June 18, 2015

What would Joyce have done?

Posted in Irish Independent · 106 comments ·

We must go to Athens. Will you come if I can get the aunt to fork out 20 quid?

So said Buck Mulligan to Stephen Daedalus in the opening chapter of Ulysses.

I’ve just come back from the Martello Tower at Sandycove – all Joyced up – where this opening scene from ‘Ulysses’ takes place. My Twitter feed is alight with stories from Greece as I try to write, between listening to some wonderful renditions of Joyce and scoffing down a few kidneys for breakfast, courtesy of Peter Caviston in Glasthule.

Greece and its ancient Hellenic classic civilisation was never far from the classically educated Joyce and it informs so much of Joyce’s writing. Isn’t it a bit ironic that here, on Bloomsday, all I can hear is how Greece is being hung out to dry by politicians who, unlike Joyce, have no sense of history?

Will Europe’s bean-counting civil servants ever learn that money that can’t be paid back won’t be paid back?

The Greece conundrum looks like it is coming to a head. Most rational people believe that Greece and its creditors should just apply the rules of capitalism to the debts. The Greeks should explain to the creditors that they are co-responsible. Athens should pay them nothing and see what happens.

The story of Greece is a universal story and unfortunately it is the story of our age. It’s the story of the poor versus the rich, the debtor versus the creditor and, most crucially, it’s the story of the difference between the man who earns his income from wages and the man who earns his income from rents, interest or dividends. One has assets and gets progressively richer; the other wages and debts and struggles to stand still.

The same applies to countries.

The debtor country, like Greece, earns its income from work and pays this (because of all its debts) to the creditor, who then turns this Greek income into rents or interest.

As long as the EU sides constantly with the interests of creditors and tries to turn the eurozone into a ‘creditors’ paradise’, where there is no risk implied in lending money, there will be massive political problems, because siding with the creditor is always going to make the rich richer and the poor, poorer. We see a similar siding with the creditor and putting the interests of the creditor first at work in everyday Ireland. It is the property market. In Ireland, the odds are stacked in favour of the landlord against the tenant.

Rents are rising much faster than wages and house prices are rising faster than both.

This means that the landlord, who is (almost always) already rich, simply gets more and more rent and the tenant pays a greater and greater proportion of his wages out as rent. In the buying market, the first-time buyer is being priced out by the cash buyer who is hoping to turn the potential first-time buyer into a long-term tenant, out of whom the cash ‘investor’ can extract rent into perpetuity.

Obviously, the bigger the landlord or cash buyer, the better the terms he gets for the initial capital he needs to buy the property and the more he can squeeze in rent out of the tenant. So the big guy is winning twice. He is minimising his costs and maximising his income. This is what I would term ‘endemic landlordism’.

This process is insidious and creates a bias in a society, which leads to all sorts of anomalies in the housing market.

Joyce would have known all about endemic Irish landlordism.

Joyce’s father, John, began as a man of some means and ended up poor. The moves he and his family made around late 19th and early 20th century Dublin describe a tightening spiral from wealth towards poverty – from the leafy, red-brick suburbs of Rathgar and Rathmines, to the less posh Bray and Blackrock and down to the shabby, poor north inner city.

Having moved to 20 different addresses in Dublin before his early twenties, Joyce ended up in the Tower at Sandycove. When he left there hastily, captured in the first chapter of Ulysses, he hurtled out of the tower and not only never came back to Sandycove, but never lived in Ireland again.

I wonder how much this lack of a secure place to live for any decent period of time affected Joyce and his view of this country?

Not having a place to live, constantly looking over your shoulder or waiting for the rent to go up or not being able to get enough money together to get a place of your own, has a profound effect on people, their marriages and families. In Ireland today, young workers can’t afford to buy a place to live and this is a massive problem, which extends well beyond just economics.

Let’s look at the fundamental inequality about what is going on, whereby rich investors are getting a massive subsidy when they buy property and the average person, who simply wants to get a place to live, is paying a massive premium.

Let’s look at a massive property fund called the Ulysses fund. The irony of a secure landlord fund named after James Joyce, who was possibly one of the most insecure and peripatetic of all tenants, shouldn’t be lost on anyone.

This fund of properties is owned by big investors who probably borrowed in foreign currencies at very low rates of interest that are available only to the very rich. The portfolio cost €150m for properties that were valued at €2bn at the peak of the commercial property market in 2007.

Ulysses comprises 14 offices, 51 retail units and 31 apartments with 90 underlying occupational leases spanning a mix of long and short-dated terms. The current annual income is €13.94m – or close to 9pc. Many of the tenants are Government agencies, so you, the taxpayer, are the underwriter.

There is nothing illegal about any of this. It just shows you how, if you have access to capital, Irish property is a winner.

If, in contrast, you are a first-time buyer, you are probably paying 4.5pc plus for your money. You are paying over the odds because you are bidding against your friends and there is the cash buyer to contend with who can always outbid you.

When I see the young and not so young of Ireland pinned to their collars to try to find a place to live, while wealthy foreigners who bought portfolios for half-nothing make out like bandits, I’m reminded of Joyce’s observation about this country: “Ireland is the old sow that eats her farrow”.

Was he right?

  1. Subscribe. Greetings from sunny Antigua lads.

    • Mike Lucey

      @DMcW “Ireland is the old sow that eats her farrow”. Was he right?

      I’m sorry to say but, Yes she is the old sow that eats her farrow and will remain doing so until she is rehabilitated. In my humble opinion this can only be achieved and more importantly maintained with direct democracy, otherwise she will always slide back into her self destructive ways under the stewardship of elected keepers.

      Lets at least try and do something about it by reinstating what ‘we the people’ had in principle under the Free State Constitution but this time around see it through!

      Here is a place to start and it only take a minute.

      [b]Allow Irish Citizens To Call For Referendums In Ireland[/b]

  2. Feta Cheese

    Europe remains a political unit, probably the most popular and attractive supranational entity in the modern world . Yet why does Europe retain its coherence , when almost all its recent achievements are claimed by its member states?It is not too much to claim that Europe , as a community and as an idea , is the ghost of the Latin Language community ,still respected and propitiated five centuries after its death ( Roman Empire) .

    Like Latin will the Roman alphabet dissolve and make way for Cyrillic and Arabic script and our cuisine be pootinified !

    • Deco

      Noonan, when under pressure to talk about a topic for which he is not prepared as a tendency to distract the audience with an “off-the-cuff” remark like his Feta Cheese remark.

      Fact – Ireland’s absolute debt figures are much worse than Greece. And that is not something that our leadership wishes to discuss.

  3. Pigeon Tower

    Martello Tower reminds me of a place to keep pigeons where the owner fund manager sends them away only to return again with messages and to lay eggs that will be blown out and preserved in antiquity .

  4. Original-Ed

    Landlordism in Ireland is purely about speculation and nothing else. Tenants are considered to be a necessary evil and nothing more. This speculative approach to wealth creation is a major hindrance to growth in the productive sector. No politician will face up to it, as most are at it themselves and they know no better. They leave the difficult stuff to FDIs.

  5. What a rant about us and them. No solutions just a commie rant.
    Debts that can’t be paid will not be paid. Rents that can’t be paid will not be paid either.

    Not a word about the fiat ponzi schems monetary system that enables and assist and abbets this inequality. nothing that explains that the issuaNCE OF UNLIMITED CASH AT ZERO INTEREST flows first to the bankers then to financial assets, then to anywhere else causing the greatest ineqity in hundreds of years.

    Property prices are zooming in major cities all over the world with the same lamentable results. Try Vancouver and Toronto.

    It is more the rant of a trade union “leader” than of a respected economist.

    Follow the money and the only conclusion is that the money system must be repaired. It is debt based interest bearing. It is credit at interest. Usuary.

    It is where the inequity starts and spawns its corruption.

    It is far past time this issue of the money supply is debated and examinined in detail. What are you afraid of? Exposing the truth?

    • When a central bank prints money and ships it off to a third party, it takes the central bank out of the picture.

      However, when a central bank uses the newly printed currency to buy assets, it retains control over the assets and thereby stays in the game. The bank can influence economic activity by choosing when and how to divest of the asset. It keeps the world guessing, and it keeps them in power.

      So under the current system, small groups of central bankers maintain their access and control over economies by purchasing assets, and the benefits they create flow to small groups of wealthy investors.

      As for the everyday citizens, they get the joy of earning below-market rates on their savings and deposit accounts. Everything would be alright if they only borrowed more… or so says the central bankers. – Rodney Johnson

  6. With only 5,125 home purchase mortgages given out in Q1 2015, it is still a cash buyers market of 51% of all home sales in Q1.However it’s easy to talk up the mortgage market by saying lending is up around 50% – but that’s a bit like a car dealer saying he sold 2 cars in April and then 3 in May! Q1 central bank statistics remind us that the number of mortgages in this country is still decreasing – i.e more retired people paying off their mortgage than young people getting their first mortgage.
    In relation to the Greek crisis I really can’t understand that the euro is actually getting stronger! Do the markets think we’ll be better off with Greece leaving or think that they are living up to the conditions? With Greece going, the ECB may want to print money to cover the losses. Perhaps Greece is secretly printing its currency to change overnight next month. I know there’s talk of a digital currency but surely the transition would need hard currency to reduce the mayhem.

  7. polomora

    Fully agree with everything said here. The debts should be written off.

    Maybe David himself missed the oxymoron when he wrote “The debtor country, like Greece, earns its income from work and pays this (because of all its debts) to the creditor, who then turns this Greek income into rents or interest.”

    I think that a great deal of Greece’s problems are self-inflicted, due mainly to its work-shy, tax-evasion culture. That people working at arduous jobs such as barbers and taxi drivers could retire at age 50 was ridiculous.

  8. michaelcoughlan


    “I’m reminded of Joyce’s observation about this country: “Ireland is the old sow that eats her farrow”.

    Was he right?”


    We really are a nation of fuckers in that regard. 89400 voted with their feet in the 12 months to 2013 and 80400 in the 12 months to 2014. Going to countries that pay wages people can provide for families on.

    Meanwhile we import all the eastern European labour we can get and give them 15 hour contracts and Min wage jobs and no one bats an eyelid.

    Your point on the Ulysses hedge fund is very good. As I said before a hedge fund bought the four seasons hotel 3 years ago or so for 11m and sold it last year for 41mm.

    No punitive speculators tax to stop the speculation. But Hone-a-scam puts in a requirement on the citizen to produce a 20% deposit on the second time out to buy a house which would coincide with the citizen’s need to get a bigger place as his family grows. Why?

    It stops the citizen in his tracks from growing his family. This reduces the possibility that the second parent needs to stay at home to mind the kids reducing the likelihood of that person giving up her/his job and the subsequent loss of income tax to the state as a result. Those funds are starting to off load those properties as the markets start to implode and it will be de ja vu.

    You couldn’t make it up.


  9. CorkPlasticPaddy

    What would Joyce have done? Surely the headline should have read as being ‘What did Joyce do?’ He buggered off out of this country and never returned, that’s what he did!

