Imagine the real economy in a pair of tight bottle green flairs, the likes of which you could hide a six back of Harp up. Imagine the perm, the bomber jacket and a luxurious ‘tache’. It is pure 1970s. The soundtrack is somewhere between the Bay City Rollers and Rory Gallagher’s Calling Card. The best footballer in the world, Johan Cryuff, smokes at half time; people make “trunk” calls and drink Cadet Cola. And most crucially, from an economic perspective, like in the 1970s, there is no credit.
Now consider the financial markets where the government borrowed the other day. It is a globally interconnected world, operating 24/7. It’s a “totes amaze balls” casino, all Nikki Minaj, the XX, I-phone 5’s and Ronaldo preening at half time. And most importantly, there’s loads of credit for the government. It is quintessential 21st century economics.
The State – the most inefficient part of the Irish economy governed by 1970’s work practices – which competes with no one, can get all the money it wants at 2014 rates of interest. In contrast, while the domestic business, which competes all the time, every day, everywhere with everyone in the 21st century 24/7 world, can’t get working capital. It plays by 21st century rules but is governed by 1970’s financial constraints.
Thus the part of the economy with 1970’s work practices has 21st century capital and vice versa.
This past week the papers were full of triumphalist stories about the country borrowing on the financial markets. The spin was that Ireland was in some way unique – a former “bailout” country being able to borrow again. Portugal did the same this week too and it is not even out of its bailout yet! It is part of the large financial casino where money is no object.
But like a real casino the game is rigged.
In reality, the ability of Ireland to borrow is based on the fact that the financial markets believe ultimately the ECB will buy up bonds of peripheral governments and save the Euro from further jitters. So it is not a real market that assesses risk and reward, it is a subsidized one-way bet for lenders.
Legally, the ECB is debarred from buying 10-year bonds, but it will get around this by buying shorter-dated bonds (government short-term IOUs). Because the threat of deflation is very real all over Europe, the ECB knows it is going to have to prevent this. It will do this is by buying government IOUs that at present sit on the balance sheets of the banks and give the banks cash in return, keeping interest rates very low. Thereby it hopes to compel the banks to lend.
This action will have two definite results. First, it means that the central bank is financing the governments via the back door. In addition, while it might inject liquidity into the economies we can be certain that this ECB move will definitely force bond rates down and thus prices up, giving lenders a tidy profit.
That is the 21st century, sleight of hand economy where finance, politics and trader capitalism reign supreme, impervious to its own mistakes, relying on the “too big to fail doctrine”.
Back in the real world, credit in Ireland – and all over Europe – for small businesses is practically non-existent.
The economy here is experiencing a fragile, credit-less recovery- more 1974 than 2014. Without credit, spending has to come from income and this is what is happening.
Consider the data released this week.
Unemployment fell again last month showing that there is an economic pulse, faint enough, but a pulse nonetheless.
But what is financing this small upswing in local demand, which is thankfully coaxing people to employ other people?
The key to the change in the economy is income.
The most important figure in the real economy is disposable income. Income is everything: Income determines spending. If your income is rising your potential spending and/or saving is rising also.
Far too much attention in Ireland is paid to gross domestic product. It is the figure that those that want to paint a falsely rosy picture of the country, whether they are bond salesmen or government spin-doctors, deploy. But GDP is nothing more than all the production in the economy. Aggregate all the production together and then divide this by the amount of citizens in the country to get a GDP per head figure.
This figure is meaningless because if Viagra sells lots of pills for erectile dysfunction it is production, but it has no real impact on the rest of us. On this basis, Ireland is a very wealthy country indeed. GDP per head in Ireland is €33,000. If used to measure the welfare of the Irish people (vis a vis the rest of the world) everything seems hunky dory.
Be warned – it is lazy shorthand. We know because we live here that this figure is not accurate and it overestimates the wealth of people here.
A much better indicator is disposable income. On Friday the CSO published disposable income for the third quarter last year.
