Why the ECB must, for its own sake, issue its own eurobonds

When the Modest Proposal argued, a year ago, in favour of a debt management system, for the eurozone as a whole, with the ECB at its centre, the general response was that it was a good idea containing a major flaw: the suggestion that the ECB issues its own eurobonds (for the purposes of financing the servicing of the eurozone’s Maastricht compliant debt). The rejoinder was that this is not what Central Banks do. It is my feeling that our answer to this objection was complete and comprehensive. Indeed, it seems to be winning the argument across different schools of thought. Today I want to go a step further: To argue that the ECB must issue its own eurobonds for its own sake, in order that is to retain its credibility and independence.

To make this point succinctly compare and contrast the current trials and tribulations of Mr Bernanke and Mr Trichet.

When Bernanke decided that QE2 was the way to go last year, in view of the US’ anaemic growth performance (or indeed if he now wants to embark upon QE3 in the face of the Great Recession’s impending second dip), the requirement for the policy’s implementation is straightforward: a majority of the Fed’s board must vote in favour. Suppose for instance that he musters the necessary majority even though the governor of the New York Federal Reserve disagrees. Though Bernanke would much rather such disagreement did not prevail, he is nevertheless at liberty to pursue with full vigour his chosen policy once he gets his board to back it.

Imagine, for argument’s sake, that the State of New York were not just another state in the Federation but that it had full control of all taxes (including income tax) generated within the State and, moreover, that these taxes were essential in propping up, at the discretion of the Governor of the State of New York, a large number of insolvent states (e.g. Ohio, Illinois etc.). Finally, suppose that the relationship between the Governor of the State of New York and the governor of the New York Federal Reserve were close, not only personally and politically but also culturally, linguistically, historically etc. I submit to you that Mr Bernanke’s, and the Federal Reserve System’s independence, would be greatly circumscribed.

This is of course Mr Trichet’s predicament. As we speak, he has embarked upon this desperate program of purchasing Italian and Spanish bonds in the secondary markets against strong opposition from one of the European System of Central Banks’ constituent parts: the Bundesbank – the Central Bank of the country that is financing the EFSF and all the bailouts and which, it is common knowledge, is the only thing that prevents the euro system, and thus the ECB, itself from biting the dust today.

The point here is that the ECB’s supposed independence increasingly means nothing at all. Its Germanic remit, to concentrate exclusively on price stability as the Bundesbank once did (without, that is, any concern for growth and employment – the Fed’s second pivotal remit), means that the ECB does not have the legal standing to pursue quantitative easing in order to arrest the catastrophic pessimism engulfing the eurozone. And now that this pessimism is contributing generously to the demise of Italy (the main problem of which is stagnating growth), Mr Trichet finds himself in the impossible situation where he must buy up Italian bonds just to keep his own ship above water.

Alas, the markets know that he is doing this in opposition to the Bundesbank. In other words, markets know damn well that Mr Trichet will never be able to buy anything near the quantity of Italian bonds that are necessary to make a medium term difference to Italy’s fate. So, they will soon (after many market participants take advantage of the ECB’s purchase program to unload what Italian and Spanish bonds they can) start attacking Italy’s bonds. In short, unlike Mr Bernanke, Mr Trichet’s battle was lost before it was even conjured up. Nothing hurts a Central Bank’s credibility than the common knowledge that it is fighting a losing battle.

Locked in this conundrum, Mr Trichet can kick and scream all he likes that this is a mess that the politicians should sort out, not the ECB. But he should know better by now. Judging by the last eighteen months of incessant dithering and the latest fudge of the second Greek ‘bailout’, politicians are clearly not in a hurry to create a systemic solution for this systemic crisis. They will, when pushed, say many of the right things but when it comes to implementation they will continue to cling on to toxic practices (e.g. the EFSF’s funding structure) and to delay anything that may actually cost real money (as opposed to guarantees). In short, Europe’s politicians have taken Mr Trichet to the cleaners and have, since, put him out to dry.

