January 6, 2014

Low rates flatter to deceive

Posted in Banks · 106 comments ·
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On Friday night, I dropped my daughter off at Wezz in Donnybrook for the first time. This is a traumatic experience, but one which many thousands of Dublin fathers have either gone through, or will have to go through in years to come. Indeed, I myself went to Wezz – a teenage disco – when it was called Wesley and we, the boys and girls, went on the bus. These days, that has changed.

Rather than getting the bus, today’s Wezz teenage girls go to each other’s houses to get made up. This, apparently, is half the fun (let’s hope so!). Young teenage girls cake on loads of slap, giving them that unmistakable ”bewildered raccoon” look.

Seeing the transformational effect that a Mac palette and a massive brush can have on the girls got me thinking about the similar impact of low interest rates on companies. The teenage girls put on make-up to look older and more mature; their mothers use similar stuff to look younger and more girlish – but the net effect is to change them.

Low interest rates do a similar thing. They make a bad company look good and a fairly decent company look better. In short, low interest rates flatter to deceive.

Now that interest rates are rising unambiguously in the US – the benchmark for the rest of the world – what is likely to be the economic effect?

Long-term US rates will probably hit 4 per cent by the end of the year. This doesn’t seem too significant, until you realise that this time six months ago they were at 1.5 per cent. Given that inflation was about the same level, real interest rates in the US were zero. Long-term rates have more than doubled in less than half a year. This American move may or may not have an impact on European short-term rates, but it will affect the amount of liquidity sloshing around the world. This will mean that, in time, the financial markets will once again refocus on the sustainability of certain countries and companies.

During periods of excess liquidity, stock markets rise rapidly, but do the underlying companies in the stock markets change in a fundamental way? Not really. In fact, they are probably run by the same people, doing the same business, making the same sales. So why are they worth so much more?

They are made more profitable by the subterranean interest rates that allow the companies to borrow at historically low levels on interest. This cheap money allows companies to refinance expensive existing debt, lowering interest expenses and thereby pushing up net profit margins.

They can also use the cheap money to buy back their own shares, raising their share prices – and making them look more profitable and more attractive.

When people expect interest rates to rise, the first thing they do is sell risky assets because they know that the interest rate balm is giving an unfair picture of what is really happening. This process lasts until they sell other assets and in the same way as when the credit was plentiful everything looks hunky-dory, when liquidity dries up, it will expose some of the flaws.

The same thing happens in countries. When interest rates are extremely low, even heavily indebted countries can look quite sensible. In fact, growth rates may turn positive and the debt burden may actually look manageable.

However, if countries don’t take the opportunity when things are calm and when rates are low to materially reduce their debt burdens, they will get hammered when rates rises again – as they eventually will do.

For the past few years, as European and obviously Irish interest rates have been extremely low, the mainstream economic view has contended that the cure to all this debt is austerity. If we could cut back on public and private debt and pay off debt as quickly as possible, the period of low interest rates will be the background noise to a successful reduction of overall debt levels.

Well it turns out (as argued here in the column until I have become blue in the face) that that hasn’t been the case at all.Not only have Irish (and European) debt levels not fallen relative to income, but they have in fact risen. This is because incomes have fallen faster than people can pay off debt, so debt relative to income goes up, not down.

All across Europe, countries – particularly after five years of austerity – still have too much debt, public debt and, in some countries, private debt. Austerity, by hitting growth, actually makes debt ratios worse because the policy can reduce income faster than debts can be repaid – meaning that the afflicted country actually ends up with more debt, rather than less, after a period of austerity which was supposed to reduce it.

If you don’t believe me, look at the chart. Lo and behold, which is the most delinquent of all the European debtors? Why, it’s the one which followed austerity to the letter. This is exactly what this column predicted all along: the country with the highest debt and the most dramatic austerity will end up still the country with the highest debt.

It turns out that the country that has come out of the bailout quickest is the one with the most public and private debt.

Now, how could this be? How could the underlying figures be so stark while the skin-deep spin be so believable? It is because of our old friend, very low interest rates. In the same way that low interest rates can make companies look extremely profitable, they can also make indebted countries look almost solvent.

So what should you do when interest rates are low? You should cut your debt burden, so that it doesn’t cut you to shreds when rates rise.

On Friday, the IMF released a paper written by Harvard professors Carmen Reinhart and Kenneth Rogoff, which claimed that European debts were too high and should be addressed not by austerity and deflation, but by the opposite: debt restructuring and inflation. It warned – as we have done here on many occasions – that the alternative was 1930s-style debt defaults.

Does it not seem logical for our government to use the next few months, when rates remain low, to figure out a way of reducing our debt burden, negotiate it now and prevent a financial meltdown when rates rise? The data doesn’t lie: we are only looking good because rates are so low. Now is the time to be courageous.

They are already on the way up in the US. If we wait till interest rates rise, it will be carnage, with yet more panic and we will be back to square one.

Have you ever been at a teenage disco and received the shock of your life when the lights came on suddenly, and the brightness did what brightness does late at night?

Think about it.

David McWilliams writes a daily economics and finance newsletter. Sign up for your free trial today at globalmacro360.com

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  1. McGoo

    Countries reduce their debt burden through inflation. They always have. They always will. This is really basic economics, as
    the US and UK know, and they didn’t hesitate – as soon as the crisis hit, they started printing money hand over fist. They were completely baffled when the Eurozone didn’t do the same. Apparently, the Eurozone “experts” know less about economics than an average 1st year economics undergrad, and that really is depressing.

    • bonbon

      You mean like Germany in 1923, or the US with QE? Both caused severe depression, indeed.

    • Printing money hand over fist is the way to ruin. As every printed bill is loan into existence this rapid increase in the money supply has simply increased debt exponentially. The interest accruing on that debt has to be paid. as there has been no currency supplied to cover the interest the interest must be paid out of capital assets or productive energy at the expense of growth.

      Thus the faster they print the poorer we get. No recovery in sight, just feudalistic financial impoverishment.

      Basic economics.

      Past money printing recoveries have had more productive capacity to draw upon. now debt encompasses all western societies and a great many others too. The end of the line is here for this age of fiat printing. The great reset draws closer while all freedoms are curtailed.

    • paddythepig

      The inflationary sorcery you describe is stealing, it incentives speculation over prudent and sustainable growth.

      • McGoo

        Paddy : Yes, it is stealing, but it is such an established part of the system that the bond markets should price it in. Countries *never* repay their debts.

        Tony : The popular idea that banks “loan money into existence” may or may not be correct. I’m still trying to come to a final conclusion on it myself, but for now this is a good paper : http://www.themeister.co.uk/economics/mike_king_creating_money_out_of_nothing_draft_one.pdf

        “Thus the faster they print the poorer we get”. That depends if you have savings or debt. Inflation makes those with savings poorer, but makes those with debt richer (ie. less in debt in real terms).

