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The current financial crisis: three falling dominos national |
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opinion/analysis
 Saturday October 25, 2008 09:01 by Brian
 Just a few thoughts on the banking crisis and its effects on the currency markets and the real economy. It seems to this observer that you can divide this crisis into three parts, or dominos, with one already falling and threatening to knock over the other two: 1. The first domino to fall was the banking system which, as I see it anyway, was the victim of a bursting bubble effect of asset prices, particularly house prices, exacerbated by the pyramid scheme type effect of modern fractional reserve banking and related derivatives trading. One way of looking at it is that a sudden increase in unproductive asset prices, ie house prices, was always going to lead to a bubble effect on the economy. Its not as if the increase in house prices was going to lead to some brilliant long term thriving economy, because it was always the case that the asset prices were increasing only because people were borrowing more and more and then bidding against each other. Hence a bubble was just been created here that had to burst at some point. This effect was then exacerbated by the multiplying effect of modern reserve banking and especially the leveraging of asset prices by modern derivatives trading. For example its reported that quite a lot of the shares on the Irish Stock Exchange (which has collapsed like the house prices) were held by people who only invested a tiny fraction of the purchase price of the shares, they essentially borrowed the rest. This borrowing, or leveraging, has the effect of increasing the asset value dramatically in the short term, and increasing the profits of the holder, but likewise will fall very dramatically when it turns down, and will cause colossal debts in the holders. The point is anyway that maybe these modern banking practises are creating a kind of accordion effect in that they expand out an economy, multiplying out the available money and prices in the good times, and crashing them back in suddenly in the downturn times. I guess banking has always had this effect somewhat but we have had such a long run on asset prices that it has created an abnormally large bubble this time, and modern banking has learned to exist on very small margins, and in some derivatives trading on very small reserves, which then increases the multiplier effect of the banking and hence the suddenness and steepness of the fall. Such is my tuppence worth anyways, the point being that a lot of what is happening now is that in this downturn banks are scrambling for 'real' money, as it were, to pay back the debts incurred during the expansion of the accordion, so to speak. What I mean is that basically, as I see it anyway, a lot of what is happening is very like the collapse of a pyramid scheme, the system could only hold together as it went up, it doesn't go down so much as collapse exposing the holes in the financial fabric. In a way they have leant out more money than actually existed, as Gareth Duffy points out in the Sunday Independent: "SCC was just a couple of years old and was one of a new brand of Credit Derivative Product Companies (observation: these companies should use a "skull and crossbones" as their corporate logo). It had no credit rating (although HCM would not have been surprised to see it obtain one since the rating agencies were handing out ratings left and right during this period) and $200 million of capital on top of which it wrote $5 billion of credit default swaps. We will save our readers from doing the math – that is 25-to-1 leverage (significantly less than many Structured Investment Vehicles, just to place this insanity in some kind of context). Low and behold, when the credit markets collapsed last summer and SCC was required to post additional collateral on its trades, there was – to quote Gertrude Stein – "no there there.""(2)To be fair to the Irish Central Bank they long ago drew attention to this bubble in the housing market but they could do nothing about it because their hands are now tied by the European Central Bank. Obviously when we had our own currency the Central Bank would have put up interest rates when it saw, as it did and said so in its reports, asset prices increasing in this bubble fashion, so choking off the bubble before it got too bad. But now we are set to European interest rates and can no longer do that, a fact which could now cost us much more than all the EU payments we have ever received put together. But there is another striking phenomenon here, I respectfully submit that the government are deliberately letting the banks hang out to dry here. If you follow some of the commentary, in Ireland especially but also in the UK and maybe even in the US, you will see that these governments have done everything except give genuine hard cash to the banks to help them out of their difficulties. Maybe this is just an impression, but it