July 9, 2015

How a Chinese puzzle could enable the Greeks to have the last laugh

Posted in Irish Independent · 86 comments ·
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The other day Enda Kenny speculated aloud that Greece should follow Ireland. Michael Noonan thinks that too. Apparently, they should do what we did and, if Greece did, there’d be no problems.

 

Maybe we should examine this proposal because what is on the table for Greece right now makes little sense. Is there an alternative for an inventive Greece – one that might follow Ireland’s blueprint?

 

Before we answer that, let’s examine what’s on the table for Greece right now. The German/EU offer maintains that the price for staying in the Euro is possibly 10 to 15 years of austerity with no alternative industrial model. There should be no debt forgiveness and there should be years of low to zero growth as the Greeks grind out a meagre existence largely from tourist euros. Because there is no capital, this will occur at a time when Greek tourist assets will plummet and those that are worth something, such as tourist hotels, will be bought off by German and other investors for half nothing.

In time, the Greeks will end up as workers in the tourist industry, working for foreign owners of the assets. The profits from these assets will be repatriated back to Germany, boosting the German current account surplus, while the wages for this labour will be spent in Greece on imported goods, which may or may not be made in Germany. Basically Jamaica with ouzo!

Over time, the Greek standard of living will remain low and Greek people with talent will have no choice but to emigrate. There may be some pick-up in the economy but as long as there is huge debt-servicing costs, this pick-up will largely go to servicing past debts. If there is some new EU loan made available to Greece, this will simply be borrowing from tomorrow not to pay for today but to pay for yesterday.

The Greeks should do all this in order to have the privilege of paying for this stuff in the Euro. It seems a high price to pay for a currency, don’t you think?

But the alternative is, according to the EU, to revert to the drachma, watch the currency fall, watch the drachma value of Greece euro debts rise, allow the national balance sheet to implode and ensure that the banks collapse. In other words, flirt with short-term Armageddon.

All this would be for the privilege of using someone else’s currency.

But what if there is an alternative to the Euro? What if there is another option. What if the Greeks literally took the Irish example and went for it?

Think about it, what is the key difference between Ireland and Greece? The crucial difference is multinational investment. This is what makes Ireland tick. We are talking about someone else’s capital. Ireland has built an economy on using foreigners’ capital, manipulating our tax rates and creating a capital-intensive economy. This has propelled Irish living standards upwards.

This capital almost exclusively came from America.

Oh, and by the way, this industrial policy started in the late 1960s when we had a currency called the Irish pound. This was a pre-decimal currency, which dealt in half crowns and farthings. We abandoned this currency in the early 1970s for a decimal currency. Notes and coins were changed, denominations too. Both these currencies, the imperial and the decimal Irish pound, served us from Independence until 1979 and both Irish pounds were tied to Sterling.

Then we abandoned this currency and issued a new currency, the Irish punt, and linked it to a currency that most of us had never seen called the Deutschemark. This was the currency of a country the vast majority of us had never been to, one with which we did barely any trade with – apart from importing their cars. We pretended that the punt was a hard currency but in truth we couldn’t keep up with the Germans and we devalued six times. Then about 20 years later, we adopted another new currency, the Euro.

This means that Ireland used four different currencies in three decades! And all this time, what happened to American foreign investment? Did it fall as many people suggest in the face of currency instability? No, in fact precisely the opposite happened. American investment rose and rose.

During all these years, there was a very good reason for Ireland adopting the dollar as our currency but we didn’t. Had we asked the Americans, I’m sure they would have said yes because other countries using your currency is a real indication of your economic power. The Americans would have liked to project their power deep into the EU, who wouldn’t?

This is the Irish path – the path Enda Kenny would like Greece to follow.

Okay, but how can Greece get lots and lots of foreign investment into the country while still using a currency that is strong and in so doing, change irrevocably their economy?

How can they move onto a higher productivity level without all these debt repayments?

They can do it by adopting the Chinese Renminbi!

Yes, you read it right.

There’s no point for the Greeks in going back to the drachma if that will destroy its banking system.

Why not do what Ireland has done over the years and adopt some other country’s currency?

What’s in it for China? Everything!

The Chinese get a foothold into Europe. They invest billions into Greece, where they reassemble Chinese goods into Europe with no tariffs or hassle. They gradually move up the value curve, making ever more sophisticated goods in Greece – just as the Americans have done here.

They can even use the Greek tax system to reduce the taxes they have to pay, just like the Americans have done here. And, of course, it would be a massive diplomatic and geo-political coup for the Chinese.

Also, because the Greeks are allegedly Marxists and the Chinese are supposedly communist, they could brand this as a left of centre affair.

The Greeks would get a stable currency, lots of liquidity into their banking system and a currency backed by real economic logic. They would get industry and technology, so that the next generation of Greek kids could work in spotless hi-tech factories, exporting hi-tech consumer goods into Europe.

Oh yes, and lastly, who would lose most over a generation? Which European country has most to fear from its consumer goods being eviscerated by Chinese competition?

Why, Germany of course! Wouldn’t it be sweet revenge for Athens that, after being humiliated by the Germans, Greece would be the staging post for a commercial assault on Germany that would terrify the Bundestag?

Everything I have said above is doable, legal and possible within Greece’s membership of the EU.

After all, Sweden, the UK and Denmark don’t use the Euro and are in the EU, why not Greece?

I know this is mere conjecture at this stage. But if you push a country into a corner, it will do what it has to do to survive.

Economics is the art of the possible. It is about making a better future for your people and it is about doing business with whoever makes these objectives a reality.


  1. michaelcoughlan

    “They can do it by adopting the Chinese Renminbi!”

    Woooooooohooooooo!

    A vote from a Keynesian to use a gold backed currency! The Austrian in you is finally breaking through. Thank God for gold and guns!

    Some bed time reading Dathi; http://newaustrian.org/

    Respectfully,

    Michael.

  2. As usual I always enjoy these articles by David .

    At this juncture I believe that the trust of the directions by Greece will depend on what ‘myth’ that will prevail by the end of the month or sooner .

