimately, the EU Commission will nevertheless grab all deposits also under this threshold. In fact, if a smaller insolvency such as Lehman Brothers threatened to wipe out all deposits insurance in Germany, imagine what could happen if a larger insolvency should take place, Focus writes. And it implies that it will take place, as banks are sitting on a derivatives bomb.

    The expanded bail-in scheme, rumors have it, will already be on the agenda of the EU finance ministers meeting in Ireland today. A decision may not be taken yet, but a timetable may be passed defining when a decision shall be made, between now and the next European Parliament elections in June 2014. But these machinations are waking sleeping dogs in the banking separation camp, as shown by the following letter to the editor, in which Focus reader Manfred Klokenstein comments:

    “It is high time that we return to the old bank separation system, so that the risks for the small deposit holders can be minimized. Anyone who wants risky bonds can do whatever he likes at investment banks … if it fails, nobody then needs to call for the state to step in, consequently.”

    • bonbon

      Now that is for China viewers most interesting indeed. The Euro is a failed experiment. With it gone, some real investment becomes possible, and real projects. Bubbly banking is dealt with simply splitting them.

      This is much better than fake “morality lesson” parodies.

  34. StephenKenny

    Blogs often cease to be interesting when groups of political extremists get involved. They are all exactly the same, all use exactly the same methods, and to a very large extent, say exactly the same things.
    The final goal of these groups is always the same: to get into power. They purport to support democracy, but it isn’t the sort of democracy that most of us understand, universal adult suffrage, it’s democracy of the committed – only those with ‘advanced’ understanding have a say. As a result, it is essentially pointless for them to suggest solutions within the current system, their entire lives having been dedicated to criticism, and the destruction of the existing social and economic institutions.

    During times like these, when the scale of corruption and criminal nature of the existing system have reached breathtaking new highs, all their efforts are lost in the noise. As a result, a rather strange thing has happened: they’ve started to suggest what they call ‘solutions’. Of course none of them have any experience of doing anything generally useful, so their “solutions” are laughable: thus ‘Glass Steagall’ as the simple solution to the 20 year global financial disaster, and all sorts of Soviet era mega projects – desert greening, diverting rivers, vast civil engineering projects, and similar nonsense. They look like they were proposed to the presidium of the central committee after a five minute sub-committee consultation, in an effort to give the movement credibility.

    The thing I find extraordinary, although perhaps I shouldn’t, is that they are identical to the overactive underachieving Maoists of the 1970s. To true believers, everything is simple: In this case, whatever the question, Glass-Steagall is the solution.

    • bonbon

      You poor victim, it’s a terrible world out there. I would retire to the rubber room if I were you, progress is such a strain on the nerves is’nt it?

      Now let’s get on with providing jobs for the massive disaster called the U.S.E, a failed experiment. You propose nothing except some parody of a post-Church morality pantomine at the theater of the U.S.E, entertainment for the inmates. Scrap that crap!

      To clear the confusion of the liberals vacuum called their minds, Glass-Steagall was FDR’s lesson to the Brit financial world. Some from the foggy swamps of Venice’s favorite gondola’s see Mao. Get some fresh air!

  35. bonbon

    Knowing the country is infested with “brotherhoods”, here is a wake up call :

    Head of French Grand Orient Freemasonry Calls for Ending Banking Dictatorship

    PARIS, May 10 Nouvelle Solidarité–In an interview with the weekly Lyon Capitale of March 4, José Gulino, the French head of the Grand Orient Freemasonic lodge, accuses financier power of infringing on the freedom of citizens.

    In an April 18 interview with BFM Radio, Gulino was asked if this meant separating the banks. He replied, “Yes, and this is already under consideration in the U.S. and the U.K.” His statement reflects the growing anger, including among his own base, against President François Hollande’s impotently doing nothing to reverse current trends.

    Freemasons initially fought to separate the Church from the State, says Lyon Capitale asking, but “now you’re calling in a similar form for the separation of finance from the state. Can you explain?”

    José Gulino: “I’m worried when I hear our governments explain they can’t make this or that reform because the markets would oppose it. We succeeded in separating the Church from the State, and many thought at that time that it couldn’t be done.

