December 23, 2013

Official Europe is in denial

Posted in Economic History · 240 comments ·

What’s worse? Having to listen to a Portuguese communist telling us that the Euro was a victim of Ireland? Or having to listen to our own guy, when the EU has just nailed his ass to a post, telling us there is “no row” between Ireland and the EU President?

I don’t remember voting this guy to be President of anything, do you?

Now the so-called EU President went on to suggest that that chances were slim of Ireland getting a post dated cheque for paying the bondholders and “taking one for the team”. This statement comes on the same day as the former head of the IMF mission to Ireland tells us we should have burned the bondholders – as this column was arguing all along.

The notion that the Euro was not a major factor in the boom/bust cycle of not just Ireland but Spain, Portugal and Greece, is simply implausible. You may remember in the period from 2000-2007, the flow of funds from the core to the periphery was trumpeted as evidence of the success of the Euro.  This argument, proposed by the Euro-enthusiasts, was that capital flowing from Germany to Ireland looking for yield was a sign that the system was working.

In 2005, in the Pope’s Children, I invented a fictitious elderly German saver to represent what was happening to German savings and how they were being recycled out of Germany to fuel booms in places like Ireland, Spain and Greece. This warning about the day that the German might want his savings back was scoffed at by the Euro enthusiasts who refused to countenance the argument that the Euro would cause too much money to flow into the periphery in good times and too little in bad times.

The minute the crisis hit, these positive “flows” of capital suddenly became negative  “imbalances” which need to be fixed. The narrative changed from the capitalist free flow of capital from the core to the periphery, to a quasi socialist tract– except it was only socialist for the rich – which contended that the taxpayers of the peripheral countries should pay the debts of the banks.

The argument back then articulated by the likes of Barroso and the IMF was that the State must bail out the banks because this was the only way of saving contagious bank runs all over the continent. This interpretation of the way financial markets operate, resulted directly in the “taking one for the team” story.

But anyone who has worked in financial markets knows that the markets have no memory and events of the past remain in the past. The markets also know that if your problem is too much debt, your situation is made more sustainable by less debt not more debt. The solution therefore is to do debt deals, maybe not paying principal, maybe not paying money now and kicking out the debt for years to come.

In Greece, the EU oversaw a €100billion default of sovereign debt and what happened to the price of Greek debt after that? It rallied massively. In Ireland, the official line was that any changing of the terms of our debts (a default by any other name) would cause the markets to take flight. What actually happened when we didn’t pay back the promissory note on the day we were supposed to? Surely by not abiding by the terms of the contract, the markets would take fright? The opposite actually happened: the day the promissory note was not paid, and it was announced that it wouldn’t be paid for a few decades, Irish bond prices rallied!

So the interesting thing about the Barroso view of the world, is that is has actually being wrong at every juncture.  And now, realizing just how wrong the official Brussels position was, the IMF have changed their position on the whole thrust of policy.

According to the IMF this week, we shouldn’t have paid the senior bondholders at all. How does that make you feel?

But the saga is not over yet because the legacy of the massive movement of capital from one bank to another, from one country to another resulted in massive malinvestment.  Malinvestment is what happens when there is so much capital about that huge investing mistakes are made but those mistakes are only evident after the event.

The bad investment sits on the balance sheets of the banks for years because the banks’ initial reaction is that the market will come back and if they can just service the interest on the loans, the banks don’t have to write the loans off.

But as the handmaiden of the crash in asset values is a credit crunch and typically a period of deflation, the loan’s chances of being repaid are minimal with a bout of inflation.

As the European economy is in the grips of deflation, not inflation, eventually the banks’ balance sheets get worse and worse and the banks become Zombies. A Zombie bank is nothing more than a government backed safe deposit box for depositors – or at least that’s what the large depositors of Cyprus thought until their deposits were confiscated.

In order to fix the Zombie banks, the ECB came up with a ruse, which extended cash to them in return for their dodgy loans, only if the banks then bought high yielding government bonds. So for the past two years, Eurozone banking policy has been one where the central bank lends to bust banks who lend in turn to bust governments. The higher yield on the bust government bonds flows directly to the banks, so not only do the governments look like a better bet but the banks look profitable too. That’s only as long as the debt isn’t rolled over at the new lower rates, at which time the banks go bust again.

Draghi knows this and in an effort to put some sanity into the Eurozone banking system, he has ordered a stress test.

What do banks do when faced with a stress test?

They stop lending and hoard capital. The less loans they have out, the smaller the risk of bad loans and the less capital they have to raise to leap over the stress test hurdle. This means that the stress test, part of the great lurch forward to a banking union, has actually prolonged the credit crunch!

We see that in Ireland with bank lending falling all the time. The same is the case for the rest of Europe. Ireland for many businesses has become a cash economy, devoid of credit. Figures for the rest of Europe show the same story.

The other thing that banks do when they are trying to build up their capital is that they sell assets abroad and repatriate money. This may be why the Euro has been stronger of late because billions of Euro is flowing back to Europe as banks sell foreign positions.

Therefore, European businesses trying to export get the double negative whammy of banks hoarding capital and an overvalued exchange rate.

As you can see the Euro is at the epicenter of all this. Its travails are the cause, not the consequence of the banking problems and the proposed cure to the banking system’s woes lumbering the bank debt onto the citizens, playing with bond yields and now exacerbating the credit crunch with the stress test, appears like economic lunacy.

As to why the Irish economy is still breathing and beginning to recover, look no further than across the water to the booming UK, our largest single trading partner, which surprise, surprise doesn’t have to put up with the whimpering of Mr Barroso.

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  1. Grey Fox

    If we are to accept what we are told at home in that there would be a deal on our Debt and the EU and Prez Barrowboy are now saying no way!
    I would encourage a Quid Pro Quo approach and scratch the outstanding promissory note debt that was kicked down the road for my 13 year old son to pay!

  2. redriversix

    Morning. .good article David.

    many people here strongly advocated the burning of bondholders & were roundly attacked.

    I understand your point about the U.K economy “booming”….butI suggest if we went to the North of England we may see a slightly different picture….?

    I believe that the financial crisis will continue as their has not been any incentives to end it.

    Banks are more powerful than ever. The “elites” continue to get richer…the middle class are almost a thing of the past.Pensions still a timebomb……personal debt has still not been tackled.

    gainful employment has a wholenew meaning now.comparedto when are parents were building their careers.

    This financial crisis will continue as will the War on Terror which is intricately linked to same.

    I wish all of you a very happy peaceful & gentle Christmas.


  3. David,

    Thank you for your article. It describes perfectly the lunacy, arrogance and pomposity at the heart of Europe. Barroso and Schaeuble are beyond dangerous. The covering of bond holders was, I believe, the greatest financial theft in history. The ECB went political and forced our hand. I sincerely hope that this fraud will be uncovered by whistle blowers at the heart of the Irish Department of Finance who will disclose the true nature of exchanges (phone calls, emails and “the letter”) between all officials of Brian Lenihans department and Trichets office, and expose the dark heart of Euro political machinations.

    What strikes me as particularly egregious is the fact that normally when one lends money and receives a coupon payment the implications is that you are being paid for a risk – with upside and downside. In contract law this is called “consideration”. The German, US, French and UK bonds received 100 cent back on the Euro’s they lent to Irish banks, ergo, they got all the upside and yet in the end took no risk AT ALL!. We, the tax payers of Ireland, stepped in and took the hit, that they signed up for! We were never consulted, it just happened. This is very act is a direct attack on our sovereignty by stealth, forcing us to become subjugated to un-elected bureaucrats for the forseable future.

    We now owe more money today then we did when we landed in this mess. The problem is getting worse, not better. The bond markets will rip us apart when we start borrowing their money.

    Surely we have a case in the European of Court of Justice to have the bank bail-out struck out?

    This all shows that in the end countries have no real friends only “interests”.

    Sadly, as one who had celebrated the benefits of a closer Europe, I would now rather have a “Punt Nua” and tie ourselves to basket of our major trading partners, in the US, UK and Europe, the least worst choice. I just do not trust the Euro-crat’s and Irish politicians angling for fat appointments in Brussels.

    This is a long way from being over. Deposits will be next, and the Irish finance ministry will be complicit in their theft.


    • bonbon

      It is time to remember that the phrase “United States of Europe” was the catch word of Sir Oswald Mosley, the British fascist icon. Some may say we have a watered-down version called “Pan-Europe”, which came from the Mont Pelerin Society of F.von Hayek, the Austrian School icon. The latter often praised Hitler’s economics as did his fellow traveler Milton Friedman.

      Notice how many Irish economists heap praise on such economics. Even DMcW is beginning to react at the economic lunacy. Now no-one should be surprised at the nasty Barroso – that’s the kind that pop up in the U.S.E of Pan-Europe.

      • whatamess


        I agree too that DMcW is beginning to react at the economic lunacy and our host sees the courageous solutions needed to free us all…

        We are governed by proxy and what’s lunacy is that we tolerate the mere existence of these top-tier financial institutions and their evil economic and political power

        I really enjoyed this article David !..quality

        Happy holidays

    • Stephen you voted away any chance of bringing EU Monterey strong arm tacticians to Justus In voting yes for jobs remember that Stephen full employment overnight? Can you elaborate on why should European courts of Justus would give Ireland a hearing when our own courts In complicity with govt shot down any chance we may have had ,?

  4. Sherry Talk

    Barroso became lost in translation and not everything he said has been highlighted and this article has been selective in the evidence it did analyse . I do agree with this article on that evidence it did chose .

    However , the omissions in this article has much to be said on our insular mindset and funnel vision we have of ourselves and the narrow psych we dictate .This begs me to conclude that if significant omissions have been made by our esteemed host God only knows how the ‘flock’ of taxpayers interpret it to be .

    Barroso did blame the Irish Banks and the lack of proper Regulations in Irish Law to hold them to account and their actions were a significant contribution to the enormity and the imbecility of their negligence and transgression of the law and the lack of it .

    His intentions were clear and his deliverance was clouded in translation .

    Our politician continue to hold the view that somewhere down the line in 2014 their brinkmanship to influence the markets will pay off when they seek forgiveness of bank debts by tabling motions written by comediens .In effect they will sell new editions of Mrs Brown and Pat Short and expect to convince the German electorate to laugh it off .

    In the meantime AUSTERITY continues.

    • bonbon

      Ye might have something there. Barroso is an ex-communist and now a lectures as a fascist thug. That might have shaken the sherry right out of the glasses. Asking then why Inda kow-tows with that fascist thug would have caused choking, gasping. And the party would be over!
      The thugs words :
      “I am saying this because it would be wrong to give the impression that Europe has created a problem for Ireland and now Europe has to help Ireland,” he said. “In fact, it was the banking sector in Ireland–it was one of the biggest problems in the world in terms of banking stability what happened in Ireland. Let’s be honest about this…. But let’s be clear about the responsibility, because sometimes not only in the Irish case, I hear it’s suggested the problem have been by created by the European Union or by the euro. It is exactly the opposite. The problems have been created in some countries because they did not observe the minimum prudence in terms of managing their banking or financial sector, in other countries, because they were not able to control the excessive debt. This is the case.”

