Thursday, August 12, 2010

Endgame Ireland

Ladies and gentlemen, start your fans...as a noxious substance is about to hit them. We are in endgame, in my learned opinion ( how learned you ask? Well I've read at least 3 books on economics, one of which was quite expensive. Expensive automatically means its better).

Ok, so I'm not learned. But many other people are, and they are beginning to notice things like the head of our Central Bank, Patrick Honohan, referring to the spreads on our bonds (vs the German rate, now a 3% difference) as ridiculous. In other words, when we go to borrow money from foreigners (bloody foreigners, coming over here and lending us money!) we have to pay interest rates which are "ridiculous". This is now an actual economic term in Ireland.

A number of problems are about to rear their ugly heads. A bank guarantee offered by the Irish government is going to run out at the end of September, when we will get to see whether investors truly trust the banks. I'm betting that they don't. Whats more, the debts of the stinkiest of Irish banks, the nationalised Anglo-Irish, are currently considered separate to the state's balance sheet, as the EU sees these debts as viable business assets. But that might (indeed, almost certainly) will change. When that happens, Irish debt will reach around 112% of GNP. That's right, we'll be Greece without the sun or the millenia of civilisation.

But don't worry people, our government has two clever ideas. The first is that they've gone on holidays. Hooray for holidays!

The second: let me introduce you to our crack suicide squad. Suicide squad, deploy!

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