    Today, we have to examine the relations between finance and the Republic. If a company such as Renault or Peugeot were to collapse, that would be a social and human tragedy, but France would not declare bankruptcy. However, if BNP Paribas or the Société Générale closed shop, France would follow in their wake. Our country is too tied up with banks over whose fate it has no control. We have no leverage whatsoever over finance. Every morning, the bankers meet to set the interest rates they are going to charge for individuals and for nations. We have discovered they colluded to manipulate the rates and make money on the backs of our countries. This kind of decision would elude the private investigator. The system is so complicated that it eludes the citizen. Half the engineers from the Ecole Polytechnique join up with banks to develop mathematical formulas, when they should be building bridges and roads. We have to get out this system and regain a degree of freedom. Our aim at the Grand Orient is to make people free. It is for this reason that we fight for financial layman.”

  36. 5Fingers

    The Sad Truths of Internet Trolls: (Note Point 6).

    1.Trolls are immune to criticism and logical arguments. True trolls cannot be reasoned with, regardless of how sound your logical argument is.
    2.Trolls do not feel remorse like you and me. They have sociopathic tendencies, and accordingly, they delight in other people having hurt feelings.
    3.Trolls consider themselves separate from the social order.
    4.Trolls do not abide by etiquette or the rules of common courtesy.
    5.Trolls consider themselves above social responsibility.
    6.Trolls gain energy by you insulting them.
    7.Trolls gain energy when you get angry.
    8.The only way to deal with a troll is to ignore them.

  37. Bycott the blog until it is free of bon bon. Best way to ignore a troll.

  38. Shane F

    Have followed this site for many years without posting. It is irritating to see effect of a troll/thread hogger, and how some excellent contributors allow themselves to engage with .. ?

    On ADVFN there was a filter option where users could choose not to see contributions from certain individuals. And save people such as myself the nuisance of fast scrolling through yes, ‘bonbon’s posts.

    @webmaster — Perhaps that may be an easy to implement solution here?

    Sorry, My first post is on a negative subject.

    • StephenKenny

      Good suggestion

    • Dorothy Jones

      That would be much appreciated.

    • bonbon

      What prevents you posting something? Go ahead. Take a risk.

      Others here are prepared to defend their position, some do not take defeat to well.

      Ireland has taken too much punishment!

    • bonbon

      If the head of the French Grand Orient Freemasonry is not afraid to speak out in public against financial dictatorship, why should you be?

    • Adam Byrne

      Great to hear from you Shane F.

      It’s a pity it’s come to this. Mr. bonbon makes some decent posts (occasionally) but it’s gone too far now, people are fed up.

      As much as we are all in favour of free speech, I’d have to agree that something needs to be done.

      I’d only hope that Mr. bonbon himself would do the decent thing and respect the weight of consensual opinion. Censorship is not the way but we can all censor ourselves.

      All the best,


      • moneydoesnotmatter

        As much as we are all in favour of free speech, I’d have to agree that something needs to be done.

        Apparently some of you are not at all in favour of free speech. Bonbon has an opinion. if you dont agree with it move on.

      • bonbon

        “Respect the weight of consensual opinion” is exactly what FF/FG did, exactly the servility that produced the disaster.

        The most dangerous thing of all is generally accepted opinion, have you noticed?

        The antidote is not a pitifully meek morality pantomine, “learn from us, learn from us”. Imagine what China thinks when it hears such pitiful ineptitude? It is a great mistake to presume Adam Smith’s Moral Sentiments hold sway in other cultures. In fact the grip Smith has on the transatlantic, especially Ireland become painfully clear with such appeals.

        Just to remind everyone, the Decree :

        “To man is allotted a much humbler department …. Nature has directed us to the greater part of these by original and immediate instincts. Hunger, thirst,the passion which unites the two sexes, the love of pleasure,and the dread of pain, prompt us to apply those means for their own sakes, and without any consideration of their tendency to those beneficent ends which the great Director of nature intended to produce by them.”

        —Adam Smith Theory of Moral Sentiments —1759

        The utter servility decreed here is to be respected?

    • joe hack

      Censorship by some who admit that they do not have opinion other than to sensor.

      Reminds of a dictator.

    • michaelcoughlan

      Great idea.

      How could it be arranged?

  39. joe hack

    Welcome to fox news where we decide what your opinion should be. mass and moneyed media has been at work here it has influenced group think.

