July 22, 2013

It's the customers, stupid

Posted in Banks · 147 comments ·
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Anyone who has been unemployed, or has had a family member on the dole, will know exactly what unemployment does to people: it destroys them emotionally as well as financially. When you experience this at close quarters, you don’t forget it. As a result, the single most important objective of any economy must be to get as many people in productive work as possible. Only when this has been achieved can we truly say that an economy is working for the people, all the people.

And before we get into the debate about people who don’t want to work or who are taking advantage of the welfare system, let me set out my own opinion straight: I believe the vast majority of us want to work.

We want to get up every day and do a job that is rewarding and gives us self-esteem. Yes, obviously, there are those who want to doss around and if dossing around all day is all you see around you as a teenager, it soon becomes normal. But most people don’t start out that way. In the great march of life, self-improvement – either for yourself or your family – is still one of the dominant forces which drives the majority of humans.

One of the recurring themes in modern economics – at least since the industrial revolution – has been the vast improvement we have seen in living conditions from one generation to the next. This is achieved through hard work.
However, for the first time in more than one hundred years, we are in danger of that conveyor belt of prosperity coming to an end. We already have examples of countries and great civilisations that found themselves on the wrong side of history, so the stakes are extremely high.

As globalisation brings us closer and closer together, we can see there are three major forces which have meant a huge difference between the experience of the average worker starting now and the average worker starting, let’s say, when I came into the workforce in the early 1990s.

The first of the three international trends is the movement of manufacturing jobs relentlessly to Asia. This is affecting the job prospects of traditional working men all over the Western world.

The second massive change is in disruptive technology associated with automation. Consider such innocuous developments as online shopping which is destroying old service industries such as retail – the traditional working home of many young women.

This process will continue relentlessly, as automation reduces the need for human workers everywhere.

Finally, we have seen an enormous increase in the amount of women in the workforce in Ireland. This will continue as Ireland becomes more and more service oriented.

One global factor has corroded economic confidence. Massive global deleveraging, after a decade of excessive debt, is destroying the balance sheets of the middle class all over the English-speaking world.

In Ireland, we have to add to this toxic mix the collapse in house prices, the resulting negative equity, and the fact that our banking system – the essential lubricant of the modern economy – is broken, possibly beyond repair.

The result of these developments is huge levels of unemployment in the Western world. In Ireland, the construction boom masked the above long-term trends for about a decade, because young men who were in the direct firing line of these global developments found work on the sites and when they went out to spend their wages they spent it in retail, where many young female employees benefited.

Now all that has come to an end, and the rate of unemployment has quadrupled.

So how do you bring unemployment down? You find customers.

As a small employer of a number of people, I know that the only reason I will take someone else on is if I get more customers. Without customers, there are no sales and sales are the magic of business. Without sales, there is nothing, just talk. Without sales there can be no profits and without profits there can be no employees because the company, no matter what it does or is trying to do, goes bust.

So unemployment begins and ends with the customer. Irish companies are not employing more people because we have not enough customers.

We also know from America that the most dynamic employers are now small, new companies, not big, old ones. So we need customers who are willing to pay for our products in sufficient but not huge numbers, so that we need to employ more people.

That’s it.

The majority of Irish people are, and will continue to be, employed by Irish companies, doing small amounts of trade with one another.

So, contrary to the endless talk about “creating jobs”, we have to realise that you don’t create jobs, you create customers and the jobs follow.

People with income turn into customers when they spend. If they save, they are not customers. And if their savings are not lent out by banks to other people who want to spend, then there will be no customers. Without customers, there are no sales; and without sales, there are no jobs.

This means that Ireland needs to get consumer spending moving again. This implies policies that reduce the propensity to save,which has exploded as evidenced by the relentless rise in the savings ratio.

The reason why those with income are saving is that they are fearful of the future. Also, those with too much debt are trying to pay as much of it back as possible. The simultaneous impact of both these things on domestic demand is catastrophic.

In order to cushion the rapid rise in unemployment which ensues, the government has to borrow and spend. This means that the government budget deficit is the consequence, not the cause of, the problem.

As long as the government is reducing spending and raising taxes in this environment, we haven’t a hope in hell of reducing mass unemployment.

In addition, the only way we could keep things as they are in the face of the liquidity trap in the banks, where credit is still tightening, and the tax increases would be through a massively devalued currency. This would allow us to export our way out of the recession. But our currency – or at least the currency we use which clearly isn’t “our” currency – is hugely overvalued.

So where are the customers going to come from without a revolutionary change in the present economic status quo?
If the government was truly serious about creating customers who create the demand, we would see large-scale debt forgiveness of all debts, including sovereign debt renegotiation and restructuring, because debts that can’t be paid won’t be paid.

This should be accompanied by a massive monetary easing via a move to a new currency, which would fall in value to re-price Ireland downwards on international markets.

These are the type of radical moves that are needed to re-boot the Irish economy and shock the customer of Irish goods and services – both local and international – into life.

Without these serious and difficult moves, the chances of unemployment falling seem extremely remote. And those of us who have experienced the trauma of unemployment up close will know what thousands of Irish families are going through – and will continue to go through.

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  1. hibernian56

    ARRRRGH

  2. I am reminded how the Eskimos have forty words for snow and the Irish the same for rain and Arabs the same for sand and and the French the same for Perfume and the English the same for Horses etc and how David can explain Currency Devaluation from forty different locations .

    Looking out into my garden every day is never the same each day .

  3. hibernian56

    A new currency. That will never happen as long as the Civil Service rule the roost. The top level all have their beady little eyes on a cushy job in the EU, and all those expenses, those lovely expenses.

    • Hibernian56

      You may well be right regarding the interests of our top civil servants, but I think its essential keep pointing out to readers that there are alternatives and talking about “job creation” with an overvalued curency and massive debts is ludricrous…but more geregiouly it means that your are not serious about bringing down unemployment at all.

      Best
      D

      • Eireannach

        David,

        You want us to prepare to consider leaving the EU shortly after the UK votes to leave the EU before the end of 2017.

        Just say so, plainly.

        • Eireannach

          Had’nt actually throught about the UK in terms of timing, but I truely believe that without a much weaker currency, Ireland can’t recover.

          Best

          D

          • straboe1

            There is another possibility. We could have what I call a virtual devaluation. The former social partners could come together so as to negotiate a reduction in wages, costs, social welfare, professional fees etc. Our competitive position would improve and we should be able to take advantage of it and create extra jobs.

      • Adam Byrne

        They definitely are NOT serious about it David – as far as they are concerned – anyone without a job can p**s off and emigrate.

        • hibernian56

          To put it into perspective, I recently had a meeting with a top Enterprise Ireland exec, and when I mean top I mean top.
          He was discussing their matched funding offer of €150k and said “Well I suppose me giving you €15 thousand per job is not bad, given the state of things”. The context was my refusal to commit to more than 10 jobs by year 3, (cash flows would be too fragile).
          This guru was considering “his” offer of “€15k” with NO and I mean absolutely NO REAL understanding of the amount of revenue required to support said job. It was like he was playing monopoly, at one stage he suggested that our cash flows would be viewed more positively by EI if we were to show more job creation. I almost laughed out loud.
          Ignorance is bliss.
          Put a red neck in a suit, and you just have a red neck in a suit. Unfortunately, that suit is paid for by us.

          • Tony

            And this is where it all’s misunderstood by the politicians and the permanent government. Most of them think that they actually create jobs by throwing money at businesses.
            His €15k per job is cheap by comparison, when you look at what the IDA spends per job. But he, and most of his ilk, have no idea what creating a job actually entails. They seem to think it’s just a matter of hiring somebody.
            To put it in perspective, each person I hired in my retail business represented an increase in turnover of about 200k a year. This had to be done BEFORE hiring the new person because you really can’t put the cart before the horse. It often doesn’t make any difference how many bodies you have on the ground. At least in retail, the revenue has to come first, and then the job.
            David’s article is spot on.

  4. Eireannach

    Lookit – the property crash in Ireland IS THE SOLUTION.

    In a globally integrating world economy, ALL property in Western countries is overpriced in the long term. Ireland, UK, Australia, NZ, US, Canada, Spain, etc. In the case of residential property, not only because it costs more than long term justifiable price (3 times the average salary) but also because salaries in Western countries MUST continually decline to remain competitive with salaries in Eastern Europe and Asia.

    There is absolutely no way in the world that either property prices or average salaries in Ireland can ‘recover’, that is, reinflate. They have to come down further as the European, and the wider global economy, integrate and money flows to where it can catch rising waves, like seasonally migrating surfers.

