In simple terms...what happened? How bad is it?

Which will involve some people accepting hardship through no fault of their own. You just can't take a sample group of the size and diversity of the population of Ireland and reduce it down to a single monolithic entity, in order to make a very complex set of problems far more simple than they actually are.

The whole oil production/scarcity thing is also a bit of a myth in the sense that it has for a very long time been priced on the principle of supply and demand even though that is no longer true in the strict sense of consuming physical oil. Some of the biggest players in the oil trade are weirdly enough, not oil companies or organisations that take physical delivery of oil. They are large scale commodities futures traders and the whole commodities futures market is such a highly leveraged no mans land, that small fries need to stay the hell away or get blown the hell up.

60 minutes did a segment on the 2008 oil "bubble" which resulted in the price of a barrel more than doubling during a period when worldwide supply was going up and worldwide demand was going down. It created the illusion of great and impending scarcity when there wasn't one really. Not to the extent that would result in that kind of price increase in that small a time frame. It posited the idea that the CF market has become flooded by large investors with an interest in buying oil contracts and then trying make money on the volatility in price that happens when you have massive investment inflow and everyone rushing to make a dollar on the way up and on the way down.

Don Booker wrote: »

In short we are totally screwed. Expect a second bailout if we sign up to German integration - and then a default. Expect a nuclear winter within 18 months.

Yes, that looks about right. Humanity is constantly getting it wrong. Not a surprise since we keep using the same though processes.

Albert Einstein: "The definition of insanity is doing the same thing over and over and expecting it to come out different."

The equation is simple;

the Braindead Right bought into the Irish Media garbage fed
to them by RTE and the likes of The Irish Times and it's ilk...

bought endless amounts of totally worthless rubbish
at overly inflated prices
and put this country right up the crapper...


:rolleyes:

QED. :mad:

Worztron wrote: »

I agree. And their solution to a "recovery" = keep buying more crap. It is a vicious circle. How many more times must capitalism collapse before we begin to consider alternatives. There has never been a single instance of a capitalist boom that was not followed by a bust.

A 2nd bailout looks on the cards now. How are we supposed to pay off bailout #2 if we cannot pay bailout #1.

That confuses two things - what we need to borrow, and our ability to borrow. The first bailout went mostly to pay for the government's deficit spending, and there was a bailout because we couldn't borrow the money for that deficit from the markets at reasonable rates. The borrowed money is added to the public debt.

A second bailout will happen only if we still can't borrow from the markets at a reasonable rate. If we can borrow from the markets, then we won't be aiming to pay back bailout #1 any more than any other public debt. We'll borrow from the markets to pay it back. If we can't borrow from the markets, we'll get a second bailout, which will be used mostly to pay back the first bailout - it's not so much a second bailout as a loan renewal, in effect.

The only reason we'd actually pay down the debt is if we sign up to the new Fiscal Compact. That would give us twenty years to reduce our public debt from about 115% to 60% of GDP - so about half the debt at most. Assuming some economic growth in that twenty years, we'll wind up paying back rather less, or even much less, than half the debt.

The last time we were in such dire straits was 1991, when debt was 96% of GDP, at interest rates a good deal higher than now. Within 7-8 years that debt was less than 60% of GDP purely through economic growth, without us paying any of the debt off.

cordially,
Scofflaw

Worztron wrote: »

This is how I see it. Feel free to edit the list and post your view.

1. Greece
2. Ireland
3. Portugal
4. Spain
5. Italy

I would put Greece and Portugal first and second as both don't have great export markets and education standards aren't great.

I don't see a hell of a lot between the other three. We have exports but they don't generate big increases in employment any more, so the big question is where is the growth going to come from? Never mind tax increases and more cuts.

Don't see much positives for the other two either. In some ways Ireland might be 5, but not by much.

Something else that needs to be considered is that although Ireland has been and remains intractable with regard to it's corporation tax rate and the EU will not challenge that directly. However they are likely to push for corporation tax to be reformed in a way that will benefit some big consumer countries, that is to tax at the point of sale i.e. the country in which the product is sold rather than where it was made.