        Remember, fiat money is not intended to be a long-term store of wealth, it is merely a short-term medium of exchange. Inflation is built into the system, so anyone who holds fiat money as a store of wealth is, quite simply, stupid.

        Obviously, if the rate of inflation is allowed to get so high that money no longer serves even a short-term purpose (hyperinflation), then the system has been broken and ceases to function.

        “now debt encompasses all western societies and a great many others too. The end of the line is here for this age of fiat printing.” Those 2 sentences contradict each other. I agree that the current level of debt is too high, and impossible to pay back at real value. So, do we force a very large number of individuals and countries to go bankrupt, with the massive disruption to the real economy that would entail? Or do we print money and inflate the real value of the debt down to manageable levels? Common sense, and lots of economic history, tells us that we should, and eventually will, inflate.

        • It is the first time I have started to read a treatise on money where I have put it down after three pages and concluded it is biased poppycock.

          The tone of the essay is derision from the start. There is no statement of such and such asserting this or that but a tone of can you believe he said such a thing.

          Fractional reserve lending is not a myth and neither is reserves being loans from the central banks to the commercial banks. It is verifiable from the statements of the central banks themselves and in the accounts of the commercial banks.

          Imagining that the raft of economists asserting the same over the last century is to say thay are all deluded. The question is not whether the practice happens but whether it should happen or not.

          There is no doubt that the money is composed out of the either from nothing but a ledger entry on a keyboard.

          The only real money that is issued into existence that is not a debt is the coin in your pocket.

          The fact that you can not see how inflating the money supply devalues the existing currency and robs the thrifty of their savings is a fault of not following the logic. your statement that inflation makes it easier to repay debt is true and an immoral action as it is a device to reduce the value of the currency you repay the debt with and thus to defraud the lender.

          Inflating the money supply for whatever reason corrupts society into actions that deceitful and corrupt. The thrifty and prudent are penalized and the profligate spendthrift and borrower is unjustly benefitted.

          Hence the expression dishonest money is fiat debt based currency.
          Thus honest money does not corrupt and is used by morel and upright people. The only honest money has been proven for thousands of years to have been gold and voted as such by humanity itself.

          That is not an opinion of an economist but a fact demonstrated by the people themselves. The fact that so many of us in western society particularly do not know this history and deride it is testimony to the effective propaganda or the protagonists of the current money system

          Money backed by gold and silver is good. Other money is evil. Simple as that. And before you accuse me of being a religious zealot I would point out that all religions are agreed on this point.

          {“now debt encompasses all western societies and a great many others too. The end of the line is here for this age of fiat printing.” Those 2 sentences contradict each other.}

          No contradiction. Simple statement. There is so much debt the system will collapse or be replaced. Suggesting that the current level of debt can be deflated to manageable levels is an hallucination . It is also morally indefensible for reasons stated above.

          The current system is corrupt. It corrupts and destroys people, nations and civilizations. That is why it must be abandoned and destroyed or your civilization will vanish too just have others before us. It is the end of all empires the minute the contemplate debasement of currency and move from good money to bad; from morally correct money to evil money.

          Mr McGoo I am not personal to you and thank you for your observations. The Creature from Jekyll Island and Paper Money Collapse are a couple of really good books that will provide an understanding of what money is or should be.

          • McGoo

            Tony : You make several references to morality, and on this matter I mostly agree with you. Debasing the currency does rob the thrifty of their savings *if* they are stupid enough to hold fiat currency as a store of wealth. It does defraud the lender *if* they are stupid enough to lend to an entity who can’t possibly pay them back, or *if* they fail to charge a sufficient rate of interest to cover the risk of inflation.

            In other words, if people treat fiat money as “honest” money, they will get hurt. Perhaps the real immorality in all this is the failure to educate people about how money and economics work. But who would educate them, when many who work professionally in the field don’t seem to get it either?

          • You are quite right about the lack of education but the truth is there is education. It deliberately obscures the truth. It is propaganda really. deliberate lies.
            All designed to allow the robbery and poverty inherent in the design.
            All people are robbed by inflation. All people are impoverished by a system of money that is a debt at the start and its very existence is a burden and the interest charged eats the substance of the economy. It will devour us all and is doing so.
            The fact that it is being operated this way by design is the real eye opener. It is not ignorance or mistake.

            I am totally appalled that our host steadfastly refuses to address this issue. It simply demonstrates the depth of the rotten malaise and the success of the propaganda program to deceive.
            There are none so blind as those who refuse to see.

        • michaelcoughlan

          Hi,

          When you say we will inflate it assumes “we” are In control.

          Inflation isn’t a policy decision it’s the result of dreadful economic mismanagement.

          Re money being loaned into existence. That’s how it works. Re; we get poorer as a result. This happens in at least two ways; Increased taxes need to pay the extra interest levied on the newly created govt bonds plus reduction in real purchasing power in salaries supplied in increasingly worthless currency.

          Hope this helps.

  2. Couldn’t agrre with you more Mc Goo. Best D

    • David/McGoo
      I would suggest that some in Europe know more about economics than you give them credit.
      Some of them have lived longer and have a collective memory of what printing money does to an economy. They have friends and family that lived through the hyper inflation such evil stupidity produces.
      Printing endless amounts of script that is loaned into existence, issued as a debt, accruing interest, and piled on existing debt is rank stupidity or deliberate destructive policy. In either case it is sick.

      Is that what YOU COULD NOT AGREE MORE WITH,
      Now is your chance to address the issue of our system of money creation.
      Set me right if I am wrong.

  3. Grey Fox

    Although for now. the EU is not following the US in long term interest rate adjustments, the writing is on the wall, this will be the final nail in the coffin of distressed Irish homeowners and my biggest fear.
    With Enda & Co washing their hands of the mortgage crisis leaving the cleanup to the Bank’s and we all know their attitude, life for tens of thousands of Irish families is going to get much much worse. I truly dismay at this forecast.

  4. cooldude

    The IMF paper went into the various means debt burdens can be reduced and it’s an awful lot more than simply ditching austerity. Here are the methods of debt reduction suggested

    1)” Economic growth.” (This is the one Enda and the boys are banking on.)

    2) “Fiscal adjustment-austerity.” ( No mention of ditching it.)

    2) “Explicit default or restructuring.” (Bring it on. This what should have been done at the start)

    4)” Inflation surprise.” (Be careful what you wish for as hyperinflation was a big surprise to the people of Zimbabwe and countless other countries who tried this one.)

