What is truth?

Posts tagged ‘economy’

“ridiculous pay packages of board members of semi state bodies” Yeah!

Communications Minister Pat Rabbitte has said that it is “ridiculous” for board  members of semi-state bodies to persist in implementing pay packages that  “aren’t in the wildest dreams” of the average worker.

Minister Rabbitte  made the comments following the decision by the DAA chief Declan Collier to  forego his €106,000 bonus for 2010.

The decision was made following  Government pressure.

Minister Rabbitte said that there are rules set out  by the Government about limits on remuneration packages for people in semi-state  bodies.

“It should follow as night follows day that in circumstances  where people on average incomes have been taking severe hits in the public and  private sector, and in the private sector many of them losing their jobs, then  it is ridiculous to persist in the design and implementation of remuneration  packages that are just simply beyond the wildest dreams of the majority of the  workforce,” said Minister Rabbitte.

Read more: http://www.breakingnews.ie/ireland/rabbitte-calls-for-end-to-ridiculous-pay-for-semi-state-bosses-510571.html#ixzz1QTJo2LN9


Mr. Rabbitt  has been in power now for 100 and more what has
he done to curtail this wholesale plunder of the public purse nothing why
because it is the culture of “servants of the people”  in this country. When exactly did these state
bodies acquire the right to pay themselves bonus for doing the job they are amply
paid to in the first place?? What exactly does Mr. Rabbitt intend to do about
this intolerable situation. To have an ounce of credibility Rabbitt and his band
of friendly fellows should lead the way and take a 50% cut on their own extravagate
salaries and bring in new legislation to cut the lottery salaries of all semi
state bodies .Why the IMF hasn’t demanded this in the first place is puzzling
to say the least .

Deepening Economic Crisis: Inflation, Rising Interest Rates, Surge in the Price of Gold and Silver

By: Bob_Chapman

Economic recovery does not seem to be taking effect in spite of more massive expenditures by Congress and the Fed. The IMF says financial stability has improved, but then again their vision is almost always clouded. US tax revenues are not increasing in a meaningful way, manufacturing struggles to expand and Wall Street flourishes in a cascade of mega salaries and bonuses. In another six months the US will be three years what the government, the media and Wall Street call a deep recession. We call it an inflationary depression, which has existed for 26 months. After eight years of increasing money and credit, and the creation of a real estate bubble, the Fed has been fighting off asset destruction with ever more money and credit accompanied by debt deflation. Part of the Fed’s policy has been zero interest rates, which has helped Wall Street and banking and to a limited extent real estate, but has destroyed the purchasing power of retirees and has driven funds into speculation, which in many cases has ended in ever more losses and less buying power. The policy left conservative investors no place to turn to other than to join Wall Street and bankers in speculation, something they were not prepared for nor could they compete with. Borrowers have had a field day with virtually free money for which the result has been higher inflation and really major unemployment. You might call this the true Keynesian corporatist fascist model. This has left us with ongoing malinvestment, ridiculous illusions, which have led to the de-capitalizing of the US economy. In that process these interest free loans have given the big hitters the opportunity to enhance their fortunes at the expense of everyone else.

These rates and QE2 at least for the moment have been so powerful that deflation is nowhere in sight, except perhaps in job creation. In fact net inflation has moved up to 9-1/2% and we believe this year it will attain 14%, as government eventually admits to 5-1/2%, as we saw three years ago. If you think we are wrong look at producer prices that are up almost 11% over the past six months. Government and mainline economists are not paying attention. Either the higher costs are passed on or the profits will disappear. Just like in years past, over and over again, the excessive expansionism of monetary and fiscal policy will produce excessive inflation, more inflation than the so-called experts are anticipating.

The bailout of financial institutions by American taxpayers, both in the US, UK and Europe, won’t be allowed to happen again. In the next go-around they will go bankrupt. Those in the US and other stock markets with the exception of gold and silver shares, those in bonds, derivatives and hedge funds, will be wiped out as well. Few will be spared.

A year from this June inflation should be near 20% and that is where panic will set in. The 10-year T-note should be yielding 5-1/4% to 5-1/2% and the 30-year fixed rate mortgage should be 6-1/2% to 6-3/4%. After that interest rates and inflation will more than double, as they did in the late 1970s.

