Friday, October 01, 2010

Ireland's forthcoming default

Two article today present antidotes to the typical leftwing "f'ing bankers" reaction to the foolish decision by the Irish state to bail out its most profligate bank.

City AM's Allister Heath blames the Euro for feeding Irish banks with low interest fiat money, when interest rates should have been far higher. The Euro, reflecting the dominance of German economic conditions, wouldn't reflect the boom of Ireland.

The Adam Smith Institute takes things further, blaming the ridiculous 100% government guarantee of deposits at Irish banks for encouraging profligacy and costing taxpayers an absolute fortune (and removing any interest in people considering how viable their banks really are). It calls on the Irish government to end this guarantee, slash state spending and withdraw from the Euro.

The fear being that the Irish state may default itself, which of course would render all its borrowing as junk, but would mean the state would need to cut back to what it can afford.

Meanwhile, if you wanted to retire in Ireland and buy a house, now is the time.

2 comments:

Jeremy Harris said...

Some good property investment oppurtunities in Ireland at the moment..?

libertyscott said...

I wouldn't have thought there was much opportunity for gain in the medium term to be honest, but if you want a retirement or holiday home then it is the time.