# Jill Kirby on Radio people with sums on deposit losing 10% recently due to fall in €



## Starbuck

I heard Jill Kirby on the Derek Mooney show on RTE1 this afternoon. 

There was a discussion on personal finance where she referred to people having large sums on deposit losing 10% in the last few months due to the euros drop in value. She said this had cut the 'spending power' of cash in bank accounts by 10%.

This makes no sense to me.

If you live in Euroland, and you have euros on deposit - the only effect you've seen on your spending power is a very small eurozone inflationary value of 1.4%. You should be getting up to 3.1% on deposit - so the actual *growth* in your money value is +1.7% surely?

On the other hand - if you want to move to China and buy a house, yes, the fall in the euro has had a -20% effect on your spending power.
How many plan to do that?

Has Jill Kirby gotten a bit confused?


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## Slim

She was referring to the spending power of the Euro versus Sterling and other currencies, i.e. US $. She recommends holding a % of your savings in either gold, Norwegian Krona, Can $, Swiss francs or HK$s to avoid the effects of the Euro's slide which she reckons will continue.


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## Starbuck

Sure. But unless you're a currency trader or making large purchases in STG or USD - why should you care? She's telling Grannies to get into FE. Load of nonsense.


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## canicemcavoy

Is there a thread on exactly how to do this?


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## Slim

I have asked a few question on the Investments Forum here. There are a few answers floating about on there. Slim


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## Slim

Starbuck said:


> Sure. But unless you're a currency trader or making large purchases in STG or USD - why should you care? She's telling Grannies to get into FE. Load of nonsense.


 
I think her point was that if you hold large deposits in Euro and she says she meets over 50s who have up to €500k on deposit, then the loss of value against Stg, $ etc will eat into their savings somehow, inflation, cost of imports etc.

Slim


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## rustbucket

Absolute rubbish. You need to be a currency trader to figure that one out.

Too many risks involved- Euro fluctuates?

Commission and FX charges?


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## Starbuck

I agree....long term, inflation in the eurozone may rise, and that will affect the buying power of cash on deposit. But she referred to CURRENT losses, of up to 10% in 'spending power'. 

I say again - where?? This makes absolutely no sense. She is referring to EXTERNAL buying power of the euro!

And I also agree with you rustbucket. Currency speculation is NOT for widows and orphans. This was just plain bad advice! 

She's a Canadian. Perhaps she does a lot of business in Canadian Dollars - maybe has a mortgage or other expenses requiring her to convert euro to Canadian. She must be feeling the pinch then. But she's forgotten - we're not ALL in the same boat as her.


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## Chris

Starbuck said:


> I say again - where??


Have you filled up your car recently?!?!?! You are falling for the most common fallacy of economic analysis which to only look at the most obvious visible effects, in this case external buying power. The single biggest imported product for most western countries is oil and gas, when these rise then transportation, energy and heating costs rise. All of these have a huge impact on local businesses selling on the local markets; increased production costs means increased prices. This doesn't happen over night, but takes a few months to trickle down, but believe me, it will happen.
Also take a look at how many consumer products are imported from outside the euro zone, like electronics, cars, pharmaceuticals, kids toys, the list goes on and on.




Starbuck said:


> And I also agree with you rustbucket. Currency speculation is NOT for widows and orphans. This was just plain bad advice!
> 
> She's a Canadian. Perhaps she does a lot of business in Canadian Dollars - maybe has a mortgage or other expenses requiring her to convert euro to Canadian. She must be feeling the pinch then. But she's forgotten - we're not ALL in the same boat as her.



I don't believe she is advocating currency speculation, but rather a diversification out of euro only holdings. If someone believes that the euro's value is under threat, then you do not need any knowledge of currency trading or speculation.


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## Daddy

*Jill Kirby comments - wrong ?*

So if I have say 20k euros I understand it perhaps to be a good idea to say buy UK stocks to that value in sterling lets just say for argument sake Aviva PLC which is currently paying a divided yield of approx 7.75% gross.   I would be holding the stock as sterling and that would be a hedge against the declining euro.   Would this be one scenario she would be advocating.

Thanks


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## Starbuck

Chris - are you honestly suggesting an OAP with 500K on deposit in euro should switch it to other currencies to save 50 cents a litre when they buy petrol? Do you suggest the OAP goes to the bank to exchange their Kroner or Sing Dollars when they need money to fill up?

In any case, the rise in petrol is not due to currency costs, but to speculation.


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## Chris

Daddy said:


> So if I have say 20k euros I understand it perhaps to be a good idea to say buy UK stocks to that value in sterling lets just say for argument sake Aviva PLC which is currently paying a divided yield of approx 7.75% gross.   I would be holding the stock as sterling and that would be a hedge against the declining euro.   Would this be one scenario she would be advocating.
> 
> Thanks


This scenario would be diversifying out of the Euro, but I think it would be like jumping from the frying pan into the fire. An ealier post listed some strong currencies that should be looked at.




Starbuck said:


> Chris - are you honestly suggesting an OAP with 500K on deposit in euro should switch it to other currencies to save 50 cents a litre when they buy petrol?



Firstly I never suggested that an OAP should transfer *all *their money out of euro into another currency, and as pointed out by Slim, the recomandation was to hold a percentage of wealth in non-euro assets or currency.
Secondly, you are again only looking at the visible effect of higher oil prices in euros, i.e. higher petrol/diesel prices. This increases transportation costs of all the goods you buy in shops. Higher electricity prices due to higher gas prices also increase production costs. All this leads to higher prices on the most basic consumer goods.
Thirdly, what would you say to an OAP if the value of their €500k was decreasing increasingly fast due to inflation? Lots of OAPs lost huge portions/all of their wealth as they had it invested in one Irish bank, because it was percieved to be the prudent thing to do. Having all your wealth tied up in one stock, or one asset class or one currency is a massive risk, weather you are in your 20s or a pensioner.



Starbuck said:


> Do you suggest the OAP goes to the bank to exchange their Kroner or Sing Dollars when they need money to fill up?


This is a nonesense comment, as (1) this would assume that the person had physical posession of the foreign currency rather than in a bank account and (2) it wrongly assumes again that *all *of the person's money be held in the foreign currency.



Starbuck said:


> In any case, the rise in petrol is not due to currency costs, but to speculation.


Complete and utter nonsense that is spewed out all over the place. Prices of all products are dictated by supply and demand. A speculator could only drive up the price of oil by influencing demand upwards or supply downwards. If a speculator heavily buys oil futures resulting in a rise in price, but the demand for oil at that higher price is lower at maturity of the futures then the speculator heavily loses. The speculators prediction (through buying or shorting) in the price of oil ultimately has to be verified by demand and supply.
If you have some logical proof that speculators can drive up the price of anything then I would love to hear this.


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## queenlex

Chris said:


> If you have some logical proof that speculators can drive up the price of anything then I would love to hear this.


 
Sorry I cant resist..I am assuming you don't live in Ireland then and havent seen the massive rise in housing over the last few years then that led to the present crash then?


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## Chris

You assume wrongand you are hardly trying to say that a small group of speculators drove up house prices are you? It was a huge amount of people, from 20 year old student first time buyers, to middle aged people buying holiday homes, that presented the huge demand, more accurately called real estate obsession. That demand was fueled by government incentive, and low interest rates. It wasn't some small select group of speculators, like is being pointed to when there is talk of oil or bond speculators.
I repeat my point, a speculator can only make money by buying cheap and selling at profit a short time later, if there is demand on the market. It is total demand on the market that influences prices.


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## Starbuck

Chris the reason for recent oil price rises is only partly demand driven - the world recovery is not that strong yet. So where is the demand?
You say it can't be speculators because they don't have the economic clout - yet we're currently witnessing the collapse of the euro as a result of speculators betting against a eurozone member - Greece. Bond traders in cahoots with the Ratings Agencies. 
Speculators drove the GBP out of the ERM, remember?

During the oil price surge of late 2008, where was the demand? The world was in the throes of economic collapse! Speculators money went into commodities - and in the case of oil it was widely reported that tankers were being kept in holding patterns at sea to strangle the supply side. Speculation drove the price sky high.

By the way - the price of oil is now falling....why? Did the demand suddenly dissapear? Did the supply suddenly free up?

I agree with all your points about diversification of investments by the way. But remember what started me off - the claim that euro holders (in the eurozone) have ALREADY lost 10% in spending power. I still say thats wrong.


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## Chris

Starbuck said:


> Chris the reason for recent oil price rises is only partly demand driven - the world recovery is not that strong yet. So where is the demand?


The demand is coming from China. Despite the global downturn daily oil usage continued to increase from 83 mb/d in 2004 to 89 mb/d by the end of 2008 (http://www.ssb.no/ogintma_en/tab-2008-04-28-12-en.html). Global oil demand never significantly declined!



Starbuck said:


> You say it can't be speculators because they don't have the economic clout - yet we're currently witnessing the collapse of the euro as a result of speculators betting against a eurozone member - Greece. Bond traders in cahoots with the Ratings Agencies.
> Speculators drove the GBP out of the ERM, remember?


You correctly point out that reason for the euro's value collapsing is due to Greece. However, the only one that can be blamed for the higher bond yields is Greece. Those buying Greek bonds will only do so at a significant premium; if Greece is not happy with this high yield, there is a very simple solution: get your finances in order.



Starbuck said:


> During the oil price surge of late 2008, where was the demand? The world was in the throes of economic collapse! Speculators money went into commodities - and in the case of oil it was widely reported that tankers were being kept in holding patterns at sea to strangle the supply side. Speculation drove the price sky high.


There is absolutely no economic empirical evidence that speculation drove up oil prices. I won't paraphrase here, but read this article by Robert Murphy for an exact analysis of the increase: http://www.econlib.org/library/Columns/y2008/Murphyspeculators.html
If oil suppliers really wanted to decrease the supply of oil to drive up prices, they would simply leave the oil in the ground rather than pay for it to be stored in a tanker. While there was indeed wide reporting of oil being held in tankers it was never backed up by any facts. Any significant increase of oil being held in tankers would have been recorded in official above ground inventories. Above ground inventories have stayed pretty much unchanged for the last 10 years.



Starbuck said:


> By the way - the price of oil is now falling....why? Did the demand suddenly dissapear? Did the supply suddenly free up?


It is estimated that a 1% swing in oil demand or supply has an effect of about 10% on the spot price of oil (http://www.youtube.com/watch?v=hq4IagUK0p8). So yes, demand has reduced due to economic uncertainty and has caused lower oil prices.



Starbuck said:


> I agree with all your points about diversification of investments by the way. But remember what started me off - the claim that euro holders (in the eurozone) have ALREADY lost 10% in spending power. I still say thats wrong.


As pointed out in a previous post, the 10% decline in spending power is from a euro currency point of view, not consumer point of view. The immediate effect to the consumer  first exists only in imported products, but as I outlined above, this soon trickles down into other consumer products.

It is usually politicians or lazy economists that quickly point the finger at some mysterious, evil speculator entity, but this is nothing more than bovine dung, that doesn't stand up to economic scrutiny.


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## mtk

Jill Kirby spouts many fallacious arguments and this was more of it . Self publicist like mcwilliams.


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## losttheplot

Is the majority of our fuel costs not made up of tax and duties?


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## Starbuck

Chris said:


> You correctly point out that reason for the euro's value collapsing is due to Greece. However, the only one that can be blamed for the higher bond yields is Greece. Those buying Greek bonds will only do so at a significant premium; if Greece is not happy with this high yield, there is a very simple solution: get your finances in order.


Yes indeed - thats the solution to Greece's problems. But while you blame the Greeks for letting this situation arise lets not forget (and you didn't deny it) that the Bond Traders are indeed speculating against the Greek economy first and the Euro second, and creating the mayhem we are witnessing in the euro value. Thats what I said was happening! Whose fault it is is another debate. The point is the Bond Traders and Ratings Agencies are out to make a killing on the Greeks and/or Euro. They've spotted a weakness and they are going in for the kill like a pack of wolves.



> There is absolutely no economic empirical evidence that speculation drove up oil prices. I won't paraphrase here, but read this article by Robert Murphy for an exact analysis of the increase: http://www.econlib.org/library/Columns/y2008/Murphyspeculators.html


Thats a very technical piece, and I'm no expert - but what jumps off the page at me is that - having spent a lot of effort absolving the speculators - he then walks away without explaining exactly WHAT was the cause of a rapid DOUBLING of oil prices. Methinks he doth protest too much. Is he a Broker? Duh?



> If oil suppliers really wanted to decrease the supply of oil to drive up prices, they would simply leave the oil in the ground rather than pay for it to be stored in a tanker.


I didn't blame suppliers - I blame the Traders.



> While there was indeed wide reporting of oil being held in tankers it was never backed up by any facts. Any significant increase of oil being held in tankers would have been recorded in official above ground inventories. Above ground inventories have stayed pretty much unchanged for the last 10 years.


So says Mr.Murphy. Who may have a vested interest in pulling the wool over your eyes. Here's another writer who says exactly the opposite of Murphy - that speculators drove 60% of the 2008 oil price rises, and that inventories DID increase at the same time: [broken link removed]
Who to believe? You can Google any version you like!
We're all just so many dry leaves in a financial hurricane. Its a joke asking the little people to rush from one currency to another to try and save themselves, when the next target for the speculators is wherever they've headed. 
Gold bubble next?



> Is the majority of our fuel costs not made up of tax and duties?


