If Ireland is ever going to leave PIIGS status (the acronym for Europe’s most indebted and financially challenged economies – Portugal, Italy, Ireland, Greece, Spain), it must stop listening to, and then criminally prosecute the monetary authorities which have brought the country to financial ruin. It can start this most necessary process with the nation’s central bank governor, Patrick Honohan. Not only must Professor Honohan be hauled away, preferably in chains, but the sinister institution in which he heads, Ireland’s central bank, Banc Ceannais na hÉireann, must be eradicated.
In comments before the Irish finance committee (Oireachtas) on the European Central Bank’s (ECB) latest round of “bond buying” (in actuality, the monetization of debt), Honohan praised the ECB’s action saying “it has been an unmitigated plus for the Irish economy.”* He added that the ECB’s money printing extravaganza had a “broad distributive impact” throughout the economy. In his most accurate statement (unbeknownst to Honohan) the ECB’s money printing would be of great benefit to Irish public finances.
No doubt, that at least for a time, Ireland’s public finances will gain, but such benefits will only be derived at the expense of consumers who will be paying higher prices as the ECB’s new round of inflation percolates through the economy. The nation’s debt burden is also certain to widen which now stands at a staggering 114% of GDP.
To praise the ECB’s action shows that monetary quacks like Honohan have learned nothing from Ireland’s recent financial history. For it was the massive credit bubble created by the ECB and the nation’s financial institutions, most notably the Anglo-Irish Bank, which created the artificial boom of 2001- 08 that led to the inevitable bust which has devastated the economy. It has been estimated that over this time period, lending for mortgages rose from €44billion to €128billlion. Overall, Irish financial intermediaries from 1998 to 2007 increased lending some 466%!
Of course, when the bust came none of the culprits had to suffer the consequences of their nefarious behavior, but instead were bailed out by the Irish government through the creation of the National Assets Management Agency (NAMA) to the sum of some €70billion. The public is footing the bill for the banksters fraud through “austerity,” a crushing debt burden, and hefty tax increases.
While Honohan believes that the ECB has brought the Irish economy “unqualified benefits,” the facts, even by untrustworthy government statistics, belie such an assertion. The unemployment rate remains stubbornly high at nearly 10% while “youth unemployment” is a catastrophe with levels at some 20%! Worse, these numbers will not improve since policy makers remain clueless on how to remedy the situation.
Ireland’s household saving rate has plummeted to 6.45% for the fourth quarter of 2014. Personal savings from 1999 to 2014 had averaged 9.77%. Such a drop shows the pinch that citizens have remained under since the beginning of the crisis.
Honohan’s comments must be seen for what they really are. Heads of central banks are as much spinmeisters as the talking heads and teleprompter readers of the dominant news and television industries. Honohan’s main task is to protect the “integrity” of the Irish central bank. The solvency of the banking system and the government is what counts for the central bank. Jobs, price inflation, public debt are all secondary concerns for central banksters.
The only just and financially sound action for Ireland to rebound from its bankster-induced economic malaise is to outright repudiate its public debt and let the institutions and governing bodies that were responsible for it collapse. Hopefully, in the wake of such a scenario a new monetary order will arise without the scourge of central banking where money is once again a commodity – gold and silver. For Ireland’s future, anything less will only mean continued economic decline, social disintegration and debt slavery despite the optimistic words of central banksters like Patrick Honohan.
* Arthur Beesley, Irish Times, 28 May 2015.