The Laughing Policeman

September 15, 2014

There is a shortfall of €500m required for the HSE next year to avoid the closure of upwards of 300 hospital beds and further erosion of services. The collapse of An Taoiseach  Enda Kenny’s unworkable plans to bring about universal and free healthcare is not worth deliberating upon here.

Suffice to say everything is on hold.

Currently An Taoiseach is basking in the glory of possible savings of €1.5bn over the next 5 years by paying off Ireland’s IMF loans early. Interest rates falling Govt hopes to borrow low on the cheaper market funding. Of course no reference to the unconscionable, odious and penal rates of 5.8% the Central Bank agreed to accept from the troika in the first place.

Govt has had a disastrous result in its failure to renegotiate our banking debt but clipping little bits from odious interest rate terms is touted as success.

“He laughs upon point duty, he laughs upon his beat
He laughs at everybody while he’s walking down the street
He never can stop laughing, he says he never tried
Well, once he did arrest a man, and laughed until he cried”









From a debacle in Health to similar in Irish water, its come to light the meters currently being installed are costing twice their value and are also inferior in design.

Phil Hogan, newly appointed EU Commissioner for Agriculture,  has questions to face over the startup costs of Irish water up to €100m half of which was spent on consultancy fees. No, you didn’t misread that, €50m on consultancy without one pipe installed to fix a leaking national water infrastructure that has contaminated water supplies countrywide.

In response to a question on RTE Radio1 on his responsibility for such cost overruns Phil demurred stating that basically he was an ordinary man and such matters best left to professionals! Dublin people look forward to the exciting probability water charges levied upon them will not be spent on a new reservoir for Dublin needs or even to fix Dublin’s leaky pipes; but rather will be spent to decontaminate the rest of the country’s poor infrastructure and contaminated  group water supplies. Hogan should do well in agriculture raising prices for Irish beef the brunt of which will be born by Irish taxpayers as a cloak for another hidden tax.

The banking inquiry has been put on the back burner and no one believes it will lead to one jail sentence so laughingly its become a mild source of ennui for govt as another set of plans that will be neatly consigned to the distant future in the land of broken promises.

A surge in property prices led by cash buyers has led to high rents forcing some into homelessness. Rather than tackle the problem the govt has cheered on the property bubble touting it as evidence of economic recovery. High property values are required to prevent further negative equity damaging the capital base of the banks.

There is no evidence that the mortgage market has returned to normal. Mortgage lending is for the cash rich 1% not the 99% who cannot afford current pricing. Even those on high salaries cannot afford a modest home.

Inactivity, bad planning and inertia in the face of housing shortages in the Dublin area have left government the opportunity to milk every ounce of propaganda they can muster to point to rising property prices as evidence of their success. Black is called white.

New property charges, USC’s, water charges, increased funding needs for education and health inevitably lead to rising taxes not helped by failure to unwind our banking debt. A surge in vulture fund activity to buy up NAMA property portfolios in the short-term may help govt limp its way to the budget under the mask of a false housing bubble as they cover up long-term damage to the Irish economy.

But the emigrating best and brightest young professionals leaving the country in their droves will not be retained here by marginal tax cuts

“A few years ago, Irish immigration in Australia was driven more by the trades,” he explains.

“The growth in our membership, which reflects the change in demographic of immigrants towards white-collar, is among young professionals, like chartered accountants, engineers or lawyers.”

The irony of emigration is that the social welfare bill is reduced thus contributing to govt laughing stock. The greater worry is that the numbers emigrating are leaving jobs, do not come from the ranks of the unemployed. Part of the unemployment stats fiddle is to say jobs vacated are new jobs!

This is another example of a low quality good being passed off as a higher quality good. Another way of stating this is that what we have is a generic application of Gresham’s law in economics. The flooding of helicopter funding to the rich, the financial sector and the banks has left a broken financial model with austerity for the 99% and profligacy for the 1%.

The financial sector driven by the frenzy to persuade us all that this model works flood us with propaganda that their return to profit is actually the return to profit of the 99%. You do not need a microscope to see that the flood of professionals emigrating from Ireland’s health/education/legal and engineering sectors are not taken in by such bogus arguments.

Laugh all you like but meanwhile the euro area crumbles with austerity hastening its decline and demise. Europe’s financial sector mirroring that of the global dollar based financial sector is bloated and in need of a vast reset. The tentacles of the financial industry over the real economy have grown since Johnson turned the dollar into fiat to pay for war deficit spending in 1971.

“In finance, a derivative is a special type of contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often called the “underlying”.[1][2]

The problem in Ireland, EU and globally is that an inversion of that definition has occurred. The problem is the real economy has become a special type of contract that derives its value from an underlying entity, debt that fuels the economy, not the economy itself.

Therefore, for example, the price of property is not set by supply and demand. It is set by the need to fuel corresponding debt set by the financial industry.

Likewise across a range of commodities, metals and industrial goods the produce of large corporations, the financial industry has inverted the real value of economic trade in such goods across national boundaries, so that trade is subsumed by financial wizardry to be an entity whose underlying value is based not on real market conditions, but rather on financial paper manipulation.

This is a ponzi scheme that is built to fail as it failed in 2008. QE in the US has been the equivalent of giving whisky to the indians who’ve gone on a large spending spree spending in the casino of financial paper. The share values of stocks have risen while the real economy has gone into a downturn. Vulture predators created by the scam are looting Ireland.

Currently this failure is masked by cash buyers of the 1% while the 99% have curtailed spending. Across Europe economies are in decline. Things will get worse when the cash buyers have spent their last penny. When they do, they will look for more loot to spend in a deflationary economy.

It will be interesting to try to judge the moment when the inflationary financial markets fed by QE in a forever rise upwards, finally separate from the real deflationary economy in its inevitable cycle downward. Will rising interest rates fed by political unrest trigger a global meltdown?

Meanwhile its cash buyers on the loose and time to party along with our laughing policeman of the troika, an Taoiseach Enda Kenny.

"Top Derivatives Expert Estimates Size of the Global Derivatives Market at $1,200 Trillion Dollars … 20 Times Larger than the Global Economy"

“The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in writedowns and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008.”

The value of Irish property is deeply tied in and manipulated by the Irish financial sector. The gravity of the real economy weighs against paper based optimism.

till next time.





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