    Money will reenter Ireland when we have hit rock bottom. Apparently, UK property investors are hovering over Ireland at the moment, planning to pick up bargains in the forthcoming crash as 100,000 mortgages go under water permanently.

    Once these 100,000 mortgages sink like the Titanic beneath the waves, Irish property prices will be on the sea bed. Foreign investors will pick up the choice morsels. On the question of average salaries, we have to keep going down to meet Poland et al on the way up. They are still paid 33% what we are paid for the same jobs, so we have a lot further to fall before we recover our competitiveness.

    No other future is possible in a European-integrated and increasingly world-integrated economy.

    We must prepare for this future. It is our future, end of.

    • Bamboo

      +1 Well said Eireannach

      Beside the arguments of money not rolling I also believe that the general consumer are gradually realizing that they simply don’t want to spend and buy. The consumer are gradually realizing that they don’t want all that stuff anymore. They are loosing interest in the latest fashion, the latest gadget, that new sofa, that new flatscreen TV, etc. They will soon realize that it is all non-sense and will stick to what they have and accept things as they are. Of course there will be some that wants the latest this and the other but it has to be a worthwhile product. A bit like the way software manufacturers upgrade their products with a 0.1 or 0.5. It will have to be a significant upgrade before the consumer will show some interest.

      • Puschkin the Black and White Cat

        +1 , Yes , several people have commented how it’s just good to have Saturday and Sunday free, with no buying “stuff”

        • Colin

          Yes,

          Why can’t shops and stores and businesses stay open late until 9pm or 10 pm on weekdays, then have a short day on a Saturday and stay shut on Sunday? How many barbers are open at 7:30 pm on a Monday? Do barber shop owners think that everyone is available to go get their haircut Monday to Friday 9 – 5? There are business opportunities there if you are willing to provide a service at a later time in the day which would suit a lot of people who work during ‘normal’ business’ hours. Businesses must learn we no longer live in ‘normal’ economic times, so becoming ‘abnormal’ is the key.

          Or maybe they just prefer to lose income and sit at home and watch Soaps or Champions League football or wash their car?

          • Pauldiv

            They just don’t. The whole idea of being self employed is that you work hours to suit and most people prefer conventional working hours

            If you want a late barber then Bangkok is the place for you. You could maybe consider living there?

            I don’t know what barbers think but I knew a few and they loved the work. It looks like a cushy life and it can be if you take care of the fundamentals and save. Plus you have a trade you can ply anywhere. You need one thing above all else and that is empathy and personality.

            Becoming ‘abnormal’ is not for most people and you are well off kilter.

            If they want to lie back and have a beer while their young girlfriend tends to things then why not?

            Sure even barbers have a right to lie back and watch Champions league of an evening. That is what the evening is for!

            Fair play to them. It takes skill and real personal qualities to be a barber and be professional and successful

            And if they want to watch soaps and wash their cars then that is none of your business

            Yes?

          • michaelcoughlan

            Hi Colin,

            Pat Stapelton barber Limerick Oconnell street across from mace beside the church. All 81 years of him. Opens at 7am finished at 3pm. Tues to sat. Sun and Monday off. Served his time in 1945 to a guy who served his time in 1898. In the same room since 1964 two flights of stairs up. A Limerick institution.

    • jeeaaan

      So you expect us all to work for two thirds less than Poland?Where then does that fall in with the mortgages taken out at peak?It is obvious with no debt restructuring there will be an awful lot of homeless people.The cost of living is increasing instead of decreasing with already savage paycuts to alot of the private sector.You cannot compare both countries as the cost of living is much less in Poland hence lower wages,The Euro is the problem ,it is a failed currency and the sooner we get out of Europe the better.There are too many anomalies and inequalities for example poland pay 12 euro per child per month -child benefit ,we pay ten times that.Benefits are costing this state big time ,something has got to give!

  5. Troika and the Three Musketeers ( Noonan Gilmore Kenny) are warring over the €1bn surplus in the budget 2013 .

    Maybe a compromise can be arrived at to convert this €1bn into ‘COUPONS’ and in that way it is a devaluation by default at least partially and a new journey on a road least travelled .

  6. Puschkin the Black and White Cat

    David, I agree, however if we waited until hell froze over I don’t think the bunch of overpaid teachers in the Dail will ever do anything, why should they, with several pensions coming, they just don’t care.

    Of course, over borrowing will lead to devaluation, when will this effect the Dail teachers ?, if not who cares.

    I could Rabbit on all day but why, it’s all too late now, June 2013 has passed without any mitigation efforts. Noonan’s goal is to be the good boy of Europe, the top of his class, remember he’s a teacher , son of a teacher, married to a teacher.

    My experience tells me the “real” resession has just begun, my local shop is closing and the profile of the problem is as you have said, the “customers” in this case mostly school kids, just don’t have the money to spend on sweets and lunch rolls.

    Strange as it may seem this only began to happen in March 2013.

    • DB4545

      Pushkin.. Here’s the deal. My sister in law is French. She explained the French psyche to me as best she could. At the back of every French politician’s head a little bulb reminds them that when French citizens get terminally pissed off the elite are in danger of facing the guillotine. It may be historical but it still sits in their head.They reign in the excess. Our elite need to face an immediate financial guillotine. They face no sanction at present for incompetence or recklessness. I looked at that video of Mr. Rabitte drinking his pint and sneering at the peasants. I don’t agree with their behaviour. But it sickened me to watch him drink his pint paid for with my hard earned taxes while looking down his nose at the ‘rabble’.That’s because he knows that no matter what decisions he makes the peasants will have to cough up. It’s past time for the bast**ds to reign in the excess. It’s time to empty their wallets, and not ours.

  7. Bamboo

    Thanks David, great article!!

  8. Puschkin the Black and White Cat

    I read the following in the Irish Independant:

    It’s a quote by Mr Kenny [" Mr Kenny also said the Government wanted to "get people off their couches – which is where they don't want to be" and avoid situations where there is a "DNA" of welfare in some families" ]

    Looking at the families of the Dail I’d say we best get rid of people with “Teaching in their DNA”

  9. Adam Byrne

    Good article David.

    Hell will freeze over first before this useless government forgives any debts and drops the Euro.

  10. pauloriain

    David,

    So the points are;

    1. Leave the euro & float our own currency, devalue/induce inflation.
    2. Default on corporate level debt owed to foreign entitities.

    Obviously there will be some big upset abroad, maybe you could elaborate on that.

    Also can you outline your thoughts on Eireannach’s point vis a vis the value of property in Ireland, one of the least populated countries in the EU. As a cost, this is one area, which we should look to reduce costs as a competitive driver, or it will have to be into the future. That or reduce wages. That means all those tied into the over valuations, this perception of value e.g. pensions, investments, wealth funds.
    For example near me here in the Docklands there is loads of vacant land doing nothing. This land apparently is worth a fortune, but if that is the case, why aren’t there loads of productive buildings built on the land. This only proves how stupid the property market is. Valuations here are all about perception and not based on any productivity earning formula, as it should be.

    • jeeaaan

      Nama is already making plans to redelop the land you are talking about,for commercial purposes.

      • pauloriain

        Yes, I am aware of that and the Dublin City Council is designative the area a an SDZ (Special Development Zone). Your missing my point though….. why is the land vacant and why was loads of planning permission granted out in the suburbs, when much of this land has been idle for 30 years.
        It demonstrates that the current way the property market is constructed doesn’t actually work. There is no efficient market theory at work here.

  11. pauloriain

    Apologies, just to finish the point about the pension funds, investment funds & wealth funds, will see a devaluation on their investment. Painful, but necessary as their value is not based on anything real.

  12. Adelaide

    https://www.youtube.com/watch?v=FE63bb0pQfk

    Max Keiser Report: His Interview Covers Irish Banking.
    incl;
    “100% Mathematically Guaranteed that Irish Savers Will Get 100% Wiped.”
    “A 100% Certainty There Will Be A 100% Bail-In in Ireland”

    (Quick Question re: above, PLEASE HELP: I have yet to get a black+white answer to this question. Is (my) Ulster Bank (savings) in the Republic considered British or Irish. Is money safe from an Irish Bail-in?????? I can’t get a straight answer, even from the bank!!! Am considering pulling my savings any day now.
    Thanks for any clarification that anyone can provide.

    • Adelaide

      typo: Is my money in Ulster Bank safe from an Irish Bail-in?
      (ps I opened the account in the Republic)

      • 5Fingers

        UB has license from Irish Central Bank to serve Irish residents, so you are nabbed I am afraid. But, were UB to collapse due to UK issues, who knows what sort of UK/ Ireland Gov arrangements are in place to facilitate bail-in. Nabbed either way I think.