    History as we know it gave us the Chinese Walls and the Great Walls of China and the Berlin Wall and the Auschwitz Camps and Berlin Moscow and Beijing are synonymous with these . Of course there is the recent ‘Fire Walls’ in technology and maybe this was what happened in NYSE recently directed from another sovereign country . History tells us nothing changes . China and Greece can never happen no matter how inspirational it could be. This article is light in a dark room but will not penetrate outside the walls in that room .That is what walls are for .

    The colour of the Greek Flag is Blue in a white background . This month of July is the month of a Blue Moon in the summer . We have lots to wait for before this moth expires.

    • It would be interesting to know how much the philosophies of Plato and Confucius had in common or were divisive in totality .Is the puzzle a riddle ?

      • Mike Marketing

        Another Greek philosopher might be heeded.

        It was I believe the Roman Senator Marcus Tullius (Cicero) who remarked “To be ignorant of what occurred before you were born is to remain always a child. For what is the worth of human life, unless it is woven into the life of our ancestors by the records of history?”

        It proves that there is nothing as constant as change. We must be adaptable ……………………… or perish.

      • Mike Marketing

        Another Greek philosopher might be heeded.

        It was I believe the Roman Senator Marcus Tullius (Cicero) who remarked “To be ignorant of what occurred before you were born is to remain always a child. For what is the worth of human life, unless it is woven into the life of our ancestors by the records of history?”

        It proves that there is nothing as constant as change. We must be adaptable ……………………… or perish.

        And rid yourself of that endemic, pernicious corruption.

    • Pedro Nunez

      Subscribe, “dal dire al fare, c’e di mezzo il mare”

  3. Reality Check

    So Why haven’t Syriza planned for a Grexit then?
    Because they are controlled opposition that’s why.
    Dog and Pony show folks.

      • Adelaide

        thanks for the article, Reality Check, it does raise the unsettling question that personally has been bugging me for a while (and today’s news report suggest that Tsipras will sign up to Even-More-Austerity!!! than what the Greeks rejected only days ago) is that Syriza were/are just play-acting and disingenously taking the Greek people on a merry-go-round. If they cave in at the 11th hour you’d have to suspect what their intentions were along and why their lack of Grexit planning.

        • Mike Lucey

          @ Reality Check
          @Adelaide

          Yanis V is a showman but at the same time its easy to understand him and quite often hard not to agree with a lot of what he says. He has a way of simplifying matters and as we know its only the true ‘expert’ in any particular field that has the ability to explain things accurately and simply.

          He is out of the equation at the behest of the Germans but what is he doing now? It would not surprise me if he is laying the ground for a ‘new’ drachma possibly one linked to gold / silver. These guys are not clowns or fools and they terrify the establishment. A silver / gold backed currency would really put a cat among the pigeons.

          All hell will break loose in Greece if they (the ordinary folk) are saddled with ‘Even-More-Austerity’. Don’t forget the 60% of the youth that are unemployed. They are a ticking time bomb.

          In Ireland’s case the government can be thankful that there was escape routes for 300,000 Irish youths. If not all hell would have broken out here some time ago.

          “Timid men prefer the calm of despotism to the tempestuous sea of liberty” Thomas Jefferson

          When a country looses its tempestuous youth I think its also on its way to loosing its liberty as old men prefer calmness at nearly any cost but they also have their limits.

          Mike

          • Reality Check

            Mike No disrespect to you. But Varoufakis has been carefully selected. He’s like a Greek version of Obama coming out of nowhere with the rock star renegade image.
            THEY (The types who are in control) KNOW the rockstar/Che Guevara/Rusell Brand type “Rebel” is a very useful archetype to fool and distract the masses. All egged on by the wonderfully compliant bought and paid for media of course.

            Rem the masses must never see who is really behind that curtain.

            Control the opposition (Syriza) and you have TOTAL control.

          • Mike Lucey

            @Reality Check

            No disrespect taken.

            I agree with you that the entity behind the curtain ‘plays’ the masses but occasionally we see someone that sticks out from the crowd of ‘suits’ voicing opinions that generates much needed public interest in the goings on of government.

            Whether or not Yanis V is a paid stooge is somewhat irrelevant at this point in time as he is not a ‘player’ in the current process, at least not on the stage as we see it.

            What has been achieved by his appearance on the stage is that more and more ordinary people are questioning how the system works and to my way of thinking this can only be a good thing.

            Most folks get very bored watching and listening to ‘suits’, however they do sit up and pay attention to the ‘odd ball’ with a different approach, good or bad.

            I doubt it is the intention of the ‘Power Brokers’ to have too many ordinary folks taking an interest in politics and the banking system. If that happened they would not last a week longer …… as Henry Ford supposedly said ….

            “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning”

            Note that he thought that it was good (well) that this is the situation as do all the Power Brokers.

            It also looks like many ordinary folks here in Ireland are now looking past Mike Wallace’s mad head of hair and scruffy appearance and listening with interest to what he is saying and suggesting in going on.

            Its politicians like Yanis V, Mick Wallace, Ming and others that are not ‘suit types’ that generate an inquiring interest into the ‘system’ by ordinary folk and this is at least a start.

            We had better be very careful about what we call and say about politicians here on this forum if Labour Senator Lorraine Higgins has here way, making offending people online a crime. The Harmful and Malicious Electronic Communications Bill, 2015 provides for €5000 fines and up to a year in jail.

          • DB4545

            Mike Lucey

            I can understand why Labour Senators may be so sensitive about the media reporting on their activities. The Sunday Times reported that the Labour Party have taken out a lease on a penthouse(just under 5000 Sq ft with one parking space included)in Sir John Rogerson’s Quay at 213,000 Euros approx per annum. It obviously represents excellent value for money for the representatives of the State’s poor and downtrodden. However as someone who has voted for Labour I certainly felt offended at this criminal waste of money. I wonder will the Senator report the matter to Gardai?

            DB

        • Reality Check

          Exactly Adelaide and it’s unfolding right now.

          “Greeks are looking for more money but are offering €4bn extra in austerity, or €12bn, in bid to secure deal”
          “The government also plans to raise value added tax for restaurants, roll out pension reforms and to set a firm timetable for privatizations”.

          http://www.independent.ie/business/world/greece-crisis-greeks-capitulate-offering-tax-hikes-on-shipping-restaurants-ahead-of-535bn-bailout-talks-31366245.html

          Syriza are a trojan Horse to get what the bankers wanted folks. Where did Syriza come from? Nothing really! Golden Dawn wanted to leave the Euro but they were locked up in prison on ludicrous conspiracy charges.

