February 9, 2015

Europe is now a bankocracy

Posted in Sunday Business Post · 120 comments ·

I am queuing in the cavernous aisle of Right Priced, a wholesaler in George Town, the capital of the Cayman Islands. Around me, poor black Caymanians are stocking up too, served by Filipino immigrants. These are not the people you see in the glittering strip of bars and hotels that service the massive ex-pat population here. These people are different. They are close to the bottom of a society, which has become extremely wealthy over the years by being a tax shelter for rich people’s money.

Why am I in a wholesaler – a sort of Musgraves in the sun?

I am buying soap, deodorant and toothpaste for Cuban friends ahead of my flight to Havana. If anything underscores the difference in outcomes between the two systems in these neighbouring Caribbean islands, it is this.

One is the home to the most freewheeling, tax avoiding, beggar-my-neighbour capitalism on earth. It has opened its doors to foreign capital and has created a society that plays host to thousands of professional expat service workers. They grease the wheels of this offshore banking and tourist haven. The locals don’t appear to mix too much with the ex-pats, but the co-existence is made all the more tolerable by the soothing balm of other people’s money.

In contrast, Cuba has done the very opposite, creating a socialist paradise in the sun where the health and education system may be the envy of many first world countries but where the cracks in the edifice are evident everywhere. Yes, things are changing, and there is little doubt that the people in the other Caribbean islands – dependent, as they are, on tourism – are very worried about the opening up of Cuba.

Cuba is a giant in the region. It is hard to overstate just how much bigger and culturally richer Cuba is than many of the other Caribbean islands. Yet still today, Cuba remains a place where friends have to ask other friends to bring over soap. Even the most committed idealist has to question this state of affairs so many years after the revolution.

The outcomes of both economic models – one beggar-my neighbour capitalism, the other beggar-myself socialism – is so stark that it could be a made-up textbook economic experiment carried out here in the Caribbean, if it didn’t happen to be true.

Interestingly, reading some of the commentary on Greece in the past few days, you could be forgiven for thinking that the choice Greece faces is between a Cuban or a Caymanian future. The hyperbole with which the legitimate democratic mandate of the Greek people has been received in Europe is quite shocking. Syriza and their (elected) leaders are being portrayed as wannabe Fidel Castros about to push Greece headlong into the abyss of collectivism.

In order to save the euro and the rights of creditor banks, the EU top brass are in danger of destroying the EU, because the EU is based on solidarity, for all. It is an extraordinary sight that the ECB will try to cut off liquidity to the banking system of a member country and in so doing, precipitate a bank run. What does that say about European solidarity?

Yes the Greeks have made mistakes and yes the country is corrupt, but everyone knew this and still lent to them. The onus when lending is on the lender, not the borrower, to suss out whether the borrower is delinquent or not. If you were going to lend to someone wouldn’t you want to do at least a credit check? And if the person had debts greater than their income and no real way of paying the cash back, other than borrowing more from someone else to pay you, wouldn’t you think twice? Surely the chance of bankruptcy might have struck you as possible?

After all capitalism without bankruptcy is like Catholicism without hell. You need the deterrent to make the whole thing work. So when Greece says, we don’t have any money – which is true – who is to blame? And does prompting a bank run make it more or less likely that the Greeks will pay?

Debts that can’t be paid won’t be paid. A broken balance sheet is made better by less debt, not more. The way you get to less debt is by doing deals, so that the country can pay and grow at the same time. If you turn the country into a debt-servicing agency for foreign creditors, what hope does it have of being a stable society?

Threatening the Greeks now just proves in whose interests Europe is run. It is not a democracy but a bankocracy – still run for the interest of creditors. This can’t last. Greece is no angel in this drama, but neither is it exclusively culpable.

The story of debtors and creditors is as old as the hills. It is biblical and it is about financial morality.

Here in the Caribbean, the bible is everywhere. There are churches of all sorts here and religion is extremely strong, particularly evangelical faiths.

Today would have been the 70th birthday of the Caribbean’s most famous son, Bob Marley. And although a committed Rasta, Marley wrote lyrics infused with the verses of the scriptures with talk of redemption and exodus. These were the words, language and symbols of his Christian youth in Jamaica and his knowledge of the Old Testament – a book the Orthodox Greeks subscribe too as well.

In both Leviticus and Deuteronomy, extensive reference is given to the concept of the debt jubilee, which is a period of time after which excessive debts of a neighbour should be forgiven. The reasoning is that if a neighbour is crushed with the burden of excessive debt payment, he is unlikely to remain a peaceful, well-behaved neighbour indefinitely.

As I head to Cuba – a country whose isolation has been lifted due to the intervention of the Pope, on the birthday of Bob Marley – I wonder what morality lessons inform our friends in Berlin.

Germany, the serial defaulter of the 20th century, is now enforcing impossible conditions on Greece and dressing it up as left versus right or efficiency versus sloth or North versus South.

It is none of these. It is about too much money lent and borrowed. It is about morality and ultimately, it is about the future of Europe.

As I listen to the Bob Marley celebration on the radio here, I wonder how will this all end: with redemption or exodus

  1. FART

    I believe that Greece will ‘fart’ from the Euro as the Germans have decided will happen . There will be no exit …just …’a fart ‘ . This will be instant as we all know by the meaning of that word and sometimes it happens when we least expect it even if it is embarrassing .No matter how many anoraks the Greek Prime Minister borrows to meet with his counterparts in Europe nothing will slow down the sudden explosion that will follow .

    The resultant residue will tamper the remaining edifice and following a new health certificate from the ECB it will be deemed to be strong to hold the bones that are left .

    • With the speed of light Grexit becomes Grefart

      • My understanding of the Greek political strategy is like this :

        They believe that they have invented something new that can travel around the world like Olympus Airways and not burn fuel . Their idea is that they can all get into a balloon and suspend it the air and not move . So when the Earth rotates they can land wherever they like .

    • The Germans are mad to allow this to happen. Of course I love Germany, my brother lives in Dresden. Just as much as I love the USA which I visit a lot.

      It’s not the German people, nor the American people.

      It’s the psychopaths who have hijacked the whole world, the elites, the insiders as David would call them.

      Their day will come and its coming soon. I’ll be there walking the walk, trust me.

  2. woodsey

    If ‘redemtion’ means extending Greek debt repayments out to 2115, then this is the way it’ll go.

