Will the Republic ‘get it’ going forward?

In the Washington Times Kishore Mahbubani, a former Singapore diplomat and author of “The New Asian Hemisphere – The Irresistible Shift of Power to the East”: “…being globalized has its downside – when the world economy stutters, the more open economies feel the pain first.” It also has this to note from Michael Hennigan, founder of the Irish financial Web site Finfacts.com, which echoes some of the conversation in last Friday’s podcast:

“Huge inward investment from the U.S. triggered the Celtic Tiger, but it was allowed to develop into an out-of-control property boom, rather than focusing on developing a domestic exporting sector. Between 2000 and 2007, employment in Ireland expanded by 40 percent – in construction, public services, retail and distribution – while employment in the international tradable goods and services sector fell.”

It continues:

Alan Barrett, economist at the Dublin-based Economic and Social Research Institute, saw few viable options in the short term for Irish policymakers. “Ireland needs to regain its competitive edge so that it can position itself to participate in the global upturn. This means getting our cost structure into line with our competitors and will involve wage cuts,” he said.

Such cuts are a touchy subject in Ireland, as in most of EU states. While private enterprise is cost cutting, Mr. Barrett paints a different picture of Ireland’s public sector, saying, “The government will have to bring the unions around to this line of thinking.”

More upbeat is Robert E. Kennedy, executive director of the William Davidson Institute and a professor at Michigan’s Ross School of Business:

“…the success over the past 20 years of Singapore and Ireland is a sign that globalization is working. Traditionally, having a large home market was extremely important for development. Ireland and Singapore have outperformed the global economy by a large margin over the past 10 to 20 years.

“Ireland is very well positioned to be the services workshop of Europe and should hold on to and strengthen its position as the EU headquarters of many global firms. I am bullish on Ireland´s future. The present gloom is an overreaction.”

He also issued a cautious warning to Singapore:

“Offshoring and outsourcing are opening up next opportunities for firms and new competitive risks. Singapore has advantages in being close to China, but it’s a tough neighborhood, with lower-cost rivals with domestic market advantages, such as Malaysia, Philippines and Vietnam, ardently pursuing services exports.”

Simon Roughneen concludes:

Ireland and Singapore “got it” better than most during the past 15 to 20 years, but it seems to be an even bet on whether these recent bellwethers of globalization and prosperity get it going forward.

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  • Dave

    “Between 2000 and 2007, employment in Ireland expanded by 40 percent – in construction, public services, retail and distribution – while employment in the international tradable goods and services sector fell.”

    That is consistent with the export figures for those years which show that Ireland’s exports stagnated after it joined the eurozone, having enjoyed double digit growth under the Punt:

    Year Exports
    2000 83,889
    2001 92,690
    2002 93,675
    2003 82,076
    2004 84,409
    2005 86,732
    2006 86,772
    2007 88,852

    The provisional figures for 2008 and 2009 both show significant declines, with the figures for 2010 likely to be horrific.

    On the other hand, the real Celtic Tiger occured under the Punt when it was devalued in 1993 to boost exports:

    Year Exports
    1990 18,204
    1991 19,070
    1992 21,260
    1993 25,179
    1994 28,891
    1995 35,330
    1996 38,609
    1997 44,868
    1998 57,322
    1999 66,956

    The first decade was the Celtic Tiger and the second was the EU’s Phantom Tiger created by ECB’s expansionist monetary policy of cheap credit that led to massive debts and failed to create wealth.

  • kensei

    Dave

    The US ran into recession into the early part of the decade, and lots of other places slowed down. Guess what does to exports, particularly if you have built up IT in the dot com bubble? Correlation is not causation. Go right that out 100 times.

    You also cannot compare Ireland starting from a low base with a maturing economy. You do not get double digit growth forever. It simply cannot be supported. That said, there is a drop off in export growth. Whether that is down to the ECB or Irish Government policy or external factors or a combination of all three, you’ll have to do better than post up a list of figures.

