Coast Guard Documents Fourth Keystone Leak

From:  Blog Keloland

Posted: Wednesday, December 8, 2010 at 8:22 am
By: Cory Allen Heidelberger

 

Check that: it’s apparently not the pipeline we have to worry about; it’s those darn leaky pump stations.

Carrie La Seur of Plains Justice gets the scoop on the fourth documented leak along TransCanada’s Keystone I tar sands pipeline. According to incident report #951480 filed by the U.S. Coast Guard’s National Response Center, Keystone Pump Station 24 near Hartington, Nebraska, sprang a leak. The report says, “caller stated a check valve on a pressure transmitter located on the suction side of a line pump stuck open releasing 5-10 gallons of crude oil onto the ground.

The leaks must be working their way south. Check out TransCanada’s Keystone system map:

Map of Documented Keystone I Pipeline Pump Station Leaks
May–August 2010 (click image to enlarge)

)

The previous three Keystone leaks happened at the Carpenter Pump Station in Beadle County in May, then the Roswell Pump Station in Miner County in June, then the Freeman Pump Station on August 10. Was the pipeline passing a stone or something?

Once again, let us review TransCanada’s June 2006 pipeline risk assessment:

…the estimated occurrence intervals for a spill of 50 barrels or less occurring anywhere along the entire pipeline system is once every 65 years, a spill between 50 and 1,000 barrels might occur once in 12 years; a spill of 1,000 and 10,000 barrels might occur once in 39 years; and a spill containing more than 10,000 barrels might occur once in 50 years. Applying these statistics to a 1-mile section, the chances of a larger spill (greater than 10,000 barrels) would be less than once every 67,000 years [ENSR Corporation for TransCanada, "Pipeline Risk Assessment and Environmental Consequence Analysis," Document No. 10623-004, June 2006].

Given four incidents in three months, we are now in the clear on small leaks for 260 years. Thanks for getting those out of the way, TransCanada!

Calls Grow to Shut Down the Pegasus Pipeline for Good

From:  The New York Times

By JIM MALEWITZ

Crude oil in a drainage ditch in Arkansas after an ExxonMobil spill there in March.

Jacob Slaton / Reuters

 

November 9, 2013

GUN BARREL CITY — For more than eight decades, Jim Howell was hardly one to cause a political ruckus. But this spring, he realized that a crude-oil superhighway ran through his backyard, just two feet below his patchy lawn and seven feet beyond a newly built porch.

“At first I felt guilty and stupid,” Mr. Howell said about discovering that the 20-inch-wide pipeline passed so close to his compact brick house.

Guilt became alarm as he read more about it and as people from ExxonMobil, its operator, showed up to add a row of yellow-and-black- striped warning markers. The pipeline, Pegasus, was the same one that ruptured about 280 miles northeast in March, spewing at least 210,000 gallons of heavy Canadian crude into neighborhood streets in Mayflower, Ark.

MORE

Prepare For Tough Times If Your Job Has Anything To Do With Real Estate Or Mortgages

From:  The Economic Collapse

By Michael Snyder, on September 11th, 2013

 

If you have a job that involves building homes, buying homes, selling homes or that is in any way related to the mortgage industry, you might want to start searching for alternate employment.  Seriously.  Interest rates are starting to rise dramatically, and mortgage lenders such as Bank of America, Wells Fargo and JPMorgan Chase are all cutting thousands of mortgage-related jobs.  Last week, mortgage refinance activity plunged to the lowest level that we have seen since June 2009 and total mortgage activity dropped to the lowest level since October 2008.  Unfortunately, this is only the beginning.  Mortgage rates closely mirror the yield on 10 year U.S. Treasuries, the the yield on 10 year U.S. Treasuries has nearly doubled since early May.  But it is still only sitting at about 3 percent right now.  As I have written about previously, it has a ton of room to go up before it hits "normal" historical levels, and so do mortgage rates.  As I noted the other day, some analysts believe that the yield on 10 year U.S. Treasuries is going to hit 7 percent eventually.  If that happens, mortgage rates will be more than double what they are today.  And we have already seen the average rate on a 30 year fixed rate mortgage go from 3.35 percent in May to 4.57 percent last week.  If interest rates continue to rise we could be heading for a "housing Armageddon" that will make the last housing crash look like a Sunday picnic.