With his independence in dealing with the Italian and Spanish fallout circumscribed by the Bundesbank’s recalcitrance, and his credibility in tatters as a result of fighting a losing battle, Mr Trichet has an opportunity to leave the ECB with a move that will restore his reputation: Set in train the issue of eurobonds for the purposes of financing, initially, the current program of purchasing Italian and Spanish debt in the secondary markets.

With such a move, the ECB will have killed two birds with one stone. It will no longer be in thrall of the Bundesbank and the German government, as it will have its own means of utilising non-European official and global private funds for the purpose of financing policies essential to the long term survival (let alone stability) of its charge (the euro). And, to boot, it will have given the politicians a way out of their current cul-de-sac (i.e. the toxic EFSF): The moment the ECB can fund, by its own means, the servicing of the Maastricht compliant eurozone-wide debt (60% of each eurozone member state’s debt) politicians will, no doubt, see the light and turn away from the doomed EFSF-based strategy to implementing Policy 1 of the Modest Proposal.

This is what we have come to: Our European Central Bank must, to preserve its dignity, credibility and independence, take a bold move to borrow in the international markets in order to stabilise the currency and show Europe’s pathetic politicians the path that leads to salvation.

17 Comments

  • I do not gain any enjoyment from making this comment; but by alligning yourself with the actions of the Federal Reserve, you also open yourself to the charge that you are asking that Europe follow the presumption of the US to turn their collective backs to the utterly crazy actions that led to the demise of their economy.

    You need to read this, very carefully. http://broadcatching.wordpress.com/2009/04/06/matt-taiibi-the-big-takeover-rolling-stone-magazine/

    It is entirely possible that there are people in Europe trying their level best NOT to follow the US down their chosen road to economic destruction and, as such, are trying their best to find a way forward that tries to preserve their ethics.

    • Dear Chris,

      I think you misunderstood my point. Under no circumstances am I allligning myself with the Fed or indeed with any other branch of the US government’s dealing with the crisis (if you get a chance to glance at my new book you will see this). My point is a minimalist one: The Fed has powers and a degree of independence that the ECB does not. It may be using it badly but at least it has it. In contrast, the ECB’s supposed independence is a dead letter as long as Germany remains the backstop for the EFSF and Mr Trichet has no capacity even to implement basic monetary policies without the green light from Berlin. In short, both the US and the EU have aided and abetted the new regime we live under (I call it Bankruptocracy). The difference is that the EU has additional baggage that causes it to sink faster and, in so doing, to speed up the global economy’s slide into the second part of the double dip.

    • Yanisv,

      I do understand your point, but the underlying part of this huge iceberg is the very simple fact that the US banks were NOT the only players in the disastrous sale of unfundable grossly over-leveraged debt; Europe’s banks were as much involved as any. The grossly over-leveraged bonds THEY sold to various governments are the visible reason for all the difficulties every Western nation faces today.

      Now that we have all been enlightened my some very good journalism; the cat is out of the bag. The dreadful unethical mess that the US authorities have created for themselves must weigh heavily upon the minds of the leadership of the European dream, (for that is what it is today), to the effect that they must find a way forward that does not emulate the Federal Reserve.

      What they are trying to achieve is the transfer of grossly over-leveraged debt from the individual government’s balance sheets onto Europe’s balance sheet. That exercise will simple move the debt from one side of the piece of paper to the other. So, I for one can see why Germany would not want to see that happen. That will not deal with the underlying problem, as it only papers over the cracks in the overall European financial structure. What they need is a transfer of the value, out of the existing banking system; rather than simply a transfer from one side to another.

      The underlying problem is the fact that, throughout the Western economies; including the US, for a long time now, we have not been creating new employment for the ordinary people. The debt is the same as though a nation were someone unemployed. That, without sufficient income to pay their bills, they have run up excessive debt. If they were a citizen, they could get a better job and earn their way out of their dilemma; but they are a nation and as such; have to have their citizens earning that living. THAT is the underlying iceberg; lack of opportunity for the people to earn a good living ….. and pay tax into the national account to enable the nation to pay their bills too.

