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The lower house of the French Parliament on Tuesday overwhelmingly approved a bill that would allow intelligence agencies to tap phones and emails without judicial permission, sparking protests from civil liberties groups.
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Mario Draghi, the President of the European Central Bank (ECB), is continuing the financial war that he and his fellow central bankers have been waging on Ireland and the rest of Europe with his latest monetary scheme.

As expected, the ECB announced a massive bond-buying program of more than one trillion Euros in the hope of improving a stagnate European economy and to combat "deflation." "What monetary policy can do," Draghi declared, "is create the basis for growth." The ECB President added that "structural reforms" by the various Euro member states need to accompany the monetary stimulus if it is to succeed: "But for growth to pick up you need investment; for investment, you need confidence; and for confidence, you need structural reform."

Sadly for Ireland and the rest of the eurozone, the ECB's monetary initiative will not pan out, but instead lead to further stagnation, less investment, and eventually, considerably higher price inflation. Instead of praise from the European financial community, Draghi and the ECB should be condemned for the quackery that the plan is as every previous money-printing scheme, such as the "quantitative easing" policy in the United States, has failed abysmally.

Draghi, like all central bankers, mistakenly believes that growth can come about through the creation of money and credit via the printing press or, in the contemporary age, through a stroke of a computer key. In more rational times, such a notion would be considered absurd; however, today such thinking is lauded.

Draghi says that for "growth to pick up," there must be "investment," but he does not mention the crucial element necessary for genuine investment to take place savings. Savings the abstention from consumption must first occur prior to any investment; for savings provide the means (capital) for the production process to begin.
Yet, under the crazed interest rate policy of the ECB and that of the Federal Reserve over the past decade, real rates have been suppressed, which makes saving unattractive. If Draghi understood basic economics and wanted to increase investment, he would reverse the "zero" interest rate policy and allow rates to rise to their natural levels. Another irrational fear that the ECB's monetary stimulus is supposed to alleviate is that of "deflation." Not only is deflation nothing to be worried over, but the understanding of it by the likes of Draghi is mistaken. The traditional meaning of deflation is a decrease in the money supply as its polar opposite, "inflation," is defined as an increase in the money supply. Most today, however, see deflation as a fall in prices.

The only groups that fear lower prices are bankers and the politically-connected financial elites who do not want to see their artificially-inflated portfolios (from previous money printing) fall in value while they are able to pay off their debts with inflated currency. Yet, for 99% of Ireland's population, lower prices are a godsend.

In an honest and sound monetary system based on a commodity (gold and/or silver), "deflation" would be the norm, with prices and costs falling across the board year after year. Money's purchasing power would constantly increase, which would benefit wage earners, those on a fixed income (pensioners, retirees), and savers. Yet, for central bankers, such a scenario is a nightmare and is to be opposed, which is what Draghi is doing with his latest round of money printing.

Draghi scoffed at the idea that the ECB's easy-money policies would lead to higher prices in the future: "There must be a statute of limitations for those who say there will be [price] inflation." In fact, the ECB President wants an annual increase of prices of just under 2% as a goal of the central bank's monetary policy. Draghi thus wants Ireland and Europe to be spending 2% more each year for goods and services. Thanks a lot, Mario.

Ostensibly, one of the reasons that the Euro and the ECB were created was to impose monetary discipline on those nations who had profligate inflationary histories. Yet, with Draghi's latest move, the ECB has joined the ranks of the egregious money printers of the past.

Since the ECB can no longer be trusted to carry out its constituted purpose, Ireland, if it wants to stave off future financial disaster and revive its moribund economy, needs to end its participation in the "Euro experiment" and return to a monetary system based on "hard money." Only when Mario Draghi is unceremoniously deposed of his money-printing duties, and the organization he heads abolished, will the chance of sustainable Irish and European prosperity become a reality.
(The writer James Philbin is Professor of Economics at Lord Fairfax Community College, Middletown, VA.)
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The eurozone is witnessing its best calendar quarter for three years, despite manufacturers reporting the smallest increases in output and new export orders since last November
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German finance minister warns that country will need to spend more to defend itself in coming years, a day after similar comments were made by former MI6 chief in UK.
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Greece's new left-wing finance minister Yiannis Varoufakis said Friday the anti-austerity Syriza-led government will not negotiate over the Greek bailout conditions with the
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