The curious case of Mad Maxdolf’s sudden prosperity

A short while ago I asked regular correspondent Franz to explain something about the German economic miracle during the thirties. For very obvious reasons we don't hear too much about that these days!

Anyway, here's his report (I don't think he gives his countrymen of the time due credit, but I'll let you be the judge of that).

A couple of days ago the Savant suggested that I write a piece about the interwar period in Germany. Specifically the astonishing growth that took place between 1933 and 1939. "Dang", I thought. Couldn't my writing debut be about a more inherently crowd-pleasing subject? Puppies? Chicks? Or more in tune with the Savant's site: Chimps? Anyhow, I'll try do deal with it as gracefully as I can.

Ladies and gentlemen: I give you the Interceptor!

Now what has Mel's car from Road Warrior to do with anything? Bear with me. That beat up looking thing is actually the best analogy for the German economy of 1933. Because under the shabby looking exterior the Interceptor had a 300 hp turbocharged engine complete with nitrous oxide injection. (For mr a: I believe Mel was driving a souped up Ford Falcon XB)
Similarly, the German economy looked terrible when Hitler took power. But under its hood was an almost debt free society. Why? Because the hyperinflation of '23 and the depression a couple of years later had purged most debts from the system. Even the reparation payments stipulated in the Versailles treaty had been abandoned in 1932. A clean slate for everybody.

More importantly, there were millions of superbly educated young men willing to work for pennies. People like the young Wernherr von Braun or Albert Speer came by the dozen and quite cheaply so.

How about that for stimulus?

Yes, there were nuisances. Particularly Jewish organizations calling for boycotts of German goods. But on the other hand Germany was THE place to be, much like China in our time. And no anglo-saxon businessman worth his salt wanted to sit still while everybody else was dancing. So the same businessmen who publicly disapproved of Hitler's anti-semitism were glad to do business him in a not so public fashion. IBM, General Motors, Standard Oil. They all had their Zweigstellen in Germany, and all were making buckets full of cash (http://www.thehiddenevil.com/nazis.asp).

Back to Hitler at the Interceptor's wheel: It didn't take him long to realize what a superb vehicle it was. Ever the gambler he launched huge rearmament and public work programs, incurred huge debts and wagered that Germany would win the next war and make the rest of Europe pay for the privilege of being conquered. When Hjalmar Schacht - chief of the central Reichsbank and slayer of the '23 hyperinflation - finally realized what was going on, he quit his job in disgust.

That was in 1937.

For two more years accounting shams like the famous Mefo-bills (http://en.wikipedia.org/wiki/Mefo_bill) afforded Hitler the chance to stoke arms manufacturing to his heart's content. Two years later, the cylinders of the Interceptor's engine were close to galling. For Germany in 1939, it was literally: "To Warsaw, Paris and Moscow or bust!" Afterwards, a centrally planned war economy helped to camouflage the catastrophic economic situation of the Reich until the red army auditors moved into Berlin with T-34s.

Any lessons in all that?

During his last days in the bunker Mad Maxdolf probably realized that you may own an Interceptor, but that in itself doesn't guarantee you to leave the thunderdome in one piece.
What else? Maybe the realization how little impact the outside world and its various boycotts had on Germany's economy. Our country was following its own triumpahnt-tragic-trajectory and the shrieks of the World Jewish Congress didn't dent that trajectory one bit.

Despite the rethoric there were legions of money cockroaches that competed for Adolf's business. Iceland learned a similar lesson since 2008. Granted, they didn't commit the ultimate sin of overt anti-semitism. They only stiffed some bankstas, which only amounts to second degree anti-semitism. Anyhow: When they kicked the bankers in the shin, all establishment economists predicted that Iceland would become a pariah state, perenially on the brink of starvation, the North Korea of - well - the north.

It appears however that rumors of their demise were somewhat exaggerated. Quite to the contrary: Their little island seems to contain a healthy, strong-willed and productive people. While no heavy Interceptor, this tiny nation can definitly boast of Porsche-Boxter status. Short of invading Norway, there seems to be little chance of derailing their success story at this point. (http://blogs.telegraph.co.uk/news/danielhannan/100083764/iceland-was-right-not-to-bail-out-its-banks-if-only-we-had-done-the-same/)

Within the European Union a similar thing will probably occur fairly quickly. A country like Austria (http://www.wsws.org/articles/2011/jun2011/aust-j09.shtml) or Finnland will elect a right wing government and our overlords will proclaim that the world is coming to an end and demand the heftiest sanctions. But then the sun will rise and shine over Austria and Finnland as it had before. On a populace both more prosperous and free for escaping the commissariat of Brussels. I for one will consume several bottles of champagne that day and marvel at our overlords exposed for the paper tigers they are and have been for a long time.

One more thing: The following clip is from “Road Warrior”. When it was made, the film was intended to portray an dystopian end-of-days scenario. But doesn’t it look rather idyllic compared to the footage coming out of London not so long ago? Just a thought.
http://www.youtube.com/watch?v=0hUrcGCQV1g&feature=related

Will September see the volcano blow?

Will September be the month when the wheels finally come off the European economy? I'm not an expert or a ‘professional’ – which means my take is likely to be highly accurate. As it has been in the past.

So here’s my scenario:

(1) Greece defaults, having resolutely refused to mend its spendthrift tax-dodging ways

(2) The only people with money, the productive Northern European Protestants, refuse, due to voter revolt, to bail them out again

(3) The banks exposed to Greek sovereign debt will now in turn become insolvent – obviously not all at the same time.

(4) As soon as one does they all stop lending to one another, precipitating a freezing up of liquidity in the real economy

(5) Enter the Northern Prods again. They’re now faced with a decision similar to, but not the same as, that faced earlier. This time the question is: Will they allow the ECB to send the printing presses into overdrive, and/or will they agree to pick up the tab for Eurobonds?