    5) “A steady dose of financial repression accompanied by a steady dose of inflation.” (Wow this where they really show what they are thinking. “Financial repression” sounds like bail -ins, wealth taxes and all other forms of robbery.)

    It would seem from all of this that the ECB will start some sort of overt QE to debase the currency. The race to the bottom in all these unbacked currencies will accelerate and the ECB is going to join in. Some of the German conservatives who realize where all of this will eventually lead to are being moved aside to make way for this. This will produce the inflation which is really just another tax on consumers no matter how the economists try to pretend it’s such a great thing. A mild deflation in consumer prices is the sign of a truly healthy economy but most of them don’t even know what that is.

    The financial repression bit is the really worrying feature of the paper. This is not some fuddy duddy report like the colored papers our government is so fond of doing but never enacting any of them. This is an actual representation of what these guys will be introducing over the next few years. Be prepared.

    • Ryu Hayabusa

      Inda, the political sloth is over in Saudi-land going ‘cap in hand’ to the biggest terrorist on the planet, Prince Bandar… would you like some Irish Government bonds Effendi?

      There really is no limit to the depths this caricature of a man is willing to plumb!!

      • redriversix

        Bandar Bush…..

        has a multi million dollar boeing bought & ran by B.A.E from 88 to 1997…even had it painted in his favourite “Dallas Cowboys” colours…A thank you for his involvement in $40 billion arms deal between B.A.E and Saudi Arabia…..in 1985..!!!!!

      • He’s nothing more than a beggar. It’s cringeworthy.

      • Paul Divers

        I have problems with this. Enda and Cameron are trying to drum up business in regimes that are poles apart from modern European standards but this is neo-liberal capitalism for you.

        This is globalisation and European governments are happy to play along because it was European countries who instigated globalisation through colonialism, empire and slavery. The trinity of a Tory wet dream.

        The elites in European politics and business circles still believe in privilege and entitlement. It’s the same old story but they will apologise for regimes like China and Saudi and expect is to keep our mouths shut as long as the booty is rolling in

        Fuck them. I would rather starve that support these regimes and others like them. I am glad you are angry Ryu

        • Ryu Hayabusa

          One could easily become apoplectic Paul thinking about it but as this isn’t at all constructive will try to contain it.

          What’s certain is that this FG (FF lite)/”Labour” (essentially FG lite) coalition bring shame upon this country and if left to their devices will bring ruination on shame’s entrails.

          FG are a cancer of the system and like any malignancy they need to be excised expeditiously.

          Anyone who voted for these individuals (using the term very loosely!) need to have a long hard think about this miscalculation.. even bearing this in mind they posess no mandate at this point!. Nobody sanctioned what they are currently putting into train. They are making a bad situation much worse.

          A large swathe of the so-called upper echelon of the ‘permanent’ government need to be removed in tandem.
          With a few exceptions most of these pukes are the same who lorded it under the previous administration. They consider themselves untouchable. THEY ARE WRONG!

          Is the system going to have to unravel before people push back. This is coming to pass anyway on the current trajectory.
          Pre-empting such an occurrence would seem to be eminently more preferable and less messy.

          All depends on how much more crap people are willing to stomach. If a French culture permeated here the place would have ground to a halt already.

  5. Adelaide

    Constantin Gurdgiev in yesterday’s Sunday Times concurs.
    His 2014 Irish prediction, economy = no change, employment = no change, debt = no change, interest rates = rise, anywhere from 3% to 9%.

    Ouch!

    • Patrick

      David of course you are correct. But nobody is listening.

    • michaelcoughlan

      Hi Adelaide,

      Re debt. No change? There will be billions more in debt added to the pile. You could add increase in stealth/wealth taxes. Employments levels may increase as more reasonable jobs are replaced with dead end jobs. Emigration can’t go higher I’d say because we had peak emigration in the 12 months to April 2013.

  6. bonbon

    The IMF, while referring to FDR and “gold” in 1933, has apparently a flighty teenager attitude to Glass-Steagall, the decisive adult economic intervention that successfully brought the US out of the Depression.

    Maine Editor Says “Sen. King Can Lead On Glass-Steagall Restoration”

    The monetarist makeup-cake of the IMF recipes should by now not fool anyone. Staring into the blaring financial lights and missing entirely the oncoming 16-wheeler is a really daft way teach economics, whether at undergrad or expert level.

    “Fortunately, for King and other supporters, the issue is clear enough to build a real groundswell of public support. Unlike arcane banking rules, practically everyone can understand this one. And people hate rigged games, of which current banking law is a prime example.”

    • If we follow the lead of FDR we increase the value of gold by 66% (or put another way, devalue the currency by 66%, so gold immediately goes to at least $2000 an ounce. But what should gold need to be to liquidate the US debt assuming the US still has 8200 tonnes of gold. Estimates range from 20,000 to 100,000 an ounce. With the current rate of expansion of the money supply that gold figure continues to rise rapidly.

      Can’t happen. Just did in Zimbabwe to trillions an ounce.

  7. The real inflation rate is 8% not less than 2%. Interest rates on the 10 year US bond at 3% nominal rate is negative 5%. a negative 5% rate on money loaned is inflationary , that is the investment climate for cash is so bad that people will park it in a bond or bank to have it worth less in spending power every day.

    Why are the nominal interest rates so low. Because the central banks have to have them there or their Ponzi scheme blows up.

    Why are the long term rates rising? Because nobody wants to invest in a currency being rapidly debased. Because the market is beginning to assert itself over the paper scam. No other country or investment funds wants to invest in one of the largest bubbles in history. The bond market is starting to crash. The buyer of treasury fund of the last resort is the Federal Reserve. Most of the new debt is being monetized by the fed. China, Japan or most other ex buyers of US bonds are ridding themselves of the bonds they hold . These sales cause the US funds and currency to return home from abroad. The inflation baked into the US pie is coming home with a vengeance.

    Once the inflation train starts there is no knowing where it will stop. 5%-10%-20% interest. Destruction of wealth as the bonds collapse.

    If the US goes Europe will follow.

  8. “So what should you do when interest rates are low? You should cut your debt burden, so that it doesn’t cut you to shreds when rates rise.”

    Six months ago you were suggesting people should go out and spend to maintain the cash flow.
    “your spending is my income” you said or words to that effect. Savers were hoarders it was suggested. The frugal were the problem. Spend , spend, spend you said.

    Now you say people should cut their debt burden. Isn’t that what a lot are trying to do. The problem is they waited too long. Their job was already lost before the debt was considered a problem.

    The problem with the current debt is that it was obtained in the good times via a debt based credit boom.

    As said often. A credit based boom has always resulted in a bust, and this one is no different regardless of what you do.

    Your so called recovery countries of increased debt and spending have simply kicked the can down the road and their turn will follow with even more destruction.