    This country was run by clowns and idiots back then and its been run by clowns and idiots since that time. The sooner the Irish electorate wake up and take notice what’s going on and what will continue to go on if they don’t change the way that they vote. FF,FG,and Labour have made a complete and utter mess of this state since it’s foundation and they will continue to do so unless the Irish people stop and think in who they vote for. The only way that this country will ever change is for the electorate to cop themselves on and actually think before they go into the polling booth and vote for anyone associated with those political parties. The last ninety odd years has certainly proven that none of them actually give a damn about the ordinary Irish citizen. All they’ve cared about is looking after the rich to the detriment of everyone else.

    • “The sooner the Irish electorate wake up…”

      They’re not going to.

    • joe sod

      The modern world is based on liquidity , debtors and creditors. It is true that many countries Greece especially have borrowed too much and this was the crucial reason behind the 2008 financial crisis when global liquidity dried up. It also maybe the case that many countries debt is unsustainable. However if every debtor country and bank defaulted back in 2008 there would have been a 1929 style global collapse with enormous numbers of people unemployed and no money for social welfare or public sector wages. This did not happen even in countries like Greece. It is popular now to pretend that because a financial meltdown did not happen then that we can revisit 2008, default on all the debts and continue on as before. This is just simplistic and plain wrong. Greece used the money it borrowed wastefully and stupidly, is that the creditors fault? No. It will be able to borrow more money but only if it agrees to reforms to cut out the waste.

      • joe sod

        “The story of Greece is a universal story and unfortunately it is the story of our age. It’s the story of the poor versus the rich, the debtor versus the creditor and, most crucially, it’s the story of the difference between the man who earns his income from wages and the man who earns his income from rents, interest or dividends. One has assets and gets progressively richer; the other wages and debts and struggles to stand still.”

        language like this is redolent of stuff said by lenin in 1917 castigating the bourgeois rich. But Greece is far from the russian serf and Greece’s creditors are hardly the Romanov family. I doubt if Greece really wants this revoltion that syriza maybe leading it.

  10. DJR

    Added to this should be the role of the banks in financing this system. Like any good parasite, the bigger the host the better. Banks are delighted to finance this scheme, sucking up one third of a workers income while adding nothing to the productivity of the nation themselves. It is very strange to hear people calling for the scrapping of the central bank rules which are trying to limit the parasites feast!

    The sad fact is that our politicians have deemed the crisis over, having failed to lay out any strategic plan or vision for the future, besides calling us the best little country in the world in which to do business. Having allowed property to cause our last crisis, nothing has been done to stop it damaging our future too:
    - rental prices rising to a level that will make it difficult to attract & employ workers at competitive international salaries
    - commercial property becoming equally uncompetitive & unavailable
    - complete lack of proper reform of the planning process which has created this massive shortfall in suitable residential & commercial property
    - lack of a credible regional strategy which would address the imbalance around the Dublin area and create jobs in areas where they are desperately needed
    - young, highly qualified people emigrating and given the cost of student accommodation they’ll have experienced before they left, unlikely to return
    - rapidly declining birth rate, due to both parents having to work to finance a mortgage & high child care costs, which will quickly erode our currently very favourable demographics

    • michaelcoughlan

      “rapidly declining birth rate, due to both parents having to work to finance a mortgage & high child care costs, which will quickly erode our currently very favourable demographics”

      I am convinced they have a one child policy in place,


    • Deco

      Excellent points DJR.

      It might make sense to move third level out of County Dublin on the basis that students will not be able to live there, unless with relatives.

      Perhaps move Belfield to Belview (outskirts of Waterford City) ?

      It would save the students a fortune, and would solve a serious problem with over-centralization in the mid-East region.

      It would also solve a serious problem in the SE with respect to lack of economic drivers.

      UCW anybody ?

      One of the reasons for the declining birthrate – the amount of competition presently in the workplace for the promotion that will enable and income that will provide for a family.

      Another reason – a society where people are discouraged from preparing for the future.

    • ‘It is very strange to hear people calling for the scrapping of the central bank rules which are trying to limit the parasites feast!’

      How about getting rid of the central banks themselves …..Period.
      Remove the fiat ponzi scheme money from the system. Nothing stopping the government issuing its own money ay no interest and it not being lent into existance it will be debt free too. There is absolutely no need for a national debt at all. It is a creation of the central bankers.

      There will still be a need to prevent the unlimited supply of money by the government and that is done by tying it to a limited amount of commodity which amount is not easily increased.

      Usually gold is resorted to as the tried and tested element of unique qualities not found in any other, making it emminently suitable as the international money of account.

  11. bilimori

    David, good morning from California,

    I agree with you that the Greeks are being hung out to dry, and the manner in doing so is particularly odious.

    I am curious as to how much of the money that Greek borrowed was fiat money, just numbers entered into an electronic register, to be paid back in hard earned money that disappears as the fiat entry is written off.

    It would be interesting if an independant Greece could then pay off its debt with Fiat Drachmas.

    A theme for a good economist to explore.


  12. Grzegorz Kolodziej

    “A state without the means of some change is without the means of its conservation”

    Edmund Burke, Reflections on the Revolution in France

    Today I would like to write on debt forgiveness, but I intend to take a slightly different approach to David’s views expressed in this and his previous articles. David often says that in cases such as Greece’s it takes a reckless lender as well as the reckless borrower for the situation to arise. However, in his articles he often seems to turn a blind eye on the borrower part of the ignominious Greece v the EU equation (perhaps he thinks that Irish readers are unaware of the EU and IMF hypocrisy and swindles in their dealings with Greece, but I think the opposite is the case – Irish debate is definitely informed by the EU/IMF con tricks in Greece and most Irish readers are totally unaware that not only Greek austerity IS NOT worse than Eastern European austerity and their debt repayments not as burdensome as some Eastern European countries debt repayments, but also of the fact that Greece has been hard done by partly because serious states always act in their own interest and partly because Greece had swindled other EU countries before and Greek voters are guilty of having approved that year by year for since 1981 and particularly since 2001).

    However, I will start from what should change in creditors attitude before I’ll come to what the Greeks should change just to end my with the question of debt forgiveness and what the implications of Grexit for Ireland might be.

    Starting with Greece’s main creditors, some things which they demand from Greece make sense and some others do not (such as demands to increase VAT on catering – it is typical of the IMF that instead of urging countries to cut public spending but also cut taxes, they urge them to cut public spending and i n c r e a s e taxes – this was done in Poland), but I do not believe they are in the moral position to patronize the Greeks or the Irish (Herr Martin Schulz did it recently on German TV when he said that it is Greece’s duty to accept the German conditions).

    German debates are a good example of what the philosophers of science call the confirmation bias. I closely follow their debates on Greece and even though there are voices to be heard in their media which are not that dissimilar to David McWilliams’s position on Greece, they are in minority and the prevailing mood in their debates is that prudent Germany suffered so much paying for stubborn Greeks who do not want to reform (in fairness to German media, they almost always invite Greek representatives and other member states representatives to their media, which cannot be said about the UK media or the Irish media).

    There was a German middle-class couple was coming down to visit our house once a year and I think their opinions on Greece and Ireland, supported by the bunch of German newspapers they would bring with them, are very representative of the average educated German (let alone uneducated): Germany is the benefactor of Europe due to historical burden and responsibility they have, but people of Germany are getting sick of that and some day they will pull the plug.

    Everything that you would say to them that Germany did not donate any money to Ireland, but merely lent it, and did it not due to their generosity, but for profit and in order to hide the level of leverage of their and French banks would be rebuked with a touch of asperity, let alone any remarks that Germany did a lot to avoid their historical responsibility – for example by getting away with not paying war reparations to any other country than Israel or not re-implementing national minority rights for ethnic Poles (while Poland recognizes German minority rights in Poland – Polish taxpayers spend money on German schools in Poland and representatives of German minority have a guaranteed seat in the Polish Parliament) – Hermann Göring’s World War II decree of 27 February 1940, which confiscated property of all Polish people living in Germany is still a law in Germany and even though in December 2009 the Minority Commission of the Council of Europe obliged the German government to formally respond to the demands within four months, the question as to why exactly they still implement Nazi laws in Germany remains unanswered. All of it is taken with disbelieve by normal Germans, such is the cognitive dissonance brought about by bringing a narrative different to what they hear everyday in their media (Germans like to think of themselves as very well informed).

    German memory is very selective – there is no mention of the London Debt Agreement in their debates on Greece. I am not surprised, because to remind them that the introduction of the Deutsche Mark in 1948 wiped out most of Germany’s domestic debt while their external debts, including their interested payments, had been reduced by 50pc and the rest was spread out by three decades would counter their false narrative of virtuous Germans and feckless Greeks, Irish, Poles and pretty much everyone else with a possible exception of Austria, Holland and Scandinavia.

    Yes, Germans were very good at saving money partly because, well, they are Germans, but partly thanks to restructuring of their debt their debt was less than 20pc of their GDP while the rest of Western Europe in the 1950s struggled with debts of about 200pc of GDP (a curious fact: the German Bundestag initially rejected the London Agreement because they thought this would legitimize what they considered to be the French occupation of German territory). Albrecht Ritschl, an economic historian at the London School of Economics, estimated that the total debt forgiveness West Germany received from 1947 to 1953 was more than 280pc of Germany’s 1950 GDP, compared to 200pc of GDP Greece has been pledged in aid since 2010.

    However, even that is not the biggest difference between debt forgiveness for Germany and rescue plans for Greece or debt forgiveness for Poland in 1991.

    The biggest difference between German debt forgiveness and Polish debt forgiveness was the clause in the London Agreement that said West Germany should only pay for the debts out of its trade surplus (which is exactly what Syriza wants), and any repayments were limited to 3pc of export earnings every year (which is even more than Greece wants). This meant that German creditors had to buy West German exports in order to be paid and Germany did not have to recourse to new loans.

    The opposite happened in Poland. Poland was also forgiven half of its debts, but this was not Poland’s actual debts incurred in 1970s – they have been repaid – but the extortionate interest rates imposed on Poland in 1980s.

    In Poland debt service in 1990 was about 9bn dollars (out of total 44bn dollars owed), which was 80pc of Poland’s convertible currency merchandise export earnings. Far from being allowed to pay the rest of its debts from export earnings, strict production limits had been imposed on Polish agriculture (without any subsidies to compensate the loss of earnings), while German and French supermarkets in Poland had been exempted from paying income tax. It was not until March 1991 when the members of the Paris Club limited Polish debt repayments to 600m dollars annually and this was contingent on Poland’s signing an agreement with the IMF and negotiating comparable debt reductions with all other creditors, which did not happen until November 1991. Even after debt reductions Poland had to spend much more than 1953 Germany on debt repayments from its export earnings and remember, this was done in an environment when Europe was closing its markets to Polish exports and Poland was opening its markets to European food imports while the opposite was happening in 1950s Germany.

    As a result, Poland were running enormous trade deficits in the 1990s (122bn dollars in total – I have written about it in my response to German ambassador’s speech in Trinity College where he portrayed Germany as the benefactor of Europe) and it is estimated that Polish consumers were supporting 1,500.000 jobs in Western Europe in the 1990s, which eventually led to unemployment as big as there is now in Greece, wages and pensions half of Greek real wages after austerity cuts and emigration out of Poland (I have mentioned before that if Greeks were suffering so much from austerity why did not emigrate like Poles or the Irish? – up till 2012 less than 3,000 Greeks have come to the UK to work, compared to 35,000 from a small Nepal).