        If you have friends/ relatives trying to get business off the ground, why not invest in them? Do you have anyone you believe in enough? For a lot of people the answer is NO. See what I mean by a sense of community? Not easy eh?

        • Adelaide

          How certain are you? 100%?
          At this stage I’d agree with you.

          The confusion is that Ulster Bank Ireland Ltd is one legal entity/company that operates both North and South. The answer to the question depends on the interpretation, is Ulster Bank Ireland Ltd an ‘Irish Bank’ or a ‘Northern Irish Bank’?

          • 5Fingers

            Speak with professional – you have me.
            My experience is from someone who has savings in Rabobank. I think the point is where business is transacted.

          • Tony

            To throw in more confusion, it’s a subsidiary of a Scottish Bank. :)

          • bonbon

            Bail-in is not just EU – London’s at it too. The group of banks in question is “Inter Alpha” – look it up.

      • bentley

        Why put ur money in UB when you can get as much as 23% on 6 mth deposits in several European countries ??

      • nobody is safe in any bank in any country.
        you are not safe holding currency as it deflated. you need savings in hard assets for inflation protection.
        nothing in the bank, no stocks, no bonds, no savings, no certificates or precious metals.

        From Jim Sinclair
        My Dear Extended Family,

        Bails-ins do not require a crisis to occur and can surface one bank at a time, spread out over years.

        Too big to fail is no longer valid at all.

        Those that are not already international will find it very difficult to navigate the hoops that must be crossed for a Westerner to open an account anywhere internationally. For those that cannot think internationally, think very local, smaller local banks that have not taken bail-out or TARP money.

        Gold is for saving, especially now at these extremely discounted price. Gold is no problem now as it will trade to new highs.

        The major situation is deposits above insurance levels in banks too big to fail. Those deposits are directly in harm’s way.

        The next situation is your retirement accounts as targets for the IMF and governments to secure as fonts of capital into which to place sovereign paper.

        The following situation is the FDIC itself which is not capitalized to insure the huge amounts of deposits it has undertaken from one to $250,000.

        The idea that you can have multiple FDIC insured accounts at $250,000 and collect on all of them is a pure gamble on the goodness of the government’s interpretation.

        To be convinced that SIPC can insure all the securities that they hold themselves out to do in a systemic problem is absolutely foolish and total nonsense.

        The idea that the FDIC or SIPC will pay in cash is total madness in a systemic crisis. They will pay in special issue US Treasury instruments that will be salable only over a specific amounts of years, more than likely five years.

        The chances of a systemic crisis have risen since 2009, not lessened because of the dependency of the Western world economy on constant QE plus accumulated QE.

        The risk is higher than in 2009, not less in 2013/2014.

        Sincerely yours,
        Jim

        SSo there you go. You might be able to recover funds to the amount insured by government taxpayers but if the cupboard is bare then the payouts will not happen. Protect yourself.

      • michaelcoughlan

        Hi Adelaide,

        Your money is not safe in the Irish banks. Take it out. If it isn’t a huge sum of money buy Swiss francs and Norwegian krone and leave at home. Use 10% for silver coins bought from celticgold to store at home. Or you could open an account with goldmoney and buy gold. You either have the courage to act or you don’t.

    • bonbon

      Black and white, bail-in is EU POLICY now. Often posted here. Have a look at :

      EU Commission Prepares Scheme for Bail-Ins To Be Run by Brussels

      From Date-Rape to Forced Bail-In: The Case of Spain’s Bankia

      and especially

      Another Bank Bail-In, In London

      Cyprus was the test case, overseen by none other that EU rotating-in-chief Enda!

  13. 5Fingers

    We are about 5 years (some say 10) into this crisis and a lot of the demographic has got older, wiser and probably a lot more cynical right around the formerly richer countries. The gloss is starting to come off a lot of the “Brands” which form a major part of our “export” economy. 16% drop on PC sales. Microsoft,Intel, Apple, Google…all showing double digit drops and signs of “also ran”. This is Ireland’s next little crisis which won’t do the much for local consumption either.

    Right now, people are finding there is nothing worth buying unless you want to become pissed, fat or be entertained. Sure people are saving. Sure there is a lot of money stashed away. But aside from debt clearance and essentials, exactly what else is there unless you want to be sunburned, pissed, goggle eyed and fat?

    There is more to life than being entertained. Therein lies the problem.

    • Eireannach

      @5 Fingers

      Using the internet, eg. the BBC Languages website or downloading Pimsleur Language Labs from the Pirate Bay, anybody anywhere in the world could learn a foreign language in their home for free these days.

      Or anyone could learn basic construction or craft skills in niche areas like wooden flute manufacturing or double glazing sash windows or whatever.

      None of that really important skills development work actually need cost any money any more.

      There will be no return to the splurge consumer era we have left, for lots of reasons.

      RE: our future society and livelihoods, we have to think outside of the consumerism box. We can learn skills and make stuff without much money.

      Add all of these considerations to the 100,000 mortgages about to sink in Ireland, and you have a vision of property prices, at least down the country in Ireland, sinking and sinking to the €50-100K mark over the next 10-15 years.

      • 5Fingers

        Eireannach – 100% agree with spirit. But 100% disagree with method.

        Online anything in relation to learning is dubious at best. All the skills you mentioned are – interestingly enough – best served from apprenticeships or having friends. I am a great believer in Men(Women) in Sheds for example.

        I also believe nothing should be free. Every participant (giver/taker) should have “skin in the game” to have satisfaction/ value. The method of achieving this is through trust (eye-balling and all senses as much as possible). Money is currently the means of copper-fastening same for loosely associated individuals. Maybe we need another way. I look at crowd sourcing for funding, but I fear the on-line approach is merely another financial con-game in the making.

        As for mortgages and indeed savings and any other artifacts of the now crumbling financially driven era…they are gone. If there is one good thing the Online revolution did, it was to accelerate the demise of banking. My advice to anyone with money of any sort…get yourselves friends and tools and education and above all, try put some time (not all!!!) aside to help others out to do same for no personal gain.

        • Eireannach

          @5Fingers

          To clarify my remarks above, I agree with you completely that learning something online is no substitute for an apprenticeship, and the role of the mentor is as important as ever in ever skill and craft learning process.

          That said, you or I or anyone else can learn tons of stuff about economics or fractional reserve banking or whatever for FREE on the internet. We don’t need to buy books if we don’t want to. You tube and Wikipedia alone are like massive online documentary libraries and encylopedias.

          So we can be rich, in many ways, without spending money.

          The internet will slow down the consumer economy, as people consume less material stuff, and more Max Keiser or Jim Rogers or Mark Faber or Peter Schiff or Peak Oil documentaries and all the rest of it, ‘high value’ consumption of intellectual information in exchange for…no money.

          The longer and deeper the crisis of the 21st century, the longer and deeper the era of watching YouTube documentaries in your boxer shorts, and the less shopping for consumer tat and clutter.

          Which will destroy the tat and clutter businesses (ie. retail).

          • 5Fingers

            Ah yes…a consumerless productive society…A few things, we are still very dependent on large systems. Telecoms/ Internet is not free and all carriers are suffering very tight margins. Even the Googles etc will soon be fighting to hold onto Advert space. Lights could go off in a lot of places for loss of development of alternative model. To be honest I have no clue how it’ll evolve…but evolve it will. Personally, I feel there is yet unexamined emergent properties of the internet that remain to be discovered – particularly around sensor and mech control at a societal level that will feed nicely into a consumerless society – robotically enhanced (Wo)Men In Sheds, 3D printing, Watcher and Concierge services and so on. A world where everyone is taking part in a mentoring/ angel service to ensure the best comes out.

          • Bamboo

            It won’t be long from now and you WILL have to pay for YouTube and the likes. This Youtube will have a type of youtube premium or gold membership.
            The ordinary folks not paying will be left with the crap.

          • Bamboo

            David dedicated an article on this.