seems that all the schemes that are out there have been conspicuous in not giving money to the banks, as such, (especially in the Irish case) or delaying it so long that they are deliberately allowing the banks to fail? Don't forget that there are many devious political advantages for corrupt governments to control the banking system, which is what is happening as the banks increasingly face bankruptcy. The likes of the Independent Newspaper Group, and even (real) opposition TDs and journalists, have need of finance from time to time and who is to say that a bit of political gamesmanship might not now be necessary to get money from these new nationalised banks? Its striking too that the media glare has turned with a vengeance onto the banking executives and their pay etc (which is unjustifiable I admit but caused no problem for the powers that be until their sudden conversion), exactly in the same way that the Neary episode was hyped up just before the government took control of the Medical Council (3), and the way the Lynn saga was spun out just before the government took control of the independent legal bodies (4). Maybe all that is happening here is that the people who run the state apparatus are making sure that they control all industries and professions, so that if anybody crosses them they can threaten to sack them or deny them work in their profession, exactly as a senior Fianna Fail figure was able to threaten Royston Brady.(5) It seems there is always a silver lining for some people!lol 2. The second domino is the effect on the 'real economy' of a credit squeeze. Most, otherwise perfectly sound, small and medium businesses need ongoing credit facilities to function normally. Say a farmer needs some credit to buy cattle in the spring that he can then pay off when he sells the cattle in the autumn, or a bookshop needs credit to stock up on books before the Christmas rush, loans that they can pay off easily in the New Year etc etc. Pretty much all businesses are like this and this sort of borrowing is no big deal and not an intrinsically bad thing I don't think. The problem is that if banks cannot give out credit at all, because they cannot get credit with the turmoil on the financial markets and the effect of the housing and stock market crashes on their balance sheets and reserve requirements, then they cannot lend out any money for this perfectly normal lending. Hence the farmer generates no income and will have to lay off any labourers he employs, and the economy gets no benefit from the export of the cattle, and that bookshop will have to lay off staff as will the book publishers because nobody is buying their Christmas stock etc etc. So on top of the effect of the normal slowdown of the economy, and the serious and totally unfixable problems of the declining housing and construction markets, this credit squeeze within the small and medium enterprise area could really tip the economy into a huge depression. That people are now openly talking about this you can see from the remarks of Dr Morgan Kelly of UCD: "What makes bank crises economically catastrophic is that they cause credit squeezes which drive profitable firms out of business. Every company in Ireland relies on a credit line to pay wages and other expenses between payments from its customers.It seems to this observer that we should look upon the state of 'credit' in Ireland today exactly like we would look upon a scarcity of any normal, but essential, product. Like water for example. It seems to me that we are like the citizens of a city who are hearing about turmoil up in the mountains, where the reservoirs are that house the essential water supplies of the city. We hear that the big reservoir owners have run out of water, but it hasn't sunk into us in the city yet that that water shortage will soon effect us down here, we are still using water like we always did thinking that somehow those big problems will solve themselves before the water actually runs out in all our taps. I respectfully submit that we are in a fools paradise here with respect to this shortage of credit, just like those city dwellers would be with respect to water? The money has dried up, the banks don't have it and they could only absorb the crisis for so long by drawing on their reserves, so how can we expect the economy to function normally? What needs to happen is that the government should recognise that this scarcity will begin to grow in the real economy and they should simply ration, or channel, the available credit to essential needs. In this case the essential needs are those normal (meaning money for cyclical business needs, not for expansion or takeovers etc) requirements by Small and Medium Enterprises, because these industries would survive otherwise and would keep the economy going and provide essential services (like food production and distribution) which will otherwise go the wall if they cannot get credit. Instead whats happening is that the government is spending sums like 500 million to prop up house prices, a scheme which will