January 2, 2014

2014 looks brighter - but another banks crisis could derail recovery

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On the day that’s in it, let’s examine some of the big economic and financial questions that will impact on our lives in 2014.

Will the economy continue to recover slowly or will it slip back?

The short answer is that the economy should keep moving along in a positive direction but it could be derailed by another banking crisis, sparked by the ECB’s stress tests.

The good news is that Ireland’s two largest trading partners, the USA and the UK, are performing better than expected. In the UK, the economy has turned around much quicker than even the most optimistic Tory could have hoped for. However, the UK is back to its old tricks again as we are seeing, especially in London, a massive bubble building in the housing market and a return to bank lending to the housing market in general. This makes the population feel a bit richer, but this could be derailed again by a slump in house prices, particularly in ridiculously priced central London.

Much depends on how Mark Carney, the (Irish-passport-holding) governor of the Bank of England, reacts in the next 12 months. My hunch is that he will keep the party going as long as he can, rather than tighten interest rates too quickly. Even if there is a small rise in the UK’s rate of interest, the economy is growing at an annualised rate of 3pc and unemployment is falling quickly towards 6pc. Both of these factors should keep up consumer spending in our biggest single trading partner.

All of this implies that the UK will perform healthily this year, which is great news for labour-intensive Irish exports such as agriculture, tourism and services. Let’s not forget that Ireland and Britain do €1bn of trade with each other per week.

Meanwhile, in the USA, the Fed has signalled “peak stimulus” and will begin the process of trying to unravel five years of pumping cheap money into the economy. This will have a bigger than anticipated impact on stock prices than the financial markets seem to be worried about. But all told, the US economy is creating jobs, its housing market is not just stabilised but is improving across the board, and wages will begin to rise this year as workers demand a bit more of the pie.

In the past few years, the spilt in the US between wages and profits has been skewed to profits, so much so that US corporations are sitting on the biggest cash pile in history. This has to be spent and it will either be spent on investment or wages, or both.

The bit that is spent on investment is important to Ireland because that is the bit that may be invested by multinationals here.

As long as global tax authorities don’t make good on the intentions of the G8 in Enniskillen, 2013, and try to tighten up on flagrant tax manipulation by countries such as Ireland, extra multinational investment, driven by US companies having too much cash on their balance sheets, will continue.

But what about domestic demand?

This is the major question for most businesses in the next 12 months. In the past three months there was evidence the domestic part of the economy could begin to improve, buoyed up by a better-than-expected improvement in the jobs market and some increases in house prices. As a result, tax revenues were slightly better than forecast and retail sales in October and November were strong, as too was the rebound in consumer sentiment. However, according to anecdotal evidence from retailers, the final weeks up to Christmas did not see a surge in spending as the retailers had hoped.

So where do we stand now in January 2014?

For the economy to chug along, domestic demand needs to recover because this is where the vast majority of Irish jobs come from. Domestic investment — a much smaller component of GDP than consumption — also needs to rebound.

Irish companies — like their counterparts in the US — have been saving hugely and paying down debts. This implies that there could well be a strong return to corporate investment this year, and continued small falls in unemployment.

Our recession has been a balance sheet recession. Balance sheets are broken; too much debt and plunging houses prices have caused the savings ratio to rise. This implies that there may be pent-up demand, which we are now seeing in the guise of “cash” buyers in property, but we may see this in other areas of consumer spending in the next 12 months.

But you may ask how can we have an uptick in consumer spending, investment and some house prices, while at the same time have double-digit rates of unemployment, shrinking bank lending and prohibitively higher marginal rates of tax?

This is because there are at least two Irish economies out there, and by and large the difference between the two economies is generational.

The middle generation between 30-45 has no extra spending power because of the legacy of the housing bust. They were the ones who bought houses in the boom and are the ones who suffered most in terms of negative equity.

THE younger generation in their 20s — the ones who have stayed — have actually benefited from the housing bust, as housing costs up until this year remain subdued. But they have little disposable income because wages for people in their 20s have fallen quite dramatically and schemes such as “internships” are becoming increasingly popular. These don’t pay well but are seen as the only way of getting experience to ultimately get a job.

