September 23, 2013

The cult of money printing

Posted in Banks · 161 comments ·

There is something vaguely odd and actually quite comical about the sight of a Hasidic man, head to toe in black with a wildly elaborate fur hat perched on top of his ringlets, sweating in the warmth of Montreal’s Indian summer. The attachment to early 17th-century Eastern European clobber in the 21st century, seems a bit over the top. However, according to a friend of mine who knows about these things, the hat, its size and shape, denotes precisely what sub-branch of the Hassidim this man belongs to.

As with any exclusive club, like the scouts, the freemasons or the orthodox religious of all hues, little rites and rituals that seem entirely incongruous to the outsider are of existential significance to an insider. Within the Hassidim, apparently, the type of hat speaks volumes.

The fur hat – hugely popular in Europe centuries ago – reminded me as to why this great island city, plonked in the middle of the giant St Laurence river, became wealthy in the first place. The fur trade dominated the colonial history of North America from the 1650s to the 1800s. The centuries old fight for Canada between the French and the British centred on grabbing the wealth of the fur trade. The French settled here in Quebec after the adventurer Jacques Cartier landed in Montreal with the help of the local Indians in 1653.

Within decades of the first beaver pelts arriving from Canada, fashionable Europeans couldn’t get enough fur from North America. Enormous wealth accrued to the centre of the fur trade, Montreal. The St Laurence river was the main artery of the trade, with Indians and French trappers using canoes in the tributaries of the great river to bring the pelts to Montreal and from here fur was shipped out to Europe. By the mid-1900s, European fashion had changed, and gradually the public wearing of resplendent fur hats became the preserve of the environmentally tasteless and the obscurely religious, like my friend here in front of me in Montreal.

However, part of the legacy of the great fur trade is the province of Quebec and its French population.

Like any emerging market, Quebec of the 18th and 19th centuries, grew rapidly based on having a new product and availing of the newest technologies of the time in river transport and intensive production. This propelled the growth rate of the new territories in America. Eventually, the living standards in emerging markets of North America caught up with and then overtook those of Europe.

As we look around the world today, have we any reason to believe that, over time, the emerging markets of Asia, Brazil and parts of Africa will not catch up and overtake the West?

In maths, there is a concept called the 7 per cent rule. It explains exponential growth and why a quantity can grow experientially when its increase is proportional to what is already there. So for example, think about compound interest, where €100 invested at 7 per cent per year annual compound interest will double in ten years to €200, double in another ten years to approximately €400 and double again in the next ten years to approximately €800.

The same happens to economies and living standards. If an economy starts to take off, its living standards can double very quickly, if that growth rate is sustained.

Historically, the key to growth is technology and discovery. This is why for example in the 2,000 years from Alexander the Great to Napoleon, general living standards rose by only about 70 per cent – because there was hardly any technological innovation.

In contrast, once the industrial revolution took off, the living standards in Britain and much of industrial Europe doubled every few of decades. Now with technology widely available to the huge emerging markets of the world, there is a possibility that living standards in India, China and Brazil will double in every generation. And all the while, their living standards – boosted by their growth rates – will catch up and surpass the West because they will be making things, they will be manufacturing material at a rate that is likely to be more productive than that in the West.

As a result, we are seeing and will continue to see a migration of manufacturing and wealth to these countries, replicating exactly what happened vis-a-vis North America and Europe from the beginning of the 19th century on.

This ongoing process is having profound implications for the structure of industry in the West and for job opportunities in the future in the developed countries.

The reaction of the West to this process has been bizarre. For example, in the US the reaction has been to print money, in the hope that printing money might kick-start the economy into life. This week we are seeing nerves deep inside the Federal Reserve, the US central bank, which is worried that the policy is working but not quickly or robustly enough.

The financial markets were expecting the Fed to “taper” this week.

Tapering means the Fed was widely expected to reduce the amount of money it was printing each month from $85 billion to $75 billion and gradually it would reduce its money printing policy totally as the unemployment rate fell to 6 per cent in the US.

But the Fed signalled that the US economy was still fragile so it would hold off from doing anything.

Let’s stand back and look at what is happening from a bit of altitude.

Injecting $85 billion a month is $1 trillion a year. That’s $1 trillion a year into a $16 trillion economy. This is a phenomenal stimulus. Yet it mightn’t be working.

The money is not getting out from the banks to the real economy, and might be only driving stock markets higher. This is making the already wealthy even richer.

We have a serious dilemma. We know from the history of Montreal and elsewhere that emerging markets with the right technology and some competitive advantage, can grow very quickly and double the standard of living of their citizens extremely quickly. We also know that the Asian economies are best positioned to mirror the 19th-century Montreal experience in the next 50 years. So where does that leave the West?

What if our collective policy response to globalisation, which has amounted to massive monetary expansion is neither making our economies grow nor diminishing inequality but is doing the opposite? What if the Fed’s policy of quantitative easing is simply making the 1 per cent richer and is not trickling down to the average guy? And what if the recent blips in emerging markets growth in India, Brazil and elsewhere are blips and they are destined to overtake the West in time, in the same way as Canada overtook its colonial master Britain?

These are questions we should be asking in the wake of the Fed’s decision to plough on with money printing this week. Unfortunately, reading the financial press with its gushing reports about soaring stockmarkets, the deeper questions are not even being asked, let alone answered.

There is an almost cult-like belief in the omniscience of the central banker to cure our ills.

Maybe my friend with the furry hat isn’t that odd at all. After all, his unquestioning belief in his faith only mirrors the global financial markets unquestioning belief in Bernanke. When everyone is singing of the same hymn sheet, it is time to question everything.

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  1. mcsean2163

    Hello Everybody!

  2. michaelcoughlan

    Morning David,

    Hi David,

    When I read this article in the SBP I found myself getting frustrated at your reticence and lack of decisiveness in the conclusions you arrive at towards the end of the piece re the inflation of the bubbles in the stock and bond markets especially since you accurately pointed out the bubbles in the housing market and particularly in Anglos share price. 

    It’s almost like you were presenting a paper to colleagues at an academic conference and seeking their approval. There are also a number of inaccuracies in my view (although forgivable in nature) which would lead me to believe that c+ or b- would be a fair award for a submission of this kind in an academic environment so let me explain.

    The intensity in production of beaver pelts which was an ASSET STRIPPING endeavour was achieved by the newer technology of a breech loaded brass encased rifle rounds instead of the old musket loaded ball and power variety. This allowed the French etc to kill all around them in the wilderness using far less ammunition with much greater accuracy and much smaller amounts of gunpowder and rounds than previously. It wasn’t as a result of innovations in farming techniques for example. 

    There couldn’t be a more apt comparison in newer killing technology allowing for the wholesale slaughter of natives and wildlife alike (for example in the 1870′s during the buffalo harvest orchestrated by the US government committing human and ecological genocide by making money from the buffalo hides but allowing the carcasses to rot starving the American natives who would use all parts of the animal ensuring the ethic cleansing of the American west) and the UAV technology of the US airfarce today killing all around them in Afghanistan. Just like when the Canadian and American natives were being chopped up with rapid firing Gatling guns in the 19th century and the Afghanistan natives and their children who are currently being chopped up by bombs dropped by drones from five miles up you don’t hear the visceral screaming of mutilated children either. Of course the enormous slaughter going on now and just like the 19th century is to facilitate the  ASSET STRIPPING of the country in question.

    Next you state that printing money as a reaction to the current circumstances is bizarre where you assume that the aim is to kickstart the economy. You arrive at this conclusion because of your moral conscience. This is an incorrect observation David. The aim of the money printing is to stop the derivatives bubbles from unwinding and which is TWENTY times the size of the world economy. It’s this derivatives bubble the FED is worried about not that the recovery is slow or non existent. The FED has signalled it’s worried about the derivatives bubbles unwinding in the face of the fiscal cliff in the US not that the US economy is fragile which they don’t give a shit about since much of the economic activity in the US is an exercise in ASSET STRIPPING just like the fur trade and the conflict in Afghanistan. The $1 Trillion ISN’T going into the US economy it’s GOING INTO the derivatives bubble. 

    Finally David the biggest error you have made in the piece is the assumption that the world has unquestioned belief in Bernanke. NOBODY gives a shit about him OR the Dollar any more which is why the Wealth creating Asian economies as opposed to the asset stripping feudal economies of the US and the UK are using bilateral trade or gold backed transactions between themselves  sans the dollar to settle their debts.

    Thankfully David You ARE raising these very necessary and important questions.



    • michaelcoughlan

      Why Warren Buffet hates precious metals.

      I wonder if it’s because silver for example has outperformed Berkshire Hathaway in the last 10 years by wait for it 700% in the last 10 years. (See max from 5:30 on above).

