November 16, 2015

Time to think the unthinkable

Posted in Sunday Business Post · 100 comments ·

If, after four years of printing money, the system isn’t working, what next?

Could oil prices go to $4 a barrel? It seems way off-beam, but last weekend at Kilkenomics, Nassim Taleb, he of The Black Swan fame, suggested in a fascinating discussion about the economics of the Middle East that oil prices are heading downwards. This is no wildcard estimate. This comes from a man who has made a fortune understanding risk and why the rest of us don’t understand it.

Whether he is right or not, this suggestion – and his further prophecy that Saudi Arabia will go bust because, far from being strong, it is the most fragile state in the region – got me thinking about conventional wisdom and mainstream assumptions about what is possible and what is impossible.

If Saudi Arabia could go bust, what else might happen – or, more significantly, what attendant events that we are not even thinking about could come to pass in the next few years?

This idea of thinking the unthinkable is one of the joys of Kilkenomics, where all sorts of thinkers from all over the world, who are not restricted in what they allow themselves to entertain, meet up.

In the Set Theatre at Langton’s in Kilkenny, Martin Wolf of the Financial Times speculated on Brexit and what might happen to Northern Ireland if Britain leaves the EU, and Scotland then leaves Britain. He thought a truncated union of England, Wales and Northern Ireland had a faintly ludicrous air to it, particularly as English nationalists in power in England mightn’t be that enamoured with the annual bill for a bit of Ireland. It’s an interesting angle. Have you thought about this?

Wolf believed that the British population would pull back from the brink in the referendum – but, that said, he conceded that the chances of Brexit are now very real. He explained that his background, as a son of Jewish refugees from Europe – whose entire families on both sides perished in the Holocaust – informed his economic views and the value he put on economic stability. He argued that whatever the unintended consequences, the most crucial element after a crisis is to make sure that the crisis doesn’t turn into a full-scale depression or doesn’t allow extremist politicians to emerge. As a European Jew, you can understand profoundly Wolf’s sensibility.

We talked about the response to the crisis by central banks and whether quantitative easing (QE) is working. He made the point that if a second Great Depression was avoided in 2008-2010, then central banks are to be lauded for what they have achieved. However, as to what’s next, he, like so many others, wasn’t sure. One thing is clear: that, while a Great Depression might have been averted in 2008-2010, the global economy doesn’t feel right.

In Europe, Britain and Japan, deflation is on the horizon. Prices – measured by traditional inflation measurements – are falling. Central banks everywhere, with the exception of the US, are still trying to stimulate the economies – to no real end. Interest rates are at zero everywhere, and in Europe, deposit rates have even turned negative – but demand is still nowhere.

Much of the rich world is characterised by a post-boom, post-debt neurosis, where the people don’t want to borrow and the banks don’t want to lend to the right people at the right rate. Now, with this in mind, let’s go back to Nassim Taleb and his view of the possible collapse of the oil price, because although his view of oil seems a bit extreme – maybe it is not. Think about the global economy right now and its inability to grow even with zero per cent interest rates; strange things happen.

Ten years ago, had you predicted interest rates would be at zero for a prolonged period, people would have thought you mad – but that is exactly what has happened. The thing about the world when it is at a tipping point is that what appeared radical before the crisis becomes mainstream, and what was mainstream becomes redundant.

The fact that central bankers have thrown the kitchen sink at the economy and the recovery is still so weak is explained by four extraordinary turns of events. The first is the depth and extent of the downturn that followed the global financial crisis; the second is the legacy of the debt crisis, whereby too much debt makes you terrified to spend, even if your income is going up a bit. Three: this fear knocks the stuffing out of business and consumer confidence; and four, and most worrying, is the evidence that the crisis and its aftermath has revealed deeper and more enduring structural problems – such as the fact that the West is getting old, manufacturing has moved to the East and productivity is falling, as investment falls too.

The net result of these four corrosive forces has been a fragile recovery and persistently high unemployment in Europe. This high level of unemployment has meant weak demand and uncomfortably low levels of inflation, which makes paying back debts more difficult. All this leaves us with the strange situation that, after years of austerity, debts in many countries are actually higher, not lower, than they were before austerity. Remember, austerity was introduced to decrease, not increase, indebtedness.

If, after four years of printing money, the system isn’t working, what next?

This is where another two Kilkenomics guests, Richard Murphy (adviser to Jeremy Corbyn) and Stephanie Kelton (American economic guru for democratic candidate Bernie Sanders), offered some new insights. They both thought that it was only a matter of time before central banks, rather than give money to the banks, might actually deposit money in people’s bank accounts. This would make people spend and, hey presto, demand would recover and off we go.

Traditionalists at this stage will guffaw and declare this could never happen. Surely such profligacy would lead to inflation, or worse?

While there is little doubt that this policy sounds radical now, allow yourself to think the unthinkable for a moment. In economic terms, the ground has shifted. It may shift again.

And after all, it was Nassim Taleb who warned of Black Swans – improbable events that have enormous consequences. Don’t rule them out.


    Once Trump is elected and the military build up begins there will be an industry to pull America up again. Lets hope that every bomb lands on fanatical scum accross the globe, particularly Allah loving virgin raping filthy headscarved bastards. Praise the lord and pass the Ammuntion.

    • michaelcoughlan

      “Praise the lord and pass the Ammuntion”

      Fuck in hell! (Not heaven).

    • First of all Trump isn’t going to get elected Smokey – Clinton is.

      As I recall, Trump said he was going to spend the money on building up American infrastructure not a military build up – if he’s telling the truth about that then I hope he does get elected – but like I said, he won’t – the corrupt and devious Clinton is a shoe-in.

      Be careful what you wish for, if you thinking bombing more people is going to make your life better, then you are wrong. For a start if the US goes near Iran (which I don’t think they will be stupid enough to do) then all hell is going to break loose. It’s time for the US to mind it’s own business and let people in far-flung places arrange their own societies in the way they see fit themselves. Anything overly inhumane won’t last long anyway, in relative terms.

    • Deco

      Actually, Trump’s foreign policy is tame and peaceful compared to all the other options except Rand Paul. Mostly it consists of renegotiating trade deals in a rather abrasive and headstrong manner.

      Though, I reckon Trump’s internal policies will be very different though. Certain parts of the administration will be told to answer hard questions about what they are doing with public money. There will be a (ridiculous) roundup of (hardworking) Mexicans. And Democratic Party run one party states will get zero assistance from Washington.

      I reckon that Trump will get trumped by Ted Cruz at some point in the next six months. Currently nobody knows what to expect from Cruz.

      I will tell you one thing that we scare millions – the thought of the mastermind of the Benghazi debacle getting into power. It is not her turn. (Again). She was Senator for NY in the buildup to the financial crisis. And she was in the White House when Glass-Steagal was repealed.

      • Grzegorz Kolodziej


        I agree that Mr. Trump’s foreign policy seems to be tame compared to other candidates except Rand Paul, Bernie Sanders (who is neither a serious nor a desirable candidate) and perhaps Ben Carson (who issued the most radical statement on Islam so far, but it was internal rather than external) – that includes Mrs. Hillary Clinton, who is perhaps the most hawkish of them all).

        However, the proof of the pudding is in the eating and as Mr. Trump did not hold any serious public office and he proved oneself to be a bit of a turnover

        on quite a few issues, I would hold my judgment on him until he gets elected (which I think it is unlikely – I doubt he would get the nomination; however, in an unlikely event that he gets the nomination, he would probably be the best suited Republican to stand up to Hillary because he is the most media savvy of them all – Ted Cruiz, while being the best debater on Harvard – according to the dean of Harvard – is too radical to win the election if he wins the nomination) – so far it’s all rhetoric, and of course, rhetoric cannot be ignored as President Obama had to learn the hard way what happens if you renege on your election promises (whether they were right or wrong is another issue), but what matters most to me the most is their voting records (in Mr. Trump’s case it would be his donating record): and it this respects only

        • All due respect Grzegorz (and I am not trying to deliberately provoke you – not this time anyway) but you have mentioned this before about their (or his – Trump’s) ‘voting records’.

          Surely it’s more important what the person is going to do in the future, rather than what they have done in the past? I prefer to look forwards rather than backwards.

