I don't understand why the Irish government didn't let its banks go bust. (e.g. Bank of Ireland, Allied Irish) What exactly would be the problem here? Would more damage have been done in the long run by letting nature take its course? (Contagion is a powerful word here.)
Why did the Irish state have to take the bank debt onto its own balance sheet? As a sovereign entity couldn't it just write the debt off, or let the central bank create the money? Is there a Central Bank in Ireland which can "magic up billions" like the Bank of England?
The share price graph looks interesting. Should have bought in Feb.
They allegedly did so because the Irish financial system was about to seize up. They needed to give other banks confidence that Irish banks were good for short term (overnight) lending. So, much the same problem as everyone else at the time.
Elsewhere, there are claims that AIB's Austrian subsidiary was involved in naughty extra-mural activities, which made it imperative that it be dumped cheaply despite its excellent cash reserves. But those claims will never see the light properly, so they're not even worth discussing.
One could speculate either way.
Not really. The government can sell bonds to the banks and get cash in return. But a) the market isn't currently giving much for Irish state bonds, and they're expensive for the government to maintain. b) The government don't really need cash at this precise moment. Their problem, as you suggest above, is the unfeasible guarantee they made in 2008.
Euros can only be issued against the assets of the European Central Banks just as £'s can only be issued against the assets of the BoE. Ireland does not have its own currency.
Banks are businesses and just like any other business they are bust whenever liabilities exceed assets. Of course signs that this situation is in danger of arising are apparent before it materialises. Its at that point that banks seek interventions either by investors or governments.
If they fail of course then they reach the point where they must cease trading. That would be calamitous. Not only would savers lose access to their money (even a government guarantee takes time to put into effect) but worse than that companies would lose their operating cash and reserves. They would not be in any position to pay either their bills or wages. They would soon be following their bank into insolvency.
It's for this reason that governments really have no alternative but to intervene. They intervene either by loaning money (usually at punitive rates of interest) or by buying shares in the bank specially created for the purpose (diluting the holdings of existing share holders) . Ultimately the banks will recover their profitability and the loans will be repaid. The improved fortunes of the bank should enhance the value of its shares which can then be sold back to the market at a profit.
What I don't understand is that earlier in the year the EU carried out stress tests on 91 banks throughout the EU. These were supposed to find out whether any banks were in a precarious enough position to be at risk if there was a further deterioration of the economic situation. Of those, only 7 failed the test, and they were in Germany, Greece, and Spain. None of the Irish banks failed the tests.
So here we are, just a matter of weeks since those test results were released being told that there are huge problems with Irish banks. Just how much can we believe anything we're being told?
there is a bank of ireland...but it's position is not clear...
the irish state don't own the euro currency... the irish state issues debt in euros....but doesn't control the euro...issuing debt is a form of issuing money...
as i'm saying, it is an unclear muddle...that is a central part of the chaos/muddle...
issuing debt in a currency you don't control is very much more dangerous than issuing currency in a currency you do control...
it gets more complicated...but that's a start
1)the banks are part of the washing machine whereby governments exercise their power...
2)the banks are not normal capitalist businesses....banks are heavily controlled by the rulers....the state owns the printing presses..
3)the ecb and the euro are a thorough-going mess...there is no clear or certain control...
4)the banks owe each other money in a complex web...if one goes down, others don't get their money back...then they can't pay either...(here is your word, 'contagion')
Euros can only be issued against the assets of the European Central Banks just as 's can only be issued against the assets of the BoE. Ireland does not have its own currency.
Banks are businesses and just like any other business they are bust whenever liabilities exceed assets. Of course signs that this situation is in danger of arising are apparent before it materialises. Its at that point that banks seek interventions either by investors or governments.
If they fail of course then they reach the point where they must cease trading. That would be calamitous. Not only would savers lose access to their money (even a government guarantee takes time to put into effect) but worse than that companies would lose their operating cash and reserves. They would not be in any position to pay either their bills or wages. They would soon be following their bank into insolvency.