    • All I can offer you is a big picture scenario. Gold is going to sell in the thousands of dollars and you can count on that. But that does not discount the “possibility” that it could go lower first. It’s confusing. But that’s life.

      The confusion is caused by faulty data. The ongoing Release of misleading Official Data by U.S., Chinese and other Major Nations causes distortions in the markets. Real U.S. GDP is a Negative 1.7%, Real U.S. Inflation at 8.81% and Real U.S. Unemployment is 23.2%. It’s no wonder that money is flowing out of gold and silver and into the stock market.–David Schectman

  9. bonbon

    Indo editorial presents 5 reasons to be wary about the eurozone’s stability in the coming year. Top of their list significantly is the German Constitutional Court – if Karlsruhe “did take the nuclear option, the bond market could declare open season on the currency bloc’s weaker members once more, pushing it back into crisis.”

    http://www.independent.ie/business/world/eurozone-five-reasons-to-be-wary-in-2014-29891893.html

  10. Everyone is more broke than they admit.

    One thing that would immediately crush the dollar and send dollar-gold to the stratosphere is the following, by Richard Russell:

    Richard’s Latest Remarks

    I offered the thought that the US could unilaterally re-set the price of gold to a much higher number and overnight re-liquefy the system and minimize the pressure of our enormous debt. The price of gold has been re-set twice before by the US, so why not now? Yet nobody in DC has even broached this idea. Why?

    Then the full horror of the situation struck me. The reason raising the price of gold isn’t discussed is that we probably haven’t got the gold. Like Britain, we may have sold much of our gold or loaned it out to bullion banks!

    There have been rumors of the US having “lost” much of its gold. Then why the hell doesn’t the Treasury have an audit on our gold holdings and end the rumors? What is the Treasury hiding? We need an audit to prove that the US has the gold.

    -Dow Theory Letters, December 31, 2013

  11. Too big to jail. Market manipulation transparent yet allowed.
    —————————————————————-

    2013 – The Year of JPMorgan

    Theodore Butler | January 3, 2014 – 10:22am

    Probably owing to the dramatic decline in the price of gold and silver, I’ve read scores of year end metal reviews, more than I have ever read previously. Like most of you, I read in order to learn. Therefore, I approach every year end review and outlook with an eye towards understanding just what caused the prices of silver and gold to decline as much as they have and what that portends for the New Year.

    I know I look at silver and gold differently than most commentators and what follows I haven’t seen elsewhere, for better or worse. Let me assure you that I’m not trying to be different for the sake of being different; my objective is to understand what really moves the price of silver and gold – no more, no less. I’m not interested in making up stories that can’t be verified or documented; I would not put my name on anything that I did not believe to be factual and accurate.

    As has been the case for the past five years (since it acquired the concentrated short positions of Bear Stearns), 2013 was the year of JPMorgan in silver and gold. Everything important that transpired in silver and gold can be traced to JPMorgan, just as this bank will dictate what happens in the future. I realize I am being overly specific and that many different factors influence the price of any market; but the circumstances surrounding JPMorgan are so overwhelming as to render all those other factors combined moot when it comes to silver and gold.

    From the very beginning of the year to the last two days of 2013, JPMorgan has dominated and controlled the price of silver and gold. Here are the documented facts. At the start of 2013, with gold at $1650 and silver at $30, JPMorgan held short market corners in COMEX gold and silver futures. JPM was short 75,000 gold contracts (7.5 million oz.) and 35,000 silver contracts (175 million oz.). JPMorgan’s short market corners at the start of 2013 amounted to a 21% net share of the entire COMEX gold futures market (minus spreads) and an astounding (but typical) 35% of the entire COMEX silver market. No single entity had ever held such outsized and anti-competitive shares of any important regulated futures market. It is unreasonable not to associate such extreme market corners with what followed in price.

    To continue reading, please subscribe to Butler Research.

  12. I’m sure, if pressed, the CME could come up with some cockamamie excuse why JPMorgan was allowed to hold and take delivery of so many gold and silver contracts in one month, but the real reason is that JPMorgan is above all rules and law. The CFTC backed down on policing JPMorgan and it would be foolish to think the CME would restrict its most important client in any way. Far from a band of brothers, this is a brotherhood of criminals. Besides, rules are for the little people, not JPMorgan.

    - Silver analyst Ted Butler, Butler Research, January 3, 2014

    http://r20.rs6.net/tn.jsp?f=001xg2xqoDhUOh_2T–aCOdjy_ya6sH4Dfa2E6CVITRZLVo5MRmv472ia-tWesp0OwIm6eEGpdvGct0XUEFYSI4vE0d4E_sYdW74Y_s9h5P4A4mKBij3Bgz5P_omQKFBGWO41oruavAATdz5EvRTJdeNSojlm_p3ASxJ8u4lMZYh05yNqMZBNBFPOBBWLkwB3Ze7ym23mb6ydo=&c=9_3fLAqBZY7eBgDbQI0I7lxYD_YcLb04CVWH3MO40EVEPYwEbRW2_w==&ch=Pw1rVAxu3zTzZ6yUknCWpu3D2gmCGB2mSzspY_RKW2guA1OrrRUTkw==

  13. bonbon

    For the goldbugs, German Bundesbank is one of the the top losers apparently, of the 2013 gold-crash. Total losses for all central banks $457 billion.
    http://www.welt.de/finanzen/geldanlage/article123602726/Notenbanken-verlieren-mit-Gold-457-Milliarden-Dollar.html

    • Why thanks, very informative. I agree with the total article.

      It points out Germany is very favourable to gold. The Bundesbank bank took the opportunity to by more “cheap gold.
      It expects a price of $2000 within two years. Very positive. The Germans know real money when they see it.

      BTW They did not actually loose anything. The price is up four fold since Germany entered the euro in 1999. Less than 300 to 1200 plus.$US

      “An ounce on the commodity markets for 1240 dollars, or just over 900 euros was traded on Monday. Even after the painful price reduction by 2013, gold is in dollars so still more than four times as high as before the turn of the Millennium.”

  14. http://blog.milesfranklin.com/the-great-disconnect
    ———————————————————-

    The great lie leads to the great disconnect, the huge misallocation, the biggest crash is on the way.

    ————————————————————-
    “Another area that makes no sense are interest rates. Why are interest rates at historical lows (though doubled off their bottoms) if financial and debt ratios are as poor as they are. Actually “poor as they are” is the wrong term…I should say worse than they have EVER been. Why would rates be low if “risk” is at all-time highs? Another disconnect?
    Bill Holter

  15. bonbon

    This has to take the biscuit !
    New York FED Chief Dudley Displays His Brilliant Economic Insight

    “Fed economists confront a major “riddle.” They don’t know whether or not the unemployment rate will continue to fall as the economy improves, because possibly millions of frustrated workers will now begin to return the labor force — which could lead to a rise in unemployment!”

