The Great International Depression of 2008 & Beyond /

Your man's story is pure horror for me - it's slavery, enslavement - i see it as nothing else I'm afraid. I don't know which one of you it was that said it here but we seem to not be happy unless we are consuming or unless we surround ourselves with things. Could have been Squire who said it more eloquently than that which is why I try to keep some of your more quotable posts.

But it seems to be true for a lot of people in general but particularly for many of those who got a flavour of the New Money of the Celtic Tiger, God rest his soul. The people who impressed me most who I lived with/met during college and after were always those who seemed to enjoy nothing in particular - boiling an egg in the morning, enjoying a good meal in the evening and reading; going for a good long walk, having two or three pints now and then and a good chat; going pure "mental" once in a while by indulging in a feed of Lennox's on Barrack Street, Cork - nothing major boy.

I don't know if those with the new money have to go through a phase to become prudent people with old money - both sides are necessary for economics. The spendy people are certainly feeling it now though ...

I think that is the problem, people got a love for money and just spent spent spent. You have to have sympathy but at the same time there is a need for personal responsibility in this all. I do hope that these people will struggle through, but equally that they will learn something. Lessons can be very tough.

There's one thread on the Pin which has an Irish Times article saying Ireland isn't an economic basket case..... that we have plenty of deposits in terms of GDP and practically no Government debt.

Kerrynorth is begging to differ.

I think it's the likes of your man above with the CC debt of 15k that is the problem.. Ireland has 1.6 trillion in personal debt ... some big jump there from the Irish society of Alice Taylor's To School Through the Fields, not that I've read it. Debt like that is like hardened arteries for an economy surely ...

Good buzz around today all the same - plenty of people out loving and buying and smooching and all that stuff. Good weather too.

And lastly from the Pin - the timeline of the Great Depression Parte Deux II

http://ddposts.s3.amazonaws.com/crisis_timeline.png

Audi

During the back half of last year I had reason to look at problem mortgages/loans really from the asset point of view. What do you do with the property if repossession was necessary?

It was clear enough that most people who were in trouble were generally reasonably responsible and usually it was illness or similar that tilted them over the edge. Mind you there were also a right few idiots with multiple leased cars and furniture on the buy now pay later. Also the amateur property developers; some were utterly pathetic. You have to ask why did these people get loans?

Generally for most people the difference between being solvent and insolvent is marginal, Quite often they can pay well over 75% of their liabilities and often many actually own a large percentage of their house but cannot sell. Many of these people will hopefully have a bit of a rest bite now that base rate is 1%. Most of it is sad, lose your job and lose your home. There was one 1 can remember where the husband was in a car accident, quite badly injured, delays getting money from insurance, no income coming in, bills piling up. The spendthrifts are not necessarily the problem.

I agree that anything that brings down the cost of electricity in Ireland would be a good investment and like yourself I would sooner see money spent there than shoved into some banking void.

KerryNorth is usually a sound opinion. I have seen some articles recently, think one was in the Times, suggesting that the fall in house prices (UK) was starting to level out. They are virtually propaganda as they are based on very isolated data. House prices only dropped 1.3% in January instead of the 1.5% in December, rejoice. The big problem for the Irish economy, I would imagine is the over reliance on overseas investment and a construction industry that will be languishing for another 3 years.

Mind you if we can get through to the Autumn without calamity this may well have bottomed out with more general recovery mid 2011.

There will be no levelling out as this is an epic history making event. What some might call over her A Game Changer

People here are starting to say 15 years before recovery !!

Squire - you built stuff for people and now it's not moving ? But you have to get paid if you haven't already been paid so some of tha 7 billion goes to you , doesn't it? Or maybe I'm not understanding it right.

Basically it seems that we are now left with a lot of stuff we hadn't planned for ... this is getting sold as a worldwide crisis of Too Much Stuff lsuch as commercial properties, vehicles or houses. Was there a big overshoot in the production of Stuff but with no or falling demand. This mightn't be too bad if it was local but it's over two or three massive trading blocs that this could turn into a big stone dropped in the water which will make big waves yet.

Where can you see a recovery coming from though ?

Auditor #9 wrote:

I think it's the likes of your man above with the CC debt of 15k that is the problem.. Ireland has 1.6 trillion in personal debt ... some big jump there from the Irish society of Alice Taylor's To School Through the Fields, not that I've read it. Debt like that is like hardened arteries for an economy surely ...