      Why do you think I came into this debate? It was because, for decades, try as hard as I might, I could not gain access to the equity capital, particularly on free enterprise terms; I must have to enable me to create new jobs. I am credited by the French government as having the same technological foresight as Gustav Eiffel a century before me; yet that stood for nothing. As far as the existing banking industry and their government supporters are concerned, I am a useless, worthless idiot.

      What we have today is a very good example of medieval feudal mercantile economics; where the only people that get access to funding are friends of the leadership of the bureaucracy that serves the national leadership. You can only get funding to create those jobs if you submit to feudalism.

      Look around you everyone; millions upon millions unemployed; vast loss of tax income; bankrupt administrations and self serving banks that care not one jot; that they have led all these nation s to where we are today; entirely enslaved under the formidable burden of their grossly over-leveraged, and as we see from my cited article above; entirely phoney – debt.

      So, how do we find a way out of this mess? Certainly NOT by moving the numbers around a piece of paper. We face perhaps the most difficult challenge ever faced by any continent in any previous period of international history. We have to reject feudalism and recreate the fertile economic conditions that has led Germany to success; a new Marshall Plan. The original of which did not involve moving money around a piece of paper; it involved direct investment of equity capital into new industry. We must repeat that exercise throughout Europe.

      That was why I had proposed a new mechanism of a vanishing Bond. To transfer value, not across the piece of paper; but out from the existing banking system, particularly the shadow banking and bond markets; but this time back into new job creation; right down at the grass roots of each nation.

      Unless, and until, everyone steps right back to look at the overall problem; the gigantic iceberg, not just the debt; they will not see the absolute necessity for a new way forward. The much much bigger problem is the very simple fact that a feudal mercantile economic model simply does not create enough employment; particularly free enterprise employment; even more particularly; right down at the grass roots, in each and every nation effected by this crisis.

      Germany is right to ask the questions; but they should be directed towards they own bureaucracy who have held back the development of Europe for decades with no one having the courage to question their motives.

      Until Europe rejects feudalism; nothing they do will make the slightest difference.

      That is the challenge they face; have they the courage to accept the truth of it?

    • Dear Chris,

      We are singing from the same hymn book. Emulating the US’ 2009 surrender to bankruptocracy is not my idea of a sound policy for dealing with Europe’s crisis. Unfortunately, Europe is presently managing to combine: (a) a form of capitulation to the bankers that exhibits not one iota less serviluty to the bankers than Washington did toward Wall Street, and (b) a deeper immersion of Europe’s banks to insolvency than that you are experiencing in the US. Additionally, the ECB is now effectively pumping just as much liquidity into Europe’s banks as the Fed did but with even fewer strings attached – if you can imagine that. Our Modest Proposal calls for something simple and fair: That banks should be cut off the ECB’s wasy, unconditionally offered, money and forced (I stress, ‘forced’) to take on capital from the EFSF in exchange of equity. In other words, the banks’ shareholders must be wiped out. For there is no argument for bailing the banks out and keeping their owners. Turning now to the sovereign debt issue, our proposal for ECB-issued bonds is not an exercise in shifting debt around. It is an exercise in utilising the fact that the ECB and the eurozone have NO debt in order to mobilise non-European funds (e.g. Chinese sovereign wealth funds) so as to lower substantially the interest payable by the eurozone member states as a whole – the reuslt being the elimination of the debt crisis.

    • Yanisv,

      First of all, I am no longer based in the US. I did, until recently, have an office in Washington DC, but that has been closed down to reduce my costs and, more particularly, because of my recent discovery of other European inventors that have been as badly treated as I have been, (if not more so), by the US government. They do not honour their Patent Cooperation Treaty responsibilities and as such make a complete mockery of the idea of intellectual property underpinning a successful technology based economy. As one knows, it takes a lifetime to gain a good reputation and a moment’s thoughtless action to lose it. The US has, very sadly; completely lost theirs.

      But this debate is much more important. We are not singing from the same hymn book; I wish we were. Let me explain why I say that.