      That should clear up “omissions” for the sake of the sherry crowd.

  5. Is there a reason that the phrase, “Burn The Bondholders” should be used? To me it seems to give a chance to defend paying back the bondholders, due to its aggressive, “feck them” sounding tone. My knowledge of the intricacies of the financial system is more as self informed interest, rather than any professional interest; but it seems to me that standard financial practice should have been that anyone investing in technically insolvent companies (i.e. whether its banks, governments, or otherwise) loses their investment, or most of it. Am I missing something here? Shouldn’t it be the bondholders on the defense, trying to argue why they should receive anything?

    • bonbon

      The apparent confusion is a result of faux-issue. This foggy dew can be cleared by delving into a little bit of homework on Glass-Steagall, the law that was repealed end 1999 bringing on the bubbles and crashes since. Re-instating this especially in the USA will indeed impact Wall Street and the City, but in a way most popular phrases or expletives just cannot capture.

      Glass-Steagall puts the fear of God into amok banksters like nothing most honest citizens can understand. Here for the latest on Glass-Steagall

      • In a political world where spin is everything, it seems that using a phrase like, “Burn the Bondholders”, simply opens up a case for argument. The principle of not using taxpayers money to pay bondholders for failed banks is very logical, and in keeping with both democratic and capitalist principles. Adding emotion by this type of phrasing doesn’t serve anyone trying to stop unfair payments back to bondholders. I do believe the phrasing, which has come into fairly common lexicon (i.e. Stephen Donnelly and other politicians often use it), is harming, rather than furthering the case of the proponents.

        • bonbon

          The spin on “saving the taxpayer” is now exposed as “bail-in”. In other words a double whammy. It is important to cut through the fog.

    • paddythepig

      You could say the same thing about depositors.

  6. bonbon

    DMcW keeps looking over his shoulder at the U.K, but in a Guardian interview yesterday, Helmut Schmidt adds: “Britain has a problem which that will make itself felt in the next 15-20 years. In the 19th century it was the most advanced engineering nation in the world. Now it has more or less given up on engineering and replaced it with finance. That means you can be hurt.”

  7. redriversix

    Remember the kid in back to the future part 2 ?
    No education

    no manufacturing
    no new ideas
    dumb down education
    ramp up entitlement
    wall to wall consumerism
    debt is good
    saving bad
    the lure of easy money
    sustainability ?
    The M.T.V Generation…..?

    No empathy. ….

  8. Mick Regan

    Whilst agreeing with the overall sentiment of the article, i’m still curious as to the supposed increased relevance of the UK market. From what I can see ( we’re still below, for example, what was being achieved during 2011 and 2012.

    Furthermore, aren’t the vast majority of our exports (90%+) accounted for by foreign owned firms so the benefit to the local economy has to be measured accordingly.

    Having said all that, I would dearly love to have some democratic say in who acts on my behalf in the EU, but that isn’t part of the agenda, is it.

    • bonbon

      No it is’nt. Empire is the agenda. Ukraine brought that surely to the table for anyone to see. The Empire looks like it is going for regime change now in Ukraine, the New Eastern Front. Napoleon in 1812, Hitler in 1941, and now the EU in 2013. Russia has seen all this and has no illusions.
      Lithuanian President Dalia Grybauskaite, whose country has held the rotating EU presidency for the past six months, said that “Europe is open for the Ukrainian people, but not necessarily for this government–that’s the message.” She added, “The crisis in Ukraine was brought about by the very government of Ukraine.”
      That direct assault on the elected government of Ukraine, echo’s Barroso’s thuggish insult to Ireland, a barking chorus.

      Yes, official EU is in denial, and insane flight-forward.

  9. mcsean2163

    What’s worse?

    For me, by far and away, it is Kenny’s lame response.

  10. Typo? minimal WITHOUT inflation – good luck with that one once Budesbank figure out what ‘whatever it takes Draghi is up to!

    German Xmas Market here in Brum – they go bonkers in Brum/Irish pubs as can’t at home. Sabbath shows full of them too – and. Steelhead Paddies!

    As the true implications of Euro roadmap to Fed Europa becomes clear – I predict uprising by 2016 -the 1st Irish Republic is a failed state

  11. CorkPlasticPaddy

    As Nigel Farage stated in the European Parliament some time back Barrossa and the other clowns in Europe are a complete and utter shower of tossers, and Barrossa’s latest outburst just goes to prove that particular fact!

    As I mentioned before ever since the EEC changed to being the EU everything has simply gone ‘tit’s up’ and if it were ever to become the USE then God help us all!!!

    • bonbon

      The only way to force through a U.S.E would be a major emergency, a Lehman on steroids, or even worse, which they tried, immanent conflict with Russia (notice the new EU Eastern Front, Ukraine). They might go for just that. Enabling Laws, Carl Schmitt and Obama’s Unitary Gov’t, are “on the cards”, in the Tea Leaves. The only way to outflank this tyranny is immediately breakup of banking as FDR did in 1933. Then we will see the true state of “the books”, or as DMcW says, “unexploded landmines”.

  12. NK

    I suggest that it is not the official Europe who is in denial, but the people of member countries such as Ireland. You had a chance to burn the bondholders and even exit eurozone, but you didn’t. You got what you deserved (and voted for).

    Also, I think Barroso may feel insulted because you called him a socialist: he is a maoist.

    I can’t wait for euroskeptics to take majority in the EU parliament and start raising hell.

    • bonbon

      People voted for a bunch of liars, FG/LP who did NOT do what they promised. Nobody deserves that treason. SF did campaign, and made great strides, on burning the bondholders and an incessant smear campaign continues.

      Barroso is a fascist thug. Funny how the sherry-set pander to terms you bandy about, but choke and sputter on that truth.

      Neither be in denial nor waiting for a miracle in the EU parliament of a state that does not even exist.

      • whatamess

        Yes,some are still “waiting for that vision or heavenly light,,,,,with his cross and his camera and his bottle of beer” …

        Yerrra shur, let’s conveniently for the sake of ‘hassle’,in a ‘conveniently’ straight line is the shortest distance between two points kinda Chimpanzee/”popular approach” , rather than CHOOSING a wilfully FUTURE driven option, of choosing/electing the “human noëtic quality of will” to destroy the satanic Tower of Basel /Anglo Dutch tyrants cult ,hell bent on suffocating us all to the point of apoplexy !!!!!

        “The direction is given, not by the species as such, but by the potential shaped along the track followed by the species” – e.g. Fusion Technology! — “the proper intention of the increase of the per-capita, net physical productivity of the human species and its properly sovereign governments, lies within the per capita usefulness of both the product, and of its use, RATHER than a mere profit from the price”,as the monetarist system would proclaim!

        Forget The Hoenig Rule too…Glass Steagall,in it’s original simplicity, is humanity’s “artistic composition” of WILFULL and necessary ACTION/INTERVENTION to deal with the current complexity,,,especially the 6 TBTF ,Tower of Basel ,Wall St Serpents and London based counterparts

        GS is exactly the fire-walling needed,TESTED and for decades and NEEEVERRRRR found wanting,and citizens’ designed/purposeful strategy needed for Joe and Jane’s MUCH deserved PROTECTION ,from plausible IMPACT of future KNOWN toxic gambling debts, by the financial elite!

        Regrettably,some Tiger conditioned perspectives by some here, is waaaaay ‘out of focus’, as some position themselves on “the low stool” of the Padre Pio Embroidery Parable

        Glass-Steagall 2014!

        Then, our collective wilful and TRUE mission orientated approach to OUR future !

        Carpe Diem !

  13. joe hack

    I am off for a beer ð ¶ “Carpe Diem” can you get that on tap ¿

  14. Great article as far as it goes.
    One thing leads to another as is said.
    The tone exhibits frustration and irritation with the sequence of events. The lack of democracy. Even when allowed a vote, in a referendum, the controlling interest will keep asking the question again and again until they get the desired answer. Then that desired answer is never allowed to be refuted.

    The question has yet to be asked as to why we use the currency we do. I am not talking about the Euro, punt nua or the pound. They are all similar. All are fiat money based on debt.

    All the worlds problems reside in the fact that there is too much debt.
    Why do most of the world use such a money system. Why do we allow the central banking system to cover us all in total debt.

    Why as a sovereign people do not individual countries revoke the very system that envelopes them in this debt.

    Since the central bankers have been granted autonomy over the nations’ currencies we are all being subjected to a doctrinaire feudalist form of slavery.

    We are all indentured for our life to slave to pay the interest on the debt, both personal and state. Not only do we encumber ourselves but future generations.

    Why David do you examine all else but this. Why do you ignore the very essence of our problems. Why do you not explore the very creation of our debt problem which is in the creation of the money system we use.

    Why do you not explain to the people that we are enslaved, indentured, to the creation of all (97%, all except the coin in out small change)our money. Why do you not explain that the use of this money system and it’s constant expansion of the money supply ads more and more debt to the pile. How can you say that adding debt to debt increases our problems and is no solution while you accept and allow the very system that steadily adds more and more debt. The increase is now becoming exponential David. The problems exponentially worse.

    Why, Why, Why will you not go to the very root of our problems David?

    • bonbon

      Why do you obstinately refuse to go the roots of the monetarist disease, whether fiat or metal? Most now see the Austrian School trap, the lurking depopulation agenda.

      We Irish are very wary of genocide, and slavery.

      • lip syncing LaRouche
        you ignore the central banking problem too.

      • I am so dense that I have not a clue what you refer too. Please explain so that even a dim wit can comprehend your point of view.
        What is the monetarists disease.
        What is the Austrian School trap
        How and where is the depopulation agenda.

        • michaelcoughlan

          Your wasting your time Tony. Their modus operandi was explained by another poster. They use similar tactics as those employed by the leniinists of the 1970′s and have failed with the same completeness as the leninists for the same reasons.


        • michaelcoughlan

          Got me there Tony. Egg on my face.

          I hope things continue to get better for you Tony in the new year so best of luck.


          • No egg on YOUR face Michael.

            Scramble the eggs in creamy milk, add a touch of cinnamon, add a slug of Rum and a touch of Drambuie, stir briefly and sit down next to the fire and sup on that while you nibble a slice of Christmas cake.
            Use a pint mug Michael. It goes down exceedingly well with very mellow lingering aftertastes.

            Happy New Year.