    A very typical example of German neo-colonialism would be Siemens purchasing a computer factory ELWRO in Wroclaw in 1989 for 38.5 million dollars, just to shut it down immediately and raze the facilities in order to eliminate cheaper competition from Eastern Europe. This was not a single case, but rather a modus operandi of all German and French companies in Poland. Why Poles allowed that, you might ask?

    Well, partly because they had corrupted governments and partly because Germans were corrupting them, financing parties which toed the German line and using extensive files on Polish politicians they inherited from Stasi and in case of Foreign Minister Krzysztof Skubiszewski even resorting to blackmail that they would reveal his past should Poland insist on Germany signing a Peace Treaty with Poland – chancellor Kohl was even willing to prolong the reunification of German just to avoid signing it.

    Lest you think that my comments on Germany corrupting and blackmailing Polish politician, take a look at cellulose factory in Kwidzyn. In 1990 it was one of the modern in the world and its equipment alone was worth 400m dollars (the actual factory much more). Minister Janusz Lewandowski gave it to Germans for free (thanks to such actions he was elected as the EU Chairman of the Committee on Budgets; perhaps you would be interested to know that another Polish politician, Donald Tusk member of the same party as Janusz Lewandowski and his friend was not only financed by Germans in the 1990s – he even advertized their products as a minister – but Tusk’s brother served in Wehrmacht during WWII). Minister Waldemara Koz?owski filed a complaint with the Prosecutor’s Office whereupon he was killed.

    Coming back to the aforementioned London Agreement stipulated that in the event of reunification, the issue of German reparations payments from WWII would be newly regulated (I would like to remind our readers that Germans not only killed 2,900.000 Polish Jews and 3,100.000 non-Jewish Poles in concentration camps in occupied Poland, but they had also stolen tons of Polish property and savings); however, with the exception of compensation paid out to Israel and forced labourers, Germany did not pay any reparations to Eastern Europe or Greece, this making Germany the biggest debt transgressors in world’s history. Poland was also one of the countries which granted Germany a waiver (or rather it was forced to do so by the Soviets) in 1953 with the exception of individuals claims. The waiver was confirmed in UNESCO in 1969, but as the document is not available in UNESCO, Poland would have legal grounds to redress (even more so because the waiver was granted by the Polish vice-minister during his speech in UNESCO on 23 September 1953 and the only people who could legally grant it were Polish president, prime minister or foreign minister – in his letter to Mr Miguel de Serpa Soares, the Under-Secretary-General for Legal Affair of UNESCO from 23 August 2014 Dr Grzegorz Kostrzewa-Zorbas is writing that he wants to verify the existence and content of a document based on Poland’s Council of Ministers resolution passed on 23 August, 1953 and effective 1 January, 1954 in which Poland allegedly renounced WWII reparations from Germany – 845bn dollars in most conservative estimates – and he received an e-mail from UNESCO’s Christel Mobech, dated 11 September 2014 stating that “The document you are requesting is not available with the Office of Legal Affairs”).

    Germany and France are not the only culprits in maltreatment of the country they pretended they were helping. The other culprit was the IMF, which forced Poland to borrow 30 billion dollars to buy American government bonds (with the interest rate 1pc-2pc) – in order to do that, Poland had to issue Polish government bonds (with the interest rate 15% and more); as a result of all this Polish taxpayers lost about 100 billion dollars.

    But when in one of his previous articles David compared German debt forgiveness to Polish debt forgiveness, he turned a blind eye on the Greek part of the equation. Here is the Greek part:

    1. Most EU countries have been cooking the books, but let’s be honest – Greece cheated like no one else in the EU. Take agricultural subsidies as an example. There are 11 million people living in Greece and 38 million in Poland, yet Greece received more EU subsidies for agriculture than Poland (and Ireland with her 4 million souls received half of Poland’s subsidies). Partly this was due to exceptionally bad deal negotiated between Poland and the EU, except that neither Poland nor Ireland planted dummies passing off as olive trees to cheat the satellites and the EU taxpayers. Yes, it was the bloody Krauts who first broke the Maastricht 3pc budget deficit rules (followed by the Frogs) – but Greeks probably set up the unbeaten world record in terms of how much one can lie about budget deficits by misinforming the EU taxpayers that they had been running 6pc budget deficits rather than 13pc. This was done not only at the cost of countries richer than Greece, but also at the cost of poorer countries than Greece such as Poland – Greece received more regional EU funds than Poland partly because they lied so much about their situation. I have to say all of this renders the Greek argument for solidarity in Europe rather hypocritical.
    2.Like I mentioned before, the Greeks complain about their austerity – but this is a country where earnings are still twice as high as in Poland, even after their cuts. Someone might say that wages are twice as high only for those Greeks who are working – but their pensions or unemployment benefits are higher still not only compared to Poland, but to the whole Eastern Europe where people are told that they somehow have to support the Greeks, even though in the austerity year 2012 car sales in Greece increased by 16pc compared to a nearly 20pc decrease in Poland. In austerity Greece teachers can retire after only 20 years of working with a lump sump of 40,000 euro – partly paid, lest you forget, by the poorest Polish pensioners who receive 200 euros per month and still pay taxes from it (the informers of the communist secret services, including murderers such as Stefan Michnik, Adam Michnik’s brother, receive up to 2,500 euro per month pensions).

    Last but not least, burdens on Greek taxpayers due to servicing Greek debts are lower than burden on Polish taxpayers due to servicing Polish and Greek debts – and yet Poland, not a member of the eurozone, had very magnanimously volunteered to donate 8bn euro to Greece, even though it has to pay almost 10bn euro a year on servicing its foreign debts (Slovakia, having suffered much more austerity than Greece, did not show such generosity and neither did the US, which also refused to support Greek pensioners). I will come to reckless lenders in the second part of my comment, but pray, tell me, why did Greeks always accept all the loans that had been offered to them by the German and French banks (and why they invited crooks like Goldman Sachs to help them cheat)? Was it because, as the American philosopher George Santayana once said, “in Greece wise men speak and fools decide” (he obviously did not hear about our Bertie Ahern, a fool who was taking decisions and who sounded as if English was his second language)?

    Contrast the successive Greek governments behaviour (paradoxically, Syriza being probably the most reasonable of them all purely due to the endgame stage of the Greek game) with the Polish government of the prime minister Jaroslaw Kaczynski who in 2010 – twice shy after Poland being once bitten by the IMF in 1990 – refused to accept a 16bn euro IMF loan, which has really infuriated the IMF and the American press joined the German press in Kaczynski’s character assassination (I would like to remind our readers that I am neither a member nor a voter of his Law and Justice party, though many of my Polish friends are).

    3.Greeks invented tragedy, philosophy, democracy and higher education (Plato’s academy). The problem is that they have not invented anything else for the last 2,000 years which prompts the question why the EU taxpayers subsidise their research and development programs twice as much as Polish R&D (so more than six times as much per capita) – even though Poles, not Greeks, invented
    -the oil industry (Ignacy Lukasiewicz – he invented the first distillation of petroleum, first kerosene lamp, asphalt and he helped to set up the oil industry in Texas),
    -television (telectroscope invented by Jan Szczepanik – who also invented the first bulletproof vest, patented in 1897),
    -camera for movies – pleograf (Kazimierz Proszynski in 1894, who also synchronised sound and image and lit up New York with first advertising on public buildings),
    -microchips for IT industry (Jan Czochralski),
    -minicomputers (K-202, which preceeded the IBM PC by 10 years and it was faster),
    -they first welded steel structures and designed the highest pre-WWII building in the world (in New York). In the last decade Poles revolutionised laser industry and invented gryfen – arguably the most important new material since titanium.

    I am sorry to say, but it looks like most money that went to Greece on R&D should have gone to Eastern Europe instead if we want to invent new materials rather new ways of cheating the EU taxpayers. Incidentally, Germany with twice as many people as Poland received twenty five more EU subsidies on R&D (incidentally, Poland is now the second most euro sceptic society in the EU after Great Britain – largely due to the fact that while Polish wages doubled since joining the EU, so did Polish prices – i.e. in 2003 an average Pole could buy 139kg of beef for his or her monthly salary while in 2013 it was only 99kg– contrast that with 25pc real wage increase in Germany 8 years after introducing the euro currency and 140pc real wage increase in Greece – that is before Greek cuts and partly due to the fact that Germany is attempting to eliminate competition from Poland by imposing strict CO2 emission limits on Polish industry while increasing their own CO2 emissions).

    There is one factor in Greece’s disaster which no one here on this blog considered: Greece economy suffered because of the EU subsidies of which Greece was a beneficiary. The problem is that as in Poland, the EU subsidies generate costs and force countries to borrow because of the stupid EU regulations. The Open Europe estimates that Greece loses 6.2bn euro a year on EU regulations. I wonder how much Ireland loses – has anybody thought of that?

    And to give you a taste of what the Eastern European approach to Greece might be and what the German approach to Eastern European politicians is, watch this short video with Martin Schulz:


    • Good analysis and comments.

      • Grzegorz Kolodziej

        Thank you Tony for your kindness.
        Btw, the said Donald Tusk who is now almost totally pro-German and a social-democrat too, had totally different views in the late 80s. His views on gold and central banking were the same as yours, I still have a book in which him and Lewandowski wrote Hayekian articles (I took a mickey out of it in my comment for The Economist that it must have been Salma Hayek Tusk had in mind).

        And guess what happened? Germans splashed their money, allowed him to write articles paid by German embassy in Poland, Kohl took money out of CDU and gave it to Tusk’s party, Tusk changed old Corolla for a powerful beemer and out of the window goes gold standard. Hang on, did the same thing not happen to Alan Greenspan?

        P.S. You were right that Noonan did not exchange Irish state’s euros for gold but his own shares. This story was bothering me (I thought perhaps I was only dreaming about it) and finally I traced it to find out that Noonan sold his own Euro shares to invest in gold buying into the SPDR gold shares exchange fund…

    • DB4545


      Excellent and detailed analysis and I defer to your obvious knowledge in some areas. I would just ask that you pull the detail a bit tighter because it’s too long when it’s longer than the original article! Kind and respectful regards.


      • Grzegorz Kolodziej

        Thanks DB4545,
        I think you have a point with pulling details tighter. Funny enough, when I start writing my comments I intend them to be much shorter, but then I always think that if they are not followed up by references to data and sources (perhaps my years spent in Irish courtrooms make themselves felt), they would be considered just as opinions of an extremists, particularly because a lot of things I write might sound a bit extreme – such as Germany running an undercover politics of elimination Eastern European heavy industry and long-term agenda of repossessing western parts of Poland.
        A propos following up, an error crept up to my comment about Donald Tusk (I usually approach contributing on this blog as both sharing information – I also find out a lot for myself from readers comments – and exercises in speed typing, which I have to maintain at certain level – this comes at a cost that I usually do not have time to edit my comments).
        I wrote “Tusk’s brother served in Wehrmacht during WWII” – in fact it was his grandfather, Jozek Tusk. When this was found out, Civic Platform used it as an example of Kaczynski’s anti-German bias pushed to the limits of spreading mendacious information against Tusk, but after the campaign it turned out that the Wehrmacht story was true and even the Germans now admit it:


        Now, I do not mind that someone’s grandfather served in Wehrmacht just for the sake of it (I once met a German girl whose grandfather was in Waffen-SS and she was as far from racism as one be, rather shy and delicate), but not if that person takes money from German intelligence and implements detrimental politics…

      • Canadaddy62

        Shortening this is one person’s opinion. My opinion is: Grzegorz – don’t change a thing. Your perspective on the EU is valuable and few of us with an Irish background have access to an Eastern European view. Very enriching.

