Tuesday, November 23, 2010

I Couldn't Agree More Dean

 I happened to catch a piece early this morning Ireland should 'do an Argentina' out of the Guardian by Dean Baker which is quite an interesting read. It is an excellent piece on the Irish situation and the death sentence that accompanies help from the ECB and in particular the IMF. Here are a couple of gems from Baker's article.

"It is worth remembering that Ireland's government was a model of fiscal probity prior to the economic meltdown. It had run large budget surpluses for the 5 years prior to the onset of the crisis. Ireland's problem was certainly not out of control government spending; it was a reckless banking system that fueled an enormous housing bubble. The economic wizards at the ECB and the IMF either couldn't see the bubble or didn't think it was worth mentioning."

Amen Dean!

"While it is often claimed that these institutions are not political, only the braindead could still believe this. The decision to make Ireland's workers, along with workers in Spain, Portugal, Latvia and elsewhere, pay for the recklessness of their country's bankers is entirely a political one. There is no economic imperative that says that workers must pay; this is a political decision being imposed by the ECB and IMF."

 Amen again Dean! but don't let me interrupt.

"The other point that should be kept in mind is that even a relatively small country like Ireland has options. Specifically, they could drop out of the euro and default on their debt. This is hardly a first best option, but if the alternative is an indefinite stint of double-digit unemployment, then leaving the euro and default look much more attractive."

Amen yet again Dean ! 

I seem to recall read somewhere else that Ireland has other options as well. I assure you that when Bruno and Rocco roll up at you shop door offering 'a bridge loan' to help you out you would be advised to politely decline it and pray they don't come back.  Same goes with the IMF. 

"What the people of Ireland and every country must realise is that if they agree to play by the bankers' rules, they will lose."

Please stop Dean I can't take it! How refreshing to finally hear a candid appraisal of the situation with which I couldn't agree more.

The IMF playbook, raise taxes, devalue currency, then repeat. If results lag simply repeat the above process over and over and over again until the landscape looks like the aftermath of a plague of locusts. 

All done first class via the confines of a suite with meeting room at the posh Hotel Intercontinental and a diplomatic passport to boot! Lovely. 

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

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1 comment:

Scoremore said...

Just like the people of Japan, the Irish will sit idly by as their leaders sell them into debt slavery for the next century. The Americans will follow in due time and the world will return to the middle ages. There is nothing new under the Sun.