  3. De Velera

    The father of Eamonn De Velera was Cuban and while you are there search up his long lost family and invite them to the 1916 commemoration.Maybe FF might have better health policies to learn from this reunion .

    • Colin

      That’s the Limerick pronunciation there John, its actually spelt de Valera.

      In lanzarote, canary islands, the indigenous people are very tall and slim. Many of them left the islands for better lives in Venezuela and Cuba, before those countries got their independence from Spain.

      So, maybe the long fella is from a long line of long fellas which originate from lanzarote, which isn’t a million miles from Senegal, which according to you, has links with Donegal and Galway?

      Now for ya, doesn’t that beat Banagher?

  4. Mike Lucey

    It looks like the splits are now appearing. The US and their UK puppets have got their noses up over Mrs M’s and Mr H’s talks with Mr P.

    Also it seems that the two musketeers did not seek the permission of the EU to have a chat with Mr P, more splits!

    I think Russia may well do a prop up deal with Greece after the Grexit. One major think both would seem to have in common is the Orthodox Church which looks to be growing stronger in Russia of late. What has Greece got in common with the other EU states? When it comes to it, what have any of the EU states got in common with each other? Its the Tower of Bable and we all know what happened to that!

    I read that Germany has the DMarks all printed and ready for circulation, only to German bank account holders! Maybe a good time to open an account over there! France is probably in the same position and the rest can have the € for whatever its worth. Day by day its now looking more like a failed currency on its last legs also the $ is not looking much better when it comes to fundamentals.

    Rand Paul says it well, ‘“your dollar is backed used car loans, bad home loans, distressed assets and derivatives.”’

    I would not be surprised to see the bail-ins happening shortly as prepared for by the Globalists C Bankers.

    I think I’ll listen to some Bob Marley and check the price of the yellow metal.

  5. Mike Lucey


    Bob Marley – Babylon By Bus Remastered (Full Album)

  6. michaelcoughlan

    Hi David,

    “The story of debtors and creditors is as old as the hills. It is biblical and it is about financial morality.”

    Once again more advent garde commentary. The only mainstream economist introducing moral concepts into the dialogue. I wonder do the MBA students study the theory of moral sentiments?

    I suggest that capitalism (which hasn’t existed for a long time now) can only exist in the context of a full understanding and adherence to moral principles.

    Contrast that idea with atheist totalitarian madness or banking psychopathic madness and you’ll catch my drift.

    “I wonder how will this all end: with redemption or exodus?”

    Both David. Exodus from fiat currencies into the great redeemer gold. Sure isn’t it happening already;


    Listen to Rickards in the link. He really knows what he is talking about.


    • michaelcoughlan

      @Tony Brogan.

      Please read the link Tony because Rickards says it clear the point I have been saying even though I am not an expert like you on gold;

      China is using Gold as a hedge in other words insurance for when fiat currencies slide against it in value. I presume they know that the real wealth in their economy is their factories and a huge workforce wiling to work for a dollar a day or what ever the rate is there.

      Your soil link by the way was fascinating.


      • I am familiar with Richards now for 4 years or so. He has popped up lately promoting his books and the fact he was a negotiator years ago for the Long term Capital management mess, and how he works or did work for the CIA etc etc.
        He makes good reading but I do not know why but I am suspicious of his motives. He does not feel right. Maybe he is still an insider.

        BTW I am no expert on gold. I just have my opinions after extensive reading!!

  7. EugeneN

    A lot of right wing sentiment is going to be shocked altogether if Greece manages to shake off the Euro, default ( as countless countries have done before), devalue it’s currency and start on the path to massive recovery.

    • michaelcoughlan

      “A lot of right wing sentiment”

      Hi Eugene.

      Yes but farther right than that. I would say neo liberal fascist sentiment.

      best regards,


  8. The “cracks in the edifice” so “evident everywhere” in Cuba are not the result of of an apparent decision to “create a socialist paradise in the sun”, David. I’d love to know where you got that phrase from. Have you ever heard a Cuban use it? What they will probably tell you is that those cracks that do appear, are the result of a criminal and illegal international trade embargo that the country has had imposed upon it since 1961. Yet, despite those obstacles, they appear to have build (and again, I am using your words, David) “a health and education system that may be the envy of many first world countries”. Put that in your Cuban cigar and smoke it. I think you may be projecting a pre-conceived outlook on the facts of the situation. Look at all the countries in the world (starting with your own) that have been free to trade with each other during all that time. Then tell us how many are not a complete and utter shambles.

    • michaelcoughlan

      Hi Oscar,

      I don’t want to offend you or your politics but saying “those cracks that do appear, are the result of a criminal and illegal international trade embargo” is like saying the Titanic wouldn’t have sank if the Iceberg wan’t there.

      It’s a standard left wing response to always blame and demonise EVERYONE ELSE for the reasons far left policies ALWAYS fail.



      • Michael, Michael, Michael! Whatever are we to do you, you poor child? You have not offended my politics, nor could you: your brain cannot fathom what my politics are. I could try to help you to understand but I fear it would only send you to A&E – and Ireland’s health system is not the envy of some countries that we could mention.

        And yes Michael, it is entirely plausible to speculate that the Titanic would not have sank if the iceberg had not been there! At least it would have had a very good chance. It was a big ship of good design, well constructed and, as they say in Belfast, ‘in perfect condition when it left the shipyard’.

        • michaelcoughlan

          Hi Oscar.

          You just did to me what you did to the yanks. Threw balls a shite at me in a patronising condescending manner. You also stated that my brain couldn’t figure out your politics when you don’t even know me.

          Well Oscar you might be right or wrong but I bet you that every one else reading your post thinks you are at least centre left and perhaps also an asshole.

          At least Oscar no one in Ireland will shoot you for speaking your mind on a public blog on the internet or indeed deny you access to the internet in the first instance

          LIKE IN CUBA.

          Best regards,


          • Well just for the record Michael, I never mentioned ‘the yanks’, never ‘threw shite’ at anyone, never claimed to know you and never resorted to calling anyone ‘a asshole’. You did all that yourself, without prompting from me.

            You clearly didn’t read my post either. If you had, you wouldn’t have responded in the manner that you did. Instead, you just read into it what you wanted to hear.