          A Fix the Greeks have been shafted by controlled opposition.

  4. markodxb

    China has it’s own big puzzle to contend with, over 3Tr$ is wiped of their stock market values. That dwarfs the value of a Greek debts..

    Anyhow Greece like Ireland will always have a master, in Ireland it was the Vikings, the British, the Catholic Church and now Germany/EU. I know we are speaking hypothetically but China like any other master will only look after its own interests like any other Imperialist Empire.

    • CallerNJ

      The 3trn is a mute point, if anything the Chinese will be looking to more opportunity to create new cashflow, their economy is moving too slow these days, the Greece situation proposed by McWilliams would be a gift to the Chinese make no mistake.
      Also their factory floors are state of the art, so yes even Germany would be threatened by this new “master”.

      Agree with ur point on master. The Chinese will own from a distance, but not as smothering a way as Germany does, its not the way they do business.

      • Mike Lucey

        @CallerNJ

        You are right about Chinese businessmen.

        I have dealt with a few in the past and found them quite reasonable and fair if a little over cautious at first but once they realised that I was not out to screw them, things went smoothly. They also believe in working hard themselves, often harder than their employees.

  5. Original-Ed

    The only problem with this approach is that, unlike the Americans, the Chinese don’t use local labour in their production units abroad.

    They don’t do local – look at Italy, Zambia, and others.
    Then there was Cowen’s proposal for a Shenzhen on the Shannon – the people of Athlone were none too happy with the thought of 50,000 Chinese descending on their town. In Italy one town has 3,000 working in a clothing factory – a state within a state.

    It’s a none runner for Greece – as Greece doesn’t have an industrial past.

    Interestingly, the Czech Republic shied away from joining the Euro and looking at their pay scales it was a very wise decision – their indigenous producers are very competitive relative to the eurozone and
    Skoda is the big winner. The German VW and the Spanish Seat are basically the same technology, but are more expensive.

    Our good fortune is down to our influence in the US (the one good thing to come out of the famine),language,education,culture and location. Greece has little to offer the Chinese other than location.

    • Mike Lucey

      @ Original-Ed

      I think you are right, pity, as David had a nice picture painted.

      It looks to me that WWIII started in 2008 is well underway. Financial bombs achieve far better results than conventional bombs, no clean up after other than the odd suicide.

      Its only a matter of time until we see the ‘NWO’ being marched out and the funny thing is that it will more than likely be welcomed by 99% of the world population.

      ‘Bill Gates’ new remote-controlled contraceptive microchip could be used for eugenics: critic’
      https://www.lifesitenews.com/news/gates-foundation-funds-remote-controlled-contraceptive-microchip-that-can-w

      I rest my case!

  6. onq

    The Chinese strategy is one of limited engagement as has been mentioned above.

    http://news.xinhuanet.com/english2010/china/2011-04/21/c_13839683_6.htm

    III. Forms of Foreign Aid

    China offers foreign aid in eight forms: complete projects, goods and materials, technical cooperation, human resource development cooperation, medical teams sent abroad, emergency humanitarian aid, volunteer programs in foreign countries, and debt relief.

  7. mcsean2163

    They would get industry and technology, so that the next generation of Greek kids could work in spotless hi-tech factories, exporting hi-tech consumer goods into Europe.

    You have clearly never worked in these factories, (I did). The jobs are horrific and de-humanizing. Most employees are operators doing repetitive tasks all day, all week, all year.

    I did it. I hate to say it but young Greeks might be better off unemployed than working in those places.

    You only get one life.

    • Reality Check

      That Bloomberg crap it just classic mind control gaslighting. “Panic it’s the Abysss The Drachma”
      I’m surprised (some paid for hoaxers) haven’t produced notes with some universally hated person’s face on it.

  8. Voltex

    Two economies.. both operating in the same global market place…both with equal access to factors of production…why does one do well while the other flounders?
    Difference is access to strategic resource factor markets.
    https://business.illinois.edu/josephm/BA545_Fall%202011/S10/Dierickx%20and%20Cool%20(1989).pdf

  9. Grzegorz Kolodziej

    Bulgarian lev gains currency in Greece as euro exit looms

    http://www.ft.com/cms/s/0/3c5c32b0-264f-11e5-9c4e-a775d2b173ca.html#axzz3fQvamoUu

    China and Poland to sign ‘One Belt, One Road’ cooperation agreement

    http://english.sina.com/china/2015/0616/820403.html

    From The Economist:

    “Yes, the stockmarket is down a third over the past month, but that has simply taken it back to March levels; it is still up 80% over the last year.[...] If economic stability is not in peril, why then the panic? The most compelling explanation is politics. The government has staked much credibility and prestige on the stockmarket. [...] the biggest concern about the panicked policy response is what it says about the government’s agenda. The economic hopes invested in Messrs Xi and Li stemmed from their pledge in late 2013 to let market forces play a “decisive role” in allocating resources. The actions of the past ten days have made abundantly clear that it is still the other way around: the Chinese government wants a decisive role in markets.

    The failure of share prices to do their bidding is, in that respect, welcome. It shows that the Communist Party, powerful though it may be, cannot indefinitely bend markets to its will. ”

    http://www.economist.com/blogs/freeexchange/2015/07/chinas-stockmarket-crash

  10. http://usawatchdog.com/world-engaged-in-same-lie-as-greece-karl-denninger/

    Get rid of the idea of any association with a debt based currency. do you want me to yell!! Being associated with any fiat currency anywhere in the world is more of what got you in trouble in the first place.

    There is a good case to be made that most national debts are onerous debts. It is clearly the case with the 50% of Ireland’s debt that was the result of bailing out the banks.

    It is true of Greece too. It was banks that were bailed out not people or their government.

    When do you look at the fact that our currencies are all debt based illegal scams. Frauds. David you are party to the fraud by advocating any further association with other fiat currency. You have influence, have you no conscience?

