Only Vote for Politicians who promise these things!!

count66

In order to save Ireland economically there are really only a few options open to this country which in the short term will be very, very painful for this country, but in the medium to long term will save this country from ruin.

• First we need to restructure our debt, by separating clearly our sovereign debt from our bank debt and offering no more than 10c on the euro to the holders of this debt. Ireland owes the ECB over €185 Billion euro alone, we can use this very large stick to beat the EU to force our hand.

• Secondly, we need to put plans in place to leave the euro, not the EU, but the euro in an orderly manner. The euro is one of the big factors that played into the financial mess that we are in. By taking away our national right to set our own interest rates, we allowed cheap money to flow into this country and set in place a debt fuelled boom. It also took away the central banks need to monitor in depth what was going on in the economy and to set interest rates accordingly. The huge danger at the moment is that, Germany is now powering ahead with economic growth with the result that it has rising inflation. This is going to force the ECB's hand to raise interest rates in Sept 2011 and for the next couple of years on a quarterly basis. Such interest rates hike will be a disaster for the Irish economy and will probably force the mortgage market to totally collapse as mortgage holders can ill afford to pay extra mortgage rates on top of increased taxes.

• Finally, given Merkel & Sarkozy latest plan to try and force Ireland to raise it's corporation tax rate by the end of March 2011, we need to finally realise that the EU no longer has our interests at heart. Anyone who did would realise that it is this very corporation tax rate that is currently keeping Irelands export economy alive and growing. We need to fight back now and fight dirty and hard as it's our very nations economic future that is at stake.

I work within the financial services industry (not banking) and I deal with international investment managers every day. They have told me plainly that they expect two things, for Ireland to default and if we don't do it now we will ruin our economy for generations and also that they expect the EU, as long as we stay in the euro to go after our corporation tax rate and that if this happens, no mulitnational will remain in Ireland.

The investment managers are some of the holders of these bank debts and they have already factored these default losses into their projections and take losses as part of the investment game. It is not on a long term basis going to affect their view of Ireland as a country. Not defaulting and continuing on the path we are will!

Any vote seeking politician who is not wise enough to understand these basic principles that I have outlined above is not fit to govern this country. If they do come knocking on your door, and say rubbish like we will renegotiate the interest rate on the deal - tell them that paying interest on a loan for bank debt to shelter bondholders who don't need the money is not acceptable on any level to the Irish public, that remaining in a currency that is setting interest rates to suit Germany economic situation and not Ireland's is not acceptable and that moving our corporation tax rates to suit Germany and France's own regimes is not acceptable.

If they start to say, look at all that Europe has done for us, please remind them that, yes that was true but sometimes your worst enemy is those that treat you kindly at first and lure you into their web. I'm sure that the British did many fine things for this country too during some of their time here, like building the railways, but at the end of the day, they had to go too.

I'm not a eurosceptic, I still believe in the European Economic Area but we can no longer afford to surrender our future and our upcoming generations future for the sake of the wellbeing of the Germans and French.

If none of our potential policiticans realise this then don't vote for them. Tell them on the doorsteps this is what we the Irish people want - this is our country and political parties policies should be set by us, the Irish people. If not and they try and force their policies upon you, then do not vote for these people.

Vote well and wisely.

P.S. Sinn Feins policy of just telling everyone to get lost debt wise won't work either so this is not a pro Sinn Fein or United Left Alliance post. They need to refine their policies too!

rodento

Err!...

How can you make plans to leave the Euro in an orderly manner

Also I would have thought that the multinationals based here cause of the corporation tax and the fact that we are a euro gateway

count66

rodento wrote: »

Err!...

How can you make plans to leave the Euro in an orderly manner

Very easily - the same way we made orderly plans to enter the euro - why do people think we are tied to this thing forever.

We need to do it though in a very carefully and planned way and it won't happen overnight. We need to restructure our debt and get that issue sorted out first. Once that's done and we pay down our sovereign debt in an orderly manner, as well as continuing the economic reforms that are necessary we will reassure the markets in time that we are a good solid bet to lend to again - in time.

Finally we need time to get our mint back up and running. There are lots of other things too - but that is just a sample and as I said it won't happen overnight but it is very possible.

Multinationals use Ireland as part of the double dutch strategy for saving money on the tax paid on their profits - you can google this as it's quite complicated to explain. It has nothing to do with the euro - most multinationals use hedging (the buying of forward currency contracts) to prevent fx exposure anyways as their base currency is normally $US so they can still puruse this strategy even with our own national currency.

Plus most of the multinationals came here prior to the launch of the euro so not really a factor.

My preferred option would be for Ireland to even think the unthinkable and provisional adopt sterling for a short period until our economy is fully stabilised as our economy is more closely alligned to Britains rather then Germany's. Once stabilised we should then revert to our own currency

3DataModem

Any politician who promises to deliver anything at the doorstep if elected is lying.

All that government party members can deliver is toeing the party whip.

All that independants or small parties can deliver will be decided by coalition horse trading after the election.

My suggestion:
Pick a party that's manifesto is close to your wishes OR pick an independant whose top two or three wishlist is something close to your heart. Then vote for them.

LeixlipRed

So you're a financial speculator? I'd easily trust you as easily as I'd trust Maggie Tatcher or Leo Vardkar. Hedge-emony.

count66

LeixlipRed wrote: »

So you're a financial speculator? I'd easily trust you as easily as I'd trust Maggie Tatcher or Leo Vardkar. Hedge-emony.

Glad to see you have a vast intellect and have challenged everything I wrote in such a clever, deep and rational way.

It takes an intellectual giant to answer my proposed solutions to Ireland's economic difficulties in such a mature, non name calling manner ha ha.

You made me smile - I'm new here but if that is the level of intellect of a moderator around here that is just pathetic.

Just for your info, I'm actually an internal auditor and prevented my particular institution from getting involved in any of the speculation that brought down most of it's competitors so I do actually no what I'm talking about when it comes to these things.

What's your qualifications other than name calling and making ignorant assumptions?

LeixlipRed

Qualifications? Don't need those to be right wing, just a belief in capitalism and privilege.