  15. strathspey

    David, you and a sizable percentage of the Irish population advocate that the EU or rather ‘Germany’ was at the route of the Irish problem with the loaning of cheap money. However, if the same cheap money was available to all 17 Euro zone countries, how is it that only the Irish, Greeks, Portugese and Spanish seemed to have made a balls of it?

    • joe hack

      What a fantastic fundamental question that will be answered here.

    • Welcome Strathspey

      Its really got to do with current account balances. If you are running a surplus as Germnay does, then someone has to run a deficit – Ireland etc. So what happens is those countries with large current account deficits run into trouble. As to why we balls up, Greece was government borrowing, Ireland and Spain was private sector borrowing, Portugal was a bit of both, Italy likewise and the big as yet unfinished business is France.

      If you don’t have your own currency, what tends to happen is the pain in the fall in demand is felt in unemployment and emigration – which is what we saw here.



    • bonbon

      I notice neither of you mentioned banks this time, as if they did not exist. One look at Deutsche Bank’s 2012 Report would prompt (expletive deleted)

      “At $72.8 Trillion, Presenting The Bank With The Biggest Derivative Exposure In The World (Hint: Not JPMorgan)”

      So Germany is now number 1, ahead of JPMC in the casino. Do you think the new coalition in Berlin will do better than the clowns in Dublin, Madrid, Athens? Notice how ECB’s Asmussen is one of the “40 secretaries” and realize we have seen nothing yet. The IFSC Pales in comparison.

    • StephenKenny

      I suspect that it comes down to what you do with the borrowed money.

      If you spend the money on things that enhance wealth creation, then your economy will generally improve, whereas if you borrow the money for speculation, then it won’t.

      The question is therefore what constitutes ‘enhancing productive capacity’. Well, that’s very difficult to answer – and a correct answer this year might not be correct next, or in 10 years time. Similarly, a correct answer might become incorrect if someone else gets there first.

      One thing is for sure, speculative bubbles are so much easier than true wealth creation, and with the full-on support of those that benefit (the financial services sector), and of the media, they will always prove irresistible to the dishonest and weak of will.

      • bonbon

        Speculative bubbles are only easy because the repeal of Glass-Steagall made them so very, well liberal. What makes them even easier is Adam Smith’s moral sentimentality, or sentimental morality, or just plain hand-wringing at the “bad guys”.

        The difficulty monetarists of all stripes answering any economic question on “enhancing productive capacity” is a direct result of Adam Smith’s Edict. Instead, have a look at Economy

        • bonbon

          So You wish To Learn All About Economics

          Chapter 4 : Definition of Economic Value, and
          Chapter 3 : Thermodynamics of Political Economy

          I heartily recommend.

          • whatamess

            recommended for good reasons…it’s superb

            Watching this video link is also worthwhile ,as a ‘hitting the ground running’ strategy , before reading the above…it helped me anyway..


          • StephenKenny

            I don’t think so whataamess – the Larouche PR department, known here as ‘bonbon’, have a view of the world which is centred on only the committed members supporting a global leader to oversee their transnational projects, which have more than a passing resemblance to the vast Soviet era, transnational, engineering horror stories – diverting rivers, greening deserts, etc: Environmental and technical global scale disasters.

            The bonbon technique is taught to the members of the such movements, and includes all the normal tiring old stuff of: using any spurious method to link any disliked person or idea to a known evil (Hitler of course being a favourite); just simply using their numbers (bonbon is not a single person – they are a group) to endlessly talk over everyone else; if in doubt just use meaningless abuse to drown any other views. The bonbons have been hysterically anti any form of free markets since they joined this place.

            It’s a technique that’s as old as the hills, and anyone who remembers the Leninists in the student unions of the 1970s will become very nostalgic.

            As for Glass Steagall, it sounds nice but wouldn’t work at all, it’s just the sort of trite nonsense that political extremists use to pretend that they have some view beyond their political group getting power.

            Any broker dealer stripped of their ability to leverage on deposits would just issue shares (bought by pension funds), use the funds to leverage themselves to the sky, and rely on established limited liability legislation to catch the losses, while keeping the profits.
            Any deposit taking bank stripped of the ability to take part in the casino would simply invest in AAA investments, while using the same old methods to ‘encourage’ the rating agencies to grade whatever they wanted (e.g. 100 times leveraged subprime auto loans) as AAA.

            The system is broken, and as in all similar situations, the political lunatic fringe come out with their tireless sets of madcap schemes, all of which would end up in the a country/region/power bloc/world being run by the dear leader, supported by their ever supportive henchmen – ‘democracy of the committed’.

            All the markets are effectively rigged; there is no effective oversight of the financial services sector; and we have been, and will be, robbed blind, while being endlessly diverted by the mad schemes of the likes of the bonbons.

          • whatamess

            How’s Stephen,

            Diverting rivers, greening deserts, etc are all plans that contribute to increase of the potential relative population density tho right? That’s straight forward enough.i.e. Humanity’s courageous ,purposeful WILLFULL Plan to Grow …and NOT wait for wishful spontaneity – i.e.the current Plan it seems to me…in unknowable ways,we just let the “markets” decide our future?! not for me thanks

            Transnational projects are so so difficult to ‘imagine’ Stephen, especially when we witness every day the level of political corruption and lack of collaborative co-operation, on even minor matters,but maybe,just maybe,our imaginations can handle/not feel threatened ,the reality of greening deserts ,when we all see robots on planet Mars,by OUR design?
            The scientific prowess is there to deliver such CHANGE.Yes i too worry about the environmental ramifications ,but at least we are now OPENLY pondering and discussing “what could be” and yes what ‘some’ say is ‘pondering the imponderables’,chiefly because of our conditioning and forced fed limits to growth poison.

            So,respectfully, your “Environmental and technical global scale disasters” is maybe you stoppping investigating and reaching for a pacifier,as you might too if you were asked to pray to Ganesh the elephant god? I have beeen ‘guilty’ of pacifiers in the past myself and although i was convinced i was right,i was waaay wrong.So i strive to have an open mind and when fact confirms assertions,my mind, if necessary,then adjusts.

            [ The Ambani brothers in India were often told what they could realise their dreams,but it didn’t stop them tho.They had VISION and that’s lacking now like never before i feel….Casino economics can corral our minds and blind us to what IS possible,but our creative intervention is crucial.

            Mission orientated,MEGA scale,non- proprietary ‘philosophies’ interest me greatly,as the can be our propulsion from this deep hole.

            And yes,there’s plenty of negative press about LaRouche.This is not so surprising to me as there’s always been resistance to CHANGE and in my personal quest for TRUTH,i’m happy to hear all suggestions on how we extradite ourselves from the current enslaving system.

            CREATIVITY is needed now Stephen

            a Renaissance !but, in our minds first

            The history books will be full of what humanity did at THIS very precipice

          • whatamess

            the ganesh bit aboveis outa place, kinda….that comment is about systems of belief that are odd to you when you first encounter them and if u havent read my posts in last week or two Stephen,u might be understandably curious why the ganesh bit….anyway anyway ;)

        • bonbon

          @stephenkenny – you have absolutely nothing to offer, except Adam smith’s Brutish sentimentality. A true liberal, you cannot answer any question on economics, have not the foggiest notion of economic value, and for years now have posed here as an anchor, or millstone. Maybe DMcW needs such but Ireland must dump Smith, clear the foggy dew!

          • Funny thing is I thought Stephen Kenny was right on the money in all ways. It must aggravate the LaRouche Lip Syncers no end.

            Here is someone to put down:
            An individual able to express an opinion and a point of view without a script available to copy and paste.

        • michaelcoughlan

          You confuse liberal with corruption.

          As for hand wringing Maddof was let off lightly with his 150 year prison sentence was he? Ditto for the scumbags in charge of enron.

          Keep posting bonbon the more you post the more you damage yourself.

    • michaelcoughlan

      Hi StrathSpey,

      McWilliams response only describes the symptoms as they manifested in current accounts and borrowing patterns/currencies etc.. Bonbon the crazy gives a similar explanation of symptoms as they manifested in banks. The answer as always is the human condition so let me give you a couple of examples;

      Take David I dont have my leaving certificate drumm the CEO of Anglo. Why do you think such a halfwit was given the top job in Anglo? Because Seanie knew he could control him. Mr drumm was the type of character who would laugh and joke about the billions going awry in anglo and the Anglo tapes proved as McWilliams stated that the behaviour of him and his colleagues towards the end could be described as sociopathic. Did David’s behaviour damage his employment chances? No. He has a job in the US on a massive salary. Why?

      In my view the people who employ him know he’s the type of individual who will give it to the customers up the ass to suit thd bank. His lack of foresight and intelligence protects him from having to deal with the psychological consequences of his own behaviour a normal person
      would suffer from in the same set of

      Take bertie people should fucknoff and commit suicide ahearn. Same type of dynamic. All the feel good factor during the craziness of the boom helped him win a third term. Was he going to stop the music? No chance. Just like bonbon the crazy he blames other entities berties being Lehmans.

      On a far more genocidal the note which no dour will appeal to bonbon the crazy the german people were similarly duped by hitler when he took unemployment in Germany from severals of millions in the early 1930s down to less than a million by 1939 and of course we know where ge got the money (gold fillings) from to finace his activities from don’t we?

      If we don’t learn from our history we are condemned to relive it.

      Hope this helps,


      • michaelcoughlan

        Dour should be doubt.

      • bonbon

        Plain liars may hope to protect Hitler’s economics as Hayek of the Austrian School and Milton Friedman of his Mont Pelerin Society did. Hitler’s finance minister was Bank of International Settlements, BIS, chief Hjalmar Schacht, the austerity idol. And Prescott Bush, yes granpa, paid for Hitler’s election, in other words Wall Street. Neo-cons and libertarians then class the nazi camps as full employment, and FDR’s New Deal as unemployment.

        Is’nt it interesting that von Hayek, Friedman and “arch rival” Keynes ALL praised Hitler’s economics? Learn from that before such economics is applied here.

        • michaelcoughlan

          “Prescott Bush, yes granpa, paid for Hitler’s election”

          What a load of shit.

          “Neo-cons and libertarians then class the nazi camps as full employment, and FDR’s New Deal as unemployment”

          Do they? What an even bigger load of shit.

        • michaelcoughlan

          Hjalmar Schacht was part of he resistance against hitler and was imprisoned in dachau concentration camp after the plot against hitler.

          Keep posting bonbon. The more you post the more you damage yourself.

          • bonbon

            Hjalmar Schacht, the instigator of the infamous labor camps, was Hitler’s finance minister, founder of the BIS, and austerity idol. Hitler was indeed a bankers boy. As for Prescott Bush and Montagu Norman (BoE chief) financing the NSDAP, that is well documented :
            The Bush Family’s British Fascism

            The Reichstagsbrandt of 1933 is the model for 9/11. Enabling Powers? – look what happened!