            There are a lot of online resources available as you said and mentoring is equally important. Universities and institutes are fighting for their ranking. Besides China and Japan – The number of prestigious fee paying colleges are growing rapidly in wealthy and upcoming Asian states like Malaysia, Vietnam and Indonesia. The marketing is ferocious – every shopping mall has a stand recruiting students, teachers and lecturers all year long. The division between the rich and the not so rich are defined not only by the size of their cars and houses but more and more by what college their children attend. It seems that children from the Chinese community by default shine way above their peers. These are English speaking colleges and again the Chinese students are above their peers in their command of English. So much so that it seems that the Chinese colleges are so much more finicky in their entrance exams markings. I am talking here about outside China in Asia – I have no knowledge about China. It seems that religion and therefore culture is a crucial part of entrance criteria to education in this part of the world. However, western teachers/lecturer with a western (sounding) voice are in high demand and is the preferred option for these colleges.
            Apart from all this, students are highly educated and well prepared even before they set foot on college campus. Probably through online resources like khanacademy.org and other sites.
            I think this trend will explode and probably hit Ireland as well. I see in Ireland that students going for an IT degree are very skilled already and know exactly what branch of IT they go for. I think that soon they are so skilled in what they do that universities and/or institutes simply can’t add any dimension to their discipline/studies. As in the past this only apply to the so-called “nerds” – soon this will apply to all everyone interested in studying.
            What do you think?

          • Eireannach

            @Bamboo

            Your experiences in Asia are instructive. Parents clearly consider ‘mastery’ of the English language and a Western (European-North American) sensibility as criteria for self-betterment in life. As in continental Europe, where English is the neurtal ‘refereee’ lingua franca to prevent the excessive power of Russian/German/French/etc, the Chinese and other Asians aren’t modernizing via the Japanese language. Instead English is likely to emerge as the lingua franca of Asia too, just as in continental Europe. India is well advanced on the path of English as the go-between language. If China is also focused on aquisition of English, then it’ll be game, set and match to English as the lingua franca of the 21st century.

            Even if YouTube start charging for content, Khan Academy and the like will be offering free content, and a more formal learning environment online.

            Two landmarks of the free education revolution are:

            1. Salman Khan’s Khan Academy

            2. MIT OpenCourseWare. Imagine that – anyone can now do an MIT university course for free online! You don’t get the certificate at the end, but you get everything else, minus the student debt.

            I can imagine employers of the future hiring somebody with ‘MIT OpenCourseWare course’ “qualification” on their CV and congratulating the student for choosing an excellent course and at the same time side-stepping the burden of student debt as they begin their career.

            http://ocw.mit.edu/index.htm

  14. tomahawk

    EUreka
    Unemployment solution 1.(courtesy of PaddyO’Gorman report on PK earlier)
    Increase the number of petty fines to those who cant or wont pay.
    Examine the employment benefits:
    Guard issues summons.
    Solicitor gives’free’ legal aid.(Hard to avoid flac at the moment)
    Judge gives out fine.
    Defendant opts for short stay in jail.
    Behold the cascade and variety of employment ;
    Guards,Clerks,An Post,Solicitors,Judges,Prison Officers, more clerks and maybe even a taxi home.
    We dont need to look abroad……….just extend the excellent we have already in place.
    Unemployment solution 2.
    Quadruple size of Irish army…….

    • hibernian56

      +1
      Having been arrested, imprisoned for several hours and brought to “court” a couple of years ago over a parking fine, I realised there was no law in this shite hole potato republic of ours.

      It was all about money, the guard who tricked me into meeting me to arrest me (yes he lied), the scumbag sergeant who made me take my laces off and the half pissed fuckwit judge who threatened me with contempt after I demanded my defence and stated that the whole affair was farcical and explained the situation.

      He eventually cancelled the fine as it was an error (bought car for missus, garage went whollop, no log book blah blah blah) but made me give a “charitable donation, which I refused to do, as I told him charity is charity only if it’s not extorted. He was speechless and politely asked me to leave lest anyone else realised that the corner stone of justice is “innocent until proven guilty”.

      That “Judge” was obviously a simpleton political promotion more concerned with filling the civil service feeding trough than dishing out justice and protecting the citizens.

      • DB4545

        There are some really decent hard working judges in this country hibernian56. Raymond Groarke and Paul Carney are two that spring to mind. Unfortunately you found out the hard way that the justice system largely serves itself and the wealthy for the most part in this State. It would be interesting to analyse the links between the political and the judicial. The legal aid trough and district court appointments are areas that need a serious clean up. Contrary to your comments there is law in this little republic of ours, in fact there are two, one for the rich and one for the poor.

  15. Original-Ed

    You’re now down to the kernel of the problem – no customer, no economy. Real job creation should only be in response to demand, otherwise it’s only a mirage.

  16. Adelaide

    No Customers: Back from a driving staycation and I lost count of the number of rural towns and villages that ‘No Longer’ have an ATM and a petrol station, actually ran out petrol once and cash once as we were ‘randomly’ driving round at our whim. Next time I’ll forward plan. In the States there are rural populated areas called Bermuda Triangles that have spiralled down this route thoroughly, where the inhabitants have been forced to adapt to an off-grid environment, like large tracts of rural Detroits.
    Perhaps in the near dystopian future our Euro-strangled country will be referred to as Detroireland by American tourists visiting the ruins of the old sod.

  17. Jimmy Gavin

    How about the idea that we have “virtual customers” just like the farmers with all their empty fields all over the country, producing NOTHING? Europe pays these farmers a subsidy for growing nothing, doing nothing. Virtual customers for virtual crops or other virtual produce!

    Europe could pay all the un-employed a subsidy to produce virtual cars, virtual technology, etc. etc.

    All the un-employed could buy 4 wheel drives and go down to some empty factory and look into it for half an hour each evening doing what farmers sometimes call “herding”.

    Zero unemployment is what we would have…it’s the natural progression from the Potemkin Villages as mentioned previously………think outside the box here people……pearls of wisdom is what I’m dropping here on this forum….EXTEND AND PRETEND…..

  18. Jimmy Gavin

    The latest idea from the “numpties” that run this place is to direct water from the Shannon to Dublin to cater for the growing demand……I am all in favour if they promise to release the Shannon at the top of Kildare Street and wash all in its path into Dublin Bay…..

    • bonbon

      A sheep dip for the IFSC would be best served with Liffey water, would’nt you think? No need to waste the Shannon!

  19. Ryu Hayabusa

    Hi,

    Yes the nail has been hit on the head here.. Ireland will wallow in the economic mire until we extricate ourselves from this flawed, ill thought overvalued currency which we never should have entered in the first place. The drop in competitiveness and the erosion of the cost base intensified dramatically from the day the euro was first introduced here. Remember the ‘stealthy’ price increases which began immediately in the rounding-up conversion process!?. This set the template.
    Withdrawing won’t be without it’s consequences but it will be the lesser of two evils in the long run.
    Regarding the monstrous debt overhang I’m reminded of the quote David mentioned in an article from American Economist Herbert Stein
    “If something cannot go on forever it will stop” ..a.k.a. debt that cannot be repaid won’t be repaid!
    One way or the other this situation will come to a head, &expecting these entrenched, loathsome mandarins and this so-called government to take corrective action or even give the impression they might be inclined to do so is futile. Repugnant self preservation is the only creed they adhere to and they will ride this country over an economic bluff to try to preserve their status quo.
    …a bit like the fable of the tortoise and the scorpion crossing the river. It’s in their nature to act as they are acting.
    They need to be brought to book and pronto, but any way you slice this it ain’t gonna be pretty!!

    • bonbon

      Start with telling the truth about the EU :

      The EU Is the Best System for Genocide, Says Author of Limits to Growth

      Joergen Randers, co-author of the 1972 The Limits to Growth “report,” has said that the European Union is the best system to bring about genocide. Randers, whose latest book, is 2052: A Global Forecast for the Next Forty Years, released ahead of the June 2012 Rio ’92 anniversary bash, gave an interview to Corriere della Sera weekly magazine Sette Green on April 16, in which he said that democracy has failed in meeting the challenge of climate change, and that authoritarian systems are needed.

      It is the nature of empire, that reptilian reflex, to cull. Ireland had it once already!

  20. bonbon

    DMcW is right about another currency, and “easing” as he puts it, but set’s it all in a labile Baby Tiger psycho-babble “feelings” and “emotional” garden of tears.

    Instead look at the Triple Curve, a true principle of economics. That plunging physical economy means your very life! A CNN or RTE camera team asking “how you feel about that” deserves a simple direct response!

    The only way credit can be quickly produced is FIRST to break the banks, Glass-Steagall, and THEN apply Hamiltonian Credit. This was very well understood by FDR, JFK, Arthur Griffith, Bismarck, but first clearly defined by an Irish American Matthew Carey.
    Without breaking the banks, throwing out Dodd-Frank, any “easing” will go to the Casino, and the biggest right now since end-2012 is Deutsche Bank with JPMC in the same trousers.
    So either DMcW is “triangulating” in a Tiger labile attempt to appease, or he is yet again “self-flummoxed” as admitted recently.

