August 26, 2013

Dark arts of the bankers

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For those of you who are partial to a bit of history – and particularly the history of this part of the world in the years before the Plantation – Wolf Hall, the 2009 Booker Prize winner by Hilary Mantel, is a must-read. It is the story of Thomas Cromwell, Henry VIII’s confidant and adviser – and the man who, possibly more than most, was responsible for the Reformation in England.

This, we Irish readers already know, has enormous implications for us. However, the most interesting aspects of the book are the intrigue, the diplomacy, the mendacity and the downright nastiness of the court of the king.

To the modern reader, one of the characteristics which jumps out of the pages was the blind faith which the people had in the church, the scriptures and of course the ever-present threat of heresy, hell and Satan.

The flip side of the fear of heresy is of course the belief in the notion that all heretics could be burned to repent, and in repentance all would be fine, the old order would be restored and civilisation could carry on.

Reading the book (one of my summer reads), I couldn’t help noticing the similarity between the old clerical hierarchy of the Middle Ages and today’s economists, particularly central bankers.

Back then, the priests held sway over the people by suggesting that they and only they could understand the word of God and that the word of God was so unbelievably sacred that only men of great learning were in the position to interpret it. The real fear of Lutherans was that they would break the privileged position of the church hierarchy by saying that the gospel could be printed and given out to commoners so that the common man could talk to God himself without the need of the priest to mediate.

This move, of course, would break the mystique of the church and would thus smash the hold it had over the people. In order to preserve the mystique of the ancient church, the priests talked in riddles, in Latin – a language that the commoner didn’t understand – and they kept the sacred texts secret or at least declared the gospel so difficult that only men of great academic learning could possibly understand this. All this was designed to ensure their exclusive access to the truth.

Sometimes when I hear my fellow professional economists talk, I am reminded of the medieval priests. Many economists use similarly contorted language, many worry about the same hyper-academic sensitivities and pretensions and many seem to believe in the infallibility of certain doctrines which are maintained by rituals, ceremonies and closed-door conferences where only the learned meet to discuss the finer points of economic doctrine.

This weekend, there will be one such gathering of the learned and, at the end of it, a carefully orchestrated press conference will be the economic equivalent of white smoke in the Vatican. At the press conference, the conclave of the world’s most powerful economists will reveal the conclusion of their deliberations.

The reverence with which this huddle of central bankers – the annual Federal Reserve meeting at Jackson’s Hole this weekend – is handled in the media and the wider financial market reinforces this notion of the cult of the banker.

In recent years, the notion that the central bankers of the world – largely the same people who missed the greatest asset bubble in history in the Noughties – are now in some way infallible has taken hold.

Today, after five years of printing money hand over fist to get the world economy going again, the theological difficulty facing the high priests of economics is how to end the money-printing episode without causing the financial markets to crash again.

By printing money, the central bankers erred from their own true gospel, and while many tolerated this experiment because of the unforeseen and exceptional circumstances they, like true believers, want to get back to the one true path of sound money.

The great recession of 2008-2012 was the central bankers’ equivalent of Henry VIII’s marital problems and male succession dilemmas which allowed the English church to bend the rules on divorce expediently and in so doing set the Reformation in train in Britain.

Most of the clergy that went along with the monarch truly believed that this would be a temporary issue, a bit of rule-bending to get over the present difficulties. Few believed it would permanently change the way their world worked, and few still understood that the threat to their power was total and would be calamitous for them.

Today, the world’s central bankers are also caught in a theological dilemma. By printing money hand over fist, they suspended central banking dogma in the face of an immediate and present threat – deflation and recession. Now the question is: can they find the path back to the way things were before or is the cat now out of the bag?

The miracle of money-printing was that it had been a cheap way of trying to kick-start the economy. Now that the US economy is showing signs of growth across the board, the central bankers are struggling with how to end this unorthodox deviation.

The problem for the central bankers is that once they allowed the cult of the central banker to take hold and once they positioned themselves as the last line of defence against economic Armageddon, the financial markets now believe that they have all the answers. But they don’t.

Here’s the tricky bit. The huge rally in financial markets in the past few years is due to the billions of freshly printed dollars, yen, pounds and euro. But this cash has driven a wedge between financial markets and asset prices on the one side and the underlying economy, which has to deliver the growth rates to justify the elevated asset prices, on the other.

Now if the economy doesn’t grow sufficiently, the taking away of the stimulus – known now as ‘tapering’ – will precipitate a market crash that the very process of printing money was supposed to prevent in the first place.

This is the conundrum. In recent weeks the US economy is showing that the recovery is in train, but it’s weak and fitful. The markets have twigged the central bankers’ dilemma and have sold off the emerging market countries in advance of the end of the unorthodox regime. But, again, this very sell-off means that the end of the unorthodox regime will come at great cost.

Like the medieval church, once they started tinkering with theology and their own ancient truths about how the economy works, the high priests of economics have revealed that their old rules actually might not have been hard and fast rules after all.

This is why the boss of central bankers is a bit like a medieval Pope. He first has to keep his conclave together, but he has to acknowledge that the old world might not ever be the same again and, finally, he has to deal with pesky heretics from within his own ranks who believe that the evidence of the last few years means that the old economic rules no longer apply.

It’s a big ask even for someone like Ben Bernanke, who has proved himself to have the dexterity of a Medici bishop of Rome, but who may well be heading an economic Reformation without even knowing it.

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  1. Lius

    Good morning all

  2. I enjoyed this article . However the real dark arts of the Irish Bankers makes your contribution look like a cappuccino when the reality is that what the banks deliver is a dark roasted aromatic toxin

  3. SMOKEY

    It sounds like a great time to sell U.S. Mutual fund shares and go to money markets for safety and liquidity.

  4. cianireland

    It will be so difficult to remove stimulus that I doubt they can at this stage, not without trying new approaches first.

    I’m not convinced the current failure disproves the value of stimulus, more that the transmission mechanism of the stimulus into the economy is not working. To steal and butcher analogies, I reckon Bernankes Helicopter money is falling into the sea and that he’ll need to work harder to hit land ie real economy.

    This sounds like heresy but why not use the stimulus to reduce income taxes. This is direct transmission into the markets; why not?!

    I would really like to know the economic rationale for not doing so or indeed for not going back and looking at the dogma that presumes it is crazy…

  5. StephenKenny

    ” Now the question is: can they find the path back to the way things were before or is the cat now out of the bag?”

    Before? “Before” was a property and financial services bubble, “before” that was the dotcom stockmarket bubble, and “before” that was a property bubble, and “before” that was a stockmarket bubble – each one “solved” by more borrowing, all of which still needs to be paid off/devalued away.

    I’m not sure that this “before” is a very good idea.

  6. rodlarge

    Two questions; What is to be done and who will do it? Everything else is just commerce

  7. Pat Flannery

    It’s a good analogy as I understand it in that it explains the dilemma and possible permanent consequences: Thomas Cromwell represents the new faith of printing whatever money the markets require and the Pope is the Fed Chairman who must protect the old faith in sound money.

    If history is to be our guide then the Reformation is already well under way. There are those like yourself who believe that every man should be his own Pope and there are those who practice discipline that you call austerity and perhaps would even liken to celibacy.

    In its finest distillation the dilemma is whether we should maintain a central governing authority or submit to anarchy. The anarchists brought us the deregulation that resulted in unrestrained speculation and crash. Thomas Cromwell’s political isolationism and religious intolerance brought England centuries of religious wars.

    My reading of history is that he almost single-handedly sowed the seeds of England’s religious wars that have poisoned British life right down to the present day, the most virulent descendent of which is still alive and well in Northern Ireland. Not a pretty legacy.

    Your hope seems to be that a future Fed Chairman will permanently free the markets of odious regulation you call austerity as Cromwell did for Henry’s medieval England while later generations will canonize Paul Volker as the one who stood against Henry’s licentiousness and lost.

    The difficulty with this Medieval England analogy is that modern America cannot break with the rest of the world as readily as Henry’s island England did with Continental Europe in the 16th Century. This time Continental Europe and most of the developed world, particularly China, are for sound money. This time the old faith may endure.

  8. ps200306

    “In order to preserve the mystique of the ancient church, the priests talked in riddles, in Latin – a language that the commoner didn’t understand – and they kept the sacred texts secret or at least declared the gospel so difficult that only men of great academic learning could possibly understand this. All this was designed to ensure their exclusive access to the truth.”

    … Completely off-topic, but since you started it David, your thesis above is a complete fable mostly promulgated by certain Protestant apologists. Bible translations into the vernacular were commonplace (allowing for the fact that books in general weren’t common before the invention of the printing press). Every major language to which Christianity spread had its vernacular translations, in some cases with the system of writing itself invented by churchmen specifically for that purpose, where there was no written tradition in the language. Look at Cyrillic, used by a quarter of a billion Europeans and West Asians, named for St. Cyril who introduced the precursor Glagolitic. Likewise, there were English translations “before there was English”, in Middle English, Saxon and Teutonic. Here’s a link to help you get started:

    http://en.wikipedia.org/wiki/Bible_translations_in_the_Middle_Ages

  9. Adelaide

    http://www.cognitivemedia.co.uk/
    “How Does Quantitative Easing Work?”
    A 60sec RSAnimate demo.