Yes, but the taxes and duties are fixed - unlike the spot price.


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## Duke of Marmalade

Chris said:


> Complete and utter nonsense that is spewed out all over the place. Prices of all products are dictated by supply and demand. ...
> 
> If you have some logical proof that speculators can drive up the price of anything then I would love to hear this.


Ultimately an exchange rate is driven by the supply and demand for the goods and services produced in that currency. However, it is quite clear that recent FX movements are not in the least caused by shifts in trade supply/demand. A grand scheme is announced and up jumps the Euro. A hung parliament in the UK and down falls sterling. These movements are all caused by the speculative motive not by shifts in supply/demand on the merchandise trading front. I think you are narrowly defining speculators as a clique of market manipulators. I agree that these are a fiction. But in the short run at least it seems to me that an exchange rate is the equilibrium between those who think (speculate) that it will rise and those who think that it will fall.


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## Chris

Starbuck said:


> Yes indeed - thats the solution to Greece's problems. But while you blame the Greeks for letting this situation arise lets not forget (and you didn't deny it) that the Bond Traders are indeed speculating against the Greek economy first and the Euro second, and creating the mayhem we are witnessing in the euro value. Thats what I said was happening! Whose fault it is is another debate. The point is the Bond Traders and Ratings Agencies are out to make a killing on the Greeks and/or Euro. They've spotted a weakness and they are going in for the kill like a pack of wolves.


If speculators have driven Greek bond prices below what they should be then why aren't actual bond investors pouring in to buy new Greek debt? Bond investors are agreeing with speculators, otherwise Greek bonds sales would be going up.
Speculators are of utmost importance to ensure that new information influences market clearing prices as quickly as possible. Speculators are constantly being blamed for driving prices up or down more than what the price should be. Take for example the ban on short selling Irish bank shares. This was introduced by politicians (in their infinite stupidity) because Anglo Irish shares were being pushed down "beyond anything that resembled fundamental reasons". As it turns out, those that were shorting Anglo Irish were absolutely right. Instead of Anglo Irish being forced out of its misery sooner, the ban on short selling ensured that more people bought shares in the bank, and lost the lot.



Starbuck said:


> Thats a very technical piece, and I'm no expert - but what jumps off the page at me is that - having spent a lot of effort absolving the speculators - he then walks away without explaining exactly WHAT was the cause of a rapid DOUBLING of oil prices. Methinks he doth protest too much. Is he a Broker? Duh?


Nope, he's not a trader, he's an economist.



Starbuck said:


> I didn't blame suppliers - I blame the Traders.


But yet you mentioned the apparent manipulation of prices through keeping oil tankers in a holding loop. Speculators buy futures contracts, not actual oil. The price of a futures contract has to be ultimately confirmed by the spot price, which is a result of actual oil sales.



Starbuck said:


> So says Mr.Murphy. Who may have a vested interest in pulling the wool over your eyes. Here's another writer who says exactly the opposite of Murphy - that speculators drove 60% of the 2008 oil price rises, and that inventories DID increase at the same time: [broken link removed]
> Who to believe? You can Google any version you like!


Engdahl's main proof for his theory is summed up in this quote:


> By purchasing large numbers of futures contracts, and thereby pushing up futures prices to even higher levels than current prices, speculators have provided a financial incentive for oil companies to buy even more oil and place it in storage. A refiner will purchase extra oil today, even if it costs $115 per barrel, if the futures price is even higher.
> 
> As a result, over the past two years crude oil inventories have been steadily growing, resulting in US crude oil inventories that are now higher than at any time in the previous eight years. The large influx of speculative investment into oil futures has led to a situation where we have both high supplies of crude oil and high crude oil prices.


This is exactly what Robert Murphy proves empirically as incorrect. Crude oil inventories have been pretty much unchanged for more than 10 years.



Starbuck said:


> We're all just so many dry leaves in a financial hurricane. Its a joke asking the little people to rush from one currency to another to try and save themselves, when the next target for the speculators is wherever they've headed.
> Gold bubble next?


And what would you say to a pensioner if their euro holding becomes worthless some day. Let me reiterate the example of pensioners who had all their wealth tied up in one apparently safe bank, and now that is worth nothing. The same could happen with euro cash. It's all about eggs in the one proverbial basket

Speculators are not some evil entity, they are of huge importance to the market and investors, as Murphy points out.


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## darag

Duke of Marmalade said:


> I think you are narrowly defining speculators as a clique of market manipulators. I agree that these are a fiction.


But isn't that the generally accepted meaning of a speculator these days?  It certainly is what is implied by Starbuck's use of the term and it's clear that politicians generally use the term with this sense - i.e. that "speculators" manipulate markets unfairly.

People who don't understand markets and don't like the prices at which people are willing to buy and sell to each other on markets love the idea that they can blame some conspiratorial group of elite "speculators" who have somehow forced OTHER buyers and sellers to agree to exchange at an "unfair" price.

If you truly believe "speculators" have manipulated the price of anything, then it is trivial to make huge amounts of money if you are right.  If I ever find convincing evidence of market manipulation, I certainly won't be writing blogs or Internet articles about it - I'll be using that information to become fantastically wealthy.

The Anglo share price example that Chris mentions is typical of anti-speculator hysteria; the government bans short-selling to stop "speculation" in response to it becoming apparent that the Irish property market was not in for a "soft" landing and that Anglo was hugely exposed.

Another is the Greek bonds fiasco; despite the fact everyone agrees that Greece out-and-out lied about the extent of its national debt and about the extent of its budget deficit for years, it was the speculators' fault for causing wild swings in their bond yields.  The simple fact was the market was responding (reasonably rationally) to each new revelation which demonstrated how much of a basket case Greece was.

And why anyone would expect the euro to maintain it's value in light of the EU's political response to the Greek situation (with Germany flipping back and forth between vague promises and taking a hard line) and the announcement of a major and drastic change in ECB policy (that it will directly fund government debt), is beyond me.

There is simply no need to go looking under rocks for "speculators" to explain these market reactions.  Isn't it funny how these bond and currency speculators have never actually been identified?  You'd imagine at least one would have written a book or appeared in a TV news program (even with their voice disguised and behind a shadow screen)?  The reason is that the idea of a "speculator" who manipulates world bond or fx markets for their own gain is a bogeyman peddled to the gullible by politicians and other vested interests who are infuriated that they cannot force people to buy and sell to each other at prices they deem "fair".


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## Duke of Marmalade

Chris said:


> And what would you say to a pensioner if their euro holding becomes worthless some day.


This is nonsense talk. I too have great faith in speculators to ensure that realistic prices and not politically manipulated prices obtain.

Now consider the following 10 year sovereign bond yields:

German Euro: 2.86% p.a.
US Dollar: 3.45% p.a.
UK Sterling: 3.75% p.a.

We can assume that there is no explicit default risk in any of these situations as each could engineer a devaluation to avoid default (UK and US do this habitually).

So as a currency the Euro is still viewed by the markets (speculators) as a long term better bet than the Dollar or Sterling - speculators are prepared to buy (and sell) German 10 year Euro bonds for a measly 2.86% p.a. despite the fact that Jill Kirby tells us (in today's Sunday Times) that it has 15% - 20% further to fall.

What Jill seems to be forgetting is that the Euro was a big benefactor of the credit crunch and it strengthened spectacularly against the Anglo Saxon currencies which were by far the biggest abusers of credit. 

The Euro has recently given up a small proportion of those gains as it grapples with its own delinquents but IMHO it is irresponsible to suggest the possibility of a total meltdown in the currency.


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## Starbuck

Good points there DoM. Unfortunately JK's advice (scare stories?) will have effect of simply terrifying some people (probably older people) into doing something wreckless and ill advised with their money. For no good reason, and no benefit.
By the way - in an ultimate irony - during the interview she advised us to buy PHYSICAL gold, then in the same breath admitted she has her own gold holding in unallocated certificates!! The hypocrisy! Do as I say, not as I do....


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## RMCF

Surely if you have savings in Euro, live in a Euro country, earn in Euro, don't plan to move to a non-euro country, will always be buying things in Euro etc etc, then you have not lost anything?


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## TSThomas

Purchase any imported goods?


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## Chris

Duke of Marmalade said:


> We can assume that there is no explicit default risk in any of these situations as each could engineer a devaluation to avoid default (UK and US do this habitually).


I'm not as optimistic about default as you, but let's take that argumant as it is. To a foreign investor devaluation is the same as default. Let's say an investor loaned the UK treasury €100 converted in to sterling, and let's say that would be £90. 2 yearts later the UK treasury has devalued the currency and pays the investor back £90, but because of the devaluation that £90 is now only worth €90. This is no different than going to the b9ond holder and saying that you can only repay 90c on the €.
This is why the euro has been stronger than sterling and US$ in the past couple of years; the UCB has refrained from direct devaluation of the euro until now.



RMCF said:


> So as a currency the Euro is still viewed by the markets (speculators) as a long term better bet than the Dollar or Sterling - speculators are prepared to buy (and sell) German 10 year Euro bonds for a measly 2.86% p.a. despite the fact that Jill Kirby tells us (in today's Sunday Times) that it has 15% - 20% further to fall.


Yes, I agree that the euro is still viewed as a stronger currency than sterling ans US$, and would personally agree with this. But since the announcements of the Greek bailout and ECB purchasing bad debts directly (read printing money) I believe that it is now merely the best out of a bad lot.



RMCF said:


> Surely if you have savings in Euro, live in a Euro country, earn in Euro, don't plan to move to a non-euro country, will always be buying things in Euro etc etc, then you have not lost anything?



Again this ignores the impact that higher import prices (due to a weaker euro) will have on locally produced goods and services. Zimbabwe and other hyperinflationary countries of history are extreme examples, but you can hardly argue that the devaluation of their currency has anything but a negative impact on people living, working and buying in Zimbabwe.


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## Starbuck

More scare mongering. This is not Zimbabwe. Don't be ridiculous.

*Euro slide pulls oil prices lower*

             Monday, 17 May 2010 07:11

http://www.rte.ie/business/2010/0517/oil.html

PS Best of a bad lot still means best, and a better bet in the long run.


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## Duke of Marmalade

RTE scaremongering.

Headline news this morning - "Euro falls sharply to 4 year lows etc. etc."

Oh dear, I think, should have listened to Jill as I do spend quite a bit of sterling in the six counties.

Turn on my computer to see the worst. What's this? Euro is actually up against sterling.

RTE headline should have read "dollar rises..." and it should not have been a headline, we have in fact had a very quiet open to the week on world markets.


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## Chris

Starbuck said:


> More scare mongering. This is not Zimbabwe. Don't be ridiculous.


I never said that the Euro zone is or ever will be like Zimbabwe. What I pointed out was that a devalued currency is not irrelevant from the perspective of someone living, working and buying within the euro zone.
People that warned of the property crash and financial crisis were all accused of scare mongering as well (in the press, by politicians and on this forum). The fact that,contrary to what politicians keep saying, many economists actually predicted the whole mess, is now being ignored with comments comments like "nobody saw it coming" or even worse "nobody could have seen this coming". And the same economists now have a very bad outlook for the majority of western fiat currencies.



Starbuck said:


> PS Best of a bad lot still means best, and a better bet in the long run.


No it is not, there are far more stable and stronger currencies out there. Moving out of the Euro into sterling or US$ would make absolutely no sense, so you have a point there, but Swiss francs, Canadian/Australian/HKL $ are all better options in the long run.


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## Duke of Marmalade

darag said:


> But isn't that the generally accepted meaning of a speculator these days? .....The reason is that the idea of a "speculator" who manipulates world bond or fx markets for their own gain is a bogeyman peddled to the gullible by politicians and other vested interests who are infuriated that they cannot force people to buy and sell to each other at prices they deem "fair".


_darag_ I missed this post first time round. I agree with most of what you say here. What I was trying to say is that short term exchange rate movements are driven by the speculative motive and not by shifts in the balance of exporters/importers. Used to be only exporters/importers had access to the FX markets. Since Thatcher and de-regulation it has been open season. It is not always a good thing. Look at sterling last year. It moved from 1.50 euro to parity in a short space of time. Sheer panic had set in. It was clearly overdone and has swung back. Back to topic is it really good advice to recommend being exposed to these wild mood swings?


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## roker

I receive a UK pension every month and I don't see the exchange rate varying that much recently and cannot see what the panic is about, today it is £1 = €1.17 it was the same last july, the worste was last Oct when it was £1 = €1.06, Oct 2008 it was €1.29


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## darag

Hi Duke - it's relatively easy to say the Sterling panic was overdone last year with hindsight but at the time it didn't seem unreasonable given the monetary policy decisions taken by the BoE and the horrendous fiscal position of the UK government.  This was back when France and Germany were still smug about having dodged the crisis by "not following the Anglo-Saxon model" while now we see that their banks were hugely exposed to dodgy debt (just that it wasn't anything to do with sub-prime mortgages). 

I'd also argue with your 80s/Thatcher deregulation theory; until 2 years ago (when the price of everything went bananas), the FX volatility had been steadily declining for decades.

But back to the topic indeed.  No I don't think any individual investor will gain a lot from direct exposure to other currencies.  But if you've followed the old advice - investing globally in low cost cap-weighted index funds - they you're already hedged to an extent against currency swings as you are buying profits generated in all the major currencies.