          • michaelcoughlan

            Hjalmar Schacht denounced the treatment of the Jews before the war. For opposing hitler he almost paid for it with his life in dachau concentration camp.

            He was aquitted at the Nuremberg trials of any wrong doing.

            Keep posting bonbon. The more you post the more you damage yourself.

          • bonbon

            BIS founder Schacht put Hitler’s policies into full effect, and was not interrogated at Nuremberg, just smirked in an ermine coat.

            Those who were caught in the “bomb plots” were horribly executed. Schachtian austerity was and is a murderous, genocidal policy “for the effort”. It took a while for the bankers role t be made public, did’nt it.

          • michaelcoughlan

            “Hjalmar Schacht was not interrogated at Nuremberg, just smirked in an ermine coat”

            Really bonbon? Were you able to view the proceedings after getting there in your thorium powered time machine?


            Keep posting bonbon. The more you post the more you damage

        • bonbon

          Brooklyn, N.Y.-born Hjalmar Horace Greeley Schacht, of JP Morgan, libeled the 1932 Lautenbach plan, and von Schleicher, as “Bolsheviks”. In other words he blocked the only way to recover for Germany, motivating the coup d’etat. Plain evidence. Today we hear Hayek mobs using exactly the same libel, for exactly the same end.

          • michaelcoughlan

            Horace Greeley Schacht was bornmin tinglev then Prussia Germany now Denmark.

            Block the only recovery path for Germany did he? Germany is a baker case isn’t it.?


            Keep posting bonbon the more you post the more you damage yourself.

          • bonbon

            Yes he made sure Hitler got power. Hitler, the darling of Hayek, Friedman et al. His friends at the BoE and Harrmiman Bros. paid for the election. A cosy little nest of fascists.
            The Tower of Basel by LeBor is full of detail.

          • michaelcoughlan

            “Yes he made sure Hitler got power”

            He risked his life doing the opposite.

          • Schacht supported public-works programs, most notably the construction of autobahnen (highways) to attempt to alleviate unemployment – policies which had been instituted in Germany by von Schleicher’s government in late 1932, and had in turn influenced Roosevelt’s policies.

            Tell me it ain’t so. FDR was a fan of Sachacht


            He also organized the German economy in a way that reminds me of a LaRouche proposal to mobilize the economy in pursuit of grand plans. Tell me it ain’t so bonbon

  16. On 23 December 1913 the Federal Reserve Act was passed after most of congress had gone home. It created the greatest financial tyranny and tapeworm the world has ever known. Remember that without central banks world wars and socialism would be impossible: taxpayers & bond markets would rebel before they got too far.–The Money changer aka Franklin Saunders

  17. michaelcoughlan


    The article is much ado. States the obvious. What realpolitik suggestions do you have David?


  18. bonbon

    ZeroHedge notes that Goldman-Sachs has launched and is rapidly raising funds for a new proprietary trading fund based on the Volcker Rule — which purports to ban them. One of the Volcker Rule’s biggest of hundreds of exemptions is for banks issuing securities based on real estate loans. The real estate market, after all, is believed to be driving a “recovery” and therefore exempted.

    So here we go again, and don’t try parochial bunkum “to explain it”.

    The Volcker Rule only exists to block Glass-Steagall.

  19. pauloriain

    Struggling to take David seriously these days. Watching Barroso it seems he was making a bit of sense. Even if he wasn’t, what do people actually expect the man to say…… eh yeah we bullied you guys…… eh sorry! But lets get back to the reality of the situation… Are we saying that our banks didn’t wreck the economy? Are we say that we didn’t have a sheep running the financial services regulatory authority who shouldn’t have been appointed in the first place and secondly if it was a proper regulator it should have had the teeth to regulate to protect the economy.

    The worry is we take this ‘blame someone else’ approach, when we need to be adult enough to take some responsibility.

    We signed up for the Euro when our largest trading partners, the UK & the US don’t use the EURO.

    We voted down two European Treaties, Nice and Lisbon and instead of our leaders saying no to other European leaders, the Irish people democratically have spoken, we were forced to give them the result they demanded. So when it came to burning bondholders, is there any wonder that the so called leadership of the country wasn’t going to do what it was told.

    Are we saying that our government didn’t do benchmarking and over pay our public servants and also commit itself to running budgets based on property based tax revenue, in a country which had a property boom, where it was deemed supply of property was a problem…….. even though our country has the lowest density population per hectare in the whole of Europe……. duh!

    See at the heart of this is people trying to rewrite the narrative and if we don’t learn from history as they say, we are likely to repeat it.

    But here’s the best part and instead of analysing historical mistakes, why aren’t we taking about solutions and the most obvious one is, we can still stick it to these guys, by just taking the promissory note and all the bits associated with it out of the imaginary drawer where this imaginary money was conjured up from and just disappear it and then sit back and see what the ECB and EC are going to do about it. Remember, our banks need the ECB, but we are apparently sovereign again, so it’s time to test how sovereign we are.

    • bonbon

      Sovereign from what exactly? The way to identify that is firmly put Glass-Steagall on the table and watch the sparks fly. One or two of them will indeed burn the bondholders, but the real banshee wailing begins when we put this on the table :

      Franklin Roosevelt’s Credit Principle – Transcript Available

      Then let the ECB implode, and bring Wall Street and London down with it. The USA, Germany .. will all put this on the table, so Ireland must get it’s act together and be ready.

      • Going through the transcipts one is introduced to the ideas that Larouche advocates.

        Not in straight details but in a round about way. Demonize Andrew Jackson ,and derogate his achievements.
        applaud the banks of the US of Hamilton and Biddle. that is what do we find.

        Roosevelt advocating a national “credit” from a bank to loan to farmers in their best interest of course, after the example of the two previously mentioned banks.

        further research reveals both First and Second National banks and their advocates with strong connections to the house of Rothschild, in fact funded by Rothschild.

        This leads to the astonishing thought that bonbon while vilifying the “venetian” bankers and their descendants, the banks of Amsterdam and the spinoff Bank of England and calling then “Empire” and brutish to boot, says nothing about the current banking system as a spinoff of the brutish empire.

        Now we find him advocating a credit system that is apparently just the same as what we have already which is the source of all the problems.

        “Although Nicholas Biddle was President of the Bank of the United States, it was well known that Baron James de Rothschild of Paris was the principal investor in this central bank. Although Jackson had vetoed the renewal of the charter of the Bank of the United States, he probably was unaware that a few months earlier, in 1835, the House of Rothschild had cemented a relationship with the United States Government by superseding the firm of Baring as financial agent of the Department of State on January 1, 1835.”
        Above extracted from,

        The only solution is to be rid of the central banking system completely and to issue treasury notes that require no bank at all. The notes are issued free of debt. There is zero requirement for a national debt. A national debt is the creation of the central banking system.

  20. bonbon

    Often discussed here is the urgent issue of credit for the real economy. The best way to clear up the confusion that monetarists of all stripes sow to block at any cost the urgent reconstruction now needed :

    “FDR’s Credit Principle” investigates the needed transformation of the relations between direct lending institutions and government power, and debt and budgeting.

    Part I, “FDR Reviews the Crisis and Reforms of 1933,” discusses Roosevelt’s own review of the crisis of 1933 and the essential reforms from his own preface to the 1938 Papers of Franklin Roosevelt, and the Hamilton precedent for appropriate government authority.

    Part II, “Non-Mechanical Economic Cycles: Generalizing the Principle of Government Credit,” is a conceptual discussion of credit as a more general principle of economy, as expressed in a comparison of Nicholas Biddle’s Bank of the U.S. and the case of FDR’s Commodity Credit Corporation. This understanding of government credit is contrasted with the actions of the Andrew Jackson Administration’s attack on the credit system. Part II is the most important part of the lecture, and referenced throughout.

    Part III, “Franklin Roosevelt’s Credit Budgeting,” reviews in detail the key parts of Roosevelt’s annual Budget Messages, from 1934-1941, which provide much needed clarification of the correct understanding of of debt, borrowing, and a productivity budget. Jackson’s false view of debt is contrasted as seen through letters at the time.

    • bonbon

      Part IV, “FDR’s Approximation of the Bank of the United States: RFC Direct Lending and the Twelve Credit Banks for Industry,” takes up the little known origin of the lending powers which made the growth of the 1930s possible, and how the actual intent of FDR was to permanently transform the Federal Reserve System into a direct credit system like Alexander Hamilton’s Bank of the United States. This reviews his legislation for 12 “Credit Banks for Industry,” and the eventual modifications of Section 13 of the Federal Reserve Act, and associate powers of a transformed Reconstruction Finance Corporation.

  21. Paul Divers

    Irish singer-songwriter in New York pens poignant Christmas song (VIDEO)

    Merry Xmas Everyone.

  22. bonbon

    Besides the destructive mumbo-jumbo of Keynes here is an movie expose of

    Austrian Economics: The Idiology of Serfdom.

    Monetarism of such varieties is the deadliest enemy of recovery and reconstruction.

    • I listened to the first 5 minutes and had to turn it off. Referring to the Austrian economists as deriving from the Hapsburg empire centuries ago is balderdash; LaRouche lip syncing and Karaoke comments.

      Try this instead. for those interested in rational comments

      • bonbon

        Whether you like or or not Hayek was a Hapsburg dreamer, as he states in his 1983 interview. The video documents every single claim. Now the Austrian School may find this embarrassing, but so what? It is a backward feudal swamp.

      • bonbon

        Rand Paul’s Austrian School: The Hapsburg War Against America

        In 1876 the Hapsburg Emperor Franz Joseph hired Carl Menger (1840-1921), who would become known as the founder of the Austrian School, as tutor to his son, Crown Prince Rudolph.
        Menger’s new dogma, that the State must not be allowed to interfere with financial freedom — the right of imperial financiers to deploy their Money Power — took its place beside other “liberal” anti-republican instruments forged in the Hapsburgs’ crypts: pessimism in literature, soulless psychology, deliberate ugliness in art, crazed atonality to overpower Mozart’s and Beethoven’s beauty. (Carl Menger’s brother, the socialist attorney Anton Menger, crystallized this assault on reason and progress into what became known as the Frankfurt School.)

        Germans reacted to Menger’s polemics against Lincoln and Bismarck by referring derisively to the “Austrian School” — meaning those who argue for the presumed logic of imperial Free Trade economics while declining to discuss any actual history whatsoever. This is the origin of the term, Austrian School, which has identified Menger’s disciples such as Hayek and von Mises, Rand Paul’s brainwashers.

      • bonbon

        And William Tell refused the tyranny of Habsburg Gessler.