The mini-housing bubble that we have been enjoying for the last couple of years is coming to an abrupt end.  It doesn't matter what the mainstream media is telling you about a "sustainable" housing recovery.  Just look at how the big mortgage lenders are behaving.  They know the gig is up.  According to Bloomberg, Bank of America has just announced that they will be eliminating 2,100 mortgage-related jobs...

Bank of America Corp., the second-largest U.S. lender, will eliminate about 2,100 jobs and shutter 16 mortgage offices as rising interest rates weaken loan demand, said two people with direct knowledge of the plans.

Would they be doing that if we were really heading into a "sustainable housing recovery"?
And Wells Fargo and JPMorgan Chase are also both eliminating thousands of mortgage-related jobs...

Mortgage lenders are paring staff as higher interest rates discourage refinancing and cast doubt on how long the housing market rebound will last. Wells Fargo & Co., the biggest U.S. home lender, plans more than 2,300 job cuts, and JPMorgan Chase & Co. may dismiss 15,000.

Would they be doing this if they thought that brighter days were ahead?

Of course not.

In fact, Well Fargo just announced that it expects to make 30 percent fewer home loans this quarter because of rapidly rising interest rates.

It's over folks.

The mini-housing bubble that the mainstream media has been hyping so much is over.
If your job has anything to do with real estate or mortgages, it is time to start thinking about a career change.

This is especially true if your job is related to refinancing mortgages.  All of the smart people have already refinanced.  As rates continue to rise rapidly, the only ones that will be refinancing are really stupid people.  According to Zero Hedge, mortgage refinance activity has already dropped by a whopping 70 percent since early May...

For the 16th of the last 18 weeks, mortgage refinance activity plunged (dropping 20% this week alone). Since early May, when the dreaded word "Taper" was first uttered, refis have collapsed over 70%. With mortgage servicers and providers large and small laying people off, it seems hard for even the most egregiously biased bull to still suggest that the housing recovery is sustainable.

And this rise in interest rates is just getting started.  The Federal Reserve has not even begun to "taper" yet.  Once that starts happening, the consequences could be quite dramatic...

“In early 1994, when the U.S. recovery gained strength, the Fed started a tightening cycle and bond markets crashed not only in the U.S. but also around the world,” European Central Bank Executive Board member Joerg Asmussen said on Tuesday.
“If spillovers were large in 1994, we can expect them to be even larger today in an even more deeply interconnected world,” he added in the text of a speech for delivery in Brussels.

Of course when the Federal Reserve "tapers" their quantitative easing it won't really be "tightening" as much as it will be slowing down the pace at which they are recklessly creating tens of billions of dollars out of thin air.  But the effect will be similar to what we saw back in 1994.
As interest rates rise, it will become much more expensive to buy a home and much more difficult to sell a home.  To give you an idea of how dramatically interest rates can affect housing affordability, I wanted to share some numbers from one of my previous articles...

A year ago, the 30 year rate was sitting at 3.66 percent.  The monthly payment on a 30 year, $300,000 mortgage at that rate would be $1374.07.
If the 30 year rate rises to 8 percent, the monthly payment on a 30 year, $300,000 mortgage at that rate would be $2201.29.
Does 8 percent sound crazy to you?
It shouldn't.  8 percent was considered to be normal back in the year 2000.

Are you starting to get the picture?

As interest rates go up, home prices will have to fall.  Otherwise, nobody will be able to afford them.

In the end, we could end up with tens of millions more homeowners that are substantially "underwater" on their mortgages.