  10. 5Fingers

    Hilarious article. I’ll never be able to shake off images of Monsignor Noonan and Bishop Honohan and his acolyte Mon. Roux.

    I am an economic atheist BTW. The notion of sound money is yet another tool for status quo retention. The big fear for these guys is they loosing control of an environment they truly misunderstand. It’s gone multi-polar.

  11. Le Route de la Roux

    One Direction melodies are popular now do we need another direction from Roux ?

    Roux is a member of the Enarchy a deeply embedded secret society that practice the arts on the Sistine chapel in Rome /

  12. cooldude

    The notion that the high priests of central banking somehow missed the recent asset bubbles is not the full story. They actually created these same bubbles through their interference in interest rates and their encouragement of commercial banks to get involved in all sorts of shady behavour in the full knowledge that no matter how stupidly they behaved the central banks would stand by them.

    The notion that creating money at zero cost is some sort of miracle is simply ludicrous. All it does is take toxic securities off the commercial banks which would be valued way lower if they were sold in the open markets. There has been no improvement in the real economy unless you count moving people from full time employment to part time employment as improvement because that is the only area there has been employment growth in the US economy. The overall labour participation rate continues to fall, the real value of wages is now back to the levels of the 1960′s and the modern day soup kitchens of the food stamps has almost doubled to close to 50 million in 5 years.

    The reason behind all of this is simple. Central bankers only real interest is supporting the interests of the commercial banks who are their shareholders. They don’t give a shit about the real economy or unemployment but their policies constantly create asset bubbles which gradually transfer wealth from the ordinary people to the financial elites. The next bubble to burst will be the bond bubble and this will really cause some mayhem. Stop giving these charlatans respect they don’t deserve. Bernanke is getting out because he knows his policies are failing and he hasn’t a clue what to do about it.

    • Pat Flannery

      I agree cooldude. The municipal bond market for example is a disaster waiting to happen. Super-massive bond borrowing plus impossible defined benefit pension liabilities means that virtually every local government agency, including school districts in America is relying on continued low interest rates for survival.

      The entire state of California for example would become instantly insolvent if it had to pay real economic rates for its borrowed money. All that bottom-less spending is coming out the same giant money bubble.

      Something has to give and give soon. Nobody knows exactly what spooked the market on Black Tuesday, October 29, 1929.

  13. Tony Murray

    Bernanke is quoted as saying: greed caused the crisis and it is greed that will solve it…! People need to be encouraged to get out there and start spending their cash mindlessly… No tomorrow mentality required to fix all.

    There are Billions sitting on deposit in Irish banks… Sitting there doing ‘nothing’ (well apart from propping up distressed banks, reducing some of the intimidate anxieties).

    With all the money printing going on, if the deposit rates are any evidence, there seems little fear of future currency devaluation; this obstacle it would seem has been cleverly circumvented ‘somehow’.

    The how to of getting people to spend their deposited billions is possibly one part of the overall solution, would you agree?

    • Pat Flannery

      Tony Murray: if there are “Billions sitting on deposit in Irish banks… Sitting there doing ‘nothing’” why are they printing more?

      • cianireland

        They are printing more precisely because it is doing nothing. Institutional liquidity trap.

        I agree largely with cooldude above but if we take the view that the current version of QE to prop up bank and corporate balance sheets isn’t translating to main street and that the CBankers are pot committed to QE then I reckon they need to try a grass roots/bottom-up approach to getting the QE money into the economy.

        Why not income tax reduction via QE?

        Anyone?

        • Yes, I agree …..but then how ? A bad fiscal policy decision could make matters worse ?

          Tax needs to be de- politicised and in favour of the masses .

          • Pat Flannery

            cianireland & John ALLEN: I’m afraid I still don’t understand.

            If the CBs are printing money to give to the banks to speculate in the markets why are the banks hoarding it instead of turning it into speculative assets?

            Does this mean that the banks have already lost confidence in their own speculate assets game? If so, this thing is already over.

          • cianireland

            PAT… my interpretation is that the banks/corporations are keeping deposits on hand to protect themselves against the storm. They are hoping markets don’t tank again but all of the signs point to trouble in the economy.

            Should asset values tank and margin calls go out across the markets massive war chests will be needed to stop the system imploding which scares the big banks; they don’t want to have to ask for bailouts again and would rather defend themselves.

            The CB’s are racing to save the day but every time they print money it gets into the hands of the banks directly, who in turn use some of it to bid up the markets (in case things come good, in the hope that Joe Public will join the party and buy the inflated assets from them later and also to avoid a crisis causing sell-off)… and the rest to boost their own liquidity ratios and in case of a rainy day.

            Banks are not using the money to create loans for small and med size business which have been shown to be just about the only really effective way to create jobs… the banks perceive how messed up the economy is and don’t need more loans that will need writing down should a new storm come. Best to play safe and help themselves.

            SME’s need credit and create jobs. They find the opportunity in the market place and deploy capital broadly and effectively. Unlike house buying which creates assets that deliver a burst of activity now at the expense of future consumption (which then gets absorbed as mortgage repayments hurting future consumption)

            Govt intervention is almost never quick enough and rarely even works, so the best thing is to give capital to capitalists who are rewarded for their efforts with supernormal profit; SME’s. The economy benefits with jobs. Incidentally large corporations are generally Net job destroyers eg taking one full-time job and creating two part time jobs to avoid paying medic-aid etc, as is the case in USA now.

            The banks are NOT lending the money to main street,as intended, so it is sitting on balance sheets (as the banks and corps know things are not right)and in asset prices, largely the secondary equity and bond markets.

            The markets were presumed to make Americans feel rich which would lead them to spend in the real economy; this is NOT happening because people on the streets also know they are screwed.

            Indeed something of the order of 5 million full-time ”bread winner jobs” were lost since 2008 and only .5 million have been replaced(not certain of figures but they are bad).

            The jobs increases in the states are largely part-time and are cruelly driven by state food stamp programmes making them viable. Its untenable.

            The wedge of QE money creating the gap between the markets and real economy will need to be bridged. Top down QE has driven up the financial system leaving the real economy behind.

            In order to close the gap the US needs a new approach as people are increasingly aware that more of the same wont work.

            I believe that they will look for ways to get ground-up growth and consumption. If not directly by a wild stunt like QE subsidised services allowing them to reduce income tax, then by other measures that I can’t think of… they will be talking about what to do in Jackson Hole…

            Main street/grass roots consumption has to be boosted and private debt paid down so that corporate incomes can increase in order to justify the stock market levels and bridge the economy vs markets gap.

            If the gap is not closed there will be a leveraged sell-off in the markets rendering the entire risky QE project a waste of time and tearing up economic dogma.

            Incidentally; when/if things come good I fear that the corpos and banks will race to use (eg lend out) all of the QE money which will then enter the market and cause mayhem. Bank lending can deliver multiples of what is on the balance sheet via the fractional reserve system and only a change in regulations would prevent rampant expansion of money in the economy and delivering Inflation.

            … I believe that QE could work and that of all the models Keynesian support for a leveraged system is the only solution to avoid Armageddon caused by massive de-leveraging. I believe it is QE until it works OR a catastrophic market event should the system get caught in a post QE/taper delveraging cycle…

            (apologies for the rambling and lack of proof reading, I’m trying to also hold down my day job… )

          • 5Fingers

            Best nuts and bolts description I have seen in a while. WHat you have described is a system which is barely stable and can flip to explosive growth (and sollowing collapse) or merely a collapse on the basis of a rumour or some “event”.

          • Pat Flannery

            cianireland: That was a great effort. Thank you for taking the time. I hope you don’t get fired for it. But I’m still a little confused.

            Here’s what we know: most of the money being printed by the CBs is staying right on the commercial banks’ balance sheets as liquid assets; the problem therefore is how to get it out into the real economy. OK, I get that.

            Then you sum up by saying that you believe that QE is the only thing between us and Armageddon. I get that too. But QE is not working! It is based on a trickle-down theory that is just not happening.

            So, I’m not sure you explained how QE can be made effective in our market economy. Shouldn’t we be looking for something else? Or do we just wait it out and hope that the markets will correct themselves?

            I am also still confused about one other thing: what happened to all the securitized mortgage “assets” that were put on the banks’ balance sheets? Should they not be sufficient capital to keep the banks solvent?

            According to Adelaide their “sales” were never recorded on the banks’ balance sheets as “liabilities”, yet they were genuine sales because the banks were able to buy them back at discounts and show the profits as “income”. That has never been explained.

            It seems to me that there is much more than QE going on here. According to my logic above the banks’ balance sheets should be bulging with assets before they put a single cent of QE money on their balance sheets.