            Your Titanic analogy would seem to suggest that you are the type who tends to react without thinking. Standard right-wing response – that’s why their policies ALWAYS FAIL. As evidenced in the case of CUBA!

          • michaelcoughlan

            Hi Oscar,

            This response patronised me for a second time because your original post stated clearly you didn’t think I have the brain to figure out your politics and now you blindly state you didn’t do that at all.

            This was an attempt, and a bad one, to discredit me. Another way of saying it is to throw a ball of shite at me to take other peoples attention away from your own nonsense.

            Like I said you might be right but the embargo you refer to was put in place by the yanks even though you didn’t mention it and actually started in 1960 which was extended in 1962. I didn’t claim that you knew me either.

            There is no connection between my titanic analogy and right wing politics. You are just as brainwashed as everyone else who thinks far left politics is viable.

            Just so that you know;

            I feel that the people in charge in the US are neo liberal amoral psychopaths so the next time you are confused or misguided all you have to do is ask me.

            On this occasion Oscar I suggest that you consider that I have no hidden agenda because my view is that if you continue to keep throwing balls a shit at me my advice to you will be the same as was for the bonbon’s;

            Keep on posting Oscar, the more you post the more you damage yourself.


          • I suppose I could type a response Micheal but I have lost all interest at this stage. Except to say …

            Oh, never mind, you wouldn’t get it anyway.

          • Daithi7


            You are right on a few things granted:

            1. I wouldn’t understand your politics
            2. I couldn’t care less
            3. You do make me believe in the future benefits of better education for all though!!

            all the best comrade!!

        • Colin

          Well constructed oscar? I think there was a big fcuk up with the rivets they used, wrong ones ultimately, which resulted in each compartment sheet metal getting unzipped, just like taking off your jeans at night, only this had catastrophic consequences by letting in enough water to force it all the way down to the sea bed.

          • Yes, but if they hadn’t hit an iceberg, they would have been fine. In fact, if they hadn’t swerved to avoid the iceberg, they would have been all right. If they hit it full-on, the ship would have remained afloat. Probably not able to continue its journey but it would not have sunk to the bottom of the ocean before the passengers could be evacuated – and there where ships nearby that could have accomplished this task with enough time.

          • michaelcoughlan

            Hi Oscar,

            The point I was making about the Titanic has nothing to do with its construction since I have to explain it to you.

            It was human arrogance that was responsible. In the first instance the belief that the ship was unsinkable and secondly the fact that the ship was sailing at full speed in iceberg alley.

            It’s human arrogance of the Cuban regime to believe that they can shite all over the cuban population for example making entrepreneurial activity illegal or preventing access to the internet and NOT expect it’s neighbours to take a dim view of it’s activity.

            Just so you know the “unsinkable” titanic had a sister ship and guess what?

            It sank.



          • Colin


            If they hadn’t left port, they wouldn’t have hit the iceberg, and no one would have died.

          • michaelcoughlan

            Hi Oscar,

            Re read my post just above yours.


          • Actually Michael, the Titanic had two sister ships. The other was called the Olympic. You mean to tell me that you didn’t know?

            It might surprise you to read that I come neither to praise Cuba nor to bury it. There are plenty out there already attempting that – some of them might even have a foot in both camps.

            I have no first-hand knowledge and no direct experience of the country. I know about as much as any general reader of 20th century history would know, or could find out if they feel so inclined. My mention of the ‘criminal and illegal international trade embargo’ was an attempt to put the matter in a Cuban context – i.e. how Cubans themselves might perceive events, as opposed to D McW’s hackneyed characterisation of a ‘socialist paradise in the sun’. If you care to read my original post you will see that intention quite clearly.

            As far as the ‘Cuban regime making entrepreneurial activity illegal’, I don’t know what you are alluding to there and wonder, if, like a lot of other things, you don’t really know what you are talking about. How could they ban entrepreneurial activity? Why would they even want to? It seems highly unlikely since, if that were the case, the international trade embargo would be of no consequence to them. Wouldn’t you agree? An autarkic society, with no goods or services to trade, has no need to be concerned of such matters.

            As far as the internet goes, again, I have no first-hand knowledge or direct experience of the country (as I suspect you don’t either but at least I’m not pretending – the saddest lies are the ones we tell ourselves, Michael) so I don’t know what the precise situation is in that regard. However, the indisputable, if uncomfortable truth that you must concede, is that the internet itself is the spawn of the very same military-industrial complex that has been weighing down heavily on Cuba for over 50 years, and would destroy it in an instant were it not for the fact that such an act would immediately inflame the whole of South and Central America along with the Caribbean.

            These are the people whom you describe as “neo liberal amoral psychopaths” and believe me, they heard you. You might want to watch your back there – you could find yourself banging on the door of a Cuban embassy some day, pleading with them for asylum. These people you speak of in such terms have long memories even though they can’t see beyond their noses. They believe in nothing and they are scared of everything – like our friend Daithi7 above. Still following Daithi7? Or are you already lost?

            And no doubt that factor colours the attitude and stance of the Cuban government and the Cuban people – or at least the ones who do not pine for the days of Mafia-controlled casinos running the place.

            You see, Michael, states (all of them, every one, without exception) exist to ‘safeguard’ and ‘protect’ their citizens against internal subversion and external threat. It is in that context that a society will only ever be more or less ‘free’, more or less ‘enslaved’, more or less open, more or less closed, more or less accommodating to change, more or less stuck in the past.

            None of us ask to be born into this world – it was like that when we got here.

          • michaelcoughlan

            “It might surprise you to read that I come neither to praise Cuba nor to bury it.”

            Neither do I nor you Oscar.

            From the link below Oscar;

            “A special permit is required to use the Internet “

            “As far as the ‘Cuban regime making entrepreneurial activity illegal’, I don’t know what you are alluding to there and wonder”

            That’s because it suits you.

            From the link below; People are now allowed to own their homes.

            From the link below; Cuba loosens restrictions on private enterprise.

            From the link below; Cubans can now travel freely.

            “These are the people whom you describe as “neo liberal amoral psychopaths” and believe me, they heard you. You might want to watch your back there”

            For a man who knows fuck all about Cuba you seem to know a lot about “neo liberal amoral psychopaths”. Of the many reasons I am not afraid of them Oscar is because they couldn’t give a fiddlers about me or anyone else.

            “you could find yourself banging on the door of a Cuban embassy some day, pleading with them for asylum”

            There is no fear of that.

