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What will the economy look like in 6 months time?

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    #902
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Wanderer78 wrote: »
    Some really good points here, but I'd still advocate for an increase in infrastructure spending, I'd also advocate for an increase in grant systems for Sme's, and for covid payments to remain, as it might just keep some businesses open

    I would argue the biggest dividend would be gained from investing in education, research and creating the environment for Irish companies to utilise the knowledge gained through working in the multinational sector, both here and overseas, in creating indigenous Irish tech/ medtech/ pharmaceuticals businesses, based here and building a sustainable high end industrial base.


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    #903
    wassie
    Registered Users Posts: 3,346 ✭✭✭wassie


    Wanderer78 wrote: »
    balancing books is largely nonsense anyway, particularly in the public domain, the usual neoclassical nonsense, debt is a critical component of the money supply, as it is the money supply, without debt, we d have no money, we ve just managed to convince ourselves, rising public debt is bad, but rapidly rising private debt is good! we clearly found out the hard way in our own country, rapid rising private debt really is a bad idea, but disturbingly, it seems like very few citizens have figured this out, including probably most of our politicians and their advisers. no money comes freely, whether its publicly or privately created, as it all ends becoming debt anyway.

    And the Italian economy is a great example of this. All of their debt woes is mainly attributable to public debt. Its private debt as a % of GDP is excessively low compared to other OECD countries.

    As Wanderer78 says, we on the other hand don't seem to be getting the message......

    image-5.png


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    #904
    Wanderer78
    Registered Users Posts: 29,006 ✭✭✭✭Wanderer78


    Deleted User wrote:
    I would argue the biggest dividend would be gained from investing in education, research and creating the environment for Irish companies to utilise the knowledge gained through working in the multinational sector, both here and overseas, in creating indigenous Irish tech/ medtech/ pharmaceuticals businesses, based here and building a sustainable high end industrial base.


    Yea I'd definitely agree with promoting irish industries in this way, but that can be a slow burner, it does look like we re slowly growing our own start up industries, which is fantastic, I truly believe we can do it, we have the people, we have the knowledge, we have the ability, we can do it, but I think we currently need everything on deck to get this going


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    #905
    KyussB
    Registered Users Posts: 2,314 ✭✭✭KyussB


    Deleted User wrote: »
    Where an economy does not have the capacity to absorb capital transfer / debt issuance, Austerity is the only option, as to just make more cash available will only drive inflation and not recovery. Not an issue in the current environment however. At least not in most of Europe anyway. Allow a country such as Moldova to run a massive budget deficit however and you would likely see large inflation, that wealth largely making its way out of the country or both
    Europe has been below-target on inflaton for more than a decade, with deflation being a persistent threat - inflation is actually sorely needed.
    A properly run economy doesn't risk excessive inflation until it's at Full Output - at which point spending needs to be cut back, but not before.


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    #906
    Wanderer78
    Registered Users Posts: 29,006 ✭✭✭✭Wanderer78


    wassie wrote:
    And the Italian economy is a great example of this. All of their debt woes is mainly attributable to public debt. Its private debt as a % of GDP is excessively low compared to other OECD countries.


    Its very complex, but the introduction of the euro has been extremely damaging to the EU as a whole, it has the potential of tearing it apart if we re not careful. we urgently require some sort of surplus recycling system in place, which is currently in place in large countries such as the us and Australia, but countries such as the frugal four are having none of it, this is potentially very dangerous for us all.


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    #907
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Wanderer78 wrote: »
    Yea I'd definitely agree with promoting irish industries in this way, but that can be a slow burner, it does look like we re slowly growing our own start up industries, which is fantastic, I truly believe we can do it, we have the people, we have the knowledge, we have the ability, we can do it, but I think we currently need everything on deck to get this going

    The problem I currently see, in the medtech sector where I work, is the mat many Irish startups see the goal as developing a product selling on to a major player once the get a viable product. Some Cash does come back into the Irish economy, but any long term success of these products go elsewhere.


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    #908
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    KyussB wrote: »
    Europe has been below-target on inflaton for more than a decade, with deflation being a persistent threat - inflation is actually sorely needed.
    A properly run economy doesn't risk excessive inflation until it's at Full Output - at which point spending needs to be cut back, but not before.