      • bonbon

        In the last chapter of Friedrich von Hayek’s book, The Road to Serfdom, Hayek demands that national governments be prevented from interfering with international trade: a global police force must be set up, to usher in the final world empire of Free Trade.

        There was a setback just last week when Ukraine refused to bow to that tyranny. Unfortunately Inda has stooped so low to the Barroso-Gessler, he should be ashamed of himself.

  23. bonbon

    Sophistry at its very worst, the FT takes out a full page attack on the Pontiff’s denunciation of the “market-economy” and inequality. The Fabian touch omits entirely that the Pontiff exposed globalization as a killer economy.

  24. bonbon

    There is one thing worse than Barroso or Inda, and that is the attempt to stifle any recovery, and progress, to satisfy an insane ideal of monetarism. Sooner or later these nutcases will have to admit, as Hayek, Friedman, Lerner (a leading Keynesian) did, their admiration for fascist economics ala Schacht, Moussolini, Pinochet, Franco to name only a few. watching opportunistic politicians dodging the obvious would be amusing if it were not so destructive.

  25. Pat Flannery

    All I will say is that I agree 100% with Barroso and disagree 100% with David and the Irish media spinmeister machine. The Irish should man up to what they did and stop blaming their Euro partners. That lie is damaging Ireland. Lies never work. Merry Christmas.

    • bonbon

      You mean that Ireland is the biggest banking problem in the world? That’s just a little over the top is’nt it? See above for his exact words.

      I think Deutsche Bank chiefs Fitschen and Jain, Jamie Dimon are howling at your sheer ignorance, and have their knuckleduster thug out front to get you in line.

  26. bonbon

    The disgusting scrooges at the Indo who refer to this little bit of government generosity as “running up a bill” -

    President Michael D Higgins‘s office has honored 423 older Irish citizens, awarding them a €2,540 gift and a personal letter from Mr Higgins, for reaching the age of 100. This includes citizens from the entire Island even if now abroad.

  27. michaelcoughlan

    Happy Christmas everyone.


    • Peace on earth
      Goodwill to All

      • bonbon

        The austrian School Von Mises Insitute’s paid writer Thomas DiLorenzo, in his hilariously misnamed book The Real Lincoln, defends secession and claims that slavery would have ended peacefully if only the United States had been successfully destroyed.
        Aba Lerner (Keynesian) of Columbia University, blurted out that “if the social democrats in Germany had listened to (Hjalmar) Schacht, then they wouldn’t have needed Hitler”.
        What monetarists Hayek, Friedman or Keynes mean by goodwill is hardly peaceful.

        • You act as a disgusting perversion of humanity bonbon.
          Only a warped mind would attach such comments to expressions of goodwill sent to all people in the spirit of the Christmas message.

          • bonbon

            So now you are usurping the Pontiff’s role? A golden calf somewhere perhaps? Such pomposity!

          • michaelcoughlan

            Actually asshole if Tony were usurping someone at Christmas it would be jesus. If you have any golden calfs around the place see if any local charity will take them.

            Jesus was opposed to Moneychangers and people who worshiped golden calfs but valued gold since it was one of the gifts he received from the three wise men.

      • Ryu Hayabusa

        A fine sentiment Tony.

        There is just one impediment… Man! :O

        • Ryu

          When all is said and done there is only one thing to offer your neighbor. Wishing goodwill and peace is as neighbourly as it gets.

          Person to person and nation to nation.

          Now and then we get to help out too. Those food banks are popping up everywhere. Unfortunately that there is the need but lovely to see that all these people volunteer to help out those less fortunate. Charity thankfully is far from dead.

          Happy New Year to you

          • Ryu Hayabusa

            A very happy and prosperous New Year to you and may fortune smile upon you.

            Yes, It’s true what’s required is a seismic shift in collective human conditioning.

            How much more misery and suffering will have to be endured before this nadir is reached?

            And even then it’s by no means a foregone conclusion.

            One good thing to arise from this morass is the boost in the volunteer movement that you highlight.
            I volunteer myself for a few years now, &it definately heightens the sense of self satisfaction in a person, makes you feel better about yourself.
            Plus you get to meet like minded people, it’s got lots of things to recommend it.

    • Ryu Hayabusa

      Happy Christmas to you Michael.


    Antal Fekete outlines why the period 1814-1914 was one of the most prosperous in human history.

    The real Bills doctrine (RBD)moved goods rapidly from production to consumption and acted as self liquidating credit. Gold was only used to settle the financial differences between the parties.

    The RBD was abandoned as the nations prepared for war and international trade came to a complete halt. As it was not re-implemented after hostilities ceased it was the major reason of the collapse of the gold standard and the depression of the 1930′s.

    Re-introduction of the RRBD together with a return to a gold standard would see a quick return to prosperity.

    It is well worth a read for serious students of the causes of our current monetary and economic crises.

    • bonbon

      No mention there of the Long Depression known as the Great Depression until 1930 hit, which was caused by the Specie Resumption Act. That insane attempt at “sound money” was the direct cause of the FED act. A Specie Resumption today would cause a depression beyond even belief. That is better termed genocide, either willful or not.

      • You twist the article to suit your warped viewpoint. Others will read it and make less biased decisions.

        There is a discussion of the depression and the causes of it, completely overlooked by yourself.

        You make no comment on the real bill doctrine which is the bases of the essay. You pick away at the fringes like a demented terrier. Rational logical discussion with you is impossible. You simply spoil everything you touch. You essentially make this blog impossible to operate as a proper forum for discussion. You attack every other person’s presentation with your lunatic LaRouche lip Sync.

      • bonbon

        Still avoiding the Specie Resumption Act. IT is indeed embarrassing for the “money value” clowns of Adam Smith’s insane British East Indie Company policy.

        That Long Depression, today overshadowed by the Great Depression and now is a lesson learned. The mad idea of “sound money” is simply from unsound minds.

        A Great Depression now imposed by some utterly incompetent Adam Smith mob would indeed spoil a lot more than a coffee table “discussion”.

        So cop on.

    • bonbon

      Quote : ” we must give the Bank of England credit for financing Pax Britannica for a period of one hundred years between the close of the Napoleonic Wars and the outbreak of World War I. ”

      I thought Pax meant peace. Next :
      “the main cause of the Great Depression of the 1930′s was government sabotage of the Real Bills Doctrine of Adam Smith. ”
      Very odd, to say the least. “FDR’s Approximation of the Bank of the United States: RFC Direct Lending and the Twelve Credit Banks for Industry,” was the way out of the Great Depression, and the author fails to mention that, for some strange reason.

      • Probably because he does not agree with your(LaRouche) proposition.
        Many have said the US did not recover until after WW11

        Also the Doctrine of Real Bills was abandoned. FDR also abandoned the gold standard domestically and seized personal property while devaluing the us dollar 65%.
        Then came Bretton Woods and the US has run a Deficit ever since.
        Because of that Nixon revoked the gold convertibility of the US dollar
        Because of that there was no restriction on the printing of currency
        Because of that we are all in debt to the eyeballs with no way out.
        Sort of started with FDR not getting rid of the FED when he had the chance.

        Reminds me of the tale of the horseshoe nail. for the want of … the kingdom was lost.

        We can all open old closets and point fingers.
        Deal with the present. Get rid of the central banking fiat Ponzi scheme money.

        When you are ready I’ll tell you what to replace it with. ……oops done that.

        • bonbon

          What has Pax Britannica to do with the present, or for that matter Adam Smith of the British East Indie Company? Their view of the world is now at its end. See below for the phase change.

  29. bonbon

    The ominous foreboding of 2014 and 1914. The Transatlantic regime is dead and lurching towards war.


    Official Europe in denial? Look at this stark warning from Der Spiegel FT columnist Muenchau :
    Has he read that Strategy Report?

  30. bonbon

    Not sure if DMcW mentioned this :

    Irish shell companies in financial alchemy with German pension funds. Not fictitious at all, and only hit the press in Dec 2013.

  31. whatamess

    -30.8% in 2010 for Ireland ! And 3% is our target !

  32. whatamess

    And have a quick look at Greece(on the annual deficit graph) in 2009 @ -15.6 …In 2010 then Greece, with an aggressive upward adjustment to -10.7% [ Greece itself buying most of it's own sovereign bonds(debt mounted on further debt)]

    The graph also shows the MASSIVE adjustment then -30.8% in 2010 to -13.4% in 2011 for Ireland …for me,that steeep graph tells a clear story of the strangulation and suffocation of people,to keep the evil, rigged broken ,system afloat

  33. joe hack

    Monopoly at least in the game sometimes the greedy go to jail ¿ but still no GS don’t want to spoil the fun;that’s just a game isn’t it – not reality – no one gets hurt¿

  34. Paul Craig Roberts
    Allegedly, the US has free capital markets, and globalism is bringing free capital markets to the world. In actual fact, US capital markets are so manipulated–and now by the authorities themselves–that manipulation cannot stop without a crash.

    What American “democratic capitalism” has brought to the world is manipulated financial markets and the absence of democracy. How long this game can play depends on the outside world.

    Read the full article. US real economy is declining. All stats that show otherwise are manipulations.

  35. Dorothy Jones

    Germans were hoarding the D-Mark. 12 years after the introduction of the Euro, 13 billion D-Mark is in circulation in Germany. In Hamburg alone in 2013, 3.86m€ were exchanged.

  36. Adelaide

    My flight delayed to Dublin, what’s with the record-breaking bad weather there, a code RED-RED? I hate airports!

    Anyhow, I’d be interested to hear your predictions for 2014. Predictions are so yumptious. They’re irresistible.

      • StephenKenny

        That’s a very ‘British’ sort of interpretation.

        The uk is printing in excess of £100bn per year, the uk economists predict that government income will rise by about 20% over the next 4 years, to make up this deficit, since no significant expenditure cuts are planned. Even at the peak of the most absurd of property bubbles, the uk economy has not grown at a pace like that.

        The uk labour government proudly announced that it used mass immigration (about 850,000 per year in the mid 2000s) to hold down wages. I haven’t seen any uk media or public sector admission that this rising national gdp will be accompanied by falling gdp per person.

        Even this rising national gdp is questionable – what will these new people do? Where will the jobs come from? Certainly, all this noise about a booming IT sector is just a media fantasy, created and driven by the commercial property owners in those areas.

        The uk now has direct government intervention in the residential property sector, interest rates at a 350 year low, and a government deficit running at about 20% of government expenditure.

        In conjunction with the other developed economies, every economic indicator is now being ‘managed’ – e.g. A rising gold price is an indicator of rising inflation, so artificially hold down the gold price, and that’s one less indicator of inflation. This enables them to do the unthinkable, and print (electronically or otherwise) unlimited amounts of money, and for that to have no apparent negative affect on the economy. The problem is, how to find indicators which indicate the true state of the western economies.