            I mean this sincerely Oscar. There is no one happier than me that the Cubans can now;

            1) Open a business,
            2) Use the internet,
            3) Can go on holidays abroad,
            4)Own their home and pass it to their descendants.

            WITHOUT getting permission from the government first.

            Yours sincerely,


          • Keep on posting Micheal, the more you post the more you damage yourself.

          • michaelcoughlan

            Hi Oscar,

            Keep throwing balls of shit at me Oscar.

            Guess what? The more you do the more you damage yourself!

            Know why? Your dialogue is shown up for the nonsense it is and all you can do is respond with a slight on the person doing it.

            You demonstrate the same arrogance as the headcases who thought Cuba could be centrally planned and bye the way; the same type of arrogance responsible for causing the Titanic to sink.

            Best regards,


          • You’re doing great work there, Michael. Keep it up. Don’t let anyone, least of all me, deter or sway you an iota. I see no hope whatsoever for poor Daithi Eight but you have what it takes.

    • Deco

      Well, from the societal viewpoint, consumer capitalism does come at a very serious cost.

      Cuba has problems – but then so does everybody.

      The real question becomes whether or not a country has the sovereignty, the honesty, the intellectual ability, and the capacity, to fix those problems.

      In Ireland, we don’t. All we have is an establishment who want to fix a system that puts working people in a fix, and who want to reflate a Ponzi-scheme.

      The Cubans are lucky – they have not yet been afflicted with Ponzi-economics.

  9. Adelaide

    I would like to notify museum curators of the near-future that back in 2000 I placed the Punt-Euro Converter Calculator that was issued to every Irish household in a drawer for sake keeping knowing one day a museum may like to purchase it as part of their “History: The Failed Euro” installation.

  10. Con Burke


  11. The speed of Ireland’s Rejection of a debt conference would lead an outsider to believe We Live In a Democracy.? We belong to the most undemocratic Society In the modern world and Its beginning to show, IRISH people didn’t want house tax water tax but it was rammed down our throats by a Govt that has Little or No regard for democracy,

    • Mike Lucey

      ……. shure couldn’t someone go the the ‘debt conference’ and take a few notes! Maybe there could be something to be learned from Yanis ….. ahhhh shure again doesn’t Larry Kenny, Moe Howlin and Curly Noonan know all about how to fight our case in the EU ….. NOT!

    • Daithi7

      ? ‘We belong to the most undemocratic Society In the modern world ….’

      Any other hyperbolic gems to lob in???

      Did you vote? do you receive social welfare? benefits? Do you consider water a valuable resource? or do you think anyone and everyone has a right to (ab)use it!?

      The people voted for a strong government to govern, that is what they are doing…. its called democracy in action, GET OVER IT!!!

  12. cyberjohn

    This is just a side show of the global economy so i agree with grexit. Why aren’t we as one. One Europe. Haven’t I as much in common with Merkie as I have with Roy Keane. As much in common with a corkonian as a parisian. We are all one. All the same. Why the barriers. Wasn’t this what europe was supposed to be about. Solidarity with each other. Some chance. It seems to be more to do with profits. When the Germans are making the profit they will not share. Maybe all others should stop buying German products until they realise how much they too rely on the solidarity of their fellow europeans citizans. One for all and all for one.

  13. Jungle Demands

    The Irish Government has now appointed a British SC to act for the State to defend the EU decisions re Apple in Ireland .

    Based on the language of Thames Valley I do not have any optimism that this defense will succeed.

    As I have protested before the Irish Finance Acts have two words for Taxation namely Taxation and Cain . Unknown to the Government my findings show that these two words ……do not mean the same thing and should be investigated . Using the original logic of the intended meanings of each word of original man when black man first arrived on the shores of the isles their meanings are :

    Taxation = to stick as in demand as in to shoot an arrow to kill ; and

    Cáin = to trap as in assessment as in to catch first before you kill or send out a demand .

    It depends on the language used and there is a choice that will determine if the State wins .

    Unfortunately the Government will insist that Thames Valley English will prevail and that both words mean the same .Which they obviously do not .

    So I make this Jungle Call ….aaahhhh ahhhhhhh ahhh


    • Deco

      Outsourcing Irish style.

      Are Irish lawyers that expensive, that the state needs to hire a London lawyer to keep down costs ?

      Or is it a matter of Irish lawyers being crooked to the point of being completely untrustworthy ?

  14. David,

    Quote: Germany, the serial defaulter of the 20th century, is now enforcing impossible conditions on Greece…

    I am afraid you cast the wrong light onto a problem that is bigger than what this statement would suggest.

    Remember the Lisbon referendum version 2.0?

    Before this referendum the Eurogroup had no legal basis. After the Irish were told, thanks for your vote, but you ticked the wrong box, let’s do that again, and the treaty was then voted in favour, Protocol 14 was what this Irish vote enabled as well, which is now the lgeal basis for the Eurogroup.

    When Eurogroup’s President Dijsselbloem met with Yanis Varoufakis, it was Dijsselbloem who insisted that the Eurogroup is the platform to discuss the Greek situation.

    This 19 members group is the decision maker and holds power of the currency decisions, together with lender of last resort ECB.

    It was the ECB move that restricted Greece’s lending capability, well knowing that such causes further capital flight, by not accepting the admittedly bad collateral. It is such political intervention that needs to be equally understood as the neo liberal agenda being pushed by forces that are not exclusive to Germany.

    Varoufakis plans to ask Eurogroup tomorrow for a longer bridge programme after he asked Schäuble who declined as expected.

    • If the Eurogroup won’t negotiate or compromise with Greece then Yanis Varoufakis needs to tell them to shove their treaties up their arse. That is his mandate from the Greek people.

      • Hi Adam,

        Observing the Merkelator’s and Ohhhbama’s press conference as well as her meeting with Putin and Hollande, a few things stood out for me.

        Willingly, Merkel is “under orders” by her american overlords. She might get some breathing space, to ensure her political status quo in Germany and present herself, but ultimately, whether it is the Ukraine, Greece, or TAFTA, she follows in her submissive state of mind, one goal only blinking in her eyes, her own political career.

        Political convitions are in the foreign dictionary of words for Merkel.

        The Eurogroup Is fully underestimated by David, and well, the public in that context. Beginning 2005, the mandate of thew first elected Eurogourp President began. Jean-Claude Junckers! The meet in context of Ecofin as well.