    • Deco

      Thanks Greg.

      There is a lot there.

      The EU is sliding towards becoming another Habsburg Empire. Except the corruption, waste, fiddling, and lying are all much worse with the EU.

    • “·An 88-year-old German
      woman, Ursula Haverbeck, is fac -
      ing criminal hate speech charges
      after debating how many Jews died
      in the Holocaust on national
      television. The debate was aired on
      German public television and
      broadcast all over Europe. She will
      face 5 years in prison if convicted”

      Friends of Freedom newsletter


      • Grzegorz Kolodziej

        Yes, I watched an hour long the interview with her and it was so staggering that I intend to re-watch it. What fascinates me is that in the 90s, when I was following German debates closely (I even had a German girlfriend at the time who came to Krakow to learn Polish in order to get to work with the theatre director Krystian Lupa) that kind of interview would have never ever appeared on German TV, let alone on their main program (when Hans-Jürgen Syberberg aired his interview where Winifried Wagner, who has been ever since portrayed as an anti-semite, but in fact she rescued some Jews risking a lot, but kept shtum about it and it was not known until she died) merely said that Hitler was a charming person and that she only knew him from that side, there was an incredible outrage in German media which de facto finished Syberberg’s career).

        Then I sort of zoomed off German TV, a decade has past and what do I see?
        A person hundred times more controversial than Winifried Wagner is given an hour long air time in the mainstream German media!

        You see, what those Holocaust deniers do is that they take some information that is true – i.e. that there was no gas chambers in Auschwitz until Auschwitz was divided into Auschwitz 1 and 2 – because Auschwitz was initially a concentration camp for Poles and Jews did not start to arrive until 1942 – and turn it into outrageous claims that there was no gas chambers and extermination of Jews, Poles, Gypsies, etc. at all and that the biggest tragedy of WWII was the German Vertrieben!

        BTW, watch this and watch the reaction of CSU crowd when Schauble (still influential figure, 2nd after Merkel perhaps) talks about Polish western borders


        • coldblow

          I could be wrong, but I got the impression that Tony is concerned that the prosecution of an 88 year old for saying what she thinks (be it right or wrong) is a massive over-reaction and a threat to freedom of speech, while you see the fact that German tv showed the interview at all is alarming and presumably think it fair that the interviewer’s career was ended by it.

          I share Tony’s view but I am interested in your own point of view. Nowadays the label ‘denier’ is thrown around liberally to intimidate anyone who dares to dissent with conventional wisdom, eg global warming denier or evolution denier. It is of course a pejorative term and means simply ‘you are beyond the Pale’, in other words an irrational extremist.

          • Grzegorz Kolodziej

            I agree that the label denier is thrown around liberally to intimidate those who dare to dissent from conventional wisdom. I am sure that you are aware of that book, if you are not, please get it today:


            True, prof. Finkelstein became too radical later on as for my taste, but noone could really deny facts he exposed even though many tried.

            I also do not think that anyone, let alone any historian should be in prison for exercising his freedom of speech. There are many communist holocaust deniers – holocaust which killed more people than any other holocaust, some of them took money from STASI, supported holocaust in North Korea and Jaruzelski’s regime in Poland and are members of the Labour Party in Ireland.

            I am glad that I can find some people in Ireland like you, Tony or Deco who are on the same wavelengths as me.

            But as far as Ursula Haverbeck is concerned, I do not think she should be given one hour of prime time on German TV and I’ll tell you why. Some things Ursula says are worth considering, some are true (there was no gas chambers in Auschwitz), but they are not completed by further explanations (there were gas chambers in other camps). But her general thesis is twofold:

            1. People had it hard in concentration camps, but it was the war and everyone had it hard. Therefore we cannot talk about the extermination plan.
            2. The biggest tragedy of WWII was driving Germans out of Poland.

            Now, as to 1: no, people in occupied Poland had it 10 times as hard as people in, say, occupied Czechoslovakia and Czechs had it harder than people in Germany. If she accuses people of lying she is the biggest liar.

            As to 2: The biggest tragedy is that those fuckers who were driven out of Poland got rich thanks to debt forgiveness of countries like Poland. I would like to remind Ursula that Germans who weren’t Nazis and declared basic loyalty to Poland could stay. It just shows you how many Germans were Nazis

            My opinion?
            My opinion has been shaped a long time ago:
            Germany is pursuing politics of shaking off their blame for WWII. They do it systematically from their films to historians and ministers. Some time ago they stopped using a name German concentration camps and they say Nazi concentration camps. If it is Nazis and not Germans, than maybe it was Poles? Consequently, they now talk about Polish concentration camps (and so do Americans influenced by Jewish lobby, although new President elect Duda met the US ambassador and gave him such rollicking that Obama, who also talks about Polish concentration camps, had to replace him).
            What’s their next step? Why, reclaiming German property in western Poland and then moving the borders.
            Frau Haverbeck is on TV to suit this narration and therefore she should not be on TV, unless it is her own.
            Look, if I said on TV that it was the fault of the Irish that Cromwell came to Ireland because the Irish massacred protestant shortly before which they did – there was an exhibition in TCD – would that be a fair comment? NO!!!
            Should that biased opinion be aired on TV without any further comments? NO!!!
            Should I lose my job as interviewer? Maybe not, but it certainly should diminish my TV employment prospects.

            This is what I think….
            P.S. Deutsche Bank, which so prominent in Greece, has a glorious past. They stole money from Polish banks and built Auschwitz for that. It’s a great moral position to hector Greece

          • coldblow

            Thanks for the clarification, Grzegorz. I have often wondered if and when the question of the ‘lost’ German territories in the east would raise itself.

            I hadn’t spotted the use of ‘Nazi’ or even ‘Polish’ concentration camps as opposed to ‘German’ ones. I remember some newsreels when doing the first year of my history degree of the big change in attitudes towards the Germans after the the end of the war. An early British newsreel, probably from 1945, showing pictures of the rubble and the stunned survivors spoke scornfully: ‘This is the Master Race’ but within a year or two, especially with the Berlin Airlift, this image had softened greatly. This may have been when the idea became widespread that they had been duped by a fiendishly cunning Hitler (who bore almost the sole responsibility).

            You would hear nothing about any of this in the Irish media, either official or unofficial, as I doubt if hardly anyone has a clue. Even matters which are closer to home are ignored and not understood. Last night I watched this excellent documentary (from 2005) about Britain and the EC.


            Whatever your attitude to the EC I think very few have any grasp of what happened. A telling comment towards the end by one of the speakers is that Parliament should spend at least two and a half days per week discussing EU laws and regulations as these dictate the way people are to live, yet there is no discussion at all. I’m sure it is the same here. (In Poland too?)

            Tull McAdoo here always described TDs as
            County Councillors for all the real effect they have, and it’s such a good label that I used it on Peter Hitchens’s blog. I noticed Hitchens used the term to refer to MPs in a recent article and (though it could just be a coincidence) that’s the way ideas can spread.

        • DB4545


          Interesting video Grzegorz. You can almost feel the national socialist undercurrent coming from the audience. I lived in West Germany in the early 1980′s. The CSU in Bavaria under Franz Josef Strauss if I recall were especially fond of the auslander raus element of the electorate. A work colleague from Poland is from the border zone with Germany. He explained that he studied in East Germany prior to re-unification and there was always a strong undercurrent of racism directed at guest workers. Whenever I hear the word heimat coming from a German speaker it always fills me with dread. It’s good to get a broad and deep Eastern European perspective on Germany. They seem determined to humiliate Greece and have a very selective memory regarding their own past debts and the generosity of other Europeans and the US. Maybe they could learn a little humility considering the havoc they caused in Europe in the last century.


          • Grzegorz Kolodziej


            “regulations as these dictate the way people are to live, yet there is no discussion at all. I’m sure it is the same here. (In Poland too?)”

            Look at the this table of Poland’s annual growth rate from 1991 to 2013.
            As you can see, it was MINUS 7pc in 1991. What happened in 1991? We let in G. Soros and his stoodge J. Sachs, which implemented their plan, so called Balcerowicz Plan. Some of the elements of the plan were right, but most of them was based on increasing taxes (Sachs had a moronic idea that you fight inflation by taxing production rather than decreasing money supply).
            Then what happen in 1992? A little bit of debt reduction, yes, but first and foremost the only sovereign government of Jan Olszewski who kicked the Russian army and limited the influence of Soros.
            Look at 1997 – 7.1pc. Not bad, innit?
            But hang on, what happened after 1997?
            Why, we started implementing the EU legislation, forced by Germans and the French (their President Chirac told us in Warsaw we missed the opportunity to shut up)

            Total 1991 ?7.0%
            Total 1992 2.6%
            Total 1993 3.8%
            Total 1994 5.2%
            Total 1995 7.0%
            Total 1996 6.2%
            Total 1997 7.1%
            Total 1998 5.0%
            Total 1999 4.5%
            Total 2000 4.3%
            Total 2001 1.2%
            Total 2002 1.4%
            Total 2003 3.9%
            Total 2004 5.3%
            Total 2005 3.6%
            Total 2006 6.2%
            Total 2007 6.8%
            Total 2008 5.1%
            Total 2009 1.7%
            Total 2010 3.9%
            Total 2011 4.3%
            Total 2012 2.0%
            Total 2013 1.6%

    • coldblow

      I share your assessment of the Germans. I regularly listen to German radio, in recent times mostly about the Ukraine, and find that they tend to stick to the orthodox interpretation of events. They might express these views in more balanced language than some of the press in Britain and Ireland (Putin is worse than Hitler etc) but they are still deeply conventional (and therefore, almost by definition, wrong).

      As regards the opinions of the average German, my German teacher shared these, going back about four years now. She returned from a trip home and was open about taking her opinions from Bild. The Greeks were lazy and feckless. Mind you, her understanding of Irish history was very cartoonishly simplistic, and I finally fell out with her one evening when she dismissed the Catholic Church as ‘evil’ and justified this by saying that this is what serious journalists argue and that journalists know more about these things than anyone else. (I had just suggested that the German ‘church tax’ was a good idea as it made people put their money where their mouth is.) the good thing about her was that she was open and honest about her views so it was easier to argue against them.

      Caesar noted the German aversion to imports in Book 4 of his Gallic Wars@ while they contented themselves will old nags of horses which they worked until they dropped down dead the Celts were paying enormous sums for the best imported horses (read Mercs nowadays).

      Michael Lewis’s article (Beware of Greeks Bearing Bonds or something like that) from 2010 got a lot of favourable attention at the time. He drew a picture of almost insane corruption but I was always uneasy about this as it is only part of the picture.

      ‘Geithner and Obama lobbied the IMF and ECB shamelessly to bail out Greece, simply so that it could pay bondholders, because U.S. banks had issued credit default insurance (CDS) against Greek bonds and were on the hook for a big loss if a default occurred.’


