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elefantfresh
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Sure, Bertie was one of the first of us NOT to have his money in Irish banks - haha!
(comments previously added on this reply now removed from myself as I don't want to keep inflating easy demagogic considerations. Guys, feel free to follow your heart and 6th sense however you prefer. I gave my answer on the default-situation and I'm ok with that. All the best!)
I agree with you. The whole idea of deposits leaving the country being the problem simply ignores reality. Deposits leaving the country is merely a symptom of the disease. The disease is a bankrupt state, bankrupt banks and politicians and the public with the head in the sand. Simply getting people to return or retain their deposits here and selling this as the solution is like giving a lung cancer patient a bottle of Benylin to stop the cough.
swervedriver
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As well, people should realise that when they leave their money with an Irish bank, their money doesn't necessarily stay in Ireland. It can be used to guarantee purchases and investments by that bank outside of the state.
They only people the banks care about is their shareholders. Why should Irish depositors make purchasing decisions which are then syphoned off in profit? One could argue that all Irish people are in some way shareholders of Irish banks, but these banks are dodos and I very much doubt we'll be seeing any dividends from our investments. We've got very little from our huge investment in Bank Of Ireland, the supposedly good bank, one third of which was sold for a billion (after we've pumped in multiples of that amount and removed most of their bad loans, off to NAMA).
I keep most my deposits in a bank regulated by the ICB (RABO), but only because I'm monitoring the situation and nothing to do with a misplaced sense of nationalism.
G
Guest105
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I agree. Lets "pull on the green jersey".
Our government have done fantastic. They NEGOTIATED the reduction in rate and loan extension all by themselves!!!
Yes, I'm gonna follow the lead of our minister for finance and put my money where he has it.
.....oh wait....
you spin me right round baby right round, like a record baby, right round right round
Now see what you have done I just can't get that song out of my head
thats the idea
they can use that song in "reeling back the years" when they get to 2001,2002,2003,2004,2005,2006,2007,2008,2009,2010,2011 etc.
Hopefully we'll get to a year when playing "killing in the name of" - Rage against the machine will be appropriate.
"F**k you, I won't do what you tell me" !!!
they can use that song in "reeling back the years" when they get to 2001,2002,2003,2004,2005,2006,2007,2008,2009,2010,2011 etc.
Hopefully we'll get to a year when playing "killing in the name of" - Rage against the machine will be appropriate.
"F**k you, I won't do what you tell me" !!!
Japan today weakened their currency because they want to protect export and economic growth -which is exactly what Germany, will do in the remote possibility of the Euro splitting.
Taking money out of Ireland into German banks in the belief that Germany will have a new DM worth,say, 20-30% more than the punt means that one must believe that Germany will retain an expensive currency.
This is nonsense. If Germany has currency worth much more than others, it destroy their economic growth which is greatly based on exports.
No state wants an expensive currency -even the Swiss have just reduced interest rates to ease pressure on the increasingly dear SF.
Chris and Horus - you do like to misquote and indeed imagine things that were never said...
..nobody says that taking deposits out of the state is the problem. We know the problems . But continued capital flight is a problem and will exacerbate other problems - whereas it is possible that a return of deposits to Irish banks may ease some of the our problems. Certainly, lending to home buyers and small businesses may increase if banks had more money.
None of this is patriotic sentiment. (Personally, I'm a unionist -I don't believe in an independent Irish state -I think Ireland would have done better in a United Kingdom).
It's just plain economic sense for people here to stop dumping their money abroad, especially if those people wish to remain here.
Taking money out of Ireland into German banks in the belief that Germany will have a new DM worth,say, 20-30% more than the punt means that one must believe that Germany will retain an expensive currency.
This is nonsense. If Germany has currency worth much more than others, it destroy their economic growth which is greatly based on exports.
No state wants an expensive currency -even the Swiss have just reduced interest rates to ease pressure on the increasingly dear SF.
Chris and Horus - you do like to misquote and indeed imagine things that were never said...
..nobody says that taking deposits out of the state is the problem. We know the problems . But continued capital flight is a problem and will exacerbate other problems - whereas it is possible that a return of deposits to Irish banks may ease some of the our problems. Certainly, lending to home buyers and small businesses may increase if banks had more money.
None of this is patriotic sentiment. (Personally, I'm a unionist -I don't believe in an independent Irish state -I think Ireland would have done better in a United Kingdom).
It's just plain economic sense for people here to stop dumping their money abroad, especially if those people wish to remain here.
I'm afraid none of this stands up to economic history. Germany always had a strong currency and always maintained a strong currency. At the same time Germany after WWII always had a strong, or stronger, economy when compared to the rest of Europe. A strong currency is a huge advantage as it causes capital to flow in which allows the economy to expand. It also makes people and businesses wealthier as they are then able to buy more than before witht he same amount of money.
The whole idea that depreciating a currency is the magic pill to increasing economic growth is nonsense. Depreciating a currency's value does not give rise to medium or long term growth, as the increased cost of imports at the very least offsets the increased exports. The most successful economies in the world all have strong or strengthening currencies:
I disagree, deposit flight is not the problem that needs to be addressed it is merely a symptom of the problem.