An example that is easily understood is that due to foreclosure and lack of job creation, rents should increase 10% over the next 1-1/2 years. That is known as Homeowner’s Equivalent Rent, which is 23% of total inflation. We believe that is a conservative figure. We won’t deal with core inflation, because it is just a method of obscuring real inflation. That 10% increase would add 4% to net inflation, which is currently about 9-1/2%, not 1.9%, as your faithless government would have you believe. That would put real inflation at 5-1/2%, not to mention increased prices for fuel and food. That is why our estimates are 14% to 25% over that time frame. Don’t forget interest rates will be rising as well. This only includes QE and stimulus 1 & 2. If QE3, by that or some other euphemism occurs, which we believe has too, then 50% inflation and hyperinflation is attainable. Readers have to remember that even if oil prices stopped increasing at $120.00, and food prices stayed at 10% higher levels, it would still rob consumers of $300 billion in purchasing power. That would drop consumers as a part of GDP from 71% to 69% easily. That means GDP growth even with the Fed adding $2.5 trillion to the economy, would at best stay even and may reflect as low as a minus 6%. You have to get the feel of the dynamics of this. Raging inflation, plus perhaps hyperinflation, a falling economy and 30% to 40% unemployment, U6 was 37.6% at the top of the great depression and the birth/death ratio didn’t exist at that time. Presently wages are stagnant, and they have been so for three years. Wages will finally start to rise so you can add rising wages to the inflationary explosion.

As this transpires we have the Middle East and North Africa, which are now a frightening further calamity waiting to happen. Any further violence there could take oil to $150.00 or higher. Will there be war with Iran? Perhaps and if that develops oil could escalate to $200 to $300 a barrel. Such developments would knock the foundation out from under the entire world, except for those fortunately producing oil.

Another factor is the plight of municipalities and states in the US. We have seen a small reduction in employment in these sectors, but the biggest layoffs are yet to come, as well as more than 100 municipal bankruptcies. We will also see debt default by states in relation to their bonds and other debts. Some states, such as Illinois, New York and California could cease functioning. This is not a pretty picture.

Then we have the woeful situation in the UK and Europe, all beset with rising inflation as well. A sovereign debt crisis has been prevalent for months with Greece, Ireland, Portugal, Spain, Belgium and Italy. All are at different stages of failure and nothing has really been resolved. As we wrote months ago the cost of bailout assistance would be $4 trillion, and it was just recently that the Germans and other lenders realized that the bailout cost is insurmountable. The cost will easily bankrupt the solvent lenders. Then there are the banks, all of which are close to insolvency already, which are facing massive bond losses, which will put them out of business. These are the loans they made that they should have never made, from funds created out of thin air.

Iceland has rejected paying off British and Dutch depositors, who had funds in Icelandic banks, which went bankrupt. The depositors do not have a leg to stand on and the citizens of Iceland are correct in their refusal. It was the Icelandic bankers who screwed the depositors.

Recently Finland’s voters rejected the bailout of Greece, Ireland and Portugal and who can blame them.

Wait until Greece goes into default, then things will get real interesting.

We normally do not editorialize regarding silver and gold. As you know we have recommended being long gold and silver shares, coins and bullion since June of 2000. Now that story is getting even better. Not only has gold and silver been a safe haven asset all those years, but is finally again becoming a shelter from inflation. The US, UK and Europe are in serious financial and economic trouble. Over the past 11 years, nine major country’s currencies on average have fallen more than 20% each year versus gold and silver. That is quite an extraordinary return and from our mail our subscribers are quite happy they followed our advice. Our run, including our market shorts, has simply been unbelievable.

Silver prices are on a tear and as we write they have risen to $46.30. In spite of these price levels the mining industry is not increasing production in any meaningful way. About 70% of production comes as a by-product of other types of mining, such as copper. There are no new sizeable projects in the works, and thus it is expected that production could fall 5% annually for the next ten years. The easy finds have already been exploited and new large projects are harder to find. In fact, current mines have only been able to increase production by a paltry 2.5% or so. In 2009 Argentina was the only outstanding exception and that could be a one off occurrence.

As we write gold has broken out to $1,509.30 even as the “Plunge Protection Team” fights viciously to suppress both gold and silver prices. Despite the mantra on Wall Street and in government there is 9-1/2% inflation affecting the US economy and the professionals and the public are finally catching on. In spite of the greatest bull market in gold and silver history, they still do not get it. Less than 1% of Americans own gold and silver related assets.