So who is to blame?

The Federal Reserve of course.

They created this bubble by forcing interest rates down to record low levels.

At some point it was inevitable that interest rates would start reverting back to more "normal" levels, and that "adjustment" is going to be immensely painful for the U.S. economy.

As we saw back in 2008 and 2009, when the housing industry suffers the entire economy suffers.

And the higher that interest rates go, the more suffering there will be.

So let us hope and pray that interest rates do not go any higher, but let us also start preparing for the very worst.

The Big Problem With Calling People "Conspiracy Theorists"

From:  Esquire 

By Josh Ozersky

What happens when smart writers choose to simply fall in line?

Carl Mydans/Getty Images

Adam Gopnik, The New Yorker's resident sage and polymath, dilated at some length on the cultural legacy of JFK's assassination. The piece was uncharacteristically lazy and weak-minded, a rare but complete relaxation of Gopnik's usually vigorous mind. Gopnik is about as smart as they come, but the piece is dumb, little more than one long scoff. Insofar as it engages in the debate over JFK's demise at all, it relies on a handful of weak debate points you've heard many times before. And there's a reason you've heard them before. They were all originally crafted for public use by the CIA.
Gopnik, like nearly all of his fellow archons in the journalism business, has an unshakable faith in the consensus view of JFK's assassination. As far as he is concerned, the facts of the case are in plain view and that only “conspiracy theorists” would think otherwise. His breezy, shallow essay urbanely hectors “the world of conspiracy buffs.” No argument on his part is required; these “obsessives” discredit themselves. If they were legit, he seems to think, they would have free run of The New Yorker's pages, instead of lurking in “assassination forums and chat rooms.”  Brilliant though he may be, Gopnik is in this respect every bit as dumb as any hedge fund manager or surly celebrity; like them, he thinks his place at the top is a testimony to his influence, rather than the cause of it. (His two essays in this issue amount to 11 full pages.) Big-bore public intellectuals tend to think of themselves as floating above the fray. But really, they're no better or worse than the bloggers and cranks they despise. They only think otherwise because, as another, more cynical New Yorker writer, George Trow, put it, “the referee always wins.”
Take JFK's murder. Gopnik mentions Lamar Waldron and Thom Hartman's exhaustive study of the assasination, Legacy of Secrecy—a gigantic tome utterly devoid of drama, style, or speculation. The book is rigorous in its research and citation, but Gopnik just just shrugs it off. The fact that Legacy of Secrecy presents a sustained argument supported with hundreds of White House, FBI, and other documents attained via the Freedom of Information Act, not to mention countless interviews of living persons, just doesn't matter. Waldron and Hartman are “conspiracy theorists,” too, and so not worth paying attention to.
“Conspiracy theorists” is a phrase Gopnik, to his discredit, uses without quotation marks; it's a loaded term, as he surely knows. He might be less aware that it was, at least in its current weaponized form, an invention of the CIA. That body, when widespread skepticism of the Warren Commission's findings first emerged, sent a memo, number 1035-960, to all its bureaus giving specific instructions for “countering and discrediting the claims of the conspiracy theorists.” This naturally meant using assets such as “friendly elite contacts (especially politicians and editors)” who could be provided with ready-made talking points, magic bullets in their own right. They continue to be in regular use today, consciously or not, even in the pages of The New Yorker. For instance:
Memo 1035-960: “Conspiracy on the large scale often suggested would be impossible to conceal in the United States.”
Gopnik: “No matter how improbable it may seem that all the hard evidence could have been planted, faked, or coerced—and that hundreds of the distinct acts of concealment and coercion necessary would have been left unconfessed for more than half a century.”
Memo 1035-960: “Critics have often been enticed by a form of intellectual pride: they light on some theory and fall in love with it.”
Gopnik: “It is, in other words, possible to construct an intricate scenario that is both cautiously inferential, richly detailed, on its own terms complete, and yet utterly delusional.”
Memo 1035-960: “The Warren Commission made as thorough an investigation as humanly possible.”
Gopnik: “The first truth is that the evidence that the American security services gathered, within the first hours and weeks and months, to persuade the world of the sole guilt of Lee Harvey Oswald remains formidable: ballistics evidence, eyewitness evidence, ear-witness evidence, fingerprint evidence, firearms evidence, circumstantial evidence, fibre evidence.”