      And the same person (I stopped short of calling Buffet an asshole because who would take me serious versus him? no one I would think!) goes on to praise Bernanke in the last couple of days. Buffet needs to be reminded that NO ONE has a monopoly on knowledge

    • michaelcoughlan

      Buffet buys bank wells fargo.

      Wells Fargo bought bank Wachovia.

      Wachovia launders $384 BILLION in drug money.

      And now Buffet turns up on TV praising Bernanke!

      I’m on fire today David.

      More info.

      HSBC admits laundering $881 BILLKION David:

    • michaelcoughlan

      I figured out David why Warren Bluff-it is telling porky’s on the scale he is. When he bought shares in GSucks and Wells Fargo he breached his own investing code of only buying WELL RUN companies.

      Bluff-it laid down to sup with the devil and he is about to get his ass toasted and handed back to him!

      The world is looking at a lehmans times 6 or 8 event David. No question. I have acces to my market garden, gold, food water and timber. I know ye will all be laughing reading this but the post above re banks laundering eye watering sums of drug money wasn’t a load of shite I made up.

      For those of you who might be thinking that the bankers are too smart to get caught so did the nazis whacking the Jews during the war. Self preservation isn’t a consideration for blankfein et al because the though never crosses his mind that some day he and the people around him may be facing a starving angry populace he’ll bent on payback.

    • Paul Divers

      Hi Michael you are on a roll today.

      I found the article interesting but your points take it further. The thought of those rotting buffalo carcases gave me a wtf moment and to me it captured in a nutshell everything that is wrong with the hearts of those who will do anything for money. Such waste and cruelty is barbaric.

      • michaelcoughlan

        Thanks Paul.

        Imagine what sixty thousand rotting 17 and eighteen yearolds on 1st July 1916 first day battle of the Somme must have been like Paul. All of them chopped up in a 4hr period before 11am in the morning. And of course the battle continued until NOVEMBER at the end of which there were over 1m rotting teenagers and twenty something’s lying-in no mans land.

        And guess what Paul? WW1 started only ONE year AFTER the FED was established because the largest wealth creating economy in Europe was being ASSET STRIPPED by the feaudilists issuing the loans from the west and ASSET STRIPPED by the feaudilists controlling the supply of raw materials from the east.

        Do any of you think you will convince a madman like blankfein on a salary of $70m PA of the evil these guys will unleash on the world if not stopped immediately when we can’t even stop a madman on the board from something as benign as diverting the board to
        suit his own agenda?

        • Paul Divers

          My Grandfather survived that battle and a bullet took a large crater from his buttock and gave him pain for the rest of his life. He was blown up by German bombs while lying in bed in March, 1941. That’s irony for you

          General Haig was still a hated figure even as recent as the 1980s and the barbarity of that war is still shocking today.

          I do imagine what the scene must have looked like Michael and it makes me sick thinking about it.

          I have always been interested in the connection between bankers actions and the resulting wars.

          1930s America was a dustbowl (T.S Elliot, The Wasteland) and the poverty was fatal but all of a sudden they found the money to start a world war. They had plenty of cash and financed both side – Coca Cola supplied the Yanks with Coke and The Germans with Fanta. Bastards.

          Like today this tells me they have the money and are hoarding it for the next war. War is the only growth industry left it seems

          • Nobody ever hoarded money to go to war.
            They used to tax the hell out of people and then go and rob the conquered.

            Today they open the printing presses full speed. In fact it is what Britain and Germany die prior to WW1 a hundred years ago.

            Another good reason to maintain a money system that can’t be expanded. Then no-one could afford a war.

    • BoCualain

      subscibe ;-)

    • BoCualain

      subscribe ;-)

  3. cianireland

    QE is designed to stimulate the markets, generate a wealth effect which should in theory trickle down to the real economy. And ideally to small and med size business.

    Instead, it is a massive boon to already extraordinarily wealthy corporations who use their influence to lobby govt. allowing them to not pay taxes.

    Corporations are therefore wealthier due to access to cheap credit and access to the markets with the kicker of zero taxation. Despite this they are firing fulltime workers across the board and re-hiring them as low rights part time workers or contractors.

    QE has absolutely enriched the richest private individuals AND corporations.

    So not only are middle to lower classes not seeing any of the money, they are also losing their private sector jobs to part timers OR are seeing their decent middle class business crushed by non-tax paying corporates with every advantage you can imagine.

    There is nothing vague about this situation. And there is no need to be on the fence or present these points as suggestions or questions. They are pretty well supported by data and effectively facts.

    America is being absolutely gutted by these policies.

    Incidentally, if QE was deployed in some ground up manner, getting the funny money into Average Joes hands, perhaps Keynesian policy might get a better rap. The current form of QE is a heist. Its disgusting. But I don’t think it disproves QE in this guise.

    • michaelcoughlan

      “There is nothing vague about this situation. And there is no need to be on the fence or present these points as suggestions or questions. They are pretty well supported by data and effectively facts”

      Spot on. Be more ASSERTIVE David.

  4. David,

    Here is a great article that shines a light on another related disturbing aspect to economic expansion and it is, I believe, being borne out now, especially when one considers the unequal distribution of gains.

    “We were lucky and steadily rising productivity raised all boats for much of the 20th century,” he says. “Many people, especially economists, jumped to the conclusion that was just the way the world worked. I used to say that if we took care of productivity, everything else would take care of itself; it was the single most important economic statistic. But that’s no longer true.” He adds, “It’s one of the dirty secrets of economics: technology progress does grow the economy and create wealth, but there is no economic law that says everyone will benefit.” In other words, in the race against the machine, some are likely to win while many others lose.”


    • Original-Ed

      At least he’s in the real world by implying that technology is the only rapid wealth creator – moving wads of money with some fancy labels attached from one individual to another around a table does nothing for anyone except the handlers as they cream a slice for themselves each time it moves from one to the other.

      It’s up to each country to decide how best to distribute wealth – a national income for everyone is a possible solution. But,for real wealth creation, technology is where it’s at !

      • totally agree ED capitalism would seem to have run its course In most rich country’s and your on the nail its up to each country to divvy out the wealth as fair as possible.

        • divvying up the wealth is the wrong concept. It is there to be created. People have to have equal opportunity and that is not there presently.
          Only by changing the monetary system to “honest money” can that be accomplished.

          The debt based fiat Ponzi money we operate with and the crony capitalism and the interfering government agencies such as the central banking system has to go. Other wise we are doomed to see the cream off the top and the skim milk to the rest of us.

          • michaelcoughlan

            You are correct Tony. Creating equal opportunity is different from creating equality.

            Creating opportunity allows the harder working smarter people to get ahead. Creating equality drags everyone down to the lowest common demoninator.

          • judging by the comments on here tony we will remain unequal for ever. was it ever really tried ?
            the bullshit being spouted world wide by academics will ensure that we remain In the solar system for eternity and most definitely fighting with each other.
            just like 1982 when Britain was In recession when the Argentinians took the Falklands magie thatcher found endless money for war,

          • We arte all equal in the eyes of our maker but there it rests. Those with ability create wealth and under the proper monetary system and the moral code needed to operate such a system that wealth is more evenly distributed.

            There is no wealth created by printing money, just useless units of account being devalued.

            The only other way to “distribute” wealth is to take from one to give to another. The producers quit and the non producers take. Just like today it seems to me.

      • Paul Divers

        The idea is known as Basic Wage.

        Everyone gets the same basic income and if you are enterprising you get to keep both the basic income and whatever you make in your business dealings

        People are not forced to work and are left alone while those with motivation can go an make extra money.

    • Adam Byrne

      Good article, thanks Stephen.

  5. 5Fingers

    The only part of the article with any merit was “When everyone is singing of the same hymn sheet, it is time to question everything”.

    Bernanke, Tricket, Stock Brokers, CEOs etc of large corporations, Bankers and ALL our Politicians have zero skin in the game. They have incentive to blow up everything out of proportion, but no disincentive to counter any personal gains should things go bad – legalese makes this so. Heads you (ordinary man) lose, tails they win.

    This is an ethical problem pure and simple. Making it out as some sort mystical Economic Mis-Engineeringed Concept is at best a pseudo intellectual sham.

    As for Asia etc taking off – it’s the same old nonsense…basing the future on past performance. Asia has nothing innovative to offer other than cheap labour and that show has now moved on.

  6. markodxb

    “cult like belief”, David do you feel there any credence in ‘Cult like Control’ for the 1%(the weatlhy)? The Bilderberg Group, Skull & Bones, illuminati etc… while I remain sceptical some might consider this article further proof, if what you are saying is correct.

  7. markodxb

    “cult like belief”, David do you feel there any credence in ‘Cult like Control’ for the 1%(the weatlhy)? The Bilderberg Group, Skull & Bones, illuminati etc… while I remain sceptical some might consider this article further proof, if what you are saying is correct.

