ECONOMY…by David Malone

Headline in the FT  this morning, “Europe signs up to Irish rescue.”  That is how the financial class would like you to see it.  A more accurate description is “Europe signs up to use Ireland as a conduit for bailing out its own banks and gets Irish tax payers to foot the bill.”

Less catchy I admit. But a great deal more accurate.

Back in June of this year I wrote this.

Basically it boils down to this. The system of finance, globally, must lower its level of indebtedness. The obvious place is bank bad debts. That has been ruled out by the financial class via our oh so compliant politicians. The other way to lose indebtedness is to use a country or countries as a conduit for debt reduction – a sphincter through which to shit out as much debt pressure as possible. Ireland is already in that ignominious position.

And so it has come to pass for Ireland.  European and UK banks are now going to use Ireland as their sphincter. And the Irish people are going to clean it up for them.  Ably volunteered for the job by their loyal political class. Loyal to who and what is another question.

We, the people of these various countries need now to be very careful.

Over the next few weeks we are going to be treated to a carefully incubated efflorescence of xenophobic bile and blame throwing. As tabloid papers in every nation try to whip up ill feeling and blame into an obscuring fog of ethnic bigotry whose main purpose will be to hide the bankers, of all our nations, pissing themselves with glee.

The British are being told “we” are going to help Ireland to the tune of €7 billion. Which, we are quickly assured we expect back. No doubt the “Why should we pay” squad will be roused from their easy chairs to fart out some ethnically oriented observation.  But the truth is “we” are not helping the Irish, nor even the Irish banks. “We” will be stumping up the cash to ‘help’ UK banks. RBS being one of those near the front of the queue. We will ‘give’ money to the Irish banks who will promptly give back most of it to the British banks to whom they owe the money. And  the Irish people will find themselves charged interest for having facilitated this bail out. THAT is what is happening.

Let’s all be careful and clear about this.  Irish banks are being used as a sphincter to for European bank debts.  European and British banks are horribly exposed to to Irish debt.  Which means, when translated into English, that private banks in many countries lent money into the well known Irish property bubble in order to chase high returns during the bubble years.  Irish private banks accepted the money in order to lend unwisely so they too could chase high returns. Entirely PRIVATE contracts between two sets of equally greedy bankers.

There is nothing in those contracts that pertains to or involves the people of any of our nations. And yet all our bankers with the connivance of all our politicians are engineering  things so that we ALL pay the bankers’ private debts.

The Irish people have not bankrupted Germany’s banks.  German banks in partnership with Irish banks and the Irish ‘regulator’ (to abuse the word yet again) bankrupted Germany’s banks through deals the German banks were delighted to make.  British banks have left themselves with massive unpaid loans to Irish  banks. Neither the British nor the Irish people had any say in the idiot deals done.

This IS NOT people against people. We, all the peoples of all these nations, are being forced to pay off all the banks.  It may seem that German and British tax payers are bailing our ‘the Irish’, but it is not true. We are bailing out OUR own banks through Ireland.  And the greatest losers will be the Irish people because they are the orifice through which we are going to squeeze the bankers  present to us all.



This article is reproduced with thanks to David Malone. He is the author of the book Debt Generation. You can read and listen to excerpts from his book here: http://www.debtgeneration.org/index.php