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## Starbuck

I thought it was worth revisiting this discussion 3 months on, just to see how those who followed Jills advice and bailed out of the euro will have done.

Firstly, lets look at AUD performance; EUR AUD Chart
You'll notice that, as if by magic, the EUR took a huge leap UP against the AUD within days of Kirby's advice. It went from about 1.41 to the AUD to almost 1.55. Anyone who bought AUD must've been wetting themselves.
It fell back since, but has never gone below 1.40 and is currently around 1.45. So you lost if you took her advice.

Next, the Swiss Franc; EUR CHF Chart
She did a bit better here - after some ups and downs the EUR went from about 1.40 in mid May to - eh - 1.37'ish today. Hardly the plunge we were warned of. 
But beware - the Swiss Government have been spreading the word that they don't like the current strength of their currency and want to see it fall. And don't forget, CHF interest rates are zero. 
A small move downward (as they wish) and you lost money!

In fact, after a long slide over winter the euro has been rallying against most currencies in the last few weeks. Its on an upward trend.

But the best is yet to come.
Kirby gave a stringent warning to listeners to buy PHYSICAL Gold as a currency hedge - just before admitting that she doesn't take her own advice and is heavily into Gold Certificates with the Perth Mint.
A bit of Googling revealed this about the Perth Mint:

From www.24hrgold.com
This is an article about the difficulty Perth Mint Certificate investors were having in getting hold of their physical gold/silver.


> Do you know the size of the Perth Mint's   liabilities of their certificate program?  (It's   $880 million Australian dollars (which are worth about the same as a U.S.   dollar.)
> 
> Do you know the estimated annual silver demand in   ounces and dollars?  (It's about 60 million ounces, or about $1 billion   at $16.66/oz.
> 
> THE PERTH   MINT'S LIABILITY IS WORTH ABOUT AN ENTIRE YEAR'S WORTH OF SILVER INVESTMENT   DEMAND!


And this one - appears to be from a Dublin based trader:



> I was dealing over the last 2 years with the Perth Mint buying
> and selling over $200,000 worth of gold and silver via the Dublin agents
> - each transaction was one cock up after another, long delays,
> Dublin/Perth not executing at the right buy/sell fixes I wanted,
> certificates getting lost because they were not sent to me by registered
> mail (to save money...) ... it all became too much and I'm now all in
> physical and can sleep soundly at night...
> When things go ballistic Perth will not be able to cope, they can barely
> cope now, not answering phones etc etc etc
> It is a disaster waiting to happen. And BTW I do believe parts of the
> Perth operation/govt of western Oz is insured by Lloyds (I may be
> wrong), but if several major banks implode, which is still a
> possibility, the derivatives crisis in waiting could easily take Lloyds
> down too.
> All best!
> Andy


The Perth Mint website currently carries a statement from its management denying they are short of physical Gold (i.e. selling worthless paper).

All in all I think Jill gave some rather panicky bad advice. All the folk who changed out of the euro need to cut their losses and get back into it now, because the currency is rising. As the Dollar inevitably slides toward disaster the speculators will scramble for a hard currency as shelter.

Finally, here's a good article on the current picture on currency investment, if you have the stomach for it: [broken link removed]

Moral of the story?
Like I said - Forex is not for Widows and Orphans Jill. Stop scaring the public into precipitous bad moves.


----------



## Chris

Starbuck said:


> I thought it was worth revisiting this discussion 3 months on, just to see how those who followed Jills advice and bailed out of the euro will have done.
> 
> ...
> 
> In fact, after a long slide over winter the euro has been rallying against most currencies in the last few weeks. Its on an upward trend.


I don't think she advocated currency trading, and a window of 3 months is not an investment window. I also believe that it has been repeated, that people should not put all their money into foreign currencies, but it should be used for diversification purposes.



Starbuck said:


> From www.24hrgold.com
> This is an article about the difficulty Perth Mint Certificate investors were having in getting hold of their physical gold/silver.
> And this one - appears to be from a Dublin based trader:


I cannot believe that a gold TRADER would use a certificate program. That is totally moronic. The Perth Mint is an investment facility, and in no way adequate for traders. While I cannot speak from experience about getting gold delivered from the Perth Mint, I do know that my dad had no problem earlier this year.



Starbuck said:


> All in all I think Jill gave some rather panicky bad advice. All the folk who changed out of the euro need to cut their losses and get back into it now, because the currency is rising. As the Dollar inevitably slides toward disaster the speculators will scramble for a hard currency as shelter.


I think you are looking at this in a much too short time frame to give any meaningful criticism of investing in foreign currencies. And you are hardly trying to claim that the Euro is a hard currency, are you?



Starbuck said:


> Moral of the story?
> Like I said - Forex is not for Widows and Orphans Jill. Stop scaring the public into precipitous bad moves.


Let's revisit this in a couple of years.


----------



## Fiskar

Let's revisit this in a couple of years.[/QUOTE]

I reckon that's what property investors hope too.

Heard Jill Kirby on the the national station today and would not have an "ounce" of faith in anything she says. I particularly do not like insistent people telling me what to do
Glad to say she got short sharp shriff from the stand in for D Mooney on her book towns.


----------



## Starbuck

> I don't think she advocated currency trading, and a window of 3 months  is not an investment window. I also believe that it has been repeated,  that people should not put all their money into foreign currencies, but  it should be used for diversification purposes.


Did I say she recommended currency TRADING? Where'd you get that from?

In her spiel on the Mooney show last May she related a story of meeting 'a pensioner' at a financial roadshow. Perhaps 3 months is a significant period to a pensioner (over 65)? How long do you think would be appropriate?
I have no problem in re-visiting this in another 3 months and we'll see again what's happened. But for the moment - the pensioner has lost money thanks to Jill.



> I cannot believe that a gold TRADER would use a certificate program.  That is totally moronic. The Perth Mint is an investment facility, and  in no way adequate for traders. While I cannot speak from experience  about getting gold delivered from the Perth Mint, I do know that my dad  had no problem earlier this year.


Did you actually READ the whole article? I think not to be honest.
And you've missed the point anyhow. Jill recommended physical Gold but admitted she herself buys Certs to reduce costs and security risks. "Do as I say, not as I do".



> I think you are looking at this in a much too short time frame to give  any meaningful criticism of investing in foreign currencies.



How long has the 65+ year old pensioner got?
Thats the age profile she gave, and the age profile of most D.Mooney listeners too I'd guess!



> And you are  hardly trying to claim that the Euro is a hard currency, are you?


Certainly!! Are you saying it isn't??
Whats the alternative? The USD? Good luck!!
The Yuan?? Not even the Chinese think so.
The AUD/SGD/KRN ?? 
Will we possibly be seeing oil traded in any of these soon?
The euro IS a hard currency, and when the USD really tanks in the last Q we'll soon see where the safe haven seekers run to.


> Let's revisit this in a couple of years.


Sure. Jills listeners might be dead by then and won't be complaining....



> Glad to say she got short sharp shriff from the stand in for D Mooney on her book towns.


Interesting Fiskar, I didn't hear it. Got a link?



> Heard Jill Kirby on the the national station today and would not have an  "ounce" of faith in anything she says. I particularly do not like  insistent people telling me what to do



That hits the nail on the head. Its why I don't like her either. She takes a strident tone in all her pronouncements, a kind of 'do this NOW, I told you so!' attitude. Fair enough if she was right ALL the time, but she certainly is not. Take all she says with a pinch of salt.


----------



## Chris

Starbuck said:


> Did I say she recommended currency TRADING? Where'd you get that from?


You are looking at a 3 month window!!! That is trading NOT investing.



Starbuck said:


> How long do you think would be appropriate?


Years, not months.



Starbuck said:


> I have no problem in re-visiting this in another 3 months and we'll see again what's happened. But for the moment - the pensioner has lost money thanks to Jill.


6 months is still a trading time frame. And unless Kirby, or anyone else here, advocated a pensioner invest ALL their funds in foreign currency or denominated assets, a loss (and lets face it, a miniscule one at that) on these is completely irrelevant for a 3 month time period. If you look at the actual numbers for the two currencies you mentioned then you'll notice that one has offset the other:
EURAUD 12/5: 1.4127 yesterday: 1.4477 (=-2.4%)
EURCHF 12/5: 1.4031 yesterday: 1.3749 (=+2%)



Starbuck said:


> How long has the 65+ year old pensioner got?
> Thats the age profile she gave, and the age profile of most D.Mooney listeners too I'd guess!


The average life expectancy in Ireland is about 82 years, so that is a 17 year period, which is long enough to worry about effects of currency devaluation.



Starbuck said:


> Certainly!! Are you saying it isn't??
> Whats the alternative? The USD? Good luck!!
> The Yuan?? Not even the Chinese think so.
> The AUD/SGD/KRN ??
> Will we possibly be seeing oil traded in any of these soon?
> The euro IS a hard currency, and when the USD really tanks in the last Q we'll soon see where the safe haven seekers run to.


I would have said the same thing 12 months ago, but now the ECB is going down the same road as the Fed and BoE. So any reasons you have for correctly believing the US$ will fall apart, have to equally be applied to the Euro. The Euro is no longer a hard currency due to monetary and fiscal policies of the past 6 months. If you still believe it is then you are seriously blind to what's going on.

Telling pensioners that the best thing they can do is hold ALL their assets in cash and bonds is exactly the same as was being advocated over the last 15 years about Irish Banks. Pensioners put their money in what they believed to be safe havens and now it is gone; there have been plenty of such interviews in the media. What are they going to be told when the Euro seriously loses value and sovereign defaults cause bonds to become worthless, and all their assets are in those two classes? What are they to do when inflation erodes away their fixed incomes?

Nobody has said that a pensioner should put ALL their assets into foreign currencies, and nobody has said that diverting funds into foreign currencies should be done as a wealth creator. Pensioners should not be looking for any further asset appreciation, but rather to preserve their wealth; and bonds and most fiat currencies are not a safe haven for long-term wealth preservation, not in today's world.


----------



## rekhib

As an investment, I think advising a EUR based investor to diversify into AUDs (now or 3 months ago) is probably unwise. The relative strength of fiat currencies can really only be based on the volume traded (EUR - 2nd) and the market size of the underlying bloc (EUR - 1st). That combined with the fact that EURAUD has had trouble breaking 1.40, the AUD is overvalued compared to its long-term average and that Australia is experiencing a massive housing price bubble wouldn't fill me with a great deal of confidence. A small diversification into AUD at 1.6+ might be prudent but only without the massive asset prices and the consumer debt, until those things materialise, if you live, breathe, work &c in EUR, it just can't be a good idea.


----------



## Fiskar

Starbuck

[broken link removed]

click on tuesdays show and plug your ears!


----------



## Fiskar

Chris

What pensioner over the age of 70 has the risk profile to make decisions on investments?
Most senior citizens want to know where their cash is, that it is safe and they can access it anytime. 
A person of 82 years is not going to make the same decisions or investments that one in their 40's would make nor should they be advised on the maturity of their investments to invest again. Cash is King at the end of the day. 
IMO there should be a hands off advising senior citizens to invest in risky markets, currencies and products. Investing when you are working and earning is different to managing what you have when you retire.


----------



## Chris

Fiskar said:


> Chris
> 
> What pensioner over the age of 70 has the risk profile to make decisions on investments?
> Most senior citizens want to know where their cash is, that it is safe and they can access it anytime.
> A person of 82 years is not going to make the same decisions or investments that one in their 40's would make nor should they be advised on the maturity of their investments to invest again. Cash is King at the end of the day.
> IMO there should be a hands off advising senior citizens to invest in risky markets, currencies and products. Investing when you are working and earning is different to managing what you have when you retire.



You are abolutely right that someone at 82 needn't be as diversified as someone at 65 (or 40 for that matter), but this all depends on the amount of assets and whether they intend on spending it all or leaving it to their estate.

In today's world fiat currency cash is NOT king. Telling people that everything will be OK as long as they hold Euros and bonds, while the very underlying currency and countries are hell bent on an inflationary binge and fiscal deficits, is diceitful at best.

Under no circumstances should a pensioner rely on foreign currency for short-term day-to-day income, and that is not the point of diversifying. The point is to protect some of you wealth from a demise in slowly rotting currencies (EUR, USD, GBP).


----------



## Starbuck

I hope those pensioners are getting this talk of fiscal rectitude, currency pairing, and Aussie property bubbles. They better - if they want to play that game....
Madness.


----------



## Starbuck

> You are looking at a 3 month window!!! That is trading NOT investing.
> 
> Quote:
> Originally Posted by *Starbuck*
> _How long do you think would be appropriate?_
> 
> Years, not months.
> 
> Quote:
> Originally Posted by *Starbuck*
> _I have no problem in re-visiting  this in another 3 months and we'll see again what's happened. But for  the moment - the pensioner has lost money thanks to Jill._
> 
> 6 months is still a trading time frame. And unless Kirby, or  anyone else here, advocated a pensioner invest ALL their funds in  foreign currency or denominated assets, a loss (and lets face it, a  miniscule one at that) on these is completely irrelevant for a 3 month  time period. If you look at the actual numbers for the two currencies  you mentioned then you'll notice that one has offset the other:
> EURAUD 12/5: 1.4127 yesterday: 1.4477 (=-2.4%)
> EURCHF 12/5: 1.4031 yesterday: 1.3749 (=+2%)


I've been reflecting on this conversation Chris, and I have to say your talk of currency 'investment' for OAP's is codswallop. On ANY timescale.