    • Paul Divers

      Hello markodxb

      It’s all in the language between the lines. My hunch is our man knows what is happening but dare not say it.

      The article opens with the description of a Hasidic Jew who in the author’s mind is a comical figure who belongs to a secret society and the article ends by dismissing Bernanke who also happens to be a Jew (or a Zionist pretending to a Jew to cover his true motives)

      In some ways the article itself is comical and when I read the Boy Scouts being included in the list of secret societies I had another wtf moment. I was a boy scout

  8. bonbon

    Some are still bedazzled it seems : Buffett is known as the “oracle of Omaha”, and “sage of Omaha”. Seems the gods do drive those first mad whom they would destroy :

    Crazy Buffett Declares the Fed “The Greatest Hedge Fund in History”.

    Buffett evidenced his terror at what is about to hit the financial system by praising George W. Bush for coming out with “the economic insight for all times,” when he said in 2008 that “if money isn’t loose enough, this sucker could go down.” He praises Bernanke, who cannot land his money helicopter anytime soon.

    How’s that for insight? Terror does drive oracles insane!

    DMcW refers to a “cult” – well Buffett is one of the high priests, and the insane belief in the $85 billion a MONTH ritual, which we will pay for has him gushing!

  9. george

    From an economic point of view everything is possible.
    We know now that the “Celtic Tiger, the Smart Economy, and all that nonsense” cost us approximately 64 billion euro, on top of the debt we already had. And at the end of the day, we were left with a Society in total chaos; where mainly young people are emigrating by the thousands every month, because there isn’t any future here for them, even a bleak one. In the other hand, we have to “import” people from abroad, to do low paid jobs, because the economic system is totally dysfunctional. On top of it, corrupt Banks “got it all”, while People in family homes in negative equity, are being persecuted like criminals. And inequality is rampant, and we still have people in the Public Sector getting lump sums, pensions, and privileges, that nobody else in society gets, and that a Country in crisis and debt cannot afford. And private professionals charging us, the most expensive fees in Europe. While the political system at national and local level, keep turning the screw on the small producers, entrepreneurs, and the ordinary citizens with average incomes, to finance the State.
    With a proper and fairer economic model, we could have achieved the same material wealth, for probably one third of the ecconomic cost; some of it (apartment blocks, and housing estates), which are now empty and decaying in front of our own eyes. So much for “strategic thinking” from our political class, but then fortunes wouldn’t have been made!
    So for the general well being of Nature that provide us our survival, and the general well being of the People living in the World, it doesn’t really matter if Brazil, Argentina, Mexico, or other Asian or African Country, is going to overtake Europe in economic terms, because the underlying basic principles (egotism, greed, elitism, ) that brought us to this horrible situation worldwide, will still be there. And will only be affecting geopolitics, and not changing the root cause of our problems.
    We all know that the World needs a “new system” (political, social, and economic), a global and fairer one.
    Worldwide we rely in an unfair economy system, where most of the people with average incomes pay most of the taxes needed to run Countries, while the 2% percent of the population with most of the wealth, pays very little in proportion to their income, and to the total needed.
    We are becoming richer in economic terms, but poorer in cultural aspects. So unless we match our social development with our technological one, and reform our economic system accordingly, in real terms “we ain’t going anywhere”. And we’ll see more of the same: sickening inequality, social instability, injustice, and suffering.

  10. Deco

    Well, basically, the central bankers have assigned themselves as responsible to undermine the coin of the realm that they are supposed to defend.

    The politicians have taken the responsibility upon themselves, to bankrupt the state systems that they are supposed to run.

    The bankers have taken it upon themselves to defraud the savers that place money in their banks. And the same bankers made themselves responsible for causing their borrowers to become bankrupt, throwing money at them.

    Union leaders have taken upon themselves to increase the taxes on working people, and have defined it as responsible policy.

    Meanwhile business leaders are continually lobbying the state to get “stimulus” whilst simultaneously engaging tax practices designed to make sure that the state system gets less.

    And in the institutional state, we have God knows how many quangos, who are designating themselves with the responsibility of controlling, and checking the populace and just about every aspect of society – whilst simulatenously driving society to moral degeneracy, and financial bankruptcy.

    And the proles are sitting on a couch, connected to a massive screen showing the latest developments on a trajectory of meaninglessness, whilst they descend into decline, debt, societal fracturing, and eventual financial collapse.

    The whole thing is a facade.

    Pretension is the official religion. The cult of money printing is just one stream along a torrent in Western society, that evaluates everything according to the short term sugar hit.

    • Trapped

      Brilliant observations Deco, and well written.

      I’d say if you expressed that opinion to most people they would look at you blankly, wondering to themselves what the hell you are on about.

      Bad news is, it’s not going to change, actually it’s just going to get worse. That’s my opinion anyway. It’s hard to know how to deal with the ocean of rot and BS that is this country.

    • Grey Fox

      European Central Bank =
      1 President
      1 Vice President
      4 Directors
      Total = 6

      Irish Central Bank =
      1 Governor
      2 Deputy Governor’s
      1 Ceo
      10 Directors
      Total = 14


  11. Paul Divers

    If someone can instantly recognise another’s writing then it is because the author has a distinctive voice and this is what all blogging and copy writing courses strive to get through to aspiring writers

    About 50% of the time is spent crafting a headline and it’s not uncommon for a copy writer to spend days thinking up a killer headline

    The headline ‘The cult of money printing’ is good but could be better by modifying the word ‘cult’. What sort of cult is it?

    An Odious Cult?
    A Cuddly and Heart Warming Cult?

    The opening paragraph is amusing and you can tell it is our host by the heavy use of modified adjectives and the occasional Scottish slang word which in this case happens to be ‘clobber’

    The sentence on secret societies addresses our sense of exclusion and I empathise with our host’s view of himself as an outsider

    The old man is a symbol acting as a metaphor for group think and the clinging on to outdated mindsets but I can understand why people fearfully cling to the past. They are still to arrive at what I call ‘The Process’

    The Furry Bunnet takes us on a tour of colonialism and globalisation illustrated with history lessons and Maths. Great stuff

    Then we get to the central point of the article where our host clearly disagrees with the fact that the banks are acting like perpetual emperors who are determined to impoverish humanity. Their insanity is spelled out thus:

    “The money is not getting out from the banks to the real economy, and might be only driving stock markets higher. This is making the already wealthy even richer.”

    For me this situation is intolerable and I view it as a declaration of war.

    Indeed David. We have a serious dilemma.

  12. george

    History has shown us in many opportunities, that technology is a double edge sword. And that it, in the hands of people with wrong principles, can have disastrous consequences to the whole of humanity and nature.
    The Incas used labour and services as a unit of exchange, and although they appreciated the aesthetic value of gold and silver, they couldn’t understand why greedy Europeans wanted all they could get.
    Francisco Pizarro slaved (and killed) the local population, to get as much silver as possible from Potosi. Part of it was used to finance Spanish (European) wars, and part as hard currency that was put into the markets. But eventually by flooding it, with so much silver used as units of exchange to buy the same amount of products, they created inflation and devalued the currency itself.
    Unfortunately evil triumphed over good, and all the social structures (much more advanced than the Europeans at the time) of one of the richest cultures on Earth, were destroyed by sheer ignorance, brutality, and greed. And the decisive factor was technology (ships and weapons that were brought on them); and a bit of help from viruses and horses, but they were as blameless as the poor Incas, who saw they stable and rich culture obliterated.
    While the Europeans-Christians had 10 commandments that they very seldom obeyed; the Incas had only three that they always honoured:
    1) Not to be lazy.
    2) Not to steal.
    3) Not to tell lies.
    Definitively technology by itself won’t save us or anybody else, unless first we change our attitudes and principles.

    • Paul Divers

      Fascinating post Geroge. Looking forward to more of your posts.

      • george

        Paul, I’m glad you find it interesting!

        What I’ve said about the silver of Potosi is what I remember Niall Ferguson said in his documentary film (and book) “The Ascent of Money”.
        The rest is all real history, that you can even see today, when you visit places that were part of the Inca Empire, and talk to peasants with Indian blood in their veins, in little towns and villages. Those people don’t know malice, selfish greed, or the pathological levels of egocentrism, that we do in the western world. We in our ignorance think they are poor because they lack technology or material wealth, but we fail to notice that even after all they went through, they still stick to the core principles of their values, and are totally integrated with nature, and have a much more healthier attitude to life in general than we do. They are more sure in themselves about the importance of a meaningful live, and of the sacred respect for nature.

