bearishbull said:no way rates will hit 6+% in next 36months ,Eu economy would be put into a massive recession but ,maybe eu leaders want a recession that could lead to a reform of the rigid labour laws in mainland europe and in long run making the economy stronger...mmmm
walk2dewater said:I can't believe my eyes. The IMF is articulating what I've suspected for years now and why I've felt interest rates will have to go far higher than anyone currently expects. Ultra low rates has and is pulling up the prices of everything, including oil prices. The ultra low rates 'experiment' of Greenspan and co. has created an inflationary monster. The next recession might be worse than even I expect.
ivuernis said:David McWilliams, in his column in yesterday's Irish Indo, speculated that if the worst came to the worst and the Irish banking system was threatened with collapse as a result of debt defaulting by borrowers in the event of rising interest rates on the back of a resurgent German economy that the government may be faced with no other alternative but to withdraw from the EMU in order to regain control over Irish interest rates.
I know we can't bail out the banks like we did before because of EU regulations but I can't really see this happening even in a worst case scenario, or how it could benefit the country from pulling out of the Euro even if it prevented the banks from going bust? Couldn't they just let the bank suffer the consequences of the their lax lending policies? It would be chaotic but wouldn't other banks that are not so exposed to such a bust be able to enter into the Irish market?
walk2dewater said:If we exit the euro and go back to punts Irish debt will still remain denominated in Euros. If we exit the EMU we would have to jack up rates to keep the New Punt from dropping like a rock. Or if we let the New Punt devalue against the euro all that massive euro debt would cripple irish debtors. I'm afraid there's no getting out of having to pay it all back AND at whatever interest rate Frankfurt says.
walk2dewater said:If we exit the euro and go back to punts Irish debt will still remain denominated in Euros. If we exit the EMU we would have to jack up rates to keep the New Punt from dropping like a rock. Or if we let the New Punt devalue against the euro all that massive euro debt would cripple irish debtors. I'm afraid there's no getting out of having to pay it all back AND at whatever interest rate Frankfurt says.
ivuernis said:
It's not going to have a pretty ending is it... unless you believe in NCB's ideal world scenario where reality is thrown out the window
beattie said:About 95% of people will choose to believe the NCB however and will get burned unfortunately, but alot of powerful figures will make a great deal of money along the way.
beattie said:Very interesting read and if the outcomes it recommends actually are implemented it will really throw the cat among the pigeons. The excessive liquidity that central banks (mainly the Fed) have pumped into the market has allowed a massive asset bubble (namely housing) to occur which could have serious consequences for the economy as a whole (Friends First report of potential dangers from housing correction).Do you think housing is the only asset bubble out there? Or do you think the markets are also overvalued? Its been interesting to see places like Iceland and Dubai sliding as the cost of borrowing goes up. The gamble on emerging markets might be slowing down but will it be the only one affected? How much of the current market highs in more established areas (the ISEQ, the Eurostoxx, commodities) are being fuelled by cheap borrowed money chasing market appreciation? Are we at risk of a big market correction?
And, more importantly, where should we be putting our money? Gold? Oil?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?