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Is it time to declare a form of financial martial law


deiseguy

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1,346
I'm just throwing this one out there to see what the reaction is like. Today we had DMCW telling us about his german friend laughing up her sleeve at our spinelessness and declaring that any election we might care to have as irrelevant as we would simply do as our betters ordered from now on. In light of this should we not simply declare that all normal financial market rules are suspended. And that the government from here on will be concentrating solely on reducing unemployment. We have €45 billion banked between already sold bonds and the pension reserve fund reduce the defecit to €12billion and we have enough cash to fund ourselves for 4 years. Allow the banks to pay no more than 50% of what they take in in loan repayments off shore. I estimate mortgage payments alone come to around €1billion per month. We are hemorrhaging cash as a nation and it is all going off shore and is of no benefit to Ireland inc. If this cash remained here at worst it could do no harm.

If any other group other than the financial services industry was running around causing the type of damage that these wretches are the army would have been called long ago. I am simply saying we need to do the equivalent. I don't think we can or should get out of paying all of our debts. But some of them were raised in the direst of circumstances and are at excessive rates of interest. We are a sovereign nation and no financial institution can hold a gun to our heads because as a sovereign nation we are in fact the ones with the guns both actual and legal. All off shore creditors need to be told that once a reasonable target in terms of employment numbers and GDP/GNP growth are achieved we will start to re-pay our debts but in the meantime the door is over there.
 

hmmm

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All off shore creditors need to be told that once a reasonable target in terms of employment numbers and GDP/GNP growth are achieved we will start to re-pay our debts but in the meantime the door is over there.
And how do you propose to fill the 20 billion deficit without borrowing from these "off shore creditors"? And are you happy for the country to exist without banks?
 

Nemi_

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And how do you propose to fill the 20 billion deficit without borrowing from these "off shore creditors"? And are you happy for the country to exist without banks?
But, sure, we can't sustain that deficit anyway.

Its as simple as those Eddie Hobbs shows where he'd patiently explain to some confused woman "you're spending €60,000 a year, but you're only earning €40,000, so you have to reduce your expenditure by €20,000". If default meant that we had to suddenly adjust public spending, it would actually be a good thing. Because the political will just isn't there to do what's needed.
 

deiseguy

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And how do you propose to fill the 20 billion deficit without borrowing from these "off shore creditors"? And are you happy for the country to exist without banks?
We have €45 billion banked between the pension reserve fund and the approx €20 billion of bonds we have forward sold(we are supposed to be covered into the middle of next year). I proposed cutting the defecit to €12 billion immediately we are supposed to do 4 this year and another 4 next year to bring it to 12 by then anyway so we would simply be front loading pain we have already signed up to and then we use the €45 billion to tide us over for the next 4 years. If we haven't turned it around by then we're f**ked and far from home anyway.
 

pujols

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And when do you suppose we will be rejoining the real world?
 

deiseguy

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And when do you suppose we will be rejoining the real world?
The one where "investors" are protected by the poorest taxpayers when their investments go curly in true capitalist style. If the bondholders can have their neverneverland why can't we?
 
Last edited:

rubensni

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Apr 27, 2009
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737
All off shore creditors need to be told that once a reasonable target in terms of employment numbers and GDP/GNP growth are achieved we will start to re-pay our debts but in the meantime the door is over there.
Small problem: We're running a GDP deficit of over 30%, and are borrowing €20b a year to fund day-to-day spending. If we were to do this then noone would lend us any more money. But hey, we could get by without ambulances, guards, schools, etc.
 

Nemi_

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Small problem: We're running a GDP deficit of over 30%, and are borrowing €20b a year to fund day-to-day spending. If we were to do this then noone would lend us any more money. But hey, we could get by without ambulances, guards, schools, etc.
How long do you think we can pay for ambulances, guards and schools by borrowing €20 billion? When would you envisage we start repaying that borrowing, and what impact do you think repayment will have on our ability to pay for ambulances, guards and schools in future years?

It is simply unavoidable that we'll have to find a cheaper way of paying for ambulances, guards and schools. The only variable is how much debt we'll have chalked up before we do so. Because the cost of ambulances, guards and schools are not fixed. A high proportion of the cost is people, and paying less for people will enable us to have more ambulances, guards and schools than if we don't.
 