      ‘Why Poles allowed that, you might ask?

      ‘Well, partly because they had corrupted government governments and partly because Germany were corrupting them, financing parties which toed the German line…’

      Michael Hudson (again quoted from link above):

      ‘Europe seems quite willing to be left out in the cold, by electing politicians that simply are bought off by U.S. money.

      ‘That’s the unspoken key to U.S. diplomacy: simply bribe politicians, journalists, publishers and others.’

      I also like this quote from the same article:

      ‘Without gold, the world’s central banks shifted to U.S. Treasury bills – government IOUs used to finance the budget deficit that was largely military in nature. This meant that global monetary reserves monetized U.S. military spending to surround these countries and destabilize them if the tried to withdraw from the system. (This is what my book Super Imperialism is all about.)

      • Grzegorz Kolodziej

        Discerning remarks about German understanding of Irish history being very cartoonishly simplistic… – cartoonishly is the best word one can use. Pity I cannot send you a link (because I cannot find it) to a German WWII movie they have made about Ireland when they fell out with the English and Goebbels started talking warmly about the Irish – they got German actors and they did an Irish dance, except it looked like a robot dance.

        I think your description of the Germans is very accurate “they tend to stick to the orthodox interpretation of events. They might express these views in more balanced language” [...] they are still deeply conventional”.

        Therein lies the problem – Germans have actually wide interest in the world’s politics and culture, but it is all rather conventional and I also think their culture is more politically correct than the Irish culture – which is not necessarily good as most of German theater got stuck in 1968 – but only if it’s not against their own national interest.

        If they sniff any competition from other nations industries, they do not hesitate throwing the most racial kind of abuse you can think off – it does not matter whether it is directed against the Poles, Irish or the English (Harald Schmidt had weekly a comedy show on TV with anti-Polish joke, and I would not even mind anti-Polish jokes – though not every week – provided they would be any good, but they were all crap).

        Incidentally, I wonder if any of the readers know why so called Polish jokes became so popular:


        In contrast, many anti-German Polish jokes are real funny and malicious without being oafish:

        “II World War – Russian soldiers are plundering a German cemetery. They are jumping from one grave to another – and reading who is buried there:
        - Albert Hess
        - Bruno Schwarz
        - Herman Guttman
        - Edward von Klinkerhoffen
        - Achtung Minen (Beware of Mines)”

        To be fair to Germans – I always try to be fair and view things from my opponents perspective – when they go abroad, they try to mix with the locals as opposed to English who only spend time with themselves (puking and shouting like morons – Barcelona mer wants to put a cap on their numbers and in Krakow many restaurants owners, who were overjoyed so many English tourists started coming, then complained that they lost their regular clients because of them).

        But German wide interest does not prevent them from erasing the whole chunks of their history that is inconvenient to them: for example they cultivate and organize exhibitions about their Vertriebenen, but they fail to mention that Vertriebenen were vertrieben because:

        1. They lost the war they started
        2. They lost properties in what is now 1/3 Poland because they had stolen properties in what is now the whole Poland
        3. Poland did not exactly benefit from capturing east German land because it has lost more in the East and the Soviets took all the machines anyway
        4. They forgot to pay war reparations after reunification as the London Debt Agreement stipulated

        Now, what is really amazing is that an average Polish person would know about shameful events from the Polish history – like colonizing the East (this was not always bad, for example Lithuania gained from that like you would not believe and they did it voluntarily, but there were some shameful episodes too – Polish gentry treatment of Ukrainian peasants, which was so brutal that it resulted in a revolt – but Poles treated badly their own too and they still do).

        An average Irish person knows about shameful events in the Irish history – for example some of the IRA campaign, like shooting that English policewoman from the window, some Irish also know about IRA’s Nazi collaboration (and that IRA wanted Wehrmacht to invade Ireland, but Germans refused because they came to conclusion that IRA is too crap of an army to facilitate the invasion).

        But ask an educated German why Germany did not pay any war reparations to Poland or why they still apply Nazi laws to Polish ethnic minority and they would know nothing about it (what?! We are the most tolerant country in Europe and sure we’ve paid billions and we have been paying for the whole Europe for the lat 50 years! – that’s what you are likely to hear). And their collective memory is getting worse year by year from I can see.

        As to the US, you write:

        “‘That’s the unspoken key to U.S. diplomacy: simply bribe politicians, journalists, publishers and others.’
        I also like this quote from the same article:
        ‘Without gold, the world’s central banks shifted to U.S. Treasury bills”

        But you have to bear in mind that the US influence in Poland is, unlike what David thinks, only secondary to German influence. For example, almost all Polish media and press are German owned and Germans fucked Poland over with building Nord Stream pipeline which bypassed Poland which allowed Gazprom to dictate Poland the highest gas prices in Europe…

        The US influence is visible mainly within the Law and Justice party of Jaroslaw Kaczynski, who is incidentally very pro-Israeli too because for the Americans love for Israel comes as a part of their package (think of Saudi Arabia); in fact he is so pro-Israeli that he was videorecorded saying in Israel – I have the recording – that Poland went to war in Iraq because it suited the Israel’s interest (Poles even had their occupation zone there, between the American and the British zone).

        Now, I do not mind Poland being pro-US and pro-Israeli (in fact I prefer it to being pro-German) if Poland was really benefiting from this alliance. But Poland got fuck all from it, except maybe for 1991 debt reduction which, as I wrote, only wiped out interest rates and still screwed the Polish industry and Polish taxpayers (in fact Jeff Sachs writes about in Stiglitz’s book as a social experiment which failed)- not that I value Stiglitz for he was was wrong on nearly everything he predicted and he supports different crooks:


        You see, dear coldblow, the problem is that most Polish politicians are either corrupted traitors like Donald Tusk or romantic, naive schumcks like Jaroslaw Kaczynski (the new president Duda is an unknown, but he already makes more sense talking than both of them two – but will he do the walk?).

        An example of how one should benefit from the American alliance is Turkey. They agree on military support, but for good money. Poland does so much military for the US than Turkey for nice words.

        Poland paid more for older version of F-16 52+ than Greece for their more modern versions (F-16 C/D BLock 30) and Greece did not even have to send any soldiers to Iraq or Afghanistan!

        And the Americans promised Poles that yea, you are getting old F-16′s and you are paying more ($3.5bn) than Greece, but we will compensate you by building F-16 assembly lines in Poland, which will give you $9bn in return, and we will provide technology transfers.
        And then they changed their minds…

        • coldblow


          I included that quote from Michael Hudson (about the US bribing foreign politicians and journalists and which I read for the first time yesterday) because it was so similar to your comment about German use of bribery.

    • “in order to do that, Poland had to issue Polish government bonds (with the interest rate 15% and more); as a result of all this Polish taxpayers lost about 100 billion dollars”

      If Poland had kept its own currency it would have no need to borrow anything, but only if it were issued from tresury and not a central bank as a debt and at interest.

      • Grzegorz Kolodziej

        Poland has its own currency. Issuing bonds via central bank and not treasury is forbidden by law in Poland.

        Read my today’s comment to cooldude on EU law

  13. Deco

    Ireland is run like a Ponzi scheme. No difference between the FG/LP alignment and the FF/GP alignment – apart from the sales gimmicks.

    As shown by the DOB saga, there seems to be a pre-occupation with preventing all the plebs from finding out hat is really going on.

    Racketeering is rife. Corruption endemic. NAMAWinelake silenced. The institutional state is now a colossus that grabs from those that toil, and throws it at those that spoil.

    Joyce was cynical, vindictive, sometimes humourous, and often contemptuous. But mostly, I suspect that he simply was not happy. Joyce was probably the least inspiring of all Ireland’s writers.

    Which begs the question as to why he gets more attention than the others ?

    Are we, like Joyce wallowing in a mire of hopeless. James Joyce called Dublin “the world centre of paralysis”. A location where feeling hopeless, and being safe about the hopelessness of it all, were regarded as defining characteristics. “Don’t rock the boat”.

    Time to move beyond the Joycean outlook. Time to fight back, and defy, instead of being relentlessly defeated, and loaded up with contempt.

    “give me any other Irish writer but James Joyce”.

    • sravrannies

      Hi Deco,

      could you expand on “Nama WineLake silenced”?


    • coldblow

      I once read Ulysses as well as some of his shorter works and I’m no fan of Joyce either.

    • Grzegorz Kolodziej

      I think Joyce’s “Portrait…” is a good book and “Ulysses” is a masterpiece of a kind – though already too verbose as for my taste (it was very popular in Poland with some people though and one chap spent 27 years translating it – commies were generous to the non-revolting intelligentsia), but “Finnegans…” is not only boring as fuck, but it is a self-indulgent exercise in verbal masturbation aimed only at showing off that Joyce spoke a few languages.

      Interestingly, in Poland Joyce is not the main Irish author – it is Beckett, and “Waiting For Godot” is a lecture in schools (or least was where I attended it), not “Ulysses”.

      But in my opinion the best Irish fiction writer is Flann o’Brien.
      The best Irish writer ever is without a doubt Edmund Burke, and the most influential too (with Berkeley second).

      Go to Krakow and pick up intelligent looking people who meet in discussion clubs and ask them who is the best Irish author.
      If you say Joyce, they are likely to say “yea, Joyce too, of course, but that was popular in the 60s, now it is a bit fusty.

      Go and ask them about Edmund Burke and you will have a debate.

      “But when the leaders choose to make themselves bidders at an auction of popularity, their talents, in the construction of the state, will be of no service. They will become flatterers instead of legislators; the instruments, not the guides, of the people. If any of them should happen to propose a scheme of liberty, soberly limited, and defined with proper qualifications, he will be immediately outbid by his competitors, who will produce something more splendidly popular. Suspicions will be raised of his fidelity to his cause. Moderation will be stigmatized as the virtue of cowards; and compromise as the prudence of traitors; until, in hopes of preserving the credit which may enable him to temper, and moderate, on some occasions, the popular leader is obliged to become active in propagating doctrines, and establishing powers, that will afterwards defeat any sober purpose at which he ultimately might have aimed.”
      ? Edmund Burke, Reflections on the Revolution in France


  14. michaelcoughlan

    What would Joyce have done?

    When he figured out how mad the place is he would have gone up yo monto to fu%k his brains out.


  15. DB4545


    The spin from RTE a few days ago regarding Greece was “five months in power and the new Greek Government has brought the Country to its knees”. It omitted to state that fifteen years of foreign and domestic kleptocracy have forced the Greek people to vote in a radical Government. It’s amazing how perspective or spin can be used to manipulate. The Greeks are under serious pressure and are on their knees. When we were under serious pressure and on our knees our democratically elected Government promptly got on their knees and unzipped Herr Merkel to ensure their obscene salaries and pensions remained intact.

    We of course did nothing and our forefathers must be spinning in their graves. We’re in no position to lecture a Government that is at least acting on the mandate of its people. Joyce may have said “Ireland my only love where foreign dictators and Irish traitors work hand in glove”. At least US Citizens have to swear allegiance to defend their constitution against all enemies both foreign and DOMESTIC.


    • Home Counties Girl

      @ DB4545

      Morning, I’ve just come across this DB re Ireland’s bailout – thought you fancy a read.