Gopnik doesn't need a memo to parrot this line. He picked it up along the way as a consensus pundit. Such figures tend to be incautious about their assumptions, because they think they always know the score. (They keep it, after all.) They're always right until they're not; and then they knew it all along. Talk about your unreliable narrators! Centrist gasbags from Walter Lippman on down have been duped more times than Colonel Klenk. Look at the comedy they've played just in recent years. According to them, only nuts thought that the government faked the evidence behind the Iraq War. Only tin-hat wackos could believe that, get this, two billionaire brothers were secretly conspiring to fund the overthrow of the government. Or that giant banks were deliberately short-selling the housing market. Or that the NSA was reading everybody's email. The consensus has a way of changing, but not soon enough, and its inhabitants never, ever learn their lesson. As I write, the Fukushima nuclear reactors in Japan are pouring millions of gallons of radioactive seawater into the Pacific, to the point that coastal animals in Alaska have fur loss and open sores and vast stretches of ocean have turned into biological deserts. It's a huge story, but they never got the memo. Or, maybe, they did.

Josh Ozersky is a James Beard Award-winning food writer, B-list food personality, and noted polymath and deviant. The founder of Meatopia, he will answer all your questions on meat, food, food writing, relationships, restaurants, or cooking. He is also available for private tutorials.

CBS News: Fukushima Radiation Confirmed on Alaska's Coast

From:  CBS News 

Scientists concerned about lack of monitoring plan

 

Radiation from the Fukushima nuclear plant in Japan has reached parts of the north and west coasts of Alaska.

Scientists at the University of Alaska are concerned about radiation leaking from Japan's damaged Fukushima nuclear plant, and the lack of a monitoring plan.

Some radiation has arrived in northern Alaska and along the west coast. That's raised concern over contamination of fish and wildlife. More may be heading toward coastal communities like Haines and Skagway.

Douglas Dasher, a researcher at the University of Alaska Fairbanks, says radiation levels in Alaskan waters could reach Cold War levels.

"The levels they are projecting in some of the models are in the ballpark of what they saw in the North Pacific in the 1960s," he said.

John Kelley, a professor emeritus at the University of Alaska Fairbanks, says he's not sure contamination will reach dangerous levels for humans but says without better data, who will know? 

"The data they will need is not only past data but current data, and if no one is sampling anything then we won't really know it, will we?

"The general concern was, is the food supply safe? And I don't think anyone can really answer that definitively."

He says much of the monitoring is being done pro bono by universities, NGOs and state organizations.

Ireland: Ground Zero for the Austerity-driven Asset Grab. The Bank Guarantee That Bankrupted Ireland

From:  Global Research 

by Ellen Brown

The Irish have a long history of being tyrannized, exploited, and oppressed—from the forced conversion to Christianity in the Dark Ages, to slave trading of the natives in the 15^th and 16^th centuries, to the mid-nineteenth century “potato famine” that was really a holocaust. The British got Ireland’s food exports, while at least one million Irish died from starvation and related diseases, and another million or more emigrated.

Today, Ireland is under a different sort of tyranny, one imposed by the banks and the troika—the EU, ECB and IMF. The oppressors have demanded austerity and more austerity, forcing the public to pick up the tab for bills incurred by profligate private bankers.

The official unemployment rate is 13.5%—up from 5% in 2006—and this figure does not take into account the mass emigration of Ireland’s young people in search of better opportunities abroad. Job loss and a flood of foreclosures are leading to suicides. A raft of new taxes and charges has been sold as necessary to reduce the deficit, but they are simply a backdoor bailout of the banks.