It's for this reason that governments really have no alternative but to intervene. They intervene either by loaning money (usually at punitive rates of interest) or by buying shares in the bank specially created for the purpose (diluting the holdings of existing share holders) . Ultimately the banks will recover their profitability and the loans will be repaid. The improved fortunes of the bank should enhance the value of its shares which can then be sold back to the market at a profit.
Money from thin air, a true account of how banks manipulate the system for their own nefarious greed and I don't buy into the bullshit that the banks were ever in any trouble in this country or any other, it's a scam, smoke and mirrors illusion. I hope you take on board Melanie the piece below and how ALL banks around the world less the Islamic ones operate
Banking is a SCAM at Every Level
Kevin Boyle - No One To Vote For November 20,2010
A doubt or two has been expressed which I have forwarded to Mr O'Dea. His response is posted at the end of this article here*. Also, his evidence is clearly placed before us( see below). This whole saga beautifully reveals the scam at the very heart of all bank lending.
The Personal: Darrell O'Dea
My mother came to over to London from County Longford, father from Co. Donegal. I read a book yesterday 'The Blank Of Ireland', free online here, that made me proud to be Irish.
Darrell O'Dea begins with a tirade of heartfelt rage against the Bank of Ireland and the disastrous effects its parasitical practices had on generations of his own family. He found himself in the familiar 'death grip' ('mortgage') to the tune of hundreds of thousands of Euros (by the end of the process he entertainingly describes).
His beginning was a decision to try to take control of his own affairs rather than continue to roll over and passively comply with the demands of the devouring beast tormenting him.
Darrell did not refuse to pay his mortgage.
Instead he wrote a letter to the Bank containing the following:
We will be happy to pay any financial obligation that we might lawfully owe as soon as we receive the three documents listed below:
1) Validation of the debt- the actual accounting.
2) Verification of your claim against us, i.e. a sworn affidavit or invoice.
3) A copy of the contract binding both parties.
What Darrell understood was that it was highly unlikely that the bank would be prepared to comply with this entirely reasonable request because the very fundamentals of money created as an interest-bearing debt are a FRAUD.Black's Law dictionary (9th Edition)
"A knowing misrepresentation of truth or concealment of a material fact to induce another to act to his or her detriment."
When anyone takes out a mortgage of 100,000 (say), as soon as the mortgage papers are signed the 100,000 is written into the banks books as an ASSET, an asset which can be used by the bank as a basis for future increased lending.
(The fractional Reserve system allows banks to lend approximately 10 for every 1 that exists as assets in their books [can we be surprised that international banks blow huge bubbles that repeatedly 'pop'?]).
So, if the full sum of the mortgage is IMMEDIATELY paid into the bank (which it is) why should anyone be asked to pay interest on a debt that debt never really existed as a loss to the bank in the first place?
This is the whole money-out-of-thin-air banking scam in a nutshell.
Needless to say, the Bank of Ireland failed to forward the requested documents and Mr. O'Dea refused to make his payments until they did so.
The bank employed all the usual steps of legal intimidation, bailiffs etc., but all to no avail. Mr.O'Dea's responses were legally based at every stage and demonstrated to the third parties that their intervention in a private dispute was a contravention of the law. The bailiffs (and others) backed off.
The full story, all taking place between February and October of this year is a highly comical read in places. As Mr. O'Dea's mortgage ballooned because of all the extra fees the banks were charging for their intimidatory actions, he took some aggressive steps of his own. "Darrell O'Dea" registered his name as a trademark and charged the bank 10,000 Euros every time they used it (i.e. every time they sent him a letter).
Near the end of the dispute Mr.'ODea 'owed' the bank in excess of 700,000 Euros and the bank 'owed' Mr.O'Dea 2,032,000 Euros.
The comical thing is that Mr.O'Dea's charges have a sounder legal standing than the bank's.
However, to cut a long story short, the rather excellent outcome was that 'The Bank of Ireland' simply cancelled his mortgage.
Redeemed.
Gone.
Here's the letter they sent him.
What a result!
Darrel you have won my everlasting respect.