G

Gimpanzee

I'm just throwing this one out there to see what the reaction is like. Today we had DMCW telling us about his german friend laughing up her sleeve at our spinelessness and declaring that any election we might care to have as irrelevant as we would simply do as our betters ordered from now on. In light of this should we not simply declare that all normal financial market rules are suspended. And that the government from here on will be concentrating solely on reducing unemployment. We have €45 billion banked between already sold bonds and the pension reserve fund reduce the defecit to €12billion and we have enough cash to fund ourselves for 4 years. Allow the banks to pay no more than 50% of what they take in in loan repayments off shore. I estimate mortgage payments alone come to around €1billion per month. We are hemorrhaging cash as a nation and it is all going off shore and is of no benefit to Ireland inc. If this cash remained here at worst it could do no harm.

If any other group other than the financial services industry was running around causing the type of damage that these wretches are the army would have been called long ago. I am simply saying we need to do the equivalent. I don't think we can or should get out of paying all of our debts. But some of them were raised in the direst of circumstances and are at excessive rates of interest. We are a sovereign nation and no financial institution can hold a gun to our heads because as a sovereign nation we are in fact the ones with the guns both actual and legal. All off shore creditors need to be told that once a reasonable target in terms of employment numbers and GDP/GNP growth are achieved we will start to re-pay our debts but in the meantime the door is over there.
Your crazier than the fella's that 40 something per cent elected to balls things up
 

rubensni

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737
How long do you think we can pay for ambulances, guards and schools by borrowing €20 billion? When would you envisage we start repaying that borrowing, and what impact do you think repayment will have on our ability to pay for ambulances, guards and schools in future years?

It is simply unavoidable that we'll have to find a cheaper way of paying for ambulances, guards and schools. The only variable is how much debt we'll have chalked up before we do so. Because the cost of ambulances, guards and schools are not fixed. A high proportion of the cost is people, and paying less for people will enable us to have more ambulances, guards and schools than if we don't.
Do you think people won't go on strike?
 

Nemi_

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Do you think people won't go on strike?
I expect many will, and their strike action will be about as effective as King Canute ordering back the waves.

But I'm also frequently pleasantly surprised at how many people actually understand the circumstances we are in.
 

rubensni

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I expect many will, and their strike action will be about as effective as King Canute ordering back the waves.
By declaring "martial law" (i.e. defaulting) and running zero deficit tomorrow morning we won't have access to the markets to finance capital spending either. Where will that get us?

Add mass industrial action to the above scenario and this metaphorical financial martial law will result in genuine martial law being imposed, but without an army to enforce it as they'll be on strike too!

But I'm also frequently pleasantly surprised at how many people actually understand the circumstances we are in.
Pity that understanding doesn't extend to Merrion St. ;)

Cuts are necessary, but have to be proportionate and fair or you risk creating bigger problems.
 

Nemi_

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By declaring "martial law" (i.e. defaulting) and running zero deficit tomorrow morning we won't have access to the markets to finance capital spending either. Where will that get us?
But this is a false line of reasoning. We can't borrow money that we cannot credibly repay. We cannot credibly repay money that we borrow to keep social welfare payments and the rest of public spending, like pay, at present levels.

Do you follow? Its not a question of whether we should default. Its a question of when. All of the potential consequences you mention will have their chance to emerge, as we're presently like those airheads who used to appear on the Eddie Hobbs shows, not quite able to figure out why repaying their maxed out credit cards means they won't be able to buy stuff for a while.
 

rubensni

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But this is a false line of reasoning. We can't borrow money that we cannot credibly repay. We cannot credibly repay money that we borrow to keep social welfare payments and the rest of public spending, like pay, at present levels.

Do you follow? Its not a question of whether we should default. Its a question of when. All of the potential consequences you mention will have their chance to emerge...
You're twisting the facts: the recent downgrades have been based on the ratings agencies incredulity towards the government's bank rescue policies, not the fiscal situation. The agencies felt that we could credibly repay the monies being forwarded to us last year, and since then the economy is starting to show some signs of a turnaround.
 

Cassandra Syndrome

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Joined
Aug 23, 2009
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I'm just throwing this one out there to see what the reaction is like. Today we had DMCW telling us about his german friend laughing up her sleeve at our spinelessness and declaring that any election we might care to have as irrelevant as we would simply do as our betters ordered from now on. In light of this should we not simply declare that all normal financial market rules are suspended. And that the government from here on will be concentrating solely on reducing unemployment. We have €45 billion banked between already sold bonds and the pension reserve fund reduce the defecit to €12billion and we have enough cash to fund ourselves for 4 years. Allow the banks to pay no more than 50% of what they take in in loan repayments off shore. I estimate mortgage payments alone come to around €1billion per month. We are hemorrhaging cash as a nation and it is all going off shore and is of no benefit to Ireland inc. If this cash remained here at worst it could do no harm.