That's not all personal debt, it's total debt, State, corporate, financial sector & personal. The personal element would seem to be something less than 300 billion, but with I would think (guess) something in the region of twice that, even at today's prices, in personal assets.
While it's true to say other countries don't have that level of personal debt, it's also true to say that compared to Ireland they have feck all in the way of personal assets.

What personnel assets have they over and above anyone else.

YoungDan

What we need is a Hail Mary pass.

I must confess that that seems unlikely with the current quarter back. The team are fumble prone and some may as well be playing for the other side. The receivers have become lazy and expect to be spoon fed. Sooner or later the supporters are bound to demand change, but it may take a while as the last quarter back was plain dreadful. They have become used to poor achievement. The current run will probably fissile out around the 30 yard line and with the wind in their face that will be asking a lot of the kicker.

The Western Jokers have been in decline for decades and that underlying performance decline seems likely to accelerate. They will eventually hit bottom and I doubt if they will like it. It may be that the teams that they are playing against may also be past their prime and this may save them for another few years.


I think reappraise in September. I am not at all sure how this will turn. There are too many inter-related problems/factors.

Auditor #9 wrote:

People here are starting to say 15 years before recovery !!

Squire - you built stuff for people and now it's not moving ? But you have to get paid if you haven't already been paid so some of tha 7 billion goes to you , doesn't it? Or maybe I'm not understanding it right.

I am not complaining, I got out of Ireland long ago. Except Squire Hall which is a money pit. The bailouts don't benifit me one cent.

Don't really do direct construction any more. We had to change a construction firm into basically a management firm as we ran into all sorts of difficulties related to an adverse working environment in a more troubled part of the world. It was literally a baptism of fire. I even managed to get shot. However some very capable people who I still work with, and it was turned around. We now put together projects (not entirely construction related) and get outside investment. In the end it was probably a good thing for all involved as it provided a vehicle to get people and their families into better living environments and we became a lot more flexible and diverse. Assets sold off and money freed up and it built up a good team that works well, but it was a really, really steep learning curve. To me what the government is doing is mad. It is the equivalent of putting all your money and more on an outsider in the 3.30.

Auditor #9 wrote:

Basically it seems that we are now left with a lot of stuff we hadn't planned for ... this is getting sold as a worldwide crisis of Too Much Stuff lsuch as commercial properties, vehicles or houses. Was there a big overshoot in the production of Stuff but with no or falling demand. This mightn't be too bad if it was local but it's over two or three massive trading blocs that this could turn into a big stone dropped in the water which will make big waves yet.

I think that is the wrong way to look at it. The property is a potential asset. A large retail unit is just a shell, it could easily be a workshop, or an office. Apartments could also easily be made into small start up offices. All you need is a flexible planning service and you have the potential for cheap accommodation.

Auditor #9 wrote:

Where can you see a recovery coming from though ?

Ireland is difficult but I think, firstly food is going to become more expensive, energy production if they have the sense to get on with it, there will always be a certain amount of tourism, there will be construction even if new build is more limited there will always be repairs. There will be Services, retail, government jobs etc. but for a real recovery there needs to be a fundamental change in ethos. You need to support indigenous businesses and retain them in Ireland. Also the cronyism needs to go and standards in public life cleaned up. TDs etc need to set a proper example or be made an example. Education is strong but there has to be a realisation that the educated (usefully educated) are first to leave if there is no employment prospects at home. Look at Africa. They educate and there, for many, it is a passport.

Well I might have been more accurate to say the game has changed--as in a new type of game is about to begin. This game began in 1694 and now it is over. The man on the street is oblivious because who wants to believe the old order is over.

The financial people recognise that there is a crisis and they are lobbing Hail Marys in a desperate bid to hold back the tide. It is literly make or break time and the timeframe is weeks not years. This article today by Schoon is very thought provoking and we will see how it settles out

http://www.financialsense.com/fsu/editorials/schoon/2009/0213.html

It takes a bit of reading but this is a good point


Capitalism’s fatal flaw is apparent only in its later stages. As capitalism matures, its inherent systemic instability manifests. The very expansion of capitalism sets in motion its demise. The Achilles heel of capitalism is its perpetual need to expand.

Only perpetual capital expansion can create sufficient capital flows to service and retire previously created debts, the amounts of which are always increasing because of the accruing compound interest being charged. While any slowdown is cause for worry, a contraction bodes far worse."



Because money is debt based and therefore borrowed into existance, the quantity must always be increased in order to pay the interest.



Another good point



"The roots of modern economics are intertwined with institutional deceit on a massive scale because the material rewards are so great. Therefore, the attempt to ascertain the truth about money is not an easy task; and it is not made easier by those who benefit by its deceit."



