It also means that companies will be more competitive in exporting outside of the EU, which is were all the action is. The Eurozone being a dead to demand and likely to remain that way for years.

The money should be pumped in to infrastructure and job creation, SME grants etc etc, tax breaks for consumers across the zone. Be creative, learn from where the rest fell down.

It is the EU so they’ll barely do what was needed a decade ago.

Mitch it means alot,
I’m on a tracker, I benefit.

I know a few people on trackers either half or 1 percent above ECB rates, they love this sort of news

Mitch the majority of people on trackers bought at the peek and need any break they can get. I have a family and it helps me not by much but at least it’s something

Exactly , thank god for the ECB. Imagine the crowd above in d smoke set d interest rates, we would be screwed

The ECB and EU have laid waste to half of Europe. Major global economies like Italy and Spain are falling apart.

Smaller dynamo’s like Austria and Holland have had their wings clipped with the introduction of the Euro and the ECB’s war on growth and employment.

These measures will achieve very little…. if anything at all.

The ‘lie’ is in the wording in the article – banks do not ‘spend’, they LEND… and as they create new money when they make loans, these measures will make no difference to their ability to lend, nor, thus, whether the real economy borrows & spends to provide the ‘stimulus’ that all agree is needed, but dare not be spoken of… because their mainstream ‘theories’ have discounted such things for the last 30yrs and counting.

Doubtless the banks’ proprietory trading casino operations will get a boost…

Let’s cut to the chase… what is really needed is FISCAL stimulus, free gratis, because the non-government sector will not either want to, or need to borrow, unless and until the Eurozone economy is kickstarted. Exacty as demonstrated these last six years. Austerity kills growth.

And whether the ECB ‘backs’ new loan instruments (as announced, in favour of banks) with it’s own ability to create Euros from thin air on computers for Euro countries at the near zero interest rates enjoyed by choice by sovereign currency (non Euro) states, or simply makes one off grants of free money to member countries, it makes no difference.

Providing there are sufficient available items to buy (in the currency at issue), there is NO financial constraint whatever to buying such labour or material resources with newly created money (whether some ‘loan’ agreement is attached or not).

Inflation will NOT ocurr until we near full employment. As and when it does, it is simple matter to tax away the excess money in whatever sector of the economy it is needed.

It really is this simple to recover our economies.

The reason it is not happening is as old as humanity itself.

There are two perpetually opposed ‘classes’ – those who make money from the ownership of money (or Captial assets) vs those who rely on the sale of their Labour in order to live.

By definition, the latter will always be in the (huge) majority – otherwise, nothing is produced!

Also, by definition, ‘democracy’ should represent & balance their interests vs the Capital owning few, whose wealth always confers considerable power.

The root problem we have at the moment (especially, tho’ democracy has rarely worked properly) is that the political & public service classes running our supposed democracy have been near entirely financially or intellectually ‘captured’ by the interests of the Capital owning elites.

No where is this more evident than in an utterly dysfunctional (by design) Eurozone & wider EU system of currency design and political governance.

What jobs seany ?? There’s no coming outta this recession , think about it .. Technology has taken over , tesco self check outs , bank of Ireland lodgement machines , extra vision turning into a kiosk like in the USA , and cherry in the top is 3D printers , they have developed a super printer that can lay concrete to build homes .

C’mon Seanie,

Stop shilly shallying. You’re the financial Guru. We want more substance. Look at Mike Halls Input. Now that’s got some weight.

Further..

Unfortunately, every mainstream ‘macro’ economist & their related mainstream media commentators are either frauds, charlatans or pure ignorant – but rather admit that the thinking that has dominated for over 40yrs simply bears no relation to reality, they are choosing to simply continue the charade or say nothing.

Most are well rewarded by banks and the financial sector, and senior University professors, if not actually prostrating themselves for research grants to the former sector are also sufficiently well paid to put them firmly in the top few percent domain of the Capital owners. So there’s little incentive for any of them to own up.

How bad is it? Very bad.

Earlier this year the Bank of England (UK’s Central Bank) admitted that ‘some macro economics textbooks’ were ‘wrong’ in their description of Money & Banking operations. They have finally agreed with what the Post Keynesian schools (like MMT) have been saying for decades. “Loans create Deposits..” (in the banking system, NOT the other way round.

To the average person who has been deliberately (un)educated to know nothing of this (where DOES ‘money’ originate from, hmmm??) this may not mean much…. but huge swathes of macro economic theory DEPEND on the nature of the monetary and banking system. Such assumptions as ‘Savings creates Investment’… and the ‘Money Multipler’ theory are thus complete drivel.

The BoE, coyly said ‘..some texbooks are wrong…’ Well, for the last 40yrs nearly EVERY macro economics textbook has said EXACTLY THE SAME THING on money and banking & the entire edifice of drivel mainstream macro economic theory that is based on it!