(6a) If they do, and assuming their citizens don’t reach for the pitchforks and torches, the death spiral will be countered, but at huge and grossly unfair cost to these countries. An unwelcome byproduct will be a huge surge in Eurozone inflation and eventually massively tighter political and fiscal centralisation.

(6b) If they don’t agree to pony up, then the whole banking system freezes up, literally leading to the ATMs not producing. At which stage we’re all fucked, at least for a while.

A few possible peripheral outcomes:

1: The ensuing disaster might lead to the end of fractional reserve banking, and, assuming there's a just God, with central bankers all over the world swinging from lamp-posts

2: The Chinese, with their oceans of foreign reserves, might decide to get involved to save their biggest market. Or they might take the opportunity to kick us while we’re down and get up to some of those nefarious things so beloved of Johnny Foreigner

Is my take correct?

Hang cool

Don’t know if you ever look up these doomsday scenario websites that proliferate on the web. Don’t get me wrong, I think their basic premise is correct, that we, well the USA specifically, is/are headed for an economic apocalypse.

However I feel they’re wrong in relation to its suddenness. ‘The day the EBT cards don’t work’, ‘the day Social Security cheques don’t arrive’, ‘the day the dollar ceases to be a reserve currency’. It’s all about ‘the day’. But I can’t see that happening, not in America anyway. For the simple reason that the Fed can just keep printing dollars to pay the cheques and keep the EBT cards delivering. Needless to say, this will lead to an accelerated and ever-increasing decline in the dollar’s value.

This in turn will almost certainly lead eventually to the dollar losing its reserve currency status. But even here it’s not going to be an overnight thing. In my opinion, and maybe some of the finance wizards who adorn the comments section of this blog will correct me, but the status is not a binary on/off thing, rather something that will fall into disuse as the underlying currency is debased.

So maybe those of you stacking your cave in Montana with dried foods and gunpowder can take some time out for a bit of R&R.

Our Central Bank proves its worth

The Irish Central Bank (CBI) isn't everyone’s cup of tea. Could be something to do with the fact that they dozed through the build-up to our current economic crisis. Or that our commercial banks had plunged into bankruptcy just months after the CBI assessed them as being in rude financial health. In fact many observers, myself among them, used to ask why we needed a central bank at all seeing as we don't have our own currency any more.

Well, a stunning new report silences the begrudgers in a single stroke and demonstrates conclusively the value of this excellent (if highly expensive) organisation.

For example, in a shocking discovery, the authors tell us that “the rise in unemployment, wage cuts, and increases in interest rates have acute implications for people at a personal level”

Well, who could have guessed?

And then there’s this finding which, honestly, left me stunned: “The severe decline in the performance of the Irish property sector allied to the post-2007 global economic down-turn has had a distinctly harsh impact on the Irish economy”

Crikey! Did you know that? An Irish property bust? Well, it’s news to me.

And, based on these dramatic findings, the report concludes with an ominous forecast which will bring the country’s current celebratory mood to a jarring halt. “This suggests that many Irish households will soon experience difficulties with their mortgage repayments”

You know, I hate to say it, but they could be right. Just maybe.

Anyway, with such original research, dramatic findings, and innovative conclusions, I think the CBI has fully demonstrated its value, once and for all.

Indeed.

Ok, sarcasm off. The CBI, like the rating agencies, excels at arriving at a wake and pronouncing the corpse to be dead. They are totally useless for anything else. Armies of economists, at enormous cost, labour to come up with useless rubbish like this while the country flounders. I despair.

Scary

Watched a programme on CNN last week. It promised a no holds barred investigation of the US deficits and broader problems with the dollar. Various banking and political bigwigs appeared, together with high-profile MSM talking heads. They talked as if resolving these issues was a simple matter of reducing spending a bit and increasing taxes a teeny weeny bit. They all seemed agreed on this.

I found it scary.

You may like to refer to the post I wrote a few months ago ‘Thoughts on collapse’ in which I traced out the – to me – inevitable collapse in the dollar’s value, and with it its demise as a reserve currency. I outlined the horrific consequences of that for Americans. Worse than the Great Depression of the thirties.

Yet all the pols, journalists and bankers on the show seemed unaware. A bit like the German Finance Minister in mid-2008 who blithely dismissed the US banking collapse as not affecting Europe. In this post (Help! Nobody knows anything!) at the time I wrote “it was thus with a distinct chill I heard their Finance Minister a week ago smugly say that the financial markets meltdown was a US problem and wouldn’t affect Europe. This foreboding was reinforced as I listened to Angela Merkel yesterday on TV, when it became clear that she hadn’t a bulls notion about what was going on. Unless something was, as the man said, lost in translation, she didn’t understand not even the basic concept of derivatives.”

We now know of course, all too horribly well, that my fears were well justified.

Which brings me to the point of this post: Surely be to God the people on the show I referred to, and their peers, surely they must realize that the game is up, that the USA is at the edge of the precipice? If the situation is blindingly obvious to me, and commentators on this and many other blogs - and in fact to anyone who takes the trouble to look - why isn't it being reported round the clock on every MSM channel? Why doesn’t the President declare a State Of Emergency? He does it if a bloody storm blows up in the Gulf, for Chrissake, but not for a potential societal breakdown.

Are the powers-that-be secretly looking after their own affairs, stocking up the lifeboats and preparing to jump ship at the appropriate time? Or, like the German ‘leaders’ three years ago, are they hopelessly deluded? Are they as ignorant of basic realities as GW Bush was in relation to the Iraq adventure, when three months after the invasion Condi Rice explained to him there were such things as Sunni, Shia and Kurds?

I don't know the answer to that question, but I do know I find it scary. Honestly.

Thoughts on collapse

There’s been a lot of comment on this blog, and some great links to other blogs, on the likelihood and impact of a collapse of western, particularly American, society. In March 2007 – 18 months before anyone else even began to get worried, I forecast that Ireland was headed for economic Armageddon. Boy, was I right on that one. I have now dusted down my magic ball again and, through the vapours, I foresee catastrophic collapse in the USA. The timing of which I'm as yet uncertain. I believe that this collapse will rival the Great Depression and will have major but unpredictable consequences for the issue that keeps most of us awake at night, that of the destiny of western civilization and the white race.