      If you or me had set up a printing press to produce documents that purported to be valued at, say, 100 Billion Euro and tried to sell them to a government; we would have ended that very day in jail. Not only that, but they would have thrown away the key too. In fact; that is EXACTLY what the main investment banks had been doing which was then emulated by almost every large bank in Europe. They set about selling onto the bond markets pieces of paper that were, (no, are); by any normal business viewpoint, a complete fraud. They were taking in a single Euro through their front door and passing out the back door fifty Euros. By ANY view, that was fraudulent.

      The reason why no one did anything about it provided the explanation; it was simply that all the executive governments, (including Germany), turned a blind eye. The question is why did they do that? The answer tells us why we are not signing from the same hymn book.

      Europe, apart from Germany, is in financial difficulties. Why?

      Why would so many large populations, spread right across a continent; be unable to maintain prosperity within their own borders? We cannot blame the banks as they have only been serving a need; so the question is; what need?

      I keep saying this, and will go on saying this; trying to create prosperity via spending borrowed money via giant bureaucracies to try and create private sector prosperity; SIMPLY DOES NOT WORK. Has not worked; will not work.

      If you place the capability for those self same European bureaucracies to set up a fund of up to or beyond 60% of the GNP of Europe, so that they can sell those EURO Bonds to the likes of China; you will keep on doing what does not work. They will, inevitably, try and keep on doing the wrong thing. And, there is no sign, from anything I have so far read; that tells me that they themselves understand that simple point of fact; that they have failed; that they MUST change direction!

      Their need, (the main European bureaucracies), is to maintain the present structures that have clearly failed; to do that they must go on taking the fraudulent money to pay the bills they themselves created. Any addict will continue to do whatever they can to keep on taking the drug of their choice. In this case it is fraudulent bonds to keep up their addiction to spending money on failed policies..

      I placed this comment up on The Times, London, Main Leading Article yesterday and I can tell you they left it there almost all day as the only comment:

      Why is ANY region of Europe, let alone the United Kingdom in decline; when we have had many decades of very expensive solutions, piled one on top of another; each in turn the object of admiration of this department or that department; both local, regional, national or European?

      The bitter truth is, the Finance, Insurance and Real Estate, (FIRE), economic model, (remember “Sid”?), pursued now for decades, has, VERY effectively, drained all the local prosperity of each and every region; into those FIRE industries; many based in London; and is surely why London and the SE is the only place here in the UK with any real prosperity today. The replacement of that lost local community prosperity; by repeated attempts at using government borrowings as “Capital”, (borrowed from the FIRE economy, sic!), spent through all those, now almost countless, quasi-government agencies; has clearly failed.

      We must not repeat the same mistakes all over again. And, with respect, forget about the United States; they have failed the ethics case and instituted their own moral and economic decline. We must concentrate upon our problems here in the United Kingdom.

      When will the simple truth sink in; that, apart from Germany; everyone has been on the wrong path? That each time the one thing not permitted here in the UK; is access to the equity capital, on free enterprise terms, to permit each community to create their own, local community prosperity.

      That all REAL prosperity stems from good old fashioned; free enterprise; private sector job creation; by very small businesses; founded by far sighted and responsible individuals; each trying their hand at success; each following their own path of their own choosing; each providing local moral and economic leadership to the rest of their local community. With the invested equity capital; (spent within the local community to pay their way until they either reach success, or, yes, honourably fail); still remaining in circulation, within their local community; to increase local prosperity. Something a bank loan can never, ever, achieve; as all monies lent must be drained back into the bank.

      Yes, we do need a plan. Yes, there must be investment.

      So, why not try some new thinking?