This can be seen daily. The simpliest of things are given fancy names to confuse. For example printing is called quantative easing. They are easing the quantity all right.



Whether enough people will grasp what is happening remains to be seen

Squire wrote:

Ireland is difficult but I think, firstly food is going to become more expensive, energy production if they have the sense to get on with it, there will always be a certain amount of tourism, there will be construction even if new build is more limited there will always be repairs. There will be Services, retail, government jobs etc. but for a real recovery there needs to be a fundamental change in ethos. You need to support indigenous businesses and retain them in Ireland. Also the cronyism needs to go and standards in public life cleaned up. TDs etc need to set a proper example or be made an example. Education is strong but there has to be a realisation that the educated (usefully educated) are first to leave if there is no employment prospects at home. Look at Africa. They educate and there, for many, it is a passport.

I had asked you where you thought the recovery would come from and the other answers I've seen is that population will continue to grow for a spell at the current rate (about 1.7m per week) and could at some point reach a critical mass as a group of mouths that need to be fed or schooled or all buy a playstation 7 together or something but it more looks like it will be slow burn which is good anyway.

Another angle is international prosperity and leisure. I believe that a certain proportion of the prosperous in a society tend to demand travel, education or entertainment instead of profit and assets in return for their, perhaps newly acquired wealth. Imagine a tide of Indians or Chinese in sudden overflow as they breach a saturation point wanting to just take off and see Europe or the US. Or maybe there could be a similar bursting of the waters in terms of demand for consumer items??

These are the natural fountains of new business that some have foreseen but who really knows what will happen in reality ?? The Tech story that is unfolding and has been since FIRE is the one that's most fascinating for me. Computers burst on the scene in the early 80s and have contributed to a consumer and knowledge revolution of sorts and there is still much much scope for it to expand greatly.

But what if there's something else going to come along that would make the big headlines and drive world growth - which I see in unconventional terms more in the sense of growth of activities like exercising, or growth in demand for or need for quality, not necessarily in terms of consumption of scarce resources. There could be a whole hemisphere of new products waiting to erupt in the biosciences for example - longevity products, cloning, DNA research....

I'd hate to think the island of Ireland would undergo another food supply threat but I doubt if it will. I agree with you that food will become more and more important and I've often wondered if the basis for the EU isn't to provide as secure and socialistic mechanism for providing internally-produced basic foodstuffs primarliy for internal consumption and then the surplus for export. Unless there is massive environmental damage in fecund Europe then we'll never starve as long we're willing to work.

Transport of that food might become a problem though, which is where energy comes in and I don't think Europe has a secure supply of energy at all. So growth in energy production has to be one of the ways forward too ...

youngdan wrote:

What personnel assets have they over and above anyone else.

Property. We have the highest rate of home ownership known to man, throw in the buy to lets, the Irish holiday homes, the foreign holiday homes for personal use, foreign property for holiday letting purposes, "lease back" etc. plus every other form of world wide property investment we could think of both commercial & residential and you get a fair idea of what we did with our borrowings. Property is not great at the moment, but unlike most shares, when this is all over, the property will still be there, with a value to offset against debts.

Did you read that story on the indo about the fools that are taking a serious bath from property they bought in Florida. They must never have heard of the Florida Land bubble of the mid twenties. Anyone who bought here are screwed with property tax killing them. They may be saved if the dollar crashs before the euro.

I imagine very few people own their homes in Ireland, they don't own them till they are paid for. God help them.

I have declared over yonder that all debt in Ireland should be defaulted on and a new currency introduced. Doubtless you will think this crazy like that fool Hiding a Poster's Behind. He must be a FG hack, they are the dimmest.

I read that article you linked on capitalism Youngdan, and I will post it over on the bookclub thread too, as it bears taking the time to read.

http://www.financialsense.com/fsu/editorials/schoon/2009/0213.html

He explains that capitalism demands constant expansion in production of a rate that can pay back compound interest, and that ultimately (now) that is not sustainable. He doesn't add that the rate of profit itself tends to decline due to a number of factors including costs of technology.

It is good, so far as it goes, and I recommend reading it. I agree that this is a historic collapse, and that it was ripe to go in 1971 when the US was forced to abandon the gold standard. The writer, although he is right about a lot, is too focused on finance capital imo. There is also a political world, class interests and heavily armed powers who will seek to default. Do you think the US ever intends to pay back its debt to China?