            I think the first job of professional economists like David is to fully understand what the hell is going on and then explain it to the rest of us.

            David should start by breaking down the current balance sheet of one of the pillar banks. Everything else is just sophistry.

          • cianireland

            Hi Pat,

            So in response to… ”But QE is not working! It is based on a trickle-down theory that is just not happening.”

            I agree that QE is not working however believe it is due to the fact that trickle down isn’t working ie I believe the CB’s will continue pursue QE as they are pot committed but hope that they attempt a new transmission mechanism to get the money into the hands of real people in the economy.

            Trickle down from bank-to-markets-to-investors-to-consumption is failing along the chain (reasons in previous comment).

            My instinct tells me that bottom-up makes sense but I don’t know how it can be done without totally discrediting economic dogma. In its simplest form the CB could use QE to pay for services and development etc. This could in theory reduce the income tax bill and stoke grass roots demand (and inflation which may now be more appealing to deflate away debt while quietly making Americans worse off; flat pay plus inflation is more complex for Joe Bloggs to appreciate than pay cuts/job losses). This is controversial as it sounds so obviously crazy compared to the smoke and mirrors complex sounding but barely different approach of pumping money into the markets.

            There is a lot of hope going on with the CB’s but they will need to adapt to the fact that they are not generating results the results they’d expected.

            It was Keynes who said ”… when the facts change I change my mind, what do you do sir?” Time for more Keynesianism in that case…

            Incidentally; I think it is very easy to banker/economist bash given the state of play. Banking is a critical utility at the very least and economics is the only real system/approach we have to (mis)managing the economy.

            I feel that we need to complain to make things better and not to jam a stick into the spokes of an economic system racing down hill with no brakes… unless you fancy destroying the system, as many do.

          • Pat Flannery

            cianireland: I like the way you put the need for “a new transmission mechanism to get the money into the hands of real people in the economy”.

            And I also agree that we must act within the system we’ve got. As Donald Rumsfeld said you go to war with the army you’ve got the one you wish you had.

            My thinking is that we exert our authority as citizen taxpayers. We own the AIB 100%. We should start by forming an online team and doing a full examination of all published documentation supporting each balance sheet item.

            That is where the Harry Potter bookkeeping has been going on.

          • Padz001

            Why not do QE by giving each citizen the exact same lump sum, with the proviso that it must be used to pay down any debt you have first. People with no debt will have money to spend into the economy and stimulate it. It will make a big difference to most people and no difference to the extremely wealthy. Nobody can say its not fair.

      • Tony Murray

        Hi Pat Flannery,
        The first reason I think of as to why Billions are likely sitting on deposit is that banks lend to each other on a on-going basis (they are more cautious nowadays however as to who they lend to and much prefer to collect what is owed them).

        Usually when lending agreements are reached between banks loan terms can vary by time: short and long-term lending. The amounts may be in millions if not billions…

        Banks with big payback deadlines looming need to hold enough reserves to hand to cover repayment to avoid default. Perhaps they may just require the interest only part of the agreement, if they can agree that the principle of the loan is to roll forward again (if this is possible to arrange. It may not be!) Perhaps there is a large population of cautious people in banking institutions…

        Another reason that perhaps it may be important to hold currency on hand is if the money borrowed is in a other currency, a deflation of the euro against these currencies would hick up the real value of the loan repayments. More trouble! A Euro deflation would not be positive event if large amounts are borrowed in Swiss, Sterling, Dollar etc…

        Inflation (and property devaluation) would undermine real value of assets: troubled loan books are largely in property’… More and More currency is needed to be held back on deposit to off-set asset value falls (expected falls) in bank loan book (property) values.

        Hope my understanding is correct, any clarifications or addition..

        • Pat Flannery

          Hi Tony, our postings crossed in the mail. Bet you haven’t heard that expression for a while.

          I refer you to my post on foot of cianireland’s excellent post above.

          Essentially I am asking for us, preferably under the professional guidance of David or some other economist, to study the current balance sheet of one of our two pillar banks.

          I know that’s what I need to do. I need to be able to ask lots of questions and get some answers. Somehow I feel that the answer lies hidden in broad view if we had the skills to ask the right questions.

          In other words I believe they are playing games with us. They are playing games with their balance sheets and we need to “out” them.

          • cooldude

            Pat this is an excellent blog to start to trawl through the mess of our so called “pillar banks”. I could think of a much better description for these chancers but lets keep it country. I will get some more stuff from Reggie Midleton later but this is an excellent and honest blog
            http://awakenlongford.wordpress.com/category/bankster-news/

          • cooldude

            Pat here is Reggie discussing Irish banks with Max Keiser. This was done in April but is even more relevant now that the bail in legislation has just passed it’s three month approval period and is now LAW in the EU. Also the collateral held by the banks is now even worse. This is a definite timebomb and is getting zero coverage in the lamestream media.
            http://www.youtube.com/watch?v=7gwCdgmTttU&list=TLBdO9SCfkRpw

          • Pat Flannery

            Thanks cooldude. I will watch that Max Keiser episode right now. I may have already seen it as I am a fan.

            Thanks also for the awakenlongford link. I am a fan of that too but probably don’t visit it often enough.

          • Pat Flannery

            cooldude: I watched Reggie Middleton on Keiser and no I had not seen it before. I was doing a lot of travelling in the States and Canada at that time in April.

            We should follow up on those misrepresentations he claims to have discovered. If validated they have the potential of voiding much of the collateralized assets on AIB’s balance sheet.

            As Irish taxpayers I think Reggie would share those documents with us so that we can study them. He seems like a very nice guy. After all the AIB is us. We own it.

          • cooldude

            Pat it seems you have to subscribe to Reggie’s blog to get the figures. I read his article somewhere and I will try to dig it up.

          • Pat Flannery

            cooldude: too bad. Maybe we could contact him direct and ask him as a favor.

            BTW I have set up a Facebook Page called “Bank Audit” where we can share information and perhaps form a “Friends” audit team.

            I will complete it later this evening.

  14. Sitting Ducks ( monies on deposits in banks ) are an easy prey to kill off by any Minister – we saw how the Cypriots suffered when chunks were demanded and disappeared – theirs were according to the gospel of the tax collectors at the steps of the synagogue ……the Irish version will have a sinister dark motives and will have blood on their hands and might start in nursing homes and new friendly heavenly advise to acquire a plot of land in heaven .

    • Yes the personal deposits will be “Bailed in” but the reserves supplied by the central banks to the commercial banks will be /are being used to purchase the worlds productive assets.

      It is a bankers’ takeover.

  15. Emmet Fox

    By the way, the reverence that you are describing here has been referred to in sociology as ‘symbolic power’. From symbolic power a controlling symbolic violence entails: the dominated see the world through the categories and instruments of knowledge of the dominant and subordinate themselves accordingly. In this case the bankers. This is the work of Sociologist Pierre Bourdieu for anyone interested.

    • Emmet Fox

      Sorry – as would be obvious I meant : in this case the categories and instruments of knowledge are being imposed and consecrated by the bankers

    • 5Fingers

      In the land of the blind, the fully sighted can be regarded as sick or deluded. When they catch you, you will find yourself blinded as well.

      We do need another language or perhaps another way of thinking that gets us outside of this box we are all stuck in. It is so bad we cannot even intuitively imagine another system. John Allen’s comments are very pertinent.

      Physics (possibly one of the most fundamental and rigorously tested science there is) ran into this very issue over 100 years ago. Quantum Mechanics was the way out. People in this area are still grappling with it because it is so totally foreign to intuitive interpretation – yet without its theories, we would have no semiconductor electronics or no internet. I believe economics/ financial management probably needs such a break through (speaking philosophically. HOWEVER this does not excuse the greed, wrong doing and bull$h1t sophistry currently at play – and for that reason, I am concerned that power must only come from individuals, something humanity has been very very poor at doing without messy consequences.

      • True but it is the only way to get a realistic change. From the bottom up. Grass roots it is called now.

        All that is needed is a boycott of the banking system. Everyone in the country pulls their money from the banking system and use another currency. Needs to be preplanned and then implemented overnight.

        A national strike against the banks could have effect. You do not need permission. Just put your money in the postal system. This does not change the money system but will make the banks really insolvent.

        Then talks with government begin on a new currency to be used. I’ll go no further today.:-)

        • Paul Divers

          Big banks in America are lobbying to screw the credit unions and you are advocating a boycott. The banks want it all and very soon you will have no choice. Better get a move on bro if you want a revolution.

          • cooldude

            It seems at least one country has grown a pair and told the IMF where to get off. On August 12 Hungary paid paid their last 2.2 bl euro to the IMF and told them to close their office in their country and get out of town. They plan to issue their own debt free money to benefit their people and not the bankers and are issuing legal proceedings against some politicians. So now we have two countries standing up to the banksters Hungary and Iceland. If any political party proposed this here I would support them but no signs yet.
            http://briankellysblog.blogspot.com.au/2013/08/hungary-sheds-bankers-shackles.html

          • Paul Divers

            They paid the IMF what they owed before ordering them to leave and the Hungarian Attorney General is bringing charges against three former Prime Ministers. I search the Times and Indo for ‘hungary’ and there is no reference to these events.