LeixlipRed

Btw, I was just winding you up. So don't take it too personally, I agree, we need to leave the euro asap. We need to bring the whole euro project crashing down immediately. How do we do that? Default.

count66

LeixlipRed wrote: »

Qualifications? Don't need those to be right wing, just a belief in capitalism and privilege.

The whole issue with Ireland is we don't have capitalism. Capitalism lets businesses fail that are not viable and the market dictates that.

What we have at the moment is socialism whether you like it or not as when the state intervenes in an ecomony to achieve it's plans and prevent market forces from doing their job then what you have achieved is socialism.

I'm actually an anarchist by ideology but also a realist who knows that we operate in a world that is not and we cannot go it alone so we have to play the game the best we can then which is why the policies outlined in my original post will work.

count66

LeixlipRed wrote: »

Btw, I was just winding you up. So don't take it too personally, I agree, we need to leave the euro asap. We need to bring the whole euro project crashing down immediately. How do we do that? Default.

Sound mate - although I must admit I took the bait on that one.

To have the Euro collapse entirely at the moment would be a disaster for us and most of Europe. Germany simply won't allow that to happen anyways.

The markets have stated that what they want to see from the euro countries is a closer fiscal and political union and if this is not possible then the euro as a currency is not viable and should collapse.

Whether we agree with this sentiment or not is really futile as this is the reality we are living in, hence Merkel and Sarkozy efforts again to get us to move on our corporation tax rate. I would assume to try and get the new Government to do this they will offer the carrot of a renegotiated interest rate on the original deal.

If our new Government is stupid and populist, it will accept this and come back to the people of Ireland saying look what we clever lads have achieved and only for a 0.5% movement in our corporation tax rate. The point will be though that the multinationals will see this as an immediate signal that Ireland can no longer be seen as a longer term location for investment as we have broken that unspeakable bond of our guarenteed low corporation tax rate.

Therefore if our new government is clever, they will go to this european summit in March and say look - we owe Europe altogether between banks and ECB €200+ Billion.

If you want it back or want any hope of ever getting it back, then you have to play by our terms, which are,

a) all bank debt to be separate from sovereign debt - bank debt then to be liquidated at 10c on the share for all bondholders regardless of their country of origin (except for Britain),

b) negotiate a plan with the IMF to allow 4 yrs of borrowing at their 3% interest rate to finance our economy while still implementing a sound fiscal and cost saving (not cost cutting) plan for our country,

c) negotiate a side deal re: making sure their banks get paid the money we owe them. Why? Britain as our largest trading partner and the country to which we will have to peg our new currency too will have to be our friend. They will also be our staunchest allies if we decide to leave the euro and will help us fight back against Germany and France. The past is the past - we need Britain as an ally now.

d) announce to the markets that we are leaving the euro within 4 yrs - once our IMF deal has expired and we can return to the markets. That our new currency will be tied to sterling and that we will do this phase out of the euro only after meeting the agreed economic targets in our IMF plan.

e) Pay all our sovereign debts.

May not be perfect but based on the conversations I have had with smart international people who do this for a living, this is what they are telling me, roughly, what should save Ireland.

They think we are currently mad for what we are doing

LeixlipRed

count66 wrote: »

The whole issue with Ireland is we don't have capitalism. Capitalism lets businesses fail that are not viable and the market dictates that.

What we have at the moment is socialism whether you like it or not as when the state intervenes in an ecomony to achieve it's plans and prevent market forces from doing their job then what you have achieved is socialism.

I'm actually an anarchist by ideology but also a realist who knows that we operate in a world that is not and we cannot go it alone so we have to play the game the best we can then which is why the policies outlined in my original post will work.

Socialism for whom exactly? I certainly haven't been personally bailed out by anyone. If you're an anarchist what's with the half-measures (response to your second post), let the system collapse.

count66

LeixlipRed wrote: »

Socialism for whom exactly? I certainly haven't been personally bailed out by anyone. If you're an anarchist what's with the half-measures (response to your second post), let the system collapse.

It's corporate socialism but still socialism all the same and that's why I neither a fan of socialism or communisim in any of it's formats as the state intervening in anyway is usually a bad thing as it gets corrupted.

As I said, I'm an anarchist by ideal - that means if we were starting from day 1 again as a global society, then this is the system I believe that we should implement - little or no government with production being measured by the needs of the people rather then the boom / bust production cycles that are inherent in capitalism.

Unfortunately though we are not in Day 1, and we live and operate in a global society that works in a warped capitalist / corporate socialistic way and therefore for now we must play by those rules.

Anyways to get back to my original point, until we get politicians to live in the real world of what the global markets want and think and not what Germany, France and the ECB think, we will never be free of our shackles and we should decide to give up on ourselves as a sovereign nation.

In my opinion, any country who votes in politicians again who will bow and scrape to europe and not listen to expert opinion needs to be dissolved as a country as it's not capable of running it's own affairs.

LeixlipRed

Sure you're not a Libertarian as opposed to an anarchist? Any anarchist I know (and I know a few ) wouldn't entertain the idea of "politicians" or "global markets" in general. Sounds like you want a free market economy with little government intervention. Not that there's anything wrong with that.

rodento

The main reason we would leave the Euro is so we would have the power to devalue.

Do you think bond holders, ECB etc. would let us do it without major consequences for this country

count66

LeixlipRed wrote: »

Sure you're not a Libertarian as opposed to an anarchist? Any anarchist I know (and I know a few ) wouldn't entertain the idea of "politicians" or "global markets" in general. Sounds like you want a free market economy with little government intervention. Not that there's anything wrong with that.

I can easily see how you would think that and my answer would still be that I am an anarchist, in the sense that if we could start again, yes I would choose that system as being the best.

But since we can't and whatever people say - we cannot go it on our own. In a realistic sense to even have a chance of going it alone along anarchist ideals with would need a load of natural resources (which we don't have) and a economically self sufficent population (approx 12 million people needed for this) - so it's a no go.

Therefore in the abscence of a new start and in the existence of the current system, you are right that I would lean heavily towards being a libertarian in practicality.