The people who are spending again are the late middles between 50-65 who have built up savings, have equity in their houses and who are the ones emerging as “cash” buyers for suburban houses all over the country.

As European interest rates will probably go lower this year, it is difficult to see these broad trends reversing.

The one unexploded financial landmine out there is another bank crisis, as the new stress tests signalled by the ECB reveal that Irish banks don’t have adequate capital — yet again. This is a very real fear and if the banks need more capital, where will it come from?

It won’t come from the taxpayer, because we have no more money. Will the Government borrow from future taxpayers again? I doubt the financial markets would welcome Ireland borrowing more money to pay not for today but for yesterday. So where will it come from?

This is where the ghost of Cyprus lingers. Might it come from a raid on deposits over €100,000, as happened in Cyprus? I suspect it might.

If that happens, all bets are off and we slip back again.

If, however, the €24bn war chest borrowed by the NTMA last year is spent on the banks yet again, the landmine won’t go off, but the bill for the collateral damage will be given to the next generation and the next.

I believe this, sadly, could be the plan for 2014.

David McWilliams’ new daily finance and economics newsletter, www.globalmacro360.com, is out now. Sign up for your free trial today.


  1. Paul Divers

    Subcribe

  2. Grey Fox

    If the Banks commence with “open season” on distressed mortgage holders, as threatened on a daily basis now and Government sit idly by or worse support the approach I believe all bets will be off, nothing will recover until the elephant in the room, mortgage debt is dealt with and for some people who have been existing with this desperate situation for 5 years now, it has to be getting very very serious in relation to the Family Unit and personal health forget about financial health, I believe a huge segment of the population see bad credit ratings as totally irrelevant now.

    • Greay fox you are only half right but you got it nailed down domestic economy Is on the floor and will remain so for 2014. 2015 shopkeepers at Xmas could have stayed In bed DMW fails to elaborate on 2 spesific things close to reality 1 the In out referendum by the uk secondly the Scottish referendum on remaining In uk either one of these will scupper our chances of recovery I think DMW Is Listening to Jim power or some other half backed Idiot from RTE who happens to be cushioned against Inflation with a super duper salarie or pension the real world has a different prospective on where we land at the moment the air pore Is shut,?

  3. michaelcoughlan

    “if the banks need more capital, where will it come from? It won’t come from the taxpayer, because we have no more money.”

    Very naive David.

    • michaelcoughlan

      “I doubt the financial markets would welcome Ireland borrowing more money to pay not for today but for yesterday”

      They will in the short term if they know the troika is standing behind us no matttet how idiotic the fundamentals.

  4. michaelcoughlan

    Hi David,

    No mention in the article during the talk about recovery of the profligacy of too much debt and too much money printing?

    Save us the shite bonbon about your usual drivel.

    Michael.

  5. Paul Divers

    Remove Intext.nav-links.com pop-up virus (Removal Guide)

    http://malwaretips.com/blogs/remove-intext-nav-links-virus/

  6. Adelaide

    At the end of the day it’s all opinions. I’ve read enough “2104 Predictions” by reputable economists by this stage, running the gamut from Recovery to Stagnation to Total Collapse, to not to take them seriously. The field of Economics will one day be assigned to the dustbin of follies alongside Astrology and Alchemy.

  7. how can things look brighter when the world is built on credit. The financial sand foundations of the economy. The edifice will fall and perhaps this yesr.

    http://blog.milesfranklin.com/are-you-demoralized-dont-be

    • michaelcoughlan

      Excellent post tony.

      And mr krugman still continues to try an convince the Austrian economists that there is no inflation.

      Our host continues to try and convince us that we have deflation.

      What a dismal science economics is.

      • michaelcoughlan

        If the world GDP graph were flat it would indicate stagflation but we have deflation in world GDP and rising prices in stocks.

        I’d call that reverse inflation. Can only be a short time before hyperinflation sets in.

  8. Adelaide

    Does anyone know the timeline regarding the Irish banks stress test, firstly, and secondly, any possible bail-in? Thanks in advance.

    • bonbon

      Just listen to Asmussen, from the ECB to the Berlin “40 secretaries” of the new Berlin Coalition. A short, quick, efficient weekend should do it. You do not think they will give time for a run do you? Inda presided over the Cyprus test-case, so they have polished their boots.

