Ireland just started printing its own money

[Mega]

http://www.independent.ie/business/i...y-2497212.html

Not sure if they "allowed" to do this?

Is that a German tank i can hear?

[Mega]

Re: Ireland just started printing its own money

Ah.............
http://www.zerohedge.com/article/acc...nk-print-money

[jk]

Re: Ireland just started printing its own money

i didn't know they could do that. interesting.

[lektrode]

Re: Ireland just started printing its own money

i didn't know they could do that. interesting.

too bad iceland dint do that in 2007(?) - huh? what he say... is that right?

isnt this a repeat of the "first domino" that resulted in all the rest of it?
and... wont.... AU/AG/miners.... skyrocket.... when the rest of the herd finds out...

sunday nights are always so..... suspenseful?
will we see the bernank on tv later on, or wont we?

[don]

Re: Ireland just started printing its own money

R U Sure this hasn't happened before .....

[GRG55]

Re: Ireland just started printing its own money

i didn't know they could do that. interesting.

If they can actually do that, then why didn't the Greeks do it last May?

[Chris]

Re: Ireland just started printing its own money

i didn't know they could do that. interesting.

AFAIK, they shouldn't do it (under the treaty). This looks like the Irish are giving two fingers to the Merkel and the ECB.

[jk]

Re: Ireland just started printing its own money

i guess the irish central bank just created a book entry asset showing it loaned x euros to the bank in question, while creating a book entry liability showing that that bank has x euros on deposit at the central bank. meanwhile, of course, the irish central bank never had those euros to lend. however, the books balance. it's magic.

[jk]

Re: Ireland just started printing its own money

The mechanics of Irish euro-printing [from ftalphaville]
Posted by Izabella Kaminska on Jan 18 15:00.

The Irish Independent last week drew attention to a much-missed detail in the execution of Ireland’s emergency loan programme.

As it turns out, the Irish central bank has been partly financing the programme’s loans with the printing of its very own euros.

As the Irish Independent stated:

EMERGENCY lending from the ECB to banks in Ireland fell in December, the first decline since January 2010, but only because the Irish Central Bank stepped up its help to banks. The Irish Independent learnt last night that the Central Bank of Ireland is financing €51bn of an emergency loan programme by printing its own money. ECB lending to banks in Ireland fell from €136.4bn in November to €132bn at the end of December, according to the figures released by the Irish Central Bank yesterday.

According to the ECB, the Irish central bank is perfectly within its rights to create its own funds if it deems it appropriate — providing that the ECB is notified.

A hat tip to eurozone blogging maestro Edward Hugh for drawing our attention to the following extracts of the ECB’s opinion on the emergency stabilisation of credit institutions, dated December 17 — which outlines the ECB’s position on the prohibition of monetary financing by the Bank of Ireland (and other member banks):

This provision should also specify that nothing in the draft law will prejudice the compliance by the Central Bank with the prohibition on monetary financing under Article 123 of the Treaty13.

- —-

The monetary financing prohibition in Article 123 of the Treaty is further clarified in Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of prohibitions in Article 104 and 104b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1) according to which overdraft facilities or any other type of credit facility with the ECB or the national central banks (NCBs) of Member States in favour of Community institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States are prohibited, as is any purchase directly from these public sector entities by the ECB or NCBs of debt instruments.

In other words, providing that the Central Bank of Ireland is not buying debt directly from government or quasi-government institutions — it is perfectly able to buy debt or create overdraft facilities for private credit institutions.

And if you dig deeper into Article 123 of the Lisbon Treaty you also get this point:

2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.

So publicly-owned credit institutions can, indeed, be supported with money-printing — and anywhere in the eurozone.

In the Central Bank of Ireland’s case the details slipped out via its financial statement, which showed a fine-tuning reverse operation valued at €12.33bn on its asset side for the first time since at least 2003:



Interestingly, the ECB’s own consolidated statement showed a fine-tuning reverse operation of €20.62bn on its asset side in December too. It was since removed in January.