The QE1 and 2 and stimulus 1 and 2 have done their damage. The inflationary results are in the pipeline. QE and stimulus being reflected this year and the results of QE2 and stimulus 2 next year. We believe we’ll see the results of QE3 the following year, 2013, but it will be called something else. A falling dollar and few buyers of US debt has again set the stage for the Fed taking down 80% or more of Treasury and Agency debt. If they do not do that the whole system will collapse. These programs are like booster rockets aiding an underlying positive fundamental condition for gold and silver. The flip side is the debasement and denigration of the US dollar. As an aside even though the ECB has just raised interest rates they and the UK will continue their own versions of QE, because if they don’t their economies will collapse. That will put even more inflation into the world financial system.

As the possibility of QE3, or its equivalent, lurks in the wings the very solvency of America hangs in the balance. Those who have studied financial and economic history know that the course that is being followed is unworkable, and that certainly includes the staff at the Fed and the Treasury Department. In fact, Mr. Bernanke pointed out that in his and Mr. Baskins’ writings in 1988 after the market collapses of 1987.

At the heart of America’s problems are the insolvency of many financial institutions and the failure of either the Fed or the Treasury to have them liquidated. What the banks have in mind is the liquidation of bad debt held in suspension over the next 50 years. Supposedly as conditions and profits increase part of those profits will be used to lower debt. The problem is that these corporations are bankrupt. There access in the creation of inside information allows them to produce illegal outsized profits, such as 90 days of propriety trading without a loss. We were traders for 25 years and know under normal legal circumstances that that is impossible.

The, of course, there are the giant profits, really theft from other investors, that are used in part to offset previous losses and provide outsized salaries and bonuses to the crooks that run these banks and brokerage firms. These results are aided by the creation of money and credit and zero interest rates. The ability to borrow money created out of thin air at almost no cost. As a result the Fed now has a balance sheet of some $3 trillion loaded with Treasuries, Agencies, toxic waste and if they decide to create more money and credit to keep the government and the economy functioning for another year that figure will become $5.5 to $6 trillion. That is some monetization. There is unfortunately no other way for the Fed to do it, when at best they can only expect 20% to 30% of buyers for Treasuries, as the dollar falls in value. The situation is dire as the US dollar has just fallen 5% versus the Mexican peso, as the Mexican economy grows 4.5% a year, inflation is 3.7% and unemployment is 5%, and they haven’t used stimulus.

What are we missing here? Nothing except the Fed and Treasury, as well as Congress and the President are out of their minds as were their predecessors. How bad is it when the largest bond fund in the world, PIMCO, not only sells all its US Treasuries and Agencies, because they see no value and then they proceed to short them? It’s certainly a sad day for the solvency of America. Who can blame PIMCO when government is projecting $1.6 trillion deficits as far as the eye can see. In addition, all the funds paid by Americans for Social Security and Medicare have been squandered by government. Now there is no way to pay the promised benefits. That is $100 trillion that has been stolen, or should we say misappropriated. It is so bad that the US government credit rating may soon be lowered. It was just 1-1/2 years ago we picked August 2011 as the possible time for a downgrading of that AAA credit rating.

The number of states in serious financial trouble has now risen to 40 and unfortunately that number is still climbing.


Global Research Articles by Bob Chapman

© Copyright Bob Chapman , Global Research, 2011

Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.


Comparison of Tax Proposals

 Val sent this in to us.

If a week is a long time in politics, the last few months have provided enough drama in economic and political life to last a lifetime – or maybe nine! Beginning with the arrival of the IMF in mid-November and the subsequent announcement of the National Recovery Plan, the economic spotlight has shifted to the Budget in December, the roller-coaster passage of the Finance Act through the Houses of the Oireachtas towards the end of January, and is now firmly focussed on a guessing game of the likely fiscal policy of the new Government.

This guessing game may not be that complicated. The €20bn of fiscal and spending adjustments contained National Recovery Plan formed a significant part of the discussions with the IMF and EU, and there are differing views on the room for manoeuvre any new Government may have in formulating their fiscal policy.

All of the political parties have published manifestos containing economic and fiscal proposals of greater or lesser detail, and we have summarised some key tax features

see PDF doc Here PwC 1

source: http://www.pwc.com/ie/2011irishelection/

‘The People’s Economy’ by David Mc Williams

David McWilliams has posted a new article, ‘The People’s Economy’

 I’ve been involved in setting up a new website for the last few weeks – The
People’s Economy.

