Ireland have a bank run on their hands and they now do not have much time in which to stop it running out of control.
Yesterday I argued that Ireland was resisting a bail out because it does not want to be forced to raise its corporation tax. If Ireland is forced to do it, then all those foreign corporations who have headquartered themselves in Ireland will leave. And when they do they will take their corporate cash flow with them adding to what is now officially a run on Ireland’s banks.
According to the Irish Independent, in the last three months Bank of Ireland reported corporations had withdrawn €10 billion and Allied Irish Bank was similar. Today Irish Life and Permanent said its corporate customers has withdrawn 600m Euros which is 11% of their deposit base. No financial institution can withstand that amount of blood loss for long. Once your depositors start wanting their money back you can be sure the bond holders will not lend you another brass farthing.
According to Reuters Breakingview, who have been up all night with their calculators, to ‘rescue’ Ireland’s three big insolvent banks, Anglo, Allied and Bank of Ireland, will require €100 billion. Which means the Irish people are barely half way there. Ireland CANNOT in this universe or any nearby ones, afford this amount.
Ireland has a simple choice. Either they admit that the big three banks ARE TERMINALLY INSOLVENT or Ireland itself becomes insolvent in a stupid, doomed and traitorous attempt to deny reality. I say traitorous because if the cabal of wealthy conspirators continue to run Ireland for their personal profit, they will ruin the lives of every other Irish man woman and child.
I liked what I read somewhere describing it as more of a "bank walk" than a run.
That's about the only non-tragic comment I can make. Seeing what comes next, as Ireland is pushed to the brink, can either set a precedent (we will crush & enslave you, & you, & you) or set other debtor nations scrambling for more creative solutions. Not sure where the political will would come from for the latter. We need a Euro country to be having elections soon so an anti-austerity party can attempt a takeover & stand up to the bullies.
Fat chance.
Feeling much like you are . I need some sleep. Maybe it'll all be fine in the morning?
I have often argued that the sovereign nation state has been far too successful as a power-wielding institution, to the detriment of the planet and a lot of the newer and poorer states that joined the game too late and thus had no say in making the rules.
But now, the sovereign state itself has been superceded by the less visible financial powers that reach into every corner of the globe. This is far more dangerous. We don't even know who is calling the tune, but we have to dance.
What happens to our politicians when they come into power? Are they hooked up to some huge machine that sucks out their brains and replaces them with traitorous, servile morons?
If I loaned my feckless, jobless brother $1000, knowing with some degree of certainty that he would be unable to pay me back, could I go to his responsible neighbours and friends and demand that they repay his debts to me (plus interest)?
They would laugh at me, call me a madman and rightly run me off their property. And yet that is what the Irish people are being asked to do by the moron servants of the all-powerful, and darkly opaque, financial powers that sucked out our politicians brains.
NEWSFLASH – LENDERS HAVE RESPONSIBILITIES TOO.
This all sounds like a grotesque fairytale with an unhappy ever after ending. Well, the Brother's Grim are alive and well and playing the fiddle in Dublin tonight. Sadly it's not in O'Donohue's Pub, where they'd be ran from the premises by the locals, but in Merrion St. where our leaders tug their forelocks to them.
Great work Golem, thank you.