Re: todays indo - Ireland should drop out of the Euro
I sort of gave up after the "Many investors who owed the Irish banks or invested in Irish government bonds would get burned. But that is the nature of markets. They would be paid back in the new currency, which would have to find its value." bit in his article which is simply rubbish. Bonds getting redenominated into another currency is not "the nature of markets" but is (rightly) considered to constitute default.
The idea - as described by McWilliams - is simply daft. Even modifying his idea - if the government were to honer existing bonds by continuing to pay the coupons in euros, a devaluing currency will mean that the cost of servicing the national debt would explode. That's even thinking about the quagmire that is personal debt and savings; would mortgages be redenominated into punts, thus pushing the banking system over the brink (as the banks would have to pay the cost) or leave it as is and have peoples mortgage payments balloon as the punt loses value? How would the banking system survive the stampede of longterm savings out of punt accounts into euros to protect value? How would the financial system survive without the 10s of billions of cash the banks have repoed from the ECB which it can access using Irish government euro bonds as collateral?
The piece reminds me of late night talk-show local radio hosts who start the show asking for opinions on something ludicrous - for example, should we be more understanding of asylum-seeking drug-dealing convicted pedophiles and let them out of jail early, welcome them back into society and lavish them with welfare money. It's purpose is to provoke discussion which presumably will improve McWilliams' public visibility.