The contradiction people are facing is that the capitalist system is collapsing like a house of cards at a time when human skills, science and technology allow for a better life for everyone. Instead of a better life, capitalism offers protectionism, war, and deprivation. Its historically outmoded. What we saw in Gaza in terms of turning technology to achieve human destruction and waste is a foretaste.

The only way that capitalism can restore profitability is not the gold standard, it's to physically wipe out what to capitalism is excess productive capacity - close down factories, leave houses empty or knock them down, to destroy public services and to drive down wages and the living standards. That could not be achieved without civil rights being eroded and the heavy hand of the law applied. This time though the scale of collapse is such that even widespread war could hardly achieve what would be necessary to wipe the slate clean and perpetuate the system.

The alternative is to nationalise the key industrial and infrastructural assets and if necessary the land, and to organise production on a not-for-profit basis to ensure that people are fed, housed and clothed. This is aka socialism. Some kind of hint of it has been seen in Latin America, but only a hint. This kind of change not going to be brought about by the likes of Cowen, Gilmore, Obama or Gordon Brown, so the biggest job now is to replace them.

THe EU is in the process of dismantling that post war system of food security Auditor#9: putting it back, but on a world wide basis, is what I think we need to be doing.

youngdan wrote:

Did you read that story on the indo about the fools that are taking a serious bath from property they bought in Florida. They must never have heard of the Florida Land bubble of the mid twenties. Anyone who bought here are screwed with property tax killing them. They may be saved if the dollar crashs before the euro.

I imagine very few people own their homes in Ireland, they don't own them till they are paid for. God help them.

I have declared over yonder that all debt in Ireland should be defaulted on and a new currency introduced. Doubtless you will think this crazy like that fool Hiding a Poster's Behind. He must be a FG hack, they are the dimmest.

Relatively speaking, very few people here invested in American property, Holiday property was mostly Europe and largely Spain, Portugal & France with commercial property in the UK & Germany.

Not so, the large majority owe nothing or very little on their homes, either way it doesn’t matter, the point is when putting a spotlight on the level of personal debt in Ireland it should be a basic requirement to mention the offsetting assets, this never happens Dan, the doomongers are off the leash and normal rules don’t apply.

I don’t believe default is the way to go and talk of a new currency is for the moment “nuts”

If you think I’m a fool Dan, just come out and say it, I won’t die of shock and in return I might have something to say about it myself.

youngdan wrote:

Did you read that story on the indo about the fools that are taking a serious bath from property they bought in Florida. They must never have heard of the Florida Land bubble of the mid twenties. Anyone who bought here are screwed with property tax killing them. They may be saved if the dollar crashs before the euro.

I imagine very few people own their homes in Ireland, they don't own them till they are paid for. God help them.

I have declared over yonder that all debt in Ireland should be defaulted on and a new currency introduced. Doubtless you will think this crazy like that fool Hiding a Poster's Behind. He must be a FG hack, they are the dimmest.

Isn't our personal indebtedness in mortgages around €300bn ? That's not knowing what CC debt is among other loans. Sorry but I was aware last night that the 1.6 trillion was not just personal debt but all debt - too late when posting. However, that Government debt will be partially shouldered by the people so how much in effect is the personal debt when all is said and done? Businesses pay 12% tax too in comparison to 20 and 40% for individuals so it isn't difficult to see that individuals are shouldering a whopping fraction of that 1.6 trillion.

I can see youngdan's point above that God Help Them over the next few years. OK - things might 'pick up' in 2011 - but that's an excruciatingly long way to go for many - that's nearly half of the formative period of a child's life. And that's gambling that it will 'pick up'. What if there are unexpected shocks involving oil or food price ? Or other energy supplies ? We are way too exposed with energy here and the whole thing has little wriggle-room it seems to me if the Ask About Money lad I linked to (above?) is any way typical. Another woman on AAM wanted advice on how to increase her leftover pay of €177 a month - that was when the ECB rates were a good bit highter so she's wriggled a bit freer since then and doesn't have to get rid of her bin or satellite and do those luxuries DIY now. Hoever, with the pension levy, the Govt. has put her right back up to her neck with perhaps €200 + left over at the end of the month after the shopping was done thanks bit of Jesus. I needed new brakes on my car last week which cost me €90 (I'll do my own next time, thanks) so in the case of that woman if it were her she'd have 100 quid left over if it simply HAD to be done. Another week you might need a component that costs overall 200 quid and then you start looking at your car as a serious burden on your finances. What if she's living in the commuter belt and how many more people have painted themselves into corners like that?