further indebtedise first time buyers, money that will be sorely missed when this real economy crisis hits. 3. The third domino to fall is that the turmoil in the bank credit markets will now spill over into the government debt markets, and possibly cause a collapse in most worldwide paper currencies. There seems no good reason why a credit scarcity (and bear in mind again that the credit scarcity is caused inho, at least in part, by the pyramid scheme collapsing effect, hence its not a question of money 'staying on the sidelines' and moving from one asset class to another, as some spin it, its money spent that never existed and hence causing a global credit crunch effect across all asset classes) will not also impact on the markets where governments borrow money, simply because there is, if you like, simply a global scarcity of money. Also other effects will surely now come into play: a) Some governments have been borrowing very heavily for decades, and look just as indebted as banks and developers. This is true of the US especially, with many people predicting for years that this was bound to effect the dollar and the ability of the US to tap the capital markets, and now many other governments are borrowing heavily to get them through this crisis, not least Ireland. This then makes these governments bad credit risks which would naturally cause their currencies to wobble and increase the interest they have to pay to attract money. b) Since everybody now accepts that the world is entering into a severe recession (some say depression) this is naturally going to dramatically worsen the finances of many governments (because obviously they have to pay more in social welfare and will receive less in taxes), and investors know this and will again mark down the credit worthiness of governments accordingly. Anyway it looks like the dollar will collapse at some point soon, even within a year, a collapse that as I say people have been predicting for years. Also it might in fact be the case that some in the US government will deliberately let the dollar slide, because it might be seen as a way out of their debt problems. The thing is that the US is almost unique in that their debts are nearly all denominated in their own currency, dollars, so if they print dollars and allow inflation to take hold, even a German style hyper inflation, it will collapse the real value of their debts. But if the dollar started collapsing like this it would probably trigger a worldwide currency panic which would impact on all currencies and sovereign debts, including the euro. I know this probably sounds alarmist but there are people out there talking that way, like the Swiss economist Dr Marc Faber, who in an interview on Bloomberg on the 3rd of October last stated simply that: "I guarantee you that the US government will go bankrupt, its only a matter of time." Over at politics.ie they have 'youngdan' who has become legendary for his predictions and is now saying that: "Mark my words there is a currency crisis fast approaching."(7). And in that he does include the euro, collapsing presumably sometime after the dollar. Anyways for what its worth I respectfully submit that the current government policy is ruinously the wrong one. What the government should be doing is paddling its canoe as fast as it can in the opposite direction from the shipwreck of the banking system, in order that it isn't dragged under with it. Instead with its 500 billion euro guarantee it has gambled the credit worthiness of the Irish state in the financial markets, and threatens to bankrupt the state in the much the same way that is now occurring in Iceland. Hence they may be allowing one domino, the fall and partial bankruptcy of the banks, to hit and knock over this third domino, the Irish state and its financial arrangements, when they ought to be trying to prevent a domino effect. Meanwhile their decision not to inject hard cash into the banking system, as opposed to the guarantee, will doubtless ensure that the first domino knocks over the second and lands us in real trouble. You ain't seen nothing yet folks!!!lol Footnotes 1. Gavin Duffy Sunday Independent 12 Oct 2008 p.5. 2. http://www.marketoracle.co.uk/Article3371.html . 3. http://www.imt.ie/opinion/2008/03/council_elections_loo....html . 4. http://soapboxireland.blogspot.com/2007_10_01_archive.html . 5. Chapter 11 footnote 17 http://oireland.tripod.com/conspibk.pdf . 6. http://www.irishtimes.com/newspaper/opinion/2008/1024/1....html . 7. http://www.politics.ie/economy/19036-iseq-crash-deepens....html . |
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Comments (11 of 11)
Jump To Comment: 11 10 9 8 7 6 5 4 3 2 1The bail out of Greece by Germany is a ticking time bomb.
This does not bother the Greek or Irish public sectors.
The public sectors in both places live in a parallel universe unknown to any reality.
Last Friday interest rate on Irish debt was 5.5%. Lending to Greece at 5% is a losing proposition.
Dead easy.
Ireland borrows money at 3% to lend it to the Greeks at 5% or so.
Insanity.
