Ireland

[snow hope]

I posted this in another thread the other day.

"I was in Dublin at the weekend and it is saddening to see the number of people begging in the streets and sleeping rough in shop doorways from tea-time onwards. Tough times are visiting Ireland. They have another budget due on the 7th December I think and according to the Irish Sunday papers it is going to be the toughest most austere budget ever! Apparently the ECB has been lending money to Ireland over the last year and it amounts to approx 250billion Euro so far.

Some think the IMF will be running Ireland by February 2011. Things are going to get very unstable down there."

I think we will see social unrest down there soon. People are really starting to get angry about what their *ankers and Govt. have done over the last few years.

[emordnilap]

This story caught my eye:

Earlier on Thursday, yields on Irish 10-year bonds reached a new high of 7.69%. The move reflected increasing scepticism about the Republic's ability to tackle its problems without outside help.

http://www.bbc.co.uk/news/business-11693654

It's hard to find anywhere to put your savings that gets more than the inflation rate, yet here is a sovereign country's bond offering 7.69%.

Yes, the politicians were very pleased with the take-up of recent bond offerings. Is that take-up any wonder, with that kind of (promised) return? Money always goes to money.

I'm saving at the moment towards a polytunnel and getting 3%.

[emordnilap]

I think we will see social unrest down there soon. People are really starting to get angry about what their *ankers and Govt. have done over the last few years.

People are surprisingly complacent - some even say 'is that all?' when debt figures are mentioned.

As long as people have some money coming in, I think the anger is not going to be there. What can they do anyway, especially with this sort of reaction:

http://www.rte.ie/news/2010/1103/education.html

not to mention the shameful treatment of citizens in the Rossport debacle?

The upcoming budget's going to be a tester - and it's only the first such 'austerity' budget in an endless run into the future.

I predicted after the 2009 "turning the corner" budget that there would be civil service unrest over their pay restrictions. There haven't been, meaning there's no anger there or (!) they're damned well paid.

[Cabrone]

This story caught my eye:

Earlier on Thursday, yields on Irish 10-year bonds reached a new high of 7.69%. The move reflected increasing scepticism about the Republic's ability to tackle its problems without outside help.

http://www.bbc.co.uk/news/business-11693654

It's hard to find anywhere to put your savings that gets more than the inflation rate, yet here is a sovereign country's bond offering 7.69%.

This bit isn't pleasant reading either.

The Irish government has outlined when it will make 15bn euros (£13.1bn; $21.3bn) of budget cuts designed to reduce the country's deficit ... The Irish deficit is predicted to be the equivalent of 32% of the country's economic output this year.

It’s either bravery or madness. Somehow I don’t think the bankers will be any more popular in Ireland than they are in the UK or Iceland.

Just looking at that 7.69% figure and throwing around a few thoughts......

If the external debt is approximately 10 times GDP then it stands to reason that annual interest rates on that debt cannot afford to go above 10%, else the Irish state will just be paying ever increasing amounts of interest.

However that 10% breakeven rate assumes that the Irish government uses every last cent of GDP to pay off the debt which in reality is never going to happen.

Assuming they rake in say 50% of GDP via taxation and then only spend 5% of GDP on public services by cutting schools, defence, civil service, medical etc to the bone then they are left with 45% of GDP to pay off debt.

At that level of payment the break even interest rate would be approximately 4.5% and anything higher (like the 7.69% that they are paying on those 10 year bonds) would see them submerging?

If the above is roughly correct then would the debt not need to be restructured to something like 2% p.a and paid it off over a much longer time frame?

Or am I talking rubbish?

[emordnilap]

Things are actually worse that they seem with your scenario, Cabrone. There is a massive problem with using GDP as, well, any kind of figure in calculations.

GDP includes the cost of heart attacks and fish kills, vehicle collisions and house fires, fly tipping and pesticide pollution etc etc.

GNP might be better, at a rough guess 2/3rds GDP.

[Cabrone]

Things are actually worse that they seem with your scenario, Cabrone. There is a massive problem with using GDP as, well, any kind of figure in calculations.

GDP includes the cost of heart attacks and fish kills, vehicle collisions and house fires, fly tipping and pesticide pollution etc etc.

GNP might be better, at a rough guess 2/3rds GDP.

Makes a rate like 7.69% look even more like a fast track to collapse.

Those w\b ankers really have a lot to answer for.

[emordnilap]

I'm just starting to read Fleeing Vesuvius, published this month here in Ireland by Feasta.