According to the CSO
“On a seasonally adjusted basis, the quarterly gross disposable income of households in Q3 2013 increased by €164m to €21,561m compared to the result for Q2 2013 of €21,397m”.
The first thing you will notice is that disposable income per head in Ireland is far lower than production per head. It is in fact on 35% lower. By looking at income, we begin to see the economy as it is and not as we would like it to be.
Of this income, spending increased by €215m to €19,754 per head during the three months to autumn and this means that total household saving decreased by €51m in the quarter. The derived gross saving ratio, which expresses saving as a percentage of gross disposable income, decreased from 8.7 per cent in Q2 2013 to 8.4 per cent in Q3 2013.
As the savings ratio falls, we begin to see how the recovery is going to take shape.
People are reducing savings gingerly each month. The process is slow and gradual but it is moving in one direction – towards more not less spending.
Normally at this stage of a 21st century cycle, the banks will aid the upswing by extending credit. However, lending figures published this week show credit falling again as banks hoard cash ahead of the next stress tests later this week.
As a result the real economy is stuck in the 1970s, while in the twilight world of government borrowing, the 21st century reigns.
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The realities of state/corporate/consumer debt remain hidden in plain sight, prepping the next leg of the crisis which will unfold once the Shale Ponzi/Cheap Peak Oil clusterfcuk unmasks the charade of inflating the cheap energy Credit Bubble once last time. Ireland is currently in the slipstream of the UK pre-election credit binge. When that implodes, with the slightest of raised interest rates, the truth will emerge. The longer Mark Carney avoids/evades the toxic reality of boosting Boomers by “Help To Buy” easy housing credit ‘confidence’ the worse the downswing will be. “Deleveraging in the United Kingdom and Spain is proceeding… Read more »
David, I don’t see the point of this article. It tells us nothing that we didn’t already know.
Hi, “Because the threat of deflation is very real all over Europe” When you say this it perplexes me as I see stagflation. If the people in charge are fearful of deflation is it not in the derivatives economy where the banks are making obscene profits and not on main street where real businesses exist? The real inflation rates are way higher than offical figures. Like I said before diesel at the pump is 50% higher than 5 years ago. Healthcare premiums like vhi etc are skyrocketing. Public transport costs, taxes, etc etc all higher. Are these increases not a… Read more »
From my detailed Analysis of all the Contributions to this Blog,- I note the following as of MAJOR NATIONAL IMPORTANCE ; 1. Tony Brogan ; For his superbly logical, & easily understood, & “gripping”, Explanations of : The Central Bankster Scam The Fractional Reserve Bankster Scam The General Flaw of Treasury issued Currency WHEN it is Not Gold backed The Economic System necessary to introduce for to SOLVE EVERYTHING. 2. Deco ; For his brave, & truly patriotic, elegant telling it as it is Re ; The Total Stinking Corrupt State that is Ireland Politic Class Ireland, Corporate Ireland, Civil… Read more »
This Subject Matter has a close Connection with Economics, & Politics, of Ireland ; Not just the International Scene
http://www.aangirfan.blogspot.com/2014/01/female-mp-part-of-uk-parliament.html
Jimmy Saville, & others of these Rings, operated as Spooks also.
And, they have been closely linked with the Politicos of Ireland.
The above MP could not possibly have been “MIRANDA”.
“MIRANDA” is someone very connected to Irish Political Affairs.
Yee all have discussed “MIRANDA” a lot on this blog.
It is a bit of a SHOCKER really when u learn about “MIRANDA”.
Éirinn go Brách !
Atlantean
[ Your “Inventor”,’Entrepreneur”, “Industrialist” , “Writer”, & “Patriot” in Exile ]
REPLY
Thank u to Pauldiv / Paul Divers for giving the Link to this great Defender of our fellow man ;
Here is another such Link.
AND,- ONLY A FOOL WOULD NOT SEEK OUT MORE OF HIS VIDEOS [ AND ; TRANSCRIPTS ] ; ALL FREE TOO !
http://www.realjewnews.com/?p=540
Éirinn go Brách !