    I believe that’s what I said, or meant at least, as long as the capacity is there


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    #909
    KyussB
    Registered Users Posts: 2,314 ✭✭✭KyussB


    Deleted User wrote: »
    I don’t argue austerity is the correct course now and agree with a lot of what you say. On the broader point though investing in infrastructure projects is not always the best course. If for example there was only sufficient heavy road building plant within a country for one new motorway already underway, and stimulus was put in place to build another, either the cost of building both motorways will go up as the owners and operators of that equipment make hay, driving inflation and delaying the long term benefit of both projects, or large amounts of capital get transferred out of the country to purchase the equipment/ source overseas contractor, meaning a large amount of the economic stimulus designed to help the local economy actually benefits the overseas economy and leaves all of the debt but few of the benefits locally . This happened in Latin America and Africa for decades
    Or productive capacity increases through increased demand ramping up supply from said industry.

    It would be a rather big oversight to overlook the need to increase productive capacity, when planning an infrastructure project.


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    #910
    KyussB
    Registered Users Posts: 2,314 ✭✭✭KyussB


    Deleted User wrote: »
    I believe that’s what I said, or meant at least, as long as the capacity is there
    Sorry, missed you were saying that doesn't apply to the current environment.


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    #911
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    KyussB wrote: »
    Or productive capacity increases through increased demand ramping up supply from said industry.

    It would be a rather big oversight to overlook the need to increase productive capacity, when planning an infrastructure project.

    But unfortunately what has happened multiple times around the world. I am arguing the academic point that stimulus always trumps austerity. Stimulus is definitely the right course in the current scenario.


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    #912
    Wanderer78
    Registered Users Posts: 29,006 ✭✭✭✭Wanderer78


    Deleted User wrote:
    The problem I currently see, in the medtech sector where I work, is the mat many Irish startups see the goal as developing a product selling on to a major player once the get a viable product. Some Cash does come back into the Irish economy, but any long term success of these products go elsewhere.


    You can understand why this happens, it's effectively easy money for its creator's, which I don't necessarily blame them for it, I'd probably do the same, if I was in their shoes, best of luck to them. but I do agree with your summation, a large proportion of the wealth created does indeed leave the country, we need to figure out how to gain access to more of this wealth. I do think partial payment of tax revenue should be paid in stock options of all floated companies operating here, just a small percentage. I'm sure there's plenty of other ideas out there that might help.


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    #913
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Wanderer78 wrote: »
    You can understand why this happens, it's effectively easy money for its creator's, which I don't necessarily blame them for it, I'd probably do the same, if I was in their shoes, best of luck to them. but I do agree with your summation, a large proportion of the wealth created does indeed leave the country, we need to figure out how to gain access to more of this wealth. I do think partial payment of tax revenue should be paid in stock options of all floated companies operating here, just a small percentage. I'm sure there's plenty of other ideas out there that might help.

    You could then create a virtuous circle where the stock options could seed a venture capital fund to invest in Irish companies allowing them to scale operations without the need to sell to international investors


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    #914
    Wanderer78
    Registered Users Posts: 29,006 ✭✭✭✭Wanderer78


    Deleted User wrote:
    You could then create a virtuous circle where the stock options could seed a venture capital fund to invest in Irish companies allowing them to scale operations without the need to sell to international investors


    The idea of receiving partial revenue as stock is David mcwilliams, I think it’s one of the better ideas of dealing with these kinds of issues, an astonishing level of wealth is stored in stocks and shares, we virtually receive none of this at the moment, he believes we could utilise sovereign wealth funds and fund them with these stock options, to promote indigenous business and industries, I think it’s a great idea


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    #915
    coolshannagh28
    Registered Users Posts: 1,476 ✭✭✭coolshannagh28


    KyussB wrote: »
    Europe has been below-target on inflaton for more than a decade, with deflation being a persistent threat - inflation is actually sorely needed.
    A properly run economy doesn't risk excessive inflation until it's at Full Output - at which point spending needs to be cut back, but not before.

    How is the absence of inflation explained at a time when the money supply has been hugely expanded by QE ? is it that the money created has not trickled down but has remained tied up in stock and investments in larger companies thus creating an illusion of economic expansion which has disgruntled general populations who have only marginally benefitted shown by the rise of populism . If so then forms of stimulus and money creation can continue ad infinitum or until there is revolt ?


