September 7, 2016

System is rigged for the rich so the poor borrow to get poorer

Posted in Irish Independent · 124 comments ·

Sometimes you could be forgiven for feeling the best qualification to participate profitably in this Irish recovery is not being Irish.


Last week, we had Apple squirrelling away billions and now we have Nama selling large chunks of the Irish economy, billions of euros of assets, cheaply to foreign funds. Yesterday, we had confirmation that rather than paying tax on their earnings here, these funds are using a loophole to avoid tax.


A question worth considering today is whether Nama sold to these funds knowing the funds would use a loophole to avoid tax? This is impossible to answer, but it’s a question worth asking.


Several large vulture funds are using this structure, called Section 110, to avoid paying tax on revenues from their Irish operations. The S110 was set up in 1997 to enable IFSC companies avoid tax, quite legitimately, on revenues which were gathered elsewhere in the world. It is usually done via a profit-participating note, a type of funding advanced by a parent company or a lender controlled by a parent company. Repayments on this loan are garnered from repayments on the underlying asset, and shifted offshore.


But the repayments in the case of the vulture funds/landlords operating in Ireland are Irish-generated income. These are rents paid by Irish businesses and tenants to their new landlords and the money is leaving the economy directly. The Irish State gets nothing.


The fact the Government has finally moved to close this tax loophole is to be welcomed.


The problem with this story — apart from the lack of fairness of it all — is that if these funds are allowed to move their money out of the country, the Irish tax base gets narrower. When your own state actively narrows the tax base, if the state wants to maintain the level of public services, it has to tax those who can’t avail of these tax avoidance schemes much more.


As well as looking at the fairness of these tax loopholes, I want to talk about the average citizen who can’t avail of these tax avoidance schemes whether they are for vulture funds or companies like Apple. I want to show how the system is rigged for the rich and how by just standing still, the already rich get richer and the poor get poorer.


I will do this by looking at the realities of debt in the modern western economy because debt is driving everything, in particular it is driving inequality which is forcing people to vote for extreme candidates like Trump.


Before we look at the reality of debt for poor people, let’s go back to the vulture funds and examine the use of debt by rich people.


The vulture funds were in the position to buy Irish assets over the past few years because they had access to debt and could borrow cheaply to buy the discounted Irish assets. This type of borrowing for investment is one end of the borrowing scale. It is the rarified world of wealthy borrowers. Even before they get a tax break, the rich are in clover. Rich people use debt to invest. These investments generate income and profits. When debt is scarce, there’s a bigger opportunity to make money. This is because when there is no credit about, assets will be sold extremely cheaply – as happened in Ireland.


Typically, rich people also borrow at low interest rates because they have collateral to back up their borrowings.


But there’s a massive difference between how rich people use debt and how poor people use debt. This difference is driving inequality — the single biggest political issue of the Western world. However, mainstream politicians don’t seem to understand the connection between debt and poverty. They therefore seem to be perplexed when the little guy votes for someone like Trump who says he has an easy answer.


Let’s stand back and see what’s going on. The entire Western economic system is characterised by debt. Banks want to push as much debt as possible into the system. So for the banks, periods when access to debt is difficult are disastrous. Banks make no money if you and me are not in debt. The biggest difference between the economy of my adult life and that of my father’s, 40 years ago, is debt. In my Dad’s time, people didn’t get into debt. Now debt is the norm.


But let’s see how this debt world works from the perspective of equality. While rich people borrow to invest and this investment generates profits and income, poor people borrow to consume. Once you borrow to consume, you are in trouble because there is no stream of income accruing from those borrowings. There are simply repayments. These repayments don’t add to your income but detract from your income.


So when poor people borrow for Christmas and communions or the like, they start to get poorer, not richer. They also pay much higher rates of interest on their borrowings, so they not only get poorer but they get poorer quicker. As poor people’s incomes stagnate, their ability to give their kids the lives they want diminishes too. But there is always the opportunity to borrow and of course, as banks make money on other peoples’ borrowings, the bank will always have an incentive to hook the poor person in. You don’t have to go all the way down to moneylenders to see this process in action.


Consider the simple car loan or holiday loan. These are standard products, which serve to make the average guy poorer because they are constantly sucking income away from such borrowers.


Now you can argue that people shouldn’t take out loans they can’t afford. But the problem is they can afford them technically, but the loans are just making them poorer. And, the incessant consumer advertising influences the vulnerable profoundly.


This is the reality of debt.


Rich people use debt to get richer because they invest and poor people use debt to get poorer — and they don’t realise it. So as more and more debts are pushed into the system to finance our consumer lifestyles, the gap between rich and poor gets bigger. The awful irony is that ‘trying to be like the rich guy’ is often what is driving the poor guy’s spending patterns. He doesn’t realise that trying to look and live like the rich dude is actually what is making him poorer, not richer.


And of course, unlike the rich guy represented by the vulture fund, the poor guy never gets a tax break.


Is it any wonder people are voting against the elites when the game is so rigged?

  1. It is all well and fine to talk about debt. As far as you went you are correct but it is not just “poor people” borrowing to support a lifestyle they cannot afford. It is everyone.

    Why are municipalities in debt. why are states and provinces in debt. Why are countries, nearly all countries in debt. ? This indebtedness eats up all taxpayers money , rich or poor. Like others this debt repayment reduces ability of all taxpayers to to afford the present. The various levels of government are not able to provide the governance and programs the taxpayers were promised.

    The truth is that the total debt of the world cannot be repaid even at zero interest rates. The truth is that somehow the world Gross domestic output is not enough to be able to pay off the debts already incurred. Therefore paying off the debt is no longer an option.

    You do not ask the question as to why this is so.

    Start with the Central banks. They are empowered to issue the national currencies. They have been issued a monopoly for this enterprise. They have persuaded the governments by controlling the governments. The bankers can impose austerity on any country by withdrawing credit and breaking the government causing the government to fail and fall.

    It is a fact that money issued by central banks for use is issued as a loan at interest. This money does not exist until it is issued. It is conjured from thin air.
    This means that the economy is subject to this debt and interest charges before it even turns a wheel.
    It is a fact that a sovereign country can issue its own money, free, not as a debt and not at interest. WHY DOES IT NOT DO SO?

    In addition, commercial banks can lend money they do not have. In fact banks lend out 10-30 times more money than they have on deposit. There is a name for this. Fractional reserve lending. It is a legal fraud. This hugely increases the money in the economy, with every penny issued as a debt at interest.

    None of this money loaned into existence is backed by any assets. It is ephemeral, and its true value is zero. Over the years these currencies devalue against the value of real assets. We call this inflation. The currencies are rapidly approaching their intrinsic value of zero. It is not just the poor who cannot make ends meet. It is everyone. The economy of the world is debt saturated and suffocated with interest and repayments.

    The winners are the bankers and their closest associates. Financial assets are in boom, bubble territory. They will bust very soon and many “Wealthy” will join the ranks of the poor.

    We need to close Central banks and return money creation to Treasury. This would be a start to eliminate the debt. Then remove the policy of fractional reserve lending from the commercial banks to finish debt elimination.

    There is a lot more BUT

    David it is time this was examined and presented to the public. You are aware of these practices and have yet to discuss.

  2. McCawber

    “Once you borrow to consume”
    = 20 shillings and six old pence
    = Government policy
    = Central Bank Policy
    = The punter (I want it and I want it now)
    We live in a world full of equality.

  3. Deco

    Landmark article. More truth in there, than in one months output from the self-advertised newspaper of record.

    Article # 4 in a row that hit the spot.

    Welcome to crony capitalism, and the NAMA Republic.

    The wage downward pressure, clueless assumptions about opportunity, consumer behaviour, and borrowing is what has caused much of American society to be reduced to penury.

    In such scenarios, the worst thing that one can do is believe those in charge. Becauase believeing the powers that be, reduces one to ruin.

    • michaelcoughlan

      “Landmark article”.

      Sure is. Reads easy; an author at ease with his subject. I made a mistake very recently when I confused Keynesian with monetarism and it would be real good if he opined on how the world will eventually deal with a shit pile of debt too big to pay back.


      • Sideshow Bob

        A sycophant now are we?

        I am not sure if this funnier than your opinions on China ( ever been, Michael? ever lived there, Michael? speak Chinese, Michael? have you any close Chinese mates, Michael? ) or that stupid mantra you keep repeating about housing, “that increasing supply will bring down prices´´, you know like that ACTUALLY happened here in the last few decades.

        • EugeneN

          Of course increasing supply brings down prices of credit is also restricted.

          • Sideshow Bob

            Firstly, Michael doesn´t bring credit into it. Ever.

            Secondly, your mantra is unsupported. So support it with actual figures from a housing market. I am not talking about the market for playstations or jeans here. Property is what I am talking about.

            Thirdly, what actually happened was that when the supply of housing was increased of the Irish housing market in the late 1970s when credit was arguably much more restricted than in recent decades was exactly the opposite of this. Here are the figures ( from the CSO ) 1977 – 1981 Housing completions; 24,548 | 25,444 26,544 | 27,785 | 28,917 ( roughly a 16% increase ) Median house prices (£); 20,042 | 23,975 | 29,360 | 35,410 | 40,029 ( just short of a 100% increase ).