    Welcome to a groupthink and a conformation biased blog

    North Korea is backed it to a corner how does it respond? The bullies dictate the response and they cannot see this. People should learn not to dictate as the response from the Mr Sweets is inevitable.
    This site would boring if not for Mr Sweets input “liven up your selves”
    “Ban the hot press” the cheapest and most effective advertisement circa 1977-1981

    Ban DmW! Ban the Dalkey Book Fest! Ban The Good Room particularly the Paperback version (out now in all bad outlets)

    You are not obliged to respond, or comment on this post you don’t even have to read it! but If your here you have!

  40. bonbon

    Many in Ireland have campaigned for the separation church and state, especially after the local scandals.

    Why is that the “intimacy” of commercial and investment banking has become more sacred?

    M. José Gulino, Grand Orient Freemason head, has in his way exposed the problem.

  41. Adam Byrne

    When I heard about ‘Syrian’ bombs going off in a Turkish market the first thing that came to my mind was ‘the CIA have done that to get the Turks to take the bait and deal with Syria for American interests by proxy’.

    • bonbon

      Erdogan is expected in D.C. on May 16, refuses to believe UN Commissioner Carla del Ponte’s clear statement last week that the Syrian “opposition” supported by Obama et al, used the chemical weapons.

      Just imagine the effect that had.

      The insane lurch to war must be stopped.

    • joe hack

      43 people dead in Turkey and this barely makes the news… 3 people die in Boston and it makes the world headlines for about a month

      The list of “who done” it is long but it makes little senses that Assad was involved.

      Israelis? turkey is a NATO country

      • bonbon

        Not so fast. There is still info coming out about Boston.

        Never forget war is the objective of a very desperate faction now in London and D.C. Benghazi-gate has heated up and there is extreme danger now of general war, drawing Russia in.
        Cui bono?
        Why now?
        Who had the logistics?

        • Adam Byrne

          Stop making stuff up off the top of your head Mr. bonbon, hahaha.

        • Adam Byrne

          Who knows what is going on, I wouldn’t rule out anything, but you couldn’t possibly have any inside information.

          You are a talker, not a doer, never forget that.

          • Adam Byrne

            We all have our station in life.

          • bonbon

            Right, the doers in Turkey did it alright. The victims were likely talking, only.

            But back to Benghazi-Gate : this talk could be the Watergate that brings Obama down. So the doers are attempting “facts on the ground”.

          • Adam Byrne

            Obama is staying right where he is, until his term expires in 2016/2017.

            You know it, I know it, the dogs in the street know it.

            Get in the real world dude.

          • bonbon

            There will not be much of a planet left to elect anyone, dude.

            You are rapidly becoming an illusion.

  42. bonbon

    Jeremy Warner of Daily Telegraph : Spain is officially insolvent: get your money out while you still can

    But notice, and I quote JW :
    “PS. I don’t include creditors of the British arm of Santander in this warning, who are ring fenced from the mothership back bome in Spain, theoretically at least.”

    A number of euphemisms here, insolvency is papered over waiting for Banking Union, but Ring-Fencing? As most know by now this not the real deal. How many feel that EU bank number 1, Santander, is safe?

    • bonbon

      In the followup comment JW mentions Northern Rock and BBC’s Robert Peston, then. Looks like massive trouble ahead, again. Will the so called ring-fencing work?
      As discussed here in the blog Andrew Tyrie, chairman of the UK Parliamentary Commission on Banking Standards, is quoted as having said: “A reserve power to split up any bank that tries to undermine the integrity of the ring-fence will increase the chances of its success. Banks require discouragement from gaming the rules. They will always try to do so unless strong disincentives are put in place.”

      • michaelcoughlan

        If you didn’t spend so much time talking yourself up your own you know where you would know that most of the commentators here including myself predicted that the whole thing would fail in Spain and drew that conclusion manny months ago.

        Unlike you I have been moving forward taking advice from other commentators on what we need to do to ensure we survive the coming debt tsunami. All your doing is cluttering up the blog with self serving rhetoric diverting energy from being focused on dealing with the issues at hand with nonsensical gibberish about how go fix a busted system when none of us have any power at all to do so.

        • bonbon

          Watch Santander, let’s see if the famed “electric ring-fencing” will work. What do you think?

          And a golden shield will not protect anyone – that’s just a swindle.

