Thursday, 18 November 2010

Ireland

Looking with interest and awe at the Irish financial crisis.

First off, awestruck that our government would agree to just hand over 7 billion pounds to prop up Ireland, just like that. Thats a similar figure that the cuts we're having to endure here have supposedly saved. So in effect, we're suffering for nothing: we won't save that money, instead our government have handed it over the EU central bank in order to bail out a country in the Euro zone: a project we're not part of.

Second, the fact that up until today the Irish government was adamant it didn't need help, until IMF and EU officials arrived in the country. Were Ireland forced into accepting a bailout? What is the bailout for? To help Ireland, or alternatively as I suspect to avoid panic in Germany and France?

This is just like black Wednesday: an artificial collection of countries using a single currency, on different economic cycles will inevitably provide opportunities for speculators. Just as there were runs on individual currencies during the ERM years, so there will continue to be attacks on vulnerable countries with the Euro.

After Ireland, there is the question of what will happen to Portugal and Spain. Its a never-ending cycle and these days we don't have bottomless pockets.

I said a couple of years ago that the problems associated with this recession would continue until price inflated markets like housing collapsed to a more realistic level.

Instead our government's plan is to throw our children's and grandchildren's money away trying to prop up inflated prices until inflation kicks off and normalises those prices again. It'll take decades to achieve, decades where the likes of you and me have to suffer the consequences of two decades of uncontrolled capitalism. Don't think that growth in the economy on its own can resolve the problem: thanks to all of the debt and uncertainty growth will be extremely weak for deacdes too. Not until the banking sector have expunged their toxic assets can we be really confident again. Given the usual term for a mortgage is 25 years ( you remember the original reason for the crash was dodgy mortgages), then you can expect the problem to last for at least 20 years , by which time most current mortgages will have matured.

Some days I feel like the best plan for the future is buying a boat, sailing off into the distance and not coming back. Maybe find a country with a more stable economy.

Update:

I'm reminded that on black Wednesday, none of the EU countries came to our aid. So where's reasoning behind our obligation to  the Euro Zone?

Sod 'em I say. I'm fed up to the back teeth of "our" government dipping into its pockets to help everyone else except the bloody taxpayers that fund all this madness.

2 comments:

  1. For what it's worth I think this has been forced upon Ireland. The past few weeks Europe has done nothing but produce scaremongering stories about Ireland's economy even though Ireland protested.

    Europe's lies worked though and investors started to back off, thus leaving Ireland unable to continue with their plans to get the show back on the road.

    I may be wrong of course Del.

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  2. Thats the impression I get: Ireland don't want the bailout, they'd rather do it themselves, but France and Germany are getting jittery about "their" Euro being devalued and are forcing billions of our nothing-to-do-with-the-Euro pounds into the pot to boot.

    Of course once Ireland accept this manufactured "bailout", they relinquish a whole load of financial sovereignty. In effct the European Central Bank calls the financial shots for them.
    Which means the Franco-German centric ECB will work in the best interests of the "main" partners of the Euro zone at the expense of the poorer countries.

    I think taking a country hostage by blackmail is despicable. I just wonder if the IRA will awaken and understand who is the real threat to Irish sovereignty.

    Have the EU picked on the wrong country? Only time will tell.

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