If any other group other than the financial services industry was running around causing the type of damage that these wretches are the army would have been called long ago. I am simply saying we need to do the equivalent. I don't think we can or should get out of paying all of our debts. But some of them were raised in the direst of circumstances and are at excessive rates of interest. We are a sovereign nation and no financial institution can hold a gun to our heads because as a sovereign nation we are in fact the ones with the guns both actual and legal. All off shore creditors need to be told that once a reasonable target in terms of employment numbers and GDP/GNP growth are achieved we will start to re-pay our debts but in the meantime the door is over there.
We roll over €160 Billion of commercial papers a year. So we would need to default on that. The government expenditure is around €65 Billion a year. The government claims to have €20 Billion in cash, but it has over €25 Billion owing to our banks (used to be less than €5 Billion less than 2 years ago). The National Reserve Pension Fund is €24 billion but €7 Billion of that is lost in Bank of Ireland and AIB. More is commited to Anglo.

But you are right, some form of radicle idea is needed to deal with the unservicable debt obligations we have. Its a no win situation extending and pretending anymore, in fact its costly. Too much of our consumption does not re enter the real economy and is leaked out of our ciruclar flow of income through debt obligations to foreign banks.

Debt forgiveness? Debt for equity? Sell the silver?, Sell Cavan?

Its desperate times folks. And the clock is ticking.
 

Cassandra Syndrome

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You're twisting the facts: the recent downgrades have been based on the ratings agencies incredulity towards the government's bank rescue policies, not the fiscal situation. The agencies felt that we could credibly repay the monies being forwarded to us last year, and since then the economy is starting to show some signs of a turnaround.
The economy cannot turnaround with the massive levels of debt repayments going forward most of which are capital outflows. M3 Money Supply is steadily falling and the credit crunch is intensifying.

Holohan thinks that the max toxic debt from the €150 Billion Mortgage sector is 5%. Thats ludricous. The capital base of all Irish Banks is about €20 Billion. What are the toxic loans left in the other commercial and property assets of the Irish Banks bblance sheets above this? Only €30 Billion in max will go to NAMA, what about the other €30 Billion loans in full that didn't make it that were first earmarked? Even with Holohan's dream scenario, anoher €15 Billion Euro of toxic loans from the other sectors will wipe out their equity.

The banks are completely and untterly insolvent and a lot of their loans are owed to foreign banks and the ECB.

Its a catch 22 situation that needs urgent realistic approach to sort out for good.
 

kerdasi amaq

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Aug 24, 2009
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Where did this stupid idea that governments have to borrow money come from?

Robert Mugabe knows what a totally absurd idea that this is.
 

deiseguy

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May 11, 2009
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1,346
Financial martial law could also be called social capitalism.

Social capitalism like this?
The one where "investors" are protected by the poorest taxpayers when their investments go curly. If the bondholders can have their neverneverland why can't we?
 

deiseguy

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The government claims to have €20 Billion in cash, but it has over €25 Billion owing to our banks (used to be less than €5 Billion less than 2 years ago). The National Reserve Pension Fund is €24 billion but €7 Billion of that is lost in Bank of Ireland and AIB. More is commited to Anglo.



Its desperate times folks. And the clock is ticking.
Cas in your opinion how much cash/liquid assets have the Government on hand today irrespective of the liabilities? I know the clock is ticking its ticking at a rate thats eating up €1 billion in borrowed money every 16 days. If we are going to do something radical now is the time if we have the cash on hand. Because the €45 billion figure I heard covers a €12 billion defecit for almost 4 years. Our currency will not be in any difficulty certainly not any difficulty that won't be shared exactly by a lot of other countries. Interest rates are not going to spike. All of our exporters should continue to employ people pay taxes and contribute to the balance of payments. The only downside is that we will be excluded from markets that are intent on crucifying us anyway.

Next question how much money is being paid to the banks on bank loans per month? I estimate mortgage payments are around €1billion per month alone. How much is being paid back on commercial loans plant and machinery finance etc. The vast bulk of this money seems to be going off-shore. I know it usually was but it was also being turned around and sent back straight away. I think that close to 20% of our GDP is being paid off-shore in various bank payments while you are growing rapidly its not such a big deal but now that we are in reverse this is murder.
 
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