          • Paul Divers

            ‘You Are Being Deceived’ is a 54 page pdf available on Brian Kelly’s blog

            It opens …

            Without your knowledge, you were stolen from your parents at birth and automatically became the judicial property
            of a commercial company pretending to be your government. What you think of as “your” birth certificate is proof
            of this action. The biggest secret is that your government is a collection of commercial companies whose only real
            purpose is to take as much money from ordinary people as they can, using unlawful actions. Their sole intention
            is to keep you poor, in fear and doing whatever they tell you to do.

            http://briankellysblog.blogspot.com.au/2013/08/you-are-being-deceived.html

          • cooldude

            I agree very little coverage in the media. I suppose this is to be expected as most of the media is owned by the same crowd who run the banking ponzi. Here is another article which discusses this important move http://www.euronews.com/2013/07/15/hungary-wants-to-sever-imfconnections/

          • Paul Divers

            Another good link thanks. Five weeks old but not being tweeted. Shame.

            I read the pdf linked to above and it felt like a cram on old material I’ve covered in the past. David Icke wrote about the subject matter in the late 90s
            and I thought he was a lunatic

            Reading that chapter tonight in the context of recent events made something click. I didn’t realise just how sick this world is

            It explains why the French are in Mali and why the Brits are going to war again. It explains the psochology of private central bankers and the thieves operating in the vatican controlled square mile of London

            There is currently a huge problem in the Pacific Ocean where 64 million square miles of consumer waste have accumulated while at the same time the real truth is emerging about Fukushima

            We live in a consumer economy and the only way to make it grow is to consume more but the evidence proves this is disatrous and we should be consuming less

            Because we will be consuming less in future (and mother nature will make sure we are forced to) then we have no need for growth. This is the end game for all of us

            If we imagine that huge floating pile of waste and the nightmare of Fukushima and contrast it will the thought of Elvis singing ‘Blue Hawaii’ you don’t know whether to laugh or cry

            Good on the Hungarians. I hope the Greeks follow them.

            All roads lead to London.

          • @PaulDivers. “You are being deceived”. Yes, we are all ‘corporate entities’ and the ‘legal fiction’ of our ‘real names’ rests upon not only the honour and tradition of our family and tribe but also on the expedient necessity of controlling and patrolling Bloodline Privilege.

            Just like accents : the birth-family-of-origin naming framework provide an immediate nexus of status and privilege. (Brummie as the the ultimate example, although I’ve heard vile slurs about Kerry-speak)

            This is amplified by the Passport Control document which uses the Birth Certificate to allocate Nation-State Identity Politics to Bloodline Naming Conventions. I look forward to the Irish Passport cover being updated with an IMF logo to more accurately reflect the seizure and occupation of The First Irish Republic by The Troika. ‘Ireland’ is a legal fiction and also now a redundant explanatory framework given the current Occupation.

            Now, more coffee and back into the Jargon Factory to conjure up some new linguistic insurrection.

            regards.

  16. Dionysius

    There is a bad ending to this. WW1 and WW2 were the resets.

  17. Let’s take a step forward . Bankers et al are a bright bunch so they know the results of their actions.

    So policy has to be planned and orchestrated. Results predetermined. It is the only conclusion that makes any sense.

    The objective is to be the power broker, to control the world, be the head honcho of an empire. Syphoning off the wealth of the merchant class, middle class and working folks in the same direction. To the power broker banking families.

    The debt based Ponzi scheme that is our money system is designed to indebt the world and pauperized the people. It is successful. Next the high priests of finance persuade us that it is for our own good to charge all this debt to the nation state and the public in general. It is called a national debt. Then we self flagellate with austerity to divest ourselves of all our assets in the name of paying down the debt but never paying it off. Plus paying for the banks losses directly; socializing the losses.

    The Austrian school is not to be included in the high priests of economics as they have consistently pointed out that:

    A debt (credit) based boom inevitable results in an equal sized bust.
    It always has, no exceptions , and always will.

    QU will delay the inevitable but exacerbate the problem. The longer the wait the bigger the bust. Nobody knows the black swan event that will start the collapse but it will happen. It is preordained.

    That is the Dark Art of the Bankers

    They must be removed from power and destroyed for humanity and civilization to survive.

    In the meantime it is yet another lovely day and I prepare to move to a different farm.

  18. michaelcoughlan

    Hi,

    I’d like to respond in the same bible babble format as the article. The mark of the beast ’666′ or more accurately 616 was simply the name of the emperour Nero reference numerically in an ancient form of writing called Nero ceaser I think.

    What it meant in reality was that when you centralise control in the hands of one person or tightly controlled group of people it causes the unleashing of the most unimaginable evil to be visited upon the earth. Now we have a situation where the whole world is watching benny b and what he does next all controlled by a thightly controlled group of people in the Fed.

    It’s no accident that WW1 happened only 1 year AFTER the Fed was created dont you think?

  19. 5Fingers

    Another variant – Bankers etc are not particularly bright or clever and neither are a lot of their advising economists. Their power is symbolic and depends on ignorance and intimidation. People are impressed by money.

    There is nothing controlled or coordinated in today’s crisis. There are no winners. No one gets out without causing grave impact to their own circumstances. The root cause was due to a total lack of understanding of consequences of applying 19th century business methods with late 20th century technology. The Keynesian response to fix the problem never recognised the real problem of worker displacement followed by imbalances in world manufacturing versus services versus an age demographic that refuses to self resolve.

    The comfortable majority have always managed to run away from problems created by running away…emigrate, professionalise, outsource the problem, vote for someone who will tidy it away. This time unfortunately, the barbarians are at the gate.

    I see Peats Electronics have finally closed their doors. Yet another example of a business model obliterated by the new way of doing business online.

    • http://webofdebt.wordpress.com/

      or http://webofdebt.wordpress.com/2013/08/26/the-leveraged-buyout-of-america/

      Good read here to explain the depth of the banker involvement in the overall economy. QE funds the banker expansion while the QE is added to the national debt. We the people supply the funds to the bankers so they can buy up the world. Nice business if you can get it.

      • cooldude

        I agree Tony these bankers and the families behind them are extremely clever and totally ruthless in their quest for power. We now have a global system of central banks which control the money of every country and control the politicians also. This is a totally feudal system with no accountability to anyone. All these central banks are private institutions whose shareholders are the commercial banks and the banking families behind them. These shareholders are paid a dividend every year for the right to print our money. Definitely nice work if you can get it. Now they are preparing to rob anyone who didn’t get caught in their asset bubbles by initiating their “bail in” legislation which was recently enacted in the EU. They didn’t create this legislation for the craic and they are deadly serious about using it in the next inevitable bank crisis. Their motto is the house always wins and they don’t care how they do it. Here is an interesting article on how they operate http://theeconomiccollapseblog.com/archives/who-runs-the-world-solid-proof-that-a-core-group-of-wealthy-elitists-is-pulling-the-strings

    • Sorry 5Fingers,
      I totally disagree with your opinion as stated in the first two paragraphs. You totally underestimate the power of the forces arraigned against you AND ALSO THE SUCCESS THEY HAVE IN ACHIEVING THEIR AIMS.
      You may be in danger of Sainthood also.!!{:-)

      • 5Fingers

        I do not need to read so called “evidence” to confirm a bias you have.. I have witnessed it with my own eyes and worked in this across 3 continents for nearly 30 yes. Banks are just an ant on the ass of this thing.

        All banks are doing is trying to survive the fallout of their over speculating in a market that plays by new rules.

        The banks did not invent the tech or the processes that made these employment destruction methods possible. They think they are clever with their quants and their high speed trading and special financial vehicles and their quaint outdated notions of command and control and value that you happen to share.

        Banks will be troublesome no doubt. But this will be minor in comparison with the other structural changes that are embedding. Politicians are even becoming irrelevant.

        Take heart, as the state tries to increasingly regulate with these new toys you may see this statist apparatus as the first to fail…for the best.

        • You look at the superficial structures of commercial banking without any consideration of those who instigated and control the central banking system and its structure.

          The current system is universal on all continents and nearly all countries. You are correct that the politicians are irrelevant except as they perform the masters (bankers) bidding.

          What banker value is it I happen to share? Was this a snide remark. You are too free with one of those pointy fingers. No need to be derogatory.

          “I do not need to read so called “evidence” to confirm a bias you have.. I have witnessed it with my own eyes and worked in this across 3 continents for nearly 30 yes.”

          What have you witnessed on 3 continents? My bias? The evidence of my bias? Please elucidate.