To make a comparison, I ideally believe in peace on earth but don't think I have any chance of achieving it so all I can do is do the best I currently can in the system we do have,

count66

rodento wrote: »

The main reason we would leave the Euro is so we would have the power to devalue.

Do you think bond holders, ECB etc. would let us do it without major consequences for this country

To be honest yes I think they would as long as we clearly pay our sovereign debt and separate it from the bank debt which we need to default on.

Why?, well firstly - when you lend to anybody they charge you an interest rate - this interest rate is the premium the lender charges you to cover the risk that they are taking that you will default on the loan and never pay it back. Bondholders took that risk at an interest rate they were willing to accept for that risk. So it's not a question of whether they would accept it or not - its the risk they took when investing in the banks bond.

Most investment managers also hedge the chance that you will default by buying credit default swaps. CDS'S are really just loan insurance where the lender then pays another party a premium to insure the loan they have just given out. So if the lendee defaults, the lender will get their money back from the CDS holder. This is where a lot of the European banks will get burned - on CDS's they gave. Bondholders accept pretty much that we are going to default and they have already provided for the losses in their future business plans so no issue there.

The ECB would go freaking mental to be honest but as I stated earlier we owe them €185 Billion or to put it in contect 1/3 of all their cash. If they want it back they have to play our game of letting us burn the bondholders in the bank. We have a huge weapon here which we are not using. Anyways,we will pay the ECB back their money as that is just liquidity money for the day to day running of the banks which once the banking crisis is sorted won't be needed.

Anyways, we are an independent nation so screw the ECB - we just need strong allies like the Eurosceptic Britain on our side, throw in the Danes, and the Norwegians as well!

Also, one of the main reasons to leave the euro would not only be the power to devalue but also the power to set the interest rates that are suitable for the cycle that our economy is in - and that is not going to happen with Germany powering ahead and the ECB planning to raise interest rates to keep inflation in Germany down while crucifying embattled mortgage holders in Ireland at the same time - pure madness for Ireland

LeixlipRed

Yes, it is true that socialism can't exist in isolation. 184 million inhabitants in 1917 couldn't insure it's survival in 1917 Russia so our measly 4 million certainly couldn't. I find your defeatist attitude depressing, look at the news tonight, unrest has spread to Serbia, the idea of a mass uprising across Europe isn't so absurd any more. Ok, it's highly unlikely but if we don't dream and all that...

count66

LeixlipRed wrote: »

Yes, it is true that socialism can't exist in isolation. 184 million inhabitants in 1917 couldn't insure it's survival in 1917 Russia so our measly 4 million certainly couldn't. I find your defeatist attitude depressing, look at the news tonight, unrest has spread to Serbia, the idea of a mass uprising across Europe isn't so absurd any more. Ok, it's highly unlikely but if we don't dream and all that...

I spent many years of my youth drifting across the various far left groups from the socialist party to the Workers Solidarity Movement and got slowly ground down. Wonderful and honest people, the vast majority, but unfortunately living in a reality that is not current in my opinion.

My eyes only got truely opened when I went to work among the dreaded financiers - to be honest I went working their first to see what it was like in the dragons mouth so to say - but once in there I realised, just how the world works from people who make their living from studying and predicting this world.

The vast majority of the worlds populations do not live in a democratic society and have not done so for most of the worlds existence.The very ideas of a functioning democracy and legal system are alien to the majority of people living today, (Most of Asia, Russia, Middle East, most of Africa, parts of South America etc.

Less than 1/3 of the worlds population has an education above primary level. Only 2/5 of the world have access to a t.v. on a regular basis.

My partner comes from a country in asia that is an aspiring functioning democracy for the last 20 yrs after coming out of dictatorship and they still cant achieve it. Reason being is that after the dictatorship fell, the civil service, judiciary was left behind who only knew one way to operate. This is a very slow dismantling process which the people of Egypt and Tunisa will find out when they get their fledgling democracies up and running. Not only that, but when you have vast levels of poverty as you normally do in countries that have oppressed populations, people get elected in these fledgling democracies by literally giving desperate people cash, or the promise of civil service jobs.

Even if you could overcome all that, after the worldwide mass uprisings, you would still have to have people to come together on religious, cultural, grounds etc.

I jsut can't see all that happening now - the human race is still far too immature.

The only thing that does seem to bind people together on a worldwide basis unfortunately is the need to seek out money and profit.

But then again, I'm just a cyncial former leftie ha ha

LeixlipRed

Ah no, I appreciate that you've drifted through the movement and retained your beliefs. Many people drift to the centre or right while still maintaining they're not sellouts. Gilmore, Rabbitte and co, for example. I appreciate you lack of naivety too. The activists I'm involved within share your cynical nature though so maybe that points to something new, a movement based upon building for the future as opposed to one that burns itself out on pursuit of short term gains. We'll call on you if the day ever comes I'm sure. Now, bed for me.

count66

LeixlipRed wrote: »

Ah no, I appreciate that you've drifted through the movement and retained your beliefs. Many people drift to the centre or right while still maintaining they're not sellouts. Gilmore, Rabbitte and co, for example. I appreciate you lack of naivety too. The activists I'm involved within share your cynical nature though so maybe that points to something new, a movement based upon building for the future as opposed to one that burns itself out on pursuit of short term gains. We'll call on you if the day ever comes I'm sure. Now, bed for me.

Sound mate - good to talk with you. Take it easy and chat some day again I'm sure!

Enjoy the rest of the weekend!

lmimmfn

i dont want our politicians deciding anything more than what they have now. Giving them power over devaluation will stick us right back in the 80's where only the rich could take holidays and all foreigners are percieved as being loaded just because their currency is worth multitudes more than our own, also all imported goods would cost an absolute fortune, so again back in the 80's where noone has a decent tv, only the rich had VCR's or camcorders etc.

Yes i sux being in the euro now, BUT at least we dont have 18% interest rates like the 90's( its like buying your bloody house on a credit card ).