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    #916
    Geuze
    Registered Users Posts: 13,185 ✭✭✭✭Geuze


    Deleted User wrote: »
    The problem I currently see, in the medtech sector where I work, is the mat many Irish startups see the goal as developing a product selling on to a major player once the get a viable product. Some Cash does come back into the Irish economy, but any long term success of these products go elsewhere.


    Yes, compare this short-termist attitude / "exit strategy", with German mittelstand firms.

    I think the Miele grandchildren are still on the board of directors.


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    #917
    Geuze
    Registered Users Posts: 13,185 ✭✭✭✭Geuze


    coolshannagh28 wrote: »
    How is the absence of inflation explained at a time when the money supply has been hugely expanded by QE ?

    A good question.

    There has been asset price inflation.


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    #918
    Gavlor
    Registered Users Posts: 6,179 ✭✭✭Gavlor


    coolshannagh28 wrote: »
    How is the absence of inflation explained at a time when the money supply has been hugely expanded by QE ? is it that the money created has not trickled down but has remained tied up in stock and investments in larger companies thus creating an illusion of economic expansion which has disgruntled general populations who have only marginally benefitted shown by the rise of populism . If so then forms of stimulus and money creation can continue ad infinitum or until there is revolt ?

    That’s it, the money hasn’t gone to the right place. Just have a look at the volume of share buy backs transacted by the top 10 companies in the s&p over the past 10 years. It’s shocking


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    #919
    KyussB
    Registered Users Posts: 2,314 ✭✭✭KyussB


    coolshannagh28 wrote: »
    How is the absence of inflation explained at a time when the money supply has been hugely expanded by QE ? is it that the money created has not trickled down but has remained tied up in stock and investments in larger companies thus creating an illusion of economic expansion which has disgruntled general populations who have only marginally benefitted shown by the rise of populism . If so then forms of stimulus and money creation can continue ad infinitum or until there is revolt ?
    Ya as ever we have money-creation/socialism for the rich, and for wealthy financiers/corporations - through QE - and austerity/capitalism for everyone else pretty much.

    Huge top-down asset price inflation benefiting the well off and indirectly hiking costs of living for everybody, and almost no bottom-up demand-led inflation that would benefit the least well off and working people in general (often have disinflation or even periods of deflation instead).

    Money creation is essential when it's going top-down into the hands of the powerful/wealthy through corporations/finance, and it's unthinkable 'magic money' when it's going bottom-up into the hands of everyday people and the least well off through government.


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    #920
    ILoveYourVibes
    Registered Users Posts: 15,176 ✭✭✭✭ILoveYourVibes


    Ireland will look like a third world country. We will all be poorer fewer jobs. Mass outward migration.
    Trump will invade with the brits.


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    #921
    Wanderer78
    Registered Users Posts: 29,006 ✭✭✭✭Wanderer78


    ILoveYourVibes wrote:
    Ireland will look like a third world country. We will all be poorer fewer jobs. Mass outward migration. Trump will invade with the brits.


    I'd like to think we have matured in this country, and some day we ll figure out things like money creation, and that we could simply create a large amount of it ourselves, so we are less reliant on external institutions to create it, and lend it to us. I'd also like to think we could get a handle on wealth distribution also, there's plenty of interesting ideas out there that might just work.

    I personally think covid payments should remain in place indefinitely, to try stimulate the real economy, and possibly rolled out to all citizens in some way, we can't keep playing this game of continual asset price inflation, virtually no real economy inflation, it's extremely dangerous for everyone, including the wealthy


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    #922
    coolshannagh28
    Registered Users Posts: 1,476 ✭✭✭coolshannagh28


    KyussB wrote: »
    Ya as ever we have money-creation/socialism for the rich, and for wealthy financiers/corporations - through QE - and austerity/capitalism for everyone else pretty much.

    Huge top-down asset price inflation benefiting the well off and indirectly hiking costs of living for everybody, and almost no bottom-up demand-led inflation that would benefit the least well off and working people in general (often have disinflation or even periods of deflation instead).

    Money creation is essential when it's going top-down into the hands of the powerful/wealthy through corporations/finance, and it's unthinkable 'magic money' when it's going bottom-up into the hands of everyday people and the least well off through government.

    It would appear that the rich aided by governments and central banks have figured out a way to get richer without the downside of inflation which spirals economies out of control .