    What Dudley is hinting is s that the only reason the official US unemployment rate has fallen recently, is that millions of actually unemployed Americans have simply been dropped from the labor force, as EIR and LaRouchePAC have extensively documented.

    Dudley gained such startling brilliance at Goldman-Sachs before Geithner hired him at the FED.

    Are we to expect such “riddles” from Draghi et al now?

  16. redriversix

    Their is too much debt

    Their is no incentive or bravery to address this issue.

    Govt debt is climbing even with austerity…interest payments on National Debt are climbing with a falling income.

    Next month at Davos,Business leaders will be discussing how to get more growth whilst ignoring the massive debt Mountain growing…..Cheap interest rates are fueling mini credit bubbles in the States where the amount of automobile debt at the end of 2012 outstanding was $1 trillion U.S.The growing interest rates are going to cause a shitstorm..but rather then address the issue of too much debt..the Fed or E.C.B [ same meat,different gravy] will stick a plaster on it and “hope for the best”

    Governments & Banks have learnt nothing…they are more powerful than ever..they are still selling off loans into bond markets..still securitizing loans which as a financial tool Warren Buffet called securitization a “weapon of mass destruction”.

    France going into recession,Greece & Cyprus still at deaths door etc etc etc , our debt at about 128% of gdp….

    No matter how we cut it ..or dress it up with academia…their is too much debt…this needs to be written down..written off , restructured,but not kicked on to the next generation.

    Who in Government around this World will have the balls to stand up & say Stop this PONZI SCHEME.?

    Nobody..why ? too much money to be made in a financial crisis or War whatever term you prefer for the Corporations,lobbyists and the other 1%

    Have a wonderful evening.

    Barry

    • Grey Fox

      Did you hear what happened..??

      Apparantly while she was speeding down the giant slalum wearing her new pair of skies, after hitting ramp No.1 she catapulted 12ft into the air and shouted Geronemo..when she landed, her left ski (called Enda) immediately buckled under the pressure and at the same time her right ski (named Eamon) made an automatic ‘U’ turn to the right and poor auld Angela ended up kissing a boulder, breaking both of her liathroidaí and fracturing her pelvis.

      Swiss Police are still examining the large pair of brown skid marks left on the piste. Angela remarked afterwards that the f*kn pair of them must of been made in China….

      Enda said he is grand now, he said a ride like that is very common down in Mayo. And Eamon said he just doesnt know were to turn to now as he has tried left, right, straight ahead and reverse…

    • good shooting Barry
      “Right on”

    • paddythepig

      Why didn’t you have the ‘balls to stand up and sat stop this ponzi scheme’ by not borrowing? Actions being louder than words, and all that …

      • Paul Divers

        You could do more with your mind Paddy if you stopped sounding and behaving like a bigot from the Daily Mail site. I know you troll for a giggle and don’t believe you are a tory tart at all. If you and Colin were tories then would not be reading this blog.

        We get it. All this poverty is caused by individuals not being sufficiently productive, Blah blah blah.

        Not enough austerity for you. People like Michael O’Leary would like to slash all budgets by 50% in the morning and they really believe that is the right thing to do. Thankfully there are powerful forces to apply the handbrake on these guys

        I agree that it was the 99% who gave oxygen to the ponzi scheme but what do you expect when the television is filling their heads with crap like Homes Under The Hammer?

        It was all a cruel joke just like Thatcherism but luckily I copped on thirty years ago and remain debt free. So please no more snide comments.

  17. Pat Flannery

    I know from personal experience managing businesses, that a successful CEO must strive to keep ALL debt down while growing company income, no matter what the available interest rate. So must a state government. Boosting income by incurring debt, for which David is making the case, is fraught with danger. He believes that debt is necessary to achieve income and growth. That is not the case.

    Long-term debt should always be confined to income-producing capital items. Even then great care must be taken not to overestimate the future income that will amortize the debt. Many companies fail by making this mistake. Taking on debt is not a guaranteed road to success.

    Successful companies grow by extracting income from existing assets. They are careful to keep increased income well ahead of increased debt. The exact reverse is being proposed by David.

    Successful companies grow by finding new markets, increasing production and minimizing costs. “A dollar saved is a dollar earned” still applies at the highest level of corporate and state governance.

    Successful CEOs see their customers as partners; successful governments see their citizens as partners. They each find “partnership” ways of increasing production and lowering costs. That is the best road to sustainable growth.

    Sometimes companies even achieve growth by reducing demand for their own products! Utility companies are a good example. More and more electricity companies are entering into benefit-sharing agreements with customers who reduce their energy consumption. The utility company shares in the additional income experienced by customers who lower their energy costs. That is good economics.

    Economics is not just the theoretical science that provides full employment for “book” economists. It is a practical science best understood by CEOs operating at the coal face of a company’s balance sheet – where ALL debt is still a four letter word.

  18. Grey Fox

    I heard a numpty from one of the Stockbroking Firms here in Dublin on Newstalk this evening congratulating the NTMA on the impending 10 year Bond issuance, his words of wisdom were ” we should take on as much Debt as we can while interest rates are low”!!!
    Not a word about how will we repay it!
    Am I missing something here??
    Is this not what our illusrious leader Enda castigated the people of Ireland for at Davos “losing the run of ourselves”….at least with wages as they were in 2007 most people could afford to repay their loans, in short, looking after their end of things, it was the Banks cheered on by Government and media and Legal Profession and every other profession who overcooked the books, eventually pulling the rug from under the likes of you and me, it was their greed and lack of professionalism that caused this clusterfcuk and now our Government is going to lead the charge back into the same mess again….God give me patience!!!! Cele-fcking-brations…they need to be strung up!

    • cooldude

      It wasn’t just in this country that the debt mantra took over. Guess who won world bank of the year at this same Davos meeting of elite gobshites in 2005 none other than our own reckless Anglo Irish Bank. This is the elites dirty little secret. They promote debt as the bees knees and when it all goes pear shaped they turn around and accuse people of partying too much. The whole system is a ponzi scheme and debt based money and fractional reserve banking will always lead to this sort of ending. The only way out is some sort of debt jubilee because all of this money is really just digits on computer screens which are used to extract the real resources of the planet for the banking elites. This is explained in clear detail by John Perkins. In a debt jubilee the only ones really hurt are those elites at the very top who operate the whole ponzi and these are the very people who should suffer for creating this monster.

