The Irish Money Famine

This is the sort of thing that turns my stomach. It's also an indication just how technically insolvent the global banking system is.

Nov. 28 (Associated Press) --

European and IMF experts decided that Ireland first must run down its own cash stockpile and deploy its previously off-limits pension reserves in the bailout. Until now Irish and EU law had made it illegal for Ireland to use its pension fund to cover current expenditures. This move means Ireland will contribute euro17.5 billion to its own salvation.

Notice this breaks both Irish and EU law. Notice Ireland's own citizens are now directly in the line of fire.

Ajai Chopra, deputy director of the IMF's European division who oversaw the Dublin negotiations, said "It makes total sense to use them at this time. I think this is quite unique in this type of arrangements and it will be taken as a sign of underlying strength," he said.

Total sense. Quite unique. Underlying strength.

I don't think so. The market doesn't think so. And I bet the Irish don't think so.

This is how twisted the statists are. The bureaucrats at the EU are now taking an a la carte approach to the rule of law. This does not bode well for anyone. The IMF is following its standard operation procedure: eliminate the middle class and usurp national sovereignty, exactly what it does in third-world nations. All in the name of protecting banks.

All this bailout arrangement means is that yet again, senior bondholders -- namely large banks -- won't have to pay for their bad loans. The global banking system is so short of actual cash backing up all the credits in the system that its implosion is virtually guaranteed. Bad loans get made because they have to be made. Otherwise the system goes into convulsions. It's about feeding the monster, or else.

How did we get to this point? Through fractional reserve banking, where the reserves are just a fraction of the liabilities. It's time to eliminate this Ponzi scheme and return to honest banking.

Honest Bankers of the world unite.