No wonder they're calling the titles of their threads 'Debt Disaster - Please Help'. A bit of frugality is no harm for people but then there's drowning in debt which that seems to me to be.

(I've just read most of that article youngdan - lots of nice detail in it at the start about the Gold Window)

YoungDan

Read the article and agree that one of the reasons for the collapse is greed within Banking. Interest is a concept that will eventually fail. It is usury and the Islamic lot and early Christians are right on that.

I see the current problem slightly differently, it is the inability of economic activity to disperse across populations and the world generally that has created a system that requires, as an economic engine, one part of the world to consume goods that they often do not need. Yet elsewhere there is clear need. The problem is wealth concentrating in fewer and fewer hands and the misappropriation of resources. Property bubbles neatly show how an over concentration causes price inflation followed by sharp deflation which wipes out the wealth. The money spent on a false property market at home should have been invested in other activity.

Another problem that we face is an inability for people to invest in a worthwhile manner. They have come to see their house as a form of long term security rather than just a house. Ordinary people can not make effective use of any surplus that they may have and the likes of Planners etc make sure that they don't start metal bashing in the back garden, yet in times past that is how businesses started.

I am less than sure that moving to a gold standard would solve the worlds ills. It merely transfers power to another group and wealth will gather more wealth until that system too collapses.

I don't have a problem with paper or shells as a means of trading, It is simply an IOU, for a pig, two sides of mutton, a wheel whatever. The concept is simple enough, it is just a commercial lubricant that enables trade and currencies should rise and fall against each other to reflect relative strengths of underlying currencies. I have extreme views on this and do not believe in the concept of interest rates as a mechanism of control, it is instead a distortion. It enables currencies to achieve inflated values. Printing on the other hand without an increase in the number of sides of pork is plain devaluation.

The problem is the manipulation and control of money supply not the concept. I don't see a gold based system being any less prone to manipulation and may present problems all of its own. A finite resource being used as a base in an expanding economy is going to cause problems. Ultimately any system will fail once the resources that fuel it are depleted. No currency system will grow a cup of rice.

I think faith in gold as a base for currency is possibly misplaced and over simplifies. I think real consideration needs to be given to regulation, transparency, and how to ensure that wealth disperses across society. I am convinced that most Empires collapse because of the accumulation of wealth in fewer and fewer hands and the eventual extinguishing of opportunity that this creates.

That is not to say that gold or silver may not be a a worthwhile place to rest some money in anticipation of collapse or rising inflation. It is one for each individual to assess. Be it gold, silver, copper, land or oil it is all a matter of judgement. Silver seems to be rising again as is gold but with the amount of rigging going on at present who knows? Also I tend to regard gold as a commodity like any other. It is only worth what anyone is willing to pay. There are more useful substances.

Agree with you about the language being used. There is a lot to be said for people who tell the plain truth as they see it, in plain ordinary language. Instead the sheep prefer to listen to rams that bleat utter gibberish as that doesn't cause them to fret.

As for Bankers commercial ability, I haven't met too many that I would trust on a market stall. Most of them are just glorified clerks.


Audi

Bio engineering will be a growth sector in the coming century. That is a demon that could well save or destroy us.

oops double post

You've a practical outlook on and approach to money Squire but you're one of the few who do. It is after all at bottom probably only a way to 'claim labour'. A lot of the youtbube lads promise you gold will retain its value in the event of a currency collapse but they are hoping that the euro and stg and others remain stable after a dollar collapse .... how long might it be before they'd need to get their gold through that window to get the euros otherwise they could lose more than they bargained for if the likes of the euro was to get pegged to a new Amero or something - which it probably wouldn't though but who really knows?

If the dollar collapses and a new system arranged which would include the Euro and others then is there really a guarantee that an ounce of Gold which buys X now would buy more or less X in the event of a dollar or other currency collapse ? It could well be that with a new currency your Gold or silver might buy you one half or one tenth X - more likely than what they are gambling on.

I think it's a bit of a scam that Gold and Silver thing myself although I like silver for aesthetic reasons and it could be it might have industrial purposes. It's better to get yourself some machinery and hardware in my book along with some knowledge. And contacts ....

Good article Dan.

I've been thinking, in my own limited way, that the game is now about wealth preservation. While the majority of talk and print has been about the poor sods who've been hurt by the property bubbles, the underlying subtext is really about stabalising the currencies in order to for those who made mega-fortunes to maintain the accumulated value of their spending power. What good is a billion bucks if it can't be invested in a stable currency with stable returns.

