Ireland Goes Bust

[Magda Hassan]

Never bet against the house. The house always wins. This is casino capitalism after all.

[Peter Lemkin]

The BBC hinted that the 'bailout' [much of it going to the banks (again!)] would come AT LEAST to a quarter of a TRILLION Euro....likely much more than that....I suspect that besides this being a bankster operation, it could spell the beginning of the end of the Euro and European Union experiment....slow at first, but picking up steam. I don't, however, think this is all unplanned...and who is behind the planning of this [the collapses...not of the thefts - that is obvious!] are the real villains in this piece...which will effect every one of us....not just those in Ireland - about to have Potato Famine II.

[David Guyatt]

Who benefits if that is the case?

[Peter Presland]

This is one of the best and most succinct summaries of what is behind the Irish so-called bailout that I've seen. It is particularly noteworthy in that it is from an MSM source.

Why did Eurozone officials push so hard for a bailout of Ireland?

On the face of it, it was a very strange dynamic. Irish government officials had been insisting that they were well-funded through at least the first quarter of next year. Without any current need to roll debt, Ireland could afford to be indifferent as its spreads blew out. The yields on Irish debt may have blown out, but it wasn’t costing Ireland anything.

The pressure for a bailout of Ireland did not come from Ireland itself—it came from Eurozone officials. If anything, Irish Finance Minister Brian Lehnihan’s announcement over the weekend that Ireland would seek a bailout was a concession to its European Union friends.

So why would the Eurocrats demand a bailout of Ireland when Ireland insisted it didn’t need one?

The first reason is that much of Ireland’s debt—both its sovereign debt and the debt of its banks—is held by many of Europe’s largest financial institutions. The continued downward pressure on the market value of Ireland’s debt was causing balance sheet issues for these banks. Many of Europe’s banks had written credit default swaps on Irish debt, which was draining cash. Finally, the banks were finding it increasingly expensive to borrow against Irish debt—that is, other banks would not lend money in exchange for Irish debt as collateral, except at steep discounts—creating the potential for a credit crunch.

It’s likely that the European Central Bank has large exposures to Irish debt. The ECB has been quietly buying European sovereign debt since May—although it won’t say exactly what debt it is buying. The purpose of the purchases is to stabilize the debt market and provide liquidity to the economies of Europe. The stabilization effort, at least, appears to have failed. Further purchases of sovereign debt in a renewed stabilization effort threaten to become inflationary—essentially the ECB monetizing sovereign debt in Europe. An official bailout may be an attempt to ward off monetization and inflation.

Which means that this is not so much a bailout of Ireland—it’s a bailout of Ireland’s counterparties. That is to say, it’s a bit like Europe’s version of AIG: a backdoor bailout of invisible financial players who failed to manage their exposure to a shaky borrower.

This is going to become an explosive political issue in Ireland—one that may threaten the Irish government’s ability to keep the austerity promises it is likely to make in exchange for the bailout. After all, if the real purpose of the bailout is not so much to rescue Ireland but to rescue the Eurozone financial institutions holding Irish debt, there may be good reason for the Irish people to reject the terms.

Already there are calls for a new election from within Ireland’s ruling party. In Dublin, someone hung a sign over the weekend saying “Traitors” over the official “Department of the Taoiseach (Prime Minister)” sign.

This thing is far from over.

This piece from Mish Shedlock is worth a look too: Irish Citizens Sold Down the River in "Firepower of Stupidity"

He has the Irish population heading back to feudal times. It has a stark ring of credibility to it and I suspect it likely will become the lot of more than just the Irish. In a globalised world the pressure towards a leveling of of wages costs is inexorable - and sure as hell, in real terms (ie adjusted for the constant inflation of fiat paper) there simply aren't the resources left for them to do so in an upward direction.

[David Guyatt]

Thanks for that Peter. It makes perfect sense to me too. More banks dipping their hands into our collective pockets to payoff their casino debts.

But as one friend reminded me recently, money doesn't disappear or evaporate. When someone loses some, someone else gains it. So where have all these trillions gone - into whose pockets has it landed? The government must know; in these days of biggest brother even the odd thousand is tracked and analyzed, let alone multi trillions.

[Keith Millea]

So where have all these trillions gone?

The US Government says they do not have to tell you where the money went.I'm not kidding.........

[David Guyatt]

Lucky you Keith. The Crime Minister over here wouldn't even consider raisng the subject. Keep the poor mushrooms covered in sh*t and in the dark is the prevailing wisdom in this land of the Mother of parliamentary democracy and unabashed state pick-pocketing.

People really must again get used to tugging their forelocks to their superiors and betters, I think.

[Peter Lemkin]

So where have all these trillions gone?

The US Government says they do not have to tell you where the money went.I'm not kidding.........

Its only our money....or was....now it is theirs and once it is theirs, they feel no more obligation to say anything about how they spend it; the laws, GAO, Congress, et al. be damned....and the People or Sheeple....well, would a pickpocket come back and tell you how and when he picked your, or anyone else's pocket?!.....

[Jan Klimkowski]

From my good friend, Golem XIV, over at his blog.

I've excerpted a highlight here, but his entire analysis and the accompanying comments should be read:

Now lets look at the other side of the equation, at Ireland itself. Well Ireland's GDP before the crash, in 2008, was ... drum roll please... €207 billion. Or 0.207 trillion.

SO.... on one side we have Ireland whose bond holders, its people, have between them a total GDP wealth of 0.207 trillion euros. Who are being FORCED, against their will, to pay Anglo Irish bank's debts to its bond holders, who between them hold 20.8 Trillion euros. The people of Ireland are paying to, and protecting the wealth and power of, people who have 100 times more wealth!

So where do these wealthy bond holders live and work?

Germany has the most with 15 of the bond holders. Who between them hold 5.3 trillion euros.
France is next with 10 bond holders. Who have about 4 trillion to keep them warm.
Britain is third with 9 who have around 3 trillion.
The Swiss have 6 but who have about 8.5 trillion.
America has only three and hold only a trillion.
Other nations include, Spain, Belgium, Portugal, Holland Finland, Norway, Sweden, Poland, South Africa and Italy.

All these figures are very rough. The figure for Switzerland is certainly under because Private Swiss banks just don't publish figures. What we can say for sure, figures or no figures, is these are not banks investing widow's pensions or orphan's pennies.

So who are they? Well many of the bond holders are privately held banks, which list their activities as asset management for off-shore, non-resident and high value individuals. To give you an example, one of the private banks is EFG Bank of Luxembourg. EFG stands for European Financial Group which is the third largest private bank group in Switzerland. It manages over €7.5 trillion in assets. It is 'mostly', 40%, owned by Mr Spiro Latsis, son of a Greek shipping magnate. He also owns 30% of Hellenic Petroleum. His personal fortune is estimated to be about $9 Billion.

Now there is absolutely no suggestion that Mr Latsis has ever done anything wrong or illegal. And his holdings are, I am quite sure, perfectly legal and above board. But when we talk of Anglo Irish's bond holders it is Mr Latsis and those with his sort of wealth who we are talking about NOT widows and orphans or you and me. It is therefore worth remembering, the next time an Irish politician, or any of our politicians for that matter, say that some welfare payment can no longer be afforded, it is because the money that could have paid for it has been given to the bond holders, people not unlike Mr Latsis, instead. The Irish people are paying and protecting the interests of people like Mr Latsis over the interests of their own children. And it is their own politicians who are doing this.

http://golemxiv-credo.blogspot.com/2010/...g-out.html

[David Guyatt]

Sickening. A new potato famine seems to be on the horizon.