  19. Pat Flannery

    David argues against austerity based on his misleading assertion that “austerity reduces income faster than debts can be repaid”. He does not distinguish between absolute debt and relative debt. Nor does he establish a cause and effect relationship between fiscal austerity and reduced national income.

    As I pointed out in the utility company example above, it is perfectly possible to produce more income from less consumption. Economists like David need to stop thinking that more borrowing and more spending will create more income and that the reverse, which they have dubbed “austerity” will automatically reduce income.

    Austerity and the Euro are not Europe’s problems; on the contrary they will eventually be shown to be its strengths. Europe’s problem is productivity. Its productivity involves its entire social and ethical framework.

    Europe needs a holistic reexamination of the relationship between its primary means of production: land, labor and capital. Right now the mix is all wrong, particularly in Ireland.

    When so much of a nation’s labor force is lying idle it is more debilitating than if an equivalent percentage of its land or capital was lying idle. Economists like David need to get back to basics and point them out to the politicians. Right now they are mesmerized by the markets and arguing about its medium of exchange, the currency.

    • Paul Divers

      I am all for holistic re-examination. I have been applying it to my life for years now and I am very interested in your thoughts on how Ireland can be more productive. Answers on a postcard please Pat as I am all for the sound of it.

      ‘The mix is all wrong’

      It seems to me that Ireland is still a debt junkie and has not changed its spots. The day after the Troika left Brian Hayes was kite flying about introducing bonuses in the public service. At a time when there is a recruitment ban!

      In light of the recent scandals involving charity luvvies receiving under the counter payments you have to come to the suspicion that these guys have no moral compass whatsoever or that they are devoid of emotional intelligence.

      Limerick is the City of Culture and they all bickering over power and influence like a bunch of children fighting over a caramel. It’s only the first week of January and there has been three resignations.

      Not a good signal to send out to potential investors is it?
      Wasters.

      • Pat Flannery

        The “mix is wrong” mainly because of the misallocation of government capital. That is because of the paucity of business experience in government circles.

        In the private sector a successful CEO is constantly reviewing how he/she allocates the company’s available capital. That mindset would greatly improve government’s management of the economy.

        Ireland’s current falling national income is little different from why a company’s income usually falls.

        The country does not lack resources. Much of these resources are wasted by inefficient semi-state bodies. Shannon Development comes to mind. How can an organization that owns assets worth billions of Euros, hotels, castles, golf course, even a whole town, make a loss every year?

        Then there are the “authorities”: Dublin Airport Authority, the Dublin Port Authority, RTE, even the IDA.

        No wonder they all hate Michael O’Leary.

        • Paul Divers

          What resources exactly?

          And how could these resources be utilised to prevent the obscenity of 500,000 unemployed and most of the population living in poverty just to pay down debt?

          Answer on a postcard please.

          • Pat Flannery

            Postcard:

            Eliminate IDA, Shannon Development and FAS. Refocus on indigenous industry.

            Weather great, wish you were here.

    • paddythepig

      You are 100% right Pat, but the consumption junkies on this blog aren’t listening.

      • Eireannach

        Yes, Pat Flannery is right, because he focuses on the ‘real economy’, not merely currencies and interest rates, which are nothing more that aspects of the medium of exchange.

        I can reveal to you all what I’ve been working on:

        http://www.gameofthronestours.com

        A franchise network of tours to the film locations of Game of Thrones, to operate in four countries in 2014; Ireland, NIreland, Iceland and Croatia.

        I built this business model with almost no money. The internet allows us to produce at very low cost.

        I can assure you all, I didn’t build this business, already valued at over €1,000,000 by talking about ‘currencies’ or ‘interest rates’.

      • Eireannach

        Yes, Pat Flannery is right, because he focuses on the ‘real economy’, not merely currencies and interest rates, which are nothing more that aspects of the medium of exchange.

        I can reveal to you all what I’ve been working on:

        http://www.gameofthronestours.com/

        A franchise network of tours to the film locations of Game of Thrones, to operate in four countries in 2014; Ireland, NIreland, Iceland and Croatia.

        I built this business model with almost no money. The internet allows us to produce at very low cost.

        I can assure you all, I didn’t build this business, already valued at over €1,000,000 by talking about ‘currencies’ or ‘interest rates’.

    • Paul Divers

      You didn’t clearly explain the concept of increased income with reduced consumption. Perhaps you might want to flesh it out and explain more clearly how the power company and the consumer both benefit from your arrangement?

  20. Paul Divers

    So if you use austerity as a tool to reduce debt you in turn reduce income. But you need income to pay off debt. Since no-one is spending then the debt not only remains but will become a bigger millstone when the price of money rises and our lads are going to get caught with their pantyhose down. Why is this do you think?

    Why would they deny the advice of people who know better than a bunch of glorified county councillors?

    • Austerity sells assets to pay off debt. Net worth remains the same but income is now free to spend on other goods or to save for a future purchase.
      Paying off debt does not increase income but it allows income to be spent where it might all have gone in payments on the debt.
      Living debt free is the ideal unless the debt earns income that is self supporting and pays the debt repayment. IE. earns a profit.
      Recently people have limited assets to pay off the debt as the assets were reduced in value. The answer is to still sell the asset and therefore reduce the debt to as little as possible
      Make the best deal you can.

    • paddythepig

      How do you know they know better?

  21. TrackerMan

    I think there are a number of differences that we should pick up on here between how interest rates and lending markets differ in Europe and the US. (1) In the US people have been able to refi / take on debt over the past number of years at low locked in rates for terms of 10/20/30 years, this provides stimulous and enables them to be cushioned against rising long term rates. (2) US currency should rise strongly against euro over next 3/4 years due to substanatial interest rate differential – rates will not be rising in Europe anytime soon – a natural rising of German wages against rest of Europe will be how this will revaluation of Germany will take place. Poor demand / excess debt from rest of Europe will keep inflation in check.

    When Euro falls relative to dollar this is extremely beneficial to Ireland – remember Ireland pre credit enhancement boom, we did very well. Given the level of FDI into Ireland since 2009, we will leverage very nicely off this when €/$ goes from current 1.35 to 1.15. When the US does well, and it will over the next 5-7 years we benefit and I believe we are on the cusp of a great trade driven reinvention of Ireland. Given that only 20% to 25% of people are employed by this sector at present, it will take take time for the positive benefit to be moer widely felt, but the signs are everywhere of what lies ahead.

    • Eireannach

      Two paragraphs about currencies and interest rates, and not a word about productivity.

      Not a word about making things, creating new services, putting resources to work to create jobs and meaning in people’s lives.

      I’m sick of it! Do something meaningful with your lives, for God’s sake, instead of this tedious focus on currencies and interest rates. Just be productive, and as currencies and interest rates change, as they always do, deal with it.