  9. Clare Leonard

    The EU and Michael Noonan confirmed it is now law that depositors with more than 100,000 euros would be bailed in after shareholders and bondholders, in order to save the banks. Depositors, including retiree’s pension incomes, businesses, and savings for our children’s education are now up for grabs.
    It is important to note that the 100,000 figure is an arbitrary figure and there is a possibility that this figure could be reduced by an insolvent government faced with an imploding banking system.
    When you allow for the worthless bank shares given to the people in Cyprus in exchange for their savings, the people of Cyprus actually lost over 90% of their savings.

    I would like to ask a few questions,
    Did the government hand over control of the credit unions to the Central Bank as part of the Troika agreement?
    Are the Credit Unions obliged by central bank rules to deposit their funds with the main street banks?
    Where each credit union branch has one account in these high street banks, do they qualify for just ONE insurance payment of 100,000 euros?.
    Is this the reason the Central Bank want to reduce the number of credit union branches from approx 420 to less than half that number?
    Did the central bank and the government calculate the possible savings they would make on insurance payouts, when the bail-in happens ??.
    Are Credit Unions members sitting ducks?.
    Just asking.
    Happy New Year.

  10. Ryu Hayabusa

    From reading the following article one can only deduce that Brendan Howlin has spent the last 6 months nestled in some pot-infested cubbyhole high in the Rockies… he’s further off the charts than the Voyager space probe!

    http://www.irishtimes.com/news/politics/irish-people-are-fair-and-they-re-not-stupid-they-won-t-reward-opportunists-or-destroyers-1.1641625

    “irish people are fair and they’re not stupid. they won’t reward opportunists or destroyers.”

    Dang Straight, you hobgoblin little man.

    He will witness the evidence of this up close&personal in a very short timeframe.

    • bonbon

      …We can expect to hear lots more of the same on the hustings. Yet isn’t there always the danger that voters would astonish the Government with ingratitude? “We’ll see,” Howlin says.

  11. dwalsh

    Happy new year David and my fellow commenters.

    I would say the greatest threat to humanity in the years ahead are the transnational corporations, many of them richer than most nations, and who have largely usurped our national governments, and are today pressing for complete global hegemony on multiple fronts, such as the new free-trade agreements like the Trans Pacific Partnership.

    That our governments have been usurped and corrupted by capital has led to powerful anti-government upsurges such as the tea party and other anarchistic movements. But that our governments have been usurped and corrupted by capital is not a reason to abandon them, or to abandon the principle of democratic social organisation, which is what our form of government is intended to be. Rather it is a reason to fight back and take back our governments from the usurpers.

    The enemy is transnational finance and industrial capital, which is structured into a relatively small number of private global empires, not unlike the empires of the ancient world. They are regarded by the naive as competitors and concerned only with business and profit; and there is truth in this; but they are unified and organised in their perception of their shared primary enemy – the sovereign nation state – our governments; and the public commons – the notion that a nation is the property of its citizens; a res publica; a republic.

    The enemy believes our nations and our world should be privately owned…by them.

    This transnational corporate coup and the unfolding biospheric crisis are the most important challenges facing our species in the years ahead.

    • Paul Divers

      +1. Excellent analysis.

      Their plan for impunity is obvious when you look at the leaks from the secretive Trans Pacific Partnership negotiations. They are a danger to everyone

      Corporations have more power than some governments and Irish politicians are mere colonial arse kissers because their careers are warm and secure. There is no news here. Ireland is predictable and the only doubt is which way the economy will swing in 2014. As if it matters to the average joe.

      This year I will be focusing on London and the movers and shakers over there because that is the lens through which you will see human nature at it ugliest. The forces of Neo Conservatism are going full throttle and causing misery, death and mayhem from John O’Groats to Land End.

      And they openly laugh in the house of commons when MPs cite facts about poverty and food banks. We don’t have people like Ian Duncan Smith and Esther McVey in Irish politics and frankly we don’t know the meaning of poverty when you compare it to the UK.

      We have reason to be thankful. I am just saying.

      • bonbon

        The TPP is a danger alright – it could trigger a very short world war, about 90 minutes.