      ‘EU officials used backdoor media briefings to weaken Ireland’s standing’


      • DB4545

        Home Counties Girl

        Thanks HCG. I read it.That’s what happens when schoolteachers,solicitors and publicans get to run a Country. Their focus is on salaries and ministerial pensions(their own of course). If you put a solicitor with alcohol problems negotiating on our behalf with the combined leverage of the Brussels machine there could be but one outcome. At least the Greek PM has some fight and is sober. When the mafia came to our door our elected leadership handed over the deeds of the house and gave them permission to rob the kids as well. Brussel’s way or Labour’s way. You couldn’t make it up.


  16. survivalist

    Hello Grzegorz,

    Not that I am any expert in history, nonetheless I thought it worth mentioning a couple of things. Perhaps none are really that serious however.

    Jan Szczepanik may have got the patent application in first. 1897 you say? There was however a working prototype and ‘successful’ field test of the bullet-proof vest prior to 1880; in Glenrowan Victoria, Australia.

    Asphalt to the best of my very limited knowledge of chemistry and or geology is a naturally occurring material a form of which was know and used as tar and pitch in pre-history.

    Also it is possible that the peoples around modern day China have equal claim with the Greeks to having the earliest systematic philosophy?

    Just worth mentioning, maybe?

    • Grzegorz Kolodziej

      Sorry for my late reply. I am always rushing when I speed type.
      The 1897 refers to Szczepanik’s Telectroscope, but I put a comma instead of a hyphen. The whole sentence should read:

      -television (telectroscope invented by Jan Szczepanik – who also invented the first bulletproof vest – patented in 1897),


      As far as the bulletproof vest is concerned, it was used as early as Cromwell, but you would not wear it for a million dollars even with the bullets they had.
      The Irish had the first proper take on it:

      “THE LANDLORD’S PROTECTIVE GARMENT”. The Cork Examiner. December 6, 1847.

      But it was more talking the talk than walking the walk and the inventors would not let themselves to be shot. This is what was written in that article:

      “The daily melancholy announcements of assassination that are now disgracing the country, and the murderers permitted to walk quietly away and defy the law, have induced me to get constructed a garment, shot and ball proof, so that every man can be protected, and enabled to return the fire of the assassin, and thus soon put a stop to the cowardly conduct which has deprived society of so many excellent and valuable lives, spreading terror and desolation through the country. I hope in a few days to have a specimen garment on view at my warerooms.”

      The Australian vests were still shite, even though they had a mass of around 44 kg. They were made from the mouldboards of ploughs. The suits lacked protection for the legs and hands which is the funniest things I have heard since Charlie Bird got lost in Amazon for what use is there for you if you wear 44kg and I shoot your legs.

      Then there was this guy (the end of page 4 at the bottom on the right):


      Then the was the Polish priest Kazimierz ?egle? who was the mayor of Chicago from 1893. Previous mayor was shot so he thought “I am not having any of that shite happening to me” and he contacted Jan Szczepanik. His vest cost $800 dollars in 1914, but was still shite: on 28 June 1914, Archduke Franz Ferdinand of Austria, heir to the throne of Austria-Hungary, was wearing his silk bulletproof vest when he was attacked by a gun-wielding assassin. This started WWI, so I suppose you can say that WWI was started by a Polish priest.

      The first bullet proof vest which was not shite was invented by Jan Szczepanik. In 1901 it saved the life of Alfonso XIII of Spain when he was shot by an attacker, but then it was used by gangsters in Chicago who were wearing $800 silk vests to protect themselves. Thus the Chicago mafia became untouchable. So the bloody Poles started WWI, created Al Capone and now they are in Ireland commenting on blogs – they are worse than a pest, aren’t they lol?

      As to asphalt, you are right that it may be found in natural deposits, but it had to distilled from petroleum as a highly viscous liquid or semi-solid form to be any good for road building, also from the cost point of view (it was used for waterproofing and mortar before and to embalm mummies). The first proper use of asphalt was in France (at the Place de la Concorde) in 1835, but this was whale oil which was more expensive than Sean Fitzpatrick’s suit I spotted he was wearing in CCJ (who did not make an impression on me as man who is stressed – I was shortly on his case).

      Ignacy Lukasiewicz made its use cheap and widespread thanks to his distillery invention: he had long been interested in the potential of seep oil as a cheap alternative to whale oil.

      In 1877 he also organized the first Oil Industry Congress.

      As to philosophy, it depends what you mean by that. I do not mean as philosophy a set of wisdom and sayings, but a rational method of analyzing problems based on logic.
      The things is that no one had a proper logic before the Greeks. Yes, logic was studied in several ancient civilizations, including India, China, Persia, but it was not formal until Aristotle. Bochenski, who is the author of the main textbook on the history of logic, analyzed Indian logic and said that they have made less progress for 500 years than Aristotle during his life – this was because their logic was not formal. What’s interesting, it was the only known logic – the other one was Leibniz – without the use of quantifiers. It sucked.

      The period of time where logic was most advanced was late Middle Ages. Anything after, until 20th century, was a decline in logic. People who hammer Catholic Church and praise French Revolution do not realize that we would not have modern computers if it was not for scholastic monks for we would not have logical gates. Renaissance, which was great for art, for precision of thinking was the worst period of history since the Dark Ages from 6th to 9th century.

      When Russell and Whitehead wrote their seminal “Principia Mathematica”, they did not realize that most of the things they came with had been written about in Middle Ages.
      This was discovered only afterwards by Bochenski, Salamucha (killed by Germans, as was the inventor Proszynski who died in Auschwitz) and Jan Lukasiewicz, who emigrated to Ireland.

      For example their (Russell’s and Whitehead’s) systematic ambiguity was a (unaware) translation from scholastic term (systematic ambiguity is similar to the way that a common noun may be used to label either a thing of a given kind or a picture of such a thing or the way that a word may be used to refer to itself. But without the theory of types, the different meanings would not have been noticed. The word “class” is systematically ambiguous because it has different meanings when used at different levels in the hierarchy of types. This is the case for all existential propositions with the expression “there are.” Systematic ambiguity has come to refer to a property that a term has if it means different things in different applications. We need special signs, such as particular modifying words or quotation marks, to remove this sort of ambiguity).

  17. patricia03

    Here in New Zealand, so far away from all of you, we have the same Ponzi scheme going particularly in Auckland our biggest City although Christchurch, where I live, is not far behind. To be fair though that may be because of the earthquake when many houses were destroyed. It seems to me that this Ponzi scheme with housing only happens in those Countries that have espoused Neo Liberal economics which seemed to start the early 1980s. Going from my own experience my first home which I bought in 1971 almost quadrupled in price by 1981 then doubled again by 1991 and almost doubled again by 2001. I don’t know what it is worth now although knowing what my current home is worth it would not have doubled again. But most of the houses being built here are being sold at double what my current home is worth. It does not make sense. So what has caused this? Was it caused by the U.S. going off the gold standard in 1971? Was it the removial of Bank regulation? Was it freeing up world capital?
    What an amazing post from Grzegorz. Such a lot of information. At least down here we don’t get that terrible playing off one country against another. Saying that Australia gets a bit uppity at times. But poor Greece. Nobody deserves what is being done to them. I read somewhere that the Germans are trying to do with Banks what they couldn’t do with tanks!

    • Deco

      NZ is a Ponzi racket. Every country in the Anglosphere seems to have politicians that want to try Ponzi-nomics as an economic strategy.

      I was reminded by a conversation of a “snake oil salesman” type investment guru touring the country a few years ago, who extolled would be investors to make their assets sweat, by using their property as a means to take loans from the pillar banks, to then be available to invest in his venture.

      It was classic “something for nothing” hard sell. It was prevalent in much of the previous decade. And it amounted to people thinking they could make easy money.

      Well, this has become a cultural phenomenon in many countries. Including more recently, the Scandinavian countries.

      Of course, we all know that this sort of racket will end in tears. But with low interest rates, such a racket can continue for a very long time.

      The whole thing lasts as long as the government bond markets stay up, and interest rates outside of those set by the central banks, stay low. And for this to happen an immense amount of market manipulation must take place. And for market manipulation to work there would be societal manipulation. And to achieve this there needs to be a powerful institutional state to suck every last penny, and redirect it towards the politically well connected. And there also needs to be a media that never sees anything wrong with any of this.

      I don’t honestly know when the dam will burst, and the water will come through. But I am certain that 10 years from now a disaster will have come through the economic system, wrecking havoc.

      Beware people selling your something for nothing scams, and beware people telling you that happiness is a shopping experience, and “stuff”. It is not. It comes from something that predates all the current madness.

      Good relationships with people who are true to you.

      • cooldude

        Patricia NZ is not any different to any other country involved with our modern banking system of devaluing currencies and central bank created asset bubbles which are supposed to “stimulate” the economy but what they actually do is transfer wealth from the the working population to the financial elite who are close to the easy money spigot of the central banks. This situation exists in every country in which central banks operate.

        If you look at the deliberately created crisis in this country you get a good idea how the scam works. You pump the country full of easy liquidity to create the asset bubble. This is usually in property although it also can happen in the equity market when you buy on margin and borrow for your share purchase. The huge increases in this bubble phase suck in all “right thinking ” people and anyone who questions the validity of the bubble is ostracized much like DMcW was here. Then inevitably the bubble bursts and the banking system is kapput due to its over exposure to the asset bubble. This is where it gets interesting because now you have the central banks putting huge pressure on the politicians to bail out the banks. As Trichet said here “whatever you do save the banks” and they do this by painting a horrific scenario if the country lets the banks fail. I think the phrase used here was “a financial bomb would go off in Dublin.” I presume this is the type of stuff they are using at the Greeks at the moment.
        Next you have the likes of Rothschild bank advising the government to set up a bad bank to tale all these bad loans on the cheap. This is ironic because the Rothschilds are shareholders in every central bank on this planet. Then you have the hedge funds, many of whom are owned by Rothschild’s bank buying up the properties on the cheap with easy loans which are not available to the locals. The final phase is the vast profits now being made by these insider funds at the tax payer’s expense that we now see here.

        This scam is all covered very clearly in John Perkin’s book Confessions of an Economic Hitman. The role of central banks in this scam is a reverse Robin Hood one where they actually rob from the people and siphon the money to the insider financial elites. You then move to the next country and rinse and repeat. All countries under the BIS umbrella get this treatment and are being scammed by these banksters and their cronies.

        The only country who didn’t play along with this scam is Iceland where they put their people’s welfare ahead of the bankers and are now looking at jailing some of these crooks. Despite all the shite about “you can’t let the banks fail” they did just that and their economy is doing just fine. What you do need are politicians who are not totally corrupt and have a bit of spine and they are a very rare breed.

        • patricia03

          Here is a wonderful Maori saying

          He aha te mea nui o te ao. He tangata, he tangata, he tangata. What is the most important thing in the world? It is the people, it is the people, it is the people

          If only.

    • Grzegorz Kolodziej

      Thanks, Patricia :-) 10 years ago I shared a flat in Rathfarnham with a Kiwi woman from Christchurch. I could never properly understand what this British-yet-not-British accent is all about – it’s like you start pronouncing things normally but then you disside to twist your vowels ;-) Even opulent books which deal with history of English accents drop New Zealand

  18. G-7 plan to be rid of fossel fuels in 85 years.
    If CO2 is half the menace it is supposed to be the world will be a drought infested infurno by then.
    In the meantime what is the alternative plan now that nuclear energy is largely banned.
    I guess we will be reduced to 500 million serfs hand labouring garden patches to feed the elite flying around the world planning the next G7 abomination.