Some information from the website:

What is The People’s Economy?

The People’s Economy is an information hub, a new resource for citizens and
candidates to help us understand the labyrinthine mire that is Ireland’s
current economic predicament. Created by a […]

You may view the full article and add your own comments at

A green and golden opportunity ( David Mc Williams )

So what are we going to do to keep the price of food in Ireland reasonable, and keep the rural economy alive? Believe it or not, the answer is probably more subsidies.

The agriculture industry needs to be shaken up – uneconomic, small farms will only be a drag on the industry, as subsidies that go to these farms simply allow those farmers to survive, rather than thrive.

Without consolidation and a return of the kind of investment that agriculture hasn’t seen in two decades, agriculture will not be in a position to face the challenges that will come with global demands for higher production in the coming decades.

So, instead of telling average farmers that they will get a subsidy – ie a subsistence payment – farmers could get an ‘investment payment’.

Tell every farmer that they will get four times’ the average payment – say, €50,000 per annum for the next five years – to get their farms set up for the new ‘high production-low margin’ farming model that is needed to make the industry sustainable in the future.

After five years of payments for capital infrastructure input, farmers should get nothing more. This would liberate farmers to really make a go of things – and most are not afraid of this. They are aware of what is going on in the world, and the opportunities that are available.

The time to do that is now. Let’s think: investing €50,000 in each farm each year for the next five years would be a total investment of close to €33 billion. That’s about how much we put into Anglo Irish Bank for nothing.

If we are prepared to waste this public money on a financial cesspit, we shouldn’t baulk at investing a similar amount in one of the ‘real’ industries we have. A five-year stimulus plan, instead of a €1.7 billion annual subsidy, would transform the industry, rather than maintain a status quo that is going to get us nowhere.

We can totally change the face of agriculture in Ireland for the cost of one Anglo. And the money would not be wasted. Capital spending would provide some desperately-needed employment in the areas of the economy that have been hardest hit – construction and semiskilled workers.

After five years, the efficient and well run farms will survive, and production will rise to meet the demands of a global population of seven billion people.

However, without some new thinking, agriculture will be stuck in the doldrums, and market towns like Tullamore will stagnate.

source: http://www.davidmcwilliams.ie/2011/02/01/a-green-and-golden-opportunity

“Real reform goes beyond politics” David Mc Williams

David McWilliams has posted a new article, ‘ Real reform goes beyond politics’

Back in the early 1990s, I was working in the Central Bank when work was under way on framing much of the Irish position on the Maastricht Treaty.

Every few weeks, an Irish representative from the Department of Finance went to Frankfurt, Brussels or Basle, to Central Bank or European Finance Committee meetings.

Together with my colleagues, we drafted the Irish submissions.

When I started working in the Central Bank, my boss kicked off my career by telling me to read the minutes of the previous few week’s European meetings, so that I could familiarise myself with the job. I noticed something odd: the Irish representative never spoke at the meeting. I put this down to the fact that maybe, that week, the Irish delegation had nothing to say.

But time and again, these minutes revealed that, no matter how detailed the briefs were that the junior and middle ranking economists gave to the representative of Ireland, the Irish representatives never took part in any of the debates.

Why was this? Was it because they were afraid to offer an opinion?

Were they afraid to stand out and explain to the Europeans that Ireland was different?

After all, we did more trade with Britain and the US than we’d ever done with Europe. We had a lot at stake and yet we didn’t speak up.

These were crucial debates on the European Monetary Union (EMU), and whether we should join the euro. At the time, the British and Danish representatives were particularly vocal, as, of course, were the French and Germans.

Periodically, the other smaller countries’ representatives would question what was going on, but never the Irish delegate.

The people who should have spoken out for Ireland never spoke, they went along with the majority.

There was – from my Memory of the minutes – no effort made to articulate an Irish perspective, no effort made to point out that Ireland had a lot more at stake from joining the EMU than any other country. It was clear at the time to most economists that this was a political, not an economic, policy, and our top civil servants went along with it, without question.

The same silence was apparent when we had a currency crisis in 1992/3. When any one of us suggested that the policy of defending the Irish punt at all costs against devaluation might be misguided, we were slapped down with the great civil service putdown, that any deviation from policy would be ‘‘unwise’’.