Yes, nearly every ‘macro’ economist on the planet has been educated not just slightly ‘wrong’ but diammetrically OPPOSITE ‘wrong’.

And they still wonder why none had not the gnat’s cock of a clue WHY the 2008 Financial Crisis happened…. most still don’t. Their multi billion dollar computerised ‘forecasting model’, developed by thousands of economists over decades… did not include money, banking or debt in their calculations… because they believed it didn’t matter!

Even those that realised precisely what the ruinous effects (for the majority, not elites of course) of Austerity would be…. had similarly no clue that it has been TOTALLY UNNECESSARY. Because their ‘theory’ which does not understand money & banking properly told them their was little alternative….

And the root cause of all this POLITICALLY MOTIVATED fraud & ignorance?

Mostly, in economics education, it goes right the way back to the brutal McCarthyism purges in 1950s America, when thousands of academics were blacklisted or sacked for (supposedly) ‘Communist’ views. (The ‘House Committee on Unamerican Activities’…. “Are you now, or have you ever been a member of… etc etc…” )

During this period texbooks were removed from school and University syllabuses and library shelves, among them economics texbooks….

Over the following decades, the US has come to utterly dominate economics education throughout the developed world & beyond. They dominate all the ‘prestige’ economics Journals & who gets to publish in them…

Hence the reason now for rebellion in student faculties last year right across the world to create more ‘pluralist’ University teaching in economics & restore the long ago lost modules on the vital history of economics…

Mike, you are saying that economists base their models without knowing that money is debt based?
When the ECB turns on the printing press the money doesn’t flow down to create jobs it just beefs up the stock market etc right?
And around and around we go.
Am I understanding you correctly?

I’m no economist but isn’t it the case that a debt based monetary system like ourts is mathematicially doomed to failure, it’s just a matter of when?

The link to real money, Gold, was removed by Nixon in 1971.
This is all just a ponzi scheme in it’s death throes.

Same as what happened in the US. they printed money on a few occasions to try and stimulate and non of it made its way down to the SME’s and men on the street, The stock market lapped it all up and is still doing. Although there is a correction due on US stocks.

Well said john Deegan , President Jackson was the first president to pay back all of the USAs debt , as a result he closed down the central bank .. Put an end to tyranny , a few years later president Wilson on the back of donations have way to form the federal reserve .. As long as institutions like the federal reserve & the ecb exist… We are never truly free & doomed

John

They assumed debt, thus banks’ lending to be macro economically ‘neutral’, for every debtor, a creditor in the real economy, deprived therefore of there own ability to spend whilst ‘owed’ the debt.

They assumed money is not endogenous, rather central banks determined the money supply in circulation. Presumably this is why the BoE decided recently to clarify matters.

Bank lending creates new money, deposits, and its own ex post reserves at the macro level. They aren’t and never have been ‘reserve’ constrained. Capital constrained, yes, in theory, although in practice they have run a coach and horses thru’ the rules and regulations of how assets are valued, with their placemen in politics and regulatory bodies.

I don’t agree with the characterisation of ‘debt’ based money inherently causing a problem. Nor with the idea that misnamed ‘sound’ or commodity backed money or other attempts to ‘limit’ or control supply by some intrinsic supposed quality, prevent problems.

The root of them all is quite simple – fraud. And no money system can both allow free economic action & enterprise and be some guarantee against fraud.

Banking, in the vital real economy, commercial/retail/payments system sector used to be a very sober affair. No proprietary trading on their own behalf, with bizarrely allowed conflicts of interest that have spawned, what? $100s billions in ‘settlements’ in the last few years against the major Wall St. banks & some of their EU based counterparts. ‘Settlements’ for what in a sane world would be actual criminal fraud cases, with banks’ Executives in Jail, institutions shut down, not slap on the wrist, ‘cost-of-doing-business-carry-on’ ‘settlements’ with all the usual gagging clauses, no-blame etc.

No money system is safe in the endemically fraudulent environment environment that still remains in the Finance sector. ‘Gresham’s Dynamic’ as Prof Bill Black refers to it, quickly ensures that honest traders cannot compete with the higher profit margins of fraud – and so it is in Finance as it would be in any other sector.

Yet all the safeguards, such as separation of Commercial (payments system) Banking and (sic) Investment Banking put in place after the 1929 mess were systematically removed, actually beginning in the 1970s.

We were told the lie – ad nauseam – that ‘free’ markets inherently self-regulated, now obviously, as admitted by Fed Chair Greenspan, but not before he retired with his own millions & massive pension guaranteed – complete drivel.

It was always politically motivated nonsense on behalf of the Capital owning classes to simply remove any protections for workers wages and conditions.