            What was the textbook mantra again? Please back it up, with reality!

            Fourthly, there is a kind of restriction on credit at the moment in terms of the new deposit requirements and this means there is little or no new lending occurring and importantly whatever developers see little opportunity of a profit so they aren´t bothering to initiate projects. So their is no f***ing SUPPLY and all your silly price diagrams can thrown out the window. There is Planning Permission by my estimation off CSO figures for something around 10,000 dwellings across the whole country and a lot of this one off housing in the sticks. This means a huge lag time until development of housing in serious numbers occurs here EVEN if lots of risk-takers brought up land in the morning and commissioned architects and all the other members of construction design teams to start the machine rumbling again. Put they won´t be. The older risk takers got burnt very badly, and there aren´t any new ones out there to take their place.

            Fifthly, and I am not going to reproduce the figures this time, one of the effects of rampant new construction in the 1990s and 2000s was that 2nd hand house prices went through the roof and surged for the first time ever past new house prices. Can you imagine, for example, production the proliferation of PS3´s making older PS1´s, Atari´s and God knows what else more expensive ( particularly were extreme scarity is not an issue)?

            In short property economics and house prices ,in reality, have a completely different dynamic to the laws of regular price equilibrium theory. Supply & price is all different.

            A new paradigm for development existing in Ireland, and we haven´t even begun to acknowledge it. Irrelevant mantras shouted out just to feign knowledge in the face of rampant clueless-ness don´t help.

          • EugeneN

            Slideshow Bob.

            There are two reasons why prices increased so much from 1977-1981

            1) not enough housing was built. 16% wasn’t enough.
            2) general wage increases and inflation. Very high then.

            if there are 100 people looking for a house and 20 houses then the cheapest house will be sold to the buyers at the 20 percentile and the median house sold to the buyers at the 10th percentile.

            If that 10th percentile buyer earns 100k and banks loan 3x, the buyer will be able to put down a deposit of 300k, the house will then be ~330-360k depending on deposit requirements. That’s where we are now. If we increase credit to 4x then housing prices increase to ~440-480k if banks are ok with maxing out.

            If on the other hand we increase supply so there are 70 houses available (we will need this if we are to maintain a 70% ownership rate) then the median buyers wages will be lower, top 35% but more importantly cheap housing becomes available.

          • Sideshow Bob

            This can’t be EugeneN. You are using reverse logic with the assumption that the price eq
            uilibrium model is correct and exists in some perfect pure market and then you work backwards to find a simple answer that fits.You are also assuming that demand was not equalled and you are assuming that the new built stock was the only stock available to buyers. It wasn’t. The government had a right to buy scheme for 10 years at that point going for social housing and was selling off massive amounts of stock at big discount. Als a fixed amount

          • Sideshow Bob

            Sorry hit the wrong button…yeah also about 5000 units a year was going to new social housing stock. So the market wascomplicated and I would be surprised if there wasn’t some profit taking. I imagine there was heavy inflation and migration outwards wasn’t high by 80s standards. However there was no big drop off in the eighties when most of the country legged it in price or housing production. Actually price kept going up. Housing production ony dropped off a few thousand when charlie charvet shirt haughey plugged the plug on mass direct social housing. I will come back to this price equilibrium model idea further tomorrow it is far too simple.

          • The discussion on what caused the surge in housing prices is off the mark again.

            The same problem occurred around the world. This speaks to an international problem rather than just a parochial one.

            The cause of rising house prices is the low interest rates. Cheap credit = higher borrowing. Cheap credit is the direct result of huge increases in the money supply intentionally orchestrating the lower interest rates. (Remember the market maxim, the greater the production the cheaper the product.

            This is a central bank objective. Debt was killing the economy as early as the 1970′s. The restriction of the money supply had to be stopped and the price of credit reduced or the world would fall into recession as the debt was worked out of the economy.

            This was delayed by removing the restriction on credit by breaking with the tie of the US dollar to gold. Nixon did this following bankster advice.

            The crises were averted until now that interest rates are driven to negative territory. BUT there is now so much debt that even a low cost/no cost loan cannot be repaid. If you offer the bankrupt a loan of 100 and tell him he only must pay back 80, what a deal, getting paid to borrow– he will say I cannot afford any more payments so I cannot afford the free loan.

            The averted minor crisis has now grown to one that will kill the economy. DEAD.

            I repeat, again, and again, and again……

            It is the banking system that is the basic problem.

            Why do you ignore the truth and waste your energy debating irrelevant issues?

            I forgot, this is what the PTB want you to do and they are aided and abetted by the MSM hacks who either through ignorance or willful deceit lead you all astray to divert your attention from the real issues that would resolve the problem.

            It is a bit like our medical systems. We treat the symptom and not the disease, far too many times.

            As quoted above not one person in a million understands our money system. Our education is sadly lacking. It is deliberate policy by governance and the banksters.

            GET WITH IT and save yourself from economic serfdom.

          • Sideshow Bob

            Hi Tony,

            I agree with your comments about the role of central bank money and it is the reason why in any part of the world ( and, equally in countries controlled by supposedly left or right wing governments ) that house prices are many multiples of average salaries. However, it is not the question that was being debated above.

            The question was more related to supply and demand and market behaviour in the housing market. The mantra I was objecting too was that increasing supply in housing automatically results in lower pricing. It clearly doesn´t it results in speculative bubble and eventual collapse in the price relative to the high point. If you have avoided distress across the long bubble and have cash handy you can finally pick up that cheap property. But isn´t normal behaviour.

            I guess Tony I am interested in what is going to happen next here, because we are in a new type of crisis and all I can see around is the same non-critical thinking that got us into it.

            What said about fiat money raises an interesting point though. I would be curious to see what occured before the gold standard was dropped. Did housing prices ever drop as a result of increased supply?

            I have only ever examined prices and housing completions & PPs in Ireland from 1975 onwards and to some of those stats for the UK. I never thought about looking at in relation to the gold standard.

            What says you Tony, would that be an idea?

          • @Sideshow Bob

            Hi SB
            The point I was making was that we get tied up in petty debates about side issues. The central bank policies is what rules all. solving the money supply fraud would resolve the other issues.

            However the system is so out of balance because of the CB manipulations there will inevitably be a gigantic reset. It cannot be avoided now. Nobody wants the blame for the coming chaos so the banks pretend they are the solution and that a change in the money system would be catastrophic. They do all they can to delay. kick the can down the road a little further. Put the blame for the collapse on someone else.

            Returning to the RE market. I spent 32 years as a broker. Real estate prices are affected by two things. Supply and demand (the market) and credit (a manipulation of the market or a market swaying factor)

            There can be several market places in one city. There are the desirable areas and the not desirable. It can easily be seen that the former have higher prices than the latter. (supply and demand factor. )

            In realestate the extra demand by a unit of 1 can have an exponential effect on the prices. Suppose There are 20 properties for sale but 19 buyers then the pricing eases downward because there is competition to be sold.
            Increase the buyers to 21 and 1 is going to be shut out of this market. The competition to see who is at the bottom results in prices being bid up substantially. This is why there is such a difference in pricing between different neighbourhoods.

            Let us suppose this happened in an era of no, that is zero, credit. People would have to save to have the money to buy. This would restrict the pricing to those able to pay cash.

            Then let us suppose there was suddenly unlimited credit. Immediately there would be a tidal wave of buyers competing for realestate. The prices would jump multiples overnight.

            We live between these extremes although we have verged toward the unlimited credit.

            It is clear that credit availability has a huge effect on prices. The manipulation of credit is the forte of the central bankers. Easing credit raises prices and gives people the feeling of what is called the “wealth effect”. They feel happier and more satisfied even if they are working harder than ever to make ends meet.

            Sooner or later an equilibrium is reached with all these factors and prices stabilize.
            change any input and the equilibrium will have to reset. This is the normal function of a free market place. It adjusts to suit the preferences of the greatest number of participants.

            Enter government with rules, regs. and political goals. Restrict the use of property to only certain things (zoning, and planning, and political patronage) and immediately the market factors are skewed in favour of someone or something.

            Playing around with credit is a favourate tactic of government. Having a stable money supply helps the stabilize the economy and the whole of society. Having CB policies that give us artificial low interest rates and a volume of credit that is unprecedented in all of the history of mankind will have an unprecedented effect on all market places, including real estate. Thus to solve the real estate problems discussed is not possible until the CB policy distortions are dealt with first.

            This is where David must extend his commentary to in order to have any effect og a cogent policy that works.

            The last 100 years of central bank policies have caused crisis after crisis that has been adjusted with policies that kick the can down the road. Unfortunate for us all the road is a cul de sac and we are at the end. There is no way out except to return to the straight and narrow road of stable money.

            This means the CB policies must be stopped. the central banks must be closed. The fractional reserve banking practices of the commercial banks creation of credit must be stopped and the money system must be placed in a position where the money acts like money should.