In fact I seriously question the notion of moving* savings* between currencies as anything more than an act of folly for anyone but a trained professional speculator.

Forex is NOT investment - it is HEDGING at best. And the timescale is utterly irrelevant, unless you have a crystal ball telling you exactly what global events will do to currency exchange rates in the next 3 - 6 - 9 or 12 months, or whatever you say is a safe 'investment window'. The timescale is irrelevant, and probably more risky the longer you hold on.

As the man said - sh1t happens - and when it does, the currency markets are the fastest to reflect changed perceptions *because they are the most liquid*. Forex speculators SHORT currencies, and get in and out in minutes or hours - not months. Hedgers take a longer term bet on a *risk assesment* which is normally counterweighted against the market cost  of a product or service they are trading overseas. 
The speculators are in the game bigtime, moving markets with massive resources to back them up - and plenty of megaphone volume SPIN to give things an extra little push. They know the huge profits they can make VERY QUICKLY if they succeed.
This is dangerous ground for the unwary or foolhardy.

Euro continues recovery, approaches 1.40USD 

This what I mean. 

A few short weeks ago the US speculators were busy talking of a euro implosion, and rapid parity with the USD. They underestimated the Europeans commitment, and never counted on a 750Billion euro rescue package being agreed so fast.
Now they're on the run, having been badly burned. They're off now, looking for a new victim. Who'll it be? Something overvalued - like perhaps the AUD or CAN? Why not, if there's money to be made they'll pile on the pressure.

The light is dawning that (in spite of your high hopes) the USD is NOT a safe haven any more. The Yen rose to a 15 year high against the USD today! 

The USD is TOAST. The only thing that can save it now is a war - and who knows, maybe we'll get one.
That leaves the YEN and the EURO (and the Japanese are very unhappy about the rise in the Yen value).

The only advice I'd give to anyone worrying what to do with large EUR cash holdings in Irish banks is - open an account in France or Germany and send it all there - in euro. Open a few if you have to.


----------



## Chris

Starbuck said:


> I've been reflecting on this conversation Chris, and I have to say your talk of currency 'investment' for OAP's is codswallop. On ANY timescale.
> In fact I seriously question the notion of moving savings around as anything more than an act of folly for any but the professional speculator.


Well, that's where we disagree. 



Starbuck said:


> Forex is NOT investment - it is HEDGING at best. And the timescale is utterly irrelevant, unlkess you have a crystal ball telling you exactly what global events will do to currency exchange rates in the next 3 - 6 -9 or 12 months, or whatever you say is a safe 'investment window'.


Yes, for a pensioner having some funds in foreign currencies or equities would be more in line with hedging. But how is this a bad thing?!?!?



Starbuck said:


> As the man said - sh1t happens - and when it does, the currency markets are the fastest to reflect changed perceptions because they are the most liquid. Forex speculators SHORT currencies, and get in and out in minutes or hours - not months. Hedgers take a longer term bet on a risk assesment which is normally counterweighted against the market cost a product or service they are trading overseas. This is dangerous ground for the unwary or foolhardy.


Daytraders make decisions in minutes or hours, but not all currency speculators are daytraders; days, weeks and months are very common time frames. Yes it is a dangerous ground, but only if you intend on jumping in and out of the market even on a timeframe of several months.



Starbuck said:


> Euro continues recovery, approaches 1.40USD


Well, that headline may as well read "Euro recovery, approaches 1.60". Today's exchange rate is about 1.32.



Starbuck said:


> This what I mean. A few short weeks ago the US speculators were busy talking of a euro implosion, and rapid parity with the USD. Now - trhey're on the run, having been badly burned. The light is dawning that (in spite of your high hopes) the USD is NOT a safe haven any more. They're even driving the Yen to a 15 year high against the USD today! The USD is TOAST. The only thing that can save it now is a war - and who knows, maybe we'll get one.


This is exactly why you shouldn't be looking at any short time frame, which is what I keep saying!!! Apart from that, I never said I had some high hopes for the USD, quite the opposite, I agree that it is toast, but so is the Euro, since the ECB is going down exactly the same road as the Fed. This is reflected in the



Starbuck said:


> The only advise I'd give to anyone worrying what to do with large EUR cash holdings in Irish banks is - open an account in France or Germany and send it all there - in euro.



Good advice for certain, but not planning for a collapse in the value of the Euro is a bad mistake, especially for people that are dependent on their assets for income.


----------



## Starbuck

> Yes, for a pensioner having some funds in foreign currencies or equities  would be more in line with hedging. But how is this a bad thing?!?!?


It'd be a bad thing if they considered it an 'investment'which is what you called it.
Hedging - thats a whole other game, and not one for amateurs.



> Daytraders make decisions in minutes or hours, but not all currency  speculators are daytraders; days, weeks and months are very common time  frames. Yes it is a dangerous ground, but only if you intend on jumping  in and out of the market even on a timeframe of several months.


Currency SPECULATORS?? I thought this was about protecting SAVINGS?
I would highly recommend anyone reading this discussion to just put the term 'Forex Trading Forum' into Google and read some of the forums you'll find. They're an eye opener.



> I never said I had some high hopes for the USD, quite the opposite, I  agree that it is toast, but so is the Euro, since the ECB is going down  exactly the same road as the Fed.


I understood you to term USD a 'hard currency' while saying the EUR is not? The point I'm making is that the USD is weakening (check the Yen rate) and the EUR is strengthening, contrary to Jill Kirbys forecast. And the EUR is not going down the same road as the Fed because the EU has not applied quantitative easing to the humungous levels the US has. The bailout package may never be spent. Its a ready weapon, which will be used to beat on the speculators if they want it. 

German manufacturing is leading the EU recovery. The nouveau riche of China and the Far East have a big appetite for quality cars and consumer goods which Germany and (through them) the EU will supply.
They still make things in the EU that the world wants to buy.
The US makes less and less every year - except weapons!
The EUR is the hedgeing currency of choice - just watch it soar....


----------



## rekhib

I agree that the USD is on shaky ground what with the US deficit but talk of the USD being 'toast' is surely a bit far-fetched. I mean, if the USD plummets in value and investors become wary of t-bills/notes/bonds, then it's almost difficult to imagine the horror story that will play out across the world. China holds a massive amount of US debt and if they thought for a second that they'd be $1t in the red, you can readily expect them to not be purchasing European luxury goods anytime soon. IMHO, the USD will probably decline in value but a complete collapse, I just can't imagine it. If it did happen, where's the safe haven other than a bit of gold jewellery lying around the house and some land so you can feed your family? We'd all be facing economic anarchy. If the USD is without value, no fiat currency will carry a punch. Maybe I'm misunderstanding the term 'toast'? In that light, I would tend to agree that the best place for risk-averse EURs is in the relative safety of a German bank. If anyone has an idea on what currency to hold if the USD were to collapse, I'd love to hear it.


----------



## Chris

Starbuck said:


> It'd be a bad thing if they considered it an 'investment'which is what you called it.
> Hedging - thats a whole other game, and not one for amateurs.


No hedging is not some complicated game for some professionals. It means reducing the risk, in this case on part of a portfolio. Diversification is the simplest form of hedging against an outright loss on one asset class.



Starbuck said:


> Currency SPECULATORS?? I thought this was about protecting SAVINGS?
> I would highly recommend anyone reading this discussion to just put the term 'Forex Trading Forum' into Google and read some of the forums you'll find. They're an eye opener.


You are misunderstanding my point. You mentioned speculators with a time frame of minutes or hours. All I said was that speculators have time frames from minutes to months. Investors have time frames of several years! not a couple of months. Protecting your wealth when you need it over a 10+ year time frame does not mean that you are speculating in currencies!!!! Many pensioners put all their assets in Irish bank shares because it was believed to be a safe place. Putting all your eggs in one basket is never a good idea, and the goes for advising that pensioners keep all their assets in the Euro.



Starbuck said:


> I understood you to term USD a 'hard currency' while saying the EUR is not? The point I'm making is that the USD is weakening (check the Yen rate) and the EUR is strengthening, contrary to Jill Kirbys forecast. And the EUR is not going down the same road as the Fed because the EU has not applied quantitative easing to the humungous levels the US has. The bailout package may never be spent. Its a ready weapon, which will be used to beat on the speculators if they want it.


On the USD we actually agree; it is not a hard currency, but neither is the EUR or the GBP. The EUR has strengthened against the USD, but that is hardly some great feat of an achievement. Yes I agree the EUR is a better currency than the USD, but it is not a hard currency, there are far better and stronger currencies. Yes, what the ECB has done so far is not quite as bad as the Fed, but it has made unlimited funds available to banks and is buying junk bonds. 
It is also thanks to speculators that Greece didn't suddenly collapse at a bond auction and drag the EUR down with it; blaming speculators and saying that a fund is needed to beat them with is utter nonsense. When you make money available to politicians they will use it, just wait and see.




Starbuck said:


> German manufacturing is leading the EU recovery. The nouveau riche of China and the Far East have a big appetite for quality cars and consumer goods which Germany and (through them) the EU will supply.


Yes, and at the same time a large part of the rest of the euro zone is running huge trade deficits. And the fiscal deficit policy is also offsetting the gains of German, not EU in general, exports.



Starbuck said:


> They still make things in the EU that the world wants to buy.


Agree



Starbuck said:


> The US makes less and less every year - except weapons!


Agree



Starbuck said:


> The EUR is the hedgeing currency of choice - just watch it soar....


Disagree, there may be a short term boost against the USD, but not against countries that are not plagued by monetary and fiscal incompetence.


----------



## george.shaw

rekhib said:


> If anyone has an idea on what currency to hold if the USD were to collapse, I'd love to hear it.


 
Answer: GOLD

In the same way that investors need to diversify - so in these unprecedentedly uncertain times do savers need to diversify. 

Any saver keeping all their savings in euros is unfortunately likely in for a rude awakening in the coming months and years.

Investors and savers need to DIVERSIFY.


----------



## rekhib

@george.shaw - I agree that gold and other precious metals are a safe haven in uncertain times but my point was that if the USD were to collapse, no fiat currency would be worth holding.


----------



## george.shaw

Think you are probably right - although the Swiss franc, Norwegian kroner, Singapore dollar and Chinese yuan would probably fair better than most fiat currencies but fall versus the finite currency that is gold:

Peter Schiff - GOLD $10,000 - May 11, 2010 CNBC Fast Money 
http://www.youtube.com/watch?v=ikF54jVGlwE


----------



## Duke of Marmalade

Starbuck said:


> I heard Jill Kirby on the Derek Mooney show on RTE1 this afternoon.
> 
> There was a discussion on personal finance where she referred to people having large sums on deposit losing 10% in the last few months due to the euros drop in value. She said this had cut the 'spending power' of cash in bank accounts by 10%.


The euro was trading at $1.20 and Jill was confidently predicting parity soon. The euro now trades at $1.37.


----------



## george.shaw

I don't think Jill Kirby put a time frame on it. Even if she did I think it is very harsh to criticise her as she is one of the few personal finance "experts" who advised people to diversify out of Irish property and Irish equities and into gold. 

Those who have followed her advice have benefitted.

Stiglitz and other proponents of the Euro are now warning of the demise of the European Monetary Union. Should that happen the price of gold in Euro terms (currently just under €1,000/oz) will soar. And the price of gold in local currency terms (currently the euro) is the only gold price that Irish investors and savers should look at. 

DIVERSIFY out of being overweight Euro denominated investments and savings.


----------



## Duke of Marmalade

Neil Callanan Sunday Tribune today said:
			
		

> euro falls to two year low against the dollar


The euro closed on Friday at $1.32, in June this year it was $1.19. How do these guys keep their jobs?


----------



## Complainer

Duke of Marmalade said:


> How do these guys keep their jobs?


Isn't that strange? 

From what you'd read here on AAM, anybody in the private sector who breaks wind in the wrong place gets immediately fired, whereas those wasters in the public sector are constantly breaking wind in their customers' faces, and can't be fired.


----------



## Chris

Complainer said:


> Isn't that strange?
> 
> From what you'd read here on AAM, anybody in the private sector who breaks wind in the wrong place gets immediately fired, whereas those wasters in the public sector are constantly breaking wind in their customers' faces, and can't be fired.



That is not an accurate representation of some of the public sector criticism. In the private sector there is choice, if someone farts in your face, to use your apt analogy, like the Sunday Tribune does, then I can ensure that none of my money goes to them (unless of course the government decide to give the Tribune some money). Other people may like the smell and fund the paper with their money, not mine. This is why the Tribune is struggling to get less than 5% of Sunday readership.
When a public sector employee or service farts in the face of its customers, there is no way to turn off the funding tap directly by the customer.


----------



## Complainer

Chris said:


> That is not an accurate representation of some of the public sector criticism. In the private sector there is choice, if someone farts in your face, to use your apt analogy, like the Sunday Tribune does, then I can ensure that none of my money goes to them (unless of course the government decide to give the Tribune some money). Other people may like the smell and fund the paper with their money, not mine. This is why the Tribune is struggling to get less than 5% of Sunday readership.
> When a public sector employee or service farts in the face of its customers, there is no way to turn off the funding tap directly by the customer.


No, Chris - You're missing the point again - presumably deliberately.

We have read on AAM about this fetish for firings the private sector - as some people seem to think that firing is the only way to manage the performance of staff. I just wanted to make the point (yet again) that this whole 'divide and conquer' approach is a nonsense. There is no such thing as a public sector person or a private sector person. We're all just people - good and bad.