        They now act on a legal basis, but remain a secretive circle of finance minister and consultants. It is worth to keep a close eye on them:

        ….At an extraordinary meeting on 11 February the Eurogroup will discuss the situation in Greece.

        The ministers will exchange views on the way forward following the appointment of the new Greek government and considering that the EFSF (European Financial Stability Facility) financial assistance to Greece expires at the end of February 2015….

  15. michaelcoughlan

    Hi David,

    Biflation going on so listen here;


    It’s not just the yorkie’s it’s the Creme eggs are getting smaller. Tony Brogan every sovereign wealth fund is buying land from 7:00. Beef prices in US all time highs.

    Biflation in a nutshell David. Prices on mandatory items are RISING. Prices on discretionary items are FALLING.

    According to the video a major contributory factor to the Arab spring was a rise in the price of BREAD.

    Tony Brogan you are like an oracle. As for bail in it has arrived. With interest rates going negative you get LESS money back from the bank when you go to get your savings.

    The just call the bailed in bit a FEE.

    Never more have I been so convinced that farming is the way to go.


    • michaelcoughlan

      @David McWilliams,

      Surely David there has never been more necessary a time to create a fund backed by land with a 10% hedge in gold and use shares in such a fund as a new asset backed currency for the Irish People. No futures market in land meaning no manipulation.

      Such a currency fund wouldn’t suffer from the observation of economists like you that sound money is deflationary since the scrip in circulation can be increased and revalued to prevent a brake on economic expansion which is the concerns of economists who view sound money so derogatorily? You could put in a block chain element into it etc.


      • Mike Lucey

        I like your thinking Michael.

        Don’t forget to include our huge national territorial fisheries which is x10 the area of our island.

        Hopefully some day soon this country will stop looking for easy rides and realise the huge natural and sustainable resources we have.

        I remember 55 years ago listening the geography teachers and my local CBS telling the class that Ireland had no natural resources like England’s and Germany’s coal fields. Never a mention of our territorial seas.

        • michaelcoughlan

          Thanks Mike.

          If we don’t get ahead of the curve we will be playing catch up when the whole thing goes tits up.


        • Daithi7


          I do agree with you that Ireland should have a contingency plan for exit from the Euro, which I think is unlikely to happen any time soon, but of course it may happen nonetheless. So we should have a plan to progress should that (series of) event(s) occur, as its effect(s) would be seismic in the short term but ironically would probably suit Ireland much better in the medium to long term IMHO.

          Some on here keep making a common mistake, the Euro is not the EU, its merely a shared currency of dubious merit between only some of its nation states. The EU is actually a fantastic political union that has delivered unprecedented levels of peace, prosperity, co-operation and progress (social, poilitical and otherwise) to its constituent nations and its societies. This (afaik) is unprecedented in the history of Europe and should be preserved at all cost as a result IMHO.

          p.s. as an aside hearing people (espeially media commentators who should really know better) mix up the EU & the euro is a real pet hate of mine. It shows a huge level of ignorance akin to when commentators do not highlight spending increases that will happen every year hence versus 1 off items, or when they mix up millions with Billions – there’s a difference Dummy!!

          p.p.s. this ignorance really shows its pernicious effects when the media blab on forever about a 50m euro electronic voting project mis spend and yet hardly bat an eyelid at a 500m euro per year public sector pension concession, that is slipped in between the headlines on budget or finance bill day. Its pathetic- like focusing on one deckchair on the deck of a titanic.

  16. Pat Flannery

    To all of you here who wish for an end to the Euro, beware of what you wish for, especially those who support a strong EU but not a common currency. The EU itself will fail without a common currency because it will fail to unleash its economic energies as the U.S. would have done without a common currency.

    Europe is now in the middle of a Hamilton/Madison ideological battle similar to what the fledgling U.S. had to fight in the 1790s. This may even be an existential battle similar to the American Civil War of the 1860s (hopefully to be fought with pens rather than with cannon).

    The fact is that some form of mutualization of national debt will have to be found if the world is to take the EU seriously. How it handles the current Greek crisis will be decisive, even existential.

    If not the Euro what do you all propose? Or do you want to go back to European-style tribalism with continuous internecine war? That’s what you will get if you dump the Euro and fail to unite.

    • michaelcoughlan

      very sobering post.


    • michaelcoughlan


      Your post is very insightful. I fear however that banks as our host has indicated in the title will usurp the EU irrespective of whether debt is mutualised or whether the Euro survives or not.



      • Pat Flannery

        Thanks Michael. I agree. Then we must separate the currency from the banks. We must strengthen the political control over the ECB.

        This nonsense that central banks must be independent of governments and free from political control comes from the banks. It is their ploy for controlling it. A currency is as much about the debtors as it is about creditors. That makes it a political issue.

        The problem facing the Eurozone right now is a political problem not a currency problem, not even a financial problem. This issue will only be solved at the political table not in the boardroom of Goldman Sachs.

        If handled properly (not Enda Kenny’s way) it may herald in a whole new political era. I guess that makes me an optimist.

        The situation is hardly any worse than what confronted the U.S. in the 1790s when the new country struggled to decide what to do with the myriad pieces of paper signed by all kinds of state agencies as urgent IOUs during its War of Independence with Britain.

        Debt is a fundamental political problem that will always be one of the toughest challenges facing professional politicians. There are no easy answers.

        • “Debt is a fundamental political problem that will always be one of the toughest challenges facing professional politicians.”

          Getting rid of a debt based money system might be a good start, Pat.

          • What’s the first practical step required to achieve this Tony?

          • For a government to declare a closure of the central bank and that all funds will be issued from treasury to replace the current fiat.
            These treasury notes are backed by the full faith and credit of the citizens of the country and backed by the assets of that country. They are not an IOU and do not charge interest. They are money not a loan.

            Immediately the national debt is paid off and all interest payments on the debt will also cease.

            NB This requires a national currency and not someone else such as the EURO.
            The organization of this is simple as all collections of old currency to be returned can be done by the post office and issuance of new currency done by the post office.
            Commercial banks will obtain currency to be swapped and then the money in circulation is fixed and not to be increased.

            Without national debt interest to pay the national budget will be in surplus and so income taxes will be able to be reduced for all. (Income taxes came into existence at much the same time as central banking and so are indirectly a creature of central banking). It is likely that a well administered country would require no income taxes at all.