        Paradoxically, they and other cultures around the world, that survived the “golden age” of European Conquest and Colonization, could give us many of the answers we need to face the global demons we see today.
        When everything comes down to profit, there is very little hope in the wholeness of civilization; because politics, education, healthcare, and the economic system that determines what we become, are functional to it. As Antonio Machado said, “only cynics think price and value are the same thing”.
        So unless we solve this issue first, advances in technology by itself won’t be enough, and will dehumanize most of us, even more.

    • michaelcoughlan

      It’s a pity the incas didn’t have a fourth rule; don’t take any shite from foreigners.

      • george

        Michael, the Incas were forced to take it! And even if their nobility and hierarchy were no saints, in comparison to Europeans were more just. They expanded and conquered with more benign methods than the Spanish did, and their general philosophy of life in general was much more altruistic; and their social structures much more advance, stable, and fair, than the Europeans were .
        When Hernan Cortes was in the process of conquering the Aztec Empire, few soldiers in his army deserted and settled among other tribes. Something that Cortes never forgot, because later on, he sent soldiers to recapture the deserters. When eventually, at least some of them were found, they were pleading with their ex-companion no to tell Cortes where they were, because they felt happy living among Indians and in the American Continent, in a way they never had been and never wouldn’t be in Europe; they even consciously gave up their share in gold of the spoils, promised by Cortes. The punishment for some of them poor Spaniards, when they were recaptured, was the axing of their toes, so they wouldn’t try to escape again, and no other soldier would risk to do the same.

    • Joe R

      Paul Divers,

      This history of south and central America is largely made up by George. Just because somebody writes something in a slightly convincing fashion on an internet forum does not make it true. Note Colin as a prime example of this.

      One fact, for example, is that Pizarro died in 1541 before silver was ever mined at Potosi.

      There are two easily available ( free on PDFs via the internet ) and brilliantly written histories of the downfall of The Incas and The Aztecs by William H. Prescott. I advise you to read them if you are curious. The Conquest of Peru ( Incas) for me is more fascinating.

      • george

        OK wasn’t Pizarro directly involved in Potosi, although he took all the gold and silver he could from Atahualpa before killing him and enslaving his people, to the point that even later on, and because the imposition of a criminal and colonial system, they had to import slaves from Africa. But the main facts still the same: greedy people, conditioned by the brutality of their own time and place, with the benefit of a more advance technology, that committed one of the worst atrocities in the history of mankind, without a thought for the marvels and values of one of the most sophisticated cultures in the World, that also gave to the whole of humanity some of their crops, which saved millions around the world, from hunger and starvation.

  13. redriversix

    Morning all

    Buffet is right…QE is the greatest Hedge fund of all time..!

    What begins as a waterfall of money cascading from the Fed down through Wall street….finishes as a few muddy drops from a stand pipe in Wyoming.

    Bankers still get the most out of any rescue package…

    War is Big Business

    American deaths from terrorism in 2012 =68

    Department of Defense budget for War on Terror 2013 = 660 Billion Dollars

    U.S deaths from Heart disease in 2012 = 400,000

    2013 budget for fighting Heart disease 3.5 Billion Dollars

    Keeping people alive who are sick costs money and is a drain on the State.benefits etc

    Low health budgets are a p.c way of culling the herd

    War is were the money is Boys and if you don’t get in quick you might miss it

    Shootings in Chicago , Michigan & Washington

    America is already a wasteland with some survivalist Cities on the Coasts and a few outposts in the interior

    Davids article is good in sofar as anything that brings up History is excellent as I believe a lot of answers to today’s problems lie in our history Books

    Wanna hide something from any World leaders of today ?

    Put it in a History book..they will never find it

    Have a great day & keep it simple.


  14. redriversix

    Thanks Michael. .

    Whats important is yourself & your family. ..hard to look after them if we cannot look after ourselves.

    Today is the tomorrow we worried about yesterday !!

    Have fun..


  15. Colin

    Good article David.

    A good deep question would be why do people and institutions charge borrowers interest when it is apparently against God’s Law?

    ‘You shall not charge interest to your countrymen, interest on money, food, or anything that may be loaned at interest. 20 You may charge interest to a foreigner, but to your countryman you shall not charge interest, so that the Lord your God may bless you in all that you undertake in the land which you are about to enter to possess.’ Deut. 23:19, 20

    Most Christians no longer think that usury is a sin. Though the Roman Catholic Church borrowed money at interest very early in its history, it always officially considered usury a sin until recently. On June 27, 1942, the Church established the Institute for Works of Religion (the Vatican Bank), funded by the donation of Mussolini in 1929.

    Most Protestants and evangelicals had already cast aside the law of God and saw no harm in usury. In fact, many justified it by a unique interpretation of Jesus’ parable in Luke 19. In that parable, the “nobleman” went on a journey and left varying amounts of money in the care of his servants. When he returned, two of the wiser servants had increased the money by trade—that is, lawful business.

    So, consider what we have arrived at in 2013, and all the misery that surrounds us, is it time for a re-think and go back to basics?

    • Adam Byrne

      Yeah, I think we should adopt the Islamic system Colin – no usury.

      • Colin

        It is Jewish in origin Adam, mohammed copied it and adopted it from the Jews and then lied to his followers that it was Allah who told him this. The Christians abandoned it, and now ought to return to it.

        • Adam Byrne

          Hell will freeze over first before they do.

          • Joe R

            Ok, Adam. I didn´t get the sardonic tone…and so if that floats your boat it is okay I suppose…strange one though!

        • Joe R


          Why do you indulge this attention seeking make it up as you go along racist plastic Paddy called Colin while he fills you up with shit?

          From the old testament, the guide book to being a Jew;

          Deuteronomy 23:20 (19) — Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest.

          Deuteronomy 23:21 (20) — Unto a foreigner thou mayest lend upon interest; but unto thy brother thou shalt not lend upon interest; that the LORD thy God may bless thee in all that thou puttest thy hand unto, in the land whither thou goest in to possess it.

          So as a Jew YOU have a blessing to screw a foreigner (non-jew) with usury or in reverse you can get the foreigner to lend you money.
          This isn’t a non-usury law. It is a don’t exploit your fellow Jew law.

          Islamic banking dosen’t discriminate however!

          And in relation to Christians;

          The early Christian Church, for reasons connected to the New Testament, declared that any usury was against divine law, preventing pious and outwardly pious Christians from using capital for mercantile purposes;[1] in 1179, Pope Alexander III excommunicated usurers, which was seen as an extremely harsh punishment.[1] However, Canon law was not regarded by medieval society as having any authority over Jews, and thus Christian monarchs looked to the Jews to supply capital to them;[1]

          • That is why the middle ages money lenders were Jewish. Other occupations were banned to them as well.
            They were invited back into England to form the Bank of England to fund the wars of William of Orange. Private subscribers they were, and charged the interest and repayments to the taxpayers of Britain. They have never looked back since then!!
            The Federal Reserve was modeled on the bank of England by Paul Warburg of the House of Rothschild, as he advise the Senator Aldridge on the structure of the Fed. Similar deal as the B of E

          • cianireland

            Interesting train of thought here.

            Lets have the pope head up the Central Bank and Regulator.

            Priests could run branches… can you imagine the push for child saver accounts?!

            SECULAR society thank you very much.

            Secularism can be the only way for a multi-cultural largely atheist/agnostic society; debate that if you want, I won’t be engaging. Would you live under Sharia?

            Refer to below for a classic response to the those who propose the bible as a basis for morality or indeed law…

            Dear Dr. Laura,

            Thank you for doing so much to educate people regarding God’s Law. I have learned a great deal from your show, and I try to share that knowledge with as many people as I can. When someone tries to defend the homosexual lifestyle, for example, I simply remind him that Leviticus 18:22 clearly states it to be an abomination. End of debate. I do need some advice from you, however, regarding some of the specific laws and how to best follow them.

            a) When I burn a bull on the altar as a sacrifice, I know it creates a pleasing odor for the Lord (Lev. 1:9). The problem is my neighbors. They claim the odor is not pleasing to them. Should I smite them?

            b) I would like to sell my daughter into slavery, as sanctioned in Exodus 21:7. In this day and age, what do you think would be a fair price for her?

            c) I know that I am allowed no contact with a woman while she is in her period of menstrual uncleanness (Lev. 15:19-24). The problem is, how do I tell? I have tried asking, but most women take offence.

            d) Lev. 25:44 states that I may indeed possess slaves, both male and female, provided they are purchased from neighboring nations. A friend of mine claims that this applies to Mexicans, but not Canadians. Can you clarify? Why can’t I own Canadians?

            e) I have a neighbor who insists on working on the Sabbath. Exodus 35:2 clearly states he should be put to death. Am I morally obligated to kill him myself?

            f) A friend of mine feels that even though eating shellfish is an Abomination (Lev. 11:10), it is a lesser abomination than homosexuality. I don’t agree. Can you settle this?

            g) Lev. 21:20 states that I may not approach the altar of God if I have a defect in my sight. I have to admit that I wear reading glasses. Does my vision have to be 20/20, or is there some wiggle room here?

            h) Most of my male friends get their hair trimmed, including the hair around their temples, even though this is expressly forbidden by Lev.19:27. How should they die?

            i) I know from Lev. 11:6-8 that touching the skin of a dead pig makes me unclean, but may I still play football if I wear gloves?

            j) My uncle has a farm. He violates Lev. 19:19 by planting two different crops in the same field, as does his wife by wearing garments made of two different kinds of thread (cotton/polyester blend). He also tends to curse and blaspheme a lot. Is it really necessary that we go to all the trouble of getting the whole town together to stone them (Lev.24:10-16)? Couldn’t we just burn them to death at a private family affair like we do with people who sleep with their in-laws (Lev. 20:14)?