----------



## Firefly

Complainer said:


> Isn't that strange?
> 
> From what you'd read here on AAM, anybody in the private sector who breaks wind in the wrong place gets immediately fired, whereas those wasters in the public sector are constantly breaking wind in their customers' faces, and can't be fired.



This is a good thread with some IMO, very interesting and informative posts. Any chance we can stay on topic?


----------



## Complainer

Firefly said:


> This is a good thread with some IMO, very interesting and informative posts. Any chance we can stay on topic?


Do you promise to come out with the same 'any chance we can stay on topic' request every time someone launches yet another off-topic attack on the public sector here on AAM?


----------



## Chris

Complainer said:


> No, Chris - You're missing the point again - presumably deliberately.
> 
> We have read on AAM about this fetish for firings the private sector - as some people seem to think that firing is the only way to manage the performance of staff. I just wanted to make the point (yet again) that this whole 'divide and conquer' approach is a nonsense. There is no such thing as a public sector person or a private sector person. We're all just people - good and bad.



No I am not missing the point deliberately, and saying that people are suggesting that firing is the only way to deal with performance is simply not true. People have been suggesting that the threat of being fired in the public service is miniscule at best when compared with the private sector. 
I cannot speak for others but I have been advocating a reduction in public employees through the scrapping of unnecessary services regardless of the performance of individual employees. And I agree that employee performance needs to be managed, but when the threat of actually losing your job because you and/or your organisation are not being productive enough, as measured by the customers willingness to part with his/her money, then you take away the only way to measure successful employment of scarce resources. 
Efficiency or competitiveness of performance cannot be measured at an organisational level in the public service, thus doing so at individual level is futile. Yes, you can measure costs per transaction, or per customer served in the public sector, but this is completely meaningless as it is impossible to say whether this is efficient or not due to the lack of ability for comparison.


----------



## Complainer

Chris said:


> but when the threat of actually losing your job because you and/or your organisation are not being productive enough, as measured by the customers willingness to part with his/her money, then you take away the only way to measure successful employment of scarce resources.
> Efficiency or competitiveness of performance cannot be measured at an organisational level in the public service, thus doing so at individual level is futile. Yes, you can measure costs per transaction, or per customer served in the public sector, but this is completely meaningless as it is impossible to say whether this is efficient or not due to the lack of ability for comparison.


Strangely enough, I partially agree with you about the difficulties in measuring efficiency in parts (though not all) of the public sector. But this is no reason to conclude that the public sector is too big.

Oscar Wilde's comments about the man who knows the cost of everything and the value of nothing spring to mind.


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## Chris

Complainer said:


> Strangely enough, I partially agree with you about the difficulties in measuring efficiency in parts (though not all) of the public sector. But this is no reason to conclude that the public sector is too big.


50% of the national spend comes from government, that is more than "communist" China. That is far far too big. And apart from that, of 400000+ publicly employed people only about 130000 are front line staff, i.e. guards, nurses, teachers, doctors, firefighters. Those are ridiculous numbers. I don't want to go further off topic here, so I've created another thread: http://www.askaboutmoney.com/showthread.php?t=147613



Complainer said:


> Oscar Wilde's comments about the man who knows the cost of everything and the value of nothing spring to mind.


Value is entirely subjective, and when it comes to public services it is impossible for customers to express their valuations without the service providing organisation to fear being put out of business. Thus Wilde's comment is completely irrelevant when it comes to public services.


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## Complainer

Chris said:


> Value is entirely subjective, and when it comes to public services it is impossible for customers to express their valuations without the service providing organisation to fear being put out of business.



This is just nonsense. Customers express their 'valuations' every day to many public sector bodies. Most of time, these 'valuations' are foolish rants, like the classic 'shut down NERA' rant we had on this site, because somebody didn't answer the phone quick enough. Some of the time, these 'valuations' are intelligent, serious contributions, made with an understanding of the relevant area, the relevant legislation and the service needs. 

Your 'impossible' is happening every day, out here in the real world.


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## Chris

Complainer said:


> This is just nonsense. Customers express their 'valuations' every day to many public sector bodies. Most of time, these 'valuations' are foolish rants, like the classic 'shut down NERA' rant we had on this site, because somebody didn't answer the phone quick enough. Some of the time, these 'valuations' are intelligent, serious contributions, made with an understanding of the relevant area, the relevant legislation and the service needs.
> 
> Your 'impossible' is happening every day, out here in the real world.



You're not serious are you? Profit and loss is the only way to account for efficient use of scarce resources, and this feedback simply does not exist in the public sector. People can complain about public services until the cows come home, but their money will still be spent on the service whether they like it or not. 
When is the last time that a public service had its budget cut because people complained about the service or the service was running inefficiently?


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## Complainer

Chris said:


> You're not serious are you? Profit and loss is the only way to account for efficient use of scarce resources, and this feedback simply does not exist in the public sector.


Yes, I'm deadly serious. The absence of a P&L is not a sign of an inherent fault or problem with the public sector. It's just a sign that the public sector is not a business, it's the public sector. 



Chris said:


> People can complain about public services until the cows come home, but their money will still be spent on the service whether they like it or not.
> When is the last time that a public service had its budget cut because people complained about the service or the service was running inefficiently?


The Equality Authority had the budget cut by 43% when some people started complaining about their effectiveness. In this case, they were being too effective for some people's liking.

But the public do indeed have a say about how public services are running - they get their say every five years in the ballot box, and they overwhelmingly vote to support decent public services.


----------



## Chris

Complainer said:


> Yes, I'm deadly serious. The absence of a P&L is not a sign of an inherent fault or problem with the public sector. It's just a sign that the public sector is not a business, it's the public sector.


Of course it is not the fault of the public sector that the profit and loss system does not apply to them. But this should justify keeping the public sector as small as is possible in order to ensure that the services provided make the most efficient use of scarce resources.



Complainer said:


> The Equality Authority had the budget cut by 43% when some people started complaining about their effectiveness. In this case, they were being too effective for some people's liking.


So it wasn't actually the "customers" that caused the decline in budget, is it? This is a perfect example of how defunct the government services are in ensuring efficient use of resources.



Complainer said:


> But the public do indeed have a say about how public services are running - they get their say every five years in the ballot box, and they overwhelmingly vote to support decent public services.


Please don't pull the democracy card, as people's votes have a pretty much misiscule impact on services. Given the amount of things that government interferes in it is impossible for a voter to know what each candidates' opinion or objective is for everything government does. This also makes it impossible to vote for someone that comes remotely close to what the voter would want government to actually do.
There is also no mechanism to stop government from doing something that the public don't want it to do, or if government does the opposite of what it promised during election.


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## Duke of Marmalade

Getting slightly back on topic.  There was a guy on Frontline last night who stated that a return to the gold standard would answer all our problems.  _Chris_ there surely can't be two of you


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## Complainer

Chris said:


> But this should justify keeping the public sector as small as is possible in order to ensure that the services provided make the most efficient use of scarce resources.


You can keep quoting this meaningless line as often as you like, Chris - but it has no basis in reality. 



Chris said:


> So it wasn't actually the "customers" that caused the decline in budget, is it? This is a perfect example of how defunct the government services are in ensuring efficient use of resources.


It actually shows what a dumb idea it is to suggest that the budget of public bodies should be related to the number of complaints. So if I don't like a particular public body, all I have to do is orchestrate a campaign of complaints and they get their budget cut. It's just silly stuff altogether.



Chris said:


> Please don't pull the democracy card, as people's votes have a pretty much misiscule impact on services. Given the amount of things that government interferes in it is impossible for a voter to know what each candidates' opinion or objective is for everything government does. This also makes it impossible to vote for someone that comes remotely close to what the voter would want government to actually do.
> There is also no mechanism to stop government from doing something that the public don't want it to do, or if government does the opposite of what it promised during election.



Democracy isn't a card Chris - it is our fundamental human right, and people have died to achieve it. People are still dying in other countries looking for democracy.

You're right of course, in that each individual vote doesn't count for a whole lot - just as each individual customer choosing to buy (or not buy) from Microsoft or AIB or Tesco doesn't count a whole lot.


----------



## Chris

Complainer said:


> You can keep quoting this meaningless line as often as you like, Chris - but it has no basis in reality.


Maybe you could make more than claim that my statement is meaningless. I have stated that public services are not subject to the same forces that ensure organisations make best use of scarce resources, i.e. the profit and loss system. All you have stated is that this is somehow meaningless without giving any premise for such a conclusion.



Complainer said:


> It actually shows what a dumb idea it is to suggest that the budget of public bodies should be related to the number of complaints. So if I don't like a particular public body, all I have to do is orchestrate a campaign of complaints and they get their budget cut. It's just silly stuff altogether.


No, that is not the case. It simply shows that when you have choice in service, and have full control over whether *your* money is spent on it, then the best service stays in business, while the worst fall to the wayside. And the judgement is made by the customers not politicians. As I have said before, I am not an anarchist, there is a role for government providing services, but those should be limited.



Complainer said:


> Democracy isn't a card Chris - it is our fundamental human right, and people have died to achieve it. People are still dying in other countries looking for democracy.
> 
> You're right of course, in that each individual vote doesn't count for a whole lot - just as each individual customer choosing to buy (or not buy) from Microsoft or AIB or Tesco doesn't count a whole lot.


I agree that democracy is a fundamental right, but the systems that are in pace in most western countries does not mean that the people actually rule. We hand over our individual power to rule every election day, and in most representative democracies there is absolutely no mechanism in place to stop governments. Do you think that the majority of FF voters would have voted for the bail out given the chance? Do you think Labour voters in the UK voted for Blair to go to war? Or Bush voters in the US for that matter? Or that SPD voters in Germany voted for Schroeder to underwrite loans to Russia in the dying days of his reign, to then immediately be appointed to the board of Russia's Gazprom? Democracy is the best political system that exists, but the adaptations used in most countries do not remotely resemble "rule of the people".
And yes, someone not shopping at Tesco will not bring down the organisation, but their money will not find its way directly into their tills. And unless Tesco can get enough customers to willingly part with their money, they will not stay in existence for long, therein lies the difference.



Duke of Marmalade said:


> Getting slightly back on topic.  There was a guy on Frontline last night who stated that a return to the gold standard would answer all our problems.  _Chris_ there surely can't be two of you


Thanks for bringing this back on track. There must be a hidden movement going on ;-) I didn't see the program, but will look it up on RTE player, thanks.


----------



## Complainer

Chris said:


> Maybe you could make more than claim that my statement is meaningless. I have stated that public services are not subject to the same forces that ensure organisations make best use of scarce resources, i.e. the profit and loss system. All you have stated is that this is somehow meaningless without giving any premise for such a conclusion.


Just to be clear, I fully agree with your statement that "public services are not subject to the same forces that ensure organisations make best use of scarce resources, i.e. the profit and loss system". That is indeed a matter of fact. My problem is that you draw some conclusion that public services should be less/smaller from this.

Of course public services are not measured by a P&L. The purpose of public services is not to make profit - the purpose is to provide a public service. Measuring public services by P&L is a bit like measuring the success of the Irish soccer team by the suduko completion rates of the players. It is an irrelevant measure.



Chris said:


> No, that is not the case. It simply shows that when you have choice in service, and have full control over whether *your* money is spent on it, then the best service stays in business, while the worst fall to the wayside.


Unfortunately, this is fiction - probably for the same reason that you criticise democracy. Terrible businesses, large and small, survive and expand all the time. We see evidence of it every day. 

For every complaint you come up with about Govt, I'll come up with a complaint about Eircom/NTL/my plumber/the local pub etc.


Chris said:


> I agree that democracy is a fundamental right, but the systems that are in pace in most western countries does not mean that the people actually rule. We hand over our individual power to rule every election day, and in most representative democracies there is absolutely no mechanism in place to stop governments. Do you think that the majority of FF voters would have voted for the bail out given the chance? Do you think Labour voters in the UK voted for Blair to go to war? Or Bush voters in the US for that matter? Or that SPD voters in Germany voted for Schroeder to underwrite loans to Russia in the dying days of his reign, to then immediately be appointed to the board of Russia's Gazprom? Democracy is the best political system that exists, but the adaptations used in most countries do not remotely resemble "rule of the people".


You're correct, insofar as the people don't get to vote on every decision. Are you really suggesting that that would be a better system? Do you reckon that voters will be able to educate themselves on the options around every decision that is made very week about health/education/environment/defence/welfare/agriculture etc etc.

I know the US have some level of local voting on local propositions such as school policy - I haven't seen any evidence that this produces better outcomes.

So what's your alternative to the current policital system then?


----------



## Chris

Complainer said:


> Just to be clear, I fully agree with your statement that "public services are not subject to the same forces that ensure organisations make best use of scarce resources, i.e. the profit and loss system". That is indeed a matter of fact. My problem is that you draw some conclusion that public services should be less/smaller from this.
> 
> Of course public services are not measured by a P&L. The purpose of public services is not to make profit - the purpose is to provide a public service. Measuring public services by P&L is a bit like measuring the success of the Irish soccer team by the suduko completion rates of the players. It is an irrelevant measure.