        When looking at the uk, the uk media is absolutely the last place to look at for anything even approaching the truth (apart from the sports news). Just as in the USA, the fourth estate was bought up years ago, and is little more than a PR department.

        • bonbon

          Ukraine, so far, has seen the indicators of the “western” economies, and refused the offer.
          Economist and former Member of Parliament Dr. Natalia Vitrenko, head of the Progressive Socialist Party of Ukraine and the new National Resistance Front against the Eurocolonization of Ukraine, titled her December 19 webcast, “Russia Has Saved Ukraine — For the Moment!”
          The problem is to do some homework on physical economy to find the truth. All monetarist “indicators” are totally discredited (no pun intended).

          • StephenKenny

            The problem with apologists for the various kinda of defecto dictatorships is that their range of arguments is so limited.
            For example, it is clearly quite impossible for the bonbons to understand that merely because there are a set of manipulated indicators, that there aren’t others which aren’t manipulated.
            For example, prime farmland in the USA is now far above any price that makes farming even close to being profitable.
            Perhaps, being anti free markets, the idea of the cost of production being generally far higher than the general value of that which is produced, is perfectly acceptable to such people.

          • michaelcoughlan

            Hi Stephen.

            Two things;

            Farm land in irelan is one thousand percent higher in price than
            Its commercial value.

            Re economic indicators for inflation in th UK. They don’t count the ones that tell the story for example;

            In the last 5 years public transport costs have risen 10% to 15% per year. My brother who lives there told me this. Wages for labourers re the same as they were in1990 whilst property prices are 300% higher or roughly 15% per annum. Petrol and diesel are 50% higher now than 5 years ago. We then have to Listen to mcwillams state Europe is in deflation when in fact there is rampant stagflation.

          • paddythepig

            So why don’t farmers sell all their land?

          • michaelcoughlan

            Hi paddy,

            I don’t understand the question. My first instinct was to say why should they? Replace prime farmland with worthless fiat currency?

            Land is still considered an asset on a balance sheet even at these prices of 10k an acre. During the
            boom prime land went for 25k an

          • paddythepig

            Any other asset that is 1000 percent higher in price than in value would be sold. If land truly is overvalued as much as you say, why don’t landowners cash in?

          • bonbon

            Defecto dictatorships? Have you not noticed DMcW’s reference to that fascist thug Barroso? Guess which dictatorship you live under? Do not be the “good Irishman” as the Germans were in the 1930′s. Putin has given the poor euro-peans a stark choice.

            AFAIK farmland is for food, NOT biofuels. Have you ever heard what Obama’s quota has done to prices? Stick to physical economy, avoid ALL monetarist mumbo-jumbo, and then ask what could possible be the objective of Obama. Now the EU is slavering after Ukraine’s “black earth” like Hitler before. Would that EU plant biofuels, pray tell?

          • michaelcoughlan

            Hi paddy,

            There not greedy and need the land to farm.

          • paddythepig

            I don’t buy it. Farmers are the cutest people in the country, and wouldn’t keep an asset if it wasn’t highly valuable to them.

            If land was so overvalued why would the guy with 20 acres not sell the lot for 200k, and do something else?

            No demographic is better at playing an beal bocht than our farmers.

          • michaelcoughlan

            Hi paddy,

            The ans is they are not greedy and need the land to farm. They have the skills as farmers and love for doing it so why would they do anything else?

          • paddythepig

            They do not ‘need’ the land. They want the land, because they know it’s worth more than you are stating. Sites for the kids, and so on.

            Enough of this beal bocht shite.

          • michaelcoughlan

            Your post is what’s a load of shit paddy. The land provides for those who provide for it. You repeatedly MISS the point. They are NOT greedy so won’t sell at ANY price. Farmers incomes are tiny compared to the average industrial wage.

          • paddythepig

            Michael. You play the poor mouth here, yet you are sitting on a fortune, and you can easily cash in if you so wish.

            Other people will pay good money for what you have, and other people can farm, so what are you afraid of?

            We’ve all seen the field, so we know what farmers are like, so your attitude is not surprising.

      • Boom and bust in the same country at the same time.
        Symptom of the money system.

  37. bonbon

    Here is what “official europe” is in denial of :

    LaRouche: It’s the End of the Old Imperial System

    Have a look at the map of the new Russian Customs Union. “This is going to cause a real ruckus in Europe,” LaRouche said. Ukraine is considering which documents it can sign.

    Ireland has no need to be in denial, and this phase change has huge implications.

  38. DB4545

    Just read that article Paul. Shocking. I’ll take it Mr. Saatchi didn’t approve the banner. The TV channels spit out non stop celebrity chefs (one of whom Mr. Saatchi may not approve of either) and people are reduced to this level of subsistance? These are our neighbours and we have our own soup kitchens. The EU isn’t working, certainly not for these people.

    • joe hack

      “The EU isn’t working” – the Euro, the British pound and the USA Dollar don’t work to serve the the majority of the people, but what society does work for all? There is not any good will to all here never mind in the EU?????

      • Paul Divers

        It seems that there is no goodwill anywhere Joe.

      • DB4545

        What society does work for all? None but what about societies that work for most? I’m not looking for socialism. I travelled in Eastern Europe prior to the wall coming down, socialism doesn’t work. How about Norway, Denmark, Sweden, Australia or Canada. There’s a range of social models in that mix and I’m sure one would work for us, in fact it’s where our emigrants choose to live and work.

    • Paul Divers

      Thank you for reading it DB4545

      I was shocked when I saw the picture of the church because I grew up literally a few doors away on the same street and it’s hard to take in. This is the story of life for millions in ‘Booming Britain’ as McWilliams calls it.

      This is the vilest government the British people have ever endured and it is patently clear that Ian Duncan Smith is a madman who should be barred from any form of employment. He is a contract killer and the statistics will prove it one day.

      The real story of life in this Neo-Con hell will be recorded and told by people like Lorraine. Not ignorant well paid morons from the msm, gold bugs and ideological crackpots.

      • DB4545

        I recently attended a Church of Scotland funeral service in Cranhill Glasgow (an old friend) and couldn’t believe the level of poverty. I was in Stoke on Trent a few years ago on business and again couldn’t believe how grim the place looked. I’m speaking as someone who grew up in 70′s/80′s Dublin 200 yards from Fatima Mansions so I’m no stranger to hard times. I lived in London for a number of years and it’s hard to believe Belgravia and Chelsea is on the same island as Cranhill and Stoke on Trent. The disparity in wealth is truly shocking.

        • Ryu Hayabusa

          I know a dude from Stoke on Trent and he’s a right misery guts!. Mayhap the explanation is he was exposed to the squalor you outline DB4545.

          One strange accent to boot, at least his variant of it.

          • DB4545

            Yes they don’t have a reputation as party animals that’s for sure. It’s a bit of a cliche in the south east of England that it’s “grim up north” but there is some truth to it. I’ve seen some poverty on this little island but it pales in comparison to some places in our neighbouring isle.
            I’m well off topic at this stage in relation to official Europe is in denial. I think we’re in denial as well. I think we’ve lost our way.I’m not a globalist or a sinn fein “ourselves alone” person. I think we’ve exchanged one empire in which we were effectively a farm for another in which we’re being reduced to being a farm and a quarry. We entered Europe in the hope that we’ed be one of a nation of equals. The deal as it stands is that we got some infrastructure including a motorway system in exchange for handing over our marine resources (fisheries,oil,gas)for next to nothing. Compare our situation to Norway with similar natural resources. I think it’s time to start afresh. This model of Ireland isn’t working for us.

  39. whatamess

    Japan’s economic outlook looking favourable,reports tell us.
    hmmm i wonder?

    Japan’s current debt load is considered unsustainable and although exports are maybe at ~5%,but imports have also grown in tandem to ~3%,so the once giant manufacturing nation ( No nuclear now and it did contribute 30%) is not roaring,but holding steady,seemingly. “Abenomics” is to revive their economy (i.e.BOJ’s new monetary reforms ,aka “3 arrows”, – aggressive reforms of further QE, fiscal stimulus and (supply side)structural reform …[i'd just love to know the ratios between the three arrows??]

    old article …lays it out well Japan’s plan to extradite themselves

    But Kyle Bass ,the Texas based hedge fund manager, still takes the position that Japan will soon detonate as Japan is failing miserably on the “third missing arrow” ,and even the overall aggressive stimulus,simply isn’t enough to counterbalance the debt mountain of 230% of GDP,which places it on the edge of fiscal bankruptcy and ‘an anytime now’ possible default![Puerto Rico is a sick patient too, but giant Japan,given last rights 6 months ago,is still hangin' in there ?]

    With a huge gamble of DOUBLING their monetary base,current economic growth is healthy and unemployment is at only 4%.Inflation ,now, at a 5 year high and heading towards it’s target of 2%(from a problematic deflationary position of well two decades really)but that 2% brings it’s own worries too,as bonds when they cross this 2% ‘threshold’ ,,people may very well and understandably SELL bonds,and that, the Japanese Gov’t can’t allow happen.What a juggling act!![The downsides to a weak yen too is it makes imports more expensive and imports are staedily on the up] …

    it’s all a maze,to me anyway

    Will a future “Black Swan” come from the Land of The Rising Sun? hmmm

    • whatamess


      when/if bond rates rise beyond 2%,the Gov’t will have little choice but to buy them all up to keep some kinda healthy rates,but that’s even more debt and they are stretched to the very max already…yea they can print away i suppose, but that gain debases their currency…what a rock and a hard place , especially when all the printing and QE doesn’t deliver the intended growth

  40. whatamess

    QE is useless without reduction of fiscal drag(e.g.poor consumer spending,high energy costs and servicing costs of Gov’t loans’debt)and all the while,the private sector is Deleveraging? it doesn’t compute how it possibly can work? …(unless there’s MEGA growth of course,but that hasn’t materialised,not even close)

    These gamblers seem to casually ignore the posteriori reasoning and empirical FACTS, in favour of their ideological delusional blueprint of “free markets” ,that don’t exist and maybe never have,not in a REAL way.

    P.S.Thomas Edison back in 1921 had an idea of energy backed Gov’t created debt free fiat money….appears it wasn’t just electrons that occupied his mind !

  41. SMOKEY

    50 BUCKS a month for the Macro 360??????
    A fiver a week would be too much.
    I will be very interested to see where this goes.
    It is an “insider and outsider” choice for sure.
    50 bucks a month!!
    Im an outsider on most things, and this is one of those.
    But hey GLWS’s of the subscriptions. And as always sometimes it is good to draw a line in the sand and exclude the discontented lazy rabble.