Chris - perhaps you should forward your opinion that strong currency= strong economy to the Swiss NB who, after already reducing interest rates, has warned that it will increase the supply of SF to stem the increase in value of SF...
.. or to Japan where the govnt has warned that it cannot allow the Yen to increase in value.
And a weak (or,rather, a deliberately weakened)currency hasnt exactly hurt the Chinese economy in the last decade.
Just as ten economists may have a dozen different economic views there are arguments for and against the view that strong currency=strong economy or v.v.
It is my view that, with limited domestic demand and being highly dependent on exports, Germany would not be able to sustain a currency much higher than currencies in the rest of Europe.
Anyway, we disagree and you may be proved right. As regards the problem about money leaving Ireland...
... Once again please stop misquoting me. I never said that deposit flight is the problem. I said that it was a problem that,if it increases will not help Ireland recover.
This opinion does not detract from my agreement with you that there are far deeper problems.
.. or to Japan where the govnt has warned that it cannot allow the Yen to increase in value.
And a weak (or,rather, a deliberately weakened)currency hasnt exactly hurt the Chinese economy in the last decade.
Just as ten economists may have a dozen different economic views there are arguments for and against the view that strong currency=strong economy or v.v.
It is my view that, with limited domestic demand and being highly dependent on exports, Germany would not be able to sustain a currency much higher than currencies in the rest of Europe.
Anyway, we disagree and you may be proved right. As regards the problem about money leaving Ireland...
... Once again please stop misquoting me. I never said that deposit flight is the problem. I said that it was a problem that,if it increases will not help Ireland recover.
This opinion does not detract from my agreement with you that there are far deeper problems.
One of the great fallacies often thrown about is that the era of the DM was the glorious years of the German economy and everything has gone downhill since the Euro. It's rubbish.
Oldnick is right. If the Euro was to break up and the DM was re-introduced, Germany stands to lose as much as Ireland. It's export market that it is hugely dependent on would collapse completely considering 40% of it's exports go to Eurozone Countries who will all now have their own much weaker currencies. Their banks who hold a shed load of euro-denominated foreign debt would face huge losses as these bonds were re-denominated into local currencies. Not even going to go down the list of all the other problems...
This isn't just about a strong versus weak currency argument. That ship has sailed. The Countries in the Euro are all in this together. There is no painless get out clause for any Country whether that be Greece or Germany. The sooner the politicians realise that the better. We are not heading for the breakup of the Euro. We are heading to the issuance of Eurobonds and fiscal union. It's ironic that Germany went to war to try and rule Europe when all they had to do was create the Euro!
Oldnick is right. If the Euro was to break up and the DM was re-introduced, Germany stands to lose as much as Ireland. It's export market that it is hugely dependent on would collapse completely considering 40% of it's exports go to Eurozone Countries who will all now have their own much weaker currencies. Their banks who hold a shed load of euro-denominated foreign debt would face huge losses as these bonds were re-denominated into local currencies. Not even going to go down the list of all the other problems...
This isn't just about a strong versus weak currency argument. That ship has sailed. The Countries in the Euro are all in this together. There is no painless get out clause for any Country whether that be Greece or Germany. The sooner the politicians realise that the better. We are not heading for the breakup of the Euro. We are heading to the issuance of Eurobonds and fiscal union. It's ironic that Germany went to war to try and rule Europe when all they had to do was create the Euro!
Mrs M. doesn't sound to keen on the idea. She's off walking in the mountains as we speak! Hope she has the mobile with her.
And the German supreme court in Karlsruhe might well strike this down if any attempt is made to introduce it. ...there may be trouble ahead....
G
Guest105
Guest
Switzerland and Japan are constantly talking about weakening their currencies, and sporadically intervene in the FX market. But every time they do so the trend quickly reverses within days or weeks. If they were serious they would massively intervene and keep their fx rate below a certain level. It's all political talk.
And the renminbi has been appreciating, even against the Dollar that it is pegged to, albeit at a very slow pace that wouldn't be matched by the open market. Nevertheless, China would be much better off if it could massively cut its import costs for all the natural resources it so desperately needs. Any pressure to increase export prices would be offset by lower import prices of goods needed to produce the goods. The real cost of keeping its currency weak is also only starting to play out through the very significant price inflation numbers.
OK, let me rephrase that, deposit flight is not a problem, it is a symptom of the underlying problem. I think we basically agree here, but I just think that the media and public opinion is focusing erroneously on deposit flight as a or the problem.
There was a very interesting article in the German Wirtschafts Woche that completely contradicts the idea that Germany made bigger export gains after the introduction of the Euro. (http://www.wiwo.de/politik-weltwirtschaft/die-lebensluegen-des-euro-475574/8/)
You can run it through google translate to get the full text, but here is the important part:
- after the introduction of the Euro, Euro zone exports grew by 5.2% per year
- at the same time exports to non Euro zone countries grew by 7% per year
- from 2000 to 2010 GNP grew by 1.1% annually
- from 1990 to 1999 GNP grew by 2.3% annually
Germany was doing better before the Euro, and after the introduction of the Euro it's exports grew more outside the Euro zone than inside.