            A medium of exchange.
            A store of wealth
            Readily acceptable around the world.
            Easily portable, a large value for small volume
            Easily divisible.
            Fungible. Each part is exactly equivalent to any other part.

            It is exactly why central bankers after all these years of the denigration of gold as money, to deceive the people into accepting a poor substitute, have retained their gold holdings, are secretive about how much they hold and are on aggregate accumulating more.

            The current system of debt based money charged at interest robs us all. Firstly by inflation, a form of stealth tax and second by creaming off the top via interest charges on imaginary money. This is DISHONEST money.

            We need a return to HONEST money and then we can fix the other problems that are relatively minor.

          • Sideshow Bob

            Tony Brogan,

            I found your last post on here aimed at me to be quite patronizing, and much too hypocritical to let pass. I am tired of having simplistic and completely unrealistic equations and little descriptions of 20 buyers give or take one altering the price equilibrium and all the ridiculous assumptions that underline such things thrown at me to “prove´´ or demonstrate something. The world has never been so simple.

            Your 32 years of experience in Canada doesn´t apply here. Doesn´t apply anywhere else in the world. Apples and oranges. I would say particularly so if it just took just a couple of months to qualify as an estate agent/broker before you worked with this.

            Your rage about fiat money and central banks is totally risible. Here you are Mr Life is good I am a wealthy man but where did you get this wealth except as a cut of property deals, i.e. from business activity on based on creating anything of value or true human use but actually based on extracting fees for services in deals conducted on the back of central bank shenanigans and the very fiat money creation system you decry here. Were any of the deals even socially useful? You strike me as being like the pilot of a nuclear bomber who is simultaneously an avid CND campaigner. Please make up your mind about what you are. Nor not. Your choice.

            You spoke before here, too, about how you have been up and down in terms of wealth, that you have been close to broke twice or three times from your involvement in property dealings. Seems to me like you only had half an idea of what you were doing. Would that be right? Did you have a weak education as a realtor? Was only for 4 months as I suspect? Did you learned a couple of silly equations and went forth into the world well groomed and business like believing the self-confident BS that was flowing out of your mouth? Seems that ( if I choose to believe what you have said here, ) that at this point you have escaped with your big piece of the central bank generated ponzi pie and well prior to the on-coming collapse you are predicting. And you have provided well for your kids, better than you had apparently. Seems to me, too, like you have played part of whatever ills will befall your progeny in the future economy. And those who were disinherited, equally.

            I wonder if your descendants will blame you? Do you think about your ancestors?

            Seriously, I think you should move on and reconcile yourself with what fiat money has given you and stop exorting people to engage in pointless acts like buying gold or protesting against central banks. You would be happier, I think.

            And please don´t bother commenting after me again, I won´t be paying attention.

        • michaelcoughlan

          “A sycophant now are we”

          My post wouldn’t lead someone without a bias to draw that conclusion. I can’t remember giving many posts on china. As for house prices coming down? What planet are you living on? Prices COLLAPSED.

          In most of the towns and villages outside of Dublin you will buy a house or an apartment for way LESS than the cost of building it so there is no development. Rents are SKYROCKETING due to the demand for places to live in the absence of supply and the ONLY thing that will bring down rents is INCREASE IN SUPPLY of rentable accommodation.

          Don’t waste your time throwing red coloured balls of shit at me comrade.


          • Sideshow Bob

            Comrade Coughlan,

            Do don´t have `the hump´ now do you? You can give it out but you don´t like taking it, to be sure!

            The last time rents fell though the floor and the market loosened up was when a lot of people ( mainly associated with the building industry in some way shape or form) lost their jobs. Subsequently a others in service industries lost their jobs and a lot people migrated. So there is more than way to reduce rents ( and increase availablity of existing stock). Plesae stop dealing in absolutes, particularly when they aren´t supported by facts.

            You really should get over yourself it – isn´t 2010 still. That was half a decade ago. Prices have been moving up for a while, where have you been living?

            In fact ( and I deal in facts not petty insults ) price ( which you seem to obsess and fixate about ) has only dropped 4 of the last 40 years ( safe as houses – have you heard the phrase? ). The median house is still of the order 20 times what it was in 1975 even though there has been 1.3 million units built in the period since then. It was up to 25 times. So it´s still at 80% of that increase, so that isn´t a total collapse.
            From 1975-2007 there was a constant increase in price REGARDLESS of the state of supply , and despite a huge drop off in social and affordable house building around 1990 and the subsequent uptake in private building that followed for 15 years afterwards( it averaged 22k units normally throughout the bad 80s and went to 30k in ´96 rising steadily to peak at 90k in ´06, it has been 10k -ish for a few years now ).

            And I have a question or two; if there is an absence of supply ( i.e. the market is dysfunctional ) how do you know what it REALLY costs to build something? I mean where is the cost data base coming from if nothing much is being built? And in particular if nothing is being built at a profit supposedly? Are there builders out there performing acts of charity by building houses at a loss? Is there a competitive market out there?

            Or could it be a mantra coming from CIF HQ, Department of Propaganda? In the eighties, the bad old eighties we routinely built 25k units in a median house price environment of around 45K. Strange that now with a median house price of 275-300K, we can´t get it together?

          • michaelcoughlan

            @ sideshowbob;

            “and I deal in facts not petty insults”

            You started your previous post by calling me a sycophant and I’d say most people on the blog wouldn’t say that about me.

            Your observations re me not mentioning credit is true. There is no such thing as a perfect market no question. Availability of credit is one thing but if people don’t want the product even with credit available the price will still stay low.

            There are 200k idle houses in Ireland and they are priced below the cost of production because even though credit is available no one wants them in their locations so supply must increase in areas where their is demand and availability of credit.


          • Sideshow Bob

            Right there Michael,

            The surplus figure is lower.

            200k houses is a 10% vacancy rate, and a normal rate in some kind of ideal balanced market is viewed as being about 5%. However, that is a cultural idea and depends on in-habitation patterns. Obsolete (derelict) units are allowed for at 0.5% or estimated at 10k units. I would say it is higher because that is about 400 per county. So that leaves you with about 90k surplus units.

            This was flagged 6/7 years ago.


          • Sideshow Bob

            Micheal, keep repeating the mindless CIF propaganda if you want. There was something like 9k units produced across the country every year for the last three that is 25k below the 40 year average. Take out 4k one off housing units ( I will assume self-built on cheap sites ) and pathetically low 300-500 social housing units per year that leaves 4.5k housing units nationwide a year to base speculative cost data off. NAMA probably accounts for good chunk of that. These would be in various states of completion and could be anywhere in the country.

            Seriously, I don´t see where it would be possible to make reliable estimations of cost out of such a situation. It is too dysfunctional.

            But if it makes you feel better, keep repeating the mantras.

    • McCawber

      Perhaps you should leave sycophantism to the Civil Servants and their politicians.
      Oh and BTW I had to look up the meaning of sycophant so would you guys mind using plain English so I can understand what you’re talking about.
      Insincere would be fine.

    • Sideshow Bob

      Hi Deco,

      I think you might be getting Stockholm Syndrome here…check the following out…about 5 mins in Max Keiser mentions what he thinks of of one of D McWilliams current stances…and mentions is a good report and it features Constantin Gurdgiev talking in specific and accurate detail about Apple & Ireland in the second half.

      As for that high rise article from two weeks ago have a look at this and see if you recognize any of it….by the way all the quotes from the Dublin City Council are materially wrong…

  4. goldbug












  5. EugeneN

    I doubt that David’s father didn’t get into debt. He probably bought a house with a mortgage. The problem with today’s society is the opposite of what the goldbugs think, there’s not enough inflation, not too much debt. If inflation runs at even relatively low levels of 3%, then private debt and public debt are reduced over time. Interest rates trend higher reducing asset increases and attracting money to banks not shares etc. And countries have had high debt to GDP ratios for centuries.

    In fact we should abandon inflation targets or target 5%, as well as full employment. The post war concensus did exactly that.

    • McCawber

      Inflation is bad and acceptance of inflation is all about bad habits.

      • EugeneN

        Inflation is bad is actually an elite position, masquerading as a normal mans ideology. Inflation reduces the cost of private and public debt, and is an economic stimulant. This is known even to classical economists. Which is why 2% is considered good but 1% or less bad. To mortgage holders it reduces the real cost of payments over time, increasing disposable income. It tends not to harm savings if invested in savings accounts but it does harm holders of bonds and shares tend to track, but not exceed, inflation. In deflationary eras with monetary stimulus shares and other assets increase but wages do not.

        • McCawber

          No inflation is the lazy man’s solution.

        • There is no such thing as good inflation as far as the average Joe is concerned.
          The true definition of inflation is the inflation of the money supply. That’s it. Period. A constantly expanding money supply simply devalues the value of the money. The result is that the money buys less goods and services that it did.
          The apparent result is that prices are rising when the truth is the currency is subsiding in value.

          If it is done in large measure the effects are immediately noticeable and everyone complains about the rising cost of living. If there is no inflation the stealth tax ans ability to manipulate the economy is lost. The bankers pretend that 2% inflation is good. It allows them to skim the economy gently and the people , like the frog being boiled in the pot do not notice the heat rising.