      • cooldude

        Excellent analysis all right. It is more of a private conglomerate of bankers, global corporations, global bodies such as UN IMF etc along with their puppet politicians and beaurocrats. These are all the same bunch with a revolving door policy of moving seamlessly from one area to another. Look at the likes of Draghi who moves from Goldman Sachs to head of the ECB. He is at all times representing the interests of the majors banks and the corporations they control and has no interest in the welfare of the citizens of the EU. Here is interesting article on the harm being caused by the “financial industry”. Really just a massive casino which can never lose because if they do they simply rob taxpayers and soon to be savers to cover their losses.
        http://www.zerohedge.com/contributed/2014-01-02/being-educated-above-your-intelligence-finance

      • dwalsh

        Hi Paul
        We in Ireland do have reason to be thankful, in spite of all; I agree. What is happening in England and America and in Greece and elsewhere is apalling. Openly sociopathic and anti-human.

        We must not lose heart. I am optimistic. They will push things too far; they cannot help it; and when they do there will be a natural push back from the population. There will be massive public uprisings in the near future – peaceful I hope. They will not be permitted to institute a new feudal dark age.

        Like you the lenses I focus on are the UK and also the USA.

        • Paul Divers

          Agreed. It is totally appalling and the realisation makes me feel glad I live in a civilised country such as Ireland.

          I will be homing in on UK politics in 2014.

          This is the year when the full effect of Tory policies will be realised. It will be interesting to watch the trend in the yes/no numbers for Scottish independence between now and september.

    • bonbon

      The greatest threat right now is a lurch to population reduction, which with thermonuclear weapons would mean the end of our species. The stated intention is 1 billion, and war used to be the way since Troy at least.

      The greenie hand of Zeus that old genocidalist, is lurching Brutishly again, on all fours. The situation in the Pacific is deadly, and Obama serves that intention. He must be impeached, immediately, or war is practically certain.

      • Paul Divers

        I am familiar with the theory of a mass population cull but like any sane person I have trouble computing it.

        I am sure it won’t come to that.

        Keep the Faith.

  12. Ryu Hayabusa

    Latvia has officially joined the Eurozone…

    Welcome to the house of Fun!

    http://www.youtube.com/watch?v=GJ2X9SANsME

    “i’m a big boy now or so they say.. so If you serve my confetti currency I’ll be on my way…”

    Surveys indicated half of all Latvians were against this adoption, and that two thirds of them expected it to cause prices to rise.

    Memories of Nice Treaty, Lisbon Treaty reruns loom large.. tut tut what about respecting the Sovereign will of the people?.

    Within their ‘austerity’ program poverty, unemployment and emigration have all soared.

    “In all other countries which switched to the euro, prices rose. Most likely, they will rise here as well, which is bad,” said pensioner Oleg Bachurin.

    This is their 4th currency in 23 years after The Soviet Rouble, The Latvian Rouble and the Lat. What sort of a land is this? If they think this is the panacea for their ills… Woooh uh-uh.

    Surely the Klaxons should have started blaring when that Emissary of Doom, José “Spam-well” Burras-o congratulated Riga on their joining of the Euro club.

    Finance Minister Andris Vilks, “Everything is just beginning for Latvia”

    “Welcome to the Lion’s Den.. temptation’s on its way. . . Welcome to the House of Fun!” :O

    • Paul Divers

      some might say everything is just beginning for Ireland.

    • bonbon

      ARMENIA CHOOSES SURVIVAL WHILE LATVIA COMMITS SUICIDE. The President of Armenia, Serzh Sargsyan, announced today that Armenia would be joining the Russian-led Customs Union this year. Armenia will create a new environment, in which it will be better protected and more competitive, he said in his televised New Year speech. Sargsyan made his announcement on the same day that the Latvians traded in their national currency for bankrupt euros.

  13. Ryu Hayabusa

    Some of the highest tides of the year are expected.

    Revenue raised from LPT will be used be used to improve anti-flooding measures… along the Rhine and the Rhone.

  14. bonbon

    The Dirty dozen tax hikes about to hit now. Savers are among those to be hardest hit, with the tax on interest paid for deposits set to shoot up from 33pc to 41pc from January 1. http://www.independent.ie/business/personal-finance/families-facing-dirty-dozen-of-tax-hikes-price-rises-and-benefits-cuts-29879619.html
    Will they first tax savings before simply stealing them with “bail-in” ?