          “as the state tries to increasingly regulate with these new toys you may see this statist apparatus as the first to fail…”

          Do you mean the tools used (what tools) by the state will fail, or the state itself will fail. If so what do you foresee in the future and is it a stateless world community?

          • 5Fingers

            Apologies for the snide remarks. Not intentional. Banks and indeed all professional and admin bureaucracies are in for major overhaul whether they like it or not. I see many who get hung up on banks (in all forms) still giving credence to their organizational forms which really no longer are viable. These guys are being side stepped by forces they cannot control and the financial turmoil is due to their ineptness are trying to retain a status quo.

            I am asking that we need to move beyond banks and look at what is really happening. Perhaps the best way of describing it is as unregulated swarming which has not recognition of laws or past norms. Of their nature, swarms are headless. People ( I suspect like yourself who are in the majority) find this very disturbing and seek the comfort in a devil called banks or whatever – and I see this as a complete and utter waste of time.

          • Apology accepted, thank you.

            Headless swarms have been about me all my life. Regulated and unregulated.

            I am not disturbed by the changes but observe what is happening and evaluate.
            We have two different perspectives and neither may be incorrect.

            I see the banker families and organizations moving to control the majority of the worlds assets using the wealth stripped from the 99.99% to do so.

            To use your terminology–This is well engineered and part of the master plan.
            An accelerated phase of this is the seizure of savings from the regular folks via bailin (Laws are passed in most G-20 countries) http://www.globalresearch.ca/g20-governments-all-agreed-to-cyprus-style-theft-of-bank-deposits-in-2010/5335567 and other means such as QE to infinity and the Bank bailouts Ireland is very familiar with. Followed by oppression via “austerity”.

            Bankers are the headless swarm it would appear but they are directed by the queen bees who are the bankster families.

            We live in organized chaos not random.

            I think it was the comic strip POGO proclaimed,”I have seen the enemy and it is us”.
            Lack of understanding by the 99% allows this all to continue. We are in fact, “our own worst enemy”.

          • 5Fingers

            That fella Andrew Mooney below…describes the problem perfectly.

  20. bonbon

    Interesting that DMcW points at some kind of “religion”, Jeremy Warner over at DT does too in a way – “The Euro as a religion”. And here in the blog Doing a Deal with the Devil brought out some of the pagan religion that underlies all of this.

    But why not take a much more honest look at the religion. Bernard Mandeville’s Hell Fire Clubs, of infamy all over Ireland, is a good place to start. This very same satanic priest is praised and fanatically followed today. London School of Economics acolyte von Hayek of Austrian School notoriety In a lecture he delivered at the British Academy on March 23, 1966, von Hayek lauded Mandeville as a “master mind,” as the inventor of modern psychology, and as the true intellectual forbearer of David Hume, Adam Smith, Jeremy Bentham, Carl Savigny and Charles Darwin.

    Von Hayek argued in his Mandeville lecture that Mandeville’s poem, “The Fable of the Bees,” was perhaps the greatest philosophical treatise ever composed. He credited Mandeville with inspiring Adam Smith’s argument for the unbridled free market.

    One may wonder at this, but most now do admit some kind of a “religion” is at work, certainly not economics nor sense, nor even politics.

    Now Bernanke’s outburst posted above about greed being the cause and reolution of the crisis is pure satanic Mandeville, straight from the Fable of the Bees, otherwise known as Private Vice, Public Virtue.

    DMcW, you are right, a satanic pagan religion, not new at all, has gripped those creating total havoc.

  21. bonbon

    For those more inclined to take a good look at economics, The Pagan Worship of Isaac Newton should make one pause. Not only is economics run by an insane priesthood, but it pervades physics as well. And after all various economics models hard back to physics, so it is no surprise what results obtain!

    A good example of the sheer nuttiness posing as normal is the Hamburg Appell signed by over 240 Profs of economics in 2005 (in German). This radicalism can only be understood as a religion. And it looks like it is to be dogma for the EU!

    Anyway Hayek et al found a way to elevate pure Dionysiac irrationalism, to Uni curricula, spouted from Armani-suits as revelation, from a Cult. Never mind attempting a defense of Keynes who adored “animal Spirits”.

  22. Oldest Language on The Isles of Britain & Ireland

    Today our President received a compendium of the above from me showinga substrate language used before the arrival of the Celts and that was subsumed as gaelic .Many words are still used today and all of this is explained in the report .

    This language was used by a Primitive man from Africa .What is interesting is that they had two words enacted in our Finance Acts namely Taxation and Cáin and although the Minister treats them the same Primitive man made a distinction . They interpreted Taxation as a fatal however Cáin allowed the taxpayer and bank borrower to appoint their own appeals commissioner / ombudsman . The Minister acts instead in a canabalistic way to his fellow citizens ile Primitive allowed fair play with his prey .

  23. Paul Divers

    ‘Summer Reading’ is the star phrase today Davido. Two little words which combined have the power to propel fertile imaginations off to a thousand scenarios in the tens of decades since sex was officially invented. It almost has the power of jazz and the light drug scene, prescribed or otherwise. You are a mystic. It’s just that you don’t know it yet

    The article made me think of mid 60s Baroque Pop because the images in the article are baroque in their surreality. I remember summer reading and xmas reading when the hols came. A good (or bad, I don’t really care) book by the river side sitting in a deck chair in shirt sleeves enjoying a pint of proper warm strong ale or sitting under the stairs as a kid lost in a mystery story is the simplest of pleasures

    1966 was the year of Alfie and the mature woman and the Left Banke. It was also the year in which Denis Law played golf while England were winning the world cup but most importantly it was the year in which our all time favourite economist was born.

    Have a good day God Bells.

    Walk Away Renee
    http://www.youtube.com/watch?v=6uqBTzfcIk4

  24. Doing a Deal with the Devil
    Is worth the reading again
    Welcome back Bonbon

  25. Adelaide

    Alternative Monetary Model…
    A couple of years ago I happily got involved with a small group of like-minded activists who wished to set up a Mutual Credit system based on E.C Riegels’ Valun that would function on local Market Days. The will and intention was ample, but the obstacle that proved impossible to overcome was the myths surrounding the nature of money, people are too ingrained with misconceptions about every aspect of money that attempting even a modest localised alternative was a leap too far. Without informed participants no system can be improved upon no matter how rotten and destructive that system is, and our present Ponzi fraudulent monetary model is one of the most dastardly too. Its implosion will be a complete surprise to the vast majority of its ill-informed participants. Sad.

  26. Pat Flannery

    Pardon me if this has already come up here but for those who missed it I would highly recommend you purchase the Kindle edition of “The Third Industrial Revolution” by Jeremy Rifkin http://amzn.to/1dknVU7

  27. Paul Divers

    Property porn continues unabated and there has been a MASSIVE increase in Dublin house prices. Not just modest increases but MASSIVE increases. Apparently some areas in Dublin are so desirable they are HOT!

    This is beginning to sound as hot as Uma Thurman. Let me catch my breath. It’s getting steamy in here.

    New figures obtained by high priests and priestesses at the Sindo (the same figures available to the Irish Times, Gene Kerrigan and Joe Soap ) which Mr Kerrigan says are utterly useless are being used as evidence that things are indeed getting steamy

    Not only is there demand but the demand is ‘pent up’ for the chance to buy into a dream in a ‘prized area’ presumably where they will take pleasure in ‘Golden Handcuffs’

    Prices have ‘ramped up’ so much that they come to the conclusion that the official figures are flacid. No news there

    In North Dublin there is a ‘HOT’ triangle! where things are getting frenetic in the chase for prizes of lust.

    I wonder do they mean a love triangle?

    Apparently the fever is spreading to neighbouring counties like a rash and soon we will all be infected.

    All of the above comes from a single article and could have been checked out in a couple of hours. Lazy simpletons.

    http://www.independent.ie/business/irish/huge-dublin-property-surge-sparks-frenetic-bids-29525685.html

    • Bamboo

      This is a cut and paste summary of the article:

      Huge Dublin property surge
      sparks frenetic bids
      reflecting an acute shortage of houses
      A shortage of homes
      asking prices beaten by 20pc
      is driving prices up
      there is a shortage
      acute shortage of family homes
      people are pouncing straight away and making good bids
      people are not being deterred
      a boom in prices
      ramped up prices
      There is huge demand
      a far higher increase
      frenetic bidding for houses
      ‘under offer’ in excess
      32 people interested
      eight per cent higher
      eight per cent increase
      highly prized
      are in high demand
      experienced considerable price increases
      15 to 20 per cent up in the niche market
      with demand highest
      big shortage
      is surging ahead
      huge demand
      people turned up to view the property
      people interested
      in excess of the guide price
      residential property prices in Dublin grew by 3.3
      eight per cent higher when compared
      surge in property sales
      spread across the city
      some 30 per cent above the asking price

      Cheers

  28. The best article David has written for years, in my [not so humble] opinion, and a scorching array of equally trenchant comments below the line. I’ve been struggling with the Meta-Narrative of the Cabals of Economism since I first started commenting on this blog many, many years ago. Here’s a recap and an update:

    I used a motif of @20:12, 20/12, 2012 linked to “The Mayan Amockalypse” to frame my musings that Economics was just another priestly cult. The ‘anthropological/archealogical’ excavations of ‘economics’ by Prof Micheal Hudson saved me a lot of time as he outlined the inevitability of periodic collapse as the exponential compound debt on Interest clashed with the slow and long term waves of business cycles and commodity indexes. From Mesopotamia to The Maya: nothing new under the sun, and periodic “Jubilees” or Collapse. There is no way of avoiding the collapse which began in 2007/8 and which has been put on ‘pause’ by the final throw of the Money Printing sorcerers and the fantasy of Shale Energy Independence (which is just another ponzi-asset-bubble like property). Google ‘shale bubble’ for the debunking framework.