Every now and then when i hear european politicians or the ECB giving ireland a hard time i do consider we should tell them to get to ****, but look at the mess our politicians have us in now, and you want to give them MORE power?

This euro talk is rubbish we should default and try and pull ourselves out of this mess and not be trying to dig ourselves back into our backward past.

ArtSmart

count66 wrote: »

!

by promise do you mean lie?

















kiddin . i presume the OP is a good post, too tired to read it at the mo.

Edit: got as far as the line below. then stopped reading
'Secondly, we need to put plans in place to leave the euro, not the EU, but the euro in an orderly manner.'

count66

lmimmfn wrote: »

i dont want our politicians deciding anything more than what they have now. Giving them power over devaluation will stick us right back in the 80's where only the rich could take holidays and all foreigners are percieved as being loaded just because their currency is worth multitudes more than our own, also all imported goods would cost an absolute fortune, so again back in the 80's where noone has a decent tv, only the rich had VCR's or camcorders etc.

Yes i sux being in the euro now, BUT at least we dont have 18% interest rates like the 90's( its like buying your bloody house on a credit card ).

Every now and then when i hear european politicians or the ECB giving ireland a hard time i do consider we should tell them to get to ****, but look at the mess our politicians have us in now, and you want to give them MORE power?

This euro talk is rubbish we should default and try and pull ourselves out of this mess and not be trying to dig ourselves back into our backward past.

Your right about not giving politicians more power - that's why the right to set interest rates etc would be done by an independent central bank and to be honest yes we probably would get massive inflation etc for the first couple of years after leaving the euro.

But if you look at Iceland which is our nearest comparator they went through hell like this but only for 2 yrs and now they are back in full growth and interest rates and inflation are back down to normal levels, plus their banks can borrow on the open markets again.

By staying in the euro we are giving politicians powers - basically Merkel and Sarkozy and if you think the ECB in independent your wrong - who forced us to take the bailout? - Mr. Trichet who was panicing over getting this €185 Billion back - whatever about having domestic idiots that we can get rid off with our own currency - its worse having a trans national idiot who we never can get rid off doing it!!

lmimmfn

count66 wrote: »

Your right about not giving politicians more power - that's why the right to set interest rates etc would be done by an independent central bank and to be honest yes we probably would get massive inflation etc for the first couple of years after leaving the euro.

But if you look at Iceland which is our nearest comparator they went through hell like this but only for 2 yrs and now they are back in full growth and interest rates and inflation are back down to normal levels, plus their banks can borrow on the open markets again.

By staying in the euro we are giving politicians powers - basically Merkel and Sarkozy and if you think the ECB in independent your wrong - who forced us to take the bailout? - Mr. Trichet who was panicing over getting this €185 Billion back - whatever about having domestic idiots that we can get rid off with our own currency - its worse having a trans national idiot who we never can get rid off doing it!!

no, everything you mention there can be resolved with a default as opposed to leaving the euro.
Iceland - default
ECB telling us what to do - default

In fact our idiot politicians are soooo crap that they didnt even threaten the ECB with a default and got truely bitchslapped by them. All countries are seriously scared about the IMF coming in, the ECB are 10 times worse, higher interest rate than the IMF, non-negotiable, threats and what not, but the irony is the ECB needs us to not default, so rather than leave the euro, the best 2 fingers to the ECB is to default( maybe then they wont be so wreckless throwing cash at our incompetent banks to lend us to buy over inflated prices on houses )

count66

lmimmfn wrote: »

no, everything you mention there can be resolved with a default as opposed to leaving the euro.
Iceland - default
ECB telling us what to do - default

In fact our idiot politicians are soooo crap that they didnt even threaten the ECB with a default and got truely bitchslapped by them. All countries are seriously scared about the IMF coming in, the ECB are 10 times worse, higher interest rate than the IMF, non-negotiable, threats and what not, but the irony is the ECB needs us to not default, so rather than leave the euro, the best 2 fingers to the ECB is to default( maybe then they wont be so wreckless throwing cash at our incompetent banks to lend us to buy over inflated prices on houses )

There is still one fundamental point though that you are not taking into account and that is the fact that the markets through the way they have moved interest rates on euro country bonds have clearly stated that they want a eurozone that is more closely bound fiscally. This can be seen to be true from the simple facts, that when the ESF was set up, it wasn't enough, interest rates went up, when Ireland was bailed out it wasn't enough, interest rates went up, when austerity packages were introduced across Europe, it wasn't enough, interest rates went up - the only thing that has seen markets calm down and interest rates recede has been Merkel / Sarkozy announcement that they are to seek greater fiscal union among the eurozone countries.

This in other word means - closer harmonisation of the tax policies. Our country has feck all natural resources and our labour force is expensive. Companies locating here also have to factor in transport costs, etc. The only and I know this for fact, the only thing that keeps multinationals and international finance in this country is our low corporation tax rate.

Merkel and Sarkozy, openly went for Cowen last night on this and said that according to EU sources in the news, that the only way they would renegotiate the interest rate on our deal was through us moving on our tax rate. They want this decision made by the end of March.

If they don't get this tax harmonisation that they are seeking across the eurozone, they will make life very uncomfortable for us. We have to leave the euro - to raise our corporation tax rate would be economic suicide for us - end of story.

lmimmfn

count66 wrote: »

There is still one fundamental point though that you are not taking into account and that is the fact that the markets through the way they have moved interest rates on euro country bonds have clearly stated that they want a eurozone that is more closely bound fiscally. This can be seen to be true from the simple facts, that when the ESF was set up, it wasn't enough, interest rates went up, when Ireland was bailed out it wasn't enough, interest rates went up, when austerity packages were introduced across Europe, it wasn't enough, interest rates went up - the only thing that has seen markets calm down and interest rates recede has been Merkel / Sarkozy announcement that they are to seek greater fiscal union among the eurozone countries.

This in other word means - closer harmonisation of the tax policies. Our country has feck all natural resources and our labour force is expensive. Companies locating here also have to factor in transport costs, etc. The only and I know this for fact, the only thing that keeps multinationals and international finance in this country is our low corporation tax rate.