No mainstrea economic model has ever included even the notion that ‘fraud’ can even exist. Mainstream economics models are based also on the assumption that Unemployment is both an entirely voluntary, ‘leisure utility’ choice (no, I’m not kidding) and also to have a ‘natural’ rate. Or more specifically a NAIRU – Non Accelerating Inflation Rate of Unemployment. Which is thought to coincide with achievement of a low and stable inflation rate & itself be a low & calculable figure which confers with reality. Except it doesn’t. Recently the EU Commission ‘economists’ calculated that Spain’s natural rate of unemployment is 23% !

I kid you not, much of mainstream macro economics is pure intellectual fraud – but has a LOT of careers heavily invested in it, and MASSES of self interest by the Banksters and top few percent.

Fiat money, imo, is a good system, which could work brilliantly for the interests of ordinary citizens. It inherently provides the facility to be issued debt free & ensure a cast iron, real safety floor of living standards exists in society.

Macro economies are inherently unstable dynamic systems. They require active management to maintain such things as (near) full employment (and maximum productive capacity) and low inflation.

Fiat money is absolutely the means, under REAL (not the present sham) democracy to actually deliver this control and the society any true representation of the majority wants – caring for all citizens whilst allowing individual enterprise to flourish.

Of course, the elites have long been aware of this, which is why they want exclusive control of it in their own interests, which includes running rigged casinos & all the rest…. or in other words just carrying on as they did before there was even universal suffrage.

Mike why in your opinion can we not have fiat money but make it non debt based? Why is the tax payer indebted to a private bank in order for the government to create money? Surely the government can just issue money without debt backing. Lincoln did it, JFK did it. We never did it in Europe. Then we don’t need a commodity backing like gold. But the only risk is that, unlike gold, a crooked politician can promise the sun, moon and stars to the electorate and turn on the printing press once elected.

Mitch Connors yes totally agreed. The whole American republic, which is now rapidly coming to an end, had as a founding principle no privately owned central bank. They tried to kill Jackson. Is it a coincidence that Americans paid no income tax until 1913, the same year the federal reserve was created? The last US president to issue non debt based currency outside the federal reserve was JFK who was assassinated. We in Europe were always debt slaves. For a while the American dream was a reality. Not anymore.

Did you know Mitch that some of the founding fathers wanted to place a prohibition in the constitution on government borrowing? They were overruled. The parasites were never completely exterminated and now they’re back and sucking us dry.

John

Sure we can can – at least as I think you describe it there. And we should.

There is a huge distinction between debt of the Government sector & the non-Government sector (us), as there is in their respective macro economic roles. Only a Government sector can play the vital counter cyclical role that an intrinsically unstable (and complex, almost certainly ‘mathematically’ chaotic, as in ‘fractals’, bifurcationts etc.).

Governments’ (of true sovereign fiat currencies) abilty to issue debt free money into circulation via net spending (Fiscal action) should be a key tool in achieving optimal economic outcomes for society & ALL citizens.

In reality, in true sovereign currency states (UK, US, Japan etc. basically anywhere non Euro) so-called Gov debt is not really ‘debt’ at all as it is for us in the non-Gov sector. Gov ‘debt’ for a currency issuing state is not required – by definition – for a Gov to spend. Why would you borrow if you own the magic cookie keyboard?

No, so-called Gov ‘debt’ is better thought of as a ‘deposit’ facility – Gov guaranteed safe, note – for ‘parking’ very large sums for the Financial sector. Their equivalent of our household bank current accounts, which are in fact Bank ‘debt’ – but that is not the true relationship, rather it is a +service+ for us.

But there is another ‘monetary operation’ reason for a Gov issuing interest bearing bonds (‘debt’). And that is to manipulate the supply/demand balance on the payments system bank reserves market in order to force a desired ‘base’ interest rate. Any market actor (in general terms) can can control the supply of something, or its price, but NOT BOTH. Central banks long ago gave up the idea that they could control the level of supply (even whilst Thatcher & Reagan pretended they could, until people laughed at them..) in a system where banks create new money endogenously as loans.

One could argue that this facility – in a more modest amounts than now – would still be useful for a Finance sector’s valuable contribution to society. But we should all be clear about who’s doing who a ‘service’ and interest rates would be based on nothing more than inflation expectatrions – the present BS ‘risk’ nonsense which is simply a smokescreen for usurious rip off.

As regards your last comment John re Gold (backing), it has never been politicians who +originated+ the financial frauds, pyramids etc. They have only ever been the hired PR dept. of the real criminals.

Historically, I think one could argue that our ability to manage both democracy & the economy with the kind of public information flow & reactive ability, if not needed, at least highly desireable to ensure stable outcomes, would have been difficult. We tend to take things for granted, but our ability now to gather vital macro economic data, share it and publicly debate it, is truly a revolution. Indeed imo, an +enabling+ revolution for democracy to function as it never has before – properly in the interests of the majority.