Atlantean
[ Your “Inventor”,’Entrepreneur”, “Industrialist” , “Writer”, & “Patriot” in Exile ]
REPLY
There was far more activity in the seventies than there is now – traffic jams in O’Connell Street at 2 AM every morning . Absenteeism was out of control – only two thirds of a workforce could be relied upon to turn up on any given day – there was this six day illness benefit system in place, so more income could be had by playing the system with , I seem to remember, one sicky each month. Sick notes and a Spanish Tans were synonymous. Inflation was in double digits, so spend, spend ,spend was the order of the… Read more »
Lest the above Link not open up for yee,- here is another Link ;
Different Aspect of same overall Topic.
Now yee are learning about REAL ECONOMICS.
Thank u again Pauldiv / Paul Divers for ur original posting of Link to this great Defender of his fellow man.
http://brothernathanaelchannel.com/watch_video.php?v=1029
Éirinn go Brách !
Atlantean
[ Your “Inventor”,’Entrepreneur”, “Industrialist” , “Writer”, & “Patriot” in Exile ]
Edit to above Post ; January 13, 2014 at 11:48 am The Post should have included the Title from the Source ; Here is the Title ; SUNDAY, JANUARY 12, 2014 FEMALE MP IN PEDOPHILE RING And, here again is the Post for context. This Subject Matter has a close Connection with Economics, & Politics, of Ireland ; Not just the International Scene http://www.aangirfan.blogspot.com/2014/01/female-mp-part-of-uk-parliament.html Jimmy Saville, & others of these Rings, operated as Spooks also. And, they have been closely linked with the Politicos of Ireland. The above MP could not possibly have been “MIRANDA”. “MIRANDA” is someone very connected… Read more »
….And sally O’Brien and the way she might look at ME!
Yes in the seventies we got paid in cash, we had unions and apprenticeships but the people believed they all could be millionaires so now we have internships and giant money washing machines down by Liffey…harp is still made but it’s not a cools choice …
Guess who is not rich and who is …
GLOBALMACRO 360 – Pay per view opportunists go subscribe! Quote: In addition, credit cycles move rapidly from periods where there is so much credit that it’s almost impossible not to buy to barren periods where there is so little credit that it is impossible to sell. But these moments bring opportunity. Typically I try to keep most of my capital in assets which are not too risky and deploy what I term “attack capital” to opportunities where I believe consensus might have things wrong and there is an anomaly that I think I can avail of. Annual Membership- €500.00 Get… Read more »
Dear Irish Nation [ ‘Sovereign” Debt Slaves to formerly Private Debt of More than just Yee ] ;
These Folks from “THE CITY” et all are a big Part of the Economic Scheme against the Irish Nation ;
MANY IRISH CHILD VICTIMS OF THESE PEOPLE
SOME IRISH COLLABORATORS WITH THESE PEOPLE TOO
God help all their Victims.
https://www.scriptonitedaily.com/2013/12/18/uk-establishment-closes-ranks-as-organised-paedophile-network-leads-back-to-no-10/
Éirinn go Brách !
Atlantean
[ Your “Inventor”,’Entrepreneur”, “Industrialist” , “Writer”, & “Patriot” in Exile ]
GET CURIOUS ABOUT CERTAIN GOVERNMENT POLICIES, INTER GOVERNMENTAL TREATIES, EU TREATIES, REFERENDA, COURT DECISIONS, POLITICAL CAREER ADVANCEMENTS, “INEFFECTUAL” RESPONSES BY THE IRISH STATE, …. ETC.
“PECCADILLO” TREATS FOR SPIVS & SPIVEENS ASSURED THE FULL ACQUIESCENCE AGAINST BEST INTERESTS OF IRISH NATION, & OUR MORAL DUTY TO OTHER SOVEREIGN NATIONS ALSO.
Now u are paying the Economic Price.
Éirinn go Brách !
Atlantean
[ Your “Inventor”,’Entrepreneur”, “Industrialist” , “Writer”, & “Patriot” in Exile ]
OCTOPUS “COMMON PURPOSE”
The Organisation “Common Purupose” have garnered themselves immense Power in The Irish State.