Falling on the asset side, and not balancing out, means the fine-tuning operation was not intended to sterilise the Securities Market Programme (a liquidity absorbing operation) as other fine-tuning operations specifically have. It was instead a liquidity providing imbalance.

(Update 16:49 – Reader Lorcan points out that that the fine-tuning was actually scheduled to provide cover for the expiry of the ECB’s LTRO financing on December 23.)

Curiously, though, the ECB’s November 16 statement also shows a positive imbalance on its asset side valued at €12.55bn.

Some background, the ECB states in reference to fine-tuning reverse operation procedures that:

… these operations are normally executed in a decentralised manner by the national central banks (the Governing Council of the ECB can decide whether, under exceptional circumstances, bilateral fi ne-tuning reverse operations may be executed by the ECB);

And specifically :

… foreign exchange swaps and the collection of fixed-term deposits are available for the conduct of fine-tuning operations

Readers may remember that the ECB announced in December that it would be adding fixed-term deposits from eligible counterparties with the eurosystem to the list of assets eligible as collateral for eurosystem operations from January 1, 2011.

http://ftalphaville.ft.com/blog/2011...euro-printing/

[Chris]

Re: Ireland just started printing its own money

Isn't it great? Now the Irish can devalue the money of the German and other European people without their consent. I can't wait to see how this ends.

(plot spoiler --> badly)

[Southernguy]

Re: Ireland just started printing its own money

Cold fusion, money printing, alchemia is again on the mainstream.
Ruby "robacuore" asks Berlusconi 5 million euros to shut up......etc
Maybe economic crisis creates a need to BELIEVE....in something

[GRG55]

Re: Ireland just started printing its own money

Here's a bit more on the Irish printing exercise from Willem Buiter et al over at Citi...

http://www.scribd.com/doc/47428653/C...nce-ELA-210111

The Central Bank of Ireland (CBI) has recently substantially increased theamount of emergency liquidity assistance (ELA) it has granted to Irish financialinstitutions. In this note, we comment on the nature of this assistance and howit fits into the legal and procedural framework of the European System of Central Banks (ESCB) and the Eurosystem (the ECB and the National CentralBanks of the euro area member countries). We also consider its implications for the indebtedness of the Irish sovereign and the overall stance of monetarypolicy in the euro area.

The Emergency Liquidity Assistance (ELA) facility gives all national centralbanks (NCBs) in the euro area the ability to support domestic financialinstitutions, over and above the assistance provided by the Eurosystem.Providing liquidity support through ELA is not a function of the NCBs that arisesfrom their membership in the ESCB or Eurosystem. It occurs separately fromthe non-standard measures (sometimes called Enhanced Credit support) whichare provided by the Eurosystem to safeguard financial stability in the euro areaand, by calming disorderly financial markets, restore the normal working of the monetary transmission mechanism.

Because ELA is not an ESCB or Eurosystem function, the decision to provide assistance through ELA to afinancial institution operating in the jurisdiction of an NCB lies with that NCB.Article 14.4 of the Statute of the ESCB and the ECB explicitly allows NCBs tocarry out functions that are not part of their role as members of the Eurosystem...

[gwynedd1]

Re: Ireland just started printing its own money

That is how it used to be. Bank created local currency was used until it saturated the local economy and was exchanged for specie aka precious metals. That was usually so the wealth could be transfered to the new local. Its also what kept banks from over printing it since too much parer would saturate the local economy and they would end up with an unstoppable out flow of PMs. Who died when it worked this way?

That is one reason why the Rothschild became so rich. Their international branches allowed them to retain their reserves since there was no need to convert the currency. You could take their paper anywhere.

Why do internal Irish transactions need a global currency? A local currency allows the local economy to communicate their own supply and demand where Irish candle stick makers can trade with an Irish bread maker. Nation states should always have their own currency.

[jk]

Re: Ireland just started printing its own money

Nation states should always have their own currency.

the goal of the eurozone project is political and involves the loss of sovereignty of the member nations.