  42. Ryu Hayabusa

    Quite a contrast in

  43. We can talk all we like about this money or that kind of money but nothing will, can change in the economy until the existing money system is gotten rid of.

    The current economics are designed to fail. As they fail they allow wealth to be transferred to the handful of money manager families. The ones who set up the current system for their own benefit.

    Using the term fiat money seems to be confused. Fiat= let it be done. OR money declare by an authority to be money. Usually a state declaring a currency to be the only legal tender. There may or may not be a problem with this “fiat” currency as it depends on what is actually mandated to be the currency.

    What is wrong is that it relies on a legal tender law designating a currency as the only one to be used. Where is the freedom of choice gone. A free people have the right to use what ever they wish as money. People should have the right to use whatever they wish as money, to use the money that is best for them.

    Well we do have freedom to use whatever money we like do we not. There is no restriction on what one can use as money. We may be so but there are restrictions place on the use of other money. Dues, taxes and fees are placed on other money. Most other currencies available are “fiat”, mandated by the originating state to be so.

    Fiat currencies go up and down in value compared to each other but there is generally no tax due on a “capital gain” one might make by holding one currency over another. But if one holds a non fiat currency or money and there is a capital gain then there is tax to pay.

    As a state continuously expands its money supply it dilutes its value and so prices apparently rise. So a gain in the perceived value of the object is taxed as a capital gain. Where did the gain appear from. From the dilution of the currency resulting in the fact that it takes more money to buy the object. So the same authority who causes the inflation now taxes the individual for that same inflation.

    Someone who tries to escape from the inflation caused by the money system is now penalized for trying to do so. This is a corrupted process. The state surreptitiously taxes the buying power through inflation and also overtly taxes a capital gain pretending it is not the result of that same inflation.

    Why do we have inflation? Because as explained we have an expanding money supply. Why do we have and expanding money supply. Because the current money system will collapse unless the supply constantly increases. Why will it collapse if it does not expand?

    The current money system was set up to empower the owners of the banks. They needed the help of the politician to do this in order to legalize the fraud that takes place. Bankers fund the campaigns of the politicians and so the bankers get a favourable hearing. The bankers money can be lent to the government for the politicians to spend on benefits to the people without having to raise taxes. The people get something for nothing in the immediate sense but pay later as the funds are added to the national debt and so financed over the long term. It is sort of like paying for food with a credit card.

    The bankers set up a money system where they do not actually need anything to start with. So the bank is set up with a limited capital, just enough to set up the infrastructure. Then they go to work.

    Firstly we have to understand that the banker is given a monopoly to produce the nations money. Also this money is declared legal tender and no person may refuse to settle a debt private or public with this currency. Each of us can force the other to accept payment of a debt with this currency. There is a problem here as this debt has only been “paid” with a substitute debt. The money being used is also a debt. A debt owed by the bank to the holder of the note. Why is this note a debt?

    The bank starts from zero and issues all currency as a loan. There is trade and commerce taking place and people are settling obligations with the use of real bills drawn on the value of the goods being exchanged. (now you will have to go back and read the essay I posted written by Antal Fekete )The money being used was real money, a commodity in its own right having value. This money was only used to settle the differences in final settlement between the parties concerned. No fiat currency required or asked for or wanted. The real bills were a currency good for no more than 91 days from the date of issuance and dying forfilled by the close of the transaction.

    Governments were taxing the activities of the people by duty and tariff but there were no taxes on production or income.
    governments of course were prone to spend more than they received and so as soon as a bank existed wanted to borrow. They borrow from the new national bank buy issuing a bond on the credit and wealth of the nation and the bank rolls the printing press and the money is loaned into existence. (that is right, it did not exist until it was created by the press) Interest is charged on this loan but see that the currency to pay the interest does not exist. This means that if this loan were to be charged a 3% interest and paid off in a year that it would be impossible to pay as it does not exist. We will come back to this point.

    In the meantime commercial banks require funds to do banking business. At this point they were restricted to dealing with real money, commodity money and issuing notes in exchange for the money deposited. These notes would proclaim some thing to the effect that “I promise to pay the bearer on demand the sum of ….. (fill in the blank)” Note here you were promised a similar amount to what you deposited but not necessarily the exact same money you had put in the bank. As banks realized very few redeemed all the money deposited they started to practice fractional reserve banking. That is they issued more notes out with the promise to pay than they had the deposit to cover. Then they could charge interest on what they did not have and increase profits. Note also that this interest being charged does not exist. This system worked tolerably well until there was a “run on the bank” and not everyone who went to redeem their note could be paid. This system of fraud was formally legislated as legal in many states!!

    The current central bank issues printed money out of nothing to register as reserves to the commercial banks. This is issues form thin air at interest. The commercial bank now issues multiples of that reserve to the public. The reserve ratio is set generally by the central bank and not the state. The money issued to the public is issued to the public as a loan only. In no other way does it come into existence. This currency is issued at interest and again there is no creation of the money to pay the interest. In there early days of this system there was all the other specie money being used and trade was done locally, nationally and internationally using real bills doctrine and the final settlement of the plusses and minuses being done by money.

    It was only by being urged to use credit that the use of fiat currency came to be. Gradually the use of the fiat expanded until it is all encompassing and submerges the previous system. This is because all financial problems are blamed on the original system and the fiat system was legally enforced.

    What is the result to us all of using fiat currency issued as a debt at interest?
    First there is the constant expansion of the money supply which is occurring at faster and faster velocity and now is exponential.
    Why does it constantly expand?

    As observed. All currency is issued as a debt ((loan). There is no currency supplied to pay the interest. How is the interest paid? The interest charged and paid by #1 must be taken from the money of #2.
    The interest charged and paid by #2 plus the interest taken by #1 must be taken from #3 and so on.

    Imagine 10 people each borrowing 100 dollars for a year term plus 3% interest. $103 must be repaid at year end by each. The first nine can mathematically repay 103 each. The tenth person finds there is not enough money for him to repay as it was not put into existence. Out of the original 1000 loaned to the 10 there is only 73 left (9X3=27 gone to pay the others interest. #10 is short that 27 plus the 3 interest owed on his loan so is 30 short.

    What can be done. Well the bank could realize what has happened and forgo all the interest and accept 73 from #10.
    but what happens is that there is an eleventh and twelfth person who have borrowed a 100 each but which is not yet due and so the 30 is extracted from the eleventh person who is now short 33 dollars but not yet having to pay.

    This results in the following.
    There must be a constant increase in the number of borrowers in order to supply the money to the system to stop a collapse. That is why the money system is described as a Ponzi scheme.

    The interest charged accrues to the banks. As the principle is conjured from thin air this is mostly all profit.

    The interest is subtracted from the existing capital earned by the people in business and as wages and so is a tax on the productive in the economy. It siphons off wealth from the community.

    Because the money supply constantly must be increased to avoid collapse then that de facto increases the debt load of the economy.

    Because the increase in money has to be at an ever increasing speed to avoid the collapse The accumulating debt is at increasing speed.

    Looking at any graph of the money supply and the accumulated debt you will see the correlation and the graphs now have reached rocket velocity mode and are headed in a vertical trajectory.

    There is no avoiding to collapse of the currency and the accumulated debt.

    in the meantime governments struggle to fund existing programs . Larger and larger amounts of the economy are consumed by the payment of the debt and interest. Less and less of the productive capacity of the people is available to them.

    Those closest to the issuance of the money gushing from the central banking system are able to snatch some money and look filthy rich while the majority are subsumed by the accelerating inflation and become rapidly poorer.

    The banking families are consolidating power at the expense of the rest.

    You see the results in the unemployment, the stagnating economy and the rampant inflation.

    There is no change possible until this legal fraud we call money is displaced and abandoned. The people are not focused on the basic problem and blame is assigned to the ripples and not the tidal wave.

    It is no good pointing fingers and trying to score points which is divisive and self destructive. We must look at the root cause and get an understanding of the basic problem or we complain in vain.

    Before a consensus is reached and the problem solved it will likely have self destructed and then the propagators of the mayhem will step forward with the supposed solutions. Beware or you will be further enmeshed.

    Individuals must do what they can to survive. Have your assets outside of the banking system and hopefully have a means of food and sustenance available. Politically look to Direct Democracy Ireland as a way to fire up the political process.

    • As a follow up please read this commentary about the destruction of our economy for the next couple of generations cause by the banks since 1913.

    • bonbon

      The Road to Serfdom, the Austrian School’s recipe. And then “direct Democracy” , Andrew Jackson’s populist destruction of the USA National Bank.
      See The Condemnation of Andrew Jackson for Treason especially Segment 4: The Removal of the Deposits.

    • whatamess

      How’s Tony,

      As always,your description of the Ponzi scheme that is our current system of money,is spot on.

      Do you still believe sorting out money (which i agree is an UNFAIR system and needs FIXING )will deliver the growth,now needed,after all the damage done? As a critical thinker that you have demonstrated you are,do you Tony, have that level of faith in an adjusted money system?What evidence can you offer please?

      Belief is a brain state Tony ,the action you’re wanting to call belief, is the profession of your belief, but NOT belief,right!?Belief is NOT a choice Tony.The facts are the facts,rooted and supported by fact!?

      The “tidal wave” happened at the very moment the “elite” purposefully arranged the strategic hit on GS back in ’00 at the cost of c.US$350million.The whole ‘saga’/tragedy snowballed from exactly then,until now(Voilà)The cause and effect there is crystal clear to me ?!And ignoring it ,as i feel you do,doesn’t help at all

      This might sound condescending, but that’s not my intention, but i think at this stage,9 months later of reading your worthwhile contributions,that you must have mezzzmerisingly indoctrinated preconceived false notions that are actually destructive beliefs (or blinding hopes for future perhaps??) that clearly are inhibiting your discovery of TRUTH
      [ The TRUTH,testable and verifiable by evidence/fact,and is not impacted ,in any way,ever, by peoples' 'opinions' or 'gut feelings']

      Hope this finds you and finds you well Tony

      • michaelcoughlan

        Hi whatamess,

        Happy Christmas belatedly and happy new year to you. It’s still possible I feel to save you from we know who.

        You confuse the repeal of glass stegal with the Manipulation of money. You don’t have to use a corrupted item like fiat currency if you chose not to trade with your neighbour or customer. You are FREE to choose any item YOU like and forget completely about gold if you wish.

        Next when you wax lyrical about GS
        being a good idea everyone agrees with
        you. You just fuck everyone off
        referencing it over again.

        Read your own post and examine it from your own perspective. It is a vey worthwhile and insightful post.


        • michaelcoughlan

          “You confuse the repeal of glass stegal with the Manipulation of money”

          For example the roman senate manipulated the money supply by debasing the gold coins in circulation by shaving them down slightly THOUSANDS of years before GS!