          Intelligent people are entitled and indeed should be expected to change their mind and opinions. You are surely not asserting that we can know what sort of a President Trump would be by looking at how he voted in the past?

          Haven’t you ever changed your mind about something important yourself?

          I don’t care what Trump has voted in the past – as far as I know he used to be a Democrat – now he’s a Republican – in fact I don’t care what party he’s with either if he’s the best man for the job.

          I’m not saying he is the best man for the job, this is not an endorsement of him. Frankly I don’t know if he is, no one does, excepting those with crystal balls (and volumious histories of ‘voting records’ haha).

          • Grzegorz Kolodziej

            Well, it’s a valid question:

            “Intelligent people are entitled and indeed should be expected to change their mind and opinions. You are surely not asserting that we can know what sort of a President Trump would be by looking at how he voted in the past?”

            Looking back at the history of voting, in most cases the Median voter theorem holds (I am talking about our civilization circle and I exclude huge crises – the results of which we also see in voting).

            If we assume that, then perhaps Mr. Trump’s vacillations in the past are his strengths rather than weaknesses – perhaps this shows he is very flexible and able to garner some votes Democratic electorate votes, which will be needed to win the election (btw, I think Hillary is in the best position, but you never know how far the crisis will deepen).

            There is so much to write about it to answer it properly and I have only limited time…

            All I can say is that I hugely respect Mr. Trump for being pretty much the only one who has been really successful in business and is going into this election putting his own money (in fact, I recently watched the ancient movie “Coctail” and there is mention of Donald Trump in it already!).

            But you know, business is one thing and politics is another thing.
            So far Donald Trump proved to be smarter than TV stations like CNBC and Fox who tried to undermine him, but on the other hand, so far the debate was focused on immigration rather than how to get America going again – and when the focus turned into economy, Mr. Trump stopped to shine.

            Besides, the fact that someone is a turncoat like Mr. Trump does not mean he does not believe sincerely in whatever he believes now (and you could see that people like Trump or Ted Cruz or Bernie Sanders, who are 100pc convinced they are rights talk differently than the likes of Hillary Clinton, Jeb Bush or even Marco Rubio (“I would not do anything that would hurt my mother” – you can sense this is scripted and a few people had been working on it).

            But as far as voting records are concerned, I would not dismiss them so easily. First of all, they are much more available in the US than in Ireland, Poland or the EU Parliament.
            Secondly, they are much more used and I think it is right. Do they mean Donald Trump would be a bad President?
            Absolutely not (in his case we are talking donations record).

            But they mean that they are people like Rand Paul or Cruz who have proven pro-free market records. So I would approach it as pro them rather than anti-Trump…

          • I also respect Trump for his business acumen – I don’t care about his voting record – what did he even vote in, in any case? I thought this was his first foray into politics? Cheers.

          • Ok, I see, you are talking donations records – again irrelevant in my opinion – he paid different people at different times for different reasons – every business man does that. What’s the point in burning bridges? It doesn’t matter Gregorz – it’s far more important to just simply ask ‘can he do the job?’.

        • Ben Carson being the candidate who reckons that the Pyramids were built to store grain – because that’s what he has interpreted from some passage or other of that greatest work of fiction – The Bible – despite their being no archaeological evidence to indicate such a ‘fact’.

          • Grzegorz Kolodziej

            While the quote from Mr. Carson is indeed laughable and it reflects the low level of what Aristotle called enkyklia paideikos in America (no Greek alphabet on this website), and you are right to make fun of him because Dr. Carson is not every Tom, Dick and Harry – he is an highly educated (but narrowly, Anglo-Saxon style) person who, if I remember correctly, was the fist the to separate conjoined twins – so while I am laughing with you at that quote, surely it is not more stupid than President Obama’s “I’ve now been in 57 states — I think one left to go” or his statement that after his presidency the oceans will stop rising (this is in fact so funny in its arrogance that I have it as my voicemail):



            As you see, I am quoting a very left wing journalist, because I am trying to get the information from various sources, and I ask you if possible to be critical while, i.e., assessing the new Polish government based on dubious “Guardian” sources :-( – this an appeal rather than criticism, it is not your fault that Western newspapers do not get the subtleties of the political situation in Poland (such the moved towards the right being primarily a protest against the corruption, and if the previous Law and Justice government, of which I was not a fan, was one of the two that lowered taxes and the Civic Platform government raised the taxes most from all government and was the most corrupt, than describing it as populist demonstrates the level of ignorance of, i.e., The Irish Times, rather than the populism of the new government – compared to other governments.

            But I digressed from Ben Carson – sorry.

            By the way, you can sense who is up and down (polls in the US politics do not matter as much as in the European) by who the candidates are attacking. And the Republicans stopped attacking Mr. Trump and started attacking Rubio and Cruz (Jeb Bush spent $20m on anti-Rubio commercial – seriously, it’s sickening how much money this dude has he did not earn or deserved).

          • Grzegorz Kolodziej

            While the quote from Mr. Carson is indeed laughable and it reflects the low level of what Aristotle called enkyklia paideikos in America (no Greek alphabet on this website), and you are right to make fun of him because Dr. Carson is not every Tom, Dick and Harry – he is an highly educated (but narrowly, Anglo-Saxon style) person who, if I remember correctly, was the fist the to separate conjoined twins – so while I am laughing with you at that quote, surely it is not more stupid than President Obama’s “I’ve now been in 57 states — I think one left to go” or his statement that after his presidency the oceans will stop rising (this is in fact so funny in its arrogance that I have it as my voicemail):



            As you see, I am quoting a very left wing journalist, because I am trying to get the information from various sources, and I ask you if possible to be critical while, i.e., assessing the new Polish government based on dubious “Guardian” sources :-( – this an appeal rather than criticism, it is not your fault that Western newspapers do not get the subtleties of the political situation in Poland (such the moved towards the right being primarily a protest against the corruption, and if the previous Law and Justice government, of which I was not a fan, was one of the two that lowered taxes and the Civic Platform government raised the taxes most from all government and was the most corrupt, than describing it as populist demonstrates the level of ignorance of, i.e., The Irish Times, rather than the populism of the new government – compared to other governments.

            But I digressed from Ben Carson – sorry.

            By the way, you can sense who is up and down (polls in the US politics do not matter as much as in the European) by who the candidates are attacking. And the Republicans stopped attacking Mr. Trump and started attacking Rubio and Cruz (Jeb Bush spent $20m on anti-Rubio commercial – seriously, it’s sickening how much money this dude has he did not earn or deserved).

          • They are all crap Grzegorz – whether left wing or right wing or whatever wing.

            There are no good choices, they are all corrupt as f**k and only out for themselves.

            The system itself is not fit for purpose, as well as the arseholes within it.

          • Yes Carson did great things as a surgeon – no doubt about that. He might be a good President if he got rid of the Holy Joe crap.

      • That roundup would not happen Deco, even if Trump is elected.

        He would be forced to renege on that promise.

        You cannot deport 11 million people from America. It would cause utter chaos.

        Even people of a more rightwing nature than Trump know it’s unworkable.

        He would be best dropping that idea and I’m not saying it from my perspective, I’m saying it from the persepective of his own credibility and electability.

      • Grzegorz Kolodziej

        I am sorry Deco, the natural perversity of inanimate objects plus me being in a hurry did not let me finish my sentence…

        So in this respect I only see two people within the Republicans with consistently pro-free market voting record: Rand Paul and Ted Cruiz, none of them are electable I am afraid; Marco Rubio probably comes third, but there is more than a few question marks in his record (but he has by far the best chance of them all to attract the GOP financial support now since the voters seem to have enough of the saymo, saymo in shape of Jeb Bush).
        Media-wise Mr. Trump is way better than Mr. Rubio (I would compare Mr. Trump to Ronald Reagan – a turnover too, who however could stamp his authority and use his actor’s charm in the debates; unfortunately, I would also compare Mr. Trump to late Mr. Reagan in things like the triumph of (libertarian) form over (socialist) content; i.e., both Messrs. Reagan and Trump are/were against free trade (Mr. Trump has threatened a 35% tax on Ford (F) vehicles made in Mexico and he has suggested a 25% tariff on goods coming from China to the U.S – and America simply no longer has the debt incurring option to finance their demand on goods; besides, it would still not move production to American, but rather make goods more expensive (paradoxically, what may bring production back to America is the dollar collapse).