      http://www.thetimes.co.uk/tto/opinion/leaders/article3134180.ece

    • Chris,
      We are singing part of our respective songs from the same hymn book. So, let’s see where we converge and where we differ.
      >If you or me had set up a printing press to produce documents that purported to be valued at, say, 100 Billion Euro and tried to sell them to a government; we would have ended that very day in jail. Not only that, but they would have thrown away the key too. In fact; that is EXACTLY what the main investment banks had been doing which was then emulated by almost every large bank in Europe.
      Quite right. This has been my position since 2002. My take on the contradiction in terms that goes by the term of financial ‘innovations’ is that it was nothing more nothing less than fraudulent, downright illegal, private money minting. In fact, the minted so much private money that its blow up brought down with it the US’ capacity to recycle the world’s capital. This demise is the deeper cause of the current mutating, migrating Crisis.
      >The reason why no one did anything about it provided the explanation; it was simply that all the executive governments, (including Germany), turned a blind eye.
      Quite right again. There are a number of reasons, first and foremost the way in which regulators were utterly ‘captured’ by Wall Street (and remain so to this day).
      >The question is why did they do that? The answer tells us why we are not signing from the same hymn book.
      Right yet again. Here we beg to differ. But not as sharply as you make it sound. Yes, at the bottom of the causes of the bubble that burst so catastrophically were the toxic government policies pursued tenaciously since the late 1970s, founded upon equally toxic economic theories. And yes, you are right in pointing out the folly of putting all the eggs of late capitalism’s in the basket of “the Finance, Insurance and Real Estate, (FIRE), economic model. (And yes I vividly remember “Sid”).
      So, where do we disagree? On what one does when the bubble bursts. There are two options: One is to liquidate financial capital by allowing the chips to fall where they may (your preferred option, as I see it). This sounds nice and cathartic. Only it would bring about the liquidation not only of the bankers and of the bureaucrats that allowed them to run riot (which, like you, I would love to watch happen) but also the liquidation of healthy industrial capital and human labour. A whole generation of technology and humanity will go down the drain and, even worse, this Fall will give Rise to humanity’s worst instincts, just like it did in the 1930s (after President Hoover adopted the liquidation strategy that you seem to favour).
      What alternative is there? To have governments make amends for the mess they created. The eurobonds that I have been advocating, to give one example, are not a means of strengthening bureaucracies. It is a backstop for preventing the escalation of an ongoing crisis of which you, innovative engineers the world over and, of course, labour, will be liquidated – unless government steps in to arrest the freefall. I am not saying that, once the freefall is arrested, we shall be living in an angelic social economy. No, we will find ourselves in the same corrupt, messy world. But then, once the negative engineering has stopped, we can then have the good debate on how to re-make our irrational world.
      PS. All this, from the depiction of the true causes behind the bankers’ minting of private money to a glimmer of hope for the future I tried to sum up in my new book, The Global Minotaur – just out. (Apologies for the plug)

    • Yanisv,

      I do like your description; “minted private money”, now that really places the blame very squarely and central to the debate.:

      “In fact, the(y) minted so much private money that its blow up brought down with it the US’ capacity to recycle the world’s capital. This demise is the deeper cause of the current mutating, migrating Crisis.”

      But you have misunderstood my own thinking, (I very probable have not made myself clear enough). First again I quote you:

      “So, where do we disagree? On what one does when the bubble bursts. There are two options: One is to liquidate financial capital by allowing the chips to fall where they may (your preferred option, as I see it). This sounds nice and cathartic. Only it would bring about the liquidation not only of the bankers and of the bureaucrats that allowed them to run riot (which, like you, I would love to watch happen) but also the liquidation of healthy industrial capital and human labour. A whole generation of technology and humanity will go down the drain and, even worse, this Fall will give Rise to humanity’s worst instincts, just like it did in the 1930s (after President Hoover adopted the liquidation strategy that you seem to favour).”

      As I see it, “the chips” are already on the table and it is that particular aspect that attracts my thinking. If we are correct, and I am certain that here we can both agree; there is not the slightest possibility of all that “minted private money” being redeemed for cash value and returned back into the hands of the banks that “printed” it. Indeed, that is precisely why it is all on the table; they got shot of it as fast as they could; to anyone silly enough not to ask the right questions; much to governments, much much more to the shadow banking markets.

      Again, that was why they created CDO’s and the like, to cover their tracks and the bets on the table by placing the whole mess into the hands of their counter parties; many of which were hedge funds that, (and this is a very VERY important aspect), could never have raised sufficient capital, (existing cash in circulation), to be able to purchase the bonds they hold. They must have either been given them; or they walked out with them under their arm to set up a new fund.