GET A LOAD OF THIS !
http://aangirfan.blogspot.com/search?q=common+purpose
I think that Irish State sends Civil Servants to Common Purpose for “Leadership Training”, inter alia.
WE LIVE IN NASTY TIMES INDEED !
Éirinn go Brách !
Atlantean
[ Your “Inventor”,’Entrepreneur”, “Industrialist” , “Writer”, & “Patriot” in Exile ]
My God, it’s pure luck the narcissists cannot blog in larger text. The blog would collapse under the sheer weight of the tidal waters !
Yet again DMcW points to the real problem : “Back in the real world, credit in Ireland – and all over Europe – for small businesses is practically non-existent.” Correct. Exactly what happened in the US between 1929 and 1932. It took really aduld supervision of the romper room known as Wall Street and London ( nappy change is really overdue – the stink is reaching the heavens ). Adult political economics, Glass-Steagall and the RFC, Reconstruction Finance Corp. All these are expressions of Hamiltonian political economy. Lets put politics back into politics, and economics back into economics. No edict… Read more »
Banks Win 35:1 Bet Against Civilization; Will Crash Next
The choice is now between immediate implementation of Glass-Steagall principles, or bank panic and financial crash worse than 2008.
“The most important figure in the real economy is disposable income.’ Disposable income is defined as that available after payment of income taxes. It used to be a more usable metric than today but now with the advent of VAT it is less so. With nearly 25% of disposable income seized by the state and with the calculation of dues fees and tariffs added in not much disposable income is left for discretionary spending. 20 years ago I sat down with a paper napkin and a pencil and calculated that as an income earner of $65,000 Canadian I was taxed… Read more »
Plenty of money to be had from NAMA. They have only spent a small portion of their budget. In fact so much so that senior employees seem to be offering minutes to interested parties: here via @namawinelake, that link which was removed :
And why, pray tell, is Sindo report of claims NAMA employee offered minutes of NAMA meetings, no longer online?http://www.independent.ie/irish-news/third-man-fuels-nama-leak-fears-29908538.html
You just have to have the right connections…simple as that. Simony and Nepotism rife. Or else you do something completely different….
Become ignorant, unskilled, and poor: this is your task if neoliberalism is to survive.
http://hat4uk.wordpress.com/2014/01/07/become-ignorant-unskilled-and-poor-this-is-your-task-if-neoliberalism-is-to-survive/
Quirky fact of the day:
In Germany ‘dogging’ is defined as “jogging with your dog”
For the English interpretation, Frau Angela kindly defer to one Stan Collymore! :)
Amazing how things, situations and events get ‘Lost In Translation’
Or perhaps your Irish poodle could shed some light on the matter…
In Sverige:
‘djogging’ :D
My Fellow Posters,
Sorry for my overuse of Capital Letters [ Caps ] heretofore.
Next time I will be more sparing in my use of them
More is the pity though that this Blog, does not have a look & feel of Br N’s Comment Section.
For ur convenience,- I will render the above Links again in brief Posts dedicated to no more than 2 Links.
Atlantean
Atlantean
Reiteration of Links
Sun 12 Jan 2014
Female MP in Pedophile Ring
This Subject Matter has a close Connection with Economics, & Politics, of Ireland ;
Not just the International Scene
http://www.aangirfan.blogspot.com/2014/01/female-mp-part-of-uk-parliament.html
Jimmy Saville, & others in these Rings, operated as Spooks also.
And, they have been closely linked with the Politicos of Ireland.
Howdii all,
If I ever spot any laudatory mention of FDR again, I will be sure to re-issue with increasing Elegance the Truth about the “appalling” Piece of Filth that he really was.
I do take it very much to heart that he instructed his son to murder JFK’s brother.
All just to keep out an Irishman from the Presidency.
Atlantean
Octopus “Common Purpose”
That sinister Organisation “Common Purupose” have garnered themselves immense Power in The Irish State.