I believe many, many people are beginning to realise the truly breathtaking self serving and intellectually fraudulent basis of the current ruling establishment, in every sphere – politics, civil service, church, policing, legal & other ‘professions’ and academe. Even they don’t actually as yet know all the details.

Just as the Church completely failed to prevent mass paedolphilia in its ranks, the authorities have failed to prevent Financial fraud and debilitating mass unemployment…

The ESTABLISHMENT SYSTEM needs an overhaul from top to bottom…. if we are to safeguard ordinary citizens in the callenging future our children are facing, if not even within our own generation.

Mike totally agree with you, take it as read that the “political front” of politicians are just the frontmen goons, the establishment who are screwing us we don’t see. And we need an overhaul, to put it mildly. I think many of us can see that. But can you clarify something. My understanding is that in a central bank system, like the fed or ECB, money is created, through complex shenanigans, as debt which the government or governments owe to the central bank ie fed, ECB. Are you saying that’s not how it works?

John, prior to the twentieth century the US had two episodes where it adopted unbacked paper currency. Both episodes resulted in economic depressions.
The first was during its war of independence when the fledging government issued a currency called ‘the continental’. While it served the purpose of maintaining a monetary system during the war (as well as funding supplied the US by France, Spain and the Netherlands). Ultimately, the currency became wortless and ordinary Americans abandoned it in favour of Spanish and Portugese Dollars ( gold and silver coins). The experience lead to the Americanism “Not worth a continental”.
Again during the US civil war (during the Lincoln administration), the US commenced issuance of an unbacked currency nicknamed ‘the greenback’.
In 1861, the US government suspended specie payment (gold or silver redemption guarantee) to allow it to fund the escalating cost of the civil war. The US government commenced issuance of the ‘United States Note’.

The currency was controversial from the outset. Government issuance of fiat currency was prohibited under the US constitution.

By the end of the Civil War, its relative value had halved. After the civil war the US economy convulsed into economic depression.

After the Civil War, the US government attempted stabilising the currency.
Initially, the circulation of greenbacks was reduced from a peak of about $450 million during the war to about $350 million in 1868. This monetary contraction resulted in deflation. To counteract deflation circulation crept back up to $380 million, but the economy remained depressed.
In 1875, the ‘Specie Redemption Act’ was signed into law. To stabilise the currency the government would redeem $80 million in specie (for gold) and cap the total circulation at $300 million. In the end less than half that amount was redeemed, but the initiative succeeded in stabilising the currency. Greenbacks circulation was maintained and capped at $346,681,016 for almost 100 years. After 1971 no new greenbacks were issued. In 1996, the US treasury announced that the last $100 million of greenbacks had been removed from circulation and destroyed.

During JFK’s administration the US adhered to the Bretton Woods arrangement and the US dollar was gold backed.

Mickey Hall advocates a token currency system as the US had during the revolutionary and civil war.
Today the predominant monetary doctrine is the Real Bills Doctrine. A system which promotes the issuance of debt-based currency (to try to mitigate against the dysfunction common to token money systems).
All debt-based and token money systems, ultimately, collapse with extremely negative effects on ordinary people.

Sean indeed that’s interesting. Isn’t it the case that the US constitution specifically specifies that only golf and silver coin are money and that only congress can issue money. That corresponds with what you are saying. My thoughts are that the bankster parasites, knowing the constitution didn’t forbid government borrowing, instigated the central bank fed system which is debt based ie the fed makes currency which is debt based. It would be unconstitutional for them to control the real money ie gold and silver, but the constitutuon doesn’t say they can’t create toilet paper and loan it to the gov at interest, which is what they did in 1913.

“It was now that the frenzy of speculating began to seize upon the nation. Law’s bank had effected so much good, that any promises for the future which he thought proper to make were readily believed. The Regent every day conferred new privileges upon the fortunate projector. The bank obtained the monopoly of the sale of tobacco; the sole right of refinage of gold and silver, and was finally erected into the Royal Bank of France. Amid the intoxication of success, both Law and the Regent forgot the maxim so loudly proclaimed by the former, that a banker deserved death who made issues of paper without the necessary funds to provide for them. As soon as the bank, from a private, became a public institution, the Regent caused a fabrication of notes to the amount of one thousand millions of livres.”

Memoirs of Extraordinary Popular Delusions, Charles Mackay, 1841

To understand some of the delusions that are rampant in the modern world it is well worth reading Charles Mackay’s book.