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    #923
    Wanderer78
    Registered Users Posts: 29,006 ✭✭✭✭Wanderer78


    coolshannagh28 wrote: »
    It would appear that the rich aided by governments and central banks have figures out a way to get richer without the downside of inflation which spirals economies out of control .

    to be fair to the more wealthier elements in society, i suspect this is largely to do with complex human behavior than anything else, im not leaving the more wealthier elements off the hook here, but, when humans come together in working environments, and create common goals such as maximizing wealth creation, we create environments and outcomes that can have an overall negative effect in relation to wealth distribution, human behavioral outcomes such as 'Greshams dynamics' can occur, resulting in unethical outcomes such as growing inequality etc, i.e. its a largely unintentional outcome, obviously those that will benefit from such outcomes will encourage this behavior.

    i think we have a tendency when failure occurs, or wrongs have been done, we automatically look for a villain, in this case 'the wealthy', but the true villain is actually our own complex behaviors and beliefs, of course those that gain great wealth will encourage this behavior for their own gains, but..........


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    #924
    coolshannagh28
    Registered Users Posts: 1,476 ✭✭✭coolshannagh28


    Wanderer78 wrote: »
    to be fair to the more wealthier elements in society, i suspect this is largely to do with complex human behavior than anything else, im not leaving the more wealthier elements off the hook here, but, when humans come together in working environments, and create common goals such as maximizing wealth creation, we create environments and outcomes that can have an overall negative effect in relation to wealth distribution, human behavioral outcomes such as 'Greshams dynamics' can occur, resulting in unethical outcomes such as growing inequality etc, i.e. its a largely unintentional outcome, obviously those that will benefit from such outcomes will encourage this behavior.

    i think we have a tendency when failure occurs, or wrongs have been done, we automatically look for a villain, in this case 'the wealthy', but the true villain is actually our own complex behaviors and beliefs, of course those that gain great wealth will encourage this behavior for their own gains, but..........

    This is essentially the opposite of the conspiracy theory arguments , notwithstanding this it is apparent that decisions made since 07 have been influenced by lobbying from those higher up the food chain abetted by decision makers at a remove from the general populace and also in many cases looking forward to highly remunerated positions in the future.


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    #925
    Hawthorn Tree
    Closed Accounts Posts: 544 ✭✭✭Hawthorn Tree


    Nearly 6 months since this thread started. There are major redundancy plans being worked at the moment. The coalition of chaos looks clueless.


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    #926
    Hawthorn Tree
    Closed Accounts Posts: 544 ✭✭✭Hawthorn Tree


    Why do the FFG government never speak about the economic impact of all this in any meaningful data driven way?


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    #927
    is_that_so
    Registered Users Posts: 32,136 ✭✭✭✭is_that_so


    Hawthorn Tree wrote: »
    Why do the FFG government never speak about the economic impact of all this in any meaningful data driven way?
    Not a lot they can say, the Budget is up in a few weeks.


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    #928
    PommieBast
    Registered Users Posts: 2,631 ✭✭✭PommieBast


    Hawthorn Tree wrote: »
    Why do the FFG government never speak about the economic impact of all this in any meaningful data driven way?
    Doing so would be political suicide.


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    #929
    Zebra3
    Registered Users Posts: 13,859 ✭✭✭✭Zebra3


    Hawthorn Tree wrote: »
    Nearly 6 months since this thread started. There are major redundancy plans being worked at the moment. The coalition of chaos looks clueless.

    Ulster Bank for one look like they are finished.


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    #930
    road_high
    Registered Users Posts: 19,402 ✭✭✭✭road_high


    Hawthorn Tree wrote: »
    Why do the FFG government never speak about the economic impact of all this in any meaningful data driven way?

    Because they want to keep the truth hidden. But it’s coming to a head, fast


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    #931
    bloopy
    Registered Users Posts: 1,256 ✭✭✭bloopy


    PommieBast wrote: »
    Doing so would be political suicide.

    But surely someone should.
    Everyone is so focused on the numbers that nobody is looking at the dark repercussions bubbling just under the surface.

    What is coming is a potential apocalypse for small to medium sized indigenous businesses. Large entities will be damaged but have the resources to possibly absorb the damage.
    The virus is main news now but I think it will be only a part of the story in a few months time.


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