      • TrackerMan

        High productivity is / will be the by-product of the exceptional levels of FDI seen here over the last 3/ 4 years. These things take time. Productivity in services plus maufacturing as opposed to looking at manufacturing alone that is what is important. Growth in productivity from these sectors will create wealth here in Ireland, while a depressed Euro vs dollar will further enable expansion – Ireland from 1995 to 2003

        • Eireannach

          No, high productivity will be Irish people starting their own businesses, for a change.

          • Eireannach

            10,000s of internet micro-businesses, with people running three of four operations each, using £D printers, and so on, is what I mean by ‘Irish people starting their own businesses’.

            Not the old staples of an O’Brien’s sandwich shop or Insomnia café franchise. No, I’m talking about 21stC businesses built on the internet.

          • Eireannach

            3D printers, I mean, of course.

          • bonbon

            Phew, I thought that was Pound printers, like the Carney QE ones and the Dollar printers of the FED.

            Strangely enough the first combat aircraft with 3d printed parts are already taking off from BAE. Not sure if the cannon munitions are.

          • Ryu Hayabusa

            Some variants of the 3D printer plastic pistol fashioned ‘The Liberator’ supposedly exploded or broke up when fired. Carney & Osborne’s 3D QE pound printer may also be destined to blow up in their faces!

  22. joe hack

    Not to alarm you DMW but allot more that dancing goes on at Wesley the sex acts that go on there don’t make it into “respectable porn” SO I AM TOLD. Allot more than raccoon headlight makeup goes on in the bedroom it’s not just water in those bottles.

    I guess that economics is the same, the USA and Brits have now cornered the Afghanistan poppy market, yields are up way beyond the Taliban years – they were not slaves to the west war was inevitable.

    The balance of wealth towards the east is a form of equality, china and the like have had enough of been slaves to the west – there is a chess game going on there that may lead to a stalemate which may lead to a proxy war over a rock.

    Fiat money is the makeup used here -Turn the lights yourself DMW

    • Paul Divers

      Bush and Clinton had a field day dealing narco and The British would sell their granny for a reliable supply of powder.

    • michaelcoughlan

      “the sex acts that go on there don’t make it into “respectable porn”

      I didn’t think they were grazing sheep on the pitch at Wesley?

  23. Paul Divers

    It is my imagination or do certain posts disappear in to thin air?

  24. Many have been deceived by the low rates to want to lock in billions of cash.
    Will interest rates rise and make this a poor investment??? with all the manipulation I would not go near the bond market!!!

    Ireland:

    Ireland hopes to raise €5B with 10-year bond sale: The Irish Examiner reported on yesterday’s announcement from the NTMA that unveiled the first Irish bond sale since it exited the EU/IMF bailout programme late last year. It noted that market sources suggest the NTMA will look to raise €3B, but could raise at much as €5B as demand is likely to be strong. In addition, the report noted recent comments from the NTMA’s chief executive, John Corrigan, who said that the agency would look to raise a total of roughly € 7.5B this year.

    Demand for Irish bond issue soars: The FT reported on demand for Ireland’s first bond issue since it formally exited the international bailout programme. It noted that the 10-year bond sale had intended to be €3B to €3.5B, but an overflowing order book in excess of €13B had allowed bankers to tighten the pricing of the deal. It said that bankers had tightened the pricing from initial guidance of 150 bps above mid-swaps to 142-143 bps – or possibly lower. It noted that the order book will be closed and formally priced by lunchtime.
    n in the market I do not want to go near.

    From daily commentary at http://www.lemetropolecafe.com

    • Ryu Hayabusa

      Some of the media cheerleaders were giddy with excitement this evening proclaiming how the Irish Bond Sale was four times oversubscribed.

      Rejoicing they were at how the yield fell 10 basis points on the secondary market to 3.27%

      “Such extremely heavy demand reinforces the recent positive sentiment towards Ireland,” Ryan McGrath, a Dublin-based bond dealer with Cantor Fitzgerald, said.

      “This bodes well for upcoming issuance by other euro zone peripheral countries.”

      Maybe he fell out of bed on the wrong side.
      &All that lovely cheap liquidity sloshing around looking for a home…
      Spin of this size and magnitude could hardly be contemplated post 1939-40 era.

  25. “The Golden Eye”

    Here is a thought posted on http://www.lemetrolecafe.com for the all knowing all seeing

    CON-stitutional references
    Bill:
    It’s rather amazing to me how uninformed so many folks on your site are relative to the reality behind our so-called CON-stitution.

    They have apparently all been brain-washed into believing the illusion that it actually pertains to them and that they actually are the “de jure” jurisdiction in this land who has unfortunately become the victims of a usurping power elite.

    Give me a break! What hogwash!

    They are a victim for one reason and one reason only—–THEY CHOOSE TO BE ONE!! What a rude awakening they all will have when this cat is finally out of the bag and they get hit with the reality that they have all been UNILATERALLY contracted (willingly because they did and continue to do nothing about it—bellyaching does not qualify as DOING SOMETHING!) into the status of a DEBTOR-SLAVE possessing nothing but privileges that are granted only based on their willingness to submit to complete enslavement and servitude (I know that hurts; however, take a good look around and tell me what you REALLY see).

    If any of these folks imagine for a New York second that TPTB have any intention whatsoever of yielding their position of power or allowing anything to ever go counter to their will they are simply put— sadly mistaken.

    They have not been in this position of power for 6000 years because what I’m saying is not dead nuts on. Quite the contrary. It’s called “rolling with the punches” and they are MASTERS of that ART.

    As for the assumption that TPTB will ever get themselves into a position they cannot get out of (based on things the way they are today) it is nothing more than wishful thinking that has about as much chance of occurring as the cow has of jumping over the moon. So, where does that leave us?

    Based on my apparently rather dismal picture how do we win the day?

    It’s all in the “energy field”.

    Without a complete conversion of the finite’s energy field from its current ELECTROMAGNETIC state to that of a SUPERCONDUCTIVE state, simply stated —-WE HAVE NO CHANCE WHATSOEVER because they are and will always be MASTERS in an environment dominated by an electromagnetic field.

    What is the difference between the two fields?

    Electromagnetic fields have RESISTANCE within them whereas Superconductive fields do not.

    How does one recognize and identify this electromagnetic field’s résistance?

    We feel it (and therefore know it) as the POWER OF FEAR.

    Ergo, as we overcome our fear TPTB will slowly and steadily lose their 6000 year grip over the finite world and we will end up (so to speak) winning the day.

    It’s as simple as that.
    Dean
    PS:
    It is believed by some that the ancients i. e. the Egyptians for example were able to convert metallic gold into a MONATOMIC state to induce a SUPERCONDUCTIVE FIELD in the King’s chamber resulting in increased awareness due to the monatomic gold’s affect on the pituitary gland which is esoterically referred to as the THIRD EYE or the ALL SEEING EYE.