Mackay describes the delusions that drove Europe’s witch trials, the christian crusades of the holyland (anti-islamic hysteria) and the delusion that a currency printing press could lead to prosperity.

http://www.gutenberg.org/ebooks/636

John

The Euro system of course lacks the central (political) ‘treasury’ function that sovereign currency states have. (Some minimal central ‘fiscal’ entity would be needed for a properly functioning Euro system… besides addressing its utter lack of democratic legitimacy…)

In sovereign currency states the separation of Central Bank and Treasury is largely just smoke and mirrors to keep prying eyes away from banking/central banking, likely especially politicians & their civil service depts.

In reality, all central banks are government entities, could not exist with Gov approval/censent, and in macro economics terms should be seen as a single consolidated entity.

Probably another reason to distance the two is also what I suspect is a neo liberal agenda to deny any special role for Government, rather to present it as just the same as a private sector enterprise simply with a taxation distributional function (harking back to the 19th century when the concept of ‘macro’ economics did not even exist). Sort of just a ‘tax and spend’ business (which is completely false when one understands Governments’ true role as money issuers/controllers).

At it’s most basic, encompassing level, the distinction between the ‘macro’ of a whole economy, and ‘micro’ of households & private sector, is arguably the ability of the Government to act counter cyclically – which the non-Government sector can never do.

It is logically ONLY possible to attempt to deny the need for a counter cyclical +macro+ entity IF one can state categorically that the macro economy is always and forever self stabilising.

At this stage, only someone with a brain the size of an ameoba, or having an utterly greedy, self-serving agenda could believe this is the case. (Yes, there’s always some…)

Only Government is capable of this macro counter cyclical (stabilising) function.

The Euro system intrinsically removes the counter cyclical ability of member states Governments & has provided no central means of replacing this ability.

It has failed (for majority citizens, not elites of course..) at the first economic downturn precisely in the way Wynne Godley described in his 1992 article in the London Review of Books. (Published there because dissenting voices, even from such capable academics as Godley, were not deemed suitable for prime time… )

http://www.lrb.co.uk/v14/n19/wynne-godley/maastricht-and-all-that

The most disgraceful thing is that we don’t have a single mainstrean economist in Ireland seemingly capable of correctly analysing the root problems of the Eurozone… let alone any mainstream media economics commentators.

Just noticed a short but succinct piece from Greg Palast, a rare and capable investigative journalist, on the Euro…

http://www.theguardian.com/commentisfree/2012/jun/26/robert-mundell-evil-genius-euro

Apologies for a bit of digression there :)

John, the issuance of “the United States note” lead to a constitutional crisis in the US. Many of the congressmen who backed it were, also, bankers.
Under the First Legal Tenders Act (which created the US note (Greenback) the new currency would not be accepted as payment for duty on imports. The creators of the new currency believed it would ultimately be worthless.
Since, 1973 (when Nixon abandoned Bretton Woods) US fiat currency has been issued by the Fed. This cannot be deemed unconstitutional because the Federal Reserve Bank is a private institution and the list of its shareholders cannot be made public.
The Real Bills Doctrine, which was originally created by John Law (mentioned by Charles Mackay), was included in the Federal Reserve Act which created the Federal Reserve Bank.

Was the whole reason for the Wall Street cash to rob the people of their gold ???

Sean

God knows how many episodes of speculative ‘pyramid’ bust have occurred under gold backed currency regimes.

The real issue is the fraudulent activity in the Finance sector, and history amply shows that crooks could care less if a currency is gold backed or not.

But in the periods when a pyramid build up cycle is either not present or at very early stages, or as now, in the period after a bust, any gold standard-like attempt to limit the money supply (always after the horse has bolted!) produces a serious deflationary effect. Exactly as we see in the Eurozone now & for exactly similar reasons. Austerity – reducing the net spending position of the Gov sector (please do go and study the accounting identity ‘sectoral balances’ ‘macro’ approach…) removes (destroys) money from circulation, in the same way that private debt repayment ‘destroys’ money. No surprise then, except to the mainstream clowns, that spending & thus economic activity are dampened.

Operating thus, for years, even decades, in the Eurozone at 15% to 20% (minimum!) below our productive capacity to produce the +real+ goods and services that comprise our standards of living is NOT PROSPERITY! (But it does present a marvellous opportunity for ‘firesale’ privatisation and asset sale programs… to increase the top few %’s rent-seeking portfolio…. including those of goldbugs like Sean with whatever cash they’ve left after the pyramid bust…)

A Gold Standard currency, in reality, only works for a tiny section of society Probably comprising no more than 5% to 10% of the total population. This group are those whose wealth places them in between the top few percent (who always know when the pyramid is going to collapse & suitably insulate themselves) and the rest of us who don’t have any savings to speak of at all (& by definition never can – we cannot ALL be Capital owners, and not workers….).

