Woman speaks plainily about Irish Banking at Occupy Dame Street

Ireland is an example of how a couple of individuals can burn millions.

Banks have a retail side and an investment side. The retail side consists of all the regular things we associate with a bank, such as bank branches, ATMs, depositors, and so on.

The investment side consists of speculators. The Anglo-Irish bank consisted of speculators. For decades the two sides were kept legally separate so speculators could not gamble with money taken from the retail side (that is, could not gamble with ordinary depositors’ money).

But deregulation changed all that, and caused our global Depression.

Now, when the speculators win, they keep the profit. When they lose, they dump all losses onto the retail side. To keep the retail side going, the government dumps the losses onto the masses in the form of “austerity.”

By 2007 the Irish government had not engaged in deficit spending, but speculators had ruined Irish banks. In September 2008 the ECB offered to conjure up a few billion euros on its computer keyboard and give loans to the Irish government to bail out the speculators (i.e. pay off their losses). The debt from these ECB loans would be dumped onto the masses.

There was no need for Ireland to submit to this. Ireland was not in horrible shape. Greece, Portugal, and Spain would go into crisis long before Ireland would. At most, Ireland might consider very small loans to keep its retail banks going, but there was no reason to take ECB loans to bail out speculators. However, Irish finance minister Brian Lenihan took the ECB loan at a horrendous 5.9% interest rate. 

This caused the Irish economy to crash. The Irish government could have reversed this error by backing out of its promise to pay off investors. After all, Brian Lenihan had only promised to uphold the guarantee for one year, after which (according to him) the global depression would be over, and happy days would be here again. 

However at the end of the one-year guarantee period (Sep 2009) the ECB appointed one of its members, Patrick Honohan, as governor of the Central Bank, giving him de facto control of Ireland.

Acting against Ireland, Honohan extended Ireland’s guarantee to bail out the speculators. This caused Ireland to fall into massive debt, which of course was part of the ECB plan. The more debt that Ireland incurred, the more debt (i.e. loans) Honohan took from the ECB (and IMF) to bail out the speculators. Meanwhile the bankers blame the government, and the government blames the bankers, while the masses take all the pain.     

With each bailout of the speculators, Ireland goes further into debt, such that Ireland must take more and more loans from the ECB (i.e. go further and further into debt). The more debt that Ireland incurs, the higher the interest rate for future loans, which means even more debt. The debt is now compounding out of control, and the ECB is laughing all the way.

Thus Ireland’s Depression will get worse and worse until Ireland cracks.

Brian Lenihan already died from pancreatic cancer (10 June 2011), but Patrick Honohan (the ECB agent) is still head of Ireland’s central bank. The Irish masses need to haul him to the guillotine.