          In fact even as little as 2% inflation will rob your savings of 50% of its buying power in 36 years. Likewise a 4% inflation rate will rob your savings of 50% of the buying power in 18 years. This is much more evident. A 10% inflation rate will reduce the buying power of your savings by 50% in 9 years. Of course you could be in Venezuela and have your savings worth half their value by lunchtime today.

          Because the debt based money system has to be added to in money supply or the system busts, they have to have inflation in the system. The reason is that as all th money is issued as a debt there is a constant demand for interest payment. Yet only the money to repay the principal was issued . Payment of interest results in more money being repaid than was borrowed.
          This if the debt were repaid in full, result in there being no money left in circulation but the interest still owed. The only way to repay the demanded interest is to hand over some capital asset with which to pay it.

          Thus as we pay the interest we hand the results of our labour directly to the banks and shareholders of the central bankers. To stop this being so evident the bankers rig the game by lending ever more principal with which to pay the previously charge interest. Thus the current money system is a giant ponzi scheme which will collapse without continuously added money. This is provided to us at no cost to them by the banking system. Thus the bankers reap the rewards of mankind’s labours with the simple production of more and more money issued by them at no cost , as a debt with interest attached.

          At present the world is so overloaded with this debt and the attached interest that it has sucked the productive capacity out of the world economy and it is grinding to a halt.

          Many people are warning us of this but few heeding it. The patsy governors of the central bank are trapped by this and have nothing they can do now without speeding the collapse. So, they do all they can to defer the collapse.

          When it the money system goes down it takes the economy with it. Those hold money and monetary assets such as bonds and stocks will find this money is not wealth but a chimera. The wealth is stolen and appropriated by the banker elites.

          Only those that hold real assets will survive. When the collapse occurs the same banksters will step forward with a new solution ready to scoop any wealth left that they do not already control.

          There is no such thing as good inflation. It is a bankers ploy to asset strip us all.

          Also this has nothing to do with your derogatory reference to “Gold Bugs” although most so called gold bugs are aware that gold as money does not allow inflation to flourish in any form and so prevents the robbery of the people by the banker elites. Thus it provides for a stable economy and the generation of real wealth.

          Gold bugs see the real problem as you do not and have your welfare at heart and the welfare of people in general. Do not disparage those who seek a genuine solution to the pauperization of all peoples. You have been lead astray by the propaganda of the elite cabal and thus you work against the interest of people in general and for the policies that will enslave you in economic serfdom.

        • McCawber

          Inflation and the people who champion it is/are the real enemy.
          Inflation allows governments to borrow to excess and govern badly.
          Inflation allows governments to borrow on behalf of the poor to give to the rich.
          It doesn’t suit them and the champions of these policies (The CCs and EC for example) to admit it.
          Technological productivity has been growing at a truly phenomenal rate, the price of everything should be lower than it is, significantly lower.
          Despite the printing of enormous amounts of money that rate of productivity increase has still managed to prevail over inflation or more specifically QE.
          The governments of the world and their CCs are ignoring this fact simply because if they don’t they might actually have to do something about it.

          • EugeneN

            You guys really are the problem. A good example of how elite philosophies convince simple minds that’s what’s good for them is bad. The post war consensus based on Keynes was that we should target full employment using fiscal not economic policies, but not inflation, and the result was 35 years of growth and particularly wage growth. Inflation was much higher than now. So was wage growth (I’m talking about western economies in general). This also worked within the gold standard. Since the 1980′s the neo classical argument is opposed to full employment, they used an external shock in the 70′s (oil prices) to discredit Keynes but it was a once off. The mantra then became price stability. This needed low wage growth, globalisation, crushed unions. It is where we are.

            Inflation didn’t, despite the sub educated whine of the gold bugs, pauperise savers. Interest rates on savings accounts were always higher, strong unions and even government (wage agreements even in the US) ensured that wages and pensions tracked or beat inflation. The result was huge wage growth.

            inflation is bad for creditors though. Although you can charge high variable interest rates during the time of high inflation, once it moderates you can’t and the debtor is paying back much less in real terms. My dad told me his car loan was more substantial than his house loan by 1987. He bought his house in 1970. In a time of low inflation that won’t happen.

            What will happen, particularly if we have low inflation on the CPI and thus wages, but continue with QE is massive asset inflation of stocks and housing. Neither are part of the normal bundle of goods bought each week so they are not included in the inflation figures. Nor is rent included since only a minority of people are in the rental market.

            In any case formally we live in, and have lived in since 2008 across the west, a low inflation environment. Wages stagnate. Debts remain enormous and are not inflated away. That’s not working out so well

          • Quote from Detlev Schlitchter in Paper Money Collapse, bottom p157-top p.158
            “In terms of the predictability of price trends, the moderate inflation officially targeted in paper money systems today has no advantages over the moderate secular deflation in a commodity money system. But in all other respects, and in sharp contrast to generally held beliefs today, secular deflation has many advantages. In a commodity money system, the monetary asset is likely to provide a small steady return through the on-trend decline in prices, which allows those without investment expertise (or the means to purchase investment advice) to save through cash holdings. On the other hand, the constant injection of new money in a paper money system has to lead to the distortions of interest rates and to the misallocations of capital that we analyzed earlier and that will progressively unbalance the overall economy.”

          • McCawber

            You are putting effect in front of cause.
            Inflation allowed our politicians to adopt lazy careless and very damaging policies ie borrowing for consumption and not for investment.
            This lead to the economic bind that the world finds itself in now.
            The absence of inflation forces our politicians to feel the bite of reality. You can add our civil servants and bankers to that list.
            You need to stop believing your own pr and look outside “normal economic ideologies”
            BTW you are right about us being elite, that’s why we know what we’re talking about.

          • Sideshow Bob


            I would agree with Mccawber of the Elite there. You are mistaking effect for cause.

            WW2 you may have heard involved lot of bombing and death in Europe and in Asia. Japan and Germany took the worse of it by the end, yet by the 1980s they had raced past most of the victors with the exception of the US.

            Post war growth and development was possible for them because of the mixture tech advancement and destruction that occurred during it. Wholesale destruction = tablua rasa for reconstruction, with lots of things to be developed afresh and with no elites or groups in dominant positions and so less energy dedicated to infighting and protection of status. Post WW2 isn´t just a time period, it could be a completely different economic landscape depending where you were. You can´t lump it all together in broad strokes to support a simple equation.

          • Grzegorz Kolodziej

            Eugene N,

            “The post war consensus based on Keynes was that we should target full employment using fiscal not economic policies, but not inflation, and the result was 35 years of growth and particularly wage growth. Inflation was much higher than now.” – inflation was much lower than now in property prices, house/rent/mortgage prices are the main components of the expenses of anyone aged 20-45 who does live with his/her parents and did not benefit from the house inflation. For example, in 1913 the rent for the apartment in Dublin city centre was only 1/6 of the unqualified worker’s wages (with heating costs, it was around ¼). Nowadays it would be 100% or more. It’s hard to imagine now, but if we adjust the prices of those nice red brick pre-WWII houses in working class estates to today’s inflation, it turns out that the average price of the house in the 30s was an equivalent of only 30,000 pounds today – does not seem like a low inflation to me, considering that the price of these houses in London today in north of 1,000,000 pounds.

            The post-war 35 years of growth (and particularly wage growth) can be attributed to:
            1. In the US:
            1.1. President Truman’s and the Republican Congress enormous reduction in public spending
            (btw, the DB bus strike would have been a doddle for the Democrat Truman – in 1946 he drafted the strikers into the Armed Forces).
            1.2. President Kennedy’s tax cuts
            1.3. Dollar as inflation exporting mechanism
            1.4. Bretton-Woods illusion of dollar being convertible to gold by the state – when gen. De Gaulle called the bluff, the US had to abandon Bretton-Woods and America turned from the biggest financial capital exporter to the biggest financial capital importer (the Kissinger doctrine: since we no longer have trade surpluses, let’s use other countries surpluses).
            1.5. Post WWII demographic growth (the baby-boom)
            1.6. No competition from other continents
            2. In western Europe:
            2.1 Spillage from the US growth
            2.2. Post WWII demographic growth (the baby-boom)
            2.3 In Germany, clandestine repatriating stolen assets from other countries (particularly eastern Europe, as envisaged in a secret meeting at the Maison Rouge Hotel in Strasbourg on August 10, 1944 that lay grounds for the Erhardt’s Wirtschaftswunder, as named in the US Military Intelligence report EW-Pa 128) and investing them in west German companies, London Debt Agreement and deregulation
            2.4 No competition from other continents
            3. Even Poland experienced some kind of boom in the 70s (allowing for the lunar lunacy of its regulations) after abandoning First Secretary’s Comrade Wladyslaw Gomulka’s d e p o p u l a t i o n plan, which was a continuation of Himmler’s depopulation plan for eastern Europe. A socio-cybernetic Józef Kossecki, who revealed that Gomulka was using Himmler’s depopulation propaganda methods aimed at encouraging people to have abortions and only one child, had received 3 years jail sentence; he was released under comrade Edward Gierek. Under Gomulka, even flats were purposely built with 2 rooms and a kitchen and no lifts in the building to discourage having more than one child, despite Poland being at the time in the top 10 in the world in production of the raw materials; nowadays, when both the World Bank and the EU experts returned to implementing – since the early 90s – Himmler’s depopulation plan for eastern Europe, and have repeatedly claimed that the optimal population for eastern Europe should be 15m in order to create a buffer zone between Germany and Russia (both countries also suffering from depopulation, hence the import of Russian Germans and the migrants to Germany) with no heavy industry or army (as demanded in the 80s by E. Shevardnadze as the condition for USSR’s agreement to German reunification), even Catholic newspapers in Poland would not dare to write about Himmler’s depopulation plan so that people might have some associations (this has changed last year after sacking from TV the journalists paid by German foundations, hence the rage of the EU Commission at the Polish government).
            4. Here is where Keynesism did not work:
            4.1 Africa (all IMF and World Bank advisers were Keynesian)
            4.2 India (recently they seem to have abandoned Keynesism)
            4.3 Japan of the last 2.5 decades (out of all OECD countries, Japan is the closest to a Keynesian ideal: low interest rates combined with stimulus programs – all that is missing from Keynes’s book is digging holes and covering them up to create the full employment).