  15. Amazing how everyone has their reading specs on and squint at the latest offering about the local economy or this or that trading bloc.

    Take off the glasses and get a pair of binoculars and gaze at the Swiss Alps. Zero in on Basel. Now focus on that tower on the hill.

    BIS BIS BIS

    BANK OF INTERNATIONAL SETTLEMENTS

    This is the private bank with diplomatic immunity for all enployees. Above the law of the land, any land. Here is the monetary policy set WITHOUT any input from any government. In collusion with the IMF are loans set and Austerity policies formulated.

    GOVERNMENTS HAVE NO POWER. WE ARE NOT SOVEREIGN. WE ARE MONETARY FEUDAL SLAVES. get it!!!!!???

    NOW READ ABOUT YOUR MASTER.

    Why do you think I keep yelling about firing the central banking system and reclaiming your Sovereignty.

    Time is passing while we all squabble and we become indentured debt slaves.

    http://eichikawa.com/2013/09/the-bank-for-international-settlements-who-rules-the-world.html

  16. bonbon

    Monetarists of all stripes are bey confused about “inflation and deflation”, and invent all kinds of silly “explanations”. Much better to have a look at the Triple Curve :
    http://larouchepac.com/files/triple-curve-web%20%281%29_1.jpg

    One can see the root of the monetarist self-induced torture. Physical economics is the key.

  17. something 5fingers may have thought about?? :)
    The new economy developing spontaneously.

    http://dailyreckoning.com/

  18. michaelcoughlan

    From the finfacts website;

    “The Government’s widely anticipated decision to introduce a cap of €60,000 on the annual pension that can be provided from approved pension arrangements will have implications for over 27,000 employees from 2014. The penalty for exceeding the cap is a 41% charge on the excess value, on top of paying income and USC on pension, giving a net effective tax rate of nearly 70%”

    70% it seems David on pensions above €60k.

  19. Paul Divers

    Britain is Booming

    Household finances at breaking point, says Shelter

    http://www.theguardian.com/money/2014/jan/03/household-finances-breaking-point-shelter

  20. bonbon

    PARIS, Jan. 2, 2014 (Nouvelle Solidarité): Jacques Attali, permanent Presidential advisor to Mitterrand, Sarkozy, and Hollande, and always in line with the global financial oligarchy, said the world is set for a new financial crash and a military confrontation among superpowers.

    “The financial crisis globally has not been dealt with in any fashion, even if we do have strong growth in the United States but a growth that is blown apart by a [Bernard] Madoff policy. In essence, the only difference between Madoff and the Western governments is that Madoff is in jail. Other than that their policies are identical.“. Emphasis added.

  21. bonbon

    Only One in Three Italians Supports the Euro

    Jan. 2, 2014 EIRNS — An opinion poll published by the major Italian daily La Repubblica Dec. 30 shows that support for the euro has dropped to historical lows in Italy. Support is now at 32.3%, a drop of 11.2% in one year. Commenting on the poll, opinion-maker Vittorio Feltri wrote in Il Giornale: “It is a collapse. The reason is that all Italians realized that Brussels is producing swindles all the time, demanding enormous sacrifices and taxes and, in exchange, gives us nothing except orders which we are not able to implement. We pay a crazy tribute to the EU with no advantage. We paid billions to save Spanish banks and those banks came to buy our telephones.” (The reference is to Telecom being bought up by the Spanish Telefonica.)
    “The euro has ruined us. We exchanged it at EU1.936 for the lira, whereas Germany paid one DM (1,300 liras at that time). And we wonder why we cannot compete on international markets. Italians finally realized that and are no longer willing to drink the bitter cup offered to them.”
    The poll says also that politicians have only 5% support, whereas law enforcement agencies are on top with 70%. Thanks to Pope Francis, the Catholic Church is on the rise, with 54%.

  22. Paul Divers

    ” ‘I just wanted to beat the shite out of them and have a good laugh; it was nothing personal’ is a long way from the resentful kind of half-surly, half-deferential culture which has since flavoured so many of the North’s dealings with the South. ”

    Jim Baxter on beating England at Wembley in 1967.