            ’nuff said for now. There is a lot more which has been said already many times over the last years!! :)

        • “This nonsense that central banks must be independent of governments and free from political control comes from the banks.”

          Of course, Pat. The central bank idea comes directly from the bankers and was planed and developed by them.
          That is the basic reason we must be rid of them completely.
          All state funding can be controlled directly from Treasury and the national bank already exists complete with savings books etc. It is your Post Office with a branch in nearly every village.

        • michaelcoughlan

          @Adam and Tony;

          “What’s the first practical step required to achieve this Tony?”

          You are doing it already adam using bit coin. I differ with Tony in that yes I would love to see an end to the fiat ponzi scheme but I don’t think it will be done by govts.

          Tony could start using a pm backed block chain and when there are enough people using it the support for ponzi fiat would fall away.


    • There is or are plenty of ways to have a mutual currency in which trade settlement is made but without it being held and owned by a single authority. He who controls the money controls the world.

      Therefore do not put the money into the hands of anyone but have it as a common resource used by humanity for their collective use.

      Having that will still allow diversification of the political entities allowing local control of local affairs.

      The trick is to have no centralized authority but still have free trade of commerce and open borders for capital investment and open borders for human capital.

      The one thing the EU has achieved is the free movement of labour(although I count labour as capital too) and capital. It is the centralized control of the bureaucracy and the Central bank fiat currency, the Euro, that is killing the concept.

    • Mike Lucey


      For me its just that the Euro was brought in as a blanket currency far too quickly. Too many states were not up to the mark but its what suited Germany at the time so it went ahead as a one size fits all, which is never the case unless all are the same size!

      How Greece is handled will tell a lot about how united the EU has become in the past 30 odd years since they joined. We have seen how Ireland was treated and I would not consider its treatment as fair or from ‘united’ partners. Far from it, and it now looks to be every man for himself or herself.

  17. Mike Lucey

    I’ve just read Bix Weir’s latest article, ‘A FINAL CHECKLIST FOR EVERYONE’ http://www.roadtoroota.com/public/422.cfm?awt_l=CeffA&awt_m=3YT14D9fr0AZ85B

    Now Bix tends to be out on the edge with his thoughts but nevertheless he raises a few ‘Senarios’ that prodded me in further thought.

    In the early part of his article he asks what would one do if all the ’1′s’ and ’0′s’ in our banks accounts all went out like a light bulb due to some natural or man-made catastrophe.

    He then goes on the reminisce about days past when we had our bank ‘pass books’. Pass books were a simple system but one that worked well and were quite fool proof. How many of us know exactly what we have in our savings account to the cent and how many have up to the minute hard copy verified proof of this, not many I imagine unless we pop out to an ATM daily and get a statement slip. May not a bad idea when I think about it.

    Bix sites three worst case scenarios involving, the Sun, atomic bombs and viruses, all very scary stuff indeed. He then makes some fairly practical suggestions on how folks could prep for a total financial meltdown.

    Its not something a person should read before going to bed;-)

  18. DB4545

    An interesting article David but how can you expect morality from bankers? Please note that this is also the same Germany that would have remained a bombsite without the Marshall plan (as much of East Germany did). The same Germany that decided on re-unification with East Germany and the expansion of the EU and all that this entailed without too much consultation with other Member States. They can be quite selective where memory is concerned with other aspects of their past when it suits. As you stated the deal is simple, conduct due diligence before lending against an asset and lend only based on your assessment of the risk. The bankers have the same principles as lawyers they don’t make moral judgements they just take instructions.

  19. In the final stages of a long-running investigation into corruption in the world’s largest financial market, federal prosecutors have recently informed Barclays, JPMorgan Chase, the Royal Bank of Scotland and Citigroup that they must enter guilty pleas to settle the cases, according to lawyers briefed on the matter. The pleas would be likely to carry a symbolic stigma, if limited actual fallout, in handing felony convictions to some of the world’s biggest banks.

    Posted at the lemetropolecafe.com

  20. A new episode unveiled on Tuesday is one of the most vivid examples yet of this mentality. Over the last year, federal investigators found that one of the world’s largest banks, HSBC, spent years committing serious crimes, involving money laundering for terrorists; “facilitat[ing] money laundering by Mexican drug cartels”; and “mov[ing] tainted money for Saudi banks tied to terrorist groups”.


    Get the money system out of the hands of these thieves and crooks. Get it out of the hands of the politicians. Put it, like the internet, in the hands of of the people of the earth.

  21. Robert Mc Call

    The EU is not the Euro !

    and nobody’s right,if everybody’s wrong

  22. Pat Flannery

    Tony: you say: “This requires a national currency and not someone else such as the EURO”. I am beginning to think that maybe the great strength of the Euro is that it is NOT a national currency, that the best type of currency IS a shared currency.

    Maybe through the Euro the world is stumbling towards something other than a bank debt based system of money or single nation controlled currencies, as the best way “to have a mutual currency in which trade settlement is made but without it being held and owned by a single authority”, as you also said above.

    I can remember a time when international free trade was as feared and condemned as the concept of a European common currency is today. Maybe the benefits of international trade will eventually make clear the necessity of international currencies in which banks are just service providers and the integrity of the currency is based on the mutual needs (if not trust) of free regional nations not on the power of one hegemonic power like the United States today. If the common currency experiment is successful in Europe it may spread to other regions and eventually develop into a one-world currency.

    A currency is fundamentally a matter of consensus. We don’t need a magic formula. All we need is an agreed medium of exchange. We just need to become better politicians that’s all. The need for international mutuality is becoming more obvious by the day. The present Euro crisis may yet prove a blessing in disguise.

  23. The major problem with the Euro Pat is twofold.

    It is run and controlled by the central bankers, ECB, who call the shots. They run the politicians and receive direction from the IMF, and BIS which is also a creature of the central bankers.

    One currency is not suitable for all. There must be local currencies for local people. In the US or Canada there could easily be state or provincial currencies for local people. That then leaves us with the problem of valuing each against the other. That is a market place function as already takes place.
    However for international settlement there needs to be a common currency acceptable by all and owned by no one. The US has tried to be the reserve currency because of the huge benefits accruing that was wrested from the British before them.

