What happened in Ireland and Europe, what is required to fix our Country fiscally, politically and socially.
Firstly it is important to get all the facts about how we arrived at the state we find ourselves in and to do this we have to understand how the Banks in Ireland and indeed all over the World got out of control, we must travel across the pond to the USA and go back to 1999 to a point where the Banking Act of 1933 was repealed, this act was more commonly known as “Glass-Steagall”. To explain this in simple terms, what Glass-Steagall essentially was is a closed border which separated the mostly conservative commercial or high street Banks from the more risky investment banking counterparts. The repeal of Glass-Steagall removed this Border and in doing so allowed the investment banks to create Holding Companies who could cross through this removed border and finance their high risk investments with the commercial banks insured deposits, your money and mine!
As the investment banks got more and more emboldened, the rules surrounding reporting were relaxed, especially in the areas of Derivatives and more risky exotic investments, regulation was relaxed and this encouraged further risk taking.
This is when Banks figured out that Trading and not traditional banking was the path to stratospheric profits using funds which were guaranteed to the depositors by Governments, in short, the Banks were gambling with funds they would not repay if they lost and when they won they got to keep all the profits, risk was no longer linked or dependant on cash in hand as the banks had the implicit guarantee of Governments.
So we will move forward to the present and in Ireland we all know about the reckless lending which created the property bubble and in turn resulted in the bust and the failure of the Banking sector, what a huge amount of people do not realise is that Ireland still had very important laws in the area of Banking such as liquidity laws which require Banks to retain enough reserves of cash to remain liquid, breaking these Liquidity Laws carries a 5 year prison sentence and we now know that the middle of the night meeting in September 2008 when the Irish Government was threatened and bullied into providing a Blanket Guarantee to the Irish Banks is a clear admission by the Banks and the Government that the Banks when bust and as such no longer “Liquid”! Have you seen any one single Banker even charged with breaching the Liquidity Laws – NO! and the only answer to why this is the case can be Cronyism or Corruption, wouldn’t you agree?
So we recapitalised the Banks on the basis that they would start to lend again, has this happened? Again the answer is NO!
They simply used all this money to strengthen their balance sheets because they know how bad the situation is within the walls and they know that this is not the end of their problems and so they need to build up reserves for the next crisis that comes down the road.
What is this crisis?
Derivatives, there is a conservative, wait for it!
$650 Trillion worldwide swirling around in the derivatives playground, and the day of reckoning is imminent.
How did this situation develop?
The main reason is Fractional Reserve Banking, this is the practice of leveraging the reserves of the Bank up to 100/1, also we can blame lax supervision and as I mentioned earlier deregulation in the Banking sector, lax supervision can be directly attributed in Ireland to both the Central Bank and the Financial Regulator who incidentally was retired off with a golden handshake of €600k when the proverbial hit the fan in 2009.
The traditional Bank customer like you and me with our deposit/current account has become irrelevant, the banks do not need or want us, this is another reason why they will not lend to us, will not pay interest on deposits and wants to charge exorbitant fees if we do not keep ridiculous minimum balances in our accounts.
This total disdain for customers has led to hoarding, extinct consumer confidence, crucified small businesses and more and more unemployment, Ireland’s Entrepreneurial spirit is being trampled.
Unlike our Government and the Banks, “we the people” have to live within our means, all of the above leads to a depression which will last for decades, all the money we hear about flowing from the ECB into Ireland and any money we raise in the money markets is sucked into the Banking sector and never makes its way out into the real economy and as such never creates any production.
So what do we need to do?
Well we need to force Banks to choose whether they want to be risky Investment Banks or Commercial High Street Banks.
We need to remove the Guarantee’s which take all the risk out of operating a Bank and allow them to stand of fail based on their business models, the same as any other business.
But above all we need to institute an emergency Debt Forgiveness Program for the ordinary person in the street, this debt forgiveness should start at the bottom of the pyramid and work up, it will eventually end up stopping at the top, a kind of a reverse “Ponzi”, and the top of our pyramid is the ECB and that’s ok because they create the digital money which is passed to Central Banks and on to ordinary Banks and as it is created by pressing buttons on a keyboard it can be forgiven by pressing the “delete” button on the same keyboard, so to clarify we need debt forgiveness all the way back up the pyramid.
This has to be a demand of the Irish people now, we need to demand this of our Government and they in turn of the European Project, we are back to the question we heard so often during the on-going Greek crisis, will it be an orderly or a disorderly default, which is entirely up to the ECB!
There is lots of posturing at the moment over legacy debt, Enda is in Europe this week with cap in hand, Europe is insisting on total fiscal union before any movement and this is simply total loss of Sovereignty, that is the price and there is still no guarantee that we will get any write-down, my personal feeling is we will never get any write-down of our debt.
We are at terminal debt NOW!
Between Sovereign, Banking, Business and Consumer Debt we are in the hole for over €550 Billion. If there is anybody out there who can provide a coherent plan to pay down that level of debt, I am all ears! It is impossible, we cannot even service this debt never mind reduce the principle and borrowing more money! Well, it goes without saying that one can never repay debt by borrowing more money, and idea that we can grow our way out of this is fantasy!
Our Government does not govern any more, they simply carry out orders, and they should be required to carry Actor’s Equity Cards.
Our Government is now following the orders of big Banking and this means the judiciary and law enforcement is by extension is also now following the dictat’s of BIG Banking, we now see it every day with Civil Court proceedings resulting in Criminal Court appearances and the enforcement of the Civil Courts by 13th Century English Sheriff’s Law with the assistance of the Garda Siochana and in contravention of the Irish Constitution. Irish people are either afraid or complacent when they encounter the aforesaid but both segments will be increasingly, directly affected and will experience these servants of the Banks more and more as the crisis deepens.
When it happens, you will find the assistance of the following groups helpful if not invaluable,
People for Economic Justice
We the People
The Awaken Movement
But all Irish Citizens should get involved now! Don’t wait until you are confronted by these injustices.
You could start by showing up in the Square in Dundalk Saturday Oct 20th at 13:00 hrs. for a peaceful protest
following the Eviction of Eugene Dooley in Dundalk this past week and against all Evictions / Sheriff / Receiver action which is planned.
Please get involved!
TNS RADIO and the Sovereign Independent are also both excellent sources of information and instructional advice in how to prepare yourself for the impending, unavoidable deterioration of our living standards