I've just seen an RTE report which (in part) states:
"Ireland will lend Greece €500m this year and up to €1.3bn in total over the next three years."
Where is this money coming from I wonder?
Is it just me, or is this whole "financial crisis" situation getting madder and madder?
Or, even more worrying, is there something sly going on that we're not being told about?
Sadly, the same RTE report mentions three people killed recently (today I think) in riots in Greece, in connection with the banking crisis there.
Full RTE report at: http://www.rte.ie/news/2010/0505/greece.html
Does anybody know who actually owns the Central Bank and Financial Services Authority of Ireland?
They have a web site at http://www.centralbank.ie
There is information at the site of the following kind: "The Central Bank of Ireland, which came into being in 1943, was re-structured and re-named as the Central Bank and Financial Services Authority of Ireland (CBFSAI) on 1 May 2003" -- but no clear indication of who actually owns this bank.
If it's privately owned, what are the names of the owners I wonder?
It is also stated at their web site that: "The Central Bank became part of the Economic and Monetary Union (EMU) in Europe in 1999. The national central banks of the euro area together with the European Central Bank (ECB) form the Eurosystem" -- but, who actually owns the European Central Bank?
Again, if the European Central Bank is privately owned, what are the names of the owners I wonder?
Search Engine Try:
"Who owns the European Central Bank?":
http://www.google.com/search?hl=en&q=Who+owns+the+Europ...earch
Why is it so difficult for us I wonder to find clear answers to such important and such basic questions?
This is like a slow moving car crash, it just gets worse and worse! Anyways many thanks for all your comments which I don't think need a reply except:
For them the emphasis on making money for its own sake was never right (for example there are obvious bible quotations you mention here), and was always going to lead to disaster. Of course they didn't advocate socialism as the solution, instead one of their ideas was a kind of Vocationalism. This philosophy basically advocated different professions fostering a group solidarity and taking pride in their individual and collective efforts to foster the public good e.g. they applauded the efforts of the medical profession to self regulate their field and to take pride in the degree they helped the community overcome disease rather than striving to make money for its own sake. This idea wasn't entirely unsuccessful, don't forget that before the state controlled medicine in Ireland it was quite common for doctors to work for free when treating people.rianorr
I still think though that the hype about these Irish bankers and developers is disguising a lot else that is going on. For example for me the real story of Anglo Irish bank is the role of the international bondholders, these are the real people who have been bailed out and why the Irish taxpayer should go to the brink of bankrupcy to pay this money is very mysterious. I agree with this commentator:
"I was extremely angry when the government announced the guarantee because I honestly believe it will bankrupt the country as we will have to pay back 100% of the money international bondholders gave to Anglo and other Irish banks - the UK government didn't do this for example and thought the Irish were very silly for doing so." ( http://electbutler2009.blogspot.com/2008/12/anglo-irish....html ).
Since we are in the eurozone the chances are that these bondholders are EU banks and maybe EU influence is driving the Irish government to take this step?
In any case its about time we held the Oscars for who predicted the economic crash! Its only fair they get to say their 'I told you so's !lol. I guess we have 3 groups who have been saying that this crash was inevitable:
Socialists and Communists calling it the inevitable 'crisis of capitalism'.