        On a different and a very sad note, I wrote on 24 September:

        “the situation is serious enough for Polish authorities to officially ask – this was in the news in Polish media yesterday – Mossad to come to Poland to help the Polish counterintelligence scrutinise the refugees in terms of their links with ISIS”

        as well as:

        “If you look at where the new Russian military bases in Syria are located, they are actually quite far from ISIS, so it might be as well that Russia will only fight the moderates trying to undermine the Assad’s regime and not ISIS; but maybe they will”

        As you probably do not know, as none of that is reported in the Irish media, Poland – having cooperated with the notorious Mossad and after Israel stated that they will not take any refugees on security grounds (of course, Israel being basically a racist country have other grounds too, but they might have been telling the truth on that one) decided not to let ANY refugees from Muslim countries on SECURITY grounds.

        Another unreported news is that Hungary, Czech Republic and Poland have jointly decided not to wait for Mr. Merkel (she refused extra funds for border controls in Greece as demanded by Mr. Orban before the crisis) and send their own police to Greece to defend the EU borders, paid by those countries taxpayers:

  2. Antaine

    Subscribe. :-)

    • Interesting article, I disagree with on line in it where it says that “Remember, austerity was introduced to decrease, not increase, indebtedness”.
      I think the opposite was true, in that, austerity was introduced to force the people who were already in debt to go broke so that they would have to sell of their assets at basement prices to the vultures in waiting who organized the austerity in the first place.
      As for the ‘Black Swan’ idea where it says that “They both thought that it was only a matter of time before central banks, rather than give money to the banks, might actually deposit money in people’s bank accounts. This would make people spend and, hey presto, demand would recover and off we go”.
      Well I think there is a fat chance of the Bast**ds ever doing that, I will believe that when I applaud the sight of Enda’s head on the spike in O’Connell street.
      A good article over all though.

  3. NeilW

    “They both thought that it was only a matter of time before central banks, rather than give money to the banks, might actually deposit money in people’s bank accounts.”

    At which point they become the actual government (choosing who does and doesn’t get money).

    Are you happy with unelected entities being the government?

    • michaelcoughlan

      Tony brogan will have a field day if they start putting money in people’s bank accounts because the inflation that has been confined to the stock markets will hit main stream. What then for gold?

  4. [...] crisis – The Telegraph Why Italy may need to leave the euro zone soon – The Irish Times Time to think the unthinkable – David McWilliams Gold, Oil, & ‘Grandmaster’ Putin’s Trap – [...]

  5. michaelcoughlan

    Hi David.

    “Remember, austerity was introduced to decrease, not increase, indebtedness”

    Are you serious? Was the money gained through cuts in spending and increases in taxes used to PAY DOWN DEBT?


    It wasn’t.

    They increased debt by printing extra money. The extra money gained is being used to service all the debt old and new asset stripping the world’s citizens doing so.

    “whereby too much debt makes you terrified to spend, even if your income is going up a bit”

    Not just scare you but restrict your purchasing power through increasing your taxes.

    The answer I feel to the question you ask as to what happens next is straight forward; The world’s CB’s will continue printing money until they grind the worlds underlying economy to a halt. Then there will then be an unquantifiable large transfer of the worlds wealth to a few short sellers and people in the know.

    These people will subsequently drip feed all this capital back out to the world economy to get the world creating value again which they will transfer to themselves (once again) by controlling the wealth creating process through a debt based currency until the next collapse when the same thing will happen again ad nauseam.

    Some really insane but very clever and educated people however might think it’s a good idea to mow down a couple of hundred people in a bar or night club to draw attention to what they feel is a superior evil;

  6. You have not really zeroed in on the problem.
    TThe Fact that all the QE is debt based money.
    The fact that the money system is a Ponzi scheme
    The fact that the Ponzi Scheme is reaching its exponential expansion limits
    The fact this will crash the economy of the world.

    The fact that all the things of wonder a Kilkenomics have already been presented and discussed by some of us on this blog.

    What next.
    Gold , Silver and copper coins, real money return.

    Gaddafi was murdered because he proclaimed a gold dinar as a Pan African coin.
    Saddam was murdered because he would sell oil in other than baseless UD fiat Fed reserve notes.

    Well here we go again

    Maybe ISIS has the base for the economy correct.

    Not just the economy and the manufacturing that has gone East David. It is the Fact that the gold has gone and is still going East that is the real story.

    Gold is the money of Rulers , David. He who has the gold rules.

    What do you think of that David?

  7. If, after four years of printing money, the system isn’t working, what next?

    Not 4 years David. 100 years of Fed Notes.
    44 years since Nixon went off the vestiges of the gold standard.

    What next. David?

    How about you become the leader of the pack and examine the money system in public. Present the Ponzi scheme to the general Public.

    You could come up with a solution.
    Sovereign money. No more fiat Ponzi Money.
    Money printed from treasury at no debt and no interest. That is next. Eliminate the national debt and reduce taxes , David. You would be a National Hero David.
    Then the minting of real money just like the Islamic State.
    Then the repeal of the legal tender laws.

    Are you ready to accept this is what is next?
    I doubt it!!

  8. “China and Russia’s global leadership in gold mining enables them to create their own currency and trading systems, built on a solid foundation of gold, which will be used by the BRICS countries as a universal unit of account and as a fixed measure of cost.”

    • “By habitually and universally replacing the force of law with the right of force, the US has bungled away all of the political capital and credibility it had previously earned among the Russian and Chinese public.”

  9. David NZ

    It is more likely that Saudi Arabia will fall to the Islamic State before it goes bust. They don’t seem to be able to see the danger that is right in front of them.

    Saudi Arabian citizens are paying for arms for the Islamic State and paying salaries of IS fighters. Yet the Islamic State fighters are telling journalists that as soon as they get a chance they will march on Riyadh.

    Meanwhile the Saudi state is wasting untold money bombing Yemen. It seems to be following the same pattern as Pakistan and the Taliban. First create the monster then lose control of it, then your society splits along ideological lines.

    All this talk of printing money, blah, blah, blah. None of it matters until there is some increased demand for goods and services. If consumers and businesses are constrained by past debts then either the European govts must spend to compensate for the lack of consumer spending or foreigners must buy more European goods. The latter isn’t happening so the only way out is for European govts to increase their deficit spending.

    The crux of the matter is that Germany won’t let European govts spend more than the 3% required by the growth and stability pact. This is the problem. This has been the problem ever since the GFC. Europe has coasted along on US, Chinese and developing country deficit spending. Europe has been a drag on World growth due to German enforced austerity policies.

    Until the 3% bondage limit is released the situation won’t change. Until the French or the Italians get some balls and leave the Euro and start their own central bank the situation will remain the same. You won’t have to worry about inflation because the decreased velocity of money will compensate for any QE of the ECB in the absence of increased govt spending.

    My own sense of it is that the whole thing will sputter along until 2018 when demographically induced downturns in China and the US will see the wheels come off. Then we will all have real problems. If the world is still shackled by anti deficit spending idiots at that time the Ukraine and Syria will look like a trial run.

    Then might be the time to stock up on gold, bonds from solid companies, Swiss Francs, etc.

    • Grzegorz Kolodziej

      I would on]y like to point out that:

      1. This rule has not appeared in the growth and stability pact, but in TEU.
      2. I has been since broken by whoever wanted to break it. Germany and France were the first countries which broke the rule and did not get penalized, other countries got penalized.

      We are talking about some treaties that are long time dead. All that debate whether to accept or reject the Lisbon Treaty (I was then on the “no” side seems laughable now when we see – at least since the Minsk talks – that the EU law is dead and that Mrs. Merkel makes decisions (I wonder thought what will happen if Germany would have a weaker leader as her position is very wobbly).

      • Using your logic, the Dublin Treaty is dead too in that case Grzergorz.

        • Grzegorz Kolodziej

          I studied both logic and the EU law and I have never heard about the Dublin Treaty is. Sorry, Adam.