    Here’s a lengthy quote from Eric Janszen, my favourite wonk ‘economist’, although he’s a philosopher in disguise like any credible ‘economist’:

    “Up, up and away or photoshopped recovery?…”It is my guiding confession that I believe the greatest error in economics is in seeing the economy as a stable, immutable structure.”
    - John Kenneth Galbraith – A Journey Through Economic Time (1994)

    • Fiscal stiffs
    • Best laid plans
    • No gold but oil

    How did the doomers get 2012 so wrong? They spied the Mayan calendar and saw end-times December 21. Less credulous eyes saw the 13th Mayan Baktun, each Baktun lasting 144,000 days, ending on December 21. To the instant that end was followed by the 14th Baktun. This, the new and current Baktun that we are in, will end in another 394.3 years. Then another Baktun will start. On and on forever, as was the Mayan’s philosophy of time…Lesser doomsday scenarios also failed to materialize for the same reason: careless analysis…….”

    http://bit.ly/15s45QQ

    The economic priesthood who ran the Mayan economy ‘doubled-down’ each time the crops failed, insisting that a new war or festival of sacrifice would appease the angry gods and bring rain. They had no understanding of what was really going on (soil destruction / collapsing water tables) so they just dressed up in feathers and plumes and ‘winged it’. Just like the Central Bankers and their fluffers ‘elected democratic politicians’.

    The same dynamic recurrs throughout historical time as the dominant hegemonic class in Greece, Rome, Europa or the Americas enshrines their worldview in a babble of prayers, rituals, spells, incantations and P.R. Of course, The Holy See/Vatican propaganda/bankster Mafioso is an extraordinary example of this nefarious behaviour over the last 2000 years. Here’s an hilarious quote from a ‘historian’:

    “Mr Williams says scandalous Pope Alexander VI Borgia, famed for his financial greed and many mistresses, was persecuted for his “virtuous” and fair political beliefs….He says the corrupt and secular pontiff, who led the Catholic Church for 11 years from 1492, was on a par with “whistleblowers, like Marta Andreasen, who tried to stop corruption in the EU”.

    The Catholic Church child abuse scandal was “disproportionately recorded”, he claims, concluding that it coincided “with the sexual revolution and liberation of the Sixties and Seventies” and is “a liberal problem, not a Catholic one”.”

    http://www.standard.co.uk/news/politics/world-history-according-to-ukip-man-and-its-ashamedly-unpc-8778174.html

    Now, we can all laugh, but if UKIP became hegemonic, these views would be ‘normalised’ rather than ridiculed. The accepted orthodoxies of culture, politics and ‘economics’ always reflect the narrative of the victors. Power is Persuasion. Alan Greenspan/Ben Bernanke’s bizarre statements would be dismissed as those of cranks where he not in a position of Power and Privilege. The epochal decisions of 2008 to re-empower the Banking Cabal rather than allow the creative destruction of periodic Capital Collapse has allowed the space and time to re-formulate the theological ideology and begin anew with proselytising:

    “there are those who practice discipline that you call austerity and perhaps would even liken to celibacy” Pat Flannery (above)

    As we all now know, not all priests are celibate, and not all economists stay ‘on message’ or behave congruent to their official policies. The Bank of England switched its’ pension fund to inflation-proof Government securities shortly before the crisis erupted: how fortunate!.

    We are in exactly the same position as the ancient Mayans or the Romans when they destroyed the asset base of Libya’s wheat agriculture. We have exactly the same ‘bread and circus’ distractions whether resurgent property porn or competitive male-bonding team sports. And nothing can prevent Collapse, even though with Graphene, 3D Printing, Robotics in manufacturing and Biotechnology, that collapse will look very different to Doomer expectations. In fact, the next collapse is being meticulously engineered and planned to enshrine and perpetuate Power and Privilege: India shows how those in the know get the hell out before it all comes crashing down.

    I’ve given up on ‘economics’ as it lacks the explanatory power to map consensual reality and its’ bifurcations. I’m grateful to David for writing in clear language, allowing a neophyte like me to get my grappling hooks on the ideological rockface. But I’m ready to move on. I’ve been studying Intersectionality as a critical thinking tool. It emerged from the cutting edge of Feminist/LGBTIQ thought rebellion. I find it extremely revealing to apply these methodologies to the orthodoxies of The Troika and The Federal Reserve/Bank of England incubus/succubus. Of course, Men In Suits either ignore or ridicule such tools, but they won’t be laughing when we “Make Extreme Wealth History”! Bill Gates and Warren Buffet are ‘on board’, this isn’t some tired ‘socialist’ plot. The endless ridicule of Media Studies shows just how revolutionary these tools have proven to be:

    http://lgbtq.unc.edu/sites/lgbtq.unc.edu/files/documents/intersectionality_en.pdf

    As Herd Culture succumbs to another blast of the Consumerist bellows, I sit back and observe, offering no other advice to those re-intoxicated than “caveat emptor”. Designer apartment or designer handbag: both will seem ridiculous trinkets and baubles once the crisis re-ignites.

    My son leaves to begin a philosopy degree in a few weeks. I told him: philosophers are the “Marines Of The Mind”. If you learn how to think, you can debunk any ‘economist’ in 5 minutes. I’ve learned to think about “Economics” having rigorously ignored it for decades, thanks partly due to this site. An accountant friend queried why I was “allowing my son to go into debt to do a pointless degree”. I retorted “He’s not doing Business Studies or Economics, what do you mean?” Quite simply, the poor chap didn’t even have a framework to digest this. He really ,really believes that if young people frame their lives in relation to the discredited nostrums of Boomer Economics, are supplicant, and become slave-interns, that they will also be able to afford tickets to see Springsteen and The Rolling Stones. My son would rather eat his testicles than watch either act: and that reassures me that I’ve done quite well as a Dad.

    No more comments from me. Hope to chat to a few of you at Kilkenomics if I can make it, but for now, I’ll return to lurking, smirking and LOL!-ing at articles and equally stimulating comments. Thanks folks!

    The euro zone didn’t disintegrate, Japan’s bond marked didn’t blow up, China’s economy didn’t melt down, oil prices didn’t crash, and the U.S. economy did not collapse into a second Great Recession.

    • bonbon

      To anyone attempting philosophy at a typical Uni, it is vital to read Heinrich Heine’s “Religion and Philosophy” either in English or German. There one finds the most revered Emmanuel Kant totally debunked, and what is worse, as the door opener of the horrors 100 years later.

      Kant, Heidegger, Hegel et al are standard fare and it takes a poet to point this out. As Percy Shelley wrote, poets are the true legislators, in his Defense of Poetry.

      To see why finance and economics became a pagan religion, one needs to look at Heine and Shelley. But the best modern approach is The Pagan Worship of Isaac Newton.

      It is time for economics as Science!

    • ps: David’s analysis of contemporary power relations on the island of Ireland is the beginning of an Intersectional framework of understanding..

      Using the ‘insiders/outsiders’ motif allows us to see that not all people in Ireland experience the occupation of The Troika in the same way, and that the narratives of the past and projected future are equally divergent depending on class, status, gender, race, sexuality and so on and so forth.

      In particular, the progaganda machines of FF/FG/L/SF regulalry confuse and conflate memes from the foundational texts of the First Irish Repulic as the basis for action in an occupied State which has surrendered Sovereignty. This is delusional. Whilst all may be wearing a ‘green jersey’, there are many competing advertising slogans and sponsors on them Some are ‘Republican Nostalgics’, some are ‘Neoliberal Ireland unt Europe Inc’ whilst others are ‘Gaelic Restorationists’, ‘Disaporan Returnees’,'Enforced “Voluntary Lifestyle Choice” Emmigrants’, ‘Gender Insurrectinists [Abortion, etc].

      It’s no longer useful to coalesce all these competing and conflictual narratives under a simplistic rubric of ‘Ireland’, ‘the Irish’ or ‘us’ and ‘them’. The First Irish Republic of 1916-2016 has already psychically collapsed under the tyranny of, first The Holy See then, the Neu-Europa. It’s time to accomodate those facts and move on….regards.

