In his recent article published in The Guardian newspaper, the acclaimed journalist and author Mr. Will Hutton suggests that part of the solution to the crisis would involve a situation whereby “…Central banks should inject money into their financial systems by offering to buy new bank loans made to support new investment, new innovation or new infrastructure – helped by partial government guarantees”. I fundamentally disagree with him and all the other ‘solve a debt crisis with more debt’ proponents. Here I present my own radical proposals that people need to start considering Lets start a real conversation to challenge accepted ‘wisdom’. [Read More]
To be published in the Sunday Independent 12 Sept 2010
On numerous occasions in the last week we have heard our Minister for finance Mr. Lenihan remind us of the necessity to continue to guarantee the banks. Not to have done so initially would almost certainly have meant the instant financial collapse for our state. Of the two options open to him (letting the banks go, being the first), guaranteeing the Irish banks was the only practical option. Well, according to those who were advising himself and Mr. Cowen on that fateful night, when the crises meeting took place in Government Buildings.
Let’s face it, this is what he was told by the CEO’s and the Chairmen of Allied Irish Banks and Bank of Ireland. And these people should know shouldn’t they? These were the same people who, we had been led to believe, understood international finance, economics and the creation of wealth. After all, the bankers were finance professionals and Mr. Lenihan and Mr. Cowen, were legal professionals. You wouldn’t go to a solicitor for financial advice nor vice versa, would you? Our representatives at the meeting (Zig & Zag) were either lied to or they were incompetent, or both. Fortunately for everyone in the room that night, we’ll never know as there were no minutes taken at the meeting. Yeah, right.
We can only surmise that the bankers put up an extremely strong case for the guaranteeing of the banks and strangely Anglo Irish bank, which they knew was in serious trouble. The problem is, Mr. Lenihan has ever told us what, specifically, the alternatives were. Sure, we have heard the warnings of “economic meltdown” and “imminent collapse of the financial system” etc etc. But so far, nobody has actually told us what these mean. What advice specifically did Mr. Lenihan and Mr. Cowen receive from the bankers? What “appalling vista” lay before them that left them with no choice but to guarantee the Irish banks and therefore a generation to economic hardship? I, for one, would really like to know the answer. I mean, how bad would the alternative have been? ./………… [Read More]
The banks effectively want it every way, full security against all monies that have been borrowed from them in the form of a personal guarantee from each mortgage holder and failing that, a state guarantee, notwithstanding the fact that they already hold the deeds of your property. But hold on, it gets worse. As a direct result of their utter incompetence, the banks lost all their capital reserves, then the equity (share value) thereby threatening all the depositors money which should then place all the bond holders at risk of loses as well. Yet they expect that these losses should be paid back in full by you the mortgage holder, tax payer or citizen or else we “risk damage to our international reputation”. The bondholders knew the risks (that’s their job) and individual investors and depositors should have too. [Read More]
To read the full article, please click on the Headline above.
The ‘Associated Loans’ are the amount of money that was lent to borrowers which was secured against the anticipated increase in the value of the underlying asset! The formula used to calculate the anticipated increase in value must be the same as used to calculate the length of a piece of string…. [Read More]
Why the public outcry over what will be the ‘most draconian’ budget in the history of the State ? The reason I ask is assuming that it does make it through the Dail vote all that it will have achieved is getting an additional €4 Billion into our public piggy bank. ‘ €4 billion, that’s an enormous amount of additional revenue” ? I hear you cry. It is enormous but it is not nearly enough. Unfortunately, since I pointed out in a previous posting (economic-civil-war-revisited ) the actual amount of our debt has increased by a further €8 Billion, simply because the Government did not act back in February when they knew the scale of the problem. If that’s not bad enough, next years spending will increase by an additional €5 Billion compared to this year ! [Read More]
The people are angry. An understatement you might say, but there is no doubt that the mood in the country has changed significantly in the last few months people are angry, frustrated and close to despair. There is a palpable sense that the country is lurching from one economic crisis to another and that the proposed solutions are being made up on the hoof. [Read More]
I first posted this article Feb 12th 2009 and although my timing was out by a few months the articles content is now more relevant than ever, particulary as members of the public are finally waking up to crisis that we are all in. As of the end of sept. 2009 the National Debt stood at 77,754,000,000 Euros or €35,342 for every worker in the Country (a loan which you personally must pay back). This will rise to €54,909 within three years even taking account of having had a reduction in the national budget of €4 billion in each of these years! You may notice that the term ‘Economic Civil War’ appeared here first…… [Read More]
Well, I certainly hope so. I was just listening to Pat Carey the government Chief Whip on the radio conceding that it may be necessary to implement a third taxation rate! My goodness, what an absolute stroke of genius. If you look at my previous post you will see that I have suggested not just a third tax rate or possibly 15 or 20 Incremental tax rates. Now it transpires that Labour have decided to support the same policy as have Fine Gael. [Read More]
The principle of a citizens financial contribution to the State in the form of income tax has since Roman times, been correlated to some degree with the persons ability to pay. Since the introduction of [Read More]