    All these bankers and politicians should be cast on a desert island for life with bare sustenance. They could keep each other company regaling each other about the good old days as they slowly stave to death.

    http://usawatchdog.com/world-engaged-in-same-lie-as-greece-karl-denninger/

    “All of these countries have engaged in the same lie. They have all engaged in the same fundamental fraud, which is you can spend more than you take in on a permanent basis. It is the same fraud that is going on here in the United States. We just haven’t gotten hammered with it –yet, but we will. This is a fraud. The people who did this need to go to prison. There is no way to undo that Gordian knot, other than to say we can’t pay it. We never could pay it. You were lied to, and by the way, the people who participated in the lending were active participants in a crime.”

    “It is now reported that the so-called Greek bailout really benefited big banks who allegedly received more than 90% of the bailout money. So, who was the bailout for? Denninger contends, “That’s the whole point. There was no real bailout. The people who got bailed out were the Goldmans of the world that participated in an active scam. . . . The former Greek government is equally culpable. Here’s the bottom line, those people got fired. That’s what an election is, right? If you want to start issuing indictments and start locking people up, I think that is a great idea. You know what? You start with Angela Merkel (Chancellor of Germany), thank you very little, and then you indict Draghi (President of the European Central Bank) and lock him up too. You also take all the bank CEOs who participated in this, and you put them all in prison. You take the bonds and you tear them up. The pain that will be spread all across Europe is going to be considerable. However, if don’t start punishing people who are doing these sorts of things, then what’s the deterrent?”

    • Onerous debt should read odious debt

      In international law, odious debt, also known as illegitimate debt, is a legal theory that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable.

      In other words most of Greece’s debt can be legitimately revoked. Also most others countries debt can be revoked too. Hang the bankers…………………out to dry.

  11. My 46 day ‘Isles of Wonder-Plunder-WarTorn Asunder’ Summer Road Trip of 2015 took me to Ireland, Denmark, Sweden, Iceland, Netherlands & Belgium.

    Here’s some initial random unedited thoughts triggered by this article. The Eurozone will disintegrate or converge into a Franco-Prussian-Benelux Banker’s heartland. Ireland will be taken along for that ride until the interest cycle turns then it will be hung out to dry in revenge for stitching up Germany over the wild west banking debts of the IFSC. The EU will be exposed as a proxy tool to enforce Euro compliance and either reform to Cameron-type proposals or may disintegrate if the UK Turnip Taliban succeed in conflating the existential birth/death pangs of the Euro with the wider trading arrangements of the EC/EEA.

    Icelander’s have been ‘relieved’ of the need for a Referendum by the same party that caused Krapp v1. Krappa 2.0 is shaping up nicely with an economy where fish sales are exceeded by tourists spending newly loosened credit and disposable income, especially Chinese tourists who seem to be planning to take over the island for whatever proxy purposes the CCP has programmed them for. Given the sea of green index on the Chinese stock market, what could possibly go wrong for the Icelanders? Like the Danes, they’re Paddies in disguise, with a mentality among the public that is irrevocably opposed to the centralised, bureacratic banker-Technocratic regime of the ECB. As are the Greeks, as anyone who’s ever read Nikos Katantzakis knows.

    As for the satrapy of Ireland, the same pattern of compliance with userous foreign overlords that has been going on since the Vikings colonised has returned with a vengeance. Enda and Noonan are no different to any of the other clowns who were trained into slave-submission by Christian Brother terrorist-teaching tactics. Reeling from Lisbon 2-PTSD they fawn and freeze rather than fight or flee, accepting the Odious Debt which FG were elected to challenge. And going beyond that electoral betrayal, they think they can be part of the big boy bully gangs in the Brussels playground by taunting Greece and being smarmy about getting A+ for their prison-bitch homework assignment of rendering the Republic Of Ireland a debt-service client state which has again expelled it’s young, but will invite them back with the usual sleveen crap once the credit taps are in full flow again. When the next crisis hits, those who return will be told to re-feck off again, and the whole pathetic rinse/repeat cycle of hatred and abuse of fellow citizens that characterised the initial 100 years of the doomed clerical-fascist regimes of The First Irish Republic will carry on. Until it stops.

    #NoCurrencyNoCountry
    #NoLanguageNoLiteraryLife
    #1916IsUnfinishedBusiness

    Kudos to David Mc Williams who, along with Thomas Piketty, has debunked the absurdities of Germanic ‘prudence’ born of national psychoses, bankruptcies, debt forgiveness & Marshall Plans. The hypocrisy of Merkel is egregious. O’bama has finally ‘phoned Europe’ to restore order and firmly explain that whatever pretensions Europa may have within it’s own absinthe salons, it remains a construction of The American Empire and no US President is going to watch China and Russia move in and benefit from a fire-sale of harbours and other strategic assets because of the tantrums of idiots like Juncker, Merkel and the rest of the ECB/EU clowns who will gather on Sunday.

    A new Autofiction will comment on this site once the next crisis ignites, but I thought I’d let ‘AndrewGMooney’ comment briefly from the grave as his insights here over the years have proven to be prescient and incisive. I have decided to amuse myself by calling myself a professional ‘Economist’. Well, given the events of the last decade and the circus in Europa, it seems the qualifications needed are minimal: humungous ego, ability to waffle after data-mining in the basement of The Jargon Factory, snappy suits and a stage-craft using that daft body language/hand origami which weather presenters overdo on t.v channels. I can do all that stuff! “Economics Is The New Rock’n'Roll”. Yes, it is. Another equally absurd Bread’n'Circus infotainment project to distract Herd Culture form the collapse of Industrial Civilisation and the decimation of all other species on this planet other than Homo Economus. I’m not sure if there’s another *economist* out there who’s linked Carnism, Speciesism, Otherism, Intertextuality and Intersectionality, but it will be great fun as part of a punk-rock stand-up regime. Having seen clips of ‘Klovn Forever’ and finally immersed myself in Danish culture, the future of Ireland is in it’s past, in the dim mists of when the Danes brought their mayhem and humour to the island of Ireland. Their Cultural Algorithm now, in contrast to their original ‘viking’is extremely revealing to observe. They speak another language but they’re the original, successful ‘Paddies’, as are the ‘Icelanders’. But they both had a Protestant Reformation…..not a fake ‘revolution’ that replaced the ‘British’ with the Roman Catholic church. The Danes have won the jackpot: own language, culture, currency, cycling-vision, a feck-you party attitude alongside a phenomenal work/entrepreneur/technological/social solidarity-conformism when needed [Jantelov]It’s a matrix that makes spending any further time analysing the death throes of other cultures pointless. Mind you, the Dansk Folke Party are on the rise. LOL!Where’s Ireland’s equivalent? It’s revealing that there isn’t one, such is the compliance with RTE-Pravda and the rest of the Orwellian though-control media outlets on the island of Ireland.