I guess some would call this the long predicted 'crisis of capitalism' and in truth it surely is the case that the extreme form of US style capitalism is probably being discredited by this turn of events. At least at the level of 'management speak' I'm sure a kind of 'crisis of capitalism' will become more evident. We have been told that these 'captains of industry' need to be paid gigantic sums of money for their financial wisdom only to find that precious few were able to predict the crash and navigate their companies away from the rocks. The truth is some of these practises and personalities are now widely discredited and to go about it now would be like shooting fish in a barrel!:-)
So yes no doubt a lot of people are going to acknowledge the flaws in the current 'capitalist system' and moreso as this depression deepens. But mind you I don't really think that people want to go from here and create a socialist or communist paradise where the state controls everything. I wonder too if this idea that we had a society where greedy capitalists ran riot and destroyed everything is really what happened anyway? The fall started with the subprime crisis in America where the US government had aggressively compelled the banks to lend to people who could ill afford to pay back their loans.(1) Not a slant that the media are emphasising but a fact nonetheless. The Irish government is right now explicitly in the business of pushing loans on people who are turned away from the banks as bad risks, so encouraging more and more poor people to sink under ruinous debts.(2) As regards regulation of banks it turns out that in the US powerful federal banking regulations prevented the states from stopping this lending madness from getting too bad, as the former Governor of New York found out.(3) Also the deputy head of the Czech Central Bank has pointed out how, before this crisis, banking was a hugely regulated industry, and that it was government monetary policy that led to the disaster, not banks operating independently from the state.(4)
Looking again at the disaster in Ireland many are now frustrated at the proliferation of anonymous housing estates destroying the beauty of many of the small towns and villages around Ireland and are blaming developers for their lack of foresight and greediness. But the fact is that those housing estates were very carefully planned, all the County Councils had prepared elaborate plans that dictated where the developers had to concentrate the housing, the latter had no real choice in the matter. In fact I would suggest that as much as 95% of the time and effort that developers and architects spend on their housing plans are dealing with the hugely complex and all encompassing state planning and housing regulations. Its not a cowboy free for all type atmosphere at all, its actually state planning USSR style that has created these housing estates and the accompanying horrific motorway networks.
Also its noticeable how the public sector is just as bad as the private one in the degree it has awarded exorbitant wage packets to the top managers, hence increasing state control is no guarantee of fairness in wage levels?
So anyway I think the idea that we need now to move from a concept of free enterprise - where private industry and private property concepts are paramount - to one of state control, or heavy regulation, is based on a false premise. We actually have the heavy state - and ultimately EU - control and regulation, and to a large extent it was they who led us to disaster!
Traditional Catholic writers deploring greed is good capitalism and predicting the demise of the banking system based on immoral lending.
Its not often pointed out but it is true that traditional Catholic writers were very critical of the type of modern capitalist system that developed in the 20th century. As an example you could quote Pope Pius XI writing in Quadragesimo Anno in 1931:
But definitely the main criticism the traditional Catholics voiced against the current set up was the role of debt and money lending. Traditionally the Christian churches always held that the charging of interest on non commercial loans was sinful. (To clarify what I mean by 'non commercial loans': Basically if the lender carries the risk of the loan with the borrower, e.g. by investing in a joint stock company, then it is not considered immoral to charge interest. On the otherhand if the borrower alone carries the risk, i.e. has to pay back a loan on a business or house etc even where the business has failed or the house is in negative equity, then charging of any interest was always considered a grave sin in Catholic theology.(6))
This church influence was the reason why you had serious usury laws in all Christian countries until quite recently. Take for example the situation in the UK, US and Ireland:
a) In the UK it was illegal to charge more than 5 percent interest on all loans from 1713 - before that the rate was a little higher, starting at 10 per cent with Henry VIII, before that again it was illegal altogether - to 1833, when it became legal for bankers to charge a higher rate. In 1839 it was relaxed for most remaining type of loans and all remaining usury laws were repealed in the UK in 1854. (7)
b) In the US the situation is described here by Christopher L Peterson writing in the Minnesota Law Review: c) In Ireland charging interest was completely illegal until 1635, when 10 per cent was allowed, reduced to 8 in 1704, 7 in 1722 and 6 in 1732. Here the usury provisions were abolished at the same time as in England, although by 1850 it was still illegal to charge more than 6 per cent - the maximum permitted in Ireland - for loans under 10 pounds. (9) After independence we passed the Moneylenders Act of 1933 which set a legal maximum of 48% and barred moneylenders from charging compound interest. But later, under pressure from the EU to implement one of their directives, we got the Consumer Credit Act of 1995 which scrapped the prohibition on compound interest and set no maximum interest rate. (10) Its fascinating how this Act was much ballyhooed at the time as modern, progressive, European style legislation while it actually led to the current situation where:. And they charge those rates perfectly legally because of those changes. (12)
Anyway it was this debt and interest rate aspect of modern capitalism that really concerned traditional Catholic thinkers, as you can see from some comments by James Dillon TD speaking in the Dail in the 40s: For a more modern outlook from the same perspective you could read some of the articles in 'The Hibernian' and the Catholic Family News. (14) In any case you'd wonder if some people out there now are seeing some merit in this old theology !lol
'Conspiracy Theorists' predicting a deliberately created worldwide depression.