            “we have low inflation on the CPI and thus wages, but continue with QE is massive asset inflation of stocks and housing. Neither are part of the normal bundle of goods bought each week so they are not included in the inflation figures. Nor is rent included since only a minority of people are in the rental market.”

            But QE is a variation of Keynesism. Increasing money supply and lowering interest rates are essential part of Keynesism. But they also cause misallocation of resources and drive up the property bubble.
            The rent is not included in the inflation figures not because the minority people are in the rental market – in Paris 99% of people are renting, yet rents are not included in the inflation figures – but because including them would reveal the real inflation rates, and this would dispel the myth of price stability guaranteed by the central bank. It is only a matter of time when the whole edifice crumbles and hyperinflation moves from housing to food prices, hence my appeal that even if Ireland was never to be attacked, it should still have a proper army to deal with the anarchy that will ensue when Ireland, Europe’s 3rd most energy import dependent country in Europe, will find itself in an anarchic world of hyperinflation in food prices. Bear in mind – ALL civil unrests in the socialist Poland started after drastic increases of food prices, all of them: Poznan 1956, Gdansk 1970, Radom 1976 (also the beginning of the demographic collapse thanks to Gomulka’s depopulated generation entering the job market), Gdansk 1980. Each of those strikes resulted in multiples of Bloody Sunday in victim counts among the strikers alone.

            “In any case formally we live in, and have lived in since 2008 across the west, a low inflation environment.” – no, the low inflation environment was in Kennedy’s times when the average price of the house in the US was twice the average earnings (now it’s 10; in Ireland pre-crash it was 40 and the Financial Times claimed that in Dublin it was even reaching a 100, but I haven’t done my own calculations that would allow me to either accept or reject the last figure).

            And by the way – according to your logic, Eugene, if “Inflation reduces the cost of private and public debt, and is an economic stimulant.”, then Zimbabwe should have the biggest economic growth in the world and the lowest debt.

            “You guys really are the problem. A good example of how elite philosophies convince simple minds that’s what’s good for them is bad.” – a perfect description of your post on inflation. Your post on houses in turn was interesting. I would factor in zoning into the supply issue (as far as I remember, that did not start in Dublin until 1963 and at that time house prices in Dublin were not higher than in the rest of the country).


            At 8:35mins old Nazi document that had plans to de-industrialise Britain


            Bill Gates and his “charity” work:


          • Thanks Grezgorz
            a good one.

          • Sideshow Bob

            Jeepers Grezgorz,

            I agree with Tony; a good one.

  6. AlfieMoone

    “Everybody knows that the dice are loaded
    Everybody rolls with their fingers crossed
    Everybody knows that the war is over
    Everybody knows the good guys lost
    Everybody knows the fight was fixed
    The poor stay poor, the rich get rich
    That’s how it goes
    Everybody knows
    Everybody knows that the boat is leaking
    Everybody knows that the captain lied
    Everybody got this broken feeling
    Like their father or their dog just died
    Everybody talking to their pockets
    Everybody wants a box of chocolates
    And a long stem rose
    Everybody knows..

    Everybody knows the deal is rotten
    Old Black Joe’s still pickin’ cotton
    For your ribbons and bows
    And everybody knows”

    “Everybody Knows” composed by Leonard Cohen & Sharon Robinson.

    Sharon Robinson – Everybody Knows – live at Bremen, Copenhagen – 22/8-2016

  7. McCawber

    The problem is “There is no credit growth”
    Comment on CBBC this morning.
    And yet debt is increasing.
    Is there a contradiction here.

    • sravrannies

      There’s a definite signal that thing are bad – discussing economics on Children’s BBC??


      • AlfieMoone

        ‘There’s a definite signal that thing are bad – discussing economics on Children’s BBC??’

        No, it’s an improvement but clown costumes on Economics Experts would be even better. The genius of Kilkenomics was not that it tapped into the then current ‘Economics Is The New Rock’n'Roll’ during the Great Financial Crisis and it’s aftermath but that it acts as a weekend of prophesy of a time soon to come when Economists are put into the stocks and the Great Unwashed line up to throw rotten eggs and tomatoes at them. I think this would make a very good audience participation event at this year’s event with perhaps custard pies for lesser offenders. It would go like this. Each event would have the usual Mrs Merton style ‘heated debate’ then the Audience would vote and decide who’d won the argument and who had make a total eejit of themselves. The loser would be placed in stocks and pelted with each egg/tomato priced appropriately so some Euro go to deserving causes, like helping Apple deal with their onerous tax bill, perhaps?

        I am SO looking forward to rolling up in Kilkenny in full-on Peaky Paddy Blinder BCFC mode and causing havov, heckling all and sundry in a broad Brummie brogue till the guards turn up and say “ah, Jayzus, Andy! Have you no respect for your family honour? The tribe resided a mere 14 miles away on the county border and you’re here acting the goat again…Final warning, BrummieBoy!”

        It’s proving slightly more challenging to get banned from this blog than I envisaged. Time to ramp it up. Where’s that flame-thrower…”I’m a firestarter..twisted firestarter…”


        Actually, I’m loving all this ‘goading Official Ireland’ lulz at the moment. You can go on Twitter, poke the Irish Intellectual Illuminati with sticks and they just have to put up with it and keep their traps shut and play *crickets* whilst banging their fists on their phones and cursing me…it’s going to be fun to photobomb them all at Kilkenomics and put them on my online Hall of Shame alongside the rest of the soliders of infamy….

        Goodness, is that the time? I suppose I better rejoin the ‘real world’ after a leisurely lunch in this sultry indian summer heat. Laters!

      • McCawber

        Ha ha typo CNBC

    • No contradiction. to issue Credit is to issue new debt.
      The old debt has an interest charge. If not able to be paid the interest accrues as an increased debt load.
      The reason credit is not issued is because of debt saturation . It cannot be afforded. Neither can the payments be made on the existing debt, so the interest suffocates and adds to the debt.

      Result no new credit issued but the debt load increases. Perfectly logical.

  8. Mike Lucey

    Good article David, Tony’s mantra must be having an effect ;-)

    The only gripe I have is that you refer to ‘The Donald’ as “extreme candidates like Trump”.

    While I pity the US electorate with the choice they have between Clinton and Trump I think Trump is basically quite level headed in a lot of his proposed policies. He is by no means ‘PC’ but again I think folks are pissed off with all this ‘PCness’ that has come into play over the past few decades.

    He calls a spade a spade and this strikes a cord with a lot of US folks that are currently disillusioned and becoming poorer by the day.

    For ‘The Donald’ to win he may need a landslide if what I read about how the votes will be counted is correct!

    ‘Spanish company will “Count” American votes overseas in November’

    The Irish kicked out the idea of using electronic voting machines as they has the cop on to realise that the results could easily be rigged. The system might however work if the machines issued a forge proof receipt showing the elector’s choice. Then again the old system is just fine although slow but what matter that it takes a few days to get the final results. At least with the old system of counting we can recount if things are close.

  9. Truthist

    Dear USA voters based in Ireland who happen to be readers of this blog,

    Please find as 2nd link herein the damning proof that the most extreme USA Presidential Candidate of the 2 appalling main contenders is Kill-ary Clinton
    Forthrightly named by Cathy O’Brien,Irish American & victim of USA Government Monarch Brain-Controlling Program, & attested by the USA courts as being victim AND with damages paid by Uncle Sam, as being a pedophile abuser of Cathy O’Brien.
    Cathy O’Brien: Ex-Illuminati Mind Control Victim
    Hillary Clinton Wants To Obliterate Iran

    • Deco

      If she wants to obliterate Iran, she could put a punch of amateurs in charge, and watch them do the job.