I agree that there is no painless outcome or solution and that politicians need to wake up to this, but as horusd has already pointed out one of the German state supreme courts has already made it clear that a Eurobond would not be constitutional and there are two hopes in a constitutional amendment.
Modern Germany also never wanted to rule Europe through economic and monetary strength, it simply behaved in a fiscally and monetary sound fashion and other countries were quickly exposed by the markets for doing the opposite.
Yes because I was serious about Germany wanting to rule Europe..... For every paper that shows Germany has lost out with the introduction if the euro, I can show you one that shows it has benefited hugely. I do a lot of investment in Germany for my company. Ask the manufacturers in Germany what they think and believe me, they all want the euro. Unfortunately the German public are tiring of the project.
Everything Germany does is constitutionally challenged including the various bailouts which were illegal fiscal transfers in all but name. Germany are already allowing the rescue funds to leverage off their rating. It's not a big step to Eurobonds especially since bailing out italy would be a lot more expensive. The only question is what Europe will look like in the future. Won't happen overnight but it is where we are heading. Not to the breakup of the Euro.
Everything Germany does is constitutionally challenged including the various bailouts which were illegal fiscal transfers in all but name. Germany are already allowing the rescue funds to leverage off their rating. It's not a big step to Eurobonds especially since bailing out italy would be a lot more expensive. The only question is what Europe will look like in the future. Won't happen overnight but it is where we are heading. Not to the breakup of the Euro.
Yes, but the numbers speak for themselves, the German economy was performing better before the Euro than after.
Big business in Germany is in favor of the Euro, as they are the biggest beneficiaries, after banks, of an inflationary monetary policy. But ask small and medium size companies, and you will find a very different opinion which is more aligned to that of the public. My family has several small and medium size businesses in Germany and every one of them say that the Euro has not worked out well for them and that business was a lot more stable with the DM.
I agree, and it is the way it should be. The problem is that the bailout and especially an official Eurobond have already been commented by the Bundesverfassungsgericht as dubious. They refused to dismiss the case last months and there will now be an official hearing. The interesting thing is that when the introduction of the Euro was challenged in the 90s, the court said that the fact that there was a no bailout clause in the TFEU (I think it is article 125) meant that the Euro would be constitutional. It is now faced with a huge dilemma of credibility of its own rulings.
I've just seen the statistics about exports to euroland and noneuroland -and actually I think they back up my argument that if the Germans were to have a currency worth say 20-30% more than the PIGGSEuro then this would badly affect the German export market .
German exports in the last decade did indeed rise more rapidly to noneuroland than to euroland. But this was due to the ever expanding market in the BRIC countries, overwhelmingly China. I suspect that whether or not the euro was created it would not have made any difference in the last decade -German exports would have boomed to those new markets.
But what will happen if suddenly the German new euro were 30% dearer than the Piigs euro ? forget the export market to Europe - what about exports to China and other new markets?
Naturally, Germany produces many fine products that can't be matched by Piggs and the Chinese will always want them. But if there is any trouble or slowdown in this vital market then an increase in german prices will surely have a detrimental effect ?
Furthermore,whilst german labour costs per unit have been amongst the lowest in Europe is it not possible that -if they succeed - austerity measures,improved efficiency in the Piggs will decrease the gap in labour cost per unit -regardless of the new higher priced DM.
So, I reaffirm my belief that a higher priced DM v Piigseuro will not be in German intrests and if the euro were to split the the eventual difference in value will be minimal.
P.S. figures showing an annual percentage increase in GNP mean little per se. If one goes from 5 to 10 to 20 this shows an increase each year of 100% . If in the fourth year the figure is 35 this shows an increase of "only" 75% -GNP growth has fallen in percentage terms !
Anyway these are academic arguments and current events may prove all of us wrong.
German exports in the last decade did indeed rise more rapidly to noneuroland than to euroland. But this was due to the ever expanding market in the BRIC countries, overwhelmingly China. I suspect that whether or not the euro was created it would not have made any difference in the last decade -German exports would have boomed to those new markets.
But what will happen if suddenly the German new euro were 30% dearer than the Piigs euro ? forget the export market to Europe - what about exports to China and other new markets?
Naturally, Germany produces many fine products that can't be matched by Piggs and the Chinese will always want them. But if there is any trouble or slowdown in this vital market then an increase in german prices will surely have a detrimental effect ?
Furthermore,whilst german labour costs per unit have been amongst the lowest in Europe is it not possible that -if they succeed - austerity measures,improved efficiency in the Piggs will decrease the gap in labour cost per unit -regardless of the new higher priced DM.
So, I reaffirm my belief that a higher priced DM v Piigseuro will not be in German intrests and if the euro were to split the the eventual difference in value will be minimal.
P.S. figures showing an annual percentage increase in GNP mean little per se. If one goes from 5 to 10 to 20 this shows an increase each year of 100% . If in the fourth year the figure is 35 this shows an increase of "only" 75% -GNP growth has fallen in percentage terms !
Anyway these are academic arguments and current events may prove all of us wrong.
Anyone have these figures for the U.S. and want to specualte why the Euro may have affected them?