Banking Inquiry

May 18, 2013

Jean-Claude Trichet at the Karlspreis award 2011

Jean-Claude Trichet at the Karlspreis award 2011 (Photo credit: Wikipedia)

Part 1                                    

An Irish Banking Inquiry

 300,000 of Ireland’s mainly young people have emigrated (1), no jobs for those remaining, unemployment rates of 14.7%, in reality closer to 28% when hidden buffers disguising true figures are removed.

We have an economy driven to meltdown following an economic joyride by the previous administration; an economy of failed austerity and a culture of national dependency on bailout.

This was brought about by the current administration’s disastrous policies of ruining the economic engine while  in their garage.

We should at least be able to look forward to a banking inquiry.

We still need to hold to account those who got us to where we are. You are more likely to see some of these people who refused to burn bondholders from our previous administration and our current administration,  who agreed to odious debt burdens on Irish taxpayers, who compliant at the behest of their master puppeteers in the troika, have brought this economy to economic national dependency and lost our sovereignty, receiving awards and honorary doctorates eg Enda Kenny receiving one from Boston College today!

There would appear to be no great pressure coming from our European partners and the troika as to the urgency of carrying out a banking inquiry in Ireland. Veritable silence in fact. Mario Draghi, President of the European Central Bank, when have you heard him speak out on the urgency of a banking inquiry in Ireland?

We need to get to the root of what caused financial meltdown in Ireland. We need also to know who exactly were the leading insiders who stoked the mess, what actions taken and what advice was given.

It’s easy enough to do this before an Oireachtas committee with proceedings held in camera taxpayers can watch.

Of no great interest  is the large-scale policy of lending stimulated by a bonus culture among banking personnel that led to rules being bent and good practice set aside. Cast aside were the managers sitting down examining the ability of borrowers to pay back conservative projections of their lending obligations measured with conservative lending practices; in place of widespread irresponsible lending practices fed by a bonus culture and demands that targets be reached at any cost.

What matters is that leading personnel, Ireland’s top ten or 20  players in the Dept of Finance, the Central Bank, the Regulators Office, FF and FG ministers for Finance, be deeply questioned as to their role in decisions taken. Perhaps also representatives from the Central Statistics Office should be asked to give account.

It’s noticeable current growth projections by CSO/Dept Finance invariably fall short of projections without anyone being held accountable. CSO practices the current canary in the mine whereby its forecasts are tempered by the caveat that growth projections are given on the understanding that growth will occur in Europe and elsewhere.

There will be growth if there is growth. Right.

What? This is base propaganda and not science. We need forensic application of empirical science not false propaganda fielding trumped-up stats fueled by bubble speculation on growth in the EMU.

We need for balance a group of 10 developers who can be questioned on how they got their Finance.

Representatives from the ECB, if possible Jean Claude Trichet should also be quizzed on the role/leadership played by ECB in Ireland’s response to its meltdown in particular terms offered for bailout. Add in some representatives from the EU and the IMF.

60 days over 3 months should establish the facts helped by powers of inquiry given to PAC (Public Accounts Committee), eg compelling attendance/assistance to PAC under legal sanction of contempt.

Selective amnesia maybe can be dealt with through laws demanding imprisonment for contempt of court. But I wouldn’t bet on it.

Part 2          

The collapse of the market economy in the EMU

Much mileage is made in Ireland on purveying the view the Irish Financial meltdown was caused by a simple banking collapse due to massive over lending in the property sector fueled by incompetent oversight and management of state finances.

You’ll hear the phrase ‘nothing to do with exotic derivatives’ meaning the writer usually understands little of these funds, or misunderstands and does not appreciate their impact on currency collapse and property speculation. Yet it was the bundling of property mortgages into toxic derivatives that fueled the Wall Street collapse in 2008 that precipitated the collapse of the Irish property market.

Countries like Germany love this view.For example, Finance ministers of Germany, Netherlands, Finland have signaled any future banking deal in the EMU will not retrospectively be used to finance Ireland’s banking debt.

Ireland’s property bubble and Celtic Tiger years were fueled much more by external conditions than local conditions. Let’s have a look into the engine that runs on bubbles to get a better overview of our financial meltdown. Perhaps PAC in its inquiries should focus much more on this aspect to get to the root of Ireland’s financial collapse.

There are 2 stages to its collapse: one is due to our ‘banking property bubble collapse’ fed by loose unregulated money supply at ECB level; the second is subsequent to it, call it a combination of austerity, banking bailout, that has led to the destruction of Ireland’s market economy leading to unemployment/emigration and a new pretend/virtual economy fueling toxic financial resources into the financial sector.