At first, the Irish accepted the media explanation: these draconian measures were necessary to “balance the budget” and were in their best interests. But after five years of belt-tightening in which unemployment and living conditions have not improved, the people are slowly waking up. They are realizing that their assets are being grabbed simply to pay for the mistakes of the financial sector.

Five years of austerity has not restored confidence in Ireland’s banks. In fact the banks themselves are packing up and leaving. On October 31^st, RTE.ie reported that Danske Bank Ireland was closing its personal and business banking, only days after ACCBank announced it was handing back its banking license; and Ulster Bank’s future in Ireland remains unclear.

The field is ripe for some publicly-owned banks. Banks that have a mandate to serve the people, return the profits to the people, and refrain from speculating. Banks guaranteed by the state because they are the state, without resort to bailouts or bail-ins. Banks that aren’t going anywhere, because they are locally owned by the people themselves.

Ireland was the first European country to watch its entire banking system fail.  Unlike the Icelanders, who refused to bail out their bankrupt banks, in September 2008 the Irish government gave a blanket guarantee to all Irish banks, covering all their loans, deposits, bonds and other liabilities.

At the time, no one was aware of the huge scale of the banks’ liabilities, or just how far the Irish property market would fall.

Within two years, the state bank guarantee had bankrupted Ireland.  The international money markets would no longer lend to the Irish government.

Before the bailout, the Irish budget was in surplus. By 2011, its deficit was 32% of the country’s GDP, the highest by far in the Eurozone. At that rate, bank losses would take every penny of Irish taxes for at least the next three years.

“This debt would probably be manageable,” wrote Morgan Kelly, Professor of Economics at University College Dublin, “had the Irish government not casually committed itself to absorb all the gambling losses of its banking system.”

To avoid collapse, the government had to sign up for an €85 billion bailout from the EU-IMF and enter a four year program of economic austerity, monitored every three months by an EU/IMF team sent to Dublin.

Public assets have also been put on the auction block. Assets currently under consideration include parts of Ireland’s power and gas companies and its 25% stake in the airline Aer Lingus.

At one time, Ireland could have followed the lead of Iceland and refused to bail out its bondholders or to bow to the demands for austerity. But that was before the Irish government used ECB money to pay off the foreign bondholders of Irish banks. Now its debt is to the troika, and the troika are tightening the screws.  In September 2013, they demanded another 3.1 billion euro reduction in spending.

Some ministers, however, are resisting such cuts, which they say are politically undeliverable.

In The Irish Times on October 31, 2013, a former IMF official warned that the austerity imposed on Ireland is self-defeating. Ashoka Mody, former IMF chief of mission to Ireland, said it had become “orthodoxy that the only way to establish market credibility” was to pursue austerity policies. But five years of crisis and two recent years of no growth needed “deep thinking” on whether this was the right course of action. He said there was “not one single historical instance” where austerity policies have led to an exit from a heavy debt burden.

Austerity has not fixed Ireland’s debt problems. Belying the rosy picture painted by the media, in September 2013 Antonio Garcia Pascual, chief euro-zone economist at Barclays Investment Bank, warned that Ireland may soon need a second bailout.

According to John Spain, writing in Irish Central in September 2013:

The anger among ordinary Irish people about all this has been immense. . . . There has been great pressure here for answers. . . . Why is the ordinary Irish taxpayer left carrying the can for all the debts piled up by banks, developers and speculators? How come no one has been jailed for what happened? . . . [D]espite all the public anger, there has been no public inquiry into the disaster.

Bail-in by Super-tax or Economic Sovereignty?

 In many ways, Ireland is ground zero for the austerity-driven asset grab now sweeping the world. All Eurozone countries are mired in debt. The problem is systemic.