            I know you have studied these things extensively, so I am confident you can help. Thank you again for reminding us that God’s word is eternal and unchanging. Your devoted disciple and adoring fan.

          • Adam Byrne

            I know he’s making it up as he goes along Joe R – I don’t take it seriously – as might be evidenced by the sardonic (but logic-based) tone of my replies. Cheers.

    • You may charge interest to a foreigner, but to your countryman you shall not charge interest,

      So our banking /monetary system is run by those who consider “us” foreigners.

      a quick search will reveal who owns the baking system by and large.

      So we ban the central banks, ban interest, Issue money interest and debt free from treasury, and back the currency with assets that it can’t be continually expanded to ruinous inflation. A sovereign county owns its own monetary system or all else is lost.

  16. Adelaide

    A Prime Fat Cat on Primetime: I tuned into Primetime last night because a friend texted me he was in the audience, otherwise the dross that is RTE’s news & Current affairs never sullies my TV. Well, well, well, what a refreshing eye-opener, to see a Fat Cat panellist behave and sneer and guffaw without pretence, openly unabashed with his gombeen ching-ching motive vulgar disregard for all the whining plebs in the audience made great tv. More of the likes of this Laughing Boy on tv and it could be just the prod and prick the people need to rile them out of their collective stupor. Alas, the authorities are too clever for that, such a mistake will not be repeated, I’m afraid whoever that scowling FatCatSlob was, well, he will not see the tv-studio light of day again.

    • Adam Byrne

      What was his name?

      • Adelaide

        I didn’t catch his name. I only saw the middling part. He was an overweight wind farm developer/pro wind turbine etc sitting alongside Green Party’s Eamon ‘whatshisname’ debating the wind-farms-for-UK plans for the midlands. No representative from the government were partaking.

        • Adelaide

          ps my friend in the Primetime audience is studying renewable energy in Iceland and he concurs that wind turbine energy is cost ineffective, it’s a dead duck industry that’s propped up by tax payers subsidies in a handful of ‘enlightened’ countries, otherwise it’s a commercial non-starter and has a zero future, he can’t understand the logic behind this proposal for the Irish midlands because onshore windfarms have already proven to be lose-lose endeavours. He’s not Irish so he can be forgiven to assume that there should be an element of logic to any of this. It smells of brown envelopes, back-handers and initial construction jobs for the boys-club, all subsidised by Irish tax payers for perpetuity once the sprawling midlands wind farm proves to be a loss-making white elephant. And let’s not mention its litany of non-monetary negative impacts. But then the bribed rubber-stampers of this farce are snug as a bug in D4, far removed from turbine reality.

    • 5Fingers

      You referring to this very nice person here?

    • I forget his name what Is very worrying for the 317 managers In RTE this day Are How Did he slip through The Net. I Gather he owns a few mountains with extensive grazing rights for sheep . The sheep won’t Give two squirts of tinkers Piss what Is Whirring Over There heads Thus the Laughter. OR he could be testing The waters For The Introduction Of Rabbitte’s I believe the Rabbitte Is Immune to the mixi ,
      Of course the Offical IRA Are behind Those Oulwans In The audience As with Preventing The Theft Of Gas In Mayo Finally the Purchase Of brown Envelopes by govt Depts have Risen 10 Fold,

    • Paul Divers

      Many of us never see Prime Time.
      Your post is interesting but it would be better if you named the person in question and posted a video link.

  17. Adelaide

    The very chap I was referring to.
    Awesome website to booth.

  18. Adelaide

    The very chap I was referring to.
    Awesome website to boot.

    • Adelaide

      Totally agree, Michael. It was the Offical IRA behind Those troublesome Oulwans In The Primetime audience. They cheekily plant them in amongst ordinary folk. Crafty bastards. That cry-baby woman from Louth was such an obvious plant.
      It’s always the ‘extreme elements’ causing trouble for the rest of the good folk, like those ‘extreme elements’ getting a well deserved face full of pepper spray last week. Hurray for the Gardaí! Sure I remember attending an evening demo outside the Dail a couple of years back, most like myself attending were in their day office suits etc, a respectable and subdued crowd bar a nano-second breakout of half-hearted fisticuffs occurred which bizarrely made its way on to the RTE 9News, the cameras made it seem so much more dramatic while the “demonstrators” were dismissively referred to (I always remember this) as a ‘Raggle Taggle bag of trouble makers’. My mother who attended the demo phoned me in convulsions… Hmmm, Makes me wonder if perhaps she’s in the Real IRA?

  19. Adelaide

    Here are ten bullet points that says it all. This should be printed on posters and plastered on every empty shop front in the land.

    Nine failures of the blanket bank guarantee – and its sole ‘success’

    • michaelcoughlan

      Hi Adelaide,

      A superb post also. The article in your piece has an unwritten subtext however. It’s only when you analyse this subtext using nazi logic as opposed to normal logic weighted by moral conscience that you see the world like a banker/ political/nazi sees it so let me explain.

      Three nazi officers in Poland succeed in slaughtering 10k, 8k, and 2k Jews respectively. The two officers with the two higher scores are promoted whilst the third officer with “only a score of 2k” gets to view the results of one of his own firing squads from the WRONG side of it. And all because he WASNT doing his job properly in the eyes of hitler.

      The document you refer to is an A1 result for the people who control the worlds financial system. No doubt a 70m PA salary awaits the few who pulled off a result of that magnitude!

      Everyone today seems to have upped their game.

  20. David,

    I can tell from the line “The money is not getting out from the banks to the real economy, and might be only driving stock markets higher.” that you still seem to think that first of the central bank creates money which the banks lend and relend, indirectly creating money in the process.

    The Fed can only create reserve-account-money and it cannot leave the Fed’s balance sheet and onto another other non-bank business.

    Standard and Poor’s recently published a paper on this entitled ‘Repeat after me; Banks cannot and do not “lend out” reserves’ which can be read at:

    It so important that our economists understand the actual system we are dealing with so please take the time to read it.

    • michaelcoughlan

      Hi Paul,

      I’m not as sophisticated as you in this regard so forgive my ignorant question; is the FED not replacing this newly created cash on it’s balance sheet with new govt bonds/notes?

      • 5Fingers

        In addition, the rate of growth of new business is lower than the rate of growth of reserves. It really does not explain why banks are still alive. They need real collateral from somewhere.

        • michaelcoughlan

          Their blasting their collateral (asset stripping) out of the the natives in ever other country on the world daah!

          • Hi Michael,

            An explanation of how the Eurozone’s monetary system operates can be found in our guide, ‘How banks create and destroy money’ which can be read at:


            There is an explanation of QE in there too.

            Hope it helps,

          • michaelcoughlan

            Hi Paul,

            Thanks for your response. I am more terrified than ever though. First of all I don’t know who “we” is/are but from your post I would say you are a banker AND a charted accountant.

            It’s clear from your post you have a perfect understanding of digital money and it’s creation and that’s all. You haven’t a clue what wealth is.

            Wealth Paul is “the abundance of valuable resources or material possessions”. No mention at all of money in the definition. In otherwords I could be extremely wealthy and not have a cent in my pocket!

            Moreover Paul, money is defined as “any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio economic context or country”.

            Since I’m a free born man with the capacity to create wealth and to choose freely any object I wish (gold in my case) to use as money to trade that surplus wealth with people of like mind it makes a nonsense of the document presented.

            The most satisfying though is that since gold cant be conjured out of ghin air it cant be devalued so the people in the central banks can take their digital blips on their
            screens and shove them up their

            The biggest error in your hypothesis is that the govt bonds on the balance sheets of the various examples in the document have coupons on them which are paid for through taxation on the population allowing the central banks to transfer wealth from the taxpayers to the shareholders of the central
            banks simply by fucking around with the numbers of zeros on a screen somewhere. Finally Paul when you have reduced an economy like America to a feudalist asset stripping exercise you cant get wealth from the population because none is bring created so what you do is get the govt to kick the shit out of their neighbouring countries and transfer all their wealth to the same shareholders in the central banks by Carpet bombing the bejaysus out of them!