  23. Credit union may be safer but my choice is to remove all funds and assets of any kind from the banking /credit union system

    http://www.jsmineset.com/2013/06/09/jims-mailbox-1279/

    Keep just what you need for day to day checking and all else out of the system. Pensions too. Buy land, hard assets, and PM coins and junk silver coin. Be your own banker.

    • bonbon

      That’s the Andrew Jackson ploy used to destroy the US National Bank. This is the same traitor who invented “direct democracy” paving the way for today’s Wall Street.
      Diane Sare: The Fraud of Andrew Jackson
      Former Congressional Candidate Diane Sare (NJ-5) exposes the treason of populist “hero” Andrew Jackson and the actual role of Alexander Hamilton and National Banking in building the nation, at a recent town hall meeting.

      • Sometimes you are just dumb. An individual protecting themselves from the predations of the state sanctioned bankers is an act of treason now, is it? bonbon
        Go bail yourself out.

    • bonbon

      Canadian, Vancouver firms made this. Looks like someone is readying another 9/11, for more police state crackdown. Best way to deal with it is to declassify immediately the 28-pages – the contents are explosive.

      And then to shut down Wall Street with Glass-Steagall.

    • A concise description of where we are with international finance guided by the us and the international banksters
      Not politically correct, but accurate.

      http://www.realjewnews.com/?p=880

      • bonbon

        Not sure what in the name of God you mean there, but Inda et al visit the KSA for the second time now. Are they smart enough to realize that big changes are on the way over there?

        The 28-pages !

        • I am sure you understand who runs the show and why Libya and Iraq and Iran are targets. Follow the money. Syria too and a few others left out of the SWIFT central banking system.

          The changes are world wide not just over there

        • bonbon

          No I do not subscribe to that populist nonsense. Who runs the show, as you can read here are out to do a mass kill, a long “tradition”. In that report it is perfectly clear from Homer, Stasinos, Euripides, Hesiod, Tacitus, Ovid, that the crowd in charge relish the thought of using the latest weapons to “relieve the deep bosomed earth of its burden”, as the Cypria says.
          Confrontation is not the aim, depopulation is.

          • bonbon

            In the first Roman war against the Jews (66-73 A.D.), the city of Jerusalem was burned, and all its people killed or enslaved. This detail of a relief from the Arch of Titus in Rome, depicts the looting of the Temple by Roman soldiers. There were 600,000 in that city then.

          • you do however subscribe to a lot of other populist delusions.

          • Those who run the show have your selection of characters dancing like puppets. Look to the private shareholders of the central bankers and the BIS. There find the Rothschild and associated clans. There behind the curtains of Oz.

          • Does BIS work for you or the banks????
            Look at this list and ask if it may not interfere in YOUR day to day affairs. And note the heavy interest in gold manipulation. You think isn’t money?

            Article 21 of the original BIS statute defines the day-to-day operations as follows:
            ?buying and selling of gold coin or bullion for its own account or for the account of central banks;
            ?holding gold for its own account under reserve in central banks;
            ?accepting the supervision of gold for the account of central banks;
            ?making advances to or borrowing from central banks against gold, bills of exchange, or other short-term obligations of prime liquidity or other approved the securities;
            ?discounting, rediscounting, purchasing or selling with or without its endorsement deals of exchange, checks, and other short-term obligations of prime liquidity;
            ?buying and selling foreign exchange for its own account or for the account of central banks;
            ?buying and selling negotiable securities other than shares for its own account or for the account of central banks;
            ?discounting for central banks bills taken from their portfolio and rediscounting with central banks bills taken from its on portfolio;
            ?opening and maintaining current or deposit accounts with central banks;
            ?accepting deposits in connection with trustee agreements that may be made between the BIS and governments in connection with international settlements.

            Organization and governance of the Bank for International Settlements

            The bank currently employs 647 staff members from 54 countries.

          • Dr. Quigley described the international banking network in the following manner: “The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. The key to their success, was that the international bankers would control and manipulate the money system of a nation while letting it appear to be controlled by the government.”