I agree that the purpose of public services is not to make a profit. But the problem is that you cannot measure whether they are making efficient use of scarce resources. That is why providing publicly funded services constantly increases in price, when the exact opposite happens in the private sector. That is why publicly funded services should be reduced as much as is possible. Free market health and education systems work far better than state monopolised ones, and at a lower cost to the consumer. Take freedom to choose out of the hands of those using the service, and you will not get an efficient service.



Complainer said:


> Unfortunately, this is fiction - probably for the same reason that you criticise democracy. Terrible businesses, large and small, survive and expand all the time. We see evidence of it every day.
> 
> For every complaint you come up with about Govt, I'll come up with a complaint about Eircom/NTL/my plumber/the local pub etc.


Yes, I agree with you that there are lots of private companies in lots of different sectors that do not provide a good service. But that is only my subjective opinion. The only way those companies, including the ones you mention, can stay in business is if they can convince enough customers to willingly separate with their cash, or if they are subsidised by government. Private businesses constantly go bankrupt because either their products cost too much or the quality is not good enough. This is not the case with government services. Whether I do or don't like a service, I am paying for the running of it.
There is not a single private company that can reach into your pocket a take even one cent. The only organisation that can do that is government.



Complainer said:


> You're correct, insofar as the people don't get to vote on every decision. Are you really suggesting that that would be a better system? Do you reckon that voters will be able to educate themselves on the options around every decision that is made very week about health/education/environment/defence/welfare/agriculture etc etc.
> 
> I know the US have some level of local voting on local propositions such as school policy - I haven't seen any evidence that this produces better outcomes.
> 
> So what's your alternative to the current policital system then?


I am not suggesting that people should be voting on every decision made by government. What I am suggesting is that people have the ability to call a referendum on government decisions or on suggestions of their own, and this would definitely be a better system. 
The US is not a very good example. Technically the individual states are the sovereign, not the Federal government. That means that individual state legislature cannot be overwritten by the people or local councils, so people do not have much more control than we do here.
Take a look at some of the suggestions of the practicalities of direct democracy here: [broken link removed]
It's a very simple solution, and would put a huge restraint on politicians. Would you not have loved an ability to restrain some of the FF actions of the last decade?


----------



## Complainer

Chris said:


> I agree that the purpose of public services is not to make a profit. But the problem is that you cannot measure whether they are making efficient use of scarce resources. That is why providing publicly funded services constantly increases in price, when the exact opposite happens in the private sector. That is why publicly funded services should be reduced as much as is possible. Free market health and education systems work far better than state monopolised ones, and at a lower cost to the consumer. Take freedom to choose out of the hands of those using the service, and you will not get an efficient service.


Again, you can keep repeating it, Chris - but that doesn't make it true. Where is your evidence that public is always better than private? Are you comparing the full picture, and not just price? Are you comparing like-with-like, or are you comparing full-cover public hospitals with cherry-picking private hospitals?



Chris said:


> Yes, I agree with you that there are lots of private companies in lots of different sectors that do not provide a good service. But that is only my subjective opinion.


So you don't believe your own subjective opinion, then? 



Chris said:


> This is not the case with government services. Whether I do or don't like a service, I am paying for the running of it.
> There is not a single private company that can reach into your pocket a take even one cent. The only organisation that can do that is government.


That's quite true, and it's quite right too. The Govt provides these services because most people in Ireland want/need/expect Govt to provide these services. If you don't want this, you are in a minority.



Chris said:


> There is not a single private company that can reach into your pocket a take even one cent. The only organisation that can do that is government.


Let me introduce you to my bank - Chris, meet NIB. NIB, meet Chris. NIB reach into my pocket and take my money regularly. And in other cases, 'choice' is just a myth, and the perfect free market is just a myth. See 



Chris said:


> I am not suggesting that people should be voting on every decision made by government. What I am suggesting is that people have the ability to call a referendum on government decisions or on suggestions of their own, and this would definitely be a better system.
> The US is not a very good example. Technically the individual states are the sovereign, not the Federal government. That means that individual state legislature cannot be overwritten by the people or local councils, so people do not have much more control than we do here.
> Take a look at some of the suggestions of the practicalities of direct democracy here: [broken link removed]
> It's a very simple solution, and would put a huge restraint on politicians. Would you not have loved an ability to restrain some of the FF actions of the last decade?



It's certainly worth exploring these options, but based on what I've seen so far, it's not going to work. First of all, there are very simple practical problems - like how do you validate a set of 1,000 or 5,000 signatures? How do you know if they came from 5,000 people, or just 50 people?

The more principled problems are that it will encourage the worst kind of clientilism - their website boasts that they will be able to reverse closures of hospitals and schools. It's easy to have a referendum in Nenagh not to close Nenagh hospital. That doesn't make it the right thing to do for the country as a whole. It's easy to vote to keep open Nenagh hospital if you don't have to foot the bill, or if you don't have to be responsible for maintaining quality.

I can't see regular referenda working for the same reason. It's easy to object to NAMA or IMF, when you don't have to come up with the alternative.


----------



## Chris

Complainer said:


> Again, you can keep repeating it, Chris - but that doesn't make it true. Where is your evidence that public is always better than private? Are you comparing the full picture, and not just price? Are you comparing like-with-like, or are you comparing full-cover public hospitals with cherry-picking private hospitals?


Firstly, please give your reason why my statement is not true, rather than just claiming it is not true. I have repeatedly asked you for your reasons, but you have as of yet failed to give them.
Secondly, I think you got your words mixed up there. What I am saying is that a private free market system is always better than a government monopolised system. And I have provided endless examples of this, but here are the most relevant to remind you.
My evidence is in the Swiss health care system and the Swedish education system. Not perfect free markets, but a lot freer than the Irish monopolised versions. 
Switzerland has both public and private acute hospitals that have to compete for the same patients (where everyone is private) and you can be damn sure that even the public hospitals are in a totally different league to Irish public hospitals. And it is not down to better funding, as the Swiss system costs less per person than the Irish one.
Sweden has an educational voucher system, where parents are free to choose whether they send their children to a public or private school, and have choice based on pedagogical approach and curriculum. The system also allows for anyone to open a school and offer their services and make a profit, resulting in a large increase in private schools and a decrease in public schools, and most importantly choice for parents.



Complainer said:


> So you don't believe your own subjective opinion, then?


Of course I believe my own subjective opinion, but I do not force it upon anyone else. And this is exactly what happens in your socialist world. Some higher political elite decide what is best for me, my family and fellow citizens, and then I have to pay for it whether I like it or not. You mentioned people fighting for democracy in an earlier post. What people actually fight for is freedom from oppression and liberty. Allowing elected governments to reign free in deciding what is best for people is not even remotely what people perceive to be liberty.
I think Ryan Air are not a good airline, and Eircom do not provide a good phone service. But millions of people disagree with me. And even if 10 million people agreed with me on Ryan Air, the company will stay in business if millions of other disagree. But my money will not fall into the pockets of Ryan Air. If others want to spend their money on what I perceive to be bad service then so be it. Far be it from me to tell people what they should spend their money on.



Complainer said:


> That's quite true, and it's quite right too. The Govt provides these services because most people in Ireland want/need/expect Govt to provide these services. If you don't want this, you are in a minority.


Now there is quite a leap you are making to say that the majority of people want all the services provided by government. People do not get to vote on what services government provides and they cannot even vote with their wallet, as the money has already been taken away. I also do not believe that I am in a minority, as people from all walks of life that I have talked to say that there is too much money wasted on government services that are not needed. But neither of us has proof of this and never will unless people got to vote for the existence of services.



Complainer said:


> Let me introduce you to my bank - Chris, meet NIB. NIB, meet Chris. NIB reach into my pocket and take my money regularly. And in other cases, 'choice' is just a myth, and the perfect free market is just a myth. See


NIB cannot take money out of your account unless you agree to it. If they charge for current account banking, then you have option to go to another bank that doesn't charge for this. If they charge you interest on a loan or mortgage, then it is because you agreed to the terms. It is simply a lie to say that any private company can take your money unless you have previously agreed to it happening. If they are doing so, then maybe you should go to the guards and report a theft.
As for the link to the other thread, NAMA paying over the odds for accountants is hardly argument against free markets. NAMA is a state body, and if they are paying over the odds then that is because they are not choosing a cheaper alternative.
Please explain how choice is a myth? Or the perfect free market? The only reason we do not have free markets and freedom of choice is because of government intervention in pretty much everything we do. But lets look at some areas of the economy where government interferes least, and I am dead serious with these examples. 
1) Clothing: there are no regulations on what constitutes clothing, or what they should or shouldn't be made of, or how or where or by whom they are produced, shipped or sold. There is no regulation that states that clothing should not be poisonous or in other ways harm the user. Yet there is clothing for every budget and taste. How is this possible without government guidance?
2) Electronics: there is very little regulation on consumer electronics like computers, iPods, TVs, etc. There is nothing that states that certain materials may not be used, or what level of quality should be provided, or where and how the devices are made. And yet there is ubiquitous choice for every budget and preference, with prices constantly going down and quality constantly improving. How is this possible without government guidance?
3) Software and internet content: This is probably the freest area of the economy. There is nothing stopping anyone from creating software or web content of any quality and try and sell it. While there are quality standards available these are optional and governments do not force people to adhere to them. This has resulted in an endless supply of not only cheap, but often free, software and web content. How is this possible without government guidance?
4) Furniture: I'm not aware of any furniture regulations that command a certain quality or manufacturing process? Germany does have industrial tests that allow manufacturers do add a stamp on their products to show that it has passed, but they are completely optional. Again there is furniture for every budget and taste. How is this possible without government guidance?

Of course the standard argument will be that helath and education and social welfare cannot be compared to the above. But why would it suddenly be any different for health, education and social welfare if they were provided on a free market? There is no logical reason to argue that the free market would not provide as good a service in health care as it does in clothing or software. Quite the opposite is true, as there is evidence, as mentioned above, that free market forces achieve much better results than government monopolies, everywhere free markets are allowed to develop. I have failed to find examples of failed free/freer market education and health systems, but maybe you can provide some, since you are so opposed.



Complainer said:


> It's certainly worth exploring these options, but based on what I've seen so far, it's not going to work. First of all, there are very simple practical problems - like how do you validate a set of 1,000 or 5,000 signatures? How do you know if they came from 5,000 people, or just 50 people?


I don't know how the verification process works, but I'm sure Switzerland would be very obliging to give advice on how they have managed this dilemma.



Complainer said:


> The more principled problems are that it will encourage the worst kind of clientilism - their website boasts that they will be able to reverse closures of hospitals and schools. It's easy to have a referendum in Nenagh not to close Nenagh hospital. That doesn't make it the right thing to do for the country as a whole. It's easy to vote to keep open Nenagh hospital if you don't have to foot the bill, or if you don't have to be responsible for maintaining quality.


How do you think that it would result in clientelism? A relatively small group of people (1% of voters) would have the ability to call a referendum, but that doesn't mean that the majority of all people will actually vote the same way as those that proposed the referendum. And who other than the people should decide what is right for the country? Look where that kind of FF attitude has got the country, with especially the Brian's claiming they have always acted in the country's best interest. The only people that should decide what is best are the people themselves.



Complainer said:


> I can't see regular referenda working for the same reason. It's easy to object to NAMA or IMF, when you don't have to come up with the alternative.


How then has this system worked so well in Switzerland for the last 100 or 200 years? It doesn't result in a referendum on every decision made by government. The biggest advantage is that government have to make decisions that are most likely to not attract opposition by the people, and therefore forces them to act more in the interest of the people.


----------



## Complainer

Chris said:


> Firstly, please give your reason why my statement is not true, rather than just claiming it is not true. I have repeatedly asked you for your reasons, but you have as of yet failed to give them.
> Secondly, I think you got your words mixed up there. What I am saying is that a private free market system is always better than a government monopolised system. And I have provided endless examples of this, but here are the most relevant to remind you.
> My evidence is in the Swiss health care system and the Swedish education system. Not perfect free markets, but a lot freer than the Irish monopolised versions.
> Switzerland has both public and private acute hospitals that have to compete for the same patients (where everyone is private) and you can be damn sure that even the public hospitals are in a totally different league to Irish public hospitals. And it is not down to better funding, as the Swiss system costs less per person than the Irish one.
> Sweden has an educational voucher system, where parents are free to choose whether they send their children to a public or private school, and have choice based on pedagogical approach and curriculum. The system also allows for anyone to open a school and offer their services and make a profit, resulting in a large increase in private schools and a decrease in public schools, and most importantly choice for parents.


 
  We’re getting tied up in fairly pedantic nonsense here, Chris. You just keep repeating the same claims, with no substantial evidence. One or two anecdotal examples are not ‘evidence’. We don’t build public policy around ‘what my mate in Switzerland told me’. Evidence is thorough, is substantive, is broad and looks at overall costs and benefits. Your claim that “free market system is always better than a government monopolised system” is fairly laughable. I’m always suspicious of any claim that anything is ‘always better’. If you have any serious evidence, please do feel free to post it.