    This is where gold stands up and says I am the common standard. All currencies are measured against me and I permit no setting of any currency rate against me. I am the unique money with no counterparty risk. all other currencies bow before me.

    That is the way I see it Pat. gold is easily digitized and settlements will be done quarterly to settle the books as was done with the legal bills doctrine as touted by Antal Fekete.

    Take care Pat. We need to think this out as it is the final chance.

    • Pat Flannery

      Thanks Tony but I just cannot see how final settlements could take place without the actual shipping of gold backwards and forwards. I think we have exhausted the possibilities of using gold as the final medium of exchange. I don’t see any possibility of it ever coming back.

      I would love if you would apply your considerable brainpower to building on what we already have learned through history to suggest a new basis of trade settlement. We have cured incurable diseases and can now communicate instantly around the world, surely we can agree on a universal system of measuring of value based on an arbitrary set of numbers. We do it in navigation, time measurement and in so many other ways.

      As I said, what we currently lack is political expertise commensurate with the needs of our times. We managed to avoid nuclear annihilation after inventing the atomic bomb, we can do this too, with giant benefits for humanity.

      • In a manner of speaking we have had gold dismissed as a money of value.
        BUT this is basically because it is the only money that challenges the central bank fiat money, ponzi scheme we currently use.

        Before I agree that gold will never be used as the ultimate currency I will watch and see what happens to all the nations of the world rabidly gobbling up all the gold in the world that is made available to them.

        Even Western nations of the Euro pact are repatriating their gold as they have changed their mind about selling , leasing or lending out that gold.

        you talk as if we have had that discussion and dismissed it. I submit that it has never been discussed at all but that the propaganda has work in spades to demean it. There has never been a discussion or debate. We have been told what to think and by golly most people follow the party line.

        I still cannot think of an alternative money that I trust to act as well as gold does. It is in fact not that hard to ship around if required.

        Anyway the thought process continues.

  24. Good Pat.

    This is what Kilkenomics should be about. There should be a series of forums addressing this problem. Can you imagine 50 classes with audience participation and the standup comics as moderators.

    Put it to the people and the solutions will arrive.

    We would need a week to educate the moderators to the issues so the debate is properly lead.

    Whatever format it takes it would need a conversion on the way to Kilkenny by David to have any chance of such a conversation taking place.

    • Pat Flannery

      It would be great if Ireland would lead the discussion and Kilkenomics would be the perfect forum.

      I like your “Put it to the people and the solutions will arrive.”

      Defining the problem, that too is a problem. Personally I think that the monetary system became a free-for-all after Nixon took the U.S. off the gold standard in 1972, not that he should not have done so or that he had a choice. The fact was that Brehon Woods had served a short-term purpose but could take us no further. Since then we have floundered.

      As for the death of democracy, the fact that the world financial system has to deal with SYRIZA whether it likes it or not shows that there is life in democracy yet. The fact that this faint ray of light is coming from democracy’s birthplace is beautifully ironic. We need to support SYRIZA every way we can. I believe they are asking the right questions.

      The fact that there are people like you pleading with us to go back to a gold-based system underlines the inescapable fact that the present system is broken. Personally I believe any gold-based system would not be flexible enough for our growing needs. Our global commercial systems have become far too complex and technology dependent for a gold-based system.

      Looking at the broader picture, we are probably at a similar stage in human development as when we first started to think of a system of laws rather than brute force. Consensus, when we can achieve it, brings us to a whole new level.

      A new monetary system will need to incorporate much of what we have learned from our legal systems. Governments (in a democracy) are after all merely legislators. The laws they introduce and pass are largely what their voters want at any particular time. We must preserve and foster the concept of being governed by our own laws not by men.

      Let’s hope Kilkenomics picks up your challenge. I might even go.

  25. Actually the headline here should be
    Europe is a Bankrupt Now.
    There is not a state that is solvent. Certainly the EU collectively is bankrupt.
    It is the same for the world economy in total.Madness.All based on A Ponzi debt based currency.
    Debt jubilees do not cut it. We need a new system.

  26. A simple calculation that ridicules the charging of interest within an economy never mind that all the money created by the Ponzi central bankers charges interest.


  27. SMOKEY

    Don’t know where David comes up with “Socialist Paradise”. What I saw was child prostitution in Havana, non existent child labour laws, they were working in the fields and grifting in the streets, and outright scammers con artists and thieves whenever you walked from one venue to the next. It was shocking. Hope he comes back with his wallet.


  28. Conclusion:
    Is it possible that defending central banking isn’t practical because the process itself is ultimately indefensible?

    - See more at: http://www.thedailybell.com/news-analysis/36074/Bashing-Central-Banks–Does-Rand-Paul-Know-What-Hes-Talking-About/?uuid=6F800609-5056-9627-3C5071902B060BF2#sthash.gjQStaTu.dpuf

  29. Being charged for having money in a savings or chequing account is turning investors to gold as it is cheaper to hold than a deposit of cash.
    Gold is the strongest currency in the world this year following last year when it was the 2nd strongest just 1% behind the US Dollar. 86% of the worlds people made money (or saved the losses in the native currencies) in 2014 by owning gold, and a little better by owning silver!!


  30. It is happening in Canada. The people are slowly arousing themselves to claim back the governing process from the bankers


    This is where Kilkenomics can involve the people in direct debate, and move into the forefront of molding political change. The change must come from the people. Education is the key.

    Central banking is the problem to be rid of. Sovereignty is given away with the banking privileges. A national bank issuing its own currency from Treasury is the start of the reclamation process.

    • Pat Flannery

      Good for the Canadians eh? I hope the Canadian social credit movement wins its case. Thanks for the link.

      Tony, I am with you all the way in reclaiming the power of central banks back to our elected governments because we need “bank money” of some sort rather than precious metal.

      A study of the “Wisselbank” founded and owned by the City of Amsterdam in 1609 shows that like so many other things central banking started as a good idea. It enriched the Dutch and spread to England with William of Orange. Since then, not so good.

      I hope you succeed in bringing it front and center at Kilkenomics. It is the key to all economics.

      • BUT, Pat, to restrain the politician from printing too much currency there needs to be a built in mechanism of control so the money supply is more or less constant. This leads to a stable economy, and prevents the politician from spending what is not his to spend.