      Which is what is happening, currently under the current Iranian leadership.

      The young people are drifting away from the leadership.

      Give it a decade, and there will be a takeover from below.

      And it will be very healthy, compared to what exists in the Middle East, because it consists of a a rejection of the core tenets of the current political ideology in Tehran.

      The real danger, is that when that time comes that other Middle Eastern countries might decide to destroy a secularist Iran.

      • Truthist

        Iranian Revolution of 1979 was actually orchestrated by The Dreadful Few ;
        Using these proxies : USA, France, & of course UK.
        Ayatollah Khomeini was not even Iranian ;
        He was from Afghanistan.
        Said to have Brit. spook middle-east adventurer father ;
        Williamson ; From Bristol, England environs.
        And, Ayatollah Khomeini is said to have been homosexual ;
        Thus, agreeably malleable to the Spooks.
        Anyway, he was planted into Iran by the Proxies for their plan.
        Shah of Iran — also said to be homosexual or bi at least [ ditto agreeably malleable ] — had departed from being suitably compliant for The Dreadful Few ;
        Especially, because he was seeking to overturn the terms that “The 7 Sisters” had to loot Iran of its oil.
        Iran is very advanced in many ways ;
        Very high output of female university graduates.
        I reckon that Iran would be very high tuned in the fundamentals of engineering & mathematics.
        Culturally much richer than Ireland “now” ;
        Iranian women is attested by many acquainted with them as perhaps in gereral the most beautiful of any.

  10. Mike Lucey

    ‘Nigel Farage: Ireland, if you think Apple is bad you ain’t seen nothing yet’

    Could what Nigel Farage says be what will happen? If so we’d better get a Plan B in place quickly and get out of this undemocratic EU mess as soon as possible. On an exit we at least would be ten times larger and have sometime solid on which to build a future as quality food suppliers to the UK and anyone in the World that likes to eat healthy.

  11. redriversix


  12. redriversix

    You know things are nuts when people trade debt for a living.

    Said it before and I will say it again…

    Debt is the 21st Century’s version of Slavery.

    You don’t have to afford the loan…just the interest on it.

    Stay away from is king.

    Great arricle….we were talking about this very subject in kilkenomics 3/4 years ago David.

    Have a great day


  13. redriversix

    Once your in debt …you only have the illusion of freedom.

    Debt = fear.

    Fear to chose

    Fear to move jobs..

    Fear becomes controlling…

    Then Wine becomes your freedom …

    Red or white ???

  14. coldblow

    Is Trump ‘extremist’? There are many ways to describe him but I don’t believe he is more extremist than either Obama or Clinton. Their foreign policies are surely more so, to take one example. The word means nothing more than views which are currently unfashionable. Orwell (Politics and the English Language is the name of the essay, I think) said a similar thing about ‘fascism’, meaning merely something your opponent dislikes.

    I don’t like David’s argument about the ‘vulnerable’ who are easy victims to advertising and social pressure. Same with ‘elites’. There is some truth in there but only a part of it, and a small part at that I think.

    • Deco

      Trump is an American Sovereignist.

      A public individual that is a sovereignist for any country earns stinging rebuke from parasitic extractive sectors – which unfortunately is how many sectors in Western capitalism has been chasing.

      The people in control of the speculative casino hate sovereignists. Bad for business. Whether it is Chavez, Putin or Trump, these people are placed in the derogatory category “populist”.

      Critique the narrative and this becomes apparent.

      The narrative is controlled.

      And many people are in the position of the fish who asks “what is water”….

  15. Adelaide

    For anyone enlightened enough to familiarise oneself with what E.C.Riegel termed ‘The Political Money System’, the FIAT fraud pact between bank and government, it becomes self-evident that you have opened your eyes to THE greatest ubiquitous crime against humanity, a crime that dwarves all others throughout human history in its global scale of destruction, theft and regularity.

    Once enlightened to the true nature and the inevitable consequences of the contemporary monetary model, not only do the obvious solutions become apparent, it seems to me you have a duty, regardless of the scope of your effort, to make an effort to highlight the cause and advocate for a solution.

    E.C.Riegel termed those who are wilfully ignorant of the monetary model as ‘Money Blind’, they simply do not want to be informed of that oppressive abstract entity that completely and single-handedly controls their lives from cradle to grave, money. What is it? How is it? Why is it?

    The field of economics is Money Blind, intentionally so. Their analysis and solutions will one day be relegated to the dust bin of history alongside alchemy and astrology. The blind leading the blind.

  16. survivalist

    The indebtedness which is now normal and widespread among people is mainly a result of the war on wages.

    Wage growth stopped in the 70’s. People then borrowed to maintain the standard of living that they expected; this was first facilitated by credit cards, then mortgages and so on.

    It must be realized that it was business-corporations that stopped wage growth by the way, not the workers.

    The business-corporations then loaned the money, which they were not paying as wages, back to the workers as debt, with interest.

    Eventually when people, via their limited Government influence, thought to or threatened to look at the options around no longer playing this game of debt and its related problems.

    (See the Jubilee Act that was defeated in the USA around 2009 and which was later morphed into its modern incarnation of a 3rd world charity love in).

    The corporations saw the winds of change (rather a noxious fart in their direction) and the downed tools and “went on strike”. They did this by withdrawing their capital, leading to the credit crunch aka Global Financial Crisis.

    (These days workers get fined for striking, except when given very limited permission)

    With no funds available to them, as a result of relying on privately owned central banks to print their money for them, the capitalist “strike” had the Governments over a barrel. (Or so they wanted us to believe).

    Governments needed to get money from somewhere.

    The strike or GFC was ended when Governments agreed to the demands of business-corporations which included; leaving their wealth hoards untouched, guaranteeing all their losses and future risks and so on.

    Then money was then found in the form of print some but mostly via a legalized a wealth grab. Wealth was transferred from the workers and the public services and societies (Nations) that they had invested in (rather than the stock market) and which their ancestors had built up over generations.

    That was called austerity.

    With the loot in hand it was then given to the business-corporations to lend back to the plebs and their Governments.

    The media work hard to convince people that the above story did not happen and that it is anything other.

    Vigorous and thorough debate and discussion about the technicalities AFTER the real economics are done; make it look like we are having a discourse or that change might arrive.

    But as a wise man once said:

    ““The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum….”

    • Inflation bloomed in the 1970′s after Nixon reneged on the remnants of the gold standard. This allowed unlimited money production all issued as debt and at interest.

      This is the root cause of the demise of the living standard since then. All else is a symptom of the real disease, monetary inflation.

  17. Retraction re non delivery of gold.

    Deutsebank had no obligation to deliver gold on request to an investor with Extra gold traded fund.

    There appears to have been an indication that this was so but the prospectus says not, according to Dave from Denver.

    This is still a prime example of how people think they are invested in gold when the paper they hold does not say they own anything. Taking a chance on the next fund is foolish. Bullion in hand delivered to you is the only real way you can say you have a gold investment. Caveat emptor.

  18. Truthist

    11 September is coming up in a few days.

    It’s a forgotten fact that on the night of 9/11 :
    1,000′s of Iranians held a spontaneous candlelight vigil to express sympathy & support for the American People
    Ayatollah Khamenei [ NOT Khomeini ] & the Iranian president denounced & condemned the attacks.

    “Iran’s sympathetic response to the American tragedy has been exceptional for a country under US economic siege for 2 decades.

    “Only hours after the 11 Sept. attack, President Muhammad Khatami condemned it. As did Supreme Leader Ayatollah Ali Khamenei.
    Other officials have sent sympathetic messages,
    1 from the mayor of Tehran to the mayor of New York – the 1st public official contact between Iran & USA since the 1979 Iranian revolution. […]

    “More important, 60,000 spectators observed a minute of silence during a soccer match in Iran’s Azadi Stadium, and hundreds of young Iranians held a candle-lit vigil in Tehran.”

    Much more:

    The Iranians did not dance over the tragedy.
    They’ve known suffering & endured much, & have a long historical and civilizational memory.
    But, these quickly repatriated rascals from that special little democracy in the middle east did dance over the atrocity of 9-11 ;

    • Deco

      Many wealthy young brainwashed Saudis (officially “allies”) danced, and sent around messages expressing joy concerning what occurred.

      Yes. That is the country that happens to be one of the largest donors to the Clinton Foundation.

      The state that happens to be the real source of terror in the Middle East – something that the looney wing of Irish politics (Paul Murphy, Ruth coppinger etc..) seem to keep ignoring.