Chris said:


> Of course I believe my own subjective opinion, but I do not force it upon anyone else. And this is exactly what happens in your socialist world. Some higher political elite decide what is best for me, my family and fellow citizens, and then I have to pay for it whether I like it or not. You mentioned people fighting for democracy in an earlier post. What people actually fight for is freedom from oppression and liberty. Allowing elected governments to reign free in deciding what is best for people is not even remotely what people perceive to be liberty.
> I think Ryan Air are not a good airline, and Eircom do not provide a good phone service. But millions of people disagree with me. And even if 10 million people agreed with me on Ryan Air, the company will stay in business if millions of other disagree. But my money will not fall into the pockets of Ryan Air. If others want to spend their money on what I perceive to be bad service then so be it. Far be it from me to tell people what they should spend their money on.
> 
> 
> Now there is quite a leap you are making to say that the majority of people want all the services provided by government. People do not get to vote on what services government provides and they cannot even vote with their wallet, as the money has already been taken away. I also do not believe that I am in a minority, as people from all walks of life that I have talked to say that there is too much money wasted on government services that are not needed. But neither of us has proof of this and never will unless people got to vote for the existence of services
> .


  Climb down off that high horse there, Chris. You are absolutely seeking to impose your own idealogical position on a country that has shown absolutely no appetite for your idealogical position. The closest political party to your view was the PDs, and we all know what happened to them. The fact that no other party has emerged with anything close to your view is a fairly clear indication that few people support your view. If you think otherwise, off you go and start up Chris’s party ot the ‘Freedom’ party. You could even hook up with those lovely UKIP folk, and hold your annual conferences in a (privatised) phone box somewhere. 


Chris said:


> NIB cannot take money out of your account unless you agree to it. If they charge for current account banking, then you have option to go to another bank that doesn't charge for this. If they charge you interest on a loan or mortgage, then it is because you agreed to the terms. It is simply a lie to say that any private company can take your money unless you have previously agreed to it happening. If they are doing so, then maybe you should go to the guards and report a theft.
> As for the link to the other thread, NAMA paying over the odds for accountants is hardly argument against free markets. NAMA is a state body, and if they are paying over the odds then that is because they are not choosing a cheaper alternative.


  Perhaps you missed the news of banking scandals from all the major banks over the past decade or so, from my friends in NIB loading illegal charges, to AIB’s illegal FX rate calculations etc etc. They guys can and do dip their hands in customers pockets.

  Your simplistic analysis of the NAMA issue is not supported by others on the thread. Those close to the industry know that it is effectively a cartel of a small number of large organisations.



Chris said:


> . But lets look at some areas of the economy where government interferes least, and I am dead serious with these examples.
> 1) Clothing: there are no regulations on what constitutes clothing, or what they should or shouldn't be made of, or how or where or by whom they are produced, shipped or sold. There is no regulation that states that clothing should not be poisonous or in other ways harm the user. Yet there is clothing for every budget and taste. How is this possible without government guidance?
> 2) Electronics: there is very little regulation on consumer electronics like computers, iPods, TVs, etc. There is nothing that states that certain materials may not be used, or what level of quality should be provided, or where and how the devices are made. And yet there is ubiquitous choice for every budget and preference, with prices constantly going down and quality constantly improving. How is this possible without government guidance?
> 3) Software and internet content: This is probably the freest area of the economy. There is nothing stopping anyone from creating software or web content of any quality and try and sell it. While there are quality standards available these are optional and governments do not force people to adhere to them. This has resulted in an endless supply of not only cheap, but often free, software and web content. How is this possible without government guidance?
> 4) Furniture: I'm not aware of any furniture regulations that command a certain quality or manufacturing process? Germany does have industrial tests that allow manufacturers do add a stamp on their products to show that it has passed, but they are completely optional. Again there is furniture for every budget and taste. How is this possible without government guidance?


  Chris, this post demonstrates tremendous ignorance of the real world. Have you ever heard of fire safety regulations re clothing and furniture? Have you ever heard of consumer law about ‘fit for purpose’? Have you ever heard about Equality law that prevents discrimination of web services against people with disabilities? There is a whole raft of Government services that work to protect consumers? How many children were burnt with flammable clothing? How many houses and families were burnt with flammable furniture?



Chris said:


> Of course the standard argument will be that helath and education and social welfare cannot be compared to the above. But why would it suddenly be any different for health, education and social welfare if they were provided on a free market? There is no logical reason to argue that the free market would not provide as good a service in health care as it does in clothing or software. Quite the opposite is true, as there is evidence, as mentioned above, that free market forces achieve much better results than government monopolies, everywhere free markets are allowed to develop. I have failed to find examples of failed free/freer market education and health systems, but maybe you can provide some, since you are so opposed.


  Yet again, it might help if you stop spouting theoretical, idealogical nonsense and start showing some real, thorough, comprehensive evidence that supports your view, if you can find some.


Chris said:


> I don't know how the verification process works, but I'm sure Switzerland would be very obliging to give advice on how they have managed this dilemma.
> 
> 
> How do you think that it would result in clientelism? A relatively small group of people (1% of voters) would have the ability to call a referendum, but that doesn't mean that the majority of all people will actually vote the same way as those that proposed the referendum. And who other than the people should decide what is right for the country? Look where that kind of FF attitude has got the country, with especially the Brian's claiming they have always acted in the country's best interest. The only people that should decide what is best are the people themselves.
> 
> 
> How then has this system worked so well in Switzerland for the last 100 or 200 years? It doesn't result in a referendum on every decision made by government. The biggest advantage is that government have to make decisions that are most likely to not attract opposition by the people, and therefore forces them to act more in the interest of the people.


  This is exactly the kind of nonsense we got with the eVoting debacle – other countries do it, so it must be right, and we’re the fools for not doing it. That debacle cost us €60m. If you can’t explain;
  1)[FONT=&quot]      [/FONT]how to protect against fraud in gathering signatures?
  2)[FONT=&quot]      [/FONT]how to protect against nimbyism and clientelism?

  Then really you should just stop talking. The FF argument is not an argument for throwing out our political system. It is a great argument for throwing out FF. If a staff member screws up, you don’t have reorganise the entire organisation. You move/fire/promote/demote that staff member, and replace him with someone that can do the job.


----------



## Chris

Complainer said:


> We’re getting tied up in fairly pedantic nonsense here, Chris. You just keep repeating the same claims, with no substantial evidence. One or two anecdotal examples are not ‘evidence’. We don’t build public policy around ‘what my mate in Switzerland told me’. Evidence is thorough, is substantive, is broad and looks at overall costs and benefits. Your claim that “free market system is always better than a government monopolised system” is fairly laughable. I’m always suspicious of any claim that anything is ‘always better’. If you have any serious evidence, please do feel free to post it.


How is it being pedantic? On endless occasions I have provided proof that the Swiss pay less for a better health system, based on private health insurance, than people in Ireland do. But you choose to ignore this and belittle it as lacking in evidence or thoroughness. 
I repeat my question again: If you believe my opinion to be wrong then you must have some logical explanation for it. What is that explanation? 




Complainer said:


> Climb down off that high horse there, Chris. You are absolutely seeking to impose your own idealogical position on a country that has shown absolutely no appetite for your idealogical position. The closest political party to your view was the PDs, and we all know what happened to them. The fact that no other party has emerged with anything close to your view is a fairly clear indication that few people support your view. If you think otherwise, off you go and start up Chris’s party ot the ‘Freedom’ party. You could even hook up with those lovely UKIP folk, and hold your annual conferences in a (privatised) phone box somewhere.


High horse?!? You are the one claiming that free markets are a myth and have failed us, when we haven't had anything even remotely resembling free markets. And you do not provide any explanation for this claim. How does that put me on a high horse?
You also have nothing to support your claim that people in this country want all the public services that are being forced upon us. Take a look at last week's polls in the Examiner, where the majority of respondents wanted government spending cuts over taxation. That does not exactly support your claim that people are willing to fork out all the taxes they pay for the services you claim they so desperately want.
And you really need to educate yourself on even the most basic ideas behind libertarianism before you start attacking my views. The PDs were as much aligned with libertarians as the Labour part is. 



Complainer said:


> Perhaps you missed the news of banking scandals from all the major banks over the past decade or so, from my friends in NIB loading illegal charges, to AIB’s illegal FX rate calculations etc etc. They guys can and do dip their hands in customers pockets.
> 
> Your simplistic analysis of the NAMA issue is not supported by others on the thread. Those close to the industry know that it is effectively a cartel of a small number of large organisations.


Yes banks have over charged customers in the past, but have they not had to pay it back? And if they weren't prosecuted for doing so then it is because of government cronyism and not the failure of free markets.
I agree with you on NAMA in that it is a cartel. But the only reason it exists in the first place is because it was created by politicians. What NAMA pays for services and what it will end up costing the taxpayer has absolutely nothing to do with free markets.



Complainer said:


> Chris, this post demonstrates tremendous ignorance of the real world. Have you ever heard of fire safety regulations re clothing and furniture? Have you ever heard of consumer law about ‘fit for purpose’? Have you ever heard about Equality law that prevents discrimination of web services against people with disabilities?


Maybe you could provide some links to those clothing and furniture regulations. I have not been able to find any such regulations, which of course doesn't mean they don't exist. 
You claim that there is a law that actually prevents discrimination of web services? There are some guidelines in existence, but these are very rarely applied or even enforced. But even when companies decide to apply these guidelines, the cost of doing so is not prohibitive.
This makes my examples still examples of little or no government interference. So my point still stands, that the less government interference there is, i.e. the freer the market environment, the better the results for the consumer.



Complainer said:


> There is a whole raft of Government services that work to protect consumers?


Yes, I never said there wasn't. What I said was that in the examples mentioned there is very little, if any, government intervention or regulation. 



Complainer said:


> How many children were burnt with flammable clothing? How many houses and families were burnt with flammable furniture?


You tell me, but I imagine the number is extremely low to none, where the cause of injury or death was the clothing or furniture itself.




Complainer said:


> Yet again, it might help if you stop spouting theoretical, idealogical nonsense and start showing some real, thorough, comprehensive evidence that supports your view, if you can find some.


Education: http://www.civitas.org.uk/pdf/SwedishLessons.pdf
Health care: Take a look at the German and Swiss health care system for concrete evidence of how successful private health insurance systems are.
But again you completely ignore the point being made. Private and almost free markets provide a huge number of products for every budget and taste. Why would this suddenly not be the case for health care, education and social welfare? What would suddenly make the private economy turn on its heel and not do the same thing as it does for clothing, electronics, furniture and even food?



Complainer said:


> This is exactly the kind of nonsense we got with the eVoting debacle – other countries do it, so it must be right, and we’re the fools for not doing it. That debacle cost us €60m. If you can’t explain;
> 1)[FONT=&quot]      [/FONT]how to protect against fraud in gathering signatures?
> 2)[FONT=&quot]      [/FONT]how to protect against nimbyism and clientelism?


It just so happens that someone has put together an entire book with essays about the topic:
[broken link removed]
As for the e-voting machines, I agree that it was total shambles and a perfect example of political incompetence. But that does not make e-voting per se a bad idea.



Complainer said:


> Then really you should just stop talking. The FF argument is not an argument for throwing out our political system. It is a great argument for throwing out FF. If a staff member screws up, you don’t have reorganise the entire organisation. You move/fire/promote/demote that staff member, and replace him with someone that can do the job.


This country's political system is rotten to the core, not just the politicians that have been in power. But you seem to be content with politicians running the country as best suits them and not the people. Do you not think that mechanisms should be in place to control politician's actions after they have been elected? The move/fire/promote/demote idea is all well and good, but when it comes to politicians in power, there is nothing stopping their actions between elections.
And before you shoot down a system like direct democracy, maybe you should spend just a little time researching it and its viability.


----------



## Complainer

Chris said:


> How is it being pedantic? On endless occasions I have provided proof that the Swiss pay less for a better health system, based on private health insurance, than people in Ireland do. But you choose to ignore this and belittle it as lacking in evidence or thoroughness.
> I repeat my question again: If you believe my opinion to be wrong then you must have some logical explanation for it. What is that explanation?


  Chris, your ‘proof’ is one story about one procedure for one friend. I really don’t think we should be setting national policy based on the flimsiest of anecdotal evidence. 



Chris said:


> You also have nothing to support your claim that people in this country want all the public services that are being forced upon us. Take a look at last week's polls in the Examiner, where the majority of respondents wanted government spending cuts over taxation. That does not exactly support your claim that people are willing to fork out all the taxes they pay for the services you claim they so desperately want.
> And you really need to educate yourself on even the most basic ideas behind libertarianism before you start attacking my views. The PDs were as much aligned with libertarians as the Labour part is.


  What I said about the PDs is that they were the closest political party to your line – are you really disputing this? 

  Nothing to support my claim that people want basic public services? Come on, Chris. Have you looked at Irish electoral results over the past 50 years? The fact that no party exists that follows your theoretical nonsense about the perfect free market economy is a pretty good indication that people just don’t swallow it. In fact, doesn’t your ‘free market economy’ theory actually prove that no-one is interested – because if they were, the party to provide this approach would exist and be in power?



Chris said:


> Yes banks have over charged customers in the past, but have they not had to pay it back? And if they weren't prosecuted for doing so then it is because of government cronyism and not the failure of free markets.
> I agree with you on NAMA in that it is a cartel. But the only reason it exists in the first place is because it was created by politicians. What NAMA pays for services and what it will end up costing the taxpayer has absolutely nothing to do with free markets.


  The problem isn’t with NAMA, Chris – the problem is with the cartel in the market for legal and financial services to NAMA – Where is your perfect free market there?