Merkel and Sarkozy, openly went for Cowen last night on this and said that according to EU sources in the news, that the only way they would renegotiate the interest rate on our deal was through us moving on our tax rate. They want this decision made by the end of March.

If they don't get this tax harmonisation that they are seeking across the eurozone, they will make life very uncomfortable for us. We have to leave the euro - to raise our corporation tax rate would be economic suicide for us - end of story.

I know what your saying, however the only way for the eurozone to work is to harmonize taxes and to have tighter control over countries finances. If we had the same model as exists in the US with the federal bank monitoring the states banks and controling money and loans we would never be in this situation in the first place.
The EU as a whole has to be harmonized for the euro and EU to work, basically making it so there are no differences between setting up industry in France or Ireland or even the Eastern European countries( which are currently far too competitive compared to western europe ). While it would seem that we would lose a lot, we are closest to the US for exports.

All that is of course a pipe dream, however it should be the goal because if its not the euro and EU will fail miserably but it could only happen long term. I would be fine with it except the fact that euro politicians arent voted in and neither is the president.

As for Cowen taking flak and what not and the markets no longer favouring the euro, well Cowen could have told them to watch themselves or we would default, as for not favouring the euro, well markets will go with whatever is profitable and dont give a crap about anything else, most shifted from the $ as a currency to the euro a few years ago( even OPEC considered it ), so if they hate the euro today they'll love it tomorrow etc.

count66

lmimmfn wrote: »

I know what your saying, however the only way for the eurozone to work is to harmonize taxes and to have tighter control over countries finances. If we had the same model as exists in the US with the federal bank monitoring the states banks and controling money and loans we would never be in this situation in the first place.
The EU as a whole has to be harmonized for the euro and EU to work, basically making it so there are no differences between setting up industry in France or Ireland or even the Eastern European countries( which are currently far too competitive compared to western europe ). While it would seem that we would lose a lot, we are closest to the US for exports.

All that is of course a pipe dream, however it should be the goal because if its not the euro and EU will fail miserably but it could only happen long term. I would be fine with it except the fact that euro politicians arent voted in and neither is the president.

As for Cowen taking flak and what not and the markets no longer favouring the euro, well Cowen could have told them to watch themselves or we would default, as for not favouring the euro, well markets will go with whatever is profitable and dont give a crap about anything else, most shifted from the $ as a currency to the euro a few years ago( even OPEC considered it ), so if they hate the euro today they'll love it tomorrow etc.

Firstly, the model in the US is very broken and not a good one to follow if you are of the federalist mindset - they have one of the highest debt to GDP ratios in the world and totally depend on the Chinese to buy their T-Bills and individual states are on the verge of bankruptcy - if you don't believe me google california and arizona for example.

Secondly, the Federal Reserve, despite its name is actually a privately owned bank - not a fact that many people are aware of and was blamed directly by F.D. Roosevelt for being the cause of the long duration of the great depression by restricting the money supply at a time when it should have been released. This fact was actually admitted by Bernbake recently to be factually true - again you can google it.

Anways, long story short - if there was no difference between setting up and running a business in Germany or in Ireland - why on earth would anyone choose Ireland? its geographically isolated, its wage costs are higher then most of europe and despite our arrogance we are no more educated or smarter then our fellow europeans. The only reason companies come here is for our low tax rates. Tax harmonisation and federalisation would kill us.

lmimmfn

count66 wrote: »

Firstly, the model in the US is very broken and not a good one to follow if you are of the federalist mindset - they have one of the highest debt to GDP ratios in the world and totally depend on the Chinese to buy their T-Bills and individual states are on the verge of bankruptcy - if you don't believe me google california and arizona for example.

Secondly, the Federal Reserve, despite its name is actually a privately owned bank - not a fact that many people are aware of and was blamed directly by F.D. Roosevelt for being the cause of the great depression by restricting the money supply at a time when it should have been released. This fact was actually admitted by Bernbake recently to be factually true - again you can google it.

Anways, long story short - if there was no difference between setting up and running a business in Germany or in Ireland - why on earth would anyone choose Ireland? its geographically isolated, its wage costs are higher then most of europe and despite our arrogance we are no more educated or smarter then our fellow europeans. The only reason companies come here is for our low tax rates. Tax harmonisation and federalisation would kill us.

no i know all that, i.e. Federal Bank owned by a private consortium of bankers, US being highly levereged, and the whole thing is a joke but the US is capitalism gone haywire and consumerism driving the economy into ruin, but thats for another thread .

My point wasnt on adopting the stupid end-end US system, but the governing of the federal reserve over the lending practices of state banks.

Having no difference between ireland and some eastern european country means they cant have insanely low man hour costs compared to us. Comparing some setup in ireland as opposed to Germany means were closer to the US for goods which need to be shipped. If its harmonised then the EU as a whole would have to act as 1 country, "states" would have to be subsidised if theyre at a disadvantage. The system exists already although its abused( grants for farming sheep when its nuts etc. ), but if more harmonization was introduced it would mean central control of budgets and funding based on defecits in countries GDP.

myrak

count66 wrote: »

Sound mate - although I must admit I took the bait on that one.

To have the Euro collapse entirely at the moment would be a disaster for us and most of Europe. Germany simply won't allow that to happen anyways.

The markets have stated that what they want to see from the euro countries is a closer fiscal and political union and if this is not possible then the euro as a currency is not viable and should collapse.

Whether we agree with this sentiment or not is really futile as this is the reality we are living in, hence Merkel and Sarkozy efforts again to get us to move on our corporation tax rate. I would assume to try and get the new Government to do this they will offer the carrot of a renegotiated interest rate on the original deal.

If our new Government is stupid and populist, it will accept this and come back to the people of Ireland saying look what we clever lads have achieved and only for a 0.5% movement in our corporation tax rate. The point will be though that the multinationals will see this as an immediate signal that Ireland can no longer be seen as a longer term location for investment as we have broken that unspeakable bond of our guarenteed low corporation tax rate.

Therefore if our new government is clever, they will go to this european summit in March and say look - we owe Europe altogether between banks and ECB €200+ Billion.

