European officials: No bailout yet for Ireland

Here is today's dirty little secret. A bank fulfills its economic role when it creates the money and makes the loan. Whether or not that loan is paid back (ie. the money loaned exceeds the underlying collateral) is a private contractual matter between the borrower and lender. Who takes the loss is of no importance to anybody else.

Any country who feels they must "rescue" the bank, or any country who has to rescue the bank because they have allowed the bank to strap a bomb around their chest and point a gun at the country's head, is a country that has put a noose around their neck and jumped off the chair.

Ireland is just the latest canary. Get ready to jump everybody.

Ireland belongs to that group of counties known as PIGS - Portugal, Irleand, Greece & Spain. You can expect to see more of these countries coming forward needing bailouts soon too. Had their snout in the trough too long.

@asahi man- the countries are not needing bailouts. The banks that lent money to them and the banks in those countries are. All the money they receive will then be given to those banks.

In Ireland, 100% of income tax money will be given to the banks for the next 6 years. Insanity.

BS. Ireland will get its bailout, just like Greece.

The show will go on, until finally the net payer (Germany) is out of money. That point has not been reached yet.

No offense to WilliB but he has a misunderstanding that he shares with 99.9999% of the population. In the post-1971 fiat currency, no reserve, no gold standard world, nobody runs out of money. Money is not a "thing" so you can't run out of it. What they run out of is borrowers. The ability to conjure up money is unlimited as long as you can find someone to take on the debt and promise to repay. All money is debt.

Now the ECB could handle the Irish problem very easily. They just calculate how much money Ireland needs and give it to them. A gift. Then Ireland pays of the creditors, the banks get their money and everybody goes home happy. Of course, they can't do that because that would expose the system for the fraud it is. Once people realize that money is just a rabbit pulled out of a hat, and that people can get insanely rich for pulling rabbits out of their hats while other people have to struggle day to day, the game will be over. Revolution time!!!

It is maybe the biggest catch 22 in history. The solution to the monetary system's problem would destroy the system, so they will have to let the system destroy itself in order to save it.

The euro will get even cheaper in the near future. good for us in Japan!

If Europe cut its bloated welfare budgets then it would help.

GJDailleult:

" No offense to WilliB but he has a misunderstanding that he shares with 99.9999% of the population. In the post-1971 fiat currency, no reserve, no gold standard world, nobody runs out of money. "

It is not about literally "running out" of money. That, of course, is not possible. In Weimar Republic and in today Zimbabwe everybody has plenty of "money", even if they are starving.

By "running out of mony" of course I meant transfer so much of its wealth that it destroys its own economy.

Europe does not have a welfare budget, individual European countries do. And, yes, are cutting them, savagely in some cases. Now we'll have a generation deprived of decent education, health care, and pensions, all in the name of bailing out reckless, greedy bankers. Well done.

MrRoadrage:

" Europe does not have a welfare budget, individual European countries do. And, yes, are cutting them "

No. Not "they". The European economies are very different, only they are forced into the procrusted bed of common currency, which means that either the weak economies will go bankrupt, or have to be bailed out by the strong ones. In a sane world, normal exchange rates would be provide a safety valve, but that has been taken away by the Euro and and the ECB.

So, right now, the strong economies (= Germany, basically) are transferring wealth to the weak ones. But this can only go so far. At the lastest when Spain turns up at the PIIG trough, the limit will be reached. And everybody will be worse off for it.

Good job, Brussels.

its funny how things like economics move in cycles..the same things repeat over and over again.in the early 80s ireland had soaring immigration and a basket case of an economy on the brink of bankrupcy.this time around following the boom of the celtic tiger its worse as the government enacts draconian austerity measures in budgets designed to claw back billions to cover mounting debts.the international bond markets wont be lending to ireland in the coming year after their credit ratings have been cut and with germany anxious to protect its own taxpayers first.This money is just needed by ireland for the day to day running of the country.Ireland has no other option but to accept a disastrous and extremely costly IMF/EU bailout.they have gone past the point of no return.

Ireland was praised by conservatives for the past decade as a very low-tax, low-regulation haven that should be ideal for businesses to prosper.

And yet the Irish housing bubble, fostered by insufficiently regulated banks, has threatened to bring the whole thing down in a heap.