    Have a great summer everyone. Now….I need to make me some money! [switches screens in bunker hq]

    “I have been in 6 European countries over the past six weeks & the lack of fellow-feeling..painful to observe.”

    “The eurozone is close to Grexit because of deep structural flaws and incompatible national views. On Sunday its leaders will need all their courage to overcome these obstacles”

    With 28 versions of Europe, it’s no wonder we barely recognise each other

    Timothy Garton Ash

    http://www.theguardian.com/commentisfree/2015/jul/09/28-versions-europe-eurozone-grexit

    • DB4545

      Welcome back AndrewGMooney. A fresh breath of insanity and lucidity in a world gone stale. Andrew with reference to your assertion that Paddies are really culturally Danes I think you may be on to something. Anyone who lives in Ireland knows that we don’t operate as pious catholics or upright protestants. Our DNA is hardwired for rebellion and dissent. I think a section of the population became rabid catholics at a certain point in our history just to p**s off our neighbours across the water. I think if Henry VIII had settled his differences with rome and England had remained catholic we’ve probably have become lutherans just for sheer spite. I don’t think we’re really protestant or catholic by natural inclination our true default mode is dissenter. It’s just taken us a long time to realise this.

      DB

      • It’s just fascinating to watch how the cultural algorithm that the Vikings brought to Hastings in 1066 & also to Dublin, Waterford and Reykjavik (after enslaving Irish west coast women) has morphed into something so complex and interesting. Especially the humour. Most people go on about the dark Danish noir stuff, which is great but the comedy is absolutely cutting edge, especially the Autofiction of Capser Christensen and Frank Hvam. The movie ‘Klovn Forever’ comes out in a few weeks and it looks like it will easily out-outrage the original one which made me realise “something is funny in the state of Denmark” Irish and British comedy is a stale, tired format of mockery and laughing at people, not with them. The Danes have brought empathy and compassion to comdedy in the same way they have to design, food, architecture, politics and the rest of their amazing culture. Still getting nowhere with Danish, they’ve deliberately designed a lyrical flow to keep outsiders in their place. A bit like the Kingdom of Kerry. LOL! Frank is now a Daddy, but he’s still a bad lad and the teaser-trailer suggests a new dimension of Chaplin-esque genius is about to ‘drop’ as my kids say about music and film releases. What’s this got to do with Economics? Well, the Danes kept their currency and their language, unlike the Irish. Ditto the Icelanders. With all that’s going on in Greece, it’s clear that Ireland has to make some pretty fundamental existential choices ‘going forward’ #NoCurrencyNoCountryNoCulture #NoLanguageNoLiteraryLife

        Klovn Forever (Klovn 2) funny teaser – Danish [ENG subs]

        https://www.youtube.com/watch?v=FIrwFwwDeGU

    • Nice one Andy, see you in Antigua next year. We’ll also visit Montserrat – both islands received Irish slaves, even before African ones so there’s bound to be a research angle in it for you – any old excuse. My mother, Dominique and all the lads here (and Jon in Oxford) say hello. KRO.

      • Hi Heads.

        At Dublin airport about to get out of this place for a few weeks, will be on my small boat in the Adriatic tomorrow, cheap wine, sun and lots of smashing tunes, all is good in the world!

        Best

        D

        • Have a good one David and regards to the family.

          Hitting France myself tomorrow, getting out of this kip. I’ll be getting sloshed also on cheap (i.e. not overpriced) wine.

          Just seen the dept of foreign affairs spokes-arsehole on TV3 news advising people not to go to Tunisia – like they’d have a clue what was going on.

          Follow the Brits – monkey see, monkey do.

          Here comes Enda now pontificating about Greece, Dear Jayzuz.

          • We should all be on the Irish #WildAtlanticWay pumping cash into Fine Gael’s Great Reflation Project , not gallivanting off to the hot, sunny south of Europe! Or at least to Greece to express Solidarity and Subsidiarity type stuff. I bet Enda, Noonan and Angela have booked their families into a large villa in the Aegean to bond over ouzo whilst they watch the feckless Greeks serving them dolmades and stuff. I will be in France soon too, but in the mad chaos of the final etappes of #TDF. Then I might find a beach somewhere to plot mayhem on this site when the nights close in and it’s back to the Hard-working Families Who Play By The Rules stuff. Have fun everybody. Enjoy yourselves, it’s later than you think. Etc.

        • Grzegorz Kolodziej

          Have a nice one. Don’t read too much Keynes :-)

      • That would be an excellent adventure, Adam! Yes, any excuse will do, though trying to fit the Tour De France detour into my wonky conceptual framework is a bit of a stretch…I’ll work on it next week when I return to the Tour. It was great meeting the Lucan Lads and your lovely family. Perhaps see you at Kilkenomics? Enjoy the summer with Dominique, my final summer as Dad is a bit sad as my kids are off doing their own thing and don’t want their mad dad turning up. Oh well!

  12. Deco

    Being used as a tool of Corporate China, will not make Greece better off beyond the medium term. I only makes certain that the Greek people will be shafted by new masters.

    Just as being used as a tool by Corporate California has merely led Ireland down a series of delusions, whilst the debts continue to mount, an society disintegrates from within, and above.

    Greece needs to find a Swiss or Singaporean route to it’s freedom.

    EK lecturing anybody on anything is beyond absurdity. Noonan is a first rate buffoon who is insulated from criticism by Pravda – the propaganda quango of the Irish institutional state.

    If you want to free Ireland, switch off Pravda-RTE. Max Keiser said it years ago, and it still holds true.

    I actually feel sorry for both the Germans and the Greeks – they are both victims of a scam coming from Brussels, which now exists to provide an efficient policy monopoly in favour of powerful lobbyists. In other words Brussels is on the road to the same toxicity that Washington has already found.

    And sure enough, the first result is societal chaos at the bottom. And a booming stock market at the top.

