2008 - Age of Awakening / 2016 - Age of disclosures / 2021 - Age of Making Choices & Separation / Next Stage - Age of Reconnection! Heretic

Sunday, October 24, 2010

Can Ireland exit EU and join US?

.
Something is happening, see the articles:

Soden: Let's quit EU and join US

Frederick Forsyth: Rise up, reclaim your country

Leaving the euro might well be our 'least bad' option

Mike Soden's [Irish Central Bank advisor] announcement is probably not accidental because of it's timing. This issue was simmering since 2008. Ireland jeopardised its sovereignty by assuming their private banking debt on call from Brussels, in return for some guarantees, as revealed through some leaks on David McWilliams forum, recently.

The fact that Soden chose now to speak out plus the rumors of a feud between Lenihan [fin.min.] and Cowen [prime min.], indicate that something bad is happening. My guess is that they are finding out to their surprize that those German and French "guarantees" are probably not as solid as they seemed 2 years ago (if it comes to foreign "guarantees" they should ask Poles - they may know something about that...).

Also, Lenihan has probably realized (by adding up all figures) that Irish economy will not recover on cutbacks alone. The reason is obvious to me or McWilliams - the lack of indigenous industry. A service based economy (with a notable exception of the Swiss banking phenomenon) cannot cut-back its way to prosperity, as Greeks are now finding out too.

[shocking economic heresy=on] You have to actually _produce_ something that other people would buy and charge competitive prices for that. [shocking economic heresy=off]

In my humble opinion, Ireland will not be able to solve it by exiting EU and joining US, going alone or with other alliances - the moment this happens, European banks will probably immediately pull out resources and loans from the Irish banks collapsing them and sinking the state. It is worse than Iceland - Iceland is small enough to survive being cut off, on cod fishing alone. Ireland is too big to do that and too small to do what the British are doing now.

Also, you can see here a classical example of "monkey" regressors' culture in action, among the Irish/EU ruling caste: when everything is well they cooperate, when "bananas" are lacking, they kick out the weakest members out of their herd.

------------------
Update 8-Nov-2010

Interesting articles:

THE BIG PICTURE: Ireland is effectively insolvent – the next crisis will be mass home mortgage default, writes MORGAN KELLY

Eoghan Harris: Public-sector wealth can only lead to private decay

-------------------
Update 11-Dec-2010

Interesting article:

Iceland safe, Ireland sorry?


.

3 comments :

Mark said...

"[shocking economic heresy=on] You have to actually _produce_ something that other people would buy and charge competitive prices for that. [shocking economic heresy=off]"

That's the problem with using GDP as a marker of economic activity. As long as you can keep expanding money supply, GDP goes up. You expand money supply through debt, and fractional reserving it into existence, or through printing. Little genuine necessary business is a part of it. But the numbers look good.

I think the debts will have to be restructured at one point or another. Or defaulted upon. Either will cause derivitive contracts to become active. That will be a problem for the market as people will need to liquidate to make payments, and also, people won't want to lend and since everything is denominated in USD, USD will be scarce from an accessibility standpoint and USD will go up and automatically send the US markets down and everything priced in USD down.

Ireland should develop its natural resource based industry right now through grants and incentives, then default. Spend money you don't have, then default on your IOUs.

I'm expecting the economy to rally as US, Japan, England and China print money until the next major crash which I think will be triggered via sovereign debt restructuring, or corporate bankruptcy. Could be Ireland. The US mortgage mess isn't over and lawsuits are just beginning but that might not be the catalyst.

Mark.

Stan Bleszynski said...

Absolutely! I supect that the real trigger will be something totally unexpected, a natural disater or something like that. They are prepared with their money and credit printing presses, with their lawyers to neutralize all impending drrivatives or CDS'es by twisting the rules in their favor. I nearly lost on my best puts in 2008 because they dissolved one bank so quickly giving me only 1 day (in fact only 15 minuts before the closing day) to cash my good option! They do use tricks against me, you other investors or against anyone who is trying to make a living by working and saving capital. But they cannot predict the future and Mother Nature will hit these government & banking crooks the way they never expected - they will be totally unprepared! 8-:)

Stan

Paper currency always sooner or later attains it's intrinsic value - zero! Voltaire

Mark said...

http://www.reuters.com/article/idUSLDE69R1AV20101028

State owned Anglo Irish asking bondholders to take haircut.

Mark.