  29. Erratum: “The euro zone didn’t disintegrate, Japan’s bond marked didn’t blow up, China’s economy didn’t melt down, oil prices didn’t crash, and the U.S. economy did not collapse into a second Great Recession.”

    That’s another snippet from the Janszen article.

  30. Wills

    Good read.

    A coupla points David.

    - Greg Palast has come into a document it appears to be proof that the banking elites of USA engineered all of this back in 1999. See the link http://www.gregpalast.com/larry-summers-and-the-secret-end-game-memo/

    - In regards to the solutions the banking power elites are rolling out apropos the article; if one makes an analysis of the situation right now and bear in mind it is engineered from the start the problems are the result of a master plan – then one can say this:

    : the bankers know they are tooling around with funny money in a giant con-game of bluff.

    : the bankers know the currency at the center of their con-game must have something on which for it to HOLD.

    : the bankers know this something is OIL.

    : thus it would appear that FRACKING is the ace up their sleeve in holding the con-game with the funny money together.

  31. bonbon

    Above we can see that somehow the religion approach gets to the point. The entire “free market” mantra of various loud organs, is a chant at something close to Mandeville’s Hell Fire Clubs. The utterly insane belief that economic well-being springs forth from greed, vice, laissez-faire usury, and monetary circulation should be evidence for anyone with any reason left, of a cult. Most look around and see collapse, joblessness, massive money pumping, ruin and hark to the chanting. Out of this madness will never spring forth a future.

    Much better to realize economic recovery can only come from the future, not from monophonic chants of the ruined past or present (repeated here often). No animal can ever conceive of this. No “picking up the pieces” can work, nor animal spirits, nor black arts of bankers. Choose a future!

  32. cianireland

    I’m surprised by the descent into conspiracy theory, I really thought this was a forum for intelligent discussion…

    David Icke is a moron; but then he is merely a former professional footballer and school drop out with no formal academic or research background whatsoever. How anyone can take him seriously startles me.

    David Icke fans; I am selling a range of tin-foil hats. My super deluxe tin-foil hat range stops banker family sponsored satellites from being able to read your thoughts and prevents government sponsored radio waves from being able to implant nationalist dogma in your brains. Private message me for details (group rates apply)

    • David Icke is certainly challenging to consensual reality, but I’m not sure that the disecredited incantations of Neo-Liberal sooth-saying Economists deserve more respect.

      When the Federal Reserve/BoE assemble to ‘read the tea-leaves’, normally sensible people defer to hierarchy, suspend critical thinking and allow the masturbatory wonk-fest to blind them to the fact that they’re winging it and have no real idea what’s happened or what lies ahead.

      Language is Power and Economists know this, that is why they descend into ever more ridiculous jargon to cloak their incompetence. The recent basic errors of innumerate ‘economists’ are so egregious that only a cult member would give further credence to any written or spoken communication from them:

      http://www.businessweek.com/articles/2013-04-18/faq-reinhart-rogoff-and-the-excel-error-that-changed-history

      Economics is a Cult. It always has been since it began in Mesopotamia with the emergence of Totalitarian Agriculture and the end of Matriarch/Patriarch balance in Paleolithic Culture. The most useful thing to do with a spreadsheet is rip it up. The Excel profitability model of a business cannot be of any use if it is based on foundational category errors. Ditto the macro-economy of Neo-Liberal Pseudo-Capitalism.

      A new Economics is required, one that jettisons most of the nonsense which has led to this impasse.

      Finally, the use of the word ‘moron’ is an exercise in cogno-normative oppression. Many who are cognitively challenge can offer great insights into our world, even David Icke. One does not have to “throw the baby out with the bathwater”. Just the lizards!

  33. cianireland

    I didn’t mention David Ickes belief in Green Lizards running the world as I thought it would make it too easy and reduce sales of my foil hats.

    Economics is not a cult or voodoo. It may be imprecise at times but it is far from wonk science. Yes it can be abused or misused but it is also the best tool we have for the job, indeed the only tool.

    It will always be impossible to precisely forecast economic events given the truly vast number of factors involved. Indeed it is akin to weather forecasting in that it is a good guide but will never ever be 100% perfect.

    We’ve all heard whingeing about the quality of weather forecasting from people who simply don’t appreciate the complexity of the undertaking. Very very smart people applying complex modelling of vast amounts of data still get it weather forecasting wrong. How anyone can expect economics to be any better is ridiculous! That includes advocates who suggest that they know exactly what is going on, which is not possible. At best we can have a good guess. But that is better than nothing and certainly better than sitting around talking about conspiracy theory and factors that are so far from what we can affect that they are merely a side-show.

    • Let’s not confuse the explanatory power of mathematics with the covert political sophistires of Statistics.

      “It’s almost worth the Great Depression to learn how little our big men know.”
      - Will Rogers

      Weather forecasting is independent of human behaviour (well, there’s the climate chaos thing coming up, but let’s put that to the side for now).

      Economics is used by political and social agents as a tool of power and control, whether Stalin or Alan Greenspan. In that respect, it cannot fail to be an expression of ‘cult thinking’.

      Econometric modelling is not the only tool with which to interrogate the ‘economy’. Ethics and philosophy are more meaningful. The crisis we live through would not have happened if those hiding behind Suits had kept to a basic moral compass of honesty and Contract Law. The failure to reign them in on the dubious pretext of ‘light regulation’ has now created a catastrophe far in excess of the costs of appropriate legal and ethical oversight. This is demonstrably so in Ireland as the recent tapes of Drummer & Co reveal.

      Still, at least Elizabeth Windsor finally got a reply:

      “Queen finally finds out why no one saw the financial crisis coming. Her Majesty gets the answer to her question – four years after she asked it – on a tour of the Bank of England”

      http://www.theguardian.com/uk/2012/dec/13/queen-financial-crisis-question

      Why not send her a tin-foil hat? It will help her drown out Icke and others who have sussed the reptilian agenda of Queen Elizardbeast, ahem!

      http://encyclopedia.thefreedictionary.com/Elizardbeast

  34. cianireland

    You clearly have no idea whatsoever about economics or its content.

    Any science/philosophy can be used or abused. Feel free to knock the application but to knock economics in general is absurd. Basic concepts such as supply and demand allow people to understand markets; it gets more complex from there.

    Anyway, that’s enough. Enjoy your conspiracy theories.

    • I think you’ll find that I have a profound understanding of economics and its’ covert ideological content hidden beneath the wonk spells and incantations.

      I don’t need to know every tiresome detail of my car, computer or washing machine to assess it’s utility or validity: the same applies to Economics. If I wanted to waste prescious hours of my life, I’d hang out with the serious, beardy types on IrishEconomy.ie. Actually, I prefer Constantin when I need a good blast of data.

      Supply and demands and ‘markets’ do not exist without an explicit prior political, cultural and linguistic framework. That is why the anthropological-archaeological economics of Prof Michael Hudson is so liberating and transformative in linking the origin of money to the birth of language and symbolic representation in Mesopotamia and before.

      You might enjoy this book to broaden your horizons from your cult economic blinkers:

      http://www.julianjaynes.org/bicameralmind.php

      OR: you can remain under the comfort blanket of your cult and enjoy your economic ‘conspiracy theories’ posing as science.

      I’ve enjoyed chatting with you.
      regards.

    • bonbon

      Care or dare to comment on DMcW’s “black arts of the bankers”?

      One cannot hide under a tinfoil hat all the time.

      How would you handle a direct challenge to those sacred “complex” economics deeply held beliefs? An attempt to claim no challenge is possible, well sounds just a bit old-testament, would’nt you think?

  35. An interesting article from “Automatic Earth”‘s Raul Ilargi Meijer which echoes David’s analysis of the priest/cult shamanist sham-Economist class.

    ” Post-crisis policies around the globe are directed at saving the financial system, not the people the crisis has pushed into poverty. Since these people are not seen as crucial to the survival of the core, and the system as a whole, they are – almost ritually – sacrificed on the system’s economic altar.”

    “In a reason-driven society one would expect a discussion on the viability and the intrinsic value of the system itself, but our global economic system, as I’ve said many times before, exhibits far more symptoms of a religion than a rational scheme. Our “analysis” of the system and the crises it goes through takes place in the part of our brain that deals with belief rather than rational thought.”

    “recessions don’t of course happen in spreadsheets and datasets, they happen to real people in real streets…
    The core part of their nations may be suffering a bit less, but that’s only because the peripheries suffer more.”

    http://theautomaticearth.com/Finance/the-global-economy-suffers-from-hypothermia.html

    Below the line are some amusing comments and a link to Max Keiser and Stacey Herbert thoroughly debunking the Cult Of Brain Damaged Economists and the next Kool-Aid punch-bowl to be assembled by Da Feds.

    “Keiser Report: KoolAid Bubble Mentality”

    Trigger alert: Max is very ‘animated’ during this segment and may upset some Recovering Economists with his abrasive mockery. Like David McWilliams, Max seems to think that humour and ridicule are a more effective explanatory framework for Economics than dour Powerpoint presentations in dreary hotel conference rooms.