Of course this ‘gold standard’ beneficiary group, happy to make unearned wealth off the back of the pyramid rise, want a means of securing their gains thru’ the bust, and see the gold standard as their means to do that. They are typically educated and vociferous, angry at their losses, and with dented egos when they realise the top tier, they thought themselves part of, have jetisoned them & ripped them off like the rest of us.

There are other problems with any ‘commodity’ based currency….

Considerable political power is transferred to the private sector controlling interests in the production of that commodity, further rendering any ‘democratic’ control of our economy meaningless…. gold bugs +never+ discuss this aspect, presumably these ‘commodities’ land baggage-free from Mars…or some similar magic.

There are precisely ZERO economists or others who have presented ANY procedures as to how we could change (globally, don’t forget!) from the present Fiat currencies to ANY commodity based system, given the complexities & completely incalculable counter party & interlinked financial instrument (& derivatives) risks and asset values that exist in the present & foreseeable future. Global ‘Economic Shock’ doesn’t come close – think nuclear explosions in the global economy…

Nearly every argument in favour of a gold standard currency that I have seen on internet blogs etc. seems to me to consist of pure rhetorical or polemic drivel. (I’m an engineer, BSc and MBA by training, familiar with the logical method of science and mathematics… never seen a goldbug that doesn’t immediately resort to rhetorical gobbledygook… )

Unfortnately Sean O’Keefe, notwithstandind your notably worthy posting in support of the Palestinian cause (a humanitarian at least), your posts on money & economics fit entirely this latter characterisation. Meaningless, poor or no context, or logical foundation rhetorical quotes are ‘de rigeur’ seemingly for you and every other gold bug, stuck in 19th century neo classical, if not neo liberal economics garbage.

We have Fiat currencies. They are not going to be changed any time soon (think decades at least). They are not the problem. They can be made to work very well for the majority public purpose interests. (Yes, I realise that is neither tiny minority ‘goldbug’ interests, nor those different interests of the top few percent.)

Fraudulent democratic and financial management is the problem. No money system can counter that.

That is what we should fix. Getting the present economics & money system to work for the majority interests is easy once we fix that.

Mike, agreed on our main stream “economists” here in Ireland. That goes without saying.
So if we had a government of Ireland only, with control of the money supply, issued as non-debt based, outside of this insane and undemocratic EU bureaucratic wheeze, there would be a chance things would improve?
And we don’t need to back the new currency with a gold (or other commodity) standard?
At that stage I guess we just have to get rid of all political parties lol

Sean thanks for the link.
Interesting about the consitutional crisis I didn’t know.

Mike from your last post it seems that a gold standard is not the answer to all our ills that some say it is. For my part, simplifying it, if we went to the gold standard tomorrow (ignoring the financial nuclear explosions you mentioned for the moment) then those who would be wealthy would be those who have the gold. I’m sure the elite parasites sucking us dry right now have thought about that! lol
Though, if I understand correctly, it is exactly for the reason above that we may well end up with a gold standard, especially given the almost cult status it has achieved for some?
Sean, have you looked at Bill Still “The money masters”. He is a proponent of non debt based fiat system and decries a return to the gold standard.
Mike do correct me if necessary, I’m just feeling my way around here.

John

Yes, absolutely.

But we must not forget that we are currently integrated into a US dominated geo poltical system.

That means that +any+ country in danger of setting a ‘good example’ of real concern for their citizens is going to be a target for the global elites. Which is why Cuba is still sanctioned by the US etc. Why the Sandinistas or any other socially responsive political group must be ruthlessly oppressed… I think you understand this well anyway.

So short term challenges will come with any moves against the ‘western’ neo liberal (ultimately neo feudal) global agenda. Highly topical with Scotlands pending vote on Independence. (Note the MSM silence tho’ on the far more significant Catalonia move for an independence referendum…)

But, in the long term, a competent management of a Fiat (floating) sovereign currency state can always maximise the use of its own resources.

Surely that is the best, most stable & sustainable way we can manage ourselves?

Providing we are not simply ruled in some sham democracy by a tiny coterie of self serving elites. A big question.

Which I would answer by stiplualing that NO elected officials or other public service officials should be allowed (or their spouses) to accumulate significant wealth (Capital ownership) – for life. Thus preventing ‘corruption’, intended or otherwise, at source. Sure, it won’t be perfect, but it would be both paradig changing & adequate, I believe.

Additionally, I would stop public funding of RTE (let them go fully commercial, or whatever they want) and instead instigate a democratised ‘e-voucher’ public funded but ‘commons’ sector in the media. Essentially, every adult voter may allocate whatever proportion they wish of a public funds backed ‘e-voucher’ to whatever media publishers they like.

The idea being that the narrow corporate media ownership and (advertising) revenue monopoly is broken. Truly inependent media publishers can appeal directly to independent citizens – provided with purpose specific & equal means – for income.