In fact it doesn’t take much ingenuity to envisage a collapse in the dollar, even though it’s denied in official quarters and most of the MSM. The greatest impact will derive from the loss, or serious diminution of, its role as a reserve currency. For more than fifty years this has enabled American citizens to buy what they wanted, especially oil, at knockdown prices, and to borrow at knockdown interest rates.

But it can't and won't continue. The various deficits, at internal, external, municipality, state and national levels have been largely met up to now simply by running the printing presses at levels inconceivable in earlier times. No reserve currency can survive as such under these conditions. And far from improving, the deficits are widening. Former Treasury Department economist Bruce Bartlett calculated in 2009 that “federal income taxes for every taxpayer would have to rise by roughly 81% to pay all of the benefits promised by these programs under current law over and above the payroll tax.”

Of course it’s not in the interests of the main holders of US bonds to suddenly collapse the dollar. But already many holders are getting out of the currency, and there’s no telling when this could turn into a stampede. A meeting that attracted surprisingly (?) little comment in the MSM took place last year between China, Japan, Russia, France and the Gulf Arabs with the stated intention of moving from sole dependencies on the dollar to a ‘basket of currencies’. The IMF has plans underway for a World Currency, and there are places now where dollars aren’t being accepted - parts of Europe, China and Japan.

To add to the brew, the vital ingredient of public confidence in US markets has steadily eroded as one scandal follows the other and the people involved are never held accountable. So far, not one CEO or CFO of a major investment bank or financial institution has been charged, arrested, prosecuted, or convicted in what amounts to the largest incidence of securities fraud in history. In the much-smaller Savings and Loan investigation, more than 1,000 people were charged and convicted.

What will happen in the event of such a severe decline? Well, mainly a rapid increase in the things that are happening at present.

() Inflation will soar, destroying savings

() Prices of imported goods (America doesn’t manufacture much any more) will soar even more dramatically

() Cities and states will cut back drastically on entitlements and services and/or sell off their assets to gain short-term liquidity.

() Private citizens’ savings, assuming anything survives the Wall Street plunder, will also be continually raided to fund to more short-term liquidity

() For the vast majority of Americans, wages and their standard of living will plummet to unimagined levels.

These trends are already there. Stripping out the tricks used to deflate unemployment figures indicate the real rate to be over 20% John Williams (shadowstats.com)

() Food stamp use has shown an almost uninterrupted growth for the last two years

() Shanty towns are growing up around many cities

() While all but four states run significant budget deficits, the real problem is going to come at the municipality level. Warren Buffet says that this will set off the next depression.

() Drastic, and in some cases illegal, cutbacks have been made in Detroit, Camden, Newark and several other cities, while Hamtramck (near Detroit) has actually run out of services to cut, and expects to spend its last dollar early this year. Needless to say, these are all black “controlled” cities.

Which brings me to the big question: How are whites going to react? Will the sheeple, lobotomised by Hollywood and the rest of the MSM, finally awake and realise that they’ve been sold down the river? That not alone have they been traduced, ridiculed and dispossessed, but the very taxes they pay out have been used to fund various forms of ‘reparations’ to blacks and other ‘vulnerable minorities’. Will they realise that they – and only they - have been systematically disadvantage at every hands turn?

Let’s hope so.

And now look at the other side. Blacks are going to be affected even more drastically. Apart from a small minority, their (legal) income is comprised of welfare and gub’mint employment. But these sources will collapse as the public sector, at all levels, runs out of money. Waiting in the wings we have the Aztlan Movement, and MeChA calling for ‘their lands’ to be returned to them. They have important support; Mexican President Ernesto Zedillo has warned Washington that his country "is ready to fight" if the United States enforces immigration laws and deports illegal Mexicans. "We will not tolerate foreign forces dictating and enacting laws on Mexicans."

Looking at possible non-apocalyptic outcomes, there has to be a massive reaction against illegal immigration. There’s only so much Americans, black and white, will take once the situation gets desperate along the lines I predict. A second casualty surely must be Affirmative Action. I cannot imagine whites in these circumstances continuing to accept being passed over for work in favour of less suitable candidates. But it will take a white uprising of some sort before the elites will concede on these issues. But concede they will, I believe.

What about a more apocalyptic scenario? Is it fanciful to suggest that there could be race riots, food riots, squatter rebellions, tax revolts and job marches? As every schoolboy knows, in fact even a sociology professor knows, blacks riot and burn down their neighbourhoods when their free shit becomes unavailable. Once nothing’s left to burn will they turn their attention to white and other neighbourhoods? It’s happened before. But this time would be worse with a whole generation of blacks reared with a sense of entitlement to all sorts of reparations, and on a non-stop diet of anti-white propaganda.

Remember this is also a generation whose family and social structures (never very strong, admittedly) have been devastated by over-dependence on misdirected and counter-productive welfare. So you may have newly impoverished whites, livid at facing an unprecedented decline in standards, face off against mobs of ‘disadvantaged minorities’ outraged at the termination of their free shit or claiming back their ‘ancestral lands’.

This would be a powder keg that could be set off even by rumour of an opposing tribe’s malfeasance. There’s only so much that the MSM can cover up and I believe that their credibility, already in sharp decline, will plummet after the collapse. Remember that multi-ethnic societies are not the natural order and almost everywhere they have eventually broken down, usually with horrific consequences.

Certainly the crisis will destroy what’s left of Americans’ faith in their government. So what will the elite do? Assuming there’s not a New World Order (NOW) conspiracy to foment the scenario I describe (I can't see there is) there’s always the venerable tradition of conjuring up and going to war with a new external enemy to distract the masses and redirect their anger. I imagine Joe Lieberman and the Neocons are rubbing their hands at the thought and are already drawing up a suitable list after consulting with Netenyahu . Another 9/11? Don't rule it out.

