G Our Money (Germany’s got it)!

August 25, 2013

Graph of the 1929 crash on Wall Street as part...

Graph of the 1929 crash on Wall Street as part of a timeline from Oct 1928 – Oct 1930. See full graph for entire DJIA. Designed to replace this raster image. (Photo credit: Wikipedia)

LABOURing for the banks or GoodBYE Labour

The euro was meant to give stability. We imagined German oversight and regulation of the euro currency. What we got was the ECB behaving like a delinquent and dysfunctional Anglo handing out cheap money to fellow delinquents in Greece, Spain, Portugal and Ireland, no questions asked.

Germany got wealthy on this money.

We bought its cars, its engineering expertise, its reliable exports. From 1990 onward Germany imposed austerity on its workers with a tight rein on pay levels and public finances. Its economy grew proportionally both on the fatted calf of restraint  intolerant of deficit spending and spending on infrastructural support of R&D and education and training to further inject its export performance with greater scientific focus.

Collectively the ECB pooled the currency quantum of individual members laundering surpluses into lending  to individual members of the EMU no questions asked. Unregulated lending led to tragedy with property booms leading the way for banks and developers to grow rich on corrupt planning practices looting public finances. The legacy of such years being flood plain ghost towns and a giant lamp standard in the middle of O Connell Street.

The party had to end some day. The Wall Street Crash of September 2008 was the pin to prick the euro bubbles. Even the inner core countries have not been immune to this crash. euro banks were top of the queue to purchase the toxic derivatives coiled into the global money supply by the era of deregulation from 1971 to the present day.

large-scale purchasing of bonds from euro zone banks infected by the madness by the ECB has served in the main to hide this toxic fact from the markets, a tactic too late to save Ireland’s banks.

The crash landing has been most severe for countries such as Ireland. Severe for EMU as a whole exposing weaknesses in the very foundation of the euro itself.

Many would now say the euro was a castle built on sand and will soon be consigned to history as another failed currency experiment. Its clear austerity is failing to fix its flaws. The euro Scott expedition continues with the solution to its travails stealing from the poor to pay the rich (austerity).

How bankrupt countries will manage to float with the added burden of odious debt repayments, extensive bailouts, with large parts of their real economies now removed through austerity, will be seen over the coming years. Expect the unexpected surprise.

Ireland were it not for the ‘gift’ of emigration would through the added burden of paying for long-term unemployment see its public services go quickly beneath the waves.

Taxpayers have been landed with the bill of the failing banks of the EMU. In Ireland deflation has caused an erosion of the wealth of the middle class of unprecedented proportions mostly in the form of declining property values and erosion of savings through tax increases and declining returns on investments.

However, the greatest burden has fallen on the poor and the cohort of 30-50 yr old  property owners with currently 100,000+ now in arrears on their mortgage repayments.


The Elliot ‘patient etherized upon a table approach’ has been the approach adopted by the ECB to solve the financial woes of bankrupt member states. Unfortunately, in Ireland’s case a compliance outlook, lack of insight, unprofessionalism  at the highest levels of government, within the Central Bank and the Irish Department of Finance, led to a poor deal for Ireland.

At most a whimpering approach to negotiations has led to unconscionable and odious so-called bailouts with massive failure by political parties in spite of election promises to achieve burden sharing for Ireland.

The Labour party in Ireland of all parties served with the duty to deal with the banks and Ireland’s lenders ironically has carried out the most disastrous exercise in hypocrisy of all parties. Its difficult not to view the Labour party as the local agent of the troika in Ireland , a bank bailiff working to pressurize and extract from Irish taxpayers in particular the above cohort, maximum tribute to lenders.

ECB dealing with countries on an individual level is replicated with Irish ‘pillar’ banks using the above approach to extract from individuals in negative equity and mortgage arrears, whatever they can. The problem is money can’t be extracted out of thin air. Austerity means unemployment, falling wages, higher taxes, higher charges public services leading to more people in mortgage arrears.

Our banks require further recapitalisation to plug the black hole. Further bailout tightens the grip of the anaconda strangling the local economy. A self-defeating spiral downwards results. Yet  Propaganda  that .3% growth difference measured across the euro zone in the last quarter mean the euro has turned the corner and growth has returned to the EMU….

How long Germany will stick with the euro with the monkey of euro debt on its back is anyone’s guess. One thing for sure, Germany, Finland, France, the Netherlands are not for turning and they will not be redirecting any of their external balances on the return to growth profit side to spray at the incumbent debt of the PIGS, Portugal, Italy, Greece and Spain. 

They are not about to introduce burden sharing of bank debt for bailout countries such as Ireland. The Irish economy lying comatose ‘like a patient etherized upon a table’ will be transfused of its lifeblood to repay foreign banks of the EMU credit union.

They will continue to stick the pins of austerity into those countries to extract tribute to the rich countries of eg Germany, France and Finland allowing the EMU mess to decompose further.

Meanwhile let’s smile at smug Irish economists hailing the return to growth of the new EMU based on hoovering debt and interest from the periphery to the inner core….a new paradigm for the eurozone.

Not what we signed up for, was it? Now Germany has got all our money!

The vulnerable, people with disabilities, without social protection, are paying for this.

Shame on Labour.




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