Long past time the ‘fourth estate’ had a properly funded independent sector – independent of both concentrated private AND government financial control.

Mike yes indeed, it’s quite noticable now to all but the most ostrich like (and bad) of our society that we speak a lot more about “freedom and democracy” than we actually have. And I predict as we slide further into this abyss we will see a consequent rise in the powers that (shouldn’t) be telling us this is all to protect “freedom and democracy”. We see this directly in our lives now. Our electronic communications can be intercepted without court order (nothing to worry about if you have nothing to hide, we gotta catch them terrorists). Going to an airport involves being sexually assaulted (it’s for your safety, gotta catch them terrorists). Only yesterday a story came out in the US about fake mobile phone towers to listen in a people’s communications (Terrorists can be anywhere, we have to protect you). Aldous Huxley, George Orwell, they were all errily accurate. It’s actually quite something that we are witnessing this. Of course, what we discuss here is pure pipedream. If we ever got close to doing in this country what is discussed above we would be crushed into oblivion. Having said that, any revolution (peaceful!) has as it’s first stage awareness. A critical mass of people in society must become aware of their pathetic plight before anything can change. We are very much at the awareness stage. But it is growing.

John

Seriously, please forget a gold standard. Nobody knows how, or is even prepared to risk trying to introduce it. It’s the stuff of cranks or people living on some other planet. There is +no+ practical path to it even if it were desireable.

If you want to consider a system that aims to curb ad hoc money creation by banks, have a look at positivemoney.org – the UK campaign to prevent commercial banks making loans from created money. Rather, they would only be allowed to lend money deposited with them specifically for the purpose. (ie running banks the way most people actually think they operate now!) They call this ‘full reserve’ banking.

But I think you’ll also be attracted to their proposals that Government, via spending by issuance (not debt) ensures that the money supply may increase, as needed, for growth. Broadly, in fact the same (Abba Lerner) ‘Functional Finance’ fiscal approach as MMT, where taxation is merely a regulation or distributional tool, as an opposite to spending, rather than being collected to ‘fund’ anything.

If positivemoney.org’s proposals were on the table, offered as a sole prospect, I’d take it without hesitation tomorrow.

But imo, it still relies on seriously robust regulation of private finance and shadow banking (that already has no money creation ability, in contrast to high st banks), derivative trading etc etc. just as any other system needs, to prevent fraud and pyramid scams building up.

Secondly, the economy is vastly complex and dynamic. Enterprise needs, optimally, I believe, a system that can provide finance in a timely, flexible and suitably tailored fashion to both large and (importantly) small business, also suitably ‘risk’ assesed. I’m not convinced that a hobbled high st banking system will do this optimally, nor at an interest rate cost that will not needlessly further stifle enterprise & also simply further add to the ‘rent’ grabbing of the top few percent, for nothing provided in return.

Also, positivemoney advocate no Job Guarantee or other income floor support for the bottom income layer of society. That’s a major omission imo.

Just noticing your last comment. Yes, I agree we need major reforms – even (yes, totally agree, peaceful!) revolution. But the very fact we are having this discussion here I think shows the power that the information revolution – still very muich in infancy – may have in bringing about a truly representative and compassionate democracy.

Appreciate the exchange John, best wishes, goodnight :)

Mike likewise I appreciate the exchange. Thanks.

Sweeeeeeeeeeeeeet got to love them trackers

I have a tracker bar here if you want one.

I think there’s a bus you can get if you have one?

It’s a boat and it has left

@Simon I do actual have a tracker thank god.
Tho I put that comment you for two reasons. 1 for and bit of comedy and 2 because it always gets the reaction from people with and without trackers.
Showing the split in the nation. The green thumbs I’d say have trackers the red thumbs not. Happy people vs begrudgers.

It means a lot.

For the rest of us it means that Neuro here will be have a bit more to spend in the local economy, given local business a boost and keeping ppl in Jobs. They will pay tax and other companies and help grow the economy and reduce the overall debt burden.

On the other hand it is the EU/ECB doing it so you have to presume they will have some catch and it will favour the larger countries, especially Germany.

Oh piss off

Smiley face

anyone on a tracker who’s not struggling should use the money to put on the mortgage payments. makes sense when rates are so low to pay down as much as possible, its all going to a good cause, Your’s

I did research on the federal reserve , dunno much on the ecb but I bet they are operating the same way . When the USA government call the Feds , and borrow 10 billion , the government deposit this , from there they can create 90 billion from thin air . Some guy won a landmark case in the USA , claiming the money the bank put up for he’s home didn’t exist , he convinced the judge and the mortgage was wiped clean . Only 3% of Americas wealth is actual real physical money , the other 97% is done electronically . Monetary system doesn’t work , it’s bad for humanity .. Americas GDP is in line with the peoples health meaning the more people that are sick , more money spent on pharmaceutical companies , the richer America comes . America profits from their people being obese and unhealthy .