Chris said:


> Maybe you could provide some links to those clothing and furniture regulations. I have not been able to find any such regulations, which of course doesn't mean they don't exist.
> You claim that there is a law that actually prevents discrimination of web services? There are some guidelines in existence, but these are very rarely applied or even enforced. But even when companies decide to apply these guidelines, the cost of doing so is not prohibitive.
> This makes my examples still examples of little or no government interference. So my point still stands, that the less government interference there is, i.e. the freer the market environment, the better the results for the consumer.
> 
> 
> Yes, I never said there wasn't. What I said was that in the examples mentioned there is very little, if any, government intervention or regulation.
> 
> 
> You tell me, but I imagine the number is extremely low to none, where the cause of injury or death was the clothing or furniture itself.


  No Chris, life’s just a bit too short for me to go digging out clothing and furniture regulations for you.



Chris said:


> Education: http://www.civitas.org.uk/pdf/SwedishLessons.pdf
> Health care: Take a look at the German and Swiss health care system for concrete evidence of how successful private health insurance systems are.
> But again you completely ignore the point being made. Private and almost free markets provide a huge number of products for every budget and taste. Why would this suddenly not be the case for health care, education and social welfare? What would suddenly make the private economy turn on its heel and not do the same thing as it does for clothing, electronics, furniture and even food?


  Chris, I’m sure you’re an intelligent guy – so I’m sure that when you think about it, you can see that health care is just a bit different to food/furniture/clothing. When you need health care, you really, really need it. It’s often not a ‘nice to have’ option. When you need health care, the costs of any individual’s health care will often greatly exceed the resources of that person – that’s why basic health care services for all are a fundamental requirement of any civilised society. Insurance does not solve this problem either – look at the USA where (before Obama) decent healthcare was the preserve of the middle/upper classes. The market isn’t providing healthcare for the nannies, and the cleaners and the waitresses and the Walmart greeters.

  I’m sure that when you think about it, you will also see that education is just a bit different to food/furniture/clothing. If you don’t get decent education, you won’t have access to food/furniture/clothing, and you won’t be able to provide decent education for your children. It’s a vicious circle.


Chris said:


> It just so happens that someone has put together an entire book with essays about the topic:
> [broken link removed]
> As for the e-voting machines, I agree that it was total shambles and a perfect example of political incompetence. But that does not make e-voting per se a bad idea.
> 
> .


  That’s nice – a book of essays. Just what I wanted for Xmas. What a pity they used the absolutely dreadful, painful issuu.com facility to create a barrier between me and the information I need, but that’s a side issue. Really, I wasn’t looking for a book of essays. I was looking for you, the proposer of the idea to answer a few basic questions. It seems that you really don’t know enough about this idea to stand over it at all.

  It’s not that I don’t see any possible benefits or improvements through ‘direct democracy’ Chris, but I really don’t think you’re doing a great job at selling this idea. You’ll need to up your game a bit if you want to progress this.


----------



## Chris

Complainer said:


> Chris, your ‘proof’ is one story about one procedure for one friend. I really don’t think we should be setting national policy based on the flimsiest of anecdotal evidence.


No it is not. I have posted many times comparing the cost of the Irish system with the Swiss system. The Swiss private health care system costs less to the public while providing a lot more to patients. I merely backed this up by the experience of a friend, but you seem to be selectively making reference to my posts. Bottom line is that physically and mentally ill people in Switzerland get a better service at a lower cost than people in Ireland.



Complainer said:


> What I said about the PDs is that they were the closest political party to your line – are you really disputing this?


Yes, I understand what you said, but it is still not correct. The PDs used political power to benefit their selected group of people. This is as much government interventionism as socialist policies are, with the only difference being who benefits at the expense of another group of people. Any form of government interventionism is diametrically opposite to libertarianism, which means the PDs did not even come close to my opinions.



Complainer said:


> Nothing to support my claim that people want basic public services? Come on, Chris. Have you looked at Irish electoral results over the past 50 years? The fact that no party exists that follows your theoretical nonsense about the perfect free market economy is a pretty good indication that people just don’t swallow it. In fact, doesn’t your ‘free market economy’ theory actually prove that no-one is interested – because if they were, the party to provide this approach would exist and be in power?


Calling my economic beliefs theoretical nonsense is merely exposing your total and utter lack of economic knowledge. Despite this lack of knowledge I am sure you have heard of the industrial revolution. Free markets and hard currencies with little to no government interference propelled the western world out of almost universal poverty. And the economic growth went on for about 150 years at a very sustainable and constant level. Bar the civil war years, the USA didn't even have income tax on any income until 1913. But economic growth from the late 1800s to the start of the 1900s was constant and sustainable.
After WW2 Germany's Ludwig Erhard put an immediate end to price and wage control and made endless changes to German policy that made markets extremely free. At the same time the SPD said that this would never work, would lead to poverty and a crippling of the economy. The very opposite happened and Germany became an economic "miracle", until it was ended by Helmut Schmidt's socialist reign in the 70s.
Hong Kong in the 50s was a shanty town. Free market capitalism with almost no taxation created one of the wealthiest places on earth. To this day it has no VAT, no capital gains tax and no inheritance tax.
If you want I can put together a list of failed attempts at socialism and economic planning and control?
Free market capitalism, with little interference from government, has always succeeded. At the same time the more planning and control of economic activity has been attempted under socialist policies the bigger the failure has been. 

So please do not call my economic beliefs theoretical nonsense when you so obviously know nothing about free market capitalism and economics.



Complainer said:


> The problem isn’t with NAMA, Chris – the problem is with the cartel in the market for legal and financial services to NAMA – Where is your perfect free market there?


I absolutely agree that the entire financial market is a cartel. It is the worst example of cronyism, and has absolutely nothing in common with free market capitalism. But as you can see with the examples I provided, the less government interference exists in an industry, i.e. the freer the market, the more competition, the lower prices are driven, the more freedom of choice to the consumer and the higher the availability of the products.



Complainer said:


> No Chris, life’s just a bit too short for me to go digging out clothing and furniture regulations for you.


Now you are really being a hypocrite. Within the same post you fail to provide evidence of your own claim, while at the same time accusing me of not making a good point because I linked to a collection of essays. But I have found this hypocrisy in your posts on a regular basis, so I shouldn't really be surprised.
But anyway, I did some google searching and found precisely nothing. Anticipating that you wouldn't come up with evidence of these mythical regulations I decided to ask a tailor yesterday evening when I collected a suit that needed alteration. He looked at me as if I had two heads when I asked him if there was regulation stating what, where, how, and with what material he could make clothes. Not to make a final decision on that, I was stuck in a high street clothes shop waiting for my wife, and decided to ask the manager about clothing regulations. In 20 years of clothing retail she had never heard of such regulations.
So rather than make statements like "this post demonstrates tremendous ignorance of the real world" you should maybe make a serious assessment of your own ignorance before making such sweeping statements.



Complainer said:


> Chris, I’m sure you’re an intelligent guy – so I’m sure that when you think about it, you can see that health care is just a bit different to food/furniture/clothing. When you need health care, you really, really need it. It’s often not a ‘nice to have’ option. When you need health care, the costs of any individual’s health care will often greatly exceed the resources of that person – that’s why basic health care services for all are a fundamental requirement of any civilised society. Insurance does not solve this problem either – look at the USA where (before Obama) decent healthcare was the preserve of the middle/upper classes. The market isn’t providing healthcare for the nannies, and the cleaners and the waitresses and the Walmart greeters.


I do not disagree with health care being important. But the fact of the matter is that the freer a market the lower prices are driven which is to the benefit of the patient. At the same time, government monopolised services' prices only go in one direction and that is up. When something constantly costs the state more, it means that more taxes have to be raised which come out of the pockets of everyone including those that can least afford it.
The USA health service is also a perfect example of government interference, and not of a free market system. 



Complainer said:


> I’m sure that when you think about it, you will also see that education is just a bit different to food/furniture/clothing. If you don’t get decent education, you won’t have access to food/furniture/clothing, and you won’t be able to provide decent education for your children. It’s a vicious circle.


Different yes, but not in a way that warrants government monopoly. How do you jump to the conclusion that the free market would not provide education at a price affordable to everyone? Where is the logical premise for this, when everything else provided by relatively free markets is available in abundance and at a price for every budget? Why would this suddenly be different with education and health care? If there was a logical reason to assume this to be the case, then Sweden would not have had such success when it changed its education system.



Complainer said:


> That’s nice – a book of essays. Just what I wanted for Xmas. What a pity they used the absolutely dreadful, painful issuu.com facility to create a barrier between me and the information I need, but that’s a side issue. Really, I wasn’t looking for a book of essays. I was looking for you, the proposer of the idea to answer a few basic questions. It seems that you really don’t know enough about this idea to stand over it at all.
> 
> It’s not that I don’t see any possible benefits or improvements through ‘direct democracy’ Chris, but I really don’t think you’re doing a great job at selling this idea. You’ll need to up your game a bit if you want to progress this.


As I already mention, your hypocrisy is truly staggering. Did you ever heed your own advise in the thread where you pointed at a book on income inequality, which wasn't even available for free download? If memory serves me right you ignored lots of calls from different people to even make one point from the book.


----------



## Complainer

You win, Chris - I give up. Life's just far too precious to carry out this nonsense superficial debate. You are convinced there are no clothing safety regulations in existence, because you asked a girl in a shop. (Hint: Try [broken link removed] or [broken link removed] or http://ec.europa.eu/consumers/safety/prod_legis/index_en.htm or http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:019:0029:0048:EN:PDF). You are convinced that the Swiss system is perfect,  because your mate had a good experience, and yet you fail to look at outcomes, or quality, or patient satisfaction, or total systemic costs.  You are convinced that everything any Govt does is terrible/wasteful and everything the private sector does is beautiful/valuable. You pick and choose selective bits of economic history to 'prove' your point, while ignoring the bits you don't like (such as the US 'golden period of economic boom in the post-war era where income tax rates were 80%-90%+ for high earners). You propose Swiss 'direct democracy', yet you can't answer a simple question like how do they prevent fraudulent signatures.

Sorry Chris, but this isn't a sensible debate. I'll leave you to it.


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## frankmac

Are you off again today Complainer?


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## Chris

Complainer said:


> You win, Chris - I give up. Life's just far too precious to carry out this nonsense superficial debate. You are convinced there are no clothing safety regulations in existence, because you asked a girl in a shop. (Hint: Try [broken link removed] or [broken link removed] or http://ec.europa.eu/consumers/safety/prod_legis/index_en.htm or http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:019:0029:0048:EN:PDF).


You should read some those links you post. The first two and fourth are voluntary directives, not regulations, and the third is a general consumer product safety directive. Not one mandatory regulation or regulatory body that runs around creating red tape and a bureaucratic nightmare for businesses.
And the woman in the shop was not just some girl, but had been a clothing retail manager for 20 years, but of course you selectively ignore this point.



Complainer said:


> You are convinced that the Swiss system is perfect,  because your mate had a good experience, and yet you fail to look at outcomes, or quality, or patient satisfaction, or total systemic costs.


Yes I am, and as I have state repeatedly, my friends experience was merely a personal confirmation of all the articles available that confirm that the Swiss system provides more at a lower cost. I really do not know how many more times I have to say this for you to actually acknowledge it: I am not basing my opinion on the experience of one person.



Complainer said:


> You are convinced that everything any Govt does is terrible/wasteful and everything the private sector does is beautiful/valuable.


Again you are misrepresenting my opinion. You constantly make the mistake of equating private *free* markets with those markets heavily interfered with by government. I have demonstrated over and over that those markets that are the most free from government intervention are those that produce the best products with abundant availability for every budget.



Complainer said:


> You pick and choose selective bits of economic history to 'prove' your point, while ignoring the bits you don't like (such as the US 'golden period of economic boom in the post-war era where income tax rates were 80%-90%+ for high earners).


You should do yourself a very big favour and educate yourself on economic history. I did not pick and choose, and I certainly did not ignore bits I didn't like. Here is a quick run down of what actually happened.
The post war boom years in the US were the result of abandoning Keynesian socialist policies of the New Deal. The Federal budget was cut by over 50%, federal debts were reduced and the marginal tax rate fell as well as the amount of income affected by the marginal rate. The federal budget did increase again in the early 50s, but this was a result of higher economic activity while at the same time balancing budgets.
So it is safe to say that it is you who is looking at tax rates after WW2 in isolation of what they were before to somehow bend economic history to fit into the idea that socialist policies can actually work. The post war, post Marshall Plan era in the US and Germany are perfect examples of how less government results in economic boom and increased wealth for everyone.



Complainer said:


> You propose Swiss 'direct democracy', yet you can't answer a simple question like how do they prevent fraudulent signatures.


Interesting short article here: http://www.bbc.co.uk/news/world-europe-11791272
It doesn't state how in detail the process works in Holland, other than stating a spot check, but the problem of fraudulent signatures does seem to be addressed enough for the Dutch to be happy with the system.
More info here:
http://aceproject.org/ace-en/topics/es/ese/ese08/onePage

And just to clarify, laws are not passed based on signatures, signatures can merely lead to the proposal of a referendum; a regular vote is held on the referendum.



Complainer said:


> Sorry Chris, but this isn't a sensible debate. I'll leave you to it.



I agree that this is not a sensible debate because you repeatedly cherry pick content from my posts and completely ignore any questions raised. 
The one you have repeatedly ignored most is my question why, when those markets that are freest, like clothing and electronics, work so well, it would suddenly not work for education and healthcare? I don't expect an answer, as it is one that I have not been able to get an answer for from any socialists I have discussed this with.


----------