If you want it back or want any hope of ever getting it back, then you have to play by our terms, which are,

a) all bank debt to be separate from sovereign debt - bank debt then to be liquidated at 10c on the share for all bondholders regardless of their country of origin (except for Britain),

b) negotiate a plan with the IMF to allow 4 yrs of borrowing at their 3% interest rate to finance our economy while still implementing a sound fiscal and cost saving (not cost cutting) plan for our country,

c) negotiate a side deal re: making sure their banks get paid the money we owe them. Why? Britain as our largest trading partner and the country to which we will have to peg our new currency too will have to be our friend. They will also be our staunchest allies if we decide to leave the euro and will help us fight back against Germany and France. The past is the past - we need Britain as an ally now.

d) announce to the markets that we are leaving the euro within 4 yrs - once our IMF deal has expired and we can return to the markets. That our new currency will be tied to sterling and that we will do this phase out of the euro only after meeting the agreed economic targets in our IMF plan.

e) Pay all our sovereign debts.

May not be perfect but based on the conversations I have had with smart international people who do this for a living, this is what they are telling me, roughly, what should save Ireland.

They think we are currently mad for what we are doing

Your post seems to offer a considered plan of action as opposed to the faffing around being engaged in by the bigger parties in this election cum beauty contest. For someone who doesn't speak econospeak but knows in her bones that the current policies are wrong for Ireland, which of the current party platforms is closest to your view. It seems to me that being good obedient europeans has priority with all. Cant vote for what is not on offer.

count66

myrak wrote: »

Your post seems to offer a considered plan of action as opposed to the faffing around being engaged in by the bigger parties in this election cum beauty contest. For someone who doesn't speak econospeak but knows in her bones that the current policies are wrong for Ireland, which of the current party platforms is closest to your view. It seems to me that being good obedient europeans has priority with all. Cant vote for what is not on offer.

Thanks for your reply.

There are a few people running on this platform, Senator Shane Ross (www.shane-ross.ie), Paul Sommerville (www.paulsommerville.ie) etc but there are not many.

To be honest none of the main parties seem to offer this platform which to me defies logic. All they want to do is to renegotiate the bad deal that we got from the EU/IMF. Makes no sense as a bad deal is a bad deal whether you pay 2% or 8%.

The reason I posted this in the first place is that we the electorate need to be asking why nobel prize winning economists and George Soros are saying that what Ireland has done is economic suicide but that all our politicians still want to go along with this deal.

Why aren't we the people challenging our politicians on this, instead of silly debate on whether EK should appear on Vincent Browne or not.

We need to force the politicians when they come to our doors to answer the question, why they think they are smarter then George Soros and nobel prize winning economists who say that we are on the road to economic suicide with this EU/IMF plan and why we are not taking the solutions I have outlined above.

If we don't and persist with silly debate on EK and whether or not to give a paltry €166 a month to our fellow citizens who are in negative equity we as a country are doomed.

There is an old saying - a country gets the Government it deserves so if we are foolish enough to continue to allow politicians with no background in business, economics or financial markets to set our countries economic policies without any challenge being issued to them by the electorate then we deserve what we get.

We the people own this country, we the people can elect whoever we want and through this vote, we the people can choose the policies we want to see this country pursue. If we don't do this as our civic duty then we are fools and fools will always come last and then ask why?

sonic85

really enjoyed reading this thread. if i was in shane ross' constituency id vote for him in a heartbeat. as is i havent a clue who to vote for

Capt'n Midnight

count66 wrote: »

In order to save Ireland economically
....
Ireland owes the ECB over €185 Billion euro alone,
...
Secondly, we need to put plans in place to leave the euro,

We can't leave the euro before we pay off the debt because the debt is in euro.

It would take a miracle for us to have a solo currency that won't devalue against the euro in the short-medium term. If we go solo and for any reason raise interest rates won't that compound any existing foreign currency debt ? With large amounts of foreign debt we can't devalue. And if the value of our currency did rise , then wouldn't we just wind up importing more stuff and screw up the balance of payments ?

Capt'n Midnight

Don't get me wrong we should burn as much debt we can get away without affecting our ability to borrow enough in future.

We should go over all the loans and fine print and check for any get out clause. IIRC supplying false information would break many contracts. And again with reckless trading. If it could be shown that foreign banks should have realised that our banks were over extended then use their laws ('cos ours are pathetic) Were there any bonuses/sweetners that could be considered bribes ?

johnnyskeleton

count66 wrote: »

Secondly, we need to put plans in place to leave the euro, not the EU, but the euro in an orderly manner. The euro is one of the big factors that played into the financial mess that we are in. By taking away our national right to set our own interest rates, we allowed cheap money to flow into this country and set in place a debt fuelled boom.

Do you honestly believe, at a time when there were massive amounts of money being traded freely across the world, from Japan to the US and everywhere in between, at the cheapest rates ever seen, and when not just the ECB but the Fed and the BoE all had similarly low interest rates, that the Irish central bank would have bravely gone against all of that and popular demands for cheap credit, and instead kept interest rates artifically high?

Even if you do honestly believe that, do you think for a second that the banks wouldn't cotton on to the fact that they don't actually borrow money from the central bank, they borrow it from the international money markets, so the central bank's base rate is not all that significant?

count66 wrote: »

It also took away the central banks need to monitor in depth what was going on in the economy and to set interest rates accordingly.

No it didn't, it did this on its own.

count66 wrote: »

The huge danger at the moment is that, Germany is now powering ahead with economic growth with the result that it has rising inflation. This is going to force the ECB's hand to raise interest rates in Sept 2011 and for the next couple of years on a quarterly basis. Such interest rates hike will be a disaster for the Irish economy and will probably force the mortgage market to totally collapse as mortgage holders can ill afford to pay extra mortgage rates on top of increased taxes.

Sigh. So German growth is a bad thing, yet we want Germany to pay for all our debts? Should they give us all their food clothes and cars for free too?