  21. Ryu Hayabusa

    Adelaide,

    The analogy you draw with Detroit is a pertinent one. On the current path this is the sort of landscape that can inexorably be envisaged.

  22. bonbon

    For all those endearing liberal Tiger’s on the flagellant trail (ouch), here is what Detroit is all about

    Detroit is Too Big to Fail: Crush Wall Street, Not The American People

    So : Glass-Steagall, crush the banks, not the cities. It is a choice of life and death. Detroit is coming to a town near you!

  23. bonbon

    How did the US bring unemployment down from 1933 onward? The best example is the Tennessee Valley Authority, TVA, where FDR choose the poorest region for immediate electrification – based, as is now well known, on the Shannon Scheme.
    Customers and services as well as all kinds of products appeared as long as that mission was active. Before that decision, customers could not read (60% illiteracy), never mind buy a fridge. TVA chief Lilienthal planned the 3-Gorges Dam in China, then. So today China follows FDR!
    Now what about a new economic platform, not Adam Smith’s “buy cheap, sell dear” recipe?
    Educating A Renaissance : Ireland – An Economic Revival

    (Based on Marine Transport, Engineering and Scientific Exploration)

    That is our TVA, and don’t worry, the US has the NAWAPA 21 and Eurasia the Landbridge.

    RE-BOOT THE WORLD ECONOMY!

  24. DB4545

    Bonbon.. When you’re concise you’re a pleasure to read. We went for an accelerated version of Detroit with our ghost estates without even bothering to industrialise or de-industrialise. We need to break the current banking structure throughout Europe and the USA. If we don’t we’ll have chaos in Europe and the USA and a large emerging superpower who are playing the long game is well placed to take full advantage of that. Ho Chi Minh was asked what he thought of the French Revolution. His reputed answer was that it’s too early to tell. We’re playing games with an emerging Asia who want and are gaining a stranglehold on resources. Australia and Africa has been turned into a quarry and a farm on much less benign terms than even European powers at their worst engaged in.We can’t compete economically or militarily with a fractured economy. And if anyone thinks we can somehow remain neutral in the fight for resources they’re deluding themselves.

  25. Doggone

    David,
    I have been a regular reader but this is my first comment. Having read this piece I am compelled to add one other(unpopular)comment. The massive improvements we have made to our lives over the last hundred years have been possible because we enjoyed ever increasing and cheaper supplies of energy. Oil is the obvious one and the developments in the transport and agri sectors tell the story well. Oil did most of the hard work you refer to. The economy we hanker after was built on $20 for a barrel oil. All the easy oil is gone and now it costs about $100 for a barrel of the stuff. If the price falls much below that, shale oil, tight oil and the associated gas become uneconomic. Now, before anyone jumps down my throat, I am not saying that we are running out of fossil fuel. I am just pointing out that the 160,000 barrels per day that Ireland imports is costing at least 5 times more than it did in the ‘good’ times. There will be many things we will not be able to afford to do because of this and running an energy thirsty economy may be one of them.

    • Colin

      Much of the money for mosques, Islamic schools and other Muslim assets in the West comes from the oil rich Muslim nations in the Middle East. And they get their money from the West.

      In 2008 alone, the United States sent $386 billion overseas to import 4.7 billion barrels of oil, including from the oil-rich Muslim nations. In 2008, Saudi Arabia alone raked in $256 billion from oil exports, and a bulk of that money then was funneled back out to the West via groups like the Muslim Brotherhood’s North American Islamic Trust (NAIT) to build and own Islamic assets.

      In other words, every time Western Christians put gas in their cars, they are giving money to Muslim Brotherhood or other Jihad groups to advance Islam.

      • Pauldiv

        You don’t really like muslims.

      • bonbon

        You neglect to mention who and when formed that “brotherhood”, and who finances it today. It is a british operation from the get-go. And Maggie’s “Al Yamamah” (dove of peace for the infidel) deal to supply 1 tanker per day to the UK built the slush fund that gave use 9/11 (about $185 billion has “vanished”). Now we have Obama covering the Saudi 9/11 involvement and funding “rebels”.

        Egypt : the Army moved when it became clear Morsi wanted a Sunni/Shiite endless war by a speech on Jun 15. Some are onto the British game!

    • pauloriain

      Always a good to remember this point you make. The financial crisis we are experiencing since 2008 was tiggered when oil reach $150 a barrel in 2006. That was the trigger point. Largely it was brought about by hedge fund speculation. But the problem now is, while the developed nations were not growing and consuming increased amounts of oil, the developing nations like China & India were consuming the oil and have increased their requirement.

      If the global economy, and particularly the developed countries, starts to grow again and all together, it doesn’t look like their will be enough supply. This has serious implications, the least of which will be recession. Think war and conflict.

    • Welcome Doggone

      Yes your point is very valid. Reasonably cheap energy has been a huge positive so you won’t find any araguemnt with me about that.

      Best and welcome to the site

      David

    • Ryu Hayabusa

      Doggone,

      Jeremy Rifkin has an interesting slant on this red line issue yourself and pauloriain have highlighted.
      He writes of the peak of globalisation being attained as oil reached $147 per barrel in July 2008 when the global economy basically shut down. 60 days later the financial system collapsed inevitably as the false credit and debt economies couldn’t sustain once the real economy went south.
      Following on he foresees a series of Growth/Collapse cycles over a 5 year span in the medium term… next 25 years.
      Different scenarios unfolding or a Black Swan event on the horizon could quickly push the price of oil toward the $150 mark again triggering the next stage in this collapse.
      In any case this five year anniversary is upon us as it is.
      This is worth a look if you haven’t already seen.

      The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy, and the World
      Jeremy Rifkin palgrave macmillan

      http://www.youtube.com/watch?v=lpDHcFts2OY

      The 5 pillars referred to of this burgeoning 3rd industrial revolution need to be embraced to evolve the next stage of globalisation in a sustainable manner and to break up the 99%/1% divide that currently prevails.

      • bonbon

        Rifkin, Mr. Entropy, is a radical population reducer, in other words a genocidalist. He has got the ear of certain “chistian evangelists” which is likely how he got a hearing here.

        Rifkin is now outdone by such as Dr. Schellnhuber, CBE, of Potsdam, and all owe their patronage to Prince Philip.

        It is interesting how this theme slouches and lurches through the blog. Ireland had this before in 1846.

      • bonbon

        Rifkin has a pathological hatred of cows. Poor devil.

  26. ciaran.hudson

    Coincidentally I was watching Nick Hanauer’s “Rich people don’t create jobs” Ted Talk recently and he had some similar feelings.
    Basically his thesis was that in a capitalist society the true job creators are middle class consumers.

  27. michaelcoughlan

    Hi,

    You put a lot of effort into this article but some points are badly made rendering the article almost but not quite as useless as tots on a bull so let me explain.

    Point one and two re automation and shipping jobs to lower cost economies is odd because Germany is highly automated and retains manufacturing which means there is nothing to stop us doing the same. I know Germany thrives on a weak euro relative to their economic might but they also are still paying war reparations and for reunification.

    Anglo Saxons in the Uk and the USA see nothing wrong with one and two but the Germans are more patriotic and are proud to support local manufactures because when you produce superior technology lower cost economies still want to purchase such items as it helps their efficiency.

    Moreover we know from your previous tomes that this whole exercise if about saving the euro which makes this article irrelevant.
    Ordinary people are going to have to create something for themselves as the
    authorities are beholden to the troika.

    I have come to the conclusion that Ireland is the best country to be in with whats coming down the track within two years.

    The time has come for ordinary people to come together to help each other and forget expecting the govt of politicians to do anything.

    • michaelcoughlan

      Tots should be tits If should be is of should be or

    • Goodday Michael

      Our basic problem as you are well aware of, I am glad to say, is the current monetary system run by a cabal of bankers for their own benefit.

      This is a world wide phenomenon. It has lead to fascism and the coming total enslavement of people to the state and/or one world government.

      small is better in most cases no doubt. Local people helping each other but with a global outlook. International affiliation is fine but not international dominance.

      as such local decisions need to be made locally. This includes regions and nation states.

      Attached is Fascism V. Capitalism by Lew Rockwell

      http://www.mises.org/WorkInProgress/MisesCirclePostcards/FascismCapitalismBook2013.html

      • bonbon

        Not a mention of FDR’s successful defeat of fascism between 1933 and 1945.

        I’m afraid that pointing to Mussolini also misses the point – that Il Duce’s fascist economics was GK Chesterton’s “communitarianism”. No wonder – Mussolini was in British pay from the 1920′s. That is Fabian Round Table Economics. Now that School must know all of this.