But in truth if you research this 'I told you so' subject the group that really stands out are - for the want of a better description - 'conspiracy theorists' ! It has been a cardinal principle of those writers who are following world affairs from this angle that the powers that be are going to deliberately cause a world wide depression as part of their nefarious intrigues. With no more ado I will quote from a few such commentators. First you have the French Canadian journalist Serge Monast: Some comments by Svali, a former member of a cult that she called: Another ex member of the same cult had a similar story: And finally Fr David C Trosch: You'd better hope that those last writers are wrong because in their predictions it goes downhill from here for the poor unfortunate public!
Footnotes
1. http://iperceive.net/hidden-clinton-success-story-fanni...ties/ .
2. http://www.thepropertypin.com/viewtopic.php?f=4&t=14827 .
3. "Predatory Lenders' Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers" by Eliot Spitzer 14 Feb 2008. Spitzer notes that:
"In 2003, during the height of the predatory lending crisis, the OCC [a federal agency] invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.
But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation. "
( http://www.washingtonpost.com/wp-dyn/content/article/20....html )
4. Mojmír Hampl vice-Governor of the Czech National Bank writing in the Wall Street Journal 2/12/2008: http://www.cnb.cz/en/public/media_service/interviews/cl....html . Another document prepared by this Czech central bank has come to an interesting conclusion:
"Has the single currency been helpful in resolving the 2008 financial crisis? Is Euro a shield for Europe against the external shock?
The marcoeconoic situations in Hungary, Iceland or Belgium have shown that countries and their financial markets have been suffering from crisis no matter if they are members of the Euro zone or not." ( http://www.cnb.cz/m2export/sites/www.cnb.cz/en/public/m...s.pdf )
5. http://www.vatican.va/holy_father/pius_xi/encyclicals/d....html .
6. Of course I am only simplifying things here, for a more detailed analysis you could look at sites like: http://www.websitetoolbox.com/tool/post/apologia/show_s...unt=1 .
7. John Lubbock, "Scientific Lectures" (1st pub. London, 1879), p.215, a source which also clarifies this Irish history. Also referring to the UK: "The historical objection to interest was based on the religious prohibition of usury, and this seems to have been felt especially strongly in relation to compound interest."
("Compound Interest", The Law Commission Consultation Paper no. 167 section 4.10: http://www.lawcom.gov.uk/docs/cp167.pdf )
8. Christopher L Peterson "Usury Law...", Minnesota Law Review 2008 Vol. 92 No.4 p.1117 and 1139: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1000041 .
9. W Neilson Hancock, "The Usury Laws..." (Dublin, 1850), p.3.
10. Compare the Moneylenders Act of 1933 ( http://achtanna2.oireachtas.ie/framed/zza36y1933.1.html...y1933 ) to the Consumer Credit Act of 1995 (http://acts2.oireachtas.ie/zza24y1995.18.html ), which repealed the 1933 Act. You can see they dropped the bar on compound interest while as regards the maximum limit note this from Pat Rabitte TD speaking during the debate in the Dail:
"The 1933 Act set an absolute upper limit of 39 per cent on the rate of interest which could be charged. No upper limit is specified in this Bill ....."