      So we have a system completely saturated with dodgy money that no one can place a certain value upon. But, the bonds exist and it their existence I address.

      What I propose is that, for example here in the UK, (this may be applied to any nation), the Bank of England approach the shadow banking markets with a very simple deal. It goes like this: They must have a good idea of what they hold is suspect. If they hang onto it until the full endgame; there must be a very substantial likelihood that the value they hold will, eventually, collapse. Turn to dust.

      On the other hand, there is a desperate need to replenish the prosperity of the grass roots of the nation, (any nation so affected), and everyone can now agree that quantitive easing has not produced the desired result.

      What is proposed is that they hand over sufficient bonds, (here in the UK I propose £450 billion), in an orderly manner, to the Bank of England, (pick your particular national institution), who will note the origins and value and exchange those bonds, at face value, for what I describe as Vanishing Bonds. That entire fund will then be placed as a pot of capital which can only be accessed under the rules I have already set out in chapters 3 and 15 in my free book; The Road Ahead from a Grass Roots Perspective. http://www.chriscoles.com/page3.html

      I set out the detailed plan for the creation of 6 million new, small, free enterprise private sector jobs; in The Capital Spillway Trust Response to the Green Paper, Financing a private sector recovery which is available here: http://www.itulip.com/forums/showthread.php/16929-The-Capital-Spillway-Trust-response-to-the-Green-Paper-Financing-a-private-sector-recovery

      What I propose is very simple. We need to create new private sector jobs as though planting wheat in a field; not as though looking for ripe plums with venture capital. We need millions of new jobs; today!

      You place in front of every local community a simple set of basic rules and a constitution, (you may find them all on my web site), that they then use to create their own “Local fund”, for example; Peterborough Capital Spillway Trust Fund. At the outset, it does not hold any funds, it simply acts as the encourager which then sets out to encourage ANYONE local to see if they can create an acceptable business plan to create more than one job, to a maximum of roughly ten.

      If the new business plan is acceptable to the very basic rules I have set out, the new entrepreneur must then form a formal business structure. Here in the UK would be a limited company that will issue shares. Once the company is set up, then every new employee has to have a Pay As You Earn, (PAYE), income tax reference number issued by HM Revenue and Customs. (So all the structures are already in place). Each such new employee taken on and registered brings into play the transfer of vanishing bonds, from the central fund, through the local capital spillway trust fund, into the new business. (There is no reason to prevent access to allow existing very small businesses to do the same). The proposal is to fund £25,000 equity capital as vanishing bonds for every new employee paying PAYE and make available the potential of another £50,000 as working capital. Importantly, no one may “skim” that transfer of the vanishing bonds.

      The local fund will retain 20% of the issued shares, but the entire value of each tranche will pass on into the new business with the majority of the remaining issued company shares being left in the hands of the new business founder. However, they in turn, are strictly prevented from taking the money out of the new business as personal income. Instead, this is where the local fund structure comes into play; as they are right on the doorstep. It will be the responsibility for the local fund to see both fair play and acceptance of the rules. That is entirely in their interest as it will be the local economy that will benefit in the long run.

      No founder will be able to pay themselves more than a bare minimum wage until either they are in full profit and able to pay the local fund an annual dividend of at least 8% on the full value of the vanishing bonds and working capital invested; OR, they have repaid the full value of the investment taken back to the local fund. So some of the vanishing bonds will become new shares with a good income, some again will be repaid. Now and only now may the local savers exchange those vanishing bonds for their own savings. The vanishing bonds vanish if their full value is either repaid to the central fund by being exchanged for local savings; repaid by the founder, (the local fund may want to keep them to reinvest), or the local business fails and thus the whole business structure is wound up.

      Importantly, the initial investment of the vanishing bonds will, inevitably, be immediately placed into the new business bank account. So this will provide exactly the same stimulus as quantitive easing, but always via new job creation. So, in which case the banks will have the greatest incentive to place their own holdings of grossly over-leveraged bonds into that central fund.

      The overall idea is to make a rapid replenishment of prosperity, via immediate new job creation; via existing new business regulation and structures; right down at the grass roots of each nation.