        • nobody knows as much as you, bon bon

        • bonbon

          Well there is room for homework at the School then, what?

          Fascism, as practiced by both Wall Street and Il Duce, is actually Adam Smith’s “capitalism”. The idiotic thing about all of this is Marx (communist you may remember) Marx attacking Henry Carey’s program for national economic development as a regression from Adam Smith. He rejected Henry Carey’s attack on “the diabolical influence of England on the world market,” by claiming that it was simply, “the natural laws of capitalist production,” and attacked Carey’s plans for an alliance with Russia to defeat the British Empire by labeling him a “Russophile.”

          So we have the fascists and communists joined at the hips of the Austrian School in their bedazzlement of Adam Smith. What a circus act! Worthy of Beppe Grillo!

  28. There is less money during a recession because as loans are settled with banks the money no longer exists. The savings ratio may rise also but this is a secondary cause of a lack of money in the economy during a recession.

    • It matters little to the economy how much money there is available.
      If money available increases then more of it is used to facilitate trade. This is inflation (as more money is used per transaction the value of the unit of account diminishes). That is it takes more money to buy the same item.

      If there is less money available then less is used to facilitate trade. This is deflation (as less money is used per transaction the value of the unit of account increases). That is it takes less money to buy the same item.

      There is always enough money in the economy to operate the economy successfully.

      All that happens when the amount of money in an economy changes is that false signals are given and malinvestment and erroneous choices are made. Fiddling with the money supply is always a disaster. since the advent of the central banks and the commercial banks fraction reserve system has been allowed the economies have gone from one crisis to another.

      We are in the process of the grand collapse of the current monetary system. everyone must take care to protect themselves. It is a personal responsibility and the protection will not be offered by government, they are a part of the problem.

    • bonbon

      It is a political choice to squeeze credit after a crash as in 1929-1932. FDR showed quite another choice, and we will again.

      That is Hamiltonian Credit systems, have a look here for a way out of the monetarist plague, the digital “it from bit” mesmer.
      http://larouchepac.com/creditsystem

      • I think it is the squeeze on credit that accelerates the crash. The crash is preordained by the expansion of credit which first causes the boom.

        Hamiltonian credit is another central bank state application for solution. He was a Rothschild man. Why do you promote Rothschild banking policy of debt and destruction of the people.

        As for your American water project; I will remind you again that it entails the destruction of Canadian sovereignty and thus is an internationalist and statist plan too.

        • bonbon

          The “squeeze” was Wall Street and FDR fixed that. Austerity does not work, acknowledged by all now.

          Cooperation amongst sovereign nation-states actually strengthens their economies, may I remind you. Water is a major issue crossing boundaries, and a great way to declare independence from “central bankers” with national credit systems. Hamilton did exactly this. Every sovereign nation-state must now declare independence! Canada too!

  29. “This should be accompanied by a massive monetary easing via a move to a new currency, which would fall in value to re-price Ireland downwards on international markets.

    These are the type of radical moves that are needed to re-boot the Irish economy and shock the customer of Irish goods and services – both local and international – into life.”

    First things first. All the illegal debt accumulated fraudulently by the government in support of private business, who lied to us, should be revoked. all the debt accumulated by persons because of lies and deceipt is also fraudulent debt and can be revoked.

    Then go to a national currency, Irelands own, and not the assumption of anothers’. Take back Irish sovereignty. Then issue treasury bills from treasury at no cost and no interest and pay off the balance of the national debt. We now have a clean slate. Income tax and other taxes can be abolished and the size of the state apparatus reduced.

    Then a 20% cut in wages and benefits to all government and state employees, would be a good help to set the right mood in the country, in lieu of the income tax cut.

    Remove the legal tender laws and allow free use of any money by people as they choose. This competition in currency (money) will keep the national treasury honest. Remove the tax on interest from savings.

    In this process monetize silver and gold and allow into circulation. Have treasury authorize the Irish mint to produce coins on demand to all who wish to possess. The sovereignage raised in this process will be accumulated by treasury and will back the Irish currency and the currency supported and strengthened.

    Like Iceland, Ireland will make its way in the world with a talented motivated, highly educated people, and a reduced cost base of much lower taxation and no interest payments.

    • Adam Byrne

      Good suggestions Tony but there’s more chance of pigs flying than any government in Ireland instigating even one of those measures, never mind the whole suite. I mean, look at the state of the so-called ‘leader’ of the country for Pete’s sake – a useless, brain-dead, corrupt gombeen – completely devoid or any integrity, vision or leadership qualities!

      • Good day Adam. Yes pigs may fly first but there are changes afoot to be aware of. Some of the changes suggested for Ireland will occur in other countries.

        Just because there is little likelihood of adoption does not mean one should not express opinion or ideas. From little acorns giant oak trees grow.

        Even David changes position under enough influence. When before was he talking a new currency divorced from the Euro. By the way, forget the punt as a name it indicates a nation of gamblers!!Have a national contest for a new name. Regional contests leading to a national final with electronic voting all aired on computer and national TV.

        Forget the idea of two currencies one being the euro. Euro trade is ok but reduce the bureaucracy by ridding the country of European regulation and law. We need to free the people not bind them further.

        The people need to be informed , educated about the causes of the financial mess, and then be politically active. The “leader ” will follow.
        Where are the people headed?, which way have they gone?, I must catch up as I am their leader!

        David is an educational leader, he needs to be guided to the correct track on monetary affairs, then others of influence too, and then the politicians will follow.
        The politicians are always a reflection of the people so the change must come from the people.

        • bonbon

          Followship of the fellowship of money can only lead to, well more of the same, but a vastly reduced population, in other words mass murder.

          The fellowship of money fully intend to repudiate their redeemable debts, but to leave billions without any credit to reconstruct the physical economy, in other words mass murder is fully on line.

          Whether the fellows of money admit it or not, they will be held accountable and be forced to participate in whatever happens right ahead. Make no mistake about that. It would be much better to adopt a creative and constructive approach now.

      • bonbon

        Useless “suggestions”. The US will actually again take the lead as in 1933. Ireland (and Europe) must be prepared for this, carefully. Glass-Steagall will be decided in D.C.,. Europe’s culture, yet again fails as De Cusa wrote just before Columbus.

        The oligarchy, European, referred to in your glowing terms does operate in the US too. But when the US does what is must, it clears the sky, literally too. Even the FT admits this state of affairs with repeated editorials for Glass-Steagall. The latest JPMorgan Chase in California ‘Enron’ Crime Spree only adds to the momentum.

    • 5Fingers

      I think we have a mountain of customers. But we must loose the idea of “Ireland” as anything more than a hotel or place of living.

      A few things:

      1) Iceland is a weeny country with a population the size of North Dublin Area covering Swords to Santry. After that, the comparisons are nonexistent. And its financial situation is still a mess.
      2) Ireland has a very talented workforce and a very creative one that has never stopped and continues to be one of the more highly mobile in the world. It really does not give a rat’s ar$e about Oirland or its politicians or if the whole place disappeared into a whirlpool off the coast of Wales.
      3) The cost of an expert in any field of endeavor – be it IT, Medicine, Engineering …you name it is the same the world over. It is a global rate. If you are not getting the global rate, you are average and should be doing something else or will be confined to a call centered until a dumb computer replaces you. People need to try and skill up and get experience widened. Not easy, but it needs to become and embedded feature of your life.

      The rise of the mobile professional is now unstoppable. Ireland is irrelevant. It is now another retailer of services called “Living in a Country” and now has a new level of competition – civil servants/ politicians will soon realize that they have to compete to have these professionals just like a few years ago it was the multinationals. Indeed being a professional politician is now really being like a temporary hotelier.

      he only thing that keeps people alive is worthwhile work – retirement for most is a death sentence irrespective of your core health. The challenge facing us today is how to keep people working healthily and keeping themselves skilled up to beyond 70 and 80 and in a community. In effect there has to be a point to living aside from savings. If you have no new skills, no community or friends – savings mean nothing.

      This is where I think we are moving to a City State mentality at a Global Level. It’s been this way for centuries and Dublin did have have its place a while back. While all the multinationals or big organizations may be here in Ireland, the VPs and the big movers and shakers all cluster around the big cities with their Arts and Culture and big schools and institutes. Professionals will cluster here as well on a migratory basis – rather like big motorway intersections. That’s where the power is and will remain. That’s why politicians are always doomed to irrelevancy until they realise that all they have is a hotel and until all you have is your mind.

      • Some hotels are better than others.

      • bonbon

        So the usual thieving of retirement funds shows its snout again. That is exactly what is being done to Detroit right now. Work people until they literally drop. Camps would be for that, would’nt they.