          Perhaps you mean Dublin Regulation? Yes, of course it was dead, sure if it had not been dead no terrorist would have entered the Hungarian border as an asylum. But as you seem to be a bit behind with how the situation has been developing, now Mrs. Merkel changed her mind and claims that Mr. Orban was right after all trying to adhere to the (dead) EU law:

          So, to answer your question, huge chunks of the EU law are dead (in most important parts, such as who makes decisions) but Germany is still resorting to it when it’s convenient for Germany.

          By the way, it’s breathtaking that you have described setting the “refugees” houses on fire in Germany as “every last detail”, when I pointed out that “why you are so silent on the treatment of those immigrants in Germany and France? That’s where their houses are set on fire, not in Hungary.”

          P.S. Only if you are able to formalize the sentence “everything which exists, exists either in itself or in something else” (you know my e-mail address) will your mention of logic be meaningful in any way. Otherwise you are merely make yourself a laughing stock with your desperate search for inconsistencies

          P.S. 2. How is your “no bigger threat from non-European Muslims than from other immigrants” theory doing after the tragedy in France?

          • Dublin Regulations, whatever, you knew what I mean. Winning on semantics is not winning at all.

            Don’t have time to read about every little incident. Do you remember that horrible case in Inchicore when some Irish scumbag killed two innocent Polish guys with a screwdriver, now that was horrible? Stuck in my mind.

            But I don’t follow every little piece of German news and try to conflate larger meanings from it. Life is too short.

          • P.S. 2. France has gone in and done some more bombing today – yeah that is really going to sort things out and put an end to conflict – and then they wonder why they get bombed themselves? Haha. Ludicrous.

    • Deco

      There are two powderkegs in the SW Asia area.

      Pakistan. Well this is obvious. There have been hardline preachers working on the ground building up hate since the start of the Afghanistan conflict. The ruling elite, and the military/bureacracy has thus far prevented an all out insurgency in Pakistan. There has been no concrete counter-response to tackle this. This is something to be concerned about. The only dynamic in Pakistan is towards further militant extremism.

      Saudi Arabia. The problem here is a combination of variable motive amongst the populace with respect to what constitutes moral cause. The degree of support for extremism is deep, and all over the place. There is a a dangerous combination of people with more money than sense, and a serious lack of perspective. This enables funding for all sorts of dangerous movements across the entire region. And, the donors in this case, fully believe that they are doing the correct thing. If Martin Wolf were onbserving, he might state that the worst thing that can happen in this circumstance, is for an economic crisis to erupt (brough about by cheap oil prices). According to Taleb, this seems in train. Saudi Arabia is now using oil as a weapon against Iran, Russia, US shale producers, Alberta, and perhaps even Venezuela. Technology has gained on geology and will remain ahead for five years. Beyond that, nobody knows.

      The one beneficial aspect of the recent terror attacks is that NATO and the Shanghai Co-operation Organization are likely to stop playing spheres of influence, and realize that some co-operation is urgently required. That is good for all of us, in many spheres.

  10. McCawber

    Something else that’s unthinkable.
    How about the CBs and world Governments declare 0% inflation as their target. Even at that they have plenty of wriggle room.
    They can even phase in the target if they want to.
    Question for Tony.
    Supposing you did get your Gold standard set up.
    Gold will also have an industrial function too, not just monetary.
    Are you going to ban spread betting on Gold.
    What other rules would you think might need to be put in place.

    • It’s not my standard. I just report what I see others do!
      It’s already being set up. Most central banks count gold as a monetary asset and always have.

      • McCawber

        I accept it’s not your standard but whither spread betting or any other financial play on gold.
        What rules do you think should be put in place or let’s say consider.

  11. joe sod

    Well Saudi Arabia has been very successful up to this in becoming very rich from selling oil. Only maybe Norway has been similarly successful. When you look around the world at oil states from Nigeria to Venezuela their dependence on oil has been a curse. Also Saudi actually controls the oil price and has done for 40 years, the reason the oil price fell so dramatically was Saudis decision to keep production high even though demand was falling. That has stopped investment in New oil wells which will result in shortages down the line. This is because demand for oil is rising all the time albeit not as fast as the supply was coming on board when oil was at 100 dollars plus. I don’t know what basis Nassim based his 4 dollar prognosis, maybe it was just an attention grabbing sound bite. The only thing that would result in such a situation would be a collapse in demand from some dramatic new clean energy source. For all the talk of renewables they are light years away from anything like that. The world population is rising they still want to consume more stuff, I don’t see where a collapse in oil price would come from. A few weeks ago when everyone was joking about the “back to the future” October 2015 , the surprise was that really things had not changed so much technically since 1989. Sometimes we like to exaggerate the technical progress we are in fact making. Nobody has been to the moon since 1972 so you could argue we haven’t really progressed much since 1972.

    • Grzegorz Kolodziej

      To be precise, not b e c a u s e Saudi Arabia is selling oil, as far more countries are selling oil, but because the agreements Saudi Arabia has with the US and Israel related to their security, petrodollars and oil. Those agreements provide broadly that Saudi Arabia will accept only dollars in payment in exchange for their oil and the U.S. would provide the Saudis military protection and hardware (as well as exempt them from propaganda attacks – human rights, democracy, and so on and so fourth).

      It is worth pondering over question what will happen if the position of Saudi Arabia crumbles as it does. President Obama tried to preempt that by pivoting the US position towards Iran, but it looks like Iran, while availing of the very favourable conditions of their deal with the US, does not want to establish exclusive relations with the US Saudis style, rotating between the US, China and Russia instead.

    • StephenKenny

      Whether oil goes to $4 a barrel can party be seen by how effective OPEC has been, over the past 40 years. In 1973, oil went from $2 to $10, or something, simply because OPEC member agreed to restrict production. The main producer in OPEC is Saudi, so if Saudi crumbles, it will simply be because they chose to. They could so reform OPEC, get everyone back together, and agree another round of production cuts.

      It’s looked for quite a while that since, as the Pope recently said, we are in the early stages of WW3, that NATO, and especially the US, has put pressure on Saudis and others to increase production and crush the price, as a part of an economic war on Russia.

      Countries are being destroyed, entire populations are being displaced, and all part of, as ex UK Prime Minister put it, a geopolitical war.

      The west is now more barbaric than I ever thought possible.

      • Pat Flannery

        Well said Stephen. Geopolitical rivalry is the basic problem. Humans have to start seeing themselves as a unit, not as a collection of rival units.

        We are probably the only species that has different means of communication we call languages. If we are to avoid mutual destruction we must form a common identity, even a common language.

        The Internet as a global communication technology is heading in that direction. Remember the 100th monkey phenomenon. If it is real it may save us from ourselves.

      • joe sod

        The basis of this article is that we should be prepared to think the unthinkable. David used examples of unthinkable events that have happened with ultra low interest rates and potential Brexit, but these are largely social and financial. One of the biggest unthinkable events was the break up of the soviet union. However during all these happenings our dependance and use of oil has increased. Even through all this the new economy internet etc we are still more and more dependant on oil. In 1972 we were driving around in cars and this was fundamental to western society, in 1989 there were many many more of us driving around, and today there are billions more cars driving around all burning petroleum and we are as highly dependant as ever. Where is the big technical breakthrough going to come from because it hasn’t happened in 100 years. Thats why I used the example of the “back to the future” 2015 prediction. Yes we may be able to get more unconventional oil but Saudi is choking that off by maintaing prices below which new supplies would come on board.

        • Pat Flannery

          Joe: the Saudi royal family control 25% of the world’s oil reserves. That is crazy. No wonder ISIS intends to invade Saudi. No doubt that is their ultimate objective. As ISIS is saying: “this is only the beginning”.

          And BTW there is no replacement for oil. We have foolishly developed an oil economy which has caused a population explosion for which there is no sustainable source of alternative energy.

          The best we can hope for is to make our oil reserves last long enough for us to get our population down to a level that can be sustained by some form of renewable energy like wind or solar. In other words we don’t have an energy problem, we have a population problem.

  12. michaelcoughlan

    “we don’t have an energy problem, we have a population problem.”

    No. We have a too much debt problem and a too much printed money response to it problem.