(Dail 15 February 1994: http://historical-debates.oireachtas.ie/D/0438/D.0438.199402150137.html )
11. Irish Independent 24 October 2006 http://www.independent.ie/national-news/moneylenders-no....html . As you can see here the use of these huge interest rates is quite widespread in modern Ireland, not least among the travelling community:
"Such moneylenders have been known to charge APR interest rates of up to 1000% on loans and, to inflict physical and/or mental violence on the borrower if repayment is not met, (Quinn and McCann:1997, Daly and Walsh:1988, Ford 1991)."
("THE VIABILITY OF INTEREST FREE CREDIT UNIONS FOR MARGINALISED COMMUNITIES", Chapter 1: http://www.nattravellermabs.org/union1.htm .)
12. Irish Independent 18 March 2008 http://www.independent.ie/business/irish/positive-respo....html .
13. Dail 11 March 1943 http://historical-debates.oireachtas.ie/D/0089/D.0089.194303110024.html . The subject was raised a few times in the Seanad as well:
Minister for Agriculture James Dillon TD: "I have often wondered myself why we should pay interest at all, but I do not know that the well-known indulgence of Seanad Éireann would permit an excursion into St. Thomas Aquinas and the justification of usury. I would rather like to make that excursion some day, but I take it that we have to proceed this evening on the basis that usury has become respectable when you describe it as banking.
Mr. Duffy: There are several respectable people engaged in the practice.
Mr. Dillon: So I understand, but on the assumption that, in our economic system, interest on borrowed money is inevitable—and I do not accept it; I believe that is still open to question, and I think there are powerful arguments for the view that the borrowing and lending of money at interest is fundamentally wrong—I want to distinguish between joining the fortunes of several to venture in common bond or enterprise, sharing the profits or sharing the loss, and a very different proposition, taking money and lending it at interest."
(Seanad 12 Jan 1949: http://historical-debates.oireachtas.ie/S/0036/S.0036.194901120004.html )
Actually Dillon wanted to abolish moneylending altogether: Dail debate 15 April 1942: http://historical-debates.oireachtas.ie/D/0086/D.0086.194204150041.html . It was also mentioned by Senator Brendan Ryan:
"It is interesting, if I may make a small theological digression, that the single greatest difficulty that the Roman Catholic Church has in the area of papal infallibility has to do with the whole teaching on usury. A Pope at the turn of the millennium or sometime subsequently denounced usury in such categorical terms that it is very difficult still to justify an adjustment in moral teaching to allow money to be lent with interest. Consequently, many people feel that that Pope renders the whole teaching on infallibility somewhat dubious. Many other things which they have done subsequently would add to that——
An Leas-Chathaoirleach: Is this relevant?
Mr. B. Ryan: The Bill is about money lending, credit and so on. I find many things relevant that other people would not in these matters. I have said what I wanted to say. I was addressing myself to the whole question of the morality. Traditionally, in Western civilisation, there has been a question mark placed over the lending of money with interest. It has always been regarded conventionally as somewhat suspect and somewhat less than the proper behaviour of a proper Christian in Western civilisation. The most categorical reflection of that was that pope whose name escapes me."
( Seanad 23 April 1986: http://historical-debates.oireachtas.ie/S/0112/S.0112.198604230007.html )
14. For example it featured many good articles on the subject by Tommy Price. You can see some other 'The Hibernian' articles mentioned on its wiki page here: http://en.wikipedia.org/wiki/The_Hibernian . For the Catholic Family News see for example: http://www.cfnews.org/AmericaForclosed.htm , and http://www.cfnews.org/Aquinas-LeoXIII.htm , where Fr Denis Fahey is quoted referring to the views of St Thomas Aquinas and later Popes, and http://www.cfnews.org/08Ridgefield-report.htm which reports on a Catholic conference held on the crisis including a talk on “Why the Modern Banks Must Fail!” This goes on to refer to "the frightening practice called “fractional reserve”, wherein banks are only required to keep 10% of your deposited money and then may invest the remaining 90%. This is not only a risk to the person holding the account, but helps to create the colossal and dangerous ocean of debt on which the country now floats."