In October 2013, an IMF report discussed balancing the books of the Eurozone governments through a super-tax of 10% on all households in the Eurozone with positive net wealth. That would mean the confiscation of 10% of private savings to feed the insatiable banking casino.

The authors said the proposal was only theoretical, but that it appeared to be “an efficient solution” for the debt problem. For a group of 15 European countries, the measure would bring the debt ratio to “acceptable” levels, i.e. comparable to levels before the 2008 crisis.

A review posted on Gold Silver Worlds observed:

[T]he report right away debunks the myth that politicians and main stream media try to sell, i.e. the crisis is contained and the positive economic outlook for 2014.

. . . Prepare yourself, the reality is that more bail-ins, confiscation and financial repression is coming, contrary to what the good news propaganda tries to tell.

A more sustainable solution was proposed by Dr Fadhel Kaboub, Assistant Professor of Economics at Denison University in Ohio. In a letter posted in The Financial Times titled “What the Eurozone Needs Is Functional Finance,” he wrote:

The eurozone’s obsession with “sound finance” is the root cause of today’s sovereign debt crisis. Austerity measures are not only incapable of solving the sovereign debt problem, but also a major obstacle to increasing aggregate demand in the eurozone. The Maastricht treaty’s “no bail-out, no exit, no default” clauses essentially amount to a joint economic suicide pact for the eurozone countries.

. . . Unfortunately, the likelihood of a swift political solution to amend the EU treaty is highly improbable. Therefore, the most likely and least painful scenario for [the insolvent countries] is an exit from the eurozone combined with partial default and devaluation of a new national currency. . . .
The takeaway lesson is that financial sovereignty and adequate policy co-ordination between fiscal and monetary authorities are the prerequisites for economic prosperity.

Standing Up to Goliath

 Ireland could fix its budget problems by leaving the Eurozone, repudiating its blanket bank guarantee as “odious” (obtained by fraud and under duress), and issuing its own national currency. The currency could then be used to fund infrastructure and restore social services, putting the Irish back to work.

Short of leaving the Eurozone, Ireland could reduce its interest burden and expand local credit by forming publicly-owned banks, on the model of the Bank of North Dakota. The newly-formed Public Banking Forum of Ireland is pursuing that option. In Wales, which has also been exploited for its coal, mobilizing for a public bank is being organized by the Arian Cymru ‘BERW’ (Banking and Economic Regeneration Wales).

Irish writer Barry Fitzgerald, author of Building Cities of Gold, casts the challenge to his homeland in archetypal terms:

The Irish are mobilising and they are awakening. They hold the DNA memory of vastly ancient times, when all men and women obeyed the Golden rule of honouring themselves, one another and the planet. They recognize the value of this harmony as it relates to banking. They instantly intuit that public banking free from the soiled hands of usurious debt tyranny is part of the natural order.
In many ways they could lead the way in this unfolding, as their small country is so easily traversed to mobilise local communities.  They possess vast potential renewable energy generation and indeed could easily use a combination of public banking and bond issuance backed by the people to gain energy independence in a very short time.

When the indomitable Irish spirit is awakened, organized and mobilized, the country could become the poster child not for austerity, but for economic prosperity through financial sovereignty.

Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her blog articles are at EllenBrown.com.

Killing Children: America’s Undeclared Drone War on the People of Pakistan Economic Coup d’Etat: Debt and Deficit as Shock Therapy The New Dominatrixes of Empire: Hey, Hey NSA: How Many Leaders Have You Spied On Today? Netanyahu Dirty Tricks: Israel Attacks Syria and Gaza Al Qaeda Rebels Supported by Uncle Sam: US, Allies to Blame for Chemical Attack in Syria The Entire Fiat Money System is Bankrupt: Demise of the Global US Fiat Dollar Reserve Currency Ireland: Ground Zero for the Austerity-driven Asset Grab. The Bank Guarantee That Bankrupted Ireland

From:  Global Research

by Ellen Brown

The Irish have a long history of being tyrannized, exploited, and oppressed—from the forced conversion to Christianity in the Dark Ages, to slave trading of the natives in the 15^th and 16^th centuries, to the mid-nineteenth century “potato famine” that was really a holocaust. The British got Ireland’s food exports, while at least one million Irish died from starvation and related diseases, and another million or more emigrated.