    • Ironically the West has been lectured for decades about the need to reduce population for the good of the world. Consequently we have resorted to extensive birth controls and abortion.

      European populations and Japan have basically falling birthrates that are now below the level to maintain population.

      The rest of the developing world have booming populations that we are now told to absorb. We are lectured for not accepting immigrants.

      Western culture is consequently under destructive attack. Firstly from an installed mea culpa for the ills of the world. A guilt complex is well developed. Secondly we can do penance by accepting all the hard done by abused of the world and allowing them to overwhelm the Western culture with their own. Then we are distracted with lack of proper reporting from the media and TV programming that is a collection of reality shows to break down moral values that still remain.

      Then we allow our governments to bomb the hell out of these same deprived folks in the name of saving them from dictatorships and presenting them with the saviour of democracy. The result is a return to medieval tribal warfare and religious practices and hoards of migrants.

      The education for this is sponsored by the universities which are funded by grants from government and private foundations.

      The foundations are funded as tax free entities controlled by the mega wealthy who are pursuing their own weird agenda of world control to be run by these same elites. This is why we get the politicians we do as they are all educated and persuaded to do what they do by this same elite thinking process.

      Still the world will not end and those with the guilt complex will be absorbed.

      The elite will control while we continually succumb to using their phony Ponzi Money system. The issue of out money system is little understood by anyone and even on this enlightened blog is largely ignored!!

      The Middle East and Orient see the monetary problem and are doing something about it as reported here.

      • Pat Flannery

        Tony: if you agree with my hypothesis that we do not have an energy problem we have a population problem, the monetary problem is almost a side issue.

        To me the existential question is how are we going to square our current population explosion with our diminishing oil supply. Oil is the one energy source upon which our current culture depends. There is no alternative. We are the “oil age”. Something has to give.

        • michaelcoughlan

          Hi Pat,

          The following short ted video demonstrates how the worlds population will level off naturally and guess how?

          Raise the living standards of the poorest.

          Cant see suds or gsucks going down this route any time soon;

          • Pat Flannery

            Michael: I watched your video. I hope he is right. But like you I can’t see it happening. The West cannot level income in the west let alone in the developing world.

            And even if income leveling is the answer it would take some unimaginable catastrophic natural event to trigger it.

            When (not if) catastrophic global climate change reaches its climax it might force human awareness that population/energy imbalance is the cause by putting an intolerable stress on the environment.

            I don’t see humans being capable of taking voluntary corrective action. It will take an overwhelming natural catastrophe such as climate change. Either way the corrective process will be ugly.

          • rcly123

            But then as a “possibilist”:

        • Qualify “we” . We means us and not them.

          They have the population problem. We do not.
          We developed the oil, they did not.
          We developed industry and agricultural revolutions they did not.

          We, being us, or all of us have a world problem. This, it affects us all.

          But the population growth is from them not us.
          We do not have the population growth , they do. We can accommodate more population, they can not.
          That is why the immigrant hoard floods into Europe not out.

          Of course Ireland had both an emmigrant and an immigrant problem.

          The problem is that the elite say we have a population problem so they wish to cull the hoards. Actually what happens is that if people are well fed they seem to have less children. The more settled the society the less the population growth.

          What we need is more food. Small holdings are the future as they are more times more productive than agribusiness. They are better husbands of the soil. They will provide sustainability.

          So we will have roof top gardens, back , front yard, and side yard gardens. There will be avenues of fruit trees and not ornamentals. Town councils will have vegetables growing in traffic circles and on the sides of highways and byways.

          City folk will learn that there is no food on the groceries store shelves unless it is first grown, cultivated and cared for elsewhere.

          As far as oil is concerned. We have a 500 year supply left and a 1000 supply of coal. We have research developed(ing) that will collect unlimited energy from the sun and convert it and transport it to wherever it is needed. Water will be purified and created in large quantities. We will learn not to flush two thirds of our potable water down the toilet. We will reuse, recycle, water over and over.

          We will live in a land of abundance. All we need to do is deprive the warmongers of their power. Deprive the profits before people of the ability to poison our food with chemicals and antibiotics.

          Deprive the elites of their power to produce worthless script and pretend it is money. Take away this monetary distortion and the start to the mending of the worlds problems can begin.

          The monetary distortion creates the misallocation of capital and labour. The current debt based currency enslaves us all. Nothing will be solved until that is eliminated.

          It is not just the paper money, Pat, it is the fact that it is produced as a debt at interest.

          Please address this simple fact rather than trying to pretend it does not exist. Our money system is a punitive, putridive, Ponzi scheme. It is totally destructive of itself and the economy and the people enmeshed within it. It is the singular cause of the economic breakdown the world is currently suffering from.

      • joe sod

        “Then we allow our governments to bomb the hell out of these same deprived folks in the name of saving them from dictatorships and presenting them with the saviour of democracy. The result is a return to medieval tribal warfare and religious practices and hoards of migrants.”

        very good points here. There has not been enough analysis into the failures of our elite ruling class now largely liberal. Their cack handed encouragement of the arab spring resulted in the chaos in Syria, and the failed state of libya. Surely they should now recognise that they were wrong. I doubt the ruling class of the sixties, seventies and eighties would have been so stupid. Is it the case that because of the media and now social media we are electing less and less able and wise leaders. The type of effective wise people are not electable in our current systems.

  13. The price of oil is also affected by the black market. Little talked about is how ISIS funds itself. Besides being funded in previous iterations as Al Qaeda etc by the US, Saudis, etc there is the question of the oil fields controlled by ISIS .

    Some how these oilfield are not reported as being bombed or destroyed. ISIS is reported as selling the oil on the black market. Who buys is cloudy but it has to be making its way into the world supply. I have seen suggestions that it goes via Turkey. If so Turkey plays both ends against the middle. Kurds fight ISIS, Turkey says they fight ISIS but they also fight the Kurds. Kurds fight ISIS in Iraq too and are supported by the Westin that. Nobody will allow the Kurds autonomy as they would take territory from Iran, Iraq and Turkey.

    Muddy. But this oil funding ISIS is benefitting the West in lower prices for the same oil!!!

  14. Grey Fox

    Explain to me David, or anybody else for that matter, why QE can only be used to purchase zero or negative yield sovereign bonds that nobody else wants. We bailed out banks an got absolutely nothing in return unless you want to count a so-called systemic banking system which has not reformed at all, its getting back to business as usual, our government, with the interests of its people at its heart should have insisted the distressed family home loans in Ireland were turned over to a state agency in return for saving the banks, after all that is exactly what the bail out funds were for in part – provisions for bad debt, this new state agency could have lowered interest rates, extended terms and made mortgages affordable without any sanction or conversely veto from errant banks. How much better off would be be if the mortgage crisis had not been allowed to fester for almost 8 years now? we are back to stupid prices in Dublin again, 60 year old 3-4 bedroom houses in bog standard drumcondra asking 800,000 to 1,000,000 does nobody see the lunacy of this crap, two up two down in former corporation estates back at 250,000 to 300,000, I am absolutely shocked and astounded at the never ending stupidity of people who hold themselves out to be leaders and professions, trust is destroyed, confidence is gone, there’s nothing left of traditional values one can look to, even to begin to rebuild a future and now all we are peddled by msm and government is fear and threats if we don’t pay stealth tax after stealth tax. The banks don’t need ordinary customers anymore and it seems government don’t give shit apart from once every 4 years for a couple of months when they make promises they can’t keep and spout downright lies in the place of promises they can’t make.

    • QE is run by the bankers for the benefit of the bankers ,Greyfox.

      As you are well aware I am sure.

      The question really asked is why is everyone as thick as two planks when it comes to looking at our banking and money system?

      The second question is why do we allow this to continue?

      Answer. Our economists, writers, and prognosticators are all as thick as two planks. Few exceptions.

  15. DB4545

    This is a resource war folks and it’s going to get nasty. It’s complicated to some degree by the looney tune world of Islamic extremism which isn’t the main problem although this is obviously a hot issue right now. The world has mostly been a nasty place but two generations of Europeans and North Americans and Australasians have been able to keep it away from their shores and live in relative comfort. The nice liberal people will tell you it’s not a zero sum game and we can all live in peace and comfort and prosperity and share everything out.