    I’m sure property booms/bust was a feature of terminal social decay amongst urban Mesopotamians, the Mayans, the Greeks and the Roman Empire. Never mind the Catholic Magisterium when it was forced to accept that Reality would not permit the Sun to revolve around the world, no matter how many human sacrifices were offered in Inquisition. The same dynamic is in place now as the final nonsenses of 3 decades of Neoliberal Debt/Credit Creation build to a crescendo, crash, then we enter Collapse.

    The suited sorcerers at NAMA/Canary Dwarf once again are attempting to mimic those in Canary Wharf as the hysteria of Dublin ‘asking prices’ is used to try and generate faux-Animal Spirits for the Proporty-Porn Propaganda Machine. Anyone buying a house: Caveat Emptor. And Adam Posen’s article is one to be mandated in every estate agents/realtors fantasy zone.

    “The cult of home ownership is dangerous and damaging” By Adam Posen.

    http://www.ft.com/cms/s/0/00bf5968-f518-11e2-b4f8-00144feabdc0.html#axzz2dGvDUjky

    • 5Fingers

      Is there any way of breaking out of mantra of “saving the financial system” without a catastrophic collapse? So so much of our cultural modes of organisation, contract formation, societal ranking and education is stated in financial terminology that I can see no way out. Quid pro quo = Justice. To earn to eat, you must do as customer tells you. The bigger the customer, the more you comply.

      The philosophical dissertation is all very well. But in the end, if each and every one of us is not prepared to lay ourselves on the line unequivocally, we may just morph the narrative until it too collapses under the weight of messy compromise.

      • bonbon

        Ah, that is exactly the question we Glass-Steagall organizers get from now severely shaken true believers in their wallets.

        The answer is very clear. Glass-Steagall is only the door opener, and the Hamiltonian Credit System is there prepared for immediate implementation. Let’s take the USA, where this is acutely timely :
        Credit System
        Have a look at the videos there, this is the way to handle the doomed financial system without it destroying us. These principles will be easy to replicate for sovereign nations free of usurous imperial debt. A huge reconstruction with credit, minus the source of the swindles most just cannot help looking over their shoulders for their shadows.

        Any unwillingness to challenge one’s own shadow of the monetarist past is simply Tiger.

        • 5Fingers

          It does not matter…as i said, we may just morph the narrative until it too collapses under the weight of messy compromise. GS is as subject to human cunning as anything else.

          • I suspect, indeed fear, that until the ‘meta-narrative’ of the Neoliberal Priesthood collapses and is recognised as ‘rain-making’ cant, then the psychic energies required for meaningful change will remain trapped in displacement actitivty consumer spending and competitive team sports, aka: Bread and Circus / Papal Twitter Indulgences and the like.

            Whatever viable energy is available from Fracking is being used to try to resurrect the FIRE economy, not being used as a bridge to sustainable fuel systems. There is some small movement at ‘onshoring’ to maximise the Man-Machine symbiosis of quasi-robotic production processes which are rendering ‘cheap labour’ redundant.

            Kunstler amongst others points out that ‘capital formation’ is critical and that Capital is being squandered by pandering to Zombie Banks and their legacy sunk investments. Obama has proved to be another compliant stooge of Empire and has squandered the chance to guide America to a more sustainable stewardship of the world economy.

            In other words: the reset is likely to be War…..

            http://www.itulip.com/forums/showthread.php/19599-The-Next-Ten-Years-%C2%96-Part-I-There-will-be-blood-Eric-Janszen

            Once again, the only conceptual tool I have found helpful and hopeful is is Intersectionality. Transferring this methodology from Feminism to Economism has yielded liberating insights.

            http://lgbtq.unc.edu/sites/lgbtq.unc.edu/files/documents/intersectionality_en.pdf

            I often find myself being boxed in as ‘anti-capitalist cliche’. This is not true. What I am against is phony crony-capitalism, bail-outs and bail-ins.

            Here’s a new thinker whose work resonates with me, even if I don’t share his gold fixation. He’s also a comedian and would probably rock Kilkenomics (unless he’s already done that gig and I missed his name on the bill).

            http://unbound.co.uk/books/life-after-the-state/excerpt

            I really enjoy your comments and insights. Please let rip!

    • Paul Divers

      I read David’s article again and you are right in claiming it is one his most honest efforts in years. It is an important article and a watershed and breaks ground in Irish journalism as far as I am personally concerned

      He has got to the heart of the matter and within the restraints of his terms of employment he is communicating in coded language and doing so effectively. The article will pass straight over the heads of the thought police and most of the populace because he is on a different wavelegth while appearing harmless but the fact is this article is an missile directed at the heart of the Irish Establishment

      It is a direct hit and devastating because it is upsetting some of the posters who can’t accept the truth. They laugh like little lads caught touching their willies. Their minds want a return to 1950s consumerism and they are not cut out to be adults when surrounded with chaos and silent weapons

      Our host is a boil on the arse of the Establishment and could become a monumental pain in the ass in future given enough support and encouragement but he has stiff competition in the form of the gang of politicians who put personal morality before the intersts of the community. Backward Ireland is alive and kicking in the womb of Rome’s spell and there are many people will take comfort knowing that Lucinda is takiung care of the type of business that matters to them

      We are still in days of the Mass Rocks when messages were coded in poems and ballads. We are still speaking in code for fear of the violence of the forces waiting to take down any truth seeker

      Everything is connected and this explains why humanity appears insane. Incestious interests, power and greed are the causes of evil. The Vatican through it’s henchmen in the British Crown controls everything, including Ireland and we should be investigating the nature of secret societies in Ireland because it would go a long way to explaining why this country is so dysfunctional.

    • 5Fingers

      By the way, your narrative describes the reaction to the changes and the attempt to retain the status quo. The trigger needs to be understood. No one planned it. All you are witnessing is the reaction of the “church”. In the same way, the telescope showed the reality of the solar system and rendered the Ptolomaic view irrelevant. The new tech is showing a side of humanity that demands a new narrative and culture. Collapse is probably the wrong word. More like a total consciousness shift.

    • Joe R

      Keiser is a performing clown not a reliable commentator.

      Listen to the BS at the start coming from his sidekick. Japan is incorrectly held up as an example of a developed strong economy with a sensible approach to property speculation. Somebody should send her a memo on Japanese economic history 1980-2013.

      Property ownership rates are quoted incorrectly and wild unrelated claims about manufacturing base vs homeownership are made. You heard of China? it is a big country with a huge positive balance of trade. Home ownership rate in China is 90%.

      Keiser is a buffoon.

  36. Paul Divers

    I feel that the readability of the blog could be improved if the article and post text was justified. Such small efforts reap huge pays off in usability and not just of this site. Take a look:

    Article Justify
    https://docs.google.com/file/d/0BxGb8Kv0YsCxd2hMdlEtREY3TWc/edit?usp=sharing

    Comment Justify
    https://docs.google.com/file/d/0BxGb8Kv0YsCxQTVBaC02eFVkNkk/edit?usp=sharing

  37. StephenKenny

    Although, without a doubt, economics is a sham discipline, the economic problems over the past 15 years are really little, if anything, to do with it. Blaming economists is akin to blaming real estate ‘professionals’ for property bubbles.
    We had as many economists before 1999 and the removal of the last of the 1930s financial regulations (including Glass-Steagall ), as we had afterwards.
    The problem is essentially one of law enforcement. The white collar crimes that mushroomed and multiplied from 1999 to today are still crimes: Theft, all the various sorts of fraud, false accounting, rigging markets, exchange fraud, control fraud, and so on and so on.

    These are all still crimes, but there’s no one to enforce them. Only Iceland has imprisoned senior financial services staff, and other than that, only Spain has even arrested one.

    Just cast your mind back to 2007/8, and the seemingly endless revelations, and admissions, of the entire kaleidoscope of financial sector crimes. How come not a single person was even cautioned? how come they all still have licenses to work in the sector?

    This only really one place to point the finger – the politicians. No one else has the authority and legal reach to remove all power and will from an entire law enforcement and regulation enforcement sector.

    If I didn’t know better, I would say that this enthusiasm to confuse the fact that economics is not a serious discipline, with blame for the creation of a systemically corrupt system, is no more than an effort to get everyone looking in the wrong direction.

    Economists may not be able to forecast tomorrow’s date accurately, but they are to blame for the vast fraud in the financial system.

    • StephenKenny

      …… which of course should read ..

      Economists may not be able to forecast tomorrow’s date accurately, but they are NOT to blame for the vast fraud in the financial system.

  38. cianireland

    Suggestion that the recent spike in property prices is the result of an outlier large transaction skewing the average…

    House price surge, don’t believe the hype!

    http://www.broadsheet.ie/2013/08/28/boom/#comments

  39. Tony

    And here I was looking for a nice sleepy article on napping …

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