      Think about it; everyone with any get up and go is faced with the immediate opportunity of being able to set up their own very small business for the immediate cost of creating the basic business structure. Here in the UK you may do that for less than £100. You will not be able to get at any funding UNLESS you have created new employment. You will not be able to pay yourself anything other than a very basic income to live by; but in turn, you get the opportunity of a lifetime. A once only chance to make a new start. Fully capitalized; enough time to get started; supported by your local fund; employing your local community.

      On the other side of the equation; the banking and shadow banking markets will now have a much more vigorous economy, growing rapidly with new employees that will have money earned to spend.

      The government, instead of taking on more debt to bail out the banking system, will have reduced unemployment and rapidly increasing tax income. Reduced costs, increased income. What more do they need?

      Returning to your final point:

      What alternative is there?

      Well, if we follow your thinking, we get a form of stability; and then another try at finding a solution; with no other solution actually on the table at this time. Surely the answer is, we do not have the time; we must start to find a new way forward today. Tomorrow may be certainly too late.

      So, why not try some new thinking?

      Finally you said: “PS. All this, from the depiction of the true causes behind the bankers’ minting of private money to a glimmer of hope for the future I tried to sum up in my new book, The Global Minotaur – just out. (Apologies for the plug)”

      But I had hoped to win a signed copy with your earlier competition. 

    • This is serious stuff. Let me sleep on it Chris. As for the competition, yes I have been remiss. Expect the results within 24 hours. Together with my considered reply on your interesting points above.

    • Yanisv,

      one very quick point. A small error in my quick description above.

      The £50,000 tranches of working capital, (made available alongside the £25,000 Equity capital), are to be 25 year notes at 4% Per annum. I designed the working capital element to parallel closely, the very old way of doing such. In the now long distant past all industrial working capital was made up of 25 year notes @ 4%.

      Please take as long as you need; I am sure that many others will be awaiting your analysis and any comments you have.

  • MOMENT OF TRUTH!
    Now even the Green Party of Germany expressing EROBONDS as prefered way out
    of present ongoing Eurozone crisis.Hopefully German Leadership now abandon increased
    Bailout packages without hope to succeed.Political pressure both within and outside Germany is betting on EUROBONDS and MERKELS “BIG SWITZERLAND” type solution
    comes to dust.A US Economist Eichengreen warns Germany could soon with further
    extended bailout packages join FRANCE in risk of RATING downgrade!
    Hope leaders hear the message and decide in best interest of EUROPE to turn off the
    irritant TUNE from all US BASED RATING INSTITUTES trying furiosly to CRACK down
    EUROZONE stability in favour supporting an ailing debt burdened US Economy and depreciating USD.EUROPEAN WAR DECLARATION introducing PAN EUROBOND TREATY 2011 =”Modest Proposal 1st step” will diminish these scumbags and once
    and for all kill their ILLUSION of a new US MINOTAUR RELOADED! EUROZONE on the
    way towards a Political&Fiscal Union meaning a WORLD without total US hegemony be brighter for the many not just the few.
    VISIONARY?

  • I loved your interview with Max Keiser. You are a brilliant and honest economist. Very few of those.

    I have favored a debt free money (like President Lincoln’s Greenbacks) since I was 9 years-old. We also need to end fractional reserve banking. And Credit Default Swaps have to go.

    My major focus is as an anti-war activist. I understand economics but my major interest is in a practical solution to the world’s military problems. I see the solution coming from America. Of course that will require a radical solution and a new coalition. As Dr Michael Hudson said, we need to go beyond Right and Left to form a new anti-Banker party.

    I hope you are aware of David DeGraw. He has a plan for the poor in the area of New York City to seize the banks in Manhattan . My last blog entry was about him.

    I am the author of 25 Reasons To Absolutely Despise Bankers And Their Minions (at the Vidrebel blog)

    • I shall certainly read it. War-prevention is the chief duty of the civilised. But to this end we need to put an end to this Crisis. For Crises, like that of 1929 and 2008, are th warmonger’s best mate…

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