    It’s a nice idea but the world doesn’t work like that. Except for small children at Christmas. The global poor are looking at the world on their cheap Chinese smartphones and they want a piece of the action. They want it we have it are we going to hand it over without a fight? This is where nice liberal cultural norms go out the window. Are we all going to be nice well intentioned liberals and hand over our wallets? Are we fuck. What do we say to our own kids when Daddy is expected to provide for them?

    Read Nassim Nicholas Taleb and start preparing for reality. Or be a turkey and be prepared to fed nice meaningless platitudes by politicians. Until Christmas comes around.

    • David NZ

      It’s not a zero sum gain.

      The use of improved technology to conserve resources balanced with understanding that a population needs to be sustainable means that the world can live on what it has without destroying itself.

      The only proviso is not to be stupid.

      One countries gain does not have to be at the expense of another. 200 million plus Chinese have had their living standards dramatically improved in the last two decades. Some would argue that that is at the expense of working people in the West.

      I would argue that the wealth disparity occurring at the same time as globlisation is due to the actions of elites from the 1970′s onwards.

      Tony Brogan talked about population decrease being due to people being well fed. I think populations have decreased when there are old age pension schemes in place, women are educated and people do not have to have seven kids to ensure one of those children survive to look after their parents in their old age.

      If you look at where all the refugees are coming from, you have to ask yourself why are they coming from Afghanistan and Pakistan and not just over the border in Uzbekistan and Tajikistan. Could it be the policies of the Pakistani 1%?

      Why are the refugees coming from Syria and Iraq. Could it be the stupidity and greed of non-inclusive Syrian and Iraqi regimes?

      There is something about desert societies and zero sum gain thinking. Perhaps if there is only so much water to go around then whoever gets the water is the one that survives. Unlike Europe where it rains often.

      Watch for when the oil runs out and 30 million plus Arabs who have no other source of income decide to move house.

      • joe sod

        “The use of improved technology to conserve resources balanced with understanding that a population needs to be sustainable….”

        Sounds like a statement the UN would put out with nothing concrete to back it up. If you bring billions of people into global economy all wanting to drive cars and consume stuff no technology or conservation can trump that. The only concrete technology we are actually using is trying to extract more oil from wells that we could previously. We are celebrating that as a great leap forward in technology. It’s like the inhabitants of Easter island finding some new wood to burn that they had not seen before. Hardly the great leap forward. As I said previously we are still driving around in cars many more of them than before, all burning petroleum, electric is negligible and not new tech anyway. In 1989 the great future would be in 2015, then it turned out 2015 was not much different technology just many more people. Now the great future has been pushed out to 2040 maybe.

      • coldblow

        Your point about the Pakistani and Middle Eastern regimes is significant. By Crotty’s analysis the post colonial (ie capitalist colonized, by Europe, from the 16th C on) states are ‘undeveloping’, and that includes those you named as not providing for their populations. He could see no solution for them, though he thought Ireland could perhaps introduce radical reforms, including massive taxes on land and bank interest, plus a radical reduction of the state and a repudiation of foreign debt, which could serve as a model for these countries.

        Their elites are usually forgotten in this with the finger always being pointed at the West for exploiting them. Crotty argues that their land is not held equitably and that this (plus modern medicine causing population growth) is the source of their economic problems. I always think of an old tv review by Declan Lynch which describes Bernard Manning ‘dying’ on stage in Bombay (sic) as the local gentry froze him out: “The Silent Savagery of the Pampered Elite’. I always remember to think of the Irish elite in the same way as we are a post-capitalist colony too.

        Crotty himself wrote (A Radical’s Response) that he himself had a ‘biological family’ (or similar phrase) where you have a large family without any conscious planning, which was usually everywhere until recent centuries as the death rate more or less equalled the birth rate, so overpopulation wasn’t usually a concern. (He did also say that historically the pattern was ‘peristaltic’ with food surpluses when the populations were small, this then encouraging population growth and then famine ensuing, with they cycle beginning all over again.) He argued that when you are very poor you discount the future as your present miseries are more than enough to occupy the mind. David has said the same in his articles: when you get a decent income then, for once, you can plan for the future.

  16. I was sitting here thinking the unthinkable . It is so simple that the aforementioned “”thick as two planks” brigade will scoff, laugh and deride.

    We need a real gold standard of money. Actually we need gold as money not just a standard.
    Coins of gold silver and copper. Not a bimetallic or trimetallic system or even a unimetallic system.

    Just a coin system. coins not of designated value. Coins simply of guaranteed weight and quality. Such coins will find there own value. A value not imposed as by a State or institution but valued simply by the people who use it as money.

    It would be an international currency owned by not particular country or banker but the universal property of mankind.

    Here are some arguments in favour of gold. Thinking the unthinkable.


    Ron Paul tells us to trade and chat with our neighbours. Defend ourselves from the robbers and vandals. Mind our own business and lead by good example.


    If you want to be an economic serf with the banksters constantly clipping coin and stealing the fruits of your production you will stand idly by and do nothing about tit.Inflation is a stealth tax to reduce you to poverty.

  19. Deco

    Good article. I wish I had been able to attend, but I had to work.

    Taleb is a profound thinker. He spotted finacial model problems when the mainstream was repeated mantras about markets being perfectly priced. He spots things that others ignore, and is proven correct. Taleb is to be taken seriously.

  20. mike flannelly

    Pity Taleb wasnt Irish.
    He might not HIDE and get off his arse to tell us what a Rental Affordability Crisis is.
    Old fashioned % of your net income?
    Mortgage Arrears Affordability?
    Old fashioned % of your net income?

    When in your lifetime you live through a Financial Overvalued Debt Crisis that causes financial misery and depression for families you need a Taleb to bravely stand up and make recommendations that promote corrective actions that serve the greater public good.

    New money Irish economic commentators tell us that % of your net income is just old hat barstool economics.
    Ah sure thats too simple they say.

    Because we ignored the % of income metrics,
    Land banks were written down by 90%,
    Apt values were written down by 65%
    House values by 55%

    Soft Landing Dan was Irish I think.

    • michaelcoughlan

      “Pity Taleb wasnt Irish.”

      Thank God he is not. Such a a talented man telling the truth in Ireland if Irish would get his head blown off.


    10 years ago Peter George told you that gold would fall today

    George’s insight, especially relevant as markets resume amid another crisis of terrorism, is a reminder that no analysis of the gold market is worth anything if it fails to address these questions:

    – Are central banks in the gold market surreptitiously or not?

    – If central banks are in the gold market surreptitiously, is it just for fun — for example, to see which central bank’s trading desk can make the most money by cheating the most investors — or is it for policy purposes?

    – If central banks are in the gold market for policy purposes, are these the traditional purposes of defeating a potentially competitive world reserve currency, or have these purposes expanded?

    – If central banks, creators of infinite money, are surreptitiously trading a market, how can it be considered a market at all, and how can any country or the world ever enjoy a market economy again?

    These are the questions mainstream financial news organizations, market analysts, and most purported analysts of the gold “market” are forbidden to pursue.

    Documentation answering those questions can be found here:

    CHRIS POWELL, Secretary/Treasurer
    Gold Anti-Trust Action Committee Inc.

  22. mike flannelly

    The Barstool Theory is the opposite to the black swan theory.


    Inventive economics can be used as a SURPRISE for customers of Professional Bankers lining their pockets.

    The outcomes from Self serving economic policies with regards to simple ” MONEY OUT” of your pocket affordability (mortgage/rent) are NEVER a surprise.

    Too much “money out ” will never be a SURPRISE when the shit hits the fan.

  23. goldbug







    • coldblow

      Yesterday I got Le Bon’s classic (1895) Psychologie des Foules (Psych. of Crowds) and on the very first page he makes the same point about values and laws: Ce qui gouverne les hommes, ce sont les idées, les sentiments et les moeurs, choses qui sont en nous memes. Les institutions et le lois sont la manifestion de notre ame. The mania for reforms is the worst thing you can do for a people, he says. He mentions (still on p1) the extreme mental inferiority of crowds, including the assemblies of their elites. You can’t just change people’s nature suddently. Nature is sometimes radical, but never as we understand it.