Richard Douthwaite in his section talks of 'stratospheric' money - money which never touched the ground, was never spent, merely created, lent and moved around in computers.

This is the bulk of Ireland's debt, notional cash, passed between gamblers. What I wouldn't give to push these lads off the planet.

[Potemkin Villager]

Nice vid Roger. The sign advertising "Energy Efficient Homes" (for sale) is an amusing twizt!

There is a double irony here Ren as the houses are both highly energy efficient and inefficent at the same time having been empty for several years since they were thrown up and possibly never to be occupied.

Being empty and unheated makes them very energy efficient indeed apart from the huge energy input squandered on their hasty and highly speculative construction.

If you are a fan of Trot Rockers "Gang of Four" you might enjoy another skewed view of our mainstream local development priorities.....


http://transitiontownsireland.ning.com/ ... nfanaghy-2

[emordnilap]

Nice vid Roger. The sign advertising "Energy Efficient Homes" (for sale) is an amusing twizt!

There is a double irony here Ren as the houses are both highly energy efficient and inefficent at the same time having been empty for several years since they were thrown up and possibly never to be occupied.

Being empty and unheated makes them very energy efficient indeed apart from the huge energy input squandered on their hasty and highly speculative construction.

If you are a fan of Trot Rockers "Gang of Four" you might enjoy another skewed view of our mainstream local development priorities.....


http://transitiontownsireland.ning.com/ ... nfanaghy-2

I would have enjoyed it more if there had been more 'commentary' at the bottom of the screen. Otherwise, what you're doing is brilliant. Keep up the good work.

These short films should be shown on RTÉ, maybe during Nationwide.

[Tawney]

This story caught my eye:

Earlier on Thursday, yields on Irish 10-year bonds reached a new high of 7.69%. The move reflected increasing scepticism about the Republic's ability to tackle its problems without outside help.

http://www.bbc.co.uk/news/business-11693654

It's hard to find anywhere to put your savings that gets more than the inflation rate, yet here is a sovereign country's bond offering 7.69%.

Yes, the politicians were very pleased with the take-up of recent bond offerings. Is that take-up any wonder, with that kind of (promised) return? Money always goes to money.

I'm saving at the moment towards a polytunnel and getting 3%.

I wrote Irish 10-year bonds were offering 7.69% only last Friday, now it's up to 8.7%. Ireland was the star austerity student; I wonder if the UK will learn anything from this?

Rumours of Irish bailout sweep through financial markets

Long-term Irish interest rates soar as austerity cuts seem to have failed to convince international investors

http://www.guardian.co.uk/world/2010/no ... out-abound

[Ludwig]

Fairly mild climate, decent soil and no shortage of rain?

That's us.

I thought the soil in most of Ireland was rather poor? Good for dairy, but not for most crops (and of course it's too wet for many crops as well). I may be wrong.

Still, it has the immeasurable advantage of low population density.

[Ludwig]

I'd imagine the republic is now full of bargains if you are looking for a small holding.

When I was living in Ireland I met a Peak Oil-aware teacher who was vaguely looking for a smallholding, but couldn't find anything anywhere. The Irish - very sensibly - value land, and hang onto it. I believe very little ever comes up for sale.

[emordnilap]

I thought the soil in most of Ireland was rather poor?

Some of the north-west soil is, definitely. But wild and windswept Donegal is famous for quality spuds.

The land we have seems to be pretty good, rich and black, and we're getting decent yields but we've done no real analysis of it apart from ph. Maybe we should.

We're big into composting and growing green manure crops, so that helps.

Read an interesting article lately about the way older 'diseases' will return as more people are forced to eat locally but don't ensure optimum soil conditions for their crops. We are more likely to be healthy by getting our food from many sources around the world, apparently.

I believe very little ever comes up for sale.

Certainly there's not masses but there is always land for sale...in fact, the local paper has ads for land for sale every week - and that is not the best source. The local cattle mart is.

[Mean Mr Mustard]

Anyone read this one, linked from The Automatic Earth?

http://www.irishtimes.com/newspaper/opi ... 65400.html

"Clinically dead..."

[Potemkin Villager]

Anyone read this one, linked from The Automatic Earth?
http://www.irishtimes.com/newspaper/opi ... 65400.html

"Clinically dead..."

He has been a consistent and accurate profit of doom - I gave up reading half way through. I wouldn't advise people to get too smug about things in the UK either. I often think of all those died in the wool marxists who gave up waiting for the crisis of capatalism to come about.........