            Sick twisted fucked up world isn’t it Paul?

      • About half of the 85 Billion is loaned directly to government to cover the operating deficit. That money finds its way into the economy as the government spends in whichever way they choose.
        The balance goes to buttress the commercial banks reserves to largely offset the leveraged liabilities that are not reclaimable as the assets securing these loans are miles under water.
        This is the way the banks stay in business but do not necessarily issue more loans into the economy. Hence the stagnation. Also a lot of people would rather not borrow and yet others are tapped out and can afford no more credit.

        The world’s economy suffers from debt strangulation and interest suffocation. Record debt numbers and the lowest rate in recorded history that allows no increase or the economy dies immediately.

        As other writers posted suggest the only way out is hyperinflation or default period. That’s it.

        Except for a new treasury based currency as described elsewhere :-)

        • michaelcoughlan

          Hi Tony,

          I agree with your post. One thing needs to be added and said over and over again is the following; Normal short sharp recessions are VITALLY important for an economy to function correctly because the assholes and idiots get wiped out, the assets liquidated and those assets can be picked up for cents on the dollar by the prudent business owners who allocate capital correctly ie create wealth.

          Bernanke has turned this on it’s head. His policies allow “too big to fail banks” to get bailed out by the gov when their speculations go wrong. In continuing to print money these guys who place capital incorrectly are protected and the cost is transferred in taxes to the business owners who place capital correctly.

          Bernanke probably thinks that economic growth will bring the ship back on even keel and allow him to taper but the facts are as long as his policies reward failure and destroy success contraction will accelerate.

          Even if I became like bonbon moved into a tiny little room and banged my head over and over again off the wall repeating the mantra “Bernanke must reverse his policies” it isn’t going to
          Make the slightest bit of difference.

          All the rest of us can do now is weather proof out own life boats for the tsunami of debt Bernanke and other ideologues like him are about to unleash on the world.

          • Adam Byrne

            Prescisely Michael:

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

            Nothing to be done but weather the storm indeed.

    • 5Fingers

      Paul, this is the DBA argument. But if this was the full story, banks should have collapsed long ago.

      Can Banks not lend to brokers or indeed anyone who wants to borrow big and invest (a collective who operates outside of CB rules)…does not have to be a classic business? it offers the best return. Why bother going long on boring old Mom and Pop businesses?

      • 5Fingers

        I mean DEA = double entry accounting…my terminology.

        • Hi 5fingers,

          I’m a little confused by the question.

          When banks process a loan they type new money into the borrower’s account. In doing so they gain a liability because the borrower’s account is technically just a record of how much cash the bank owes the borrower. Of course for all intents and purposes it is the money itself in today’s digital world of bank transfers.

          The bank will simultaneously gain an asset which is the borrower’s debt to them.

          If the bank has to write off debts it loses an asset while the money is created is still in the banking system somewhere as a liability. So banks can create almost as much money as they like for clients but they have to be confident the asset they get at the same time is solid. If they are wary of debtors as being good asset they may not create money.

          Does this answer your question?

    • bonbon

      What is so important for everyone to see is the utter irrelevance of your argument. I believe DMcW sees this. Your apparent “logic” is ridiculous. You have never studied Hamiltonian Credit, physical economy, and suffer from monetarist dementia.

      To set it straight, have a look at the Triple Curve.. Now ask yourself if you suffer from the schizoid affliction that produced that?

      Draghi with his new LTRO and Bernanke with $85 billion a month, are both serious mental cases – insanity parading in Armani suits. And now we have you as their apologist? Hey take the medicine, start studying physical economy, starting with the Triple Curve. Save your mind!

  21. if there’s a lot of guns In the house I’d be suspicious bless her hart she maybe only a member of erigi the political wing of the stickies remember that horrible delinquent Woman that threw the bucket of (Red) Paint Over Poor Mary Harney well she turned out to be a member of Dublin city council .
    they say they trained Al Qaeda it wouldn’t surprise me as there’s an awful lot of people going Around here Peeping out through blankets not to mention Windows If we could only get the EU IMF paid back and free up the Overworked gardai I’d feel a Lot safer,-:)

  22. Paul Divers

    I read a marketing article that used the psychology experiment performed at Yale University in the early 60s as an example of how people are trained from birth to obey authority

    The victims were actors and the professor wore the official looking white coat. The test subject was not told that no electric shocks were actually being applied. It was all an act and the last laugh was on the hapless test subjects who were paid for their time

    I am sure some of you will have heard of this world famous experiment in psychology and I was wondering if some of you, being Irish, ever feel that the psychology of Ireland since the foudation of the state has all been an act?

    • 5Fingers

      Well you may quibble the ethics. But really it is all legit. So no worries then!

      • Paul Divers

        I have not yet formed an opinion on the ethics or the legalities. What worries me is that you failed to answer my question. It it is a simple question

        • michaelcoughlan

          I know the experiment but forget the name. The result was that the people who were Administiring the shocks continued to do so even after they were told the voltage was lethal. They wouldn’t disobey authority.

          Irish psychology isn’t an act Paul. We truly are a fucked up race. Amost every parent in the animal kingdom will sacrifice itself for it’s progeny. We Irish told 89000 of our citizens mostly our young to fuck off last year and we also handed our toddlers the bill for the promissory notes which won’t kick on until they are working.

          We are screwing our poor and old people and the infirm and all of the time the bastards on the banks are still drawing BONUS from a pool of money borrowed to keep hopelessly insolvent banks open.

          Only a race as truly twisted as we Irish are not moved to act by these realities. No act Paul. No act at all at all.

          • michaelcoughlan

            I cant even fuc!^+g look at the tricolour.

          • Adam Byrne

            Flags and passports and football jerseys etc. are a load of shite.

            Gets the lumpen proletariat all worked up and brain-washed on the couch.

            Just where the powers-that-be want them.

          • Ryu Hayabusa

            Absolutely, there was some justification for that carry on circa ’88, ’90, ’94.

            Now it’s nothing more than a crock of proverbial SHITE.

            Cowen or whoever it was called the death knell on it when they used the unfortunate… “Would you ever pull on the ‘ol Green Jersey loike?” …and take one for the team. . . up the Collective Jacksie as Uncle Gaybo would proffer

          • DB4545

            The Milgram “Shock” experiment conducted at Yale and the Zimbardo “Prison Guard v Prisoners” experiment conducted at Stanford may be the studies you’re referring to. Stanley Milgram wanted to know how ordinary people could have committed such horrific crimes during the Nazi era. The experiments demonstrated that ordinary people will carry out extraordinary actions if directed to do so by someone who they perceive to hold “legitimate authority”. It’s a very powerful and effective psychological weapon. Put most ordinary 18-25 year old men through military basic training in any army. At the end of the training most will (legally) murder someone if directed to do so by their perceived legitimate authority. We certainly have undue deference to authority. Joyce said that we are the old sow that eats its farrow. Are you surprised that those who claim authority in this State have such contempt for us when we allow our children to be treated in this way?

          • Paul Divers

            Michael, I hear the disappointment in your voice and I know it is real.

            The tricolour signifies the hope of reconciliation between the tribes and it is an altruistic and noble idea. Who could possibly argue with someone who wants peace?

            In Scotland there was a move to have the tricolour banned from football grounds of clubs that were founded by and for Irish immigrants but it was ill fated. It is a flag that stirs strong reactions in the the hearts of Irish people and those who ‘mistrust’ us

            However I am sure that someone just off the plane in a strange foreign city will have much sentiment for the flag

            Flags are for children

          • Adam Byrne

            I’ve been to and continue to go to a lot of strange foreign cities Paul and still couldn’t give a toss about a flag.

          • Colin

            Adam, the fact that most Irish people think its colours are green, white and gold (not orange) tells us a lot about how ignorant the majority of Irish are. Of course it was propaganda, orange was a dirty word, and still is. No unity will happen until we fist accept their right to be different.

          • Adam Byrne

            You could apply that logic to the Islamic world Colin.

          • Colin

            No you can’t apply it to the islamic world Adam. When will you ever learn?

            You cannot have unity with someone who wants to destroy your way of life or extract tax from you in exchange for allowing you to continue to live in a second class citizen mode.

            How can you reason with people who follow the ramblings of a narcissistic 7th century liar, murderer, thief and paedophile?

          • Adam Byrne

            Evidently I will never learn Colin but thanks for keeping me informed in the meantime.

            If you asked Catholics if they were treated as second class citizens in Northern Ireland over many decades, denied employment and a means to feed their children etc. taxed and discriminated against then I’m sure a large percentage of them would heartily agree.