Our Friends the Rothschilds feature in the Articles within the Link about “Common Purpose”
http://aangirfan.blogspot.com/search?q=common+purpose
The Irish State sends Civil Servants to Common Purpose for “Leadership Training”, inter alia.
“Them’s bad Duuds Bro !”
Atlantean
Disgusting Peccodillos of “The City” Crowd, & their friends.
Some names will come as a Shock to u.
Do not forget that most of these Folks are screwing the Irish Nation of its Wealth too.
https://www.scriptonitedaily.com/2013/12/18/uk-establishment-closes-ranks-as-organised-paedophile-network-leads-back-to-no-10/
Atlantean
http://www.thedailybell.com/news-analysis/34924/Bullish-on-Yellen-A-Very-Good-Article-From-Forbes/
Forbes say to be rid of the Fed is good policy.
–Therefore I say, getting rid of any central bank is good policy.
http://usawatchdog.com/
U.S. Bled to Death by China and Harvested for its Organs-Dr. Jim Willie
By Greg Hunter
Hi Folks,
This Female MP is being “indicated” in Scandal ;
Pity that ; Because she quite the Looker
http://www.aangirfan.blogspot.com/2014/01/the-mysterious-bottomleys.html
Atlantean
Do not forget ;
The Links such as I have supplied are the sources for Real Juicy Facts about Grand Bankster Heist upon Irish Nation ;
Guido Fawkes Website is the one that uncovered the List of Bondholders per Irish Debt ;
NOT the Irish Media ; NOT the Irish Websites ; NOT the Irish Bloggers
Here is a Page from Guido Fawkes
http://order-order.com/tag/ireland/
Atlantean
How about Ivana Bakic ? ; Frequently on DMW’s Agenda programme on TV3 before.
I personally cannot stand her.
Regardless of my sentiments,- this “elected” Politico is arguably ;
“well liked” ;
This is my hunch.
But, she would not be “well liked” by me ; No way Jose !
Nasty Proponent for Killing of Unborn Children she is so she is.
Hi Atlantean
You know Atlantis sunk under the weight of its own comments. The sheer quantity of its comments drove its inhabitants into the sea first, an awful tragedy..
Perhaps you show a bit of restraint going forward? Less is more and all that.
Thanks
“Trend in regular savings improves despite lower interest rates”
http://www.rte.ie/news/business/2014/0114/497681-savings-index/
Today’s news contradicts David’s article.
Savings are increasing.
It goes on to say that increased savings are a sign of consumer confidence while David’s article posits decreased savings are a sign of consumer confidence. Which is it? So many conflicting experts! The confusion! The confusion!
Alas, I’m no longer confused, I realised in an epiphany moment that the Economists are describing a Quantum Economy, those sneaky brainboxes, the Economy Particle can be in two states at once, both up and down, the Uncertainty Principle negates all prescriptive analysis so any expressed opinion or rather utter guff is simultaneously correct and incorrect. Hence, decreased and increased savings are both positive signs and both negative signs at any given moment. Phew. QE is Quantum Economy. That explains everything.
The Thorium Evolution and Revolution !!
“One metric ton of Thorium fuel would deliver the same amount of energy as 250 metric tons of Uranium, in a pressurized water reactor…”
“Most of the residue [in Thorium based Plants] will become inert within 30 years ….and “The most dangerous waste from ‘current’ generation reactors requires storage for 10,000 years”
“There is enough waste just in the U.S. to power the country for a century…”
http://in.reuters.com/article/2013/12/20/us-breakout-thorium-global-idINBRE9BJ0RR20131220
Modern Economics ,enriched by isotopes,not by ‘pieces of eight’
Fusion will power our physical economic propulsion
DMcW, you do indeed bring the issue of credit to the table, however haltingly, but this is the issue. You are in one way or another going to go in direct confrontation with the monetarists of all stripes and especially London and Wall Street acquaintances as FDR’s brilliant intervention becomes more well known. The keepers of this doomed system fear one thing more than Glass-Steagall, and that is Hamilton’s Credit System. Here is a link with a great short video from Michael Kirsch Generalizing the Principle of Government Credit: Non-Mechanical Economic Cycles and Kennedy’s “Grand and Global Alliance” EIR History… Read more »
I know this is a bit off topic but… laughter is the best medecine. :D
http://www.latimes.com/sports/sportsnow/la-sp-sn-pastor-49ers-video-20140114,0,5762637.story#axzz2qPpQSNEz
Pastor Tim pulled off a 1 minute Sermon so he could catch a 49ers playoff game.