I'm afraid you may have spent too much time listening to David McWilliams.

count66

johnnyskeleton wrote: »

Do you honestly believe, at a time when there were massive amounts of money being traded freely across the world, from Japan to the US and everywhere in between, at the cheapest rates ever seen, and when not just the ECB but the Fed and the BoE all had similarly low interest rates, that the Irish central bank would have bravely gone against all of that and popular demands for cheap credit, and instead kept interest rates artifically high?

Even if you do honestly believe that, do you think for a second that the banks wouldn't cotton on to the fact that they don't actually borrow money from the central bank, they borrow it from the international money markets, so the central bank's base rate is not all that significant?



No it didn't, it did this on its own.



Sigh. So German growth is a bad thing, yet we want Germany to pay for all our debts? Should they give us all their food clothes and cars for free too?

I'm afraid you may have spent too much time listening to David McWilliams.

a) Firstly - never listened to McWilliams - all the information I have is gleamed from International Investment Managers who I deal with in the course of my work - sweeping derogatory statemens with no basis in fact

b) Secondly, the point about the central bank you make is pure hypothesis - I make my arguement based on the history of our central bank during it's tenure when it did have the power to set interest rates - what have you based your's on - speculation?

c) Thirdly, the US and UK did not have really low interest rates until after the economic collapse of 2008 - this is a myth - check your facts.

d) Your economic presumptions are wrong on the intrabank lending assumptions you make. The purpose of a central bank setting interest rates in a small economy like ours is to adjust inflation and to prevent asset bubbles in the domestic economy. Therefore if our central bank had set higher interest rates, the banks would have been forced to pass them on to the domestic market, even if they had borrowed their monies cheaper using the LIBOR or EURIBOR rates. This would have had two effects on the asset bubble that was the property market in Ireland - a) it would have prevented the banks giving out cheap mortgages to those who could not afford them - thus stifiling the demand for property and b) it would have made the cost of the loans for developers so massive that they wouldn't have been able to afford to take out the size of loans they did again stifiling the property market - so your point on this makes no sense.

e) Again you make a fundamental mistake regarding Germany - German Banks lent monies hand over fist to our Irish banks fueling the property bubble - this bailout is to pay back these German banks in the main, with some French and British banks thrown in their too - so when you state that the German taxpayer is bailing us out you have made such a false statement and this is the nonsense being peddled by some of the political parties. The bailout is forcing the Irish taxpayer to pay back the bondholders of the Irish banks - i.e. in the main the German, French and British banks. If we the Irish taxpayer don't pay back this bank debt - its the German, French and British taxpayers who will have to bailout their own banks - which is only fair - why should we pay for their banks mistakes - tell me that. Also by accepting this bailout the German taxpayer is getting a very good deal in another sense as well - we are paying high interest rates for this loan - who do you think this money is going to? - the EU of course and Germany being one of the biggest contributors to the EU will not have to make the same level of contributions now - sigh - I wish people would research before making these sort of statements.

Finally, German economic growth is great for Germany and more power to them. But the euro will always be geared towards this economy as it is one of the worlds largest. This is not suitable for the Irish economy which has been for the past decade in a different economic cycle pattern to Germany's with the result that we got low interest rates when we should have had high interest rates to prevent our property bubble and now we are going to have high interest rates to curb inflation in Germany when we should be having low interest rates in Ireland trying to fuel economic growth.

Educate yourself my friend and pass on the knowledge - it's high time we Irish people stopped buying this nonsense and learned the truth

count66

Capt'n Midnight wrote: »

We can't leave the euro before we pay off the debt because the debt is in euro.

It would take a miracle for us to have a solo currency that won't devalue against the euro in the short-medium term. If we go solo and for any reason raise interest rates won't that compound any existing foreign currency debt ? With large amounts of foreign debt we can't devalue. And if the value of our currency did rise , then wouldn't we just wind up importing more stuff and screw up the balance of payments ?

I appreciate your worry but it is slightly mistaken.

Firstly we would pull out of this deal altogether - so no need to worry about the debt being denominated in euro per se.

Secondly we would agree a 4 / 5 yr deal with the IMF and obtain a dollar / sterling denominated loan to fund our ecomony for the next number of years until we achieve enough fiscal and cost saving measures in our domestic economy to return to the sovereign bond markets.

Thirdly, by separating our bank debt from our sovereign debt and burning the bank debt as did Iceland we will get through this relatively quickly - 2-3 yrs and come out the other side.

Look at the economic growth Iceland is now achieving -and they are back in the bond markets - only 2 yrs after burning the banks - you can google this.

I'm not saying its an easy ride - by taking this course of action, we will have high interest rates and high inflation for 2 - 3 yrs. My point is though that we will know this, the pain will be sharp and short and in 3 yrs we will be out the other side with no generational debt hanging over us.

At the moment we are taking a panadol for cancer and I think we should just get our treatment over and done with.

Permabear

This post has been deleted.

count66

sonic85 wrote: »

really enjoyed reading this thread. if i was in shane ross' constituency id vote for him in a heartbeat. as is i havent a clue who to vote for

Cheers - I appreciate the feedback. What you can do is when the politicians come to your door - ask them these questions and also ask them so basica financial questions to test their understanding - if they can't answer these questions below, then there is no way on earth they can be governing Ireland's economic policy and dealing with heavy hitters such as the ECB,

a) What is short selling? - short selling is where I borrow a security from you - sell it at the current price - and then officially buy the security from you at a later date - reason being is I think the price is going to fall so if I sell it now and buy it later I make a profit

b) What is a credit default swap? - a CDS is loan insurance whereby if you lend me money - you go to another party and pay them an insurance premium so that if I don't pay you back they will

c) Why do interest rates on government bonds move? - the interest rate is the premium that the buyer of the bond (loan) charges so that they can get a return for the risk they run that the bond issuer (loan taker) will not pay them back. As the markets view the risk of a lendee not paying them back increases so does the interest rate.

If any potential politician cannot answer these very basic financial market questions, they have no business being in our dail setting economic policy - why? cause then it's unelected civil servants who no one voted for doing it and the uneducated politicians are just following the civil servants leads without even knowing if it's correct or not - hence the bank guarentee etc.