            Religion in all its guises is a load of old tosh, that is inevitably hijacked by bigots, fundamentalists and extremists to further their own aims, which are usually related to propery, power and money – and not ‘God’.

            People screw each other over – that’s the way of the world Colin. It doesn’t matter what creed, colour, nationality or religion you are – you’ll find that going on everywhere. There are a lot of good people out there too but they are mostly sheep and prefer to keep their heads below the parapet.

            Right now, the whole of Ireland is being screwed by a cabal of politicians, bankers and business leaders who have just as much blood on their hands as the likes of Al-Qaeda. And don’t even talk about the USA and Obama the arch-hypocrite.

            You might want to try living in a ‘foreign’ country for a while (and I don’t mean England) – it would open your mind a bit.

          • Colin

            Catholics in Northern Ireland were never taxed more than their Protestant neighbours. In fact, when N.I. Catholics compared themselves to their counterparts South of the border, they soon realised how superior their treatment was in the UK. I know this as I have family there. But you cant help yourself going hook line and sinker for RTE Pravda version of history.

          • Colin

            I’ll live where I choose to live, and I will enter the country legally and work legally, not ‘get in by any which way by hook or by crook’ as you have outlined before.

            I have an open mind. Just because it doesn’t overlap with yours doesn’t mean it is not open.

          • Adam Byrne

            Tax is but a minor aspect, maybe they weren’t, I shouldn’t have included that bit, I haven’t looked into it. You are merely splitting hairs to distract from the wider tone of the discussion.

            If I was following ‘RTE Pravda’ (whatever that is), I’d be following all the laws of the land as well like a good little boy and they’d have me right where they want you. You should realise that many laws are unfair and can (and should) be changed. Apartheid was once a law, would you follow that dutifully? F**k the law, I make my own.

          • Colin

            You don’t fuck the law, you leave the country with the fucked up law and enter another one legally, and hope they change it while you are away. Huge difference. So, if I was a white South African in the 80s, I would have left South Africa then, as I do not accept Apartheid as good law to live under.

          • Adam Byrne

            ‘Hope’ – good luck with that strategy Colin – is it related to ‘faith’?

          • Colin

            I do not expect Ireland to be run well with good laws and good law enforcement anytime soon, so I’m not expecting to return anytime soon. Its far more likely that I remain in exile, but you never know what might be lurking around the corner now, do you Adam? I’m not hoping to return either.

            Faith can sustain you during the hard times, and I can say that from my own personal experiences. But as the fella said, you don’t find many atheists on a sinking ship.

  23. Ryu Hayabusa


    This article in The Examiner playing on the established fears of rural folk, sounds plausible though.

    Can’t expect anything but a spike in anxieties when they axe 100 rural garda stations.
    Admittedly some were surplus to requirements but overall a crude myopic cost saving measure.

    Funny thing at the ploughing championship Garda Commissioner was advising people to use their community alert SMS service to placate their fears… getting into Fr. Ted territory. Who exactly are they meant to be texting, Batman.. The Masked Avenger.. Mr. Magoo??

    Was there something in last few days about Shatter mothballing the mobile Garda units? I take it they mean those farcical ‘mobile stations’ they floated while they were busy merrily culling the real thing.

    As D’Unbelievables said “It’d be a great little country if we could only throw a roof on it!”

    • Paul Divers

      “Of farmers who vote Sinn Féin, gun ownership got 100% support”

      • Ryu Hayabusa

        Yes indeedy.. I loved the way they pitched that one in, that was enough to raise an eyebrow.. or two!

        Those boys were tooled up to the hilt in any case!!

    • whatamess

      “Funny thing at the ploughing championship Garda Commissioner was advising people to use their community alert SMS service to placate their fears… getting into Fr. Ted territory.”

      that is some funny shit!!! “getting into” Fr.Ted Territory Ryu? More like Dermot Morgan couldn’t have dreamt it himself ! Surreal to all foreigners yunno!! …imagine a city slicker from New York witnessing a Garda Comm come out with that kinda stuff !! how cringeworthy…fill anyone with despair!

      ..on the “cost saving exercises” side of things,ambulance staff e.g. technicians/paramedics/nurses are now forced to position themselves just off large roundabouts all over the UK … most ambulance bases being sold and of those which remain,its downsize downsize ….these highly trained staff working 12 hour shifts from an ambulance ! What a sham!!

      Anyway anyway…
      I can hear my local Garda now at this moment shtoppin cearrz and the inevitable from his mouth ” What’s da nayme ???”

      • Ryu Hayabusa

        Yes well maybe I played that one down a little whatamess… all for dramatic effect obviously!

        It was the straight face on him while doling out the ‘advice’ …killer delivery.

        “Pull over therrre now likkea good little mann!

        …and who hafff we here nooowwwww, Mickael Shoe-Makkkerrr isit. . . hah hah hah???

        Where’s the fire pal, i’m gonna have to write you up a citation on that one.” :D

  24. Ryu Hayabusa

    They’ve long since foregone any legitimacy they had to authority. Eventually the people must wake up and “smell the coffee”

    This deference to so-called authority will wane as this crisis deepens.

    There is a well-spring of fury that has thusfar remained more or less capped.

    The enforced subjugation of the people in general can be seen in parallel to the manipulative suppression of interest rates by Central Bank policy at a falsely low level over a prolonged period.

    A bit like an elastic band, the more it is stretched the more forceful the inevitable snapback. Interest rates will find their level and the longer this is postponed the greater the ripple effect.

    • Grey Fox

      I have watched many events I would have viewed as “tipping points” come and go in Ireland over the past 6 years, I am absolutely astounded at the degree of bovine fecal matter the Irish people are able to accept, maybe the theft of deposits will suffice but I have my doubts….

      • Adam Byrne

        From where I’m standing, nothing will rouse the Irish from their deferential slumber – absolutely nothing.

        There is no tipping point and that fact will continue to be exploited.

  25. “There is an almost cult-like belief in the omniscience of the central banker to cure our ills.”

    Now the big complaint here is that endless money printing will not cure our financial/economic woes. No dispute from me there.

    But I am curious about the oft repeated statement on this blog that Ireland needs its own currency so that it can be devalued and thus make exports cheaper and so revive the economy.

    You can’t have your cake and eat it too David. What do you think this endless money printing does to the value of it, to its purchasing power? Why it lowers it of course. So what makes you think that what is bad for Bernanke to do is any better for Ireland as a country or any country for that matter.

    Truth of the matter is that currency devaluation is a reflection of an inefficient economy. As all countries are effectively printing (producing) currency in a competitive devaluation race to the bottom, it would seem that all nations economies are in sad shape. Hard to argue with that.

    The country that wants to improve will in fact have its own currency. But not more of the same old same old central bank debt based interest bearing notes. (The monetary Ponzi scheme that requires the greater fool theory of yet another borrower to step up to the plate to be loaned more mythical money to expand the money supply or the system collapses).

    The country will issue treasury notes at no cost , no debt and no interest.
    The country will revoke all odious debt.
    The country will pay off the national debt that remains with the free treasury notes, dollar for dollar Pound for pound, punt for punt ,you name the new currency.
    The country will demand all banks pay off their obligations to the state or the state will foreclose on the banks.
    All foreclosures will seize all bank property and sell it on the open market to the highest bidder.
    The state will then own all the banks other assets including the loan, mortgage, portfolio. These loans will be sold to the highest bidder. The borrower will be given a 30 day right of first refusal to redeem their loan at market value.
    There will now be no national debt and no interest to pay on that debt. The government budget will be correspondingly reduced. Income taxes will be reduced and perhaps eliminated.
    The increased money in everyone’s pocket will result in a wealth effect and improve the domestic economy and so the recovery begins.
    Relieved of the debt and the suffocating interest payments the country will flourish.
    To prevent inflationary expansion of the money supply there would be the monetization of silver coin and the repeal of legal tender laws.
    This employs a monetary system as discussed above that charges no interest, except to foreigners of course. (an eye for an eye etc.)
    The process of the monetization of silver coin has been presented several time before but having an alternative currency in competition with the national currency will provide the needed competition and the repeal of legal tender laws puts more flesh on that bone.

    Back to the hoeing I go. Great place to contemplate the solutions to the world. Picked wild mushrooms today. Fresh greens, carrots, potatoes, squash, radishes etc. too.
    Great sailing on Sunday. Bit of a wild ride.
    7 boats out of the usual 20 turned out. The wind went to the forecast 15- 30 knots. 4 boats retired and I came in with line honours , single handed and no flying sails. Sorry 5 fingers, no spinnaker!

    Life could be worse. Basics are: 3 square meals a day; dry, warm place to stay and some pleasant company.

    Meanwhile back on the farm………………..