        The challenge today is to name fascism when its muzzle appears in public BEFORE the camps.

        To declare the nation state is “irrelevant” means rights, general welfare are to be eliminated, along with populations. After all the EU was declared the best tool for this genocide by a “Limits to Growth” author above.

        The “city” nostalgia, the Venetian dream of the Serene Republic, which spawned in the swamp the current financial mass-murderous cabal now out to totally loot what ever is left as their tower sinks in the lagoon.

        Smell the swamp-gas!

    • 5Fingers

      I think we have a mountain of customers. But we must loose the idea of “Ireland” as anything more than a hotel or place of living.

      A few things:

      1) Iceland is a weeny country with a population the size of North Dublin Area covering Swords to Santry. After that, the comparisons are nonexistent. And its financial situation is still a mess.
      2) Ireland has a very talented workforce and a very creative one that has never stopped and continues to be one of the more highly mobile in the world. It really does not give a rat’s ar$e about Oirland or its politicians or if the whole place disappeared into a whirlpool off the coast of Wales.
      3) The cost of an expert in any field of endeavor – be it IT, Medicine, Engineering …you name it is the same the world over. It is a global rate. If you are not getting the global rate, you are average and should be doing something else or will be confined to a call centered until a dumb computer replaces you. People need to try and skill up and get experience widened. Not easy, but it needs to become and embedded feature of your life.

      The rise of the mobile professional is now unstoppable. Ireland is irrelevant. It is now another retailer of services called “Living in a Country” and now has a new level of competition – civil servants/ politicians will soon realize that they have to compete to have these professionals just like a few years ago it was the multinationals. Indeed being a professional politician is now really being like a temporary hotelier.

      he only thing that keeps people alive is worthwhile work – retirement for most is a death sentence irrespective of your core health. The challenge facing us today is how to keep people working healthily and keeping themselves skilled up to beyond 70 and 80 and in a community. In effect there has to be a point to living aside from savings. If you have no new skills, no community or friends – savings mean nothing.

      This is where I think we are moving to a City State mentality at a Global Level. It’s been this way for centuries and Dublin did have have its place a while back. While all the multinationals or big organizations may be here in Ireland, the VPs and the big movers and shakers all cluster around the big cities with their Arts and Culture and big schools and institutes. Professionals will cluster here as well on a migratory basis – rather like big motorway intersections. That’s where the power is and will remain.

      That’s why politicians are always doomed to irrelevancy until they realise that all they have is a hotel and savings are irrelevant until we realise that all we have is our company of friends and acquaintances who help in no small way in keeping body and soul together.

    • 5Fingers

      I think we have a mountain of customers. But we must loose the idea of “Ireland” as anything more than a hotel or place of living.

      A few things:

      1) Iceland is a weeny country with a population the size of North Dublin Area covering Swords to Santry. After that, the comparisons are nonexistent. And its financial situation is still a mess.
      2) Ireland has a very talented workforce and a very creative one that has never stopped and continues to be one of the more highly mobile in the world. It really does not give a rat’s ar$e about Oirland or its politicians or if the whole place disappeared into a whirlpool off the coast of Wales.
      3) The cost of an expert in any field of endeavor – be it IT, Medicine, Engineering …you name it is the same the world over. It is a global rate. If you are not getting the global rate, you are average and should be doing something else or will be confined to a call centered until a dumb computer replaces you. People need to try and skill up and get experience widened. Not easy, but it needs to become and embedded feature of your life.

      The rise of the mobile professional is now unstoppable. Ireland is irrelevant. It is now another retailer of services called “Living in a Country” and now has a new level of competition – civil servants/ politicians will soon realize that they have to compete to have these professionals just like a few years ago it was the multinationals. Indeed being a politician is now really being like a temporary hotelier.

      The only thing that keeps people alive is worthwhile work – retirement for most is a death sentence irrespective of your core health. The challenge facing us today is how to keep people working healthily and keeping themselves skilled up to beyond 70 and 80 and in a community. In effect there has to be a point to living aside from savings. If you have no new skills, no community or friends – savings mean nothing.

      This is where I think we are moving to a City State mentality at a Global Level. It’s been this way for centuries and Dublin did have have its place a while back. While all the multinationals or big organizations may be here in Ireland, the VPs and the big movers and shakers all cluster around the big cities with their arts and culture and big schools and institutes. Professionals will found clustered there as well as on a migratory basis – rather like big motorway intersections. That’s where the power is and will remain.

      Today’s nation state politicians are doomed to irrelevancy until they realise that all they have is a hotel and savings are irrelevant until we realise that all we have is our company of friends and acquaintances who help in no small way in keeping body and soul together.

      • Adam Byrne

        Excellent comment Philip, I agree with a lot of it.

      • bonbon

        Ah that Global village again, why not post your sources?

        After all you mention “its been this way for centuries”.

        Do I hear a nostalgic yearning for that Sun that never set on the global village, what? Dear me, how quaint.

        The lost cause again?

        • 5Fingers

          Sush there.

          City has a bigger meaning. It is a communications medium. Unlike a nation it is not geo defined. It can be interplanetary and transnational. CERN is more in the lines of where I would like to see it headed.

          When I say work I refer to the fulfilling stuff that gives meaning. Would you not agree that everyone should be facilitated as such for as long as they can breath?

  30. Now we are taking of the advent of real money. Never mind a national currency get some internationally acclaimed money.

    http://www.arabianmoney.net/gold-silver/2013/07/23/gold-will-move-in-hundreds-of-dollars-a-day-on-comex-soon-says-jim-sinclair/

  31. The world wide demand for real money. gold and silver bullion held in hand, is overcoming the manipulations of the paper market.

    some sources have indicated that COMEX has only one ounce of physical gold for every 100 ounces sold. If delivery is demanded there is none to deliver. 99/100 will receive depreciating paper money and no way to obtain bullion as there will be no sellers.

    http://www.jsmineset.com/2013/07/22/comex-must-change-its-delivery-mechanism-soon/

  32. If you like gold then you may at this point in the market favor silver better.

    http://www.mineweb.com/mineweb/content/en/mineweb-whats-new?oid=198532&sn=Detail

  33. GS stands for Goldman Sachs as it will avoid any form of the other G/S

    http://www.bloomberg.com/news/2013-07-23/-review.html

    • bonbon

      GS likes aluminium, operating under the London Metal Exchange. There is a huge scandal. Maybe the intend to pawn off aluminium coins for the starving?

  34. joe hack

    Well David there is no other way…

    (It is great to see you come outright and say that it is customers that create an economy and not the Quinn’s of the world.
    People only use bricks and mortar if they need them and can afford them the suppliers name is irrelevant Quinn did not create jobs he just migrated them from others and in doing so downgraded them…)

    The idea of going with the punt makes sense Ireland is supposedly the 15th richest country in the world yet if this country was treated like a mortgage holder it would have been reprocessed long ago.

    The suggested two currency system makes sense too -the punt for internal business and the Euro a for external transactions , this in fact may work across all euro zone countries and even world wide -The planetary currency one planet note equal to x Punt x Dollar …

    We would be a better country with full employment while living within real value…

    Waiting and hoping for a knight in shining armour will degrade us, wishful hoping is not progressive…

    • bonbon

      The Baby Tiger liberal and labile “hoping and wishing”, even pleadng, will not cut it.

      Decisive action must be taken to bring banking into line with massive Reconstruction urgently needed. That means breaking off the “investment” depts, those hoping you remain wistful. Engage the nation-state (never mind those who would trash it), as FDR did in 1933, that is what is for after all.

  35. Adelaide

    “Wishful Hoping” is the empty mantra of a return to “Full Employment”. Spouting ‘Jobs Jobs Jobs’ is denying the true reality of what we are presently experiencing which is the first manifestations of the systemic inevitability of the total labour-surplus to perfect economic-production efficiencies. Everything else is merely a symptom of this underlying fact. The banking crisis, the euro crisis and every other contemporary crisis is not the cause, they’re symptoms and every proposed solution in the public domain is mistakenly addressing these symptoms.

    The day the debate commences regarding how society accommodates the approaching reality of a future without work is the day we start to move away from the oncoming dystopia. This will involve a paradigm shift to a new view and way of life. In fact, a better or even possibly a utopian way of life. Doggedly staying the course with our present credo and systems and ‘solutions’ to prolong them will lead us into the abyss. The abyss is already touching the toes of the surplus youth of the world. We of a certain age are the last generation to ‘work’, for those behind us their world is the REAL world of total labour-surplus punctuated by McJobs. I await the day a public figure begins the process by declaring “The Jobs Are Going. Going, Going, Gone. We Must Concede Defeat. Once We Accept That Truth We Can Prepare Ourselves For A New Way Of Living”.