          • michaelcoughlan

            I think no ectric ring fencing will work. I don’t think at this stage glass steal will work either. I think a golden shield is part of an armoury necessary to survive. Almost 2 billion people on the planet in India an china agree with me.

          • bonbon

            And the other part of the armory, Hayek’s international force to protect liberty, free trade and property? Blue helmets? Because without that the golden shield will end up like Agamemnon’s mask in a museum.

            Someone has not informed you about Hayek’s program, I see.

  43. David NZ

    Europe is still the problem, not China.

    China’s demographic profile means growth until 2015 plus a lag of two years. So pencil in 2017-18 for your doomsday senario. The credit won’t fold until real growth folds.

    The sub prime crisis didn’t occur until the steam had run out of the American housing boom, and that didn’t happen until the US demographic curve had turned downwards.

    I heard some very encouraging comments reported from the leader of the SPD speaking in Poland, saying that German voters need to be told that Germany relies on growth in its’ European trading partners. i.e. an end to German enforced austerity.

    Southern Europe actually has very good population demographics – a youthful working age population. All they need are jobs.

    The world is in limbo until the results of the German elections. If Merkel wins an outright majority and continues with the growth and stability pact rubbish then Europe can kiss its’ future growth goodbye for quite some time. Hollande is doing nothing because he feels there is nothing he can usefully do right now. Better to wait and see if there is going to be a sensible partner for growth than to break the Eurozone apart now.

    Stockmarkets reaching new highs are all very well if there is real underlying growth to act as a solid foundation for the hype. If austerity continues in Europe then even with growth in the US housing market overall world GDP growth will remain tepid.

    It’s not a lack of political will in China that is the problem, it is the political blindness, stupidity and selfishness in the heart of Europe that is the problem.

    I personally have some hope that this may now be lifting, that sense is now starting to prevail as Germant’s economy stutters and reality bites those who hold the controls.

  44. molly

    This government plan is there is no plan.
    It now looks like the public service could bring down this government ,I always reckoned it would be the Irish people in there big movement would march on the dail.
    It now seams that the public sector will unite in a common goal to shut this country down ,i don’t care who does it as long as its done.

  45. mediator

    As of 21.50 258 comments – how many from bonbon. I’m reading the comments on this site less and less because I get bored by bonbon the those who reply to his verbal barrage. Please set up some filter


    • michaelcoughlan

      I agree,

      Is there anyway David that bonbon can be filtered off the page especially since you requested some time back that he/her stopped diverting the blog.


      • bonbon

        Goldbugs need an international force to protect their liberties, free opinion. Pure Hayek, with a nudge-nudge wink-wink.

        DMcW is not the type to lead such an international force.

        If your golden shield argument is any good at all at least it should survive a blog barrage, never mind what finance will do to it if not broken up.

        • michaelcoughlan

          “Goldbugs need an international force to protect their liberties” I’m not a gold bug your words not mine. More of your psychosis. Iv always said the real wealth lies in a persons skills and abilities.

          “DMcW is not the type to lead such an international force” I wouldn’t know because I haven’t asked him. You putting words in his mouth. More of your psychosis.

          “If your golden shield argument” I’ve never made a golden shield argument. More of your psychosis.

          “survive a blog barrage” I’m glad your openly admitting your sociopathic tendencies showing no regard for the owner of the site or any other member merely engaging in “blog barrage tactics” to suit your own agenda.

          Finance can do nothing to me as I am self sufficient with an independent method of trade developed to survive the coming debt tsunami.

          • bonbon

            Here you actually did mention a golden sheild and armory.

            The barrage of monetarism, that both ruined the country, and is still peddled as a resolution, you do not object to, probably cannot hear it hiding behind the shield. But then again golden shields are more monetarism, nothing else, in other words part of the problem.

    • bonbon

      Passivity has become ingrained, or ingrown?

      Post something!

  46. joe hack

    Ban Goldschlager! Tequila! And anyone you says it’s the governments fault oh and there some annoying man on here called ‘David’ he always first to comment.

    Bring back Connor Cruse O’Brian section 31

    In the new Star Trek movie “Khaaaaan” blows up section 31

    Donate to
    Give to

  47. joe hack

    Ban human foibles or drink lots Goldschlager / Tequila to dilute to effect of foibles.

  48. moneydoesnotmatter


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