      • Truthist

        Much propaganda footage immediately after 911 so as to damage the reputation of Arab Muslims & other Muslims.
        But, certainly there were many celebrations ;
        Can u blame them when it has been all 1-way street heretofore with bloodbath & destruction by The Dreadful Few –using their captive proxies :
        USA [ e.g.s under Daddy "Bad" Bush, & later Slick Willie Clinton, & later again Baby "Bad" Bush ]
        UK [ e.g. under Anthony “Charles — Miranda [ this Cambridge transvestite’s choice name when he inviting male “cottaging” clients at public lavatories AND which he was found guilty of at least twice by the Magistrates court — Lynton” Blair ;
        Well, now u know 1 of the main reasons why he was picked to be PM ;
        In more ways than 1 Tony Blair was an “MP”.
        Also, Blair was motivated to serve The Dreadful Few by slaughtering Arabs because of his family background that is last pitched in Donegal ;
        Grzegorz should be very interested in all this.
        Again, the poor Saudi citizens have to perform for show to their rulers ;
        The House of Saud are NOT Arabs or Muslims.
        Whilst they are not Arabs, they are still Semites ;
        Actually, …s.
        1 of the 2 most known open secrets in the Middle East.
        Looney Wing will NOT know this ;
        But, u do Deco.
        Lawrence of Arabia was likewise ….
        And, Irish too.
        And, homosexual.
        Just like Tony Blair.

        • I cannot find any reference to the house of Saud being anything other than Arab and Wahhabi Muslem.

          Jaim Harlow, Father, Husband, systems engineer, researcher, historian, Silicon Valley Tech…
          Written 24 Jan
          Diriyya, Najd, Saudi Arabia was the original home of Banu Saud in 1700′s. They moved to Riyadh, Najd, Saudi Arabia around 1820 CE; from Riyahd eminate the “Sudairi Seven”. The House of Saud traces its ancestry to the Adnani Arabs, of Najd, who descend from Banu Hanifa tribe And the Anazzah of North Arabia. These tribes, in turn, trace their origins to Isma’il, son of Abraham.
          88 Views · View Upvotes

  19. redriversix

    Over 1 Miliion people were killed on 9/11/2001….

    Saddest part ? most were not aware their lives were to be cut short in the name of freedom …



  20. Truthist


    German Secret Service [ BMD ], & individuals also, feature in the latest from Aanirfan here ;


    “”Old Money, New Money

    The key to understanding it all is the money system itself.”"

    “”vet now, most of the world has no idea what happened. But we, dear reader, are beginning to connect the dots.

    Here’s the basic difference: The old gold-backed dollar represented wealth that had already been created. You got more dollars as you created more wealth.

    Money was real wealth.

    But this old money was hard for the authorities to control. They said it was uncooperative. Intransigent. And stubborn. They wanted a new kind of money… and a dollar they could manipulate (to make a better economy, of course).

    So, the new dollar was created. And this new dollar was not based on wealth, but on debt.

    It was not backed by gold. And it was not connected to the real wealth of the economy.

    Instead, it was brought into being by the banking system – as a credit. It increased as people borrowed and went further into debt, not as they grew wealthier.

    The more they borrowed, the more they could buy. This gave the economy the appearance of growth and prosperity. It allowed millions of Americans to increase their standard of living, even as their salaries stalled.

    But every purchase put people further into debt…

    Between 1964 and 2007, credit expanded 50 times.

    And in 2008, the credit bubble burst.”"——Bill bonner

  22. Diversions
    Mike Savage

    Weekly Article September 7, 2016

    I hope that everyone enjoyed their long weekend as we celebrate the traditional end of summer and what the original intent of the holiday was- Labor Day. Too bad that far too many of us have a hard time celebrating the state of our employment picture across the USA regardless of the “reported” great job market.

    Unfortunately, because this is an election year we can also see that the negative political ads are out in full force and will continue through at least early November. For many years I have been disgusted by these ads and this year is no different. Little is said about the problems we are actually facing but they just try to put the other candidates in the worst light possible so you won’t vote for them.

    I have felt for a long time that these contests were nothing more than a show but it appears that this year’s election has to be setting a record. I watch many people who are enthralled by it all. Trump’s gaffes, Hillary’s scandals of the day, endless and mindless reporting on each side. This has been going on for months already!

    Normally, I would just tune this out and watch some college football and some MLB pennant races which are heating up. This year, however, is different.

    Personally, I believe that anyone that would want to be president of our country at this time is nuts.

    It appears to me that all of this coverage is disguising our real problems of too many promises and too little resources that are all coming home to roost right now.

    Of course, this situation is not exclusive to us here in the USA- it is global in scope. Aging populations, stagnating wages, artificially low interest rates, plunging economic activity and unprecedented money “printing” to give the illusion that all is ok is wreaking havoc all over the globe.

    Price discovery-willing buyer and a willing seller determining a fair price- is destroyed by those in charge who “print” money, buy assets like bonds, stocks, etfs and possibly other things. With the click of a button they can manipulate virtually any price-most likely to their advantage every time. As I have written many times they are “purchasing” real assets with virtually- NOTHING. If everyone understood this it would stop real soon!

    Here in the USA we are told we have “full employment”. I guess that is why we have one in six people in the USA collecting food stamps! I guess the 95 million people who have become frustrated – many that we likely know personally- don’t actually exist they are just figments of our imaginations. It must be true- the government says so!

    According to John Williams of Shadow Government Statistics the unemployment rate is 23% which seems a lot more likely than “full employment” by what we are seeing in economic numbers and personal experiences. Of course, because we are fed massively massaged numbers many are surprised that the consumer is not spending like they used to. Many are surprised that malls are being emptied of big box retailers and many iconic American retailers are closing stores and laying off thousands of employees. Does this sound like they expect a recovery anytime soon?

    Freight is slower all over the globe whether it be by sea, rail, truck or air. Delinquent loans are rising in subprime autos and powerhouse companies are seeing shrinking revenues and profits for over 2 years now.

    Of course people can’t spend the income they are not earning and that is the real story. The end of the story will be when the government transfer payments which are making up for a lot of lost wages either dries up or doesn’t buy enough goods to survive. I believe we are close to that time right now.

    Rather than discussing homosexuality, abortion, LGBT, which bathroom to use, etc. how about addressing our real problems and having a civilized conversation on how to fix them?

    Let’s start with the fact that many good paying jobs are disappearing and have been for a long time. It is not only because we pay higher wages in the USA but also because of crony capitalism which inhibits new startups to protect the politically connected. This is a MAJOR job killer. Fines from OSHA, threats of lawsuits and cumbersome rules make it cheaper to manufacture elsewhere and sell goods here. We are shooting ourselves in the foot- it is not anyone else doing it. We did it to ourselves.

    Healthcare is a DISASTER. The greatest healthcare system on the planet is being destroyed and is not only going to affect the quality and quantity of healthcare but also put downward pressure on casual buying because of what individuals will be paying in increased premiums and deductibles if you are unfortunate enough to get sick. It is also causing many companies to hire only part-time workers to avoid the steep costs of providing the mandated care. Another albatross to job creation.

    Could we actually pay off the near $20 trillion in Federal government debt and reported $200 trillion in promises made to citizens? Not doing what we are doing now we can’t. The only way out would be to grow our way out- a little hard when all of our policies are seemingly meant to stunt new growth.

    Could we stop the violence particularly in our inner cities? It would take a gargantuan effort but it could be done. First of all those living there have to be educated. They need a hand-up not a hand-out. They need to see hope for a brighter tomorrow and the value of life. Without hope we can see what the result is. The toughest gun laws in the country have turned Chicago into the murder capital of the world. Guns don’t kill- guns in the hands of criminals kill. They kill more often when the criminal has no fear of pulling it out because he thinks the victim is unarmed.

    The media tries to “spin” things to appear the way they would like them to appear. The media also tries to sensationalize stories to make them seem more important than they actually are and have us spend time on useless nonsense (like Colin Kaepernick, etc.).

    While folks were obsessing about useless nonsense a few things took place like:

    * Army can’t account for $6.5 trillion spent in 2015. (Pretty amazing with a $550 billion budget!) 1

    · Putin has war games on Crimea and Ukraine border after sabotage of power plants in Crimea 2

    · Angela Merkel tells Germans to store food and water for at least 10 days because of a feared attack that is coming 3

    · The world’s seventh largest shipper Hanjin has gone bankrupt and threatens global shipping. Shipping rates have been rising- this shows it is not for any positive reason. The supply of available ships was just dramatically reduced. 4

    · US State Department issued travel warnings for Israel, the Gaza Strip, the West Bank and Turkey5

    · United States handing over control of the internet to the UN on October 1, 2016 (Elites can’t get away with as much as they’d like to as they are being exposed in this medium) Email hacks, etc.6

    · Subprime Auto delinquencies were up 17% in July and 28% higher year over year 7

    · Central banks are now purchasing $200 billion per month in assets and Japan’s Kuroda says there is no limit to what they could buy fueling speculation of a big announcement in September about new asset purchases. 8

    · Many developed nations are “printing” money to pay interest and to roll over maturing bonds. Without the “free money” many would have defaulted long ago.

    These are just a few headlines that might just be more important for you to pay attention to than who is using what bathroom or what celebrity is acting like a spoiled brat today.

    The time is drawing near in my opinion. I hope that many have listened and prepared in any way you can. Have extra food in your own homes. Have a decent amount of cash in your home so you won’t have to wait in an ATM or bank line to access cash in case of an emergency. Have a safe water supply. If possible, get some precious metals. Sometimes this sounds daunting but you could get US coins issued prior to 1964 and you would be getting real metals in those coins. If you are buying precious metals for the first time be sure you are dealing with a trustworthy entity.