  36. joe hack

    A few nights ago at around 9.00pm I parked the camper van up on a beach close to a pub in a village that I am familiar with. Since around the time that the euro came the shops and services in this village and surrounding areas started to close. when I entered the remaining business it had 3 customers at the bar they were nursing flat beers and at this moment there was no one attending the bar.

    After a short while a door opened from in behind the bar and child of around 10 appeared with another child of around 3 they were followed by dog the 10 year old said “what would you like” I baulked internally, initially I thought to myself that I would like adult to serve me in a licence premises but with a knowing nod from the nursing customers and with a warm smile I order the preferred drinks. Shortly afterward the propriety arrived to top off my pint of Guinness and serve me and my significant other our drinks €8.80 for a pint of Guinness and a pint bottle of Bulmer’s

    By the end of the night and after plenty of banter and chat with the locals and later the friends I had surprised with a call to the bar the friends had to depart with just one pint over the limit in this very rural location I remained on to chat safe in the knowledge that I did not have to drive.
    Later as my wallet was running empty of cash and there was no ATM I asked the proprietor did take credit cards he replied and said “no” and added in strong local accent “I will spot you 20 or 50 euro note and you can go to the nearest ATM in the morning its 10 miles way and you can return the cash to me or if you like you could post it “…
    I ordered one more round with the last the cash I had and later the proprietor came out with a large tray of homemade lasagne for the crew of Texas Holdem players he was sitting with in the corner he proceeded to hand out portions the all in the bar.

    While I was dipping my fork in to my portion he tossed in a sausage with his big scruffy hands, yummy! It was best lasagne and sausage I have had in a long time, we left the bar at 1.30am and walked fifty steps to the camper van and we awoke to the sound of bashing waves later a swim cleared the head and later at dinner with the friends it was revealed that this bar is struggling to survive and if it fails this village will have no businesses.(Ireland also)

    This bar owner knows only too well without customers he has no business – without customers with money he has no business with the ever ongoing global franchises small businesses and there interaction with others demonstrates that work is becoming a sport of the elite but blindly they cannot see that there customers are now decreasing in this ill thought out global schema.

    No passports were use in the making of this holiday

  37. michaelcoughlan

    Hi everyone,

    Iv been reading the contributions re customers, income, work, etc and I feel the substantive issue is constantly being over looked and was only once explained in detail by Tony Brogan (not gold this time Tony).

    The real problem is that the ratio of the wealth created that is going to workers
    whether blue or White collar in 99.99% of
    cases has been steadily reducing for decade
    now through 1) greedy bastards in charge
    maximising profits by reducing salaries 2)
    inflation, 3) increasing taxes 4) debt created fist currency and the increasing costs associated with that. 5) commodity priced rising on speculation, 6) other assets rising due to increase in the money supply.

    I’m not sure whether customers or not Will make the difference. I’m now of the opinion that an enormous crash will be the only thing that will allow the reorg and restructuring required to put REAL value in workers pockets which will allow them to become REAL customers.

    • Adam Byrne

      I agree Michael – Marx’s theory of surplus value.

      Or as Tony put it over lunch in Greystones – families used to be able to survive on one wage, now they require 2 and a half – impossible.

      It’s a total scam.

    • bonbon

      An enormous crash, that Hayek dreamt of before he died, can only mean one thing – Detroit everywhere.

      Surely you have not become a genocidalist? Do I detect an Austrian School slaver for population reduction – “we will start small” as Hayek put it oh so endearingly?

      Now such mass murder as a lunch theme makes cannibalism a matter of taste!

      What was on the menu, Soylent green?

      • michaelcoughlan

        What a load of gibberish. Projecting your own nihilist gobbledygook onto my post once again putting words in my mouth.

        In a crash the money returns to it’s rightful owners ie people who create wealth and can hold onto it when maddoff types and ponzi artists are getting their comeuppance.

        As for you Bonbon I told you before your like Kevin Myers: you make such an ape out of yourself every time you open your mouth the people with real talent and intelligence meerly sit back and encourage you to speak at every opportunity.

        • bonbon

          Sitting back with tasty morsels slavering for a major crash to start small is exactly Hayek, to the bone! Have you any idea what educated people think you are proposing? Either you are addled, or bedazzled by the golden company.

          Look at Detroit – where do you see mad dog Madoff? The banks were put on life support and Detroit on death support. Is this the crash you want too see all over?

          Insane. Do not ape Hayek, he is making a monkey out of you.

          • michaelcoughlan

            Hi,

            I’m not proposing anything. The market will decide whether a crash is going to happen or not.

            Still again demonstrating your complete madness. Are you familiar with the derogatory oxymoron “the blinding clarity of a madman”……….

            As for Hayek making a monkey of me? Keep it up bonbon! You and Myers!

    • 5Fingers

      The multi wage per household development was driven by a desire to have a career on both sides of the table. The massive increase in economic activity did increase wealth for all. The mistake by many was to over leverage it to acquire debts that need 2 wages.

      People who make this complaint are typically pro wife must be confined to home. How quaint.

      • Adam Byrne

        That’s not the point Philip, that’s a different matter. No sensible person advocates confining wives to the home.

        The point is there’s more than enough in company profits to make the whole world economically comfortable.

        As Max Keiser remarked today on Twitter:

        “?Apple could move manufacturing to U.S. and pay workers in $50 bucks an hour and still have more than $100 bn. in cash sitting idly in bank.”

  38. Ryu Hayabusa

    Hi there,

    I don’t think an official apology from Forbes will quite do it for Michael D after their little ‘faux pas’ yesterday!

    • bonbon

      The “Detroit Template” and the “Cyprus Template”: A Tale of Two Cities

      Detroit: Test Case For Genocide
      The conditions now being experienced by the people of Detroit, as described vividly in this presentation, herald the future for the rest of the American people — unless Glass-Steagall is immediately restored and the true enemies of the United States recognized, and defeated.

      And be sure this is what is planned right accross.

      • DB4545

        Jesus bonbon just when you were getting concise, brief and to the point and you start babbling econoporn again. Plain f**king English. Is it that difficult?

        • Pauldiv

          Flashes of brilliance and then he scores an own goal. Fans are in despair

          • Adam Byrne

            You should be in despair Pauldiv if it’s true that you’re beloved Celtic want to sign Kevin Doyle because he’s the biggest PLANK that every pulled on a pair of football boots.

          • Pauldiv

            Adam it’s a hard life knowing I might see another 9 in a row.

            Interesting times bhoy. Interesting times.

          • Adam Byrne

            Not with that MUPPET Doyle leading the line you won’t Pauldiv. He’s utter shite.

    • bonbon

      On that item : ‘Forbes’ magazine and website describes itself as a leading source for “reliable” news on politics, economics, business and finance.

      The article in ‘Forbes’ was a profile of Samantha Power, the Irish woman being appointed as US Ambassador to the United Nations, who is “nudging” for war with Syria with R2P, Mr Blair’s Responsibility to Protect.

      • Ryu Hayabusa

        Well Yes that’s right. It was just a throwaway comment, not the main thrust of the article. The guy who wrote it was bleating.. “oh it’s the worst mistake of my life.. boo hoo hoo ” He better believe it now he’s got the esteemed Michael D’s dander up!

  39. Ryu Hayabusa

    Incidentally, Labour lost another 2 members. It’s like death by a thousand cuts… Gilmore is puttering them along nicely on the road to oblivion. It’s difficult to pin down whose got less credibility, him or his alter ego Enda.

    • Adam Byrne

      Who did they lose now? I don’t follow pathetic party politics. It would be great if they lost enough to get booted out.

      • Ryu Hayabusa

        I don’t keep track of it much myself truth be told but someone was bending my ear on it a little earlier.. Nessa Childers anyway who may run as an Independent MEP next year plus some councillor called McHugh I believe who’s off to the tropical climes of FF!
        Labour on a decidedly downward trajectory Adam, no doubt about that.

    • Pauldiv

      It’s interesting that the UK Labour Party also look like they are determined to lose the next election.

  40. Ryu Hayabusa

    Quite possible, although if they ship the kind of losses Happy Gilmore& Co. are facing into they’ll likely take Miliband chuck him on the pyre with Guy Fawkes and spark him off!

  41. Adam Byrne

    Was there a full moon today Mr. bonbon?

    I used to be mad but I’m okay nooooooooooooooooowwwwwwwwwwwwwwww!

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