We are staring into the abyss. But it could be for the long-term good.

Here's to our loss of sovereignty!

My posts on economic matters seldom attract much attention on this blog, but right now I need to get some things off my manly chest. This one concerns the EU – not exactly a popular institution with our readers. In fact the many awful things attributed to ‘The EU’ should more correctly be directed at the egregious European Convention on Human Rights. All the attempts to apply the law to riotous immigrant welfare scroungers fall foul of this ghastly legislation, not the EU per se.

In Ireland right now there’s a major campaign underway protesting at our impending ‘loss of economic sovereignty’ to the EU. Frederick Forsythe has penned a series of impassioned manifestos begging us to leave the EU and become ‘independent once again’. I’ve no doubt Fred and all the others are totally sincere. I also think they’re wrong.

Loss of a country’s economic sovereignty is not a bad thing if that country is incapable of running an economy. And boy, are we incapable – at least in the conditions in which we found ourselves over the last ten years or so. It’s been claimed that the political culture in Ireland is totally undisciplined, avoiding the hard decisions at every opportunity, until the wheels come off. True, but it only goes part of the way. The wheels in fact came off quite a while ago, and we continued taking the soft options as the ramshackle chassis careered to a grinding halt in a shower of sparks and screaming metal.

Giving money to the Irish political class is like handing a wad of notes to an alcoholic staggering towards the pub, and insisting that he not spend it on drink. Their behaviour as our deficits hit astronomical levels was to keep spending as long as we could borrow. Irrespective of where, or at what price. Result: We’ve gone from having a very low debt/GDP ratio to one of the worst in the industrialized world in just a few years. The only way they’ll ever stop is when they – quite literally – can't get their paws on any more moolah.

And here’s where the EU comes in, in the stern form of Angela Merkel. We need a dominatrix like she: Stony Teutonic gaze, clad in thigh-length leather boots and brandishing a matching leather whip. We need her to tell the leprechauns that there’ll be no more moolah until they get their house in order. Best of all, she’ll spell out exactly what we’ll have to do: cut astronomical public sector pay rates and numbers and rationalise welfare. No longer will we have semi-state non-commercial executives trousering as much money as Steve Ballmer. It’d be too much of course to expect her to eliminate foreign aid, or even cut it significantly. Still……

The other thing that ‘the Germans’ (that's what the EU is now being referred to here) will do is tackle our culture of impunity. You must understand that nobody in Ireland is ever to blame for anything. You’re a financial regulator who falls asleep on the job, and wakes up to find that the whole banking system has collapsed? Not a bother. You go out on early retirement, on full pension plus a near seven-figure tax-free sum to help you along, with effusive homage to your years of ‘public service’ ringing in your ears. Every public functionary who has lead us into our current mess has enjoyed similar taxpayer-funded largesse. In North Korea they’d have been summarily executed.

So yes, a bit of Germanic discipline is just what we need. Believe it or not, I'm looking forward to the carnage, not least because we should see a cull of the parasites and a general cleaning of the Augean stables. Staying with the German theme, well, a bit of schadenfreude will do nicely.

Ireland: All you need to know is here

As every schoolboy knows, Irish government finances are in meltdown. If you've been reading that they have 'stabilised' or that there have been glimpses of the fabled 'green shoots of recovery', ignore it. This drivel comes from the same economic whores who kept telling us right up until the day the bubble burst that all was ok. In contrast, were I one to brag, I'd tell you that, back in March 2007, while the fantasy was at its height, I warned that disaster was around the corner.

The following story tells you all you need to know about how the public sector controls the taxes we handed over to them. Fergal O'Malley held a full-time job at the Athlone Institute of Technology, which paid him in excess of €80,000 (about $100,000) a year. Amazingly, over the same ten-year period, he also held another 'full-time' post at Galway University at similar remuneration.

Now you may think - after all, he lectured in engineering - that he had mastered the science of bilocation. Or you may think that he lectured days at one college and nights at the other. No, the answer is both simple and revealing. The President of the Athlone college let the cat out of the bag by admitting that O'Malley 'had fulfilled his teaching and tutorial obligations throughout the period in question''

And the amazing this is this. He did! You see, if you're in the happy position of being a lecturer at Irish Third Level, you have to do a maximum of 16 hours a week tutorial time. And what about the other 24 hours that we mere mortals have to work? Well, that's given over to, ahem, 'academic freedom'. And what's this academic freedom? Again, the Athlone Pres - it's 'research, innovation and creativity'.

Oh well, that's all right then.

And what happens to those who don't devote their academic freedom to 'research, innovation and creativity'? Well, they take an additional post at another institute. Or they start a little business. Or they work on their golf handicap. And they do because there's absolutely no compulsion for anyone to do more than their 16 hours. If you don't do any more, nothing happens. And for this we pay them between €70,000 and €150,000 a year.

Nice work if you can get it, especially when you have a generous index linked pension on top of it.

Where, you might ask, does the Irish Government acquire the funds to support such largess? Well, when we really did have a Celtic Tiger, driven by dynamic export industries, they got it from that productive sector of the economy. Now that this sector has been decimated, well, they borrow it. At the rate of €400 million a week! That's more than €100 for every person in the country. These kind of figures make the Greeks lookmore like the Swiss.

Now the educational sector is bad, God knows. (I know also, having been part of it for a few years). But it's breadline austerity in comparison to our health sector, where the waste and inefficiencies beggar belief. And the malaise applies, to a greater or lesser degree, throughout the public sector.

And that's why I eagerly look forward to the day when the solution is taken out of the hands of the pathetic dwarfs masquerading as our politicians and we're delivered to the tender mercies of the IMF. Only then will the knife be taken to the albatross that's dragging the country into the abyss.

Hallelujah - the recession's over!