    My opinion is that investments should be in things that people Have to have as far as companies go and cash, gold, silver, and miners. It also makes sense to me to hold cash in currencies other than the US dollar. There are easy ways to do all of these things if you know how.


    Mike Savage, ChFC Financial Advisor
    2642 Route 940 Pocono Summit, Pa 18346
    (570) 730-4880
    Raymond James Financial Services, Inc. Member FINRA/SIPC

  23. Deco

    Ireland’s interest in the EU arena, and power structure, is to push


    further EU centralization.

    And not just on one issue, but right across the board. On all issues. In favour of dissenting voices, across every issue.

  24. McCawber

    Jean Claude alert.
    The EC issued their road map for the elimination of roaming charges.
    It seems there was a caveat that the consumer groups didn’t like.
    They kick up a big stink and JC, with indecent haste it would appear, withdrew their document.
    This had all the marks of a set up, done to distract attention or perhaps to give us all an example of just how democratic the EC really is, how they really do listen to us and take on board our concerns.
    And yes you are correct, I am paranoid but just because I’m paranoid………
    Have a good weekend.

    • Truthist

      Please explain McCawber the following confusing portion ;
      It is also unlike u ; Because u are usually very clear in ur posts.
      It seems there was a caveat that the consumer groups didn’t like.
      They kick up a big stink and JC, with indecent haste it would appear, withdrew their document.
      This had all the marks of a set up, done to distract attention

      • McCawber

        The proposal was to limit free roaming to 90 days.
        Obviously the consumer groups were going to kick up a fuss.
        JC expected this so put it in to give the consumer groups something to complain about but something he could be seen to take their concerns on board and do something about does demonstrating the EUs “genuine” democratic hue.
        Brexit has highlighted democracy issues in the EU.
        This is the first shot from JC demonstrate how democratic the EU is.

  25. Truthist

    Here is the ultimate authority on 9-11 ;
    Google Search Terms
    Christopher Bollyn AND 911
    Very readable.
    Very informative.
    Very relevant.
    It was NOT the Saudis NOR Osama Bin Laden who did 9-11.
    And, by the way, many Irish American victims in 9-11.
    And, of course millions of Iraqi [ men, women, & children ] murdered as pre-planned follow-through by The Dreadful Few.
    And, still counting.

  26. Truthist

    But, perhaps u wish to be told the unpalatable truth by a luminary ;
    Ah, well, here so is what former Prime Minister, & former President, of Italy has to tell u about who exactly did 9-11 ;
    . search terms ;
    911 AND Cossiga Italian prime minister & president

  27. Truthist

    Interesting debate about housing above.
    I contend that the “Housing Problem” is artificially manufactured thus :
    Outcome of greed by Stakeholders seeking to exploit the buyer
    Outcome of Parkinson’s Law per some of the reasons for Civil Service involvement & added cost to price of housing [ And, costs to the general taxpayers also ]
    Outcome of general policy from on-high to control the citizenry by “intrefering” with citizen’s efforts to house themselves.
    Actually, the Government should “f..-off” & let the housing victims — the homeless, & especially the homeless-roofless, create shanty town shelter if the victims so decide ;
    Fine modular homemade shelters, that are very affordable AND do not impact on the environment negatively, can be made available in kit-form by entrepreneurs.
    Most of the “I just want to stop the hurt” players in the Housing Problem arena are disingenuous.
    Actually, they are quite sinister people.

    • Truthist

      Qualification ;
      Outcome of greed by SOME OF THE Stakeholders seeking to exploit the buyer ;
      And, perhaps seeking to exploit :
      the developer
      the craftsmen
      the laborers
      inter alia

    • McCawber

      The government’s take from the contruction of a house is about 46% or so I’m told or read somewhere.

      • Truthist

        There should be an “Archive” facility on this blog for authoritative information about very important & relevant facts.
        The above per Government’s take on construction of a house is a good example.
        Also, various handles on the Bankster Scam [ B.S. ] Bundle, & also Institutional State of Irish State [ I.S.I.S. ] Regime, the Civil Serpents vis-a-vis ordinary Citizenry Situation, the Pro. Class Hegemony, & “Garda-Lanlordism / Landlord-Gardaism” are some other topics worthy to have definitive handles available in archives of this Socio-Curtural ECONOMICS Blog.
        Of course, many of David’s own articles would be contenders in themselves, or with modification for to suit a generic, or perhaps an ongoing, situation.

    • Sideshow Bob

      Hi Truthist,

      I posted this before in general but I would like to re-post for you right now in relation to your comment above about shanty towns:

      I hope it is informative and stimulating.

    • Sideshow Bob

      And Truthist,

      I put up a lengthy post in relation to a question you asked on me about private vs real property in an earlier article, the recent high rise one, I think. I don´t know if you saw it but it is there.

      • Truthist

        Good that u remind me of that ;
        I did not see it ;
        But, I will look for it now.
        Bob, I am appreciative that u are very sincerely interested in people having very affordable quality housing.
        The heart / The love must be there if the appalling housing problem is to be solved.
        By the way, I think that Michael Coughlan is correct to say that the supply is not there for the persons rendered :
        “homeless” ; incl. forced to at best dwell in flat or bedsit [ still exist despite the semantics ]
        “homeless & roofless” ;
        As was my situation for June & July.
        And, the government [ Dept. of SW [ SP ], & various other facets of the State ] & a certain quango-charity very shameful in how they treated me.
        However, u are saying that there is enough supply in total but not at the affordable price “to buy” for those rendered in x] & y].
        And, u give numbers to support this about the supply.
        My apologies in advance if I am misrepresenting — even in my simplifying to the limit effort — the difference between u, Bob, & Michael on this issue.
        Without hoping to draw any further disagreement from yee both, I think it would be beneficial for the whole topic of housing == spell of years during Bretton Woods & also up till u did ur studies of housing & also the spell of years that u did ur studies, & the spell of years since & with for sure ur definitive interpretation of the current situation — that u return to give a very considered handle at ur convenience.
        Please only do so at ur ease ;
        We are just the little people here doing our best against very organised hostile groups controlling society, & thus we must be mindful of protecting our energies etc.
        U cannot please all the people ; Certainly not if u are just 1 person.
        Anyway, such a statement from u about the housing situation prior & now may well serve u well in ur forthcoming ventures — construction or advocacy or academic or whatever — in this area.
        I will look at the link above of Aravena ;
        I did look into him some months ago following ur recommendation.
        As I write now, I recall that he said that “we should actually learn from the shanty dwellers for how to arrive at livable communities” ; so to speak.

        • Sideshow Bob

          He deals with a supply problem in a way that we prohibit ourselves from doing and that was common here in the past. We have too many rules and regulations and insist on a perrfect end result but this requires huge amounts of credit and payback is unknown. The step by step approach is far smarter it gives the same base to all and each can thereafter expand according to their capacity, own energy and resources. We infantilize this area and turn it into a game of well-off people middle class civil servants patronizing the a poorer class who wait in line for a hand out but are never incentivized to do things under their own steam.

          There are other issues present here with favela type dwellings, there is a credit problem, the owners can´t get loans because of a lack of title to put up as co-lateral.

          I don´t think bretton woods is key from what i know overall levels of housing production and particularly cheaper housing production was far higher say prior to the 1980s in the both the US and UK. Social housing production died here with Charlie Haughey. Is that what you are asking?

          • Sideshow Bob

            Hi sorry – lot of typos there.

            Truthist; could you clarify your question please with years, countries and supply vs price or whatever you mean and I can try to answer. alternately there is census data available if you want to look yourself. There is no spin in those figures.

  28. McCawber

    Hillary stumbled badly and fell or was dragged into her car – literally.
    Didn’t look good and will no doubt get the “treatment” from both sides.


    “”When will we learn that without freedom and sanity, there is no reason to be patriotic?”"

    • Truthist

      So significant that our host is presently responding to it with writing his most seminal article ever against the Bankster Scam [ B.S. ] Bundle.
      After all, a prescient chappie like David knows ;
      “… always be where the ball is going to be.”

  30. ‘These central-banking idiot savants have wasted eight years of people’s lives, when in December 2008 Doctor Bernanke began his QE to infinity and zero interest rate policies. This has only delayed the inevitable destruction of the banking system, a banking system that deserves to die by inflating their biggest bubble to date in the financial market.

    I know that sounds horrible, but it’s true. I’m not the guy who allowed these financial institutions to practice fraud in mortgages and interest-rate derivatives, or looked away as they manipulated public financial markets for their personal gain. For their personal gain, Washington’s elected officials and market regulators did that.

    The sooner the banksters get what they deserve, the better it will be for the rest of us, as horrible as that will be for all of us. ‘

    • “”This will quickly deflate five decades of grotesquely inflated market valuations in stocks, bonds and real estate as fast as possible. Then we pick up the pieces, and get on with our lives as best we can. Maybe people’s kids who graduated from college in 2010 will then finally leave the basement and find a place of their own.”"

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