Dr Heiner Flassbeck, Economics Professor, Hamburg University

has spoken of the lack of clear regulation that led to the Wall Street meltdown and that continues to this day “endangering democracy and the moral ground upon which our societies were built in the past”

He’s asked that governments need to be prepared to step in to restrict the movement of the financial markets. Instead governments are collaborating with proponents of deregulation and toxic Zeppelin stimulus of the financial sector through QE1/2/3/4 in the US and currently in Japan leading to massive distortions in financial markets.

These markets are no longer market driven but stimulus driven virtual constructs manipulated by forces in the financial sector and banking purveying the falsehood that stimulating the financial markets will kick-start labor markets.

Unemployment in the EMU is currently 12%+ and growing steadily.

A good example of distortion of the financial markets and destruction of the market economy is in the case of commodities. Manipulation through shorting in these markets has led in the past year to enormous market fluctuations in real commodities with investors running away due to the realisation markets are controlled and driven down by financial forces in the banking sector that have taken control away from market driven influence.

Financial sector forces have forced bailouts on economies such as Ireland, Portugal, Greece to the detriment of the free market economy in each of these markets that has been driven underground with unemployment and emigration and a growing divide between rich and poor.

Countries such as Ireland are becoming more dependent as they become more enslaved by the financial sector. Similar to satellite states in the previous USSR countries across the EU are no longer free market driven economies, but enslaved to the demands of the financial sector for austerity and the supply of national tribute through taxation and massive lending with punitive interest rates.

According to Flassbeck “monetary stimulus is not working”. According to him we have not even “the pretension of a real market”. Currently there is huge subsidization of the financial markets through QE and through zero interest rates.

Support for this view comes from Max Keiser who is even more pointedly direct in his views than the exhortation  of Flassbeck for the management of the financial sector by competent governments willing to step into the breach and make difficult decisions.

Keiser’s critique of the ‘sacred Dow’ warns that the massive explosion in the DOW over the past year is a false sign of recovery in global markets. Like Flassbeck he points to the crisis painted in unemployment figures unresponsive to the DOW index.

Explosion of the stock market (Max Keiser) is hyperinflation, interest rates are low if any, employment/spending/wage rates are low, the currency of the future is The Dow

How much QE and manipulation can the DOW and the financial markets take before eventual collapse.

In Japan, “The stimulus program will be affordable because under Haruhiko the Bank of Japan is committed to printing as much money and buying as many bonds as are out there.” undermining other currency areas eg china forced to compete with the Japanese currency which in the last 6 months has devalued by 30%. However the Japanese bond market is Fukushima and its  crashing. It too is undermining currency stability locally between China and Japan.

In Ireland support for the false Zeppelin toxic balloon of the financial markets has led to taxpayers being raided to pay bondholders, austerity, destruction of the local economy, mass emigration, destruction of health/education services, 25% + unemployment and “selective amnesia” on behalf of those who engineered Ireland’s economic collapse.

Ireland undoubtedly has been effected by a global heist of market economy economics by the financial sector.

Instead of hyperinflation through currency manipulation, manipulation of the financial markets, commodity markets, exotic derivatives distorting world trade, a cleansing of the financial markets needs to take place before it’s too late. Dodd Frank won’t do it, Basil 111 and FTT won’t do it, nothing less than a reset to currency exchanges anchored to freedom from manipulation money supply will do it.

At one time under gold the financial markets served the concept of market driven economies. In the dollar there was relative currency stability until Nixon separated the dollar from gold in 1971:

The experiment has been a failure. IT’s time for a new global currency agreement partially based on gold and including other factors to be agreed by world leaders. It would appear this will not happen before global currency collapse. Around us are plenty of indicators our currency system is off the rails.

The irony is austerity is fueling the financial markets, the financial markets are fueling global currency collapse. Now the financial markets have plundered taxpayers, next up are depositors in their banks.

Lending was fed through the financial sector through the ECB to Ireland. Ireland’s deregulated financial sector rose to the toxic occasion. It’s time Ireland replaced incompetent government with competencies of Icelandic calibre to take on its delinquent financial sector agents in government and its other decision making arms in banking, Dept of Fin and Central Bank/Regulator/Developer relationships.

A banking inquiry is a first step. Will it ever happen or will selective amnesia and coverup dupe democracy in Ireland.

1. Emigration patterns:



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