Whew – well that's all right then. What a relief. There was I thinking that the Irish economy was just at the beginning of a catastrophic economic crisis when, like magic, it’s all over!

How do I know this? Because all the great and the good say it’s so. By this I mean our political leaders, the economists (and not just the media whores who shill for their bank employers), the IMF, the Central Bank, the ECB….I could go on. For example Marc Coleman, by no means the worst of the economic commentators and a genuine independent, assures us that ‘signs of recovery are everywhere’. In fact while everyone admits things are bad just now, it’s almost impossible to find anyone who thinks it’s going to get worse.

Apart from your beloved Savant.

Now why would I doubt these eminent sources? Well, their being spectacularly wrong on just about everything to date could be a factor. For instance Peter Sutherland, The Greatest Living Irishman, and former Chair of both BP and Goldman Sachs, was not so long ago sternly wagging a finger at those who were ‘talking down the economy’. It was ‘not a bubble’ he assured us. I can see how he made the Chair at GS. All the rest of those worthies have similar track records.

Now here I must put aside my customary modesty and self-effacement. I'm forced to do it in order to show that the truth about our economy was there for anyone to see. Well anyone who wasn’t a fool or a rogue. Yes, almost three years ago I called it out – see here. In the same post I showed how the economy was being fundamentally undermined by sidelining science and technology. Just like the US has been doing.

It’s astonishingly simple to show that we haven't even come close to turning the corner. The ‘Government’ is running a massive deficit of over €20 billion equal to about 40% of its entire budget. It’s been hysterically praised for its ‘bravery’ in shaving off €4 billion off that. But that’s only a fraction of what needs to be cut.


Surely that's self-evident?

Meanwhile, despite these cuts we’re adding about €20 billion to the national debt each year. Which means that the principle and the interest on the borrowings continue to rise. If you do the math you’ll see that this will almost demolish the €4 billion savings within a few years.

What then? Well, the US is getting around the same problem by printing money. This works, up to a point, but self-evidently has colossal negative implications down the line. And being in the Euro zone, Ireland can't do this. For a variety of reasons which I can't go into here, pulling out of the Euro just isn't an option. And we can't continue borrowing as this would mean unsustainable repayment levels and/or unsustainable increases in what the lenders charge us.

This leaves a sovereign default, or massive draconian measures to correct the budget. That's what I hope happens, as our bloated inefficient public sector and indulgent social welfare (on the dole in Ireland you earn triple what you do in the UK) need to be cut drastically. That will set us back on the road to recovery. But it'll be slow and painful

Take a micro example: Say a Diversity Manager in the Health Service Executive has to get laid off, together with her staff. She - it will of course be a she - will suddenly go from earning about €200,000 a year to a tenth of that. Now even if she gets the usual obscene public sector pay-off, she still won't be rushing to spend it. There will be tens of thousands of people like her if the essential deep cuts take place.

Add to this the certainty of continued pay reductions for everyone – apart from the golden circle – and major taxation increases and you get a sense of the amount of money that will - has to be - be taken out of the economy.

To compound the problem we haven't seen the last of the property bubble collapse. This will soon enter its second phase when the huge numbers of borrowers who survived up to now by living off savings will dump their problems at the doors of the lending institutions. This is going to be a severe problem, but nobody’s talking about it.


Not yet.

Does the ‘Government’ have a plan? Well, kind of. The plan/hope is that a miracle occurs in the form of a major boost in our exports once the international economy takes off. But as I showed in the earlier post I referred to, the madness of the last seven years or so has meant that Ireland has become a very expensive place to do business, while technology and entrepreneurial skills and capabilities have been drastically undermined.

Is it all doom and gloom then? For the next few years, an emphatic yes. But out of evil cometh good. Because the forthcoming cleansing hellfire will hopefully result in a lean, efficient public sector, the elimination of welfare dependency as a lifestyle choice, honest competition in the 'professions', and an environment that actually, as distinct from verbally, encourages technology entrepreneurs.

Consider it as a kind of enema.

The US stimulus package: Your questions answered

Question: What is an Economic Stimulus payment?

Answer: It is money that the federal government will send to taxpayers.

Question: Where will the government get this money?

Answer:From taxpayers.

Question: So the government is giving me back my own money?

Answer: Only a smidgen.

Question: What is the purpose of this payment?

Answer: The plan is for you to use the money to purchase a high-definition TV set, thus stimulating the economy.

Question: But isn't that stimulating the economy ofChina ?

Answer: Shut up!

Below is some helpful advice on how to best help the US economy by spending your stimulus check wisely:

If you spend the stimulus money at Wal-Mart, the money will go to China . If you spend it on gasoline, your money will go to the Arabs. If you purchase a computer, it will go to India . If you purchase fruit and vegetables, it will go to Mexico , Honduras and Guatemala . If you buy a car, it will go to Japan, Germany or Korea. If you purchase useless stuff, it will go to Taiwan. If you pay your credit cards off, or buy stock, it will go to management bonuses and they will hide it offshore.

Instead, keep the money in America by:
1. spending it at yard sales, or 2. going to ball games, or 3. spending it on prostitutes, or 4. beer or 5. tattoos. (These are the only American businesses still operating in the US ..)

Conclusion:

Go to a ball game with a tattooed prostitute that you meet at a yard sale and drink beer allday.

America's oligarchs gorge again

In this post I referred to an article by Matt Taibbi in Rolling Stone which described Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”.

The scale and depth of their effrontery is so great that one is left with the impression that they don't care what anyone thinks anymore. And maybe they’re right. Maybe they are beyond control.

Think of it this way. At the height of the crisis a little over a year ago GS was essentially broke. The $15 billion in derivative contracts that they had insured with AIG were in effect worthless because AIG didn’t have any money. As we all know, the government, in the person of ex-GS CEO Hank Paulson, rescued AIG, which then immediately paid off GS in full. No 20 cents in the dollar shit for Goldman. In addition, with the government guarantee in place GS could now borrow more than 20 times their asset base at a rate of about 1% from the Feds’ printing machine.