  19. Deco

    Greg, I think that the current German approach is to concentrate on money accumulation, as a form of expression. The greatest irony of all is that the EU racket, has made people selfish, and indulgent in tendencies that will pull it apart.

    In other words it is designed to fail. The Germans are getting money out of it, but Germany now has serious problems – starting with demographics. If Germany has a mission currently, it seems to be to get as rich as possible, as fast as possible.

    Martin Schulz is a classic example of what has gone wrong in Europe. He expects to have his way every time. He refuses to listen to concerns from people who have to endure the hardship brought about, for the sake of further centralization.

    The EU is facing every crisis, by deciding that further centralization of power is necessary. Further centralization of power, then results in more stupid, badly thought out policy frameworks. And more stupid policies results in more disasters for people.

    The EU is on a spiral of errors. And it has been for two decades.

    The best thing the Greeks could do wold be to get out, and pay nothing from that massive debt. Of course Brussels would go completely ape****. The one thing that infuriates Brussels more than anything else is insubordination. But the greatest joke of all is that if Greece left the EU, then there would be millions of people in the EU who would go there on holidays purely to give the Greeks a “bailout” with their own money, for the sake of sending Brussels a message.

    The current Greek government are the first non-corrupt, civilian Greek government in generations. And Brussels is doing all it can to get them out of power, and get them replaced by stooges.

    Greece is not the problem anymore. The problem is Brussels. In fact the problem always was Brussels.

  20. Pat Flannery

    What would Leonidas have done?

    I believe the Greek people will eventually succeed in breaking the power of the bond markets over the world’s governments. But it will come at enormous human cost to the Greek people who are fighting this battle on behalf of all of us. If the bond markets drive the Greek people naked into the wilderness it will be a Pyrrhic victory.

    This is not just a Greek crisis, it is a global crisis. The global economy and therefore the world’s governments are currently controlled by runaway bond markets. That cannot last. The world’s central banks cannot continue to feed this rogue elephant with ever more QE without destroying the global economy. Yesterday Janet Yellen could only threaten tapering, she could not actually deliver it.

    On the night of the 2008 bank guarantee Brian Cowan successfully argued that the Irish structural fiscal deficit had already sealed Ireland’s fate as “bondsmen”. Noonan said exactly the same thing yesterday in Brussels because like Cowan he knows that Ireland is wholly owned by the bond market. It is how most governments around the world finance their states, most notably the United States.

    It looks as if Greece will be the first country to be thrown to the wolves by the all-powerful bond markets. In 480 BC despite a glorious defeat at the pass of Thermopylae the Greeks returned the following year to defeat and expel the invading Persians. For the sake of the modern world let’s hope that Greece has found a new Leonidas in Alexis Tsipras.

    • cooldude

      Pat why can’t governments simply bypass the bond market and print their own interest free money money just like Lincoln did in the US. This is solution that the bankers hate because it ends their exclusive franchise over what we use as money. If there was a complete debt jubillee would anyone really suffer? No because all the 200 trillion in debts is simply digits on a computer and it can be erased and we could start with a system which actually benefits the people it is supposed to serve.

      • Canada did just that Cooldude until the 1960′s. It built the second largest merchant navy in the world by the end of WW11 and bulit the St Lawrence Seaway in the 50′s.
        Te Avro Arrow was 20 years ahead of anything yet built when misteriously shut down by the Diefenbaker government.


        Powerful forces are afoot.

        Any government can print its own money for nothing. Any country not printing/producing its own currency lacks sovereignty and control over its own affairs.

        Economic serfs the lot of them. All other debate is futile. You are programed by the collective. The Borg has assimilated and digested you.

  21. Pat Flannery

    cooldude: because we now live in a hopelessly interconnected world. It is one of the unintended consequences of free trade.

    What I think will happen is that the world’s governments will gradually gain a clear picture of the unwelcome problem posed by the bond markets ability to hold world governments to ransom. I believe they will then construct some regulatory machinery to counter it. The current situation is in nobody’s interest, not even that of the bond holders. The worm has turned as far a regulation is concerned. It is being forced upon reluctant governments because the lack of it nearly did them in.

    I don’t think the best course is for individual countries to detach themselves from the international financial system as Iceland has partially done and for everybody to paddle their own canoe. That would be a retrograde step and deprive the world of the undoubted benefits of free global trade.

    The dilemma faced by Brian Cowan in September 2008 is real and has not gone away. I don’t think Ireland had any option at that stage but to accept the inevitable. We were lucky in that we could still stay aboard the leaky ship hoping that eventually the world community would fix it.

    It may be already too late for Greece to cling to the mother ship. If the bond markets rescue Greece right now it will surely sink the entire leaky ship. On the other hand if it throws Greece overboard the other passengers will wonder when it will be their turn.

    hat is why I believe that no matter which way it goes between Greece and the bond markets the good ship “Bond Market” is doomed. World governments will then have to get together to figure out another way of financing their national budgets. Yes Christine, it is time for a real discussion with some adults in the room.

    • “That would be a retrograde step and deprive the world of the undoubted benefits of free global trade.”

      Owning ones own currency does not prohibit trade IMO as all one needs is a settlement mechanism. If gold were used thus as it used to be then the international currency is owned by no one at all but serves humanity in general. National currencies would be easily used within the nation for day to day local affairs.

      Of course then the bankers would be out of a joband profits and there lies the real problem.

      • National currencies issued or enabled by treasury at no cost or interest, I should have added

      • Pat Flannery

        Tony, banking IS a settlement mechanism. In international trade you will always end up with some form of a settlement mechanism. The more broadly based and accepted that mechanism is the more international trade it will accommodate.

        That is why I am in favor of the Euro and common currencies in general because they reduce currency manipulation and make trade safer. On the other hand the more currencies there are the more ruinous currency speculation there will be.

        Those who call for a breakup of the Euro should study what happened in Asia during the late ’90s. The Asian Tiger countries all had their own currencies just as the Euro skeptics are now calling for. Currency speculation destroyed those Asian Tiger economies. Some have recovered others have not.

        If the Asian Tigers had a common currency in the ’90s they would probably have survived and the world would be a very different place today.

        As for gold, shipping gold bars backwards and forwards between countries obviously does not work. Therefore you will have to create paper derivatives of some sort. In other words there is no alternative to international banking as a settlement mechanism. The challenge is to regulate it without restricting free trade. I believe the world’s governments will find a way. They have to.

        • StephenKenny

          Banking is not primarily settlement, which the IS (in capitals) implies (at least to me).
          Banking is borrowing and lending for profit. To facilitate this, they also do settlement, amongst other things.
          The fundamental problem that the Asian tiger economies had in the 1990s was primarily that of a complete imbalance between risk and price of loans. Japan was very similar, up until it all fell apart in about 1990.

          All the oldies here will remember that until this event, Japan was unstoppable, and was going to rule the economic world. It was all Japanese business practices, financial skills – it even got into Hollywood. One of the Back to Future movies had a Japanese corporate owning the company that one of the main characters worked for. Then it all collapsed.

          In a 1980s Economist article, before it restructured and reoriented itself into the rather sad little mag that it is now, it was pointed out that Japanese banks were allowed to use shares of companies who they had lent money to, as part of their assets. This meant that the higher the share prices went, the more money they could lend. At the time, any criticism of this was brushed off as envy of yet another sign of their brilliant financial engineering skills.
          Of course, the result of this complete imbalance between risk and price was inevitable: Runaway asset price inflation, or put another away, strongly growing property prices. At one point the Imperial Palace in Tokyo was worth more than California (or something similar).

          The problem was nothing to do with the currency, nor would it have been even ameliorated by being part of an Asian Common Currency, it was completely crazy bank accounting regulations.

          If an economy is organised in such a way that financial speculation, or any asset speculation, is more profitable than anything else, then that’s the way everything will start to go. Not all at once, but at an increasing rate. Much like Douglas Adams’s ‘Shoe Shop Intensifier Ray’ (he was writing in the 1970s) the time will come when the only thing economically possible to do, is to open a shoe shop. (Eventually the people rebel, the shoe shop corporations send in the foot soldiers, and eventually we all evolve into birds, and never put our feet on the ground again).

          So going down the ‘common something’ route, the only possibility is to increase integration between countries in terms of everything – accounting, banking, trading, environmental regulations, employment regulations, weights and measures, and so on and so on. Overtime there’s a difference, some smart guy will figure out how to arbitrage it, and thus there will be a disadvantage for sone side.

          The solution, eventually, is a one world government.

          And if anyone who can walk and chew at the same time can’t see the appalling horrors that that would produce, they simply haven’t given it more than about 5 seconds thought.

          There are not systemic answers. We actually need to embrace our differences and just accept that things will go wrong, and learn to live with them.

          Without the nation state, every sci-fi writer who wrote on this subject, from about 1900 onwards, will be proven right.

        • “The challenge is to regulate it without restricting free trade. I believe the world’s governments will find a way. They have to.”

          The challenge is to have a currency that is not regulated.
          The problems of the world and the huge imbalances now unfolding are the result of the interferance and manipulation of government and their proxy the central banking system.
          A currency such as the Euro is a step to “collectify”
          The countries and have them immersed under a unitary
          government. The Euro has hardly proved a panacea to avoid the regulations you wish avoided.

          Free trade requires a currency that is trusted. Less and less people trust paper fiat money of any kind.
          Without trust there is nothing to support an empty promise to pay something or other.

          Gold backed currency at least has a residual value. “Gold”, as JP Morgan said, “is money, all else is credit.”
          When the bills can’t be paid then the currencies will all fail and all that will be left is gold and gold backed currencies.
          Bonds, as derivatives of fiat will be of little value either. To get anyone to take a risk owning such money the interest rates will have to be very high to compensate. Others will eschew interest to protect their wealth and capital by owning gold. Retaining what they have will be of superior interest to trying to risk what they have trying to earn interest income.

        • The real bills doctrine apparently allowed settlement upon a maximum of 91 days credit. The Bills also circulated as self liquidating credit and acted like money. Ultimately gold coin was paid for goods.

          Read the following


          • Unlike the question whether the chicken was first or the egg, the question whether bills or banks came first has a definite answer. There can be no doubt that the former did.

          • Logically and historically, the bill predates the bank. What is more, it is perfectly feasible to have an economy without any commercial banks at all wherein circulating bills of exchange emerge as the supplier delivers semi-finished consumer goods to the producer.

          • Let us look at another instance of clearing and self-liquidating credit that was vitally important in the Middle Ages: the institution of city-fairs. Among the most notable ones were the fairs of Lyon in France, and those of Seville in Spain. They were annual events lasting up to a month. They attracted fair-goers from places as far as 500 miles away who brought their merchandise to sell, as well as their shopping-list of merchandise to buy. One thing they did not bring was gold to pay for the purchase of goods on their shopping list. They would leave it home for fear of highwaymen. They hoped to pay for their purchases with the proceeds of their sale. However, this presented problems. The fact is that there were far fewer gold coins available at the fair than the total value of merchandise waiting to be sold. Fairs would have been a total failure but for the institution of clearing. Buying one merchandise while selling another could be consummated perfectly well without the physical mediation of the gold coin. Gold was needed to finalize the deal only to the extent of the difference between the purchase price and the sale price.