It’s all in the delivery really.
“There’s some bread &some wine up here on the table, you feel free to help yourself!” :)
Apparently he ran the regular service subsequently in case anyone got all sacrilegeous on poor oul Tim.
&The 49ers came through 23-10 against The Panthers much to Pastor Tim’s phee-ewww!
“As a result the real economy is stuck in the 1970s, ”
I wish that were true.
in 1970 an hours worth of labour bought 155% more than today, in the real economy.
$9000 a year as a labourer and able to buy a house in a popular city.
Today that same hour’s labour can barely let you rent a one bedroom apartment.
That is also the real economy in the same city. Wages up from 3 to 18 or 6 times, housing up from 24000 to 450,000 up 20 times.
The Unreal economy
Iarnród Eireann tweet trucker who strikes bridge.
http://www.irishtimes.com/news/ireland/irish-news/we-know-who-you-are-irish-rail-tweets-driver-who-hit-bridge-1.1599850
There’s a different kind of strike mooted to be coming down the tracks(pardon the pun) in the next few weeks.
That’s not going to do much for the economic engine!
Anyway DMcW, keep thinking about credit, the physical economy, and political economy. Break away from the deathly Keynes/Hayek/Friedman grasp from the grave. The future beckons!
Hello Michael Earlier you were suggesting that the money supply must be increased in order to expand or grow the economy. This has been demonstrably proven to not be the case. There is no need to expand the money supply in order to enlarge the economy. For example. Take your 10 farmers at a trade fair. All have something to sell and something to buy. They do not wish to barter but to buy what they wish and to sell what they had. For the sake of simplicity they all have 10 Euro worth of goods. As they all know… Read more »
US Disposable income falling
http://truthingold.blogspot.com/2014/01/the-economy-is-starting-to-free-fall.html
Ireland is the freest economy in Europe. #9 in the world
http://online.wsj.com/news/articles/SB10001424052702303848104579308811265028066?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303848104579308811265028066.html
Read all about the great recovery Read all about the great recovery gotta get into that housing market. Great gains are a coming Ireland: House price growth momentum accelerates in Dublin: Bloomberg discussed the housing market in Dublin after home prices rose in Ireland for the first time in six years in 2013. It noted that prices are still 47% below the peak in 2007, but there are signs of increased price growth, particularly in Dublin, due to a lack of supply. It said that Irish home prices will gain about 7% this year, according to a median estimate of… Read more »
Hi Paul Divers, Scheming to bring upon the Great War, & thus the Money Masters dream of World Government by them all the more close ; Ref. http://nona-people.blogspot.com/2009/10/aleister-crowley.html “When World War I began in 1914 Crowley was living in the United States. There he posed as an Irish revolutionary to infiltrate pro-German groups and engage in black propaganda on behalf of Britain’s SIS (Secret Intelligence Service or MI6) or the NID (Naval Intelligence Department).” (SECRET AGENT 666) Irish people, which would include true Irish republicans then [ Certainly not any who would do any murders, & God forbid “Atrocities” ;… Read more »
Of course all related to Matters Economic-Finacial-Political etc Saville working for Money Masters Here is real substantive stuff on that creep Saville ; Is real Hell for him ! ; That is where his Allegiances were all the time ; Hell No Problem to understand why a certain Pope gave him a Knighthood. That certain Pope gave Murdoch one also. I give this Link for to show how this Creep forced himself on a Nation which is suffering Brit Occupation of the North Eastern part of our Country. We are also prone to Brit Spook activity in the rest of… Read more »