    • DB4545

      Deco

      In relation to Pravda I rarely tune in to listen to the spin from the overpaid wasters. Vincent Browne is the only broadcaster who demonstrates some orientation towards balanced broadcasting in this Republic. The problem is that I’m still paying for Pravda anyway via a broadcasting tax and the advertising revenue spin-off it generates. The upcoming generation will only pay new media for content via outlets such as netflix or targeted advertising on google and rarely watch broadcast TV. The advertisers are not reaching them through TV hence the advertising revenue of Pravda, TV3, UTV Ireland and others are starting to go into freefall. Pravda and others may be heading the way of the dinosaurs which may eliminate justification for this tax and we might be able to achieve one of Max Keiser’s aims.

      DB

    • Pedro Nunez

      Don’t disagree Deco, so what’s their alternative?

      Sorry showing my age but from the Committments no disrespect intended;

      “Deco: If I’m gonna front the band, I like the sound of “Deco.”
      Billy: Deco the bus conductor. Is that “top-Deco” or “bottom-Deco”?

      What pragmatic compassionate suggestions have we for our Greek compriotes?

      • DB4545

        Pedro Nunez

        What pragmatic compassionate suggestions have we for the people of Greece? Do an Iceland and get the f**k out of the Euro as fast as your two legs can carry you. Learn from our reckless stupidity and fail better. Reflect on and learn a little about transactional analysis from Ireland’s workout with the EU elite and the IMF. Maybe follow the advice of Warren Buffett and keep your hands in your pocket when there’s nothing of value to you on offer.

        When someone turns up on your doorstep and is in a hurry to sell you a product that you’re not in a hurry to buy maybe the best decision is not to buy. Avoid electing drunks, thieves, imbeciles and Irish schoolteachers to public office if at all possible. The latter group are not well placed to assess risk accurately because their career path and taxpayers provide a comfortable hedge against risk.

        If you’re stupid and cowardly enough to accept the role of prison bitch remember that the rest of the prison population may try to f**k you as well a la Sarkozy. Vultures don’t circle a dying carcass with compassion in mind nor do they have your best interests at heart. You create your own compassion and your own freedom. Nobody gives it to you. Take the sensible advice of another American Mr. Yogi Berra who had experience in assessing risk. It’s hard to make predictions especially about the future.

        DB

        • Pedro Nunez

          Thank-you for such a dispassionate, unemotional clinical analysis.

          “The government which robs Peter to pay Paul can always depend on the support of Paul”.
          From “Everybody’s Political What’s What?” by George bernard Shaw.

  13. [...] mai sus este realizabil, legal ?i posibil sub statutul Greciei de membru UE„, se arat? în articolul lui McWilliams, care a explicat c? în acest scenariu Grecia ar ie?i din zona euro, dar ar [...]

  14. Pat Flannery

    In the long-running Greek saga the newest word is “re-profiling” of debt. “Restructuring” seems to have quietly died. Of course “forgiveness” was violently killed at the opening bell.

    The irony of all this is that the bond markets are not even players. They are mere observers waiting to feed on the broken carcass. They only hold about 10% of all Greek debt. The EU holds the rest. Therefore what we are witnessing is not capitalism but command economics. Technocrats have crafted a Soviet-style “capitalist” government in Europe.

    No matter what happens now Europe has been damaged. One of my American friends has likened it to a Marx Brothers skit. Europe has too many technocrats and too few professional politicians. They even laugh at Michael O’Leary-style businessmen. More than Greece needs reform.

    • Deco

      MOL is driven by the need to achieve specific results.

      Brussels is driven by the need to save face. Even Beijing is not as obsessed with face saving as Brussels.

      The EU NEVER admits to being in the wrong. Ever. Despite a litany of errors.

      • DB4545

        Deco

        Does this remind you of another organisation that operates out of Rome who also hates heretics? The EU think they are the sole franchise for economic orthodoxy even when reality is biting at their ankles and is about to bite their head off. They’re just like the Rome outfit and the local concession who studiously ignored their child raping “Brethren” in order to protect the organisation and thereby protect their own gilded lifestyle. The Greeks are like Martin Luther nailing his theses to the door of the church in Wittenburg. The EU want to mock the heretic rather than deal with the issues because if they do they know it will all come crashing down and they will lose their gilded lifestyle.

        DB

        • Deco/DB4545 Spot on on RTE Pravda and the EU-New Holy Roman Empire Orthodoxy stuff. But Ireland is in a trance which will only be broken when the Interest Rate Cycle turns and the debt burden can no longer be hidden by ZIRP. Then decisions will have to be made which will decide if Ireland remains the skeleton of a Sovereign country or is completely absorbed into Europa politically as well as economically. I suspect those who run the island and who will parade next Easter will choose to protect their family lineage by cementing their new alliance with foreign powers. Exactly as has been happening on the island of Ireland at least since the arrival of the Vikings. How many people even know the difference between Irishtown and Kilkenny? How many people grasp the ideological significance of Kilkenny Castle as they debate Irish poltics and economics? And realise that those people who set up “English Town” have now relocated to the IFSC? As a kid I went to Kilkenny from my parent’s village on the border with Laois. I thought the castle was sinister then and did so last summer as I sat in the castle cafe reading up on all this stuff. Yet folk fawn before the tourist splendour of another totemic symbol of ancient oppressions as if it’s something worth celebrating…I’ve written a song called “Irishtown”. It’s on my first and only album which will be released…..in due course….Enough! The Shire is calling me as is my little dog. Time for a long, long walk.