      He could be writing for the present day.

      • coldblow

        What he means is that the laws and institutions derive from the people not the other way round. Our utopians can’t understand this.

        I am interested in crowds (and their extreme infériorité mentale – oh joy of joys!) as part of my own psychological theory (work in progress).

        I’m sure Le Bon would be delighted to see that phrase proved if he knew about Facebook and Twitter.

  24. DB4545

    David NZ

    The only proviso is not to be stupid is a nice sentiment or platitude but it’s not reality. Given the history of this Island we should be able to make reasonable risk assessments about our vulnerabilities and fragilities. Civilisations and cultures can change very fast. Adam Smith pointed to the dangers of over dependence on the potato crop. Land sown with potato crops could feed three times the number of farm labourers compared to land sown with corn. Therefore surplus land could be used for export crops. A really efficient use of land until potato blight strikes and over optimisation makes the poor vulnerable to starvation without getting into the politics or history of the famine.

    We have to think the unthinkable because that’s what responsible adults do, THINK FOR THEMSELVES. The unthinkable has a nasty little habit of biting people on this Island in the ass as we found out all of 8 years ago. Reasonable people like Taleb who have a wealth of proven experience and success managing risk and who have no vested interests in this economy have been courteous enough to come here and offer sound advice. Do we continue with our blinkered obedience to a failed political and economic priesthood or do we start taking the advice of people with real experience of managing risk rather than managing spin?

    David’s comment at Kilkenomics regarding a French socialist economist who has written a current bestseller was very telling. Apparently the socialist economist wanted a large fee to grace us with his presence which thankfully we were spared. It reminded me of a French actor who took a great interest in the Miners strike in the UK to demonstrate his socialist liberal credentials and support for the workers. Where is he now? He decided to take up Russian Citizenship rather than pay his tax bill in France. I don’t know if Mr. Taleb charged a substantial fee but I got value for my 20 quid.

  25. DB4545

    You’re an intelligent man Adam. Legal bills can be very expensive. I don’t like paying them and I don’t like other people incurring them because of any imprecision or recklessness. I’m at a loss to understand who you may be referring to. And I hope you’re keeping well in that climate.

    • You’re in dreamland DB4545 if you think anyone is going to sue you for mentioning a name on a blog, and likewise if you think I am going to keep my mouth shut.

      So it was Piketty, thanks. PIKETTY.

      • DB4545

        Adam Byrne

        I’d have to concur that it’s unlikely for someone to successfully sue in the circumstances that you mentioned but it’s a distinct possibility that someone will waste money trying at some point down the line. I wouldn’t like anyone to place me in that position so I’m not going to do it to the host of this site. I don’t comment under my own name and for that reason I try to be tactful when I comment about other people Adam. The only real point I was trying to make is that socialists love to both take and spend other people’s money but are very adept at keeping their own money.

  26. mike flannelly

    DB 4545

    The unthinkable bit a lot of people on this island in the ass eight years ago. It well and truly was our major Black Swan moment. In hindsight the whole 2000 to 2009 soap opera was truly Biblical.
    The sheer number of multi generation local family businesses throught the country that were brought to their knees. For SMEs and family businesses that were introduced to leverage by their “friendly on a mission banker”,the loss of their livelyhoods had a major effect. The sheer size of the losses were a surprise. Business people are used to profit and loss but for the butcher, carpenter, shop owner, car franchise and mechanic to be “completely wiped out” by the same bankers promoted business plan was totally unforseen.

    The removal of built in safety factors from risk mitigation programs seem to be a standard cause of black swans.

    When the shit hit the fan in 2009 the Intelligent Professional Bankers that removed the built in safety factors while paying themselves unfair gain were not surprised.

    Profession negligence and unfair gain were trail blazers for our black swan.

    • DB4545

      mike flannelly

      Taleb refers to it as skin in the game. If you offer investment advice for a fee/commission but face no personal risk if those investments go sour then you have no business offering that advice in the first place. As people say about bacon and egg breakfasts the chicken is a participant but the pig is committed. That’s why I prefer capitalist pigs to socialist chickens. Socialists have nothing of their own to contribute but they’re always willing to share half of whatever you own. That’s why I think the Euro makes us extremely fragile, everyone is a participant but nobody is committed. If our politicians and senior civil were still being paid in Irish punts do you really think they’d have allowed their pensions to dissolve in the way that the wealth of ordinary people has been dissolved? We might have seen an Icelandic response to the crisis or the crisis might have been averted in the first place. As it stands the wasters can fuck it up all over again and still withdraw their 3000 Euro a week pensions from the nearest ATM to their retirement villa.


    Perhaps you can think the unthinkable and finally agree that the US economy is collapsing just as we have been telling you for the last 4 years.

  28. StephenKenny

    Sort of off topic, but rather a nice video of a young(er) David McWilliams. If anyone doubts his previous warnings:

  29. McCawber

    Oil doesn’t have a long term future as an energy source.
    We have probably reached peak oil DEMAND and that is realy what is pushing the price of oil down because producers want to get the oil out of the ground NOW while it’s still in demand and still needed by the global economy. Sweating the assets.
    GAS has replaced OIL as the primary (new) energy source of choice but ultimately GAS’ days are numbered also.
    The new kids on the block will be SOLAR and FUSION.
    Massive amounts of money are being invested in SOLAR and the related ENERGY STORAGE and as a result SOLAR is already a viable alternative with the future looking brighter with each day.
    FUSION is now closer than the 30 year algorithm so beloved of its’ detractors. The reason for this is very simple.
    To control something you must be able to measure it.
    The advances in the last 2 or 3 years in the speed and detail with which stuff can be measured is exponential.
    ITER might never be built because technological advances may overtake it, but it still provides the impetus for a lot of research so it won’t be a total waste.
    In the interim the only real threat is if some entity manages to turn off the OIL tap in Saudia Arabia but even might not be enough.

    • joe sod

      “Oil doesn’t have a long term future as an energy source”
      That’s a brave statement. The only thing that could replace oil to any extent is nuclear in my opinion but we are going backwards there rather than forward. Germany has committed to closing all its nuclear plants, Japan has reduced its nuclear power stations. Fusion is still confined to the text books and is hardly going to emerge out of nowhere especially when conventional nuclear is being reduced. China and India are building loads of coal power stations to use cheap coal they clearly don’t believe in the “peak demand” for oil and gas or at least they would be going for gas power stations. I think we sometimes get blinded by the tech that comes out of silicon valley. Yes it has created a social and communications revolution. But technology involved in power, energy and especially nuclear are completely different to that in silicon valley. Until I see a concrete realistic replacement for oil and gas I won’t believe in it. Surely the oil crisis of the 1970s would have been the catalyst that should have resulted in US breaking our dependence on oil, it didn’t. It merely halted the increase in demand for a few years then it took off again when prices fell. It’s my belief that’s what’s happening again now. I doubt even a few tech billionaires would even have the resources to make nuclear fusion a reality.

  30. McCawber

    CBs have reduced interest rates to 0% and printed money with the sole purpose (keeping it simple) of boosting demand.
    So why hasn’t this policy worked.
    Austerity has changed the way people think about spending money.
    They now spend money on things that they NEED.
    NEED is only a subset of DEMAND.
    DEMAND is the buying of things you NEED plus the buying of things you don’t NEED.
    Austerity is a mind set and it leads to more people trying to become self sufficient or partially self sufficient. It’s a bunker mentality, batten down the hatches. Tony Brogan, if I’m not mistaken, is a good example.
    NEED is driven by austerity.
    The reason the CBs are failing is because they are not psychologists and are almost certainly using the psychology of the rich to solve a problem of the rest of us.
    In essence they are only looking at one side of the coin and we desperately need them to look at the other side of the same coin.
    The system NEEDS people and the CBs NEED to save the people.
    Instead they have been too busy saving the RICH and their banker and politician friends.

  31. I am not driven by austerity and do not have a bunker mentality. nor do I go out and borrow just to have a good time and buy on a whim.

    Your reference to CB’s ignores several aspects.