  31. Posted on http://www.lemetropolecafe.com
    Comment on central banks
    Hello Bill:
    A comment about the Swiss Peg provided the incentive for a comment about the viability of central banks. Why are central banks allowed to exist? Clearly they are undemocratic, and therefore alien to Western Civilization. They may operate outside governments, as some are actually private corporations, yet they wield immense influence over the everyday lives of the citizens that live within the borders of western nations. They are un-elected, but impose policy on citizens who never have the opportunity to unseat them. They are autocratic over both national governments and the electorate. WHO GIVES THEM THE RIGHT TO WIELD SUCH POWER? More to the point, they have proven either incompetent or corrupt and operate above the social contract between the people and government. Rhody
    Sounds about right. Unelected yet telling us what to do and how to do it. charging interest on magic money that never existed, does not exist , and will never exist. BUT The interest charged on that phoney debt is eating us alive. How stupid are we to continue to allow this. Past Time for a change.

  32. Let us have the money problem and the central banks criminal monopoly as the topic for 2015 Kilkenomics. Call in Chris Powell,GATA. Bill Murphy, Lemetropolecafe. Max Kaiser, Bill Black, Eric Sprott, Andrew Maquire, etc etc.
    Lets get it on. Let’s get a change in thought process. Bring it on at Kilkenomics.

  33. Maybe just Maybe we will get to call a spade a spade at the 2015 Kilkenomics.


  34. After thought.
    Bill Holter would be a good addition at Kilkenny

  35. The PTB can not handle the truth. Rather they handle it all too well, never letting it see the light of day!!


  36. Two more names for kilkenomics
    Greg Hunter and Peter Schiff


    On gold, Schiff says, “Gold has not fallen, not nearly as much as the gold bears have expected. In fact, in 2014, gold was only marginally lower by 1% or 2% lower in dollars, but in most other currencies it did very well. It was up 5%, 10%, 20% or more. You pick a currency, and gold did very well. In fact, gold outperformed most all the stock markets in the world in 2014. Thus far in 2015, it is beating most all the stock markets, and it is certainly beating all the currencies. The skeptics have constantly overestimated how much gold would decline, and they are still very negative on the price of gold.”

  37. How do these people use a currency only to be found online and who have a history of not trusting paper money or the banks that use it.

    Gold is a common gift at weddings and festivals, and rural Indians who account for almost 60 percent of demand use it as a means of savings because most don’t have bank accounts…


  38. Mike Lucey

    I imagine the question, what is going to happen here in the EU is on many minds. Mine certainly!

    There looks to be an awful lot going on at the moment, the possible Grexit, France and Germany talking to Russia without the USA / UK and probably a lot more stuff that we have no idea about.

    One thing that has been mentioned here and there is the so called satellite evidence Putin holds in relation to what ‘really’ happened on 9/11! Maybe a load of BS but again! I imagine it one of his chess pieces that will be moved if and when it suits him.

    I have just read, ‘ Europe’s Greek Showdown: The Sum Of All Statist Errors
    by David Stockman • February 10, 2015′

    It goes into great detail and paints a picture that looks to be the current situation. He also paints a picture of what will more than likely be the situation.

    His bottom line would appear to be that the game is up for the Euro and possibly the EU as the Greeks won’t give in and the Germans won’t give ground.

    Do I hear DMark printing presses running at full throttle in the background, it certainly sounds like it!

    • Pat Flannery

      Mike: what Stockman left out of his unduly focused rant on Germany was the part played by his friends at Goldman Sachs. The real question facing Germany and the rest of the world is how to get out of the grasp of the moneylenders.

      Goldman Sachs and its echelon of parasitical bond holder clients are the real terrorists. Everybody is terrified of them. Hopefully the Greeks will highlight the fact that it was Goldman Sachs who almost singlehandedly shepherded Greece into the Eurozone so that it could lend to the Greek Government and send the bill to the German people.

      Stockman is right about one thing though, the Germans should have turned on the moneylenders long before now. Hopefully it is not too late.

    • “His bottom line would appear to be that the game is up for the Euro and possibly the EU as the Greeks won’t give in and the Germans won’t give ground.”

      It is not what I took out of the essay.
      Stockman basically says no matter what happens the economy is toast because of Loose monetary policy of the ECB. This lowered the bond rates, creating huge maladjustment of investment and borrowing.
      The result is exponential growth of debt across all nations including Germany.

      There is no future in the EU or Euro unless an autocratic, totalitarian state is accepted by the Europeans. That is the result of Central bank money printing policies, the moral hazard (read corruption) unleashed into the community, The greed of the politicians and the people to want unearned privileges, Resulting in an insurmountable mountain of debt. If the borrower cannot pay then the lender will loose too.

      The future of any people is to live with their means, neither a lender or a borrower be, and to be moral and upright in dealings with each other.

      For survival an individual must step aside from such a system and so must a state. Germany became embroiled in Europe and will suffer the consequences of living with drunks and embezzlers. Those that are down will drag you down with them if you get too close. charity begins at home.

      Ireland should, as often repeated, repudiate the onerous debt, (the banking debts assume by bailing out the banks) Create its own currency provided by treasury debt and interest free and pay off the national debt with the new money, Create its own public bank after the North Dakota model promoted by Ellen Brown, Close the central banking system, Reclaim its national assets such as the continental shelf, Lower or eliminate income taxes, and create a fresh start as a proud independent people.

      The choice of doing nothing is to be subsumed into the greater union and submerged in suffocating statist governance and destroyed by Central bank profligate printing of money.

      There is no such thing as a free lunch. Never was.

  39. Pat Flannery

    How about the game being up for Wall Street moneylenders?

    My only criticism of Germany is that it let itself become the debt collector for Wall Street. Shame.

    David Stockman is guy with a checkered history both in and out of government. He has a blind eye when it comes to Goldman Sachs et al. He never even mentioned the bondholders.

    I believe Yanis understands the real problem and will show the world that that this crisis is not a Greek crisis, it is a Wall Street overreaching crisis. Wall Street and their offices around the world is where the cave-in will have to take place.

    Hopefully Greece will banish the Wall Street moneylenders for ever and other countries will follow. The Greek people will be the first to get ownership of their politicians back. My hat is off to them.

  40. [...] because he’s a great story teller and his post of a couple of days ago is one of his best. Germans, Greeks, Bob Marley, Leviticus, Deuteronomy, Jubilee, Capitalism, [...]

You must log in to post a comment.
× Hide comments