15. http://educate-yourself.org/cn/projectbluebeam25jul05.shtml .
16. http://www.savethemales.ca/141002.html . She also said:
"The conflict in the Middle East is only to the advantage of the Illuminists. They HATE Israel, and hope one day to see it destroyed, and are biding their time. One of the olive branches offered by the UN when it takes over is that they will prevent war in the Middle East, and this will be greeted with joy by many."
17. Brice Taylor interviewed by Wayne Morris for the CKLN 88.1 radio station in Toronto http://www.mindcontrolforums.com/radio/ckln23.htm .
18. Fr David C Trosch of Mobile, Alabama writing at: http://www.trosch.org/msn/puppetmasters.html .
"Each nation's economy is individually analyzed, then, says Stiglitz, the Bank hands every minister the same exact four-step program."
"Step One is Privatization - which Stiglitz said could more accurately be called, 'Briberization.' Rather than object to the sell-offs of state industries, he said national leaders - using the World Bank's demands to silence local critics - happily flogged their electricity and water companies"
"You could see their eyes widen" at the prospect of 10% commissions paid to Swiss bank accounts for simply shaving a few billion off the sale price of national assets."
The above three pieces of text -- from an article by former Cambridge University lecturer Greg Palast dated October 10th 2001 -- have been copied from: http://www.gregpalast.com/the-globalizer-who-came-in-fr...int=1
For details for Marxism 2008 in the Royal Dublin Hotel go to
http://marxism2008.blogspot.com
"Stiglitz caused controversy in October 2001 when he exposed RAMPANT CORRUPTION within the IMF (International Monitory Fund) and blew the whistle on their nefarious methods of inducing countries to fall under their debt before stripping them of sovereignty and hollowing out their economies."
"Former World Bank Vice President, Chief Economist and Nobel Prize winner Joseph Stiglitz has predicted a global economic crash within 24 months - unless the current downturn is successfully managed. Asked if the situation was being properly handled Stiglitz emphatically responded 'no', and also drew ominous parallels to the development of the NAFTA Superhighway and the North American Union."
Both of the above excerpts have been copied from the "Prison Planet" (very appropriately named?) article dated October 6th 2006 at http://www.prisonplanet.com/articles/october2006/301006...h.htm
Sovereignty Stripping, Chief Justice Murray (Republic of Ireland), Dr Joseph Stiglitz:
http://www.google.com/search?hl=en&q=Sovereignty+Stripp...earch
‘I respectfully submit that the government are deliberately letting the banks hang out to dry here.’
What planet are you on.
In America’s case, the Paulson giveaway was exactly that a giveaway. No strings, no oversight, just capital to his former bosses. There is a reason the banks are not lending to each other. None of them are sure if the others are solvent or not and hense are not prepared to risk giving money to each other.
In Irish case, the government was very quick to underwrite the loanbooks of all the Irish banks. There are massive loans from these banks to the construction industry that are never going to be made good. Hense the taxpaper is going to left with a bill in the region of 100,000 euro per head of population. If that’s not rushing in to save the banks I don’t know what is. The reality is that these guys ran the credit system into the ground while skimming off large saleries and bonuses and when the game is up now look, not only for a bailout but to keep their jobs as well.
Similarly in the UK a massive bailout has taken place albeit with a tiny bit more oversight. It seems nostalgic now to regard 1 billion as a lot of money. For the left here, the cost of the Iraq war seemed like a huge expenditure but now when finance capitalism crashes the state can pull 100’s of billions out of our pockets to keep the grotesque show of private finance on the road.
The mask has definitely slipped and it’s not a pretty sight.
Does anyone know if the SWP Marxism festival is on this weekend.....What are the details?