          “After the Norman invasion of Ireland, the Anglo-Normans built Kilkenny Castle nearby as the seat of the new County of Kilkenny, which had largely the same extent as the Kingdom of Ossory. Two separate boroughs were recognised: the “English Town” or “High Town” of the colonists around the Castle, and the Gaelic “Irish Town” around the Cathedral.[2] When County Kilkenny was a liberty with a seneschal, the English borough of Kilkenny was within it, but the precincts of the cathedral were excluded form the liberty, in the “crosslands” (church ground) subject to the sheriff of County Dublin.[3] Kilkenny and Irishtown were both walled towns with separate walls, and connected by Watergate Bridge over the Breagagh.[4] Irishtown was poorer than Kilkenny. The corporation’s seal, whose Latin inscription read “the common seal of the Kilkenny citizens of the see of Ossory”, was of inferior metal to that of the Kilkenny corporation.[5] The members of the corporation were clergy in the diocese.[6]”

          https://en.wikipedia.org/wiki/Irishtown,_Kilkenny#History

          • DB4545

            AndrewGMooney

            I’m slightly optimistic Andrew because our history demonstrates that we can maddening, irritating and confounding little bast**ds. And that can make you lucky. I’ll stand corrected but please try to name another Country in Europe in which it’s welfare recipients can demand(and get)stabling and fields for their horses paid for by taxpayers as a pre-condition for being graceful enough to accept luxury housing courtesy of those same taxpayers? I thought I was reading a historical text about the Royal family or British Mandarin polo players in the last days of the Raj but these are the welfare benefits that we provide to the travelling community of County Cork. Greeks may have something to learn from the Irish travelling Community as may the wider community.

            On a slightly different note I think Irish people view the good Citizens of Iceland and Denmark with some envy. The Viking hordes apparently raped and pillaged and took our most beautiful women as slaves to enhance their bloodlines leaving us mostly with… their aesthetically challenged sisters.

            A similar but much more devastating cultural event must have taken place in Birmingham. I have to concede that I’m far from an oil painting. In Dublin I could pass for Shrek but in Birmingham I could pass for George Clooney compared to the natives. What the f**k did they put into the water supply of that city during the industrial revolution?

            DB

  15. [...] mai sus este realizabil, legal ?i posibil sub statutul Greciei de membru UE„, se arat? în articolul lui McWilliams, care a explicat c? în acest scenariu Grecia ar ie?i din zona euro, dar ar [...]

  16. Deco

    Spite is not a strategy.

    The Greeks need to think for themselves. If you outsource your policy making (which is what really happens in the EU) to a bunch of chancers like Phil Hogan, and Jean Claude Juncker, you will end up in disaster.

    There is more than just one Greece.

    Greece is the “first” Greece. There will be more to come. Portugal is looking very dodgy. Italy is another candidate. Spain is in serious trouble. Belgium is heading towards insolvency or divorce – or both.

    And then there are the debts that still exist in the Irish private sector, and the massive debts on the public balance sheet.

    Greece is no longer a location – it is a end result of what many others are also doing.

  17. Deco

    Greece is the FIRST Greece.

    Who will be the next Greece ?

    • DB4545

      I think we’re on our way to another political reformation in Europe and this time it’ll be the turn of Western Europe. We’ve had the economic equivalent of a neutron bomb detonated on the economies and people of Europe. The Euro has been the weapon of choice for the EU elites. Banks rather than tanks ensured that the assets and infrastructure remained intact but are under new ownership. It’s certainly been more efficient than reducing the major cities to rubble like previous generations. The old owners are starting to realise what’s happened and are fairly p**sed off about it. Greeks are just the first to wake up and fight.

      DB

  18. goldbug

    GREECE FROM THE PAN TO THE FIRE.

    HEADLINE SHOULD READ ->

    ESM TO FIRESALE GREECE.

    “it is necessary that the Holding Company operates at arm’s length from the Hellenic Republic in all respects”

    MAKE NO MISTAKE -> THIS IS NOT A BAILOUT.

    http://corporateeurope.org/economy-finance/2014/06/european-stability-mechanism-esm-no-democracy-bailout-fund

  19. Hi Heads.

    At Dublin airport about to get out of this place for a few weeks, will be on my small boat in the Adriatic tomorrow, cheap wine, sun and lots of smashing tunes, all is good in the world!

    Best

    D

  20. Colm MacDonncha

    Well it now looks as though Tsipras has caved…but this new Austerity programme cannot change the reality faced by Greece,Italy,Portugal and Spain, and to a lesser per capita but still monumental reality for France that they will never be able to pay back these debts and will be forever in thrall to their Aryan Meisters.

  21. goldbug

    THE GREEKS SHOULD HAVE VOTED YES.

    NOT ENOUGH COWARDS? -> PLAN B.

    BUT GAME THEORY SAID PLAN B CANT HAPPEN

    = PLAN A IS PLAN B.

    Q.E.D.

    HA.

  22. Adelaide

    I could never square Syriza’s contradictory demands of NO to Austerity but YES to the Euro, I assumed it was PR and that they seriously behind-the-scenes planned for a Grexit. Obviously I was wrong. And disappointed. They honestly were more Pro-Euro than Anti-Austerity and never had a Plan B. They have completely discredited themselves, and economist Steve Keen points out the plausible scenario were the disillusioned Greek public turn to the one part of the political spectrum yet to be tested, the far right, Golden Dawn.

    To add insult to U-Turn injury it seems like the Eurogroup are going to reject Syriza’a U-turn proposals. Syriza have gone from hero to zero in the blink of an eye and set the stage for internal bloody conflict, probably starting with the assassination of Tsipras himself.

    • DB4545

      Adelaide

      The writing is on the wall Adelaide but sometimes it takes time for people to digest and read it. I certainly hope your prediction doesn’t come to pass for any reason because once guns come out of holsters it takes a long time to restore order as we saw with the tragedies on this Island. I’m optimistic again for a number of reasons. In the US people swear allegiance to defend to the flag and constitution against all enemies both foreign and domestic. It’s symbolic but it does unite people. Where are the icons of allegiance in the EU? Do you swear allegiance to the Euro or the flag of the European Union? Would you risk your life for the bunch of liars and thieves in charge? Do you honestly think that the people on State payrolls have the slightest loyalty to this bunch of crooks? They know there’s a day of reckoning coming and just like the SS guards in 1945 they’re hedging their bets and running for cover. It ain’t over till the fat lady sings.

      DB

    • coldblow

      Adelaide

      Your thoughtful comment prompted me to think about this and to write a comment on Peter Hitchens’s site criticizing his praise of Syriza. Rather than going to the trouble of paraphrasing I this is it here:

      “I don’t read the press or follow the news in any detail and certainly not to anything like the degree that PH does, but I have big doubts about his views on Syriza and the Left in general as regards Europe.

      Syriza are rightly against austerity and yet in favour of the euro. When they met with the EU after the vote they had (as has been widely noted) no back-up plan which raises doubts about their sincerity in fulfilling the implied threat to leave the currency.