Personally, I don't put much faith in a gold or precious metal standard. The only benefit is that the money supply is constrained by the physical amount of metal on store to back a given currency. It's very hard to print another trillion dollars, backed by gold, when the gold isn't in the vaults - or even a fraction thereof.

I tend to think along more utilitarian lines and believe that the fiat currency which is backed by the goods, services and collective wealth (valued by the a nation's collective infrastructural assets) is a more tangible measure of value and should be the basis of goods and service exchange. I can't help wondering if Clinton's changes to GDP measures and the skewing of inflation figures wasn't premeditated. Did they believe that they were so debasing existing dollars through increasing debt loads that people would eventually call for a tangible dollar valuation based on assets, and so they decided to corrupt the figures to make this virtually impossible? (And, mind you, a few gold sovereigns in a safe place these days is only prudent. Gold is transferrable. A bridge is far harder to exhange for other goods.)

But the sad upshot is that the plebs and their masters are tied to the debt system. The plebs wander along in blissful ignorance and the supposed educated only worry about proving they are more valuable than the plebs by acquiring bigger debt loads. The VIs have the people where they want them - at each other's throats. Long live indebtitude - which is leading to a throng of the indebtsitute.

If we went back on the gold standard, I guess India could buy up the rest of us.

Surely rockyracoon what we have now is more or less -

Quote :

fiat currency which is backed by the goods, services and collective wealth

The problem is that too much credit was issued, and that there wasn't enough "real wealth" to back it.

If the credit had not been issued, then the crunch would have been smaller and come sooner (1971?, 2002?), but there would have been a crunch.

The critique is good, but how do we replace this?

Extending credit beyond growth in goods is the same as printing money. It is a form of devaluation. What should happen is the currency should adjust down in value. That is what happens, as it costs more to buy assets. It is not the price of houses that is wrong but our view of the value of the money. The increase in money supply buys you no more so bubbles and inflation are merely the market correcting imbalances.

In a period of deflation the opposite is true, money supply is restricted and reducing and it increases in value against assets. The trick I think is to keep money supply level with increases in GDP. It really does not matter if you are in Mayo or Dublin and part of a new punt zone or Ireland and part of the Euro zone. It all requires responsible behaviour locally and restrictions to ensure that that does happen. Booms in one part of an economy and stagnation in other regions are all to common and happen in any economic zone. It is because in one area money supply relative to assets is increasing and the other it is in reverse. The smaller the area covered by a currency the less likely this is to happen but if we go down that path every town should have its own currency.

The problem that these fluctuations cause are related to the many who bought a house when money was cheap and and are repaying when money becomes more expensive. The asset bought no longer covers the amount borrowed. On the other side of the coin there are many who gain. Those that sell when money is cheap and hold that money into a period when it appreciates in relative value.

I believe that instead of local currencies that a better solution is to break a bubble with tax. Tax can be directed to take money directly out of the area that is overheating and the spending can redirect that revenue. It would have been extremely easy to tax the property bubble in Ireland back to a reasonable level.

If a whole economy increases money supply then the currency should be allowed to devalue against that of its trading partners. If a region behaves irresponsibility it cannot correct its errors by this means. The loan repayments are themselves a tool which takes money out of the economy and deflates it. You have a period of spending followed by a period of restraint.

Within the Euro zone all Ireland can do is repay money borrowed or default and of course behave a lot more responsibly in the future. It won't have many options and no white Knights. I think the ECB will find a means to increase money supply just as the USA and the UK will be doing. An over strong Euro would kill Euro Zone business .

The whole idea of a gold backed currency is to prevent the printing of that extra billion. That is why it is called sound money or honest money. The fact that the central bank can print a billion and thereby steal a billion of value from the rest of us is the problem.

If the number of sea shells were finite then shells would be fine. Anything would be fine as long asmoney could not be printed by a clique. Why should a clique have the power to print a trillion dollars and screw the rest of us

youngdan wrote:

The whole idea of a gold backed currency is to prevent the printing of that extra billion. That is why it is called sound money or honest money. The fact that the central bank can print a billion and thereby steal a billion of value from the rest of us is the problem.

If the number of sea shells were finite then shells would be fine. Anything would be fine as long asmoney could not be printed by a clique. Why should a clique have the power to print a trillion dollars and screw the rest of us

Who decides how much gold will buy what though after the Crash and the new currency gets theoretically set up? What if your lump of gold now can buy you a new Citroen C5 now but after the conversion will only buy you a Citroen C1 ??