I'm sorry if I have 'given away' your story but I think many who will not bother to read an 80-page book might read a short article and get the very important point.
THERE IS A GOOD REASON WHY MONEY-LENDING AT INTEREST WAS BANNED BY CHRISTIAN SOCIETIES FOR THE GREATER PART OF THE LAST TWO MILLENNIA.
1) IT IS A FRAUD AGAINST THE BORROWER.
2) IT DELIVERS MONSTROUS POWER INTO THE HANDS OF THE LENDER.
Our ancestors understood something that we have been conditioned into forgetting.
Please open this pdf, save it and read at your leisure. In principle there is no reason why the criminal banking system cannot be brought down by large numbers of people taking exactly the same actions as Mr. O'Dea. In practice, one wonders if the courts would honestly follow the law.
It should be understood that the principles involved here apply not just to mortgages but to ALL loans taken out with banks.
The loan appears as an asset immediately on the banks books so the charging of interest on a non-loss is, again, fraud. As Mr.O'Dea says in an interview given here (and below), if you write a letter to the bank with which you hold the loan requesting to close your account with that bank and request an invoice for that loan, they will never send you such an invoice.
If they were to send you such a document it appears that their actions move from being mere deception (a civil matter) to extortion (a criminal matter).
(I know..
..you couldn't make it up).
The National: Government Bonds
Again, when our government 'borrows' money, it hands over 'Bonds' to the value of the money created (out of nothing) by the bank. This Bond is immediately written as an asset into the bank's balance sheet.
So, again, the bank gets all its money back the moment it 'lends' it.
Therefore, why do we pay interest (that might take a full century to 'pay back' in the case of the massive sums involved over the last two years). Our children (and maybe another 3 generations after them) will pay back many, many times the sum we didn't really borrow in the first place.
The International: Ireland's (and everyone else's) Current Bail-Out
Speculators, mostly based in the US, are attacking the Euro to keep the dollar strong. The financial mafia have decided that Ireland's banks needs to be 'bailed-out' again. It is possible to argue that Ireland's balance sheets are little different from many other European countries but common wisdom created by the political/media class is that Ireland must take the money to prevent collective Euro disaster. It will not stop there. The bail-outs will move from one country to another until every country is irreversibly in the pitiless and iron grip of the global central banks.
These 'loans' do not go to the countries involved, they go to the banks that hold the various national debts of those countries.
THIS WHOLE SCAM IS SIMPLY A TRANSFER OF WEALTH FROM THE POOR TO THE RICH. Wealth and power is being transferred to a tiny oligarchy before our eyes.
READ THE PROTOCOLS OF ZION. EVERYTHING THAT IS HAPPENING IS IN THERE.
These people already own us, as current events demonstrate, but what chance do future generations have when every aspects of their lives, and therefore their thinking too, will be controlled (through the media and the education system) to serve the interests of those who OWN EVERYTHING.
Start demanding invoices for debts.
Bring down the banks.
Start thinking about realistic alternative systems like 'Social Credit' or 'return to the greenback'.
Better that savers lose their deposits than we throw our children helpless into the fiery pit that these international criminals have prepared for them.
Kevin,
Respectfully; nobody is here or exists to give You or anyone else re-assurances. That sort of thinking lets you and everyone else off the responsibility hook.
The sceptics you mention, have through their own fears, pressurised you into removing your work on this subject matter. Their fear has you suppressing yourself . ironic or what?
Ask your Lawyer friend if he has even stood his ground in court and challenged a bank or a judge on Contract or Constitutional Law or on the basis of the European Convention of Human Rights?
You already know the answer to that.
Who knows why the bank let this one go. Seriously: Why not ring up the bank of Ireland? Ask to speak to Richie Boucher, Finbarr Murphy or Aine McInerney, ask them directly why they let this fish get away ?
All the best for now, By: Darrell: of the Ancient Clan O'Deaghadh
God Pinkman you're daft to the point of depression!
One would think that after all these years on this earth you would have learned something.
Anyway your £100000 asset is used to balance £100000 worth of liabilities.