The official view held that any potential devaluation would be catastrophic for the Irish economy. The official view was that, if we were to devalue, Ireland would suffer permanently in capital outflows, higher interest rates and higher unemployment.

In the event, after we were forced to devalue, money flowed into, not out of, the economy. Interest rates fell, as did unemployment.

In short, everything said by the Irish economic policy-making machine, the senior civil servants at the Central Bank and the Department of Finance, was wrong

You may view the full article and add your own comments at

Essential services and civil servants’ jobs are on the block!

Tánaiste Mary Coughlan has insisted that the Government will not be walking away from the Croke Park deal
There has been increasing speculation that the agreement on public sector pensions and reform could be under threat, given the deepening crisis in the public finances.
But IMPACT, the union representing public sector workers, said it met with Finance Minister Brian Lenihan earlier this week and received assurances that the Government was still committed to the plan.
Tánaiste Mary Coughlan today reiterated the Government is still willing to live up to its end of the agreement:
“We are very much committed to the deal and we feel that it is the most appropriate way in which we can bring transformation in the public sector,” she said.
Read more: http://www.breakingnews.ie/ireland/coughlan-govt-still-committed-to-croke-park-deal-476607.html#ixzz11a5wQnq5
I wouldn’t bet on the government sticking to their word I will bet that they are just biding their time, one look at the graph below tells you that they have no choice in the matter.
The only doctors that are getting work are the government’s spin doctors.
Quietly all over the country beds and services are been closed and been removed, I found this report (Behind the Croke Park dealPDF) on such closures earlier this year and things have only gotten worse!
Bottom line the government has run out of money because of the financial lunacy of bailing out bankrupt banks and the gambling subordinate bond holders of Anglo Irish Bank
Essential services and civil servants’ jobs are on the block!

The country is Broke!

We are borrowing €400 million every week and we need to cut €5bn from public spending

And that’s just for starters!

According to the report from An Bord Snip Nua release to-day the country needs to cut more than €5bn (£4.3bn) from its budget and more than 17,000 public sector jobs to save the country’s ailing economy.
An Bord Snip Nua, the Irish government’s cost-cutting panel, has called for brutal measures to drive down public expenditure.

But who are these people on this board??

Well we have Mr. Colm McCarthy of University College Dublin,


McCarthy also worked with a business consultancy firm, DKM, before taking up employment in UCD School of Economics.

McCarthy also demanded a 5% reduction in social welfare payments to achieve savings of €850m.

Then we have

Pat McLoughlin, a former deputy CEO for the HSE. McLoughlin resigned from his €165,000 post in 2005 because it would not guarantee him a sufficiently high pension so I here!

The Department of Finance had, apparently, not agreed to a ten year pension top up for this over-paid executive. Yet this same individual was then chosen to sit on a committee to decide on public expenditure cuts! What a Laugh!

Maurice O Connell, a former governor of the Central Bank. This was the man in charge of the Central Bank when the bogus non-resident accounts were being set up to avoid DIRT tax!

O Connell defended his inactivity even though it led to a loss of €100 million from state revenues. This was the man at the same time issued warnings about ‘over-spending’ on social welfare.

I wonder how many people on the dole could be supported on 100 million Euros.?

Mary Walsh, A partner in Price Waterhouse Cooper, the top accountancy firm that is close to big business.

William Slattery, Slattery used to work with the Central Bank as a regulator for Dublin’s IFSC

But then he jumped ship, to help service the hedge funds. Many of the hedge funds have located in Ireland to avoid paying tax because they are offered a special scheme which links them to the Caymen Islands.

These are gambling pools which allow the wealthy to engage in vast speculation these are the same kind of people you would find amongst the 10 Anglo Irish Golden circle members

Anyway back to the report, the following are the main points and I would need to suss out more details in the coming days to be able to make a more detail examination!

  • Cutting 17,000 jobs from the public sector –
  • health service cuts –
  • Increasing the pupil teachers ratio and reducing special needs assistants
  • Cutting social welfare and forcing medical card holders to pay new prescription charges.

I believe the report was deliberately published in the holiday season in the hope that it would be swallowed up by other events in the weeks to come.

I hope to be able to come back to this report over the weekend.





Tag Cloud