Please read Paul Sommerville and Senator Shane Ross's website - these guys were stockbrokers and financial traders - they know their stuff and know the markets - hence they know how to get us out of this mess. Unfortunately they are only in two constituencies - but you can educate yourself with these websites and seek out politicians who can really help this country through asking the right questions on the doorstep.

www.shane-ross.ie

www.paulsommerville.com


If we focus on tv debates, health service etc we are doomed as if we don't sort out our economic situation first we will have no money to sort out the health service, lower taxes etc.

And to be honest who cares about a tv debate - it's not important!

count66

Permabear wrote: »

This post had been deleted.

I agree with you that this was a real concern a few years ago but is not anymore.

The reason why is that there are serious plans in place for a two tier euro if Germany / France cannot appease the markets with their current plans.

The markets really want to see eurobonds but Germany won't agree to this as it would push up the cost of their borrowing - hence they are trying to go down this fiscal union route instead.

If this doesn't work, then the two tier euro will come into effect where basically countries like Ireland, Greece, Portugal, Spain, Belgium, Italy and possibly more will have 2nd euro which is at a different exchange rate then the prime euro - If this happens - the deposit flight will occur anyways thus negating your legitimate concerns above.

This has a distinct possibility of happening and is something that investment managers are monitoring very closely - bloomberg had a good article on this recently so if you search their site you can find it I'm sure.

Therefore how do we get out of this - face the reality that deposits from institutional investors are going to leave anyway - full stop.

Give a 4 / 5 yr window to leave the euro signalling this well in advance. Peg to sterling or even more radically adopt sterling for a few yrs after the 4 / 5 yr window.

Take an IMF deal at 3% to fund our country during this 4 /5 yr period.

Take the necessary fiscal and cost saving measures domestically

Burn the bank debt

2 /3 yrs of real economic pain.

By yr 4 we are returning to the bond market - our curreny or sterling has stablisied - institutional depositers return.

I think this would work as if we go into a two tier euro we are even more screwed.

ilovesleep

@Capt'n'midnight.
Whats going to happen if when the euro fails and collaspes in another year or two. We'll be forced to take on a new currency.

Pete_Cavan

OP, I agree with regard to the EU controlling our interest rates which fuelled the bubble. But if we leave the Euro what will our new currency be backed by? Ghost housing estates in Leitrim?

Capt'n Midnight

ilovesleep wrote: »

@Capt'n'midnight.
Whats going to happen if when the euro fails and collaspes in another year or two. We'll be forced to take on a new currency.

It won't collapse. It may move up/down by 50% relative to Sterling / Dollar / Yuan but there is also the probability of a race to the bottom of currencies devaluing. Our debt is in Euro so we don't want to be pegged to something that falls against the currency our debt is in.

If we got our debt in sterling and pegged to it we could be looking at high interest rates for a while and they would be beyond our control.



Slightly off topic but how many of our senior politicians and banking officials could honestly say they hadn't lived through a period where mortgage interest rates peaked at something like 17% and weren't aware that economic climates go down as well as up ??

count66

Capt'n Midnight wrote: »

It won't collapse. It may move up/down by 50% relative to Sterling / Dollar / Yuan but there is also the probability of a race to the bottom of currencies devaluing. Our debt is in Euro so we don't want to be pegged to something that falls against the currency our debt is in.

If we got our debt in sterling and pegged to it we could be looking at high interest rates for a while and they would be beyond our control.



Slightly off topic but how many of our senior politicians and banking officials could honestly say they hadn't lived through a period where mortgage interest rates peaked at something like 17% and weren't aware that economic climates go down as well as up ??

That's not strictly true - the markets have a very real concern that the Euro will not survive either as a currency or in its current format.

Many believe that if the current attempts to try and get a fiscal union don't work out then a two tier euro will be formed where the fiscally weaker countries like Ireland will be forced into this euro mark II which will be devalued in comparison to the main euro.

Even if they do achieve this fiscal union - the price for Ireland would be giving up our corporation tax rate which would be economic suicide.

If we don't we have two choices - euro collapses or a devalued euro mark II which still means we are tethered to a useless curreny and still can't set our own interest rates or devalue - so what's the point.

As I stated earlier if we do get our own currency we will for 2-3 yrs experience high interest rates and inflation as did Iceland when we devalue. This however, as Iceland has proven will be temporary, albeit painful but temporary and then our fiscal rectitude will be over and we can return to normal ala Iceland.

Iceland is the model to follow not Germany and the ECB - Why? cause what Iceland did has worked!!!

Please see the below quote taken from bloomberg today to back my point

"Most international investors predict at least one of the 17 nations will leave the euro area within five years and that Greece and Ireland will default, according to the January 2011 Bloomberg Global Poll that underscored the urgency leaders face in calming markets. The same poll ranked Merkel as the most favored of nine global policy makers"

Here is the link to the article

http://www.bloomberg.com/news/2011-02-04/merkel-makes-euro-indispensable-by-turning-crisis-into-german-opportunity.html

It just re enforces my point - whether we like it or not we are going to default, either leave the euro or end up in a second tier euro currency and / or sacrifice or corporation tax rate to Germany's altar.

Why or why can't we just face up to things, adopt the Iceland model which works and do things on our own terms and get on with what's best for us the Irish people and not for the wider Eurozone countries. The bailout package proves, that the Eurozone are happy to sacrifice Ireland to meet it's own requirements. We don't owe them anything!

count66

Pete_Cavan wrote: »

OP, I agree with regard to the EU controlling our interest rates which fuelled the bubble. But if we leave the Euro what will our new currency be backed by? Ghost housing estates in Leitrim?

Your right - this is a very real concern - hence my idea that we peg to sterling or even adopt sterling in the initial period after we leave the euro - despite historical reasons that people may not want to do this - think about the benefits - they are our biggest trading partner and we are one of theirs, the tie in with the north, their economy is very closely alligned with ours etc.

If we are willing to tie ourselves to Germany and France we should be ready to tie ourselves to the UK in the short term - it makes economic sense. Once we have righted ourselves we can get our own currency back again.