Surely a new boom will have new fad’s?

I’m buying decking, bought it today. Might go get a panini for lunch now with the mortgage going down again

Feels good not to have a mortgage and be able to buy paninis whenever the fuk I like!.

Or one of those decking heaters which was powered by burning money

Feels even better to have paid the mortgage and living rent free.

Dee.

Italy also has a primary budget surplus, what a rare positive that.

Italy’s legacy debt is growing because of the disaster of the Euro which killed growth in the Italian economy when they joined and has now killed growth in all of Europe.

Italy cut its own throat by joining the Euro. The ECB and EU sharpened the knife and gave it to them.

@Seanie. I agree the Euro has failed, the main reason it was setup was to facilitate intra Europe trade , Intra Euro trade has now fallen below pre Euro totals

Dee,

I didn’t specifically mention Italy above as other Eurozone countries are more heavily impacted by austerity but as you raised the topic, Oxfam see a significant effects on Italian society due to austerity.

“In an effort to avoid having to request international rescue loans, and to achieve a balanced budget in 2013, the then technocrat government, led by Mario Monti and supported by a large, bipartisan majority, increased taxes on households to 44.7 per cent of gross income. Among the new taxes, VAT increased to 21 per cent, up one per cent, and a property tax on houses was re-introduced. The latter was particularly unwelcome, as most Italians own a house bought with a long-term mortgage, but do not necessarily have a monthly income/pension to pay a tax associated with the property. The government has also made deep cuts in social spending, at the national and local level, impacting on the ability of families to cope with the continuing recession. In 2012, the government undertook an ambitious reform of the pensions system, increasing the retirement age for women and men..”

Sounds very familiar, doesn’t it?

it just means statism is broken , 40 years of living beyond society’s means is catching up and there will be a reckoning of defaults and unplanned shut down of services, appropriation of peoples savings if the gov. is evil

We have a 100% debt based monetary system since 1971.
Debt based monetary systems increase the debt to cover previous debt.
The result is an eventual exponential growth in the debt or money supply.
We are approaching the end here.
As the debt burden increases, interest rates are lowered, money creation increases, real wealth is appropriated by the banks.
Three choices for the finale:
a) Stop creating money. System collapses due to not enough money to cover the debt.
b) Print more money. The rate of money printing increases as time goes by. Hyperinflation sets.
System collapses due to worthless money.
c) Go to war. Allows appropriation of more resources allowing further increase of the money supply. See Iraq etc..Can gets kicked down the road. If WW3 avoided eventually no more expansion possible. See points 2 and 3.

Everything else is just noise.

250Bn debt will be unsustainable for Ireland, and would force some sort of default on some debt. Currently @ 181bn not looking good for us. I would imagine some sort of default like Greece took. would not do us any harm. We cant keep paying out 10bn a year on interest.

‘Statism is broken’ Really? Who did the mighty free market come running to squealing for rescue in 2008 when they destroyed themslves with greed and stupidity only their host nations?

Invest in wine rather than drinking it all.

Have you thought about Hookers?

If invest in yer sister

Blow it on the slots in Bray

Ahhhh slots…I was almost heading to Bray there.

wouldn’t mind the slots but its getting annoying that they pay out in tickets.

I don’t think there is a lot they can do to stimulate people into spending money just for the sake of it, After what we as Nation have been through, and are still struggling with, the only common sense thing to to is either build assavings buffer for harder times or pay down debt. People seem to be a bit more weary of economics this time, although saying that did you seem those muppets Q’ing for a new build house and saying 300k was a fair price for a 3 bed semi. Suppose there will always be some, but the older generation who’ve had their wings clipped will certainly not be throwing money away any more, not while they are still expected to bear the burned for debt that isn’t even theirs.

http://www.economist.com/news/special-report/21569570-growing-number-american-companies-are-moving-their-manufacturing-back-united

The above is a very interesting article on how manufacturing jobs are slowly moving back to the US and Europe as labour costs rise in Asia. It also details how unions have allowed 2 tier pay structures to emerge so companies will be encouraged to stay put or return.
The question is how long the younger workforce will put up with those above them earning more for the same job.

SSIA, if you remember but everyone was saying we’d be flooded with money. Of course that was back in the boom time.

It won’t happen because it would be outright printing money and that’s enough to give the Germans a heart attack.

There’s a bit of a hypocrisy with inflation/deflation. When inflation goes up the ECB is very quick to jack up interest rates, which it did I think twice in the last 4 years. The Swedish central bank did it too. What happened was it killed off any inflation but also just as importantly: growth. Inflation tumbled but the ECB just sat back and let it happen. There’s no similar proportional action to low inflation as there is to high inflation. That’s the reason we are in this situation.