    This in itself may explain why GOLD was chosen by the ancients to be the MEDIUM OF EXCHANGE.

  26. Ryu Hayabusa

    ‘Labour’ are circling the Latrine… can’t happen quick enough.

    http://www.independent.ie/irish-news/politics/new-blow-for-labour-party-as-south-dublin-mayor-resigns-29896555.html

    Guy obviously caught a waft of what the approaching wind’s carried.

  27. Ryu Hayabusa

    25 councillors have now left Labour since 2011…

    http://www.youtube.com/watch?v=n4RjJKxsamQ

  28. This is the only posting I can say should not be ignored. Within is an extraordinary commentary of economic trends.
    It ignores the mainstream economists BS predictions and gives a clear unadulterated look at the real position of economies world wide.

    http://blog.milesfranklin.com/wide-world-of-horrible-headlines

  29. Interesting economic comments on energy.
    Russia emerging as a super power again

    http://www.caseyresearch.com/cdd/how-putin-conquered-south-africa

  30. Low rates should be no rates

    An “interesting” article on why money should bear no interest.

    http://www.wakingtimes.com/2013/04/15/usury-the-root-of-all-evil/

    As pleaded many times Our money must be issued from treasury at no interest and not be an IOU as it currently is. This must be or there is no salvation of the economy possible.

  31. WOW…. That early in the year? Hahaha!

    Really, I must say, I did not expect the most ridiculous headline of the year 2014 to appear less than 200 hours into the new year, but there you are… ROFLMAO… Hahahaha! :)

    http://www.independent.ie/business/irish/kudos-as-michael-noonan-named-european-finance-minister-of-year-29899294.html

    • bonbon

      FINANCE minister and Leinster House veteran Michael Noonan (70) has been named European Finance Minister of the year 2013 by the Financial Times’ influential magazine ‘The Banker.” In 2010, the late Brian Lenihan was named worst Finance Minister by the FT.

      The annual awards are offered by region and Mr Noonan joins luminaries like HE Sultan bin Saeed Nasser Al Mansouri of United Arab Emirates, Cesar Purisima of the Philippines and Luis Videgaray of Mexico.

      “Most economists would concur with our decision,” it added.

      Rolling on the floor for a tummy scratch! Altogether now!

    • Ryu Hayabusa

      Most Insipid, Morally Bankrupt European Lowlife of the Year, that’s the award for him.
      He’d be nailed on for that gong.

  32. bonbon

    For those caught between the Scylla of budget cuts on the one side, and the Charybdis of tax increases on the other, The Third Option

    There is a third option that doesn’t involve issuing carbon taxes, increasing the retirement age, reducing healtcare benefits, cutting unemployment benefits, or cutting agriculture subsidies, and it is Franklin D. Roosevelt’s Reconstruction Finance Corporation and Alexander Hamilton’s National Bank, starting with Glass-Steagall. Firms hoard capital, Banks are bloated with QE etc, so do as FDR best expressed this in his 1940 budget address, saying the United States alleviated the Depression “by borrowing idle funds to put idle men and idle factories to work.”

  33. bonbon

    British Labour MP: Glass-Steagall Worked, Everything Else Doesn’t

    Noonan, getting his belly scratched by FT’s “The Banker”, may have a different idea of “what works” or “what scratches”. All dogginess aside, being bankers poodles does not work.

  34. Atlantean

    Hi David McWilliams,

    I am a fan of yours since you first hosted a current affairs programme on TV3 in Ireland.
    And, I have been reading this blog avidly for some 7 years.

    A wandering Hibernian I am now, forlorn from my native shore that has treated me cruelly ;
    And, I only trying to enhance the nations lot I was so I was.

    Exiled as I am but concerned for the innocents of my kin, & those who are likewise of decent heart among newly arrivals there,- I purposely explored the web to see your internet response when “the Boss of all Bosses” [ The Bank of International Settlements ( B.I.S. ) ; "The Central Bank of all the Central Banks" ] through its proxies determined to play it tough on the Irish State.

    For I knew you to be as good as gold ;

    vis.

    Rare [ R ]
    Good hosts such as you are a treasure, & cannot be replicated ;
    But,- thankfully yee are of stable amount, & thus can be relied upon.
    Yee are rare & unique.

    Medium for Exchange [ M ]
    A constant presence for the exchange of ideas.

    Catalyst [ C ]
    Aye, not just a medium for exchange,- but a facilitator who is constant, & unscathed, in the midst of the great discourse.
    A presence less than yours would be insufficient
    And, more of yous would be just spoiling us as brats.
    Sure,- you are perfect as you are.

    Storekeeper [ S ]
    A store of value you have proved yourself to be for us when we are otherwise cursed with Rogues & Robbers & Spivs & Spiveens that do not keep our noble principles at heart, let alone follow with interest.

    Fungible [ F ]
    Yeah, that’s true enough,- a fungible fellow ;
    Replace any righteous man with you would result in an equally righteous man.
    And, arguably, were you physically divisible then these divisions would be interchangeable with corresponding parts of other great men.

    Portable [ P ]
    We know that u have been a scholar, & worker, in many distant lands.
    And, thus proved your portability.
    Indeed,- your influence is worthy, & felt world wide.

    Indestructible / Immutable [ I ]
    Undeterred by the march of time or the slings & arrows of others outrageous opinions,- you are still pound for pound the best fighter for our Economic Salvation.
    And,- you let no space be vanquished.

    Intrinsic [ I ]
    Remember this, your great works, & your few mistakes too, are not your actual value David.
    Rather, your essence is you.
    I say his because you are one of those whom we can say is the essence of essence.
    This essence is intrinsic to u.

    Eventually, I found this great Blog of David McWilliams “dot ie” !

    Eirinn go Brach !

    Atlantean [ Your "Inventor",'Entrepreneur", "Industrialist" , & "Writer" in exile ]

  35. Ryu Hayabusa

    88 year old ex SS soldier charged in connection with wartime massacre in French village of Oradour-sur-Glane.

    http://www.independent.ie/world-news/former-ss-soldier-88-charged-over-wwii-massacre-29899775.html

    French and German President’s meet in solidarity in the ghost town “in a visit aimed at underscoring French-German postwar reconciliation.”

    It makes good PR to haul a grunt over the coals even after 70+ years. O’bama leaves this guy in the ha’penny place.
    How about dragging his scraggy derriere before the ICC??

    The European project is hurtling down a similar path to a couple of generations hence. Only difference is the foot isn’t as firmly down on the accelerator. This alliance will be tested before too very long?

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