The £100000 lent originally comes from customers deposits. Deposits represent liabilities since at some time in the future depositors are going to demand their money bank.
The loan created by the deposit represents an asset since at some time in the future that loan is going to be repaid back to the bank.
[Homework: Learn the difference between an asset and a liability which are opposites]
Banks also hold reserves. These bridge any gap there might be between the aggregate values of liabilities over assets.
Money is a means of exchange and repository of value and as such passes from hand to hand.
[Now learn the difference between cash and a debt. It's very simple. You cannot spend a debt!]
The £100000 borrowed in this case (creating the debt) will be passed onto the house seller but the debt will stay behind to be discharged usually over time. The £100000 will then presumably be with the sellers bank. He has exchanged his house for £100000 cash. The £100000 is now available to be lent to someone else and the sequence repeated.
This is no different from your employer buying your services for cash (wages) and then you going along an swapping that same cash for a basket of groceries.
Cash passes to and fro between the banking system and individuals as well as from individual to individual as transactions are negotiated. Debts remain exactly where they are with the debtor until discharged when of course they simply disappear.
Banks can and do create debt. They can't and don't create cash.
Your story is bullshit.
When you take out a mortgage or negotiate any other form or credit from a bank you enter into a credit agreement enforceable at law. You get a signed copy the bank keeps one. You cannot duck out of this obligation by making yourself a nuisance. If you do not meet your part of the agreement the bank will take action. In the case of a mortgage they will foreclose and unless you pay up all you owe including interest they will take your house. Even in the case on an unsecured loan a distressed creditor can apply to a court for an order to sell your assets up to the value of the loan plus the cost of recovering it. In extreme circumstances, this could even include your house.
1)the banks in modern states are creatures of those states... that is socialism, not capitalism
2)the ecb (the euro central bank) is highly anomalous...it has no clear structure or control
Banks need the Government and Governments need the banks - thus it has ALWAYS been . Socialism of the most basic kind . Ergo, Capitalism depends on Social;ism for its vey existence!
Hmmm! Are you sure about creating cash? The Northern Irish bank, the Northern Bank seems to do so. They have their own notes. As does the Ulster Bank, the Bank of Scotland and the RoI banks as well.
Heh!
Sadly, this is so. Such a pity that bankers are not, like gamblers, which they of course are, liable for the debts that they incur due to their own bad judgement. The only time that banks are held fully responsible for a bad debt seems to be when the make loans to 3rd World countries and get let down. However, it is always the customers of said banks who pay for the banking errors in the end, due to high tarrifs and loan charges being imposed. Very unfair.
Issuance of banknotes outside of England by the 7 authorised banks used to be regulated by the Stamp Office (since 1845) under the direction of the BoE. In 2009 the power was placed directly with the BoE Similarly with regard to notes issued in the Channel Islands. I.O.M Gibraltar and the Falkland Islands, St Helena and Tristan da Cuhna.
The Bank of Bermuda issues a Bermudan dollar which is pegged par with the $US
Except that banks never would lend money to third world governments unless such loans were underwritten by the government. For gamblers, banks certainly seem to edge towards the one way bet.
The biggest losses banks suffer are though personal and commercial lending and this is reflected in the rates they charge.
God Pinkman you're daft to the point of depression!
One would think that after all these years on this earth you would have learned something.
Anyway your 100000 asset is used to balance 100000 worth of liabilities.
The 100000 lent originally comes from customers deposits. Deposits represent liabilities since at some time in the future depositors are going to demand their money bank.
The loan created by the deposit represents an asset since at some time in the future that loan is going to be repaid back to the bank.
[Homework: Learn the difference between an asset and a liability which are opposites]
Oh dear you're just spouting the same s**te the banks want you too, you've been caught hook line and sinker, did you read any of that, seems you've glossed over it best of luck but I won't be back to hold your hand as I know how the banks operate, you just regurgitate the same tired BS they do, as I've said it's all smoke and mirrors, they don't have enough deposits from the likes of you and I to payout for mortgages etc that alone should tell you it's a scam
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