    First thing is they are the creation of the money men. In the modern age started in 1692 or so with the Bank of England. Private subscription of wealthy people to loan the new King William of Orange the money to continue the war in the Netherlands. The bank was dressed in Nationalist colours to make it look like a national institution.

    All the new money produced by this bank was of course issued as a loan to the Crown and charged at interest. Part of the deal was the bankers required a monopoly in the production of money. It became the legal tender. The banks also became the custodian of the nations wealth (gold) and held of course as a security.

    All the interest was charged to the taxpayer and the loans too as they became part of the national debt.

    Forward to 1910-1912 and plans afoot were made to ensnare the largest economy in the world, the US. Christmas eve 1913 the Federal Reserve came into being and operation. Everyone on holiday and few in the legislative chamber. The brains behind the scheme was the house of Rothschild in the person of Paul “daddy big bucks” Warburg.He of the House of Rothschild

    The Fed creation was aided and abetted by the the wealthy congressman Nelson Aldridge who enabled the bill through the senate.

    Since 1913 all countries have fallen for the Central Bank model of governance. In 1944 the Bretton Woods Agreement made the US dollar the world de facto reserve currency. It was backed by the 20,000 tonnes of gold held by the Fed Reserve on behalf of the US people. Other nations set their currency to the value of the US dollar. By this connection the currencies were held to a gold standard.

    In 1971 Nixon reneged on this arrangement by refusing to continue to back the US dollar with the remaining 8200 tonnes of gold. (the Balance had been spent by the US with spending more than they were earning, i.e. having a continual government spending deficit)

    Since 1971 there has been no restriction on the amount of money that can be produced by any country in any currency as there is no longer anything tangible backing the money.

    Not to mention the fraction reserve banking system which allows the fraudulent activity of creating money from nothing by commercial bankers to charge as a debt at interest.

    Central bankers run an autonomous monetary policy. All the money produced has been issued as a debt. All the money is charge interest.

    How can you say that the Central Bankers serve any interest other than the interests of the money managers, the central bankers shareholders themselves.

    It is no good asking the central bankers to do anything. They have no moral position to do the right thing. They are adversarial to the people. They manipulate the politicians. They corrupt society. They destroy empires, kingdoms and people.

    The central banking money system is the singular curse on mankind and the basic source of all economic and moral problems besetting society.

    It is totally corrupt. Because of the Central bankers we are become totally corrupted.

    “The reason the CBs are failing is because they are not psychologists and are almost certainly using the psychology of the rich to solve a problem of the rest of us.”

    This statement is out of whack. The central bankers are controlled by the shareholders of the central banks.
    Simply put. The central bank issues all money as a debt. Commercial bankers expand the money supply as a debt at interest.

    All money except coin is debt at interest
    People, countries, corporations now are enmeshed in the debt and strangled by it. There is no way out except by a collapse of the system.

    We will be diverted by wars and social problems so that the attention is withdrawn from the root cause of the problem. These wars and disruptions are financed by the central bank money system as they have always been.

    The central banking, fractional reserve system is the root of all the evil let loose in the world today. This is not an opinion but a demonstrable truth seem on a reasonable examination of facts and events recorded.

  32. mike flannelly

    The reason that Irelands Bloated Plastic Lefties are more detestable than the right is that they pontificate about serving the Irish working man but have a record of helping themselves and select citizens on the backs of the most vunerable non secure workers in the country.
    “All Lump sum payments and pension payments above the contributory pension must be paid for by superannuation CONTRIBUTIONS similar to private pensions.”
    The Big Magic Pot leftie economics is paid for by taxes and levies on the non secure workers and the next generation.

    How are LOW CONTRIBUTIONS for a LARGE PENSION PAYOUT to SELECT CITIZENS from taxes and levies on vunerable non secure workers even constitutional? How does this funding model serve the greater public good?


    Any legal experts?

    There is a new chairperson of the competition authority. When 100% of variable mortgage holders declared that they thought their interest rates would go up and down in line with market interest rates and DID NOT then why was this not investigated? The variable mortgage contract agreements were VAGUE and UNCLEAR. You “can not” enforce vague and unclear contracts I believe.

    Any legal experts?

    Investment mortgages were sold by professional intelligent professional bankers but had ZERO investment value from “day one”. The products did not meet the needs and objectives of the bank customer from day one.
    Its not like they didnt work out. The were NEVER going to work out from day one. Unless a “Golden Swan” arrived where everybody won the lotto.
    Restructures for these products would have seemed a formality. Instead forced firesales.

    What is the role of the competition authority with regard to mortgages that could not meet the needs and objectives of the bank customer? The mortgages were not fit for customer purpose.

    What is the role of the financial Ombudsman with regard to mortgage contracts that did not meet the needs and objectives of the bank customer? Not fit for purpose mortgages.

    I have read and asked people about the function of these critical responsible positions but am completely confused.

    Nobody can give me a straight answer.

    Should the decisions be different because a bank is broke ?

    Surely there is a seperation responsibility to make a correct decision?

    I dont know exactly how the system works but would appreciate it if someone could explain it to me.
    Im sure there has to be some straight forward explanation.

    • The variable mortgage contract agreements were VAGUE and UNCLEAR. You “can not” enforce vague and unclear contracts I believe.

      The phrase, void for ambiguity, comes to mind!!


    Public vs. Private is just another dialectic. It matters not whether money is managed privately or publicly. What matters is whether we have stable and cheap (interest-free) money. If a private interest-free mutual credit facility can provide it, grand. If Government can do it, fine. A mixture of both is probably the way forward.

    Central banks are a mixture of both: they have public and private aspects. But the bottom line is that central banks do the bidding of the Money Power. It originated in Babylon and spread through the world via Jewish Supremacism. It hides within Jewry and behind other proxies, most notably Freemasonry and the Vatican. And of course the Banking Cartel, which is a global, monolithic bloc. Through banking it also controls all major industries. This power base allows them to control every Government and every Nation on the Globe and they are looking to externalize the Hierarchy in a New World Order.

    Central banks are staffed by Goldman Sachs alumni. They keep competition out of the market. They prop up busted banks, maintaining some kind of ‘stability’. They oversee private usurious credit creation and maintain the banks’ ability to rake in trillions per year in interest. They allow the banks to create the boom/bust cycle.

    It’s high time for a new paradigm. – See more at:

    • “Imagine, in an economy nearly seventy per-cent driven by consumers, what this tax cut, in home interest savings alone, could do to stimulate the “ownership” economy – not to mention freeing the vast majority from nearly endless house debt? In addition, to avoid early foreclosures, family breakups, and financial devastation due to job loss and “free trade” job export new, more democratically-oriented, policies might allow for longer emergency mortgage relief periods to avoid exactly such no-fault crisis and debilitating chaos”


    “When the power to create our money and credit is in private hands, and based on an exclusive franchise for debt-money creation and sale of bonds at interest – as opposed to direct Treasury financing – then the entire economic and social system is set up for private profit, and debt ruin, at public expense. As history has proven, this structure is virtually guaranteed to result in endless predation, corruption, and eventual collapse at immense public expense.”

    • “”Capital must protect itself in every possible way, both by combination and legislation. Debts must be collected, mortgages foreclosed as rapidly as possible. When, through the process of law, the common people lose their homes, they will become more docile and more easily governed through the strong arm of government applied by a central power of wealth under leading financiers. These truths are well known among our principal men who are now engaged in forming an imperialism to govern the world. By dividing the voter through the political party system, we can get them to expend their energies in fighting for questions of no importance. It is thus by discreet action we can secure for ourselves that which has been so well planned and so successfully accomplished.”

      American’s Banker Association, 1924

      “America can get out of its economic woes by seizing control of the Federal Reserve, and stop using it to give 0% loans to bankers and financial interests, and instead give these loans with a hundred year maturity to the states, who could then start massive infrastructure rebuilding projects.”

      Webster Tarpley

  35. mike flannelly

    You are a mine of information Tony.

    The new chairperson of competition is also head of consumer protection.

    In other countries what is the role of the head of consumer protection and the financial services ombudsman?

    If a bank is broke is there seperation when making consumer rights decisions?

    We are a door matt generation that have no media to hold people to account and there are some decisions that you could not explain to the next generation.

    However the next generation will pay for our cowardly media that never really question anything.

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