          • To avoid this, organizers of the fair set up a clearing house. Merchants from afar registered their merchandise upon arrival and received a quota of scrip money in proportion to its value at the clearing house. Scrip money could be used right away to make purchases, even before the purchaser sold any part of his registered merchandise. The quota had to be returned to the clearing house at the end of the fair. Scrip money in excess of the quota was redeemed, and shortfall made up, in gold coin. The marvelous institution of the clearing house and the invention of scrip money could move a far greater amount of merchandise than scarce gold coins ever could.

          • Or look at one other example of clearing that was important before World War I. Suppose a cargo ship is ready to sail from Tokyo to Hamburg carrying in its bottom consumer goods in urgent demand in Western Europe. The sea-voyage takes up to 30 days. Does the importer need to raise a loan to pay the supplier for the shipment prior to sailing? Hardly. The goods are known to be in high demand and to have a ready market upon arrival. The cargo is insured against losses at sea. Accordingly, the supplier bills the importer for value received f.o.b. Tokyo, payable in 30 days in London. The importer endorses the bill, attaches the insurance documents, and sends it back to the supplier. The boat is now ready to sail. The supplier has an instrument he could use as ready cash to pay for goods needed in order to replenish his depleted inventory. When the boat docks in Hamburg, the wholesale merchant pays for the cargo with a sight bill on London, with which the importer meets his maturing obligation. This is self-liquidating credit “on the go”. No loan is involved. There is no need to invade the pool of circulating gold coins and to tie up savings for 30 days in moving goods in urgent consumer demand.

          • ” Gold was shipped only to the extent of the difference between imports and exports. The modest size of the gold reserve of the Bank of England was no fetter on a most prodigious increase in world trade, a monument to the triumph of clearing. ”


          • “It is incumbent on the detractors of the RBD to explain how the phenomenal increase of world trade in consumer goods, on which the remarkable prosperity of the world before World War I depended, was possible with only a negligible amount of gold changing hands.”

          • Bill trading assumes that the gold is outside of the banks, in the hands of the people.

          • Strategic imperatives called for the concentration of monetary gold in bank vaults. People had to be weaned from the gold coin. Nor was the reintroduction of real bill trading considered an option at the Bretton Woods conference in 1944 that was charged with the task to regenerate the world economy and trade after the ordeal of World War II. The world is still doing without the benefits of real bills. Trade has been placed under the direct control of governments. Political, not economic considerations govern the flow of consumer goods across international boundaries. Government regimentation of the lives of the people has become virtually complete.

          • “Please remember that you have seen it here first: the main cause of the Great Depression of the 1930′s was government sabotage of the Real Bills Doctrine of Adam Smith. The world’s monetary and payments system is still limping from crisis to crisis, and will continue doing so until the RBD is fully rehabilitated.”

          • “Advocates of the “100 percent gold standard” must realize that they have grossly underestimated the degree of sophistication of the structure of production in the modern economy. They must also come to grips with the fact that financing circulating capital with real bills is not inflationary. Real bills enter and exit circulation pari passu with the emergence and ultimate sale of consumer goods.”

          • Only if we approach our differences with sufficient humility can we prevail against the evil forces opposing freedom armed, as they are, with the formidable weapon of irredeemable currency. Given the stakes, I am convinced that Ludwig von Mises would, if he were alive today, put pride aside and admit that his 1912 judgment in dismissing the discount rate as an independent variable, distinct from the rate of interest, was a mistake.

            Further reading
            In addition to Adam Smith’s The Wealth of Nations I recommend my Adam Smith’s Real Bills Doctrine that was published on the internet as Monetary Economics 101 in the Gold Standard University series in 2002, see the website http://www.goldisfreedom.com.

            Antel Fekete

        • Pat , I have posted the essay from Antel fakete and a number of quotes. A settlement process was in existence before banks were created.

          Using the real bills doctrine one can circumvent the banks and return money to the people in the form of gold and silver used only at the point of purchase of the retail product.

          It was removed by the central bankers in order to control the process and to lend money at interest. Now they create money form nothing and lend at interest.

          There is no doubt that unless we return to a sound money system we will have the current balled up situation of bank created crises followed by ever more regulation that is only enforced for the benefit of the bankers but not for the people.

          In our generations we have not experienced such a system that works so it is difficult to comprehend.

  22. Home Counties Girl

    Off topic but as I’m logged in I may as well mention (if you’re not already aware) Rethinking Economics is taking place next weekend in Greenwich, London. There’s a good line-up of speakers and it’s inexpensive.


    • DB4545

      Home Counties Girl

      I see Daniel Kahneman is on the list. Nassim Nicholas Taleb references him frequently in his book the black swan. I’ve just finished reading it and it’s pretty heavy going but seriously scary. In essence Taleb asserts that the “principals” underlying modern economics are based on phony mathematics. I’m no expert but as Taleb states almost none of the people running the financial systems are experts either. It’s as if teenage boys modelled real life adult relationships based on their viewing of computer porn. Their modelling predicts a specific outcome and the reality is they wake up one day with a wife, mortgage and three kids and wonder why the outcome doesn’t match their predictions.And we wonder why the financial system is in chaos. A hedge fund called Long Term Asset management promptly lost 3.6 billion dollars when the reality didn’t match the representation by engaging in this craziness. It was headed up by two Nobel prize winners. So much for experts.


      • Deco

        Thanks for that !

        That explains a lot of what happened in the ears 2005 – 2008.

        Taleb carries his genius in a humble and intelligent manner.

      • Home Counties Girl

        @ DB

        Thanks for that. My understanding is that Taleb will be at this year’s Kilkenomics festival, can anyone confirm this please.

        • DB4545

          You’re both welcome. The book is not light reading but I’d consider it essential reading. Taleb really gives it to Academia with both barrels. He has an interesting history and a practical mind. My take on him is that he is extremely cultured and academic by nature yet views most of Academia and virtually all economists as self serving hypocrites who won’t rock the boat. They’re locked into theoretical models that are based on skewed mathematics and cannot and should not be used to predict or forecast real world situations.
          Taleb is from a Lebanese Greek orthodox background but describes himself as Levantine. Even during the height of their civil war Lebanese banks remained robust. No point investing in real estate I suppose when every faction in Lebanon wanted to bomb it back to rubble so they obviously invested wisely. Given their geography and history the Lebanese know a thing or two about trading and finance. In fact PJ O’Rourke gives an excellent analysis of Lebanon in “Holidays in Hell”.

          PJ is another man who wears his genius lightly and he was respectful to his audience last week and spent the best part of an hour signing books and shaking hands after his talk. I was happy to get my 25 year old copy of Holidays in Hell signed by the great man!It’s the longest time I’ve ever spent in a church in my life. I’d love to hear Taleb’s analysis of the mess we’re in and how we get ourselves out of it.


          • StephenKenny

            Taleb is a regular contributor to the podcast ‘EconTalk’, hosted by Russ Roberts (an economist at Stanford Uni).


    Employers have an easy solution to the housing problem. Hire people who don’t pay rent or a mortgage! Hence, shops and restaurants are staffed exclusively by teens and kidults.
    Are Irish people the only ones who do J1′S ? You won’t find many Brits, Frogs, Krauts, Aussies, etc cleaning the jacks of Cape Cod in return for a free milkshake! American college students get relevant work experience during their vacations, grads from other nations don’t emigrate in the same numbers/proportion as the Paddies do and always have.

  24. Deco

    The quote needs to be updated.

    The Irish institutional state is a sow that eats her farrow.

  25. oe1

    In the case of Greece, the useless historical debt needs to be changed for foreign direct investment. For example, repaying German taxpayers would be made easier if Volkswagon build a plant in Thesseloniki. I don’t hear any of the onging discussions coming up with such practical solutions. Its only really about taxes and welfare reform.

    Also what is European Union without solidarity? It would be good to cut Greece a deal as they are an integral part of European history. Also the Greek value system is more centred around family than other countries. And despite the Government debts, on a personal level they are much better savers than their English speaking western counterparts.

    • StephenKenny

      Well, I’m not sure about ‘proof’. But what is for certain is that no published economist has yet seriously approached the question of wealth creation. Instead, they focus on the far easier approach of creating macro models that assume various relationships between broad elements – e.g. lowering interest rates increases borrowing, or the current focus on ‘aggregate demand’. The behaviouralists, essentially sociologists, also have a particular model, and then assume that it will always work, whatever the evidence.

      When you look at most economists today, they are, in many ways, very like old fashioned communists: if reality doesn’t fit their model, then it’s reality that’s wrong, and the answer is to double down on applying the model; when that doesn’t work, the answer then is twist and deform reality until it does fit the model; when that doesn’t work, change all the definitions so that it looks like it works i.e. just announce that every 5 year plan was glorious success.

      So we have a situation where western economies have been increasing their borrowing for 30 years, and each time the economy slows, the answer is to lower interest rates even further, and massively jack up borrowing. The results are always the same and bad – asset price bubbles.

      So the answer, next time, from all the so-called Nobel Prize winning economists, weirdly, is, do it again. But bigger and more so. It failed last time, so obviously do it again. It’s like the guys at Gozplan in the 1970s (the Soviet economic planning bureau).

      Just as with Gozplan, the longer you spend pushing your failed model, the more you
      damage the wealth creating part of the economy. It really has got the point where no one in their right mind would get into any activity that wasn’t focussed on property, financial services, or related to the state sector. i.e. speculating on asset bubbles.

      I was talking to a guy who runs a niche M&A outfit, specialising in the engineering sector. There was a period of a lot of company formations of high tech companies, in the early 80s, and a lot of these owner/CEOs are looking to retire. There are two instructive things about them: Firstly, their current incomes wouldn’t enable them to buy a small flat in their local town; and secondly, the values of their businesses are not enough to enable them to retire, unless they sell the property (there usually is property) to a developer. These are good companies, with strong client bases (generally overseas), strong (if not exponential) sales, key parts of complex ecosystems. This is the norm, not exception.

      The only sensible decision is to speculate. So increasingly, that’s what people do. the economic models, whatever they are, encourage it.

  26. michaelcoughlan

    “When you look at most economists today, they are, in many ways, very like old fashioned communists: if reality doesn’t fit their model, then it’s reality that’s wrong, and the answer is to double down on applying the model; when that doesn’t work, the answer then is twist and deform reality until it does fit the model; when that doesn’t work, change all the definitions so that it looks like it works i.e. just announce that every 5 year plan was glorious success”

    You forgot the bit about starving millions to death;


    Or digging a big hole in siberia and shooting all the talent into it;


  27. michaelcoughlan

    It seems the hedge funds know the type of cock sucking spoofers that are in control in Poluba;


    Fleeced again we will be for still another round of taxes when this one blows up in the face of the minister for finance.

  28. [...] amounts to a unilateral reworking of the rules of capitalism, and it is making the EU into a ‘creditors’ paradise’. In this world, entire countries can be held hostage, some essentially turned into vassal states. [...]

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