    • michaelcoughlan

      “Truth of the matter is that currency devaluation is a reflection of an inefficient economy”

      This is one of the most important observations i have seen on the board in such a long time. Take note McWilliams.

      The Germans held on to wealth creating industries knowing the world will invest in more productive technology and enjoy a strong currency as a result. If even someone like me can spot that what the fuck is prof hone-a-scam up to saying we don’t need to investigate the Anglo tapes for example?

      The madness has been normalised. Bonbon must laughing his arse off!

  26. Craig Roberts comments

    Thus, an interview by King World News on Friday with Dr Paul Craig Roberts, former Assistant Secretary of the U.S. Treasury and one of the instigators of Reaganomics, should make one sit up and listen. The full interview can be found at this link.

    Roberts reckons that the current Fed QE programme is going to be virtually impossible to unwind – indeed the suggestion is that it might even have to be extended. If the Fed does to decide to start to unwind in any significant manner, the U.S. economy, which has been weaned in recent years on ever growing money being printed and pumped into it, will crash – and the dollar with it. If QE is continued at least at current levels, which he feels it will now have to be, eventually the dollar will also crash as dollar holders around the world realise the ultimate debilitating effects on the current global reserve currency of just printing more and more money without any economic strength to back it. There will, Roberts avers, eventually be a huge flight out of the dollar leading to an explosion in gold. But, when questioned on timing he admits he has no idea how long this would take to occur. Indeed, he says that he would have thought it would already have happened by now.

  27. From



    FED QE to Infinity and required Gold Price Suppression

    Clearly, the FED is trapped, QE to infinity, kicking the can, or pull QE and immediate economic Depression and fiscal deficits rocket higher. To keep the QE game alive, the FED/BIS directs bullion banks to manipulate the bullion market keeping the price of gold and silver low, as gold/silver is the canary in the coalmine, to make the dollar appear better than it is, for as soon as QE is pulled, bond market collapses, fiscal deficient skyrocket as unservicable, the dollar sinks into oblivion, hyper-inflation ravages the people, and the resulting wide spread economic depression. But until then, the middle and poor classes are sucked dry, as the banks manipulate all markets using ZIRP free money, as the rich get much much richer, and hence, the unlikeliness that QE will be pulled.

    The FED/BIS by directing the bullion banks (eg GS JPM) to short bullion, to give the false appearance that the dollar is sound, reduce the price of bullion, so that smarter eastern country, read Russia China et al, can buy bullion on the cheap, thus transfer gold/silver from west to each, yet bullion in the US is that last ditch defense to the inevitable collapse of the paper currency dollar, and thus, the FED is committing regular TREASON against the people of the US, so that the banksters and greedsters (bullion banks) can profit on the backs of the middle class and poor, and so that eastern countries can get their fill of bullion, and hence, acquire long term economic and military power adverse to the US. TREASON and GREED rule the FED bank and bullion banks, that unduely influence the US government, in a totalitarian fascist corrupt system, destroying the middle class, sucking the country dry of wealth, to enrich the 1% and the banksters, leading to economic depression and hyperinflation, without a last ditch defense to monetary failure.

  28. redriversix

    Humans are a strange species , considering how intelligent we are supposed to be…..

    In my attempts to help people with debt problems on a volunteer basis over the last couple of years if I have met 100 people probably only succeeded in helping 10 cases.

    Why so few ?

    Because people STILL try to find a easier,softer way to deal with their problems and its not there.

    The amount of possible deals we have achieved quietly with Banks for people is quite good but…none or very very few of these deals come to anything as people chose a pathway to destruction rather than a path which will get them some kind of solution from which they can rebuild from…

    They ring you and say “oh I was talkin to so & so in the pub & he said I could do better”……”or I was talkin to so & so over the garden wall and he said to ignore the banks”

    Or they simply chose to suffer themselves as misery seems to like company.

    and the solutions are always so simple…..but I do have to say in their defense that most of these people are quite ill from stress & anxiety and their decision process can be quite damaged..nonetheless it is still extraordinary.

    I know the Banks are mismanaged or corrupt or whatever terminology suits yourself but their is very little Joe or Joan blogs can do about that so it is a question of keeping life simple and doing what is right for them..again..this simple process becomes a herculean task because of the mental state of some of these people.

    I have some people who are encouraged to go to WAR with their Bank or Banks when these same people are too fuckin sick to go to hospital..never mind going to WAR.

    The idea of helping people should they ASK for help is for their lives to get better for asking..not worse..!!

    The idea is to keep them OUT of Court and to work out some kind of deal..but as I said at the outset..most people chose WAR in my experience and you cannot help them…just have to “let them go & wish them well”

    Unfortunately those who promote WAR have no fucking clue as to the cost of this stupid decision and when things go wrong are no where to be seen and then the phone rings again….

    Be under no illusion with few exceptions we are a Nation of Sheep who will roll over every day instead of saying no more.

    Government can bring in ten more taxes and their will be 80% compliance..why ? Ireland is a Nation of Sheep who have been dumbed down & who are excellent at submitting to the “herd” mentality.

    In France in 1941,a POPULATION of over 35 million people under German occupation.

    The Germans needed only 6000 Civil & Military police to keep the Country under Control.Resistance only really grew after 1944.!!!!

    By Contrast..Yugoslavia@1941 A Country with HALF THE POPULATION of France tied up 3 German divisions fighting resistance for the entire War..!

    So…sheep are well recorded in History..!

    SO do a household budget

    keep it simple

    put family first

    ask for help if needed

    Get on with the rest of your life………….

    Have a great day

    p.s thanks for all the nice comments..but I am a bad writer with some good days !!

  29. Good morning Barry

    You are a good man.

    Take good care of yourself.

  30. george

    So if States around the World are printing money like mad, that is no being spread evenly and for a good cause; but is being used by few vested interest groups to increase their wealth, without any consideration and regard for the social consequences of it. Are we not talking about the economic Elites, indulging themselves in “ binge printing of money”, while the rest of us have to watch powerless… some of us aspiring to do the same, some raging, and some totally indifferent to it?
    So what is left?
    Hope in politics and revolution?
    Hope in Nature, God, or the mysterious energies of the Universe?
    Hope in hitting the Jackpot?
    Is there any real and worthy hope, left for the rest of us?
    Shouldn’t somebody start a cult to venerate “hopelessness”: the believe in nothing and nobody, and let us rejoice in it?

    • bonbon

      Starting a cult are you? Or supplicating before the Mithra (look it up before even thinking about it) ?

      The way the Romans did this was to expect all leaders to take part in a Magna Mater ceremony (archaeo’s thoughtfully remove these finds) where the otherwise respectable public figures worked themselves up into a trance while a bull was slaughtered above them, chanting as they smashed their rocks with stones. How’s that for a cult?

      Wise up, or join up!

  31. bonbon

    The “Cult” is transatlantic, with practitioners Bernanke and Draghi, and noisy organs like the Oracle, Buffett. Their god, the Single Resolution Authority, demands living human offerings :

    Sept. 24, 2013 (LPAC)–Speaking before the Economic and Monetary Committee of the European Parliament on Sept. 23, ECB chairman Mario Draghi said that the ECB is ready to use again the Bazooka (Long-term Refinancing Operation-LTRO) to inject liquidity in the system, while at the same time admitting that the previous mega-LTRO injection (one trillion euros) had no effect on credit to the economy. Draghi also said that the ECB will not manage future bail-ins, but the newly created, single resolution authority will do the job. The Authority will be funded by national resources until it reaches its planned capital quota, Draghi said.

    “We are ready to use any instrument, including another LTRO if needed, to maintain the short-term money market rates at a level which is warranted by our assessment of inflation in the medium-term,” Draghi told the EP.
    The ECB had injected over a trillion euros with the first Long Term Refinancing Operation, lifting excess liquidity officially to more than 800 billion euros last year. As banks used the funny money to produce non-existing profits, they partially repaid those loans, but there are still 225 billion in excess liquidity in the system, according to the ECB’s own standard.

    The Authority will gorge on national resources until sated.

  32. bonbon

    The magical thing is the promotion of an anti-cult, “Sound Money”, to counter the “Loose Money” (Bush’s term).

    The spectacle of battling cults, with flagellants on the sidelines “mea culpa” as the cat-of-9-tails swings, is truly out the dark age so longed for by Royals and sundry.

    DMcW, I believe you must have had a glimpse of what’s behind the curtain.

  33. Adam Byrne

    Lads and lassies, I know this is not a jobs advertising forum but given the economic circumstances, I’m hoping David might forgive me on this one occasion…

    There’s 2 jobs (part-time possible) going here that have not been filled yet:

  34. Another opinion on Money printing

    “One way or the other, sooner or later, the system will hit the wall in default or hyperinflation. No other exit. Start building the new economy now. “

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