Today, Ireland is under a different sort of tyranny, one imposed by the banks and the troika—the EU, ECB and IMF. The oppressors have demanded austerity and more austerity, forcing the public to pick up the tab for bills incurred by profligate private bankers.

The official unemployment rate is 13.5%—up from 5% in 2006—and this figure does not take into account the mass emigration of Ireland’s young people in search of better opportunities abroad. Job loss and a flood of foreclosures are leading to suicides. A raft of new taxes and charges has been sold as necessary to reduce the deficit, but they are simply a backdoor bailout of the banks.

At first, the Irish accepted the media explanation: these draconian measures were necessary to “balance the budget” and were in their best interests. But after five years of belt-tightening in which unemployment and living conditions have not improved, the people are slowly waking up. They are realizing that their assets are being grabbed simply to pay for the mistakes of the financial sector.

Five years of austerity has not restored confidence in Ireland’s banks. In fact the banks themselves are packing up and leaving. On October 31^st, RTE.ie reported that Danske Bank Ireland was closing its personal and business banking, only days after ACCBank announced it was handing back its banking license; and Ulster Bank’s future in Ireland remains unclear.

The field is ripe for some publicly-owned banks. Banks that have a mandate to serve the people, return the profits to the people, and refrain from speculating. Banks guaranteed by the state because they are the state, without resort to bailouts or bail-ins. Banks that aren’t going anywhere, because they are locally owned by the people themselves.

Ireland was the first European country to watch its entire banking system fail.  Unlike the Icelanders, who refused to bail out their bankrupt banks, in September 2008 the Irish government gave a blanket guarantee to all Irish banks, covering all their loans, deposits, bonds and other liabilities.

At the time, no one was aware of the huge scale of the banks’ liabilities, or just how far the Irish property market would fall.

Within two years, the state bank guarantee had bankrupted Ireland.  The international money markets would no longer lend to the Irish government.

Before the bailout, the Irish budget was in surplus. By 2011, its deficit was 32% of the country’s GDP, the highest by far in the Eurozone. At that rate, bank losses would take every penny of Irish taxes for at least the next three years.

“This debt would probably be manageable,” wrote Morgan Kelly, Professor of Economics at University College Dublin, “had the Irish government not casually committed itself to absorb all the gambling losses of its banking system.”

To avoid collapse, the government had to sign up for an €85 billion bailout from the EU-IMF and enter a four year program of economic austerity, monitored every three months by an EU/IMF team sent to Dublin.

Public assets have also been put on the auction block. Assets currently under consideration include parts of Ireland’s power and gas companies and its 25% stake in the airline Aer Lingus.

At one time, Ireland could have followed the lead of Iceland and refused to bail out its bondholders or to bow to the demands for austerity. But that was before the Irish government used ECB money to pay off the foreign bondholders of Irish banks. Now its debt is to the troika, and the troika are tightening the screws.  In September 2013, they demanded another 3.1 billion euro reduction in spending.

Some ministers, however, are resisting such cuts, which they say are politically undeliverable.

In The Irish Times on October 31, 2013, a former IMF official warned that the austerity imposed on Ireland is self-defeating. Ashoka Mody, former IMF chief of mission to Ireland, said it had become “orthodoxy that the only way to establish market credibility” was to pursue austerity policies. But five years of crisis and two recent years of no growth needed “deep thinking” on whether this was the right course of action. He said there was “not one single historical instance” where austerity policies have led to an exit from a heavy debt burden.

Austerity has not fixed Ireland’s debt problems. Belying the rosy picture painted by the media, in September 2013 Antonio Garcia Pascual, chief euro-zone economist at Barclays Investment Bank, warned that Ireland may soon need a second bailout.