          • bonbon

            And the modern Nerobama is now intent on literally killing Americans to bail out those swindlers, fiddling. How many said the Narcissist in Chief would never do that?

            The modern nation-state, fought for against that Third Rome, the British Empire must be used to intervene as FDR did, dumping Hayek’s road to serfdom in the trashcan of history.

          • michaelcoughlan

            Your post like so manny bonbon is a woefull load of idiotic nonsensical contradictory gibberish attempting to connect your warped perversions to well reasoned posts.

            Keep posting bonbon the more you post the more you damage yourself.

      • Good day

        It took me 8 years of reading and researching on the web in my spare time to reach conclusions that I have. 12 years have gone by since I decided to find out why I did not understand the daily financial commentary issued in the daily press.

        I already worked 12 hour days so this “spare” time did not easily arrive as it does today, retired as I am. It was 2200 hrs to 0130 hr every night as I “ferreted”.

        Bit by bit the pieces fell together and like a large jig saw it was slow at the beginning. Then patterns emerged and then themes and then finally the jig saw clicked and the last pieces were easy.

        This jig saw was titled What is money?
        Sub titled now to
        What is good money
        What is bad money
        What money did people used to use and why
        What money do people use now and why.
        Why do people use bad money when good money is available
        how much money is enough for an economy
        Does the money need to expand, or contract or stay static.
        Why do we have public money, that is, state controlled
        Why do we not use private money.
        Where does our money come from
        Why is it issued
        Who gave the monopoly to the money cartel
        Why don’t we take it back
        Is money required to enable an economy
        What is the real bills doctrine
        how did it work
        Why did the RBD allow a small amount of money to be used when large enterprises were performed.
        can we operate with many different types of money
        Should everyone use the same money
        Who decides what that “same” money should be.
        Is it dictated as use or used by consensus
        Is charging interest a healthy thing for the economy
        Should we use a discount system instead

        I could go on but I have an answer for all those questions. Some of my answers are nor like additional queries.
        Why is it important to know the questions to ask, and what the answers are
        Money is the root of all evil says the bible
        Neither a lender nor a borrower be says the bible and Shakespeare
        Money is a day to day part of our lives but few can define money or answer the questions above.

        Money is the controlling factor of our lives. That is simply why those that wish to control the world decided to first control the money. When money is deliberately issued as a debt, that is loan into existence, those who issue it control mankind, humanity, every single person within their system.

        I do not ignore GS or other bills and legislation. I just consider them irrelevancies as we must first of all correct our system of money and cut the strings that bind us.

        The is an adage that laws are made to be broken.
        There are today regulators that do not do their job. They are either corrupted or prevented.

        CFTC is a prime example with which I am familiar Commodities Futures Exchange Commission. It ignores the illegal bare naked shorting in the markets in general and in particular in relation to the precious metals and mining companies. It puts a hand over its eyes and says I see no wrong.

        More regulation is not the answer but a rooting out and cleansing of the money system is. The roots of the economy are thus rotted and the limbs are falling off and the tree is about to fall. No amount of propping up will prevent its destruction.

        Looking at GS as the cause of the economic problems is a very short term view. you have arrived to see a limb fall off and conclude the tree needs a little more fertilizer. Take another look and conclude this tree has been growing for several hundred years and is rotten through and through.
        This tree is our money system and need to be scrapped and cut up and burned. The tenders of the tree need to be fired at well. They have stripped the tree of all its fruit and allowed the tree to die. It produces no more fruit as it is disease ridden. It will ruin the forest if left to stand.

        The TRUTH is that no paper money debt based fiat currency has EVER survived. You will be unable to find one instance of success. Not the Chinese who tried a mere 500 years or more ago. The tried again and failed. They tried again in the 1700′s and gave up. US colonies tried and collapsed. Everyone trying, what we have, has collapsed. That is the TRUTH.

        I have am told or have read that the average lifespan of a debt based fiat scheme such as ours is 40 years.
        If we suggest that we really started this un-backed money system in 1972 with Nixon abandoning the gold convertibility of the us dollar then we are now into 42 years. Even allowing for the huge many fold increase in the money supply there is little time left before the collapse of the system.

        This is the first time in the history of the world that everyone is using a similar system and all intertwined with each other courtesy of the central banking system controlled by the privately owned BIS, Bank of International Settlements.

        There is nowhere else to run. Are we going to implement GS in every nation simultaneously? I think not. It is a band aid on a pimple on the backside of the elephant. It will be another regulation for the bankers to end run. Remember the banksters’ own the media. They allow discourse on GS as they wish you to be distracted and otherwise occupied as they slip the noose around your neck.

        Assuming I am indoctrinated suggests what I am reading is doctrinaire. I do not get all my information from one source but search around. Sometimes I am fed information and contacts by other people and I take a detour to explore. Examine, embrace or reject or put aside for further contemplation.

        May I ask? did you read the posted essay on the real bills doctrine by Antal Fekete. He has great credentials as an economics professor. It is a very informative read. Illuminating , one might say.

        Enough for now :)
        Take care and keep expanding your horizons.
        Thanks for your good wishes.
        I am well but overeating. An increase of 7 pounds in weight as I sat out the cold snap the last 30 days.
        I must get back to the pick and shovel for the good of my health and in honour of my ancestry.

        The census reports of the Brogan family consistently showed occupation as “labourer”. On the backs of such is the world built a step at a time.

        • whatamess


          waaay too much eggnog will have you reaching for convenient pacifiers.

          Please don’t let the duality of the Matrix movie confuse you? There is only Reality!

          You’ve managed to sum up the entirety of your experience of “decades in related areas” when you write , “we had ALL the legislation we needed to stop the excesses that led to the 2007-2008 crash” and “The IDEA that this event in 1999 ’caused’ the current financial situation is like saying the The whole argument is so absurd as to be laughable.”

          Glass Steagall is not some idea ,or an opinion, or a warm fuzzy feeeling Stephen,rather protection for Joe Bloggs and a first step of a strategic Solution? And it’s ok Stephen to find things “laughable” ….it’s just your delusionary state and hysteria is common…you just rest….go play some table tennis and have a coke and a smile…you just conveniently forget our capacity for creativity and problem solving…you wait and the fairy nurse who will be around with your pill, the blue one that you and Michael like so much ;)

          A REAL Solution to a REAL problem is Glass Steagall AND only then FIXING THE PHYSICAL ECONOMY !

      • StephenKenny

        Even the bonbons don’t believe that glass steagal by itself would have any effect. The idea that this event in 1999 ’caused’ the current financial situation is like saying the The whole argument is so absurd as to be laughable.

        The fundamental problem that we face is so much more serious than that, and can be summed up by the observation that we had all the legislation we needed to stop the excesses that led to the 2007-2008 crash.
        The problem wasn’t the laws and regulations, the problem was that there’s no one left to enforce them.

        Everyone knew that the ratings agencies were doing what they doing. It was not possible for Goldman Sachs and AIG to do their mad deals. And so on. No one did anything. Afterwards, then all the evidence came pouring out, no one did anything.

        The system itself is broken, even if they passed some version of Glass Steagall, and all the rest of the necessary accompanying legislation, who would enforce it? And how well?

        On Wall Street and the City of London there has yet to be a single jail sentence. Financial fines just hit the shareholders of the companies (via dividends), and the major shareholders these days, ironically, are the private pension funds.: Barclays Bank recently ‘accidentally’ deleted the key evidence in a trial on LIBOR fixing, so pensioners get fined $3.4m.

        I’ve been coming to this site for something like 6/7 years, and have been involved in related industries for decades. We were warning about this while people were still chanting about DotCom, and then about the Celtic Tiger, all the while calling us doom and gloomers.

        Of course there needs to be proper financial regulation, of which something like Glass Steagall would be a part, but there needs to be so much more done before, during, and after.

        I don’t particularly care what you and the bonbons believe (I don’t know any of you), but David McWilliams has been one of the very few people who’s kept a stream of well argued, engaging, reality, in front of the most conservative, and difficult to persuade, of readers. The comments, could have role to play in that.

        • Thank you for your sanity Stephen
          Happy New Year

          Thank you David McWilliams for hosting this site. I hope it feeds you valuable insights.
          May you go from strength to strength in the future in your service to all to educate.

          Please accept my condolences at the grief you receive from time to time from us the contributors. you understand that there is nothing personal in any comments. Just business as is said :)

          Happy New Year, David. May you and all your kith and kin be as healthy and happy as possible.

          I go Monday to see the local Farmers Institute about renting 5-10 acres to farm. I’ll report on the pros and cons of the economics of farming as they appear to me.

          I am sure that high quality family farms are the or part of the future of Ireland. It is the fundamental base from which all else grows.

          • bonbon

            I must say I never saw a modern auto grow out of a tuber or tree. And modern nuclear cooling towers certainly never grew out of soil. Those combines and tractors seen on the landscape are not low hanging fruit. There is something fundamentally unsound about such fantasies.

          • michaelcoughlan

            “I must say I never saw a modern auto grow out of a tuber or tree. And modern nuclear cooling towers certainly never grew out of soil”

            Like everything else perverted in your posts you got this one on backwards too.

            Crops don’t grow out of cooling towers or auto exhausts.

            Keep posting bonbon the more you post the more you damage yourself.

          • I have never read a comment so asininely stupid and irrelevant.
            Get a life.

        • bonbon

          Sorry, our resident “good liberal” has not done his homework, rather typical for Tigers. Glass-Steagall did not finance the New Deal which would have been impossible without it. The utter failure of west Brits to understand this American action, could doom Ireland, by nothing other than the same “attitude” of Inda et al. One might almost say it is indigenous until one mentions Adam Smith – then hey presto one finds it is imported.
          So for readers who are prepared to check something that might save their lives :

          • So when we read your suggestion there is soon seen this paragraph.

            “It is this tone of voice, which you had not seen since the time of Lincoln, of a Government willing to come out and say, ‘we exist, we are a power, that is the purpose of the nation, the nation is not set up for Andrew Jackson’s ‘simple machine’, laissez faire, and the idea that we are going to become tools of a private financial power.’

          • Pressed the submit button too early.

            It was Jackson routed out the “private bankers” and paid off the national debt.

            FDR kept the private bankers in place and set up more credit i.e. loans for people to go even further in to debt.

            Do your homework as you have everything reversed.
            In your world white is black and right is wrong. Orwellian!!

            You support the current money system of slavery to the private bankers.
            Well at least LaRouche does and that is who you lip sync from the Karaoke Club

          • bonbon

            The lies about Andrew Jackson persist to this very day. His destruction of the US National Bank is the best issue to put on the table. Anyone reading for themselves the treason indictment linked here will see the perverse role he played for British interests.
            The Myth Of Andrew Jackson Destroyed . An audiobook is also at that link.

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