          • http://eichikawa.com/2013/09/the-bank-for-international-settlements-who-rules-the-world.html

            The founder of the most powerful banking dynasty in the world, Mayer Amschel Bauer (who later adopted the name Rothschild) said in 1791 “allow me to issue and control a nation’s currency, and I care not who makes its laws.” Four of his five sons were sent to London, Paris, Vienna, and Naples to establish a banking system that would be outside government control. The eldest son stayed at Frankfurt, Germany where the first Rothschild bank had been established. Eventually, a privately-owned central bank was established in almost every country, including the United States in 1913. These banking cartels have the authority to print money in their respective countries and governments must borrow money to pay their debts and fund their operations from them. And of course, at the top of this network is the privately-owned BIS, the central bank of the central banks of the world.

          • bonbon

            We have heard all that before, it has a hollow echo. From that Article I linked you can see what “running the show” entails. No one would deny the BIS et al, are willing running boys. It seems the actual method of large scale war for population reduction was likely first explicit with Troy. But Gilgamesh records the use of pestilence and famine. Bertrand Russell bemoaned the latter as not quick enough.

          • A lot has to be repeated ad nauseam for you bon bon before it seeps in to that magnificent brain of yours.

            The hollow noise you hear is the empty kettle in your possession. As for repetition, that is your pot calling your kettle black.

  24. Paul Divers

    There is a theory that wealthy baby boomers are causing the housing crisis in Britain. However as we can tell from the comments below the following and similar articles there are boomers being reduced to destitution. From experience I am certain that the psychological impact of being poor in Britain today is far worse that it was under Maggie.

    ‘Where there is despair may we bring hope’.

    Margaret Thatcher.

    ——————————————————-

    No haven in Hackney: census 2011 reveals housing divide

    ‘The 2011 census reveals a widening divide in the housing market: more people are renting, while the cohort of homeowners is ageing, paying off their mortgages and more likely to own their homes mortgage-free.’

    http://www.theguardian.com/society/2012/dec/11/hackney-census-reveals-housing-divide?INTCMP=ILCNETTXT3487

  25. Dr Craig Paul Roberts
    At a time when most Americans are running out of coping mechanisms, the US faces a possible financial collapse and a high rate of inflation from dollar depreciation as the Fed pours out newly created money in an effort to support the rigged financial markets. –

    http://www.thedailybell.com/editorials/34896/Paul-Craig-Roberts-The-Case-of-the-Missing-Recovery/

  26. joe hack

    Be careful there Paul, you might get lost in between the love / hate of Bonbon and Tony – comedy trios only work if the 3rd comedian is dumb

  27. Paul Divers

    Stay Positive on Ireland “It Suits You”

    http://positiveireland.org/

  28. michaelcoughlan

    Hi all,

    No one needs to listen to economists because denis says it all in a minute or two. Absolutely hilarious;

    http://www.youtube.com/watch?v=aVlNZ3SIPbo

    • joe hack

      “fuckshites! i am going for point”

    • Hi Michael
      Well he says a lot alright but not quite all. Describes the symptoms, the observable results of the real Problem.

      The real problem is our money system and how it is administered. Denis maybe like most does not know how the money system works.
      He does not know that
      the central bank has a monopoly in money production
      The money is issued as a debt
      the interest on the debt is not issued into existence
      the commercial banks receive loans from the central bank that is used as the basis of fractional reserve lending
      fractional reserve lending is a legal fraud or Ponzi scheme that requires an ever expanding money supply to exist.
      the expansion of the money supply is inflation
      inflation is a stealth tax that lowers the value of savings every year.
      the benefits of inflation only go to the bankers themselves and their close associates
      no benefit reaches the working person who only has the reduced purchasing power of their savings and reduced buying power of their wages.
      the operators of this system are the banking families that control the central banks
      the central banks operate outside the authority of government with little accountability
      the central banks are coordinated by the BIS Bank of International Settlements
      the BIS is a private organization with a unique charter giving exemption from any law.
      BIS employees travel with diplomatic immunity anywhere.
      the BIS must be destroyed before we have a hope in hell of avoiding financial serfdom

      Denis misses the whole problem and that is a problem too on this blog. If we do not get it how will anyone else.
      Denis can recite problems but does not know the causes.

  29. Preparing for default— Irish Style

    http://preparefordefault.ie/?page_id=90

    Be prepared to do what you can to protect yourself

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