Nice position to be in, especially when two of your main rivals (Lehman’s and Bear Sterns) had been allowed go bust (by the same people who rescued GS). And even more especially when TARP-related and other distressed assets were now available at a fraction of their original prices. Any fool could make hay in such circumstances, and whatever GS are, they’re not fools. The money started rolling in once again.

The fact that virtually all of the new multi-billion dollar profits come from trading (i.e. gambling), adding no value at all to the real economy is bad enough. But GS now plans to distribute billions in bonuses while the real American economy languishes in recession, businesses starved of cash and unemployment at record levels.

Throughout this crisis, before and since, the SEC and the Feds generally, were at best criminally negligent, at worst in on the scam. It’s a moot point whether the real story of what happened will ever emerge. But you would expect one thing at least to emerge from this whole sorry mess. That the Augean Stables of the SEC would be thoroughly cleaned out and that the new controllers there would be powerful, heavyweight and independent.
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But what do we get? The appointment of a twenty-nine year-old nobody from GS as its enforcement division's first chief operating officer! All we know about Adam Storch is that he previously worked in Goldman's business intelligence unit. Oh wait! We also know that seven years ago he was sorting mail at Deloitte’s Buffalo office. Yes, that's the new fox in the hen-house. This appointment is so grotesque that to me at least it says that GS realises that it is simply unaccountable and doesn’t care what anyone thinks. It will continue to loot until there’s nothing left.
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And there may be little or nothing left of the American economy in due course. Real unemployment heads towards 20% as manufacturing is outsourced to cheaper locations, while low-priced foreigners are brought in to boost profits and further reduce the share accruing to America’s middle and lower classes. Meanwhile the dollar continues its precipitous decline against what would before have been considered basket-case currencies, driving the national debt still further into the stratosphere.

In Europe this would lead to riots and peasants with torches heading for the castle. But the MSM in the US, almost all owned by mega multinational corporations, sing from the same song sheet in supporting globalisation and mass immigration. The politicians have been bought and paid for, so it’s hard to see where a solution will come from.

Meanwhile, as airline pilots subsist on $40,000 a year and food stamps, the people who caused the mess can resume raking in their multi-million dollar bonuses. And GS need have no worries. They form the nucleus of the Obama economic regime just as they did under Bush. The original heist was the brainchild of GS alumni Robert Rubin and Larry Summers, while the bankrupting of their main competitors and the disbursal of billions in taxpayers funds was arranged by GS alumnus Hank Paulson. Tim Geithner owes everything he has to Summers and Rubin and is seen as a ventriloquist’s dummy in their hands.

The vice-like grip of GS is even worse under the current administration. I began to research it but found so many that I gave up. Try it yourself! Obama has been bought more solidly than Bush.

Scary stuff.

Where will it all end?

The Hartes need a heart-to-heart

Meet the Harte family, Ger, Danielle, and their five children. They seem to be doing all right. They live in a seven-bedroomed detached house, have two cars, 4 televisions including a 50" flat-screen, and of course the obligatory Sky Sports subscription. In the photo in the Sunday Independent seven of the family are sporting Celtic (I'll have to give them a plus for that) and one what appears to be Aston Villa expensive replica tops.

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And they are in receipt of €3,800 (about $5,500) a month from the Irish taxpayer to help them along

But all is not well. The Hartes believe they’re getting a raw deal from the taxpayer, and took their grievance to the courts. They were somewhat surprised – and upset – at the subsequent lack of sympathy when the media got hold of their story.

One of the people a bit put out was an IT salesman who earned €32,000 a year, from which he had to pay transport costs for a two-hour commute to work, mortgage payments and doctors bills – all of which costs would be covered for the Hartes. He made the valid point that he was working his ass off and coming out with less than the Hartes.

‘Why bother?’ he asks.

Why indeed? And therein lies a large part of Ireland’s problems, and why our social welfare payments will be about €20 billion this year. And that's for a population of four million! 40% of the population at any one time is in receipt of welfare payments such as those trousered by the Hartes.

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And we wonder why we have a financial crisis. It's not only the bankers and developers who have brought this on us. The insane welfare expenditure instanced by the the examples I gave above show how the blame can be spread around. Ultimately of course the fault is that of the politicians who countenanced all of this, and the sheeple who elected them.

BaNAMA Republic

Enough has been written by others about governments’ bailout of bankers and speculators - the very people who caused the problem. Ironic that this is most pronounced in the Anglosphere, the alleged home of the bold capitalist risk-taker.

In Ireland’s case we have the National Asset Management Agency (NAMA), which proposes to buy all the banks’ ‘toxic assets’. And what will they pay for those assets (liabilities is the correct term) which are now worth about a quarter of their loan value? Well, the geniuses will pay, on the Irish taxpayers’ behalf, the value ‘that the assets could be expected to achieve in the medium term or when normal market conditions prevail’.
Now isn't that a lovely, clear, definitive statement of how much we’re being exposed to? NOT! Based on the legislation, everyone agrees that we have in effect no idea as to the extent of our ultimate exposure. At book values of €95 billion, we can see that a tiny country like Ireland is potentially facing a meltdown of Icelandic dimensions if it all goes wrong. Which it most likely will.

Just like in the US, it’s not as if the government has to do this. There is a very simple solution: let the shareholders and international bondholders - who invested unwisely because they were getting a great return on their investment – let them take the hit. After all, isn't that what the go-go risk-taking capitalist culture is all about?

Apparently not.

What intrigues me is why the government would incur such public odium, and inflict such devastation on its own people, rather than take this path. I don't believe it’s corruption in the commonly understood meaning of the term. Rather, again just like the US, the government has turned to the very people who walked us into the disaster to come up with the ‘solution’. Naturally this solution is one geared to support their interests, not the public’s. And the government is too incompetent and cowed to counter them. As I've pointed out on many an occasion, the sheer incompetence of Ireland’s politicians is nothing short of breathtaking.