According to John Spain, writing in Irish Central in September 2013:

The anger among ordinary Irish people about all this has been immense. . . . There has been great pressure here for answers. . . . Why is the ordinary Irish taxpayer left carrying the can for all the debts piled up by banks, developers and speculators? How come no one has been jailed for what happened? . . . [D]espite all the public anger, there has been no public inquiry into the disaster.

Bail-in by Super-tax or Economic Sovereignty?

 In many ways, Ireland is ground zero for the austerity-driven asset grab now sweeping the world. All Eurozone countries are mired in debt. The problem is systemic.

In October 2013, an IMF report discussed balancing the books of the Eurozone governments through a super-tax of 10% on all households in the Eurozone with positive net wealth. That would mean the confiscation of 10% of private savings to feed the insatiable banking casino.

The authors said the proposal was only theoretical, but that it appeared to be “an efficient solution” for the debt problem. For a group of 15 European countries, the measure would bring the debt ratio to “acceptable” levels, i.e. comparable to levels before the 2008 crisis.

A review posted on Gold Silver Worlds observed:

[T]he report right away debunks the myth that politicians and main stream media try to sell, i.e. the crisis is contained and the positive economic outlook for 2014.

. . . Prepare yourself, the reality is that more bail-ins, confiscation and financial repression is coming, contrary to what the good news propaganda tries to tell.

A more sustainable solution was proposed by Dr Fadhel Kaboub, Assistant Professor of Economics at Denison University in Ohio. In a letter posted in The Financial Times titled “What the Eurozone Needs Is Functional Finance,” he wrote:

The eurozone’s obsession with “sound finance” is the root cause of today’s sovereign debt crisis. Austerity measures are not only incapable of solving the sovereign debt problem, but also a major obstacle to increasing aggregate demand in the eurozone. The Maastricht treaty’s “no bail-out, no exit, no default” clauses essentially amount to a joint economic suicide pact for the eurozone countries.
. . . Unfortunately, the likelihood of a swift political solution to amend the EU treaty is highly improbable. Therefore, the most likely and least painful scenario for [the insolvent countries] is an exit from the eurozone combined with partial default and devaluation of a new national currency. . . .
The takeaway lesson is that financial sovereignty and adequate policy co-ordination between fiscal and monetary authorities are the prerequisites for economic prosperity.

Standing Up to Goliath

 Ireland could fix its budget problems by leaving the Eurozone, repudiating its blanket bank guarantee as “odious” (obtained by fraud and under duress), and issuing its own national currency. The currency could then be used to fund infrastructure and restore social services, putting the Irish back to work.

Short of leaving the Eurozone, Ireland could reduce its interest burden and expand local credit by forming publicly-owned banks, on the model of the Bank of North Dakota. The newly-formed Public Banking Forum of Ireland is pursuing that option. In Wales, which has also been exploited for its coal, mobilizing for a public bank is being organized by the Arian Cymru ‘BERW’ (Banking and Economic Regeneration Wales).

Irish writer Barry Fitzgerald, author of Building Cities of Gold, casts the challenge to his homeland in archetypal terms:

The Irish are mobilising and they are awakening. They hold the DNA memory of vastly ancient times, when all men and women obeyed the Golden rule of honouring themselves, one another and the planet. They recognize the value of this harmony as it relates to banking. They instantly intuit that public banking free from the soiled hands of usurious debt tyranny is part of the natural order.
In many ways they could lead the way in this unfolding, as their small country is so easily traversed to mobilise local communities.  They possess vast potential renewable energy generation and indeed could easily use a combination of public banking and bond issuance backed by the people to gain energy independence in a very short time.

When the indomitable Irish spirit is awakened, organized and mobilized, the country could become the poster child not for austerity, but for economic prosperity through financial sovereignty.

Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her blog articles are at EllenBrown.com.