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Monday, November 29, 2010

Ireland choosing debt bondage for its citizens

In a fair game, there are winners and losers. The people who are winners and losers are the participants of that game. For example, in a game of chess, the two people playing CHOOSE to participate in the game, and therefore expect one will be a winner and one will be a loser. What makes it competitive is both go in expecting to win. When the game resolves, there can only be one winner.

When bond holders and investors decided to participate in investment "game", all participants I am sure expected to make money. Historically, companies may go bankrupt or undergo other unforeseen financial stress, resulting in those investors either meeting their expectations of a win or a loss.

What Ireland has decided to do, is to pick a third party to be a loser. The market participants where facing a catestrophic loss as over-leveraged private banks where on the path for default. Ireland has decided to have a sector not directly choosing to invest in the banks, the Irish citizens, to take the loss. The result is, those who invested in banks, win, there is no loser. The meta message is, there will never be a loser for market participants. The Irish citizens, many who cannot afford to make investments in bank securities, now must pay for the losses.

The result will be decades of debt bondage for all Irish citizens who decide to remain in Ireland. This diminishes their freedom, and is a blow to democracy. America has been taking similar steps to make the US citizens pay for private bank losses. Already trillion(s) have gone to private institutions through Fannie Mae and Freddie Mac, and FDIC insured losses, as well as Federal Reserve Bank purchases, and direct government subsidies. As a percent of GDP however, Ireland is in a completely different position than the USA. My prediction, assuming the Irish decide to pay this private debt of in the decades to come, is a return to the old Ireland, with high unemployment, and being regarded as the third world country of old Europe.

And if the citizens don't stand up for their interests, then this is exactly what they deserve, debt bondage.

A good video of Parliamentary member talking about the European union is a failure, and countries like Ireland is only the tip of the iceberg. The Euro is not better off than America, and the world is just discovering this. This blog stated in January 2010 would be the year nation destabilization begins, and re-iterated the European Union is headed for failure in May, when Europe decided to make private losses part of public debt. As a tribute to my friend Conrad "I'll wait for the world to catch up" to reality.



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