And then we have the resident parasites circling like vultures, applying their own pressures as another feeding frenzy beckons. Lawyers will have a feild day (many field days) as every price offered by NAMA is appealed to every court in the land (all paid for by the taxpayer) while property valuers, consultants and middlemen of all sorts firmly insert all four feet in the trough.

The ostensible reason offered for taking the NAMA approach is that otherwise the international bondholders would take a dim view and our reputation would be damaged. First, our reputation is damaged quite enough as it is. And second, sentiment is an emotion unknown to international lenders. They’ll lend if they think they’ll get a good return and the risk is low. And as we’ve seen, there’s in effect no risk to lending to Irish banks. This being so the bondholders will continue to allow banks to throw money around like drunken sailors if they believe they’ll get their money back come what may.

But if we sold off the assets at current values, the resultant losses for the bondholders would encourage them to exercise caution in future before they pile into reckless gambling of the kind that brought Ireland down. Also we’d instantly cleanse our banking system (is that isn't an oxymoron) and use the billions slated to bail out the investors to instead recapitalise the banks.

Should be a no-brainer but it looks like we’re not going to do it. Ireland could be facing up to a Lost Generation.

Ireland's saviour - technology entrepreneurship

Ireland’s economy is going to hell in a handcart as you all know. Our one chance is to rekindle the spirit of the nineties and become an innovative, entrepreneurial, technology-driven powerhouse. We really were all of those things. Seems so long ago.

It’s with great joy therefore that I learned of the following initiative. As a former technology entrepreneur and mentor to a range of technology companies, I can tell a winner when I see one.
The ingenious scheme from Bock the Robber is to… well, I’ll hand you over to the innovator himself.

"Pray Per Click.


The concept is very simple. I’ve set up twin Pray supercomputers in Antarctica, each having three christabytes of main memory and quadruple 98-halohertz praycessors.

For a small donation (let’s say 50 cents), using PrayPal, you can generate a random prayer and have it emailed to an unlimited number of devotional web-grottoes, which I will also set up. You can send it to virtual Lourdes, Medugorje on line, cyber-Fatima or any Knock of your choice
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So how will all this work?
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Very simple. I’ll be putting a button on the front page that you can click, and using your PrayPal account you can donate 50 cents or a euro. Or a dollar. Or a dinar. Or an e-shekel. I don’t mind.

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Then you select a prayer-theme from a simple pop-up menu.
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Once you’ve donated to our church-building fund and selected the theme, our two Pray supercooled supercomputers will generate a random and unique prayer which will be broadcast to space in all known languages as well as Java and Cobol, and emailed to the recipient of your choice.
.What could be simpler?Here’s my advice to you. Pray early, pray often "
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More comprehensive details of the project can be acquired here.

Now of course, as with all technological breakthroughs, some traditional trades will suffer. Obviously the humble Mass Card, a great little earner for centuries, will be severely impacted. As will the coffers of the not-so-humble Church. But that’s progress guys – don't be Luddites now!

The patriot game

An interesting comment to my post on how Reagan's puppeteers (and Ollie North's) contributed to America's decline. This comes from an American who was at the cutting edge, so to speak. Here's what he says:

"Too bad I didn't see this blog while all this was going on. As a defense contractor employee during our lords reign, I could see what a waste it was. I also knew he was little more than a pitchman for the ruling elite. I especially like the title they gave him as "patriot".

However, would a patriot allow meat packing companies to send busses down to Mexico to get scabs - Ronnie did. (http://www.citypaper.com/special/story.asp?id=6045ES) More difficult for me personally than seeing the slaughter of cattle and the incredible carnage in those factories was seeing these workers, how they live. Meat packing, until the late '70s, was one of the highest paying industrial jobs in the United States.

Then the Reagan and Bush administrations allowed the industry to bust unions, to hire strikebreakers, to hire illegal immigrants for these jobs, even to transport them here from Mexico in company buses. Now meat packing is one of the lowest paying industrial jobs, as well as the most dangerous.

This is a great blog I will check in periodically.

It makes me sad to see decent, honourable hard-working Americans brought low by these so-called patriots.

Goldman Sachs: Bloodsuckers supreme

Great article on Godlman’s from the always excellent Matt Taibbi in the current issue of Rolling Stone. Here are a few extracts:

"The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy."

Goldman's modus operandi for such bloodsucking he explains thus:"Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage.

Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased.

They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet." Here he’s referring to the upcoming carbon credits scam - more below.

In relation to the dotcom bust he says “they did this by setting up what was, in reality, a two-tiered investment system — one for the insiders who knew the real numbers, and another for the lay investor who was invited to chase soaring prices the banks themselves knew were irrational.”

He makes a convincing claim that Goldman orchestrated the whole oil bubble of the last few years “by persuading pension funds and other large institutional investors to invest in oil futures”. This is true, and it’s equally true that Goldman got out before prices collapsed. Pension funds were the losers in this instance.

"After the oil bubble collapsed last fall, there was no new bubble to keep things humming — this time, the money seems to be really gone. So the financial safari has moved elsewhere, and the big game in the hunt has become the only remaining pool of dumb, unguarded capital left to feed upon: taxpayer money."

Taibbi really cuts loose on the incredible situation whereby the authors of the current economic meltdown have been put in charge of its rescue, as I also referred to in this post. Taibbi shows how one of the first acts of the Goldmanites was to get rid of their biggest competitor, Lehman Brothers. This was left to sink while various other non-competitors were kept afloat with taxpayers’ money.

"[Former Treasury Secretary Hank] Paulson elected to let Lehman Brothers — one of Goldman's last real competitors — collapse without intervention. The very next day, Paulson greenlighted a massive, $85 billion bailout of AIG, which promptly turned around and repaid $13 billion it owed to Goldman. Thanks to the rescue effort, the bank ended up getting paid in full for its bad bets: By contrast, retired auto workers awaiting the Chrysler bailout will be lucky to receive 50 cents for every dollar they are owed.

Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs."

Having pumped millions into Obama’s and other Democrats’ campaigns, they’re already getting payback in possibly the biggest wheeze of all – carbon credits.

I strongly recommend you read the full article here.

And where was the MSM in all of this? In the middle of it, that's where. And no surprise because they’re part of the whole dog-and-pony show. What’s needed is another October Revolution, where these parasitic criminals are left dangling from lampposts

No, it's NOT good news

The EU’s latest report of Purchasing Power Standards (PPS) shows that Ireland is still the wealthiest country in that organisation. (I exclude Luxembourg whose figure is fundamentally distorted by the number of foreign workers there). We’re apparently 40% above the EU average, while the next wealthiest, Sweden, Holland, Denmark and Austria average about 25% higher.

This apparent refutation of our much-touted poverty has given the chattering classes much to crow about. The most pernicious outcome is their attempt to use it to make respectable the massive borrowings proposed by our (mis)government. The logic, such as it goes, is along the lines of ‘hey, if we’re still this wealthy, why don't we just keep borrowing to meet the deficit until the good times roll again?’

It’s pernicious because the country desperately needs to cut our out-of-control public expenditure, which is generating deficits of Zimbabwean dimensions. Continuing to spend like drunken sailors and landing the bill on the next generation (or more accurately, the next government) will ensure that the country sinks ever deeper into the morass that now surrounds us.

Ireland's truly fucked!

Ireland's knowledge economy: ho, ho!

Up to about 10 years ago Ireland had a real chance of becoming a true knowledge economy. We produced huge numbers of graduates in science, technology and engineering (STE) from third level institutions that, while not world-leading, were doing a more than adequate job in terms of quality and employability. These graduates went on to staff, and in many cases create, leading edge knowledge-economy enterprises.

Make no mistake, the achievements were real, and we punched way, way above our weight. At one time we produced more software graduates than Germany (true!) and our software exports were the second highest in the world.

But as I showed in this post (more than two years ago, by the way) we, naturally enough, blew this unique opportunity. And our chances of recovering were dealt a further severe blow over the intervening period by allowing vast numbers of unskilled, non-English speaking immigrants into the country.

Their children are now feeding into our taxpayer-financed primary education sector. Add to these the numbers of students who were born outside the state. And the latter's numbers, according to today’s Irish Independent, amount to one in ten of the current pupil population. Given known demographics, this ratio will continue to rise – and rise rapidly. In some schools the junior infant intake class is 100% non-Irish!

To see the catastrophic impact of such developments in Ireland, check this post. Anyone who's been involved in whole-life education programmes, as I have, knows that ultimate success at second and even third level depends on the quality of primary schooling. So not alone are we, due to the financial crisis, cutting back on educational funding, we’re flooding the system with children who are severely disadvantaged from day one. Self-evidently, the ensuing problems will be reflected in the quality of education received by the rest of the student body.

Hence the cynical laugh when I hear Bryan Cowen fantasising about Ireland’s ‘knowledge economy’. Dream on, and fuck you and the rest of the political and multi-culty class that have ruined our childrens’ futures.

Speaking of which, as you'll see in the last link referred to above, white English-speaking parents are voting with their feet, and moving their children out of ‘diverse’ schooling environments. And they're using a publicly available site which identifies the relevant ratios. I wonder will this be closed down too, on the Stalinist basis that knowledge is dangerous? If not, this trend will in turn lead to de facto segregation, sink-hole schools and the possibility of a bussing-type ‘solution’ if the Victim Industry gets its way.

To Irish readers, just remember, we brought this on ourselves - we saw what happened everywhere else, but we still went ahead.

Our 'Government' will funk it

Tomorrow’s Budget is widely seen as make or break for Ireland’s economy. To me, all the signs point to a break, but a deferred one. The budget will put off the evil day, but that day will arrive, and when it does it will be even worse than it would otherwise have been.

The so-called government will take all the easy options. They’ll increase taxes for everyone, but not too much. They’ll postpone vital infrastructure projects (not many votes in them) and borrow every cent they can get their grubby paws on.
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The expenditure side, where 90% of the deficit bridging should be sourced, will be largely left intact. Consider just one statistic. At current levels, social welfare uses up over two thirds of government revenues!. This is before you get into public sector pay, or costs for health, education, law enforcement and all the rest of what constitutes ‘normal’ government expenditure. Yet it seems that this will not be touched, even though current deflation means that payments will actually go up in value.

Statistic: If you’re on the dole in Ireland you get almost four times what you get across the border in the UK.
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The other monster in the room is the public sector pay bill, which has exploded like a malignant tumour over the last decade. Public sector employees, in their secure jobs, with index-linked pensions, nonetheless earn about 30% more their counterparts in the private sector. Is that madness, or what?
But that’s nothing to what they earn in comparison to foreigners in wealthy countries.

Statistic: An ambulance driver in Dublin earns more than a cardiologist in Germany
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Statistic: A professor in Ireland earns twice what his equivalent in the UK earns
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Statistic: A policeman in Ireland after 20 years service earns more than twice that of his counterpart in France.
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The list is endless. Fact is, our public sector is rewarded at a level vastly in excess of what the economy can afford. Despite this, it has successfully resisted all reform initiatives and remains one of the most hidebound and inefficient in the Western world.

Billions currently being wasted could be saved with the stroke of a pen. Close down all of the Victim Industry quangos – there are hundreds of them. Reduce foreign 'aid' by 90% - everyone will benefit, not least the supposed beneficiaries. And deport every illegal immigrant.
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None of these things will happen, leaving the fundamental problem almost untouched. The reason? Politics before principle, party before country.
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It wasn’t always thus. Our first President died with holes in his shoes and a couple of hundred pounds in the bank.
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But that was then – this is now.