Interestingly, in spite of mountains of evidence to the contrary, politicians have been led to believe the sky will fall if we cease to pay the tribute that the moneychangers demand. And it's utterly amazing what politicians will socially destroy at the will of the lords of international finance.
There are hundreds of examples. My favorite concerns Nelson Mandela. Here was a guy who spent long years in a South African jail because of his battle to overturn Apartheid. He had supporters who risked their lives to keep the flame alive. Finally the day came and it was announced that South Africa would renounce Apartheid. There would elections. Mandela would go from prison to the governor's mansion. Except sometime before his inauguration, he was presented with the "message."
The message said, "Mr. Mandela, you are about to become President of South Africa. All the serious institutions of power in the country believe this is a good idea. But there is one small detail, your government has to agree to service the debts of the country." By agreeing to this economic "detail," Mandela sold out his movement. All the promises and expectations of his supporters would go unfunded while Mandela would have to tax his supporters to pay the debts run up by the people who had imprisoned him.
Shit sandwiches don't get much shittier than that!
But the Irish in 2010 come damn close to Mandela's dilemma. They are being offered a NASTY deal that they have no moral obligation to pay. The international loan sharks have trotted out all the myths that place the debtors at a disadvantage. And goodness knows, they may still work. But the story REALLY gets interesting if the Irish say no!
All It Has to Do is Vote "No"
How Ireland Can Strike a Blow Against the Imperial Bankers
By MIKE WHITNEY December 6, 2010
Wednesday's press conference with ECB President Jean-Claude Trichet turned out to be a real jaw-dropper. While Master illusionist Trichet didn't commit himself to massive bond purchases (Quantitative Easing) as many had hoped, he did impress the gathering with his magical skills. The Financial Times recounts Trichet's what happened like this:
"...as Trichet started to speak, his ECB troops stepped into the market to buy as many peripheral bonds as they could, particularly Portugal and Ireland."
Nice trick, eh? So while Jean-Claude Houdini was somberly reading from the ECB's cue cards, his central bank elves were beating down bond yields to convince investors that the contagion had been contained. Not bad for a 70-something bankster with no background in the paranormal. And it seems to have worked, too, at least for the time being. But, unlike the Fed, Trichet can't simply print money. He's required to "sterilize" the bond purchases, which means he'll have to mop up the extra liquidity created by the program. And, that's the hard part. If he pushes down yields in Ireland and Portugal, he has to tighten up somewhere else.
Trichet's critics, like Bundesbank President Axel Weber, think he's gone too far by buying up the bonds of struggling PIGS. (Portugal, Ireland, Greece and Spain) But these countries borrowing costs have skyrocketed and they're quickly losing access to the markets. The more it costs to borrow, the quicker the slide to default, which is trouble for the EU, because it means a wider meltdown across the continent. So what better time for Trichet to stretch the rules?
Maybe Weber hasn't noticed, but the EU is disintegrating, and if Irish voters reject the budget in the December 7 elections or if Spain starts to teeter, the dominoes could start tumbling and bring down the European project in a heap. moreEven right-wing Germans are concerned about predatory banksters ravaging Ireland.
Drastic Cuts and Punitive Interest Rates
The EU Is Pushing Ireland to the Brink of Ruin
By Carsten Volkery 12/08/2010
The Irish government has just passed its fourth budget in two years. But the drastic savings measures it contains will not help the country's massive debt problem. Some economists are now predicting it is only a matter of time before Ireland defaults.
The sum is enormous: €6 billion ($7.9 billion) is how much the Irish government wants to cut from the public finances next year. The drastic course of treatment, the fourth budget in two years, was passed by the Irish parliament late on Tuesday night. It will be a huge test of strength for the small country: The average Irish household will be €7,500 worse off by 2012, according to the Irish Independent.
The Dublin government has been congratulated and encouraged from across the European Union for being so brave in sticking to its austerity goals. The unemployed, low-income workers, pensioners, students -- hardly any sector of society has been left unscathed.
Yet this huge national sacrifice will not significantly improve the country's massive debt problem. The sometimes severe cuts to social welfare payments, public sector pay and state investment pale into insignificance when compared to the massive gaps in the Irish banks' accounts. That is why investors are continuing, undeterred, to speculate on Ireland's eventual insolvency.
Irish Taxpayers Paying the Bill
The bailout loan of €85 billion that the EU, the European Central Bank and the International Monetary Fund agreed to extend to Ireland just over a week ago had failed to calm market jitters. And why would it? After all, it actually exacerbates the country's financial problems.
The EU has failed to make the foreign bondholders take a hit on the losses from toxic real estate loans. In particular, the ECB insisted that the interests of the German, British and French banks would continue to be protected. Instead, Irish taxpayers are being asked to pay the bill: at a hefty interest rate of 5.8 percent, to ensure the foreign creditors will get their money back rather than face any losses.
That may be something German banks welcome, but it is a disaster for Ireland. And many economists now predicts that it is just a question of time before the country defaults. "This 'bailout' will sink the Republic," warns economist David McWilliams in the Belfast Telegraph. "It is the EU giving us enough rope to hang ourselves in the hope that we don't hang all of them." moreHere a real Irishman explains the problems. Not work safe but both insightful AND funny.
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