      Varoufakis is what might have been called in my day a ‘Marxian’ while Tsipras is an identikit Man of the Left. The latter (unlike his ex Finance Minister) is, according to Wikipedia, from a comfortably off political family. He has standard leftist opinions: is in favour of gay marriage, was prevented by border security from attending the 2001 anti G8 protests in Genoa, took a young woman from Sierra Leone along with him as his date at his first presidential reception to highlight the plight of immigrants to his country, attended Essex University and was in favour of the Troops Out movement in Northern Ireland (not that that last item particularly upsets me or indeed most of the others in principle).

      Both men, from what I can see (and like most politicians), are extraverts and this implies a predisposition to side with a conventional wisdom that, inter alia, sees Europe as a generally good thing. I imagine they would like to look for an imaginary distinction between the Evil Europe of corporate and financial greed and the Good Europe of solidarity, human rights and fashionable causes (an example of extravert cliché). The equivalent in Ireland would be a mass protest movement led, absurdly, by the Green Party (aka the Amish).

      One thing I read about Varoufakis is that he took out one of the ‘n’s in his name at school (because he thought it had a better look to it) and was so angry about having marks deducted for this that he kept the change ever since.

      As a separate point I understand that the Greek media were very strongly in favour of a yes vote and apparently the state broadcaster (EPT or ERT depending on who you are reading) were more balanced, giving equal weight to both sides in the referendum. Thinking about it now I find it odd that it was closed down two years ago (would the EU ever put pressure on the British government to close down the BBC just to make further cost savings?) and even odder that it was opened up again just a few weeks ago.

      As I say, I haven’t followed this in any great detail but I would be interested in hearing PH’s response.”

  23. Pat Flannery

    Adelaide: I am surprised this site has not moderated that comment. At the very least you should ask them to erase your last sentence. Please do so ASAP.

    • Why is that Pat? Assassinations seem to be the fashion for those who disagree with the banker elites. Or a government coup d’etat. However no one here is advocating such a thing. Do you walk in fear, that you are afraid to express you opinion or comment on such things. We are in a fight for our freedoms against the modern tyranny.

    • cooldude

      Hi Tony , as usual I am one of the few to agree with you. The fact that our money is being issued by private entities whose only ambition is a corporatocracy which is has supreme control over so called sovereign states. This shit is happening and we have to be the opposition. DMcW doesnt really give a shit about the consegences of a money system which is privately owned ( who are the shareholders of the irish central bank and what dividend have they been paid) sorry you thought it was controlled by the irish government it isnt it controls our government with the help of the ECB and the also privately controlled BIS.

      Some people think all of this is bonkers but if you have the critical brains to look into this and get off social media you will learn an awful lot.

      To critisize social media in this country is verbothen but serious critical thinking and informed comment is always better than off the cuff comments on social shite

  24. Jameson Quinn

    So they need to find an existing currency, from a larger economy, that is currently experiencing inflation of around 5-10% (so that their wages can become competitive again). Unfortunately, the world’s largest economies, including China’s, mostly have inflation under 2%.

    The exceptions are the Indian Rupee and the Brazilian Real. Both are running at about 6% inflation, just about what a Keynesian doctor would order for Greece. Both are countries with good foreign relations.

    And if they chose Brazil, maybe they could convince Portugal to join them too.

    As for Chinese factories and the like: you don’t have to use the currency to get that stuff.

  25. [...] should adopt the Chinese yuan. Going back to the drachma would be perilous, and China would appreciate the foothold into [...]

  26. [...] Read the rest of McWilliams’ idea here, because at this stage in negotiations, why not. [...]

  27. [...] Read the rest of McWilliams’ idea here, because at this stage in negotiations, why not. [...]

  28. [...] should adopt the Chinese yuan. Going back to the drachma would be perilous, and China would appreciate a foothold in [...]

  29. [...] Concessions • Greece Wins Euro Debt Deal – But Democracy Is The Loser (Paul Mason) • How The Greeks Could Have The Last Laugh: Adopt The Renminbi (David McWilliams) • The Euro – A Fatal Conceit (MM) • A Greek Exit Could Not Be More Costly Than The [...]

  30. ohbrother

    replace with a currency pegged to the rising U.S. dollar. LOL!

    • Mike Marketing

      Any comments on the recently made “The UK Gold” film that showed the City of London world Financial Centre for what it really is.
      The indirect controller of ‘Offshore Tax Havens’(vassal states) to enrich the already super rich.

      Makes the Greek Oligarchs look like paupers by comparison.

      The required ‘omerta’ by the bulk of the participants and the fact it is all ‘legal’ makes it frightening.

  31. Greece is not a sovereign state. It is a vassal state, a fiefdom controlled by the bankers.

    do not think you are any better off. it is the result of the money system inposed since 1913 modeled on the 1992 Bank of England.

    It’s purpose and design is to indebt all the people including the state. Then the banks seize the collateral for pennies on the dollar and grow wealthy and control humanity.

    It is a simple plan executed in broad daylight with little resistance.
    A sovereign person , a sovereign people need unencumbered money issued as an asset and not as a debt at interest.

    Greece needs it’s own money, issued free by treasury, backed by the assets of the state. It matters not whether anyone else likes it or wants it. Recovery starts with the individual and at home. Then the state needs to get its house in order.

    It is plain to see that the EU is not a trade group but a political idea designed to empower the super entity and destroy the nation state and the peoples within it. Greece is being treated as a non entity.
    You are all being had, hook line and sinker.

  32. [...] major industry, tourism, will be dominated by German investors. Irish economist David McWilliams posits a scenario where the tourist sector (hotels and resorts) will likely become foreign-owned, consumer [...]

  33. [...] major industry, tourism, will be dominated by German investors. Irish economist David McWilliams posits a scenario where the tourist sector (hotels and resorts) will likely become foreign-owned, consumer [...]

  34. [...] major industry, tourism, will be dominated by German investors. Irish economist David McWilliams posits a scenario where the tourist sector (hotels and resorts) will likely become foreign-owned, [...]

  35. [...] How a Chinese puzzle could enable the Greeks to have the last laugh – Link here [...]

  36. [...] one of the largest economic sectors in Greece will become largely foreign owned.   (See Here).  He goes on to suggest that the majority of consumer goods will be imported, and all profits [...]

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