  • Dave

    Kensei, sweet child, the reason that “employment in Ireland expanded by 40 percent – in construction, public services, retail and distribution” is because those were the sectors of the economy that were stimulated by the ECB’s expansionist monetary policy of cheap credit. Exports, on the other, stagnated and fell. That might have something to do with the high value of the Euro making Irish exports uncompetitive, ya think? Irish exporters think so, and that’s why the vast bulk of their business is now done within that backward zone and not outside of it.

  • Glencoppagagh

    Dave
    Did the ECB’s monetary policy create asset inflation in every Eurozone state? The answer is no, at least not to the extent that occurred in Ireland.
    You have to ask yourelf why did Ireland embark on such a dissolute binge. Was it simply ‘in your nature’ or is there a more technical explanation?
    By the by, I’m surprised that none of Slugger’s authorised bloggers have started a thread on the political consequences of all this for North and South: do these conditions advance the prospects of unity or set them back?

  • Dave

    By the way, Ken, what happens to the economy of a country that is built on the supply of cheap credit when that supply stops? Look around you. Those lovely bards selling 4k sofas and oak gloss kitchens can’t afford to pay their rent, and those fake jobs go to the wall. That is your Phamton Tiger economy.

    Glen, does every EU state have Ireland’s bricks-and-mortar fetish? The answer is no. Irish people have a huge fetish for property. Other cultures do not.

  • Driftwood

    Glencoppagagh

    I imagine the people losing their jobs by the thousand and those in businesses staring in to the abyss could care less about irish unity at the minute. Even the public sector workers in the republic probably about to receive a pay cut are looking wistfully at the secure Westminster subsidised jobs in NI and wishing they were in the same boat.

  • Mark McGregor

    Dave,

    ‘Glen, does every EU state have Ireland’s bricks-and-mortar fetish? The answer is no. Irish people have a huge fetish for property. Other cultures do not.

    It might help if your arguments were based on some element of fact. Even within the EU, Ireland is nowhere near the top of the property ownership table:

    http://www.eurofound.europa.eu/areas/qualityoflife/eqls/eqls2007/2eqls_01_02.htm

    Just making things up doesn’t lend credibility to any other arguments you may present.

  • Mack

    Dave, Glencoppagh, Kensei

    The Euro actually fell in value for the first few years of it’s existence.

    The “high” value of the Euro did not kill of Irish exports after 2001 for the simple reason the Euro was weak

    Both Kensei and myself work in IT, the 2001 bust was a depression in our industry and did serious damage to the real exporting economy. And not just in Ireland – also the USA.

    The response to this in the US was to cut interest rates and loosen monetary policy (Ye Olde Greenspan Put). Because of the damage to the real economy Europe (German exports slumping preventing recovery from the deep recession they were in) followed suit in reducing interest rates. The exporting economy in Ireland would have been devastated had this not happened.

    That is to say Ireland probably did need lower interest rates, but also given the nascent property bubble that was already evident by 2001 – Ireland needed strong regulation. Instead the regulator allowed lending standards for consumers & developers to be relaxed beyond belief. This is why our banks are bust and the Spanish banks are not (regulation actually tightened capital reserve ratios in Spain during the bubble).

    Do you remember the jobless recovery? Then the recovery that did not lead to pay rises for workers in the US? The real economy did not recover after 2001.
    Instead more real economy jobs shifted east.
    What happened in the Anglophone countries was that what iTulip.com describe as the FIRE economy (Finance, Insurance, Real Estate) expanded massively thanks to a property bubbles, and large demand for high yielding fixed interest securities (because other fixed interest sources paid desiory yields. These turned out to be mortgage backed securities).

    In Ireland the increase in tax take thanks to VAT on new builds and Stamp Duty (at up to 9%) on second hand properties was used to give massive pay hikes to public sector workers. This was then leveraged up and reinvested in property.

    There was huge demand for investment properties. We have 350k empties today, but were building 93k houses a year in 2006 (still over 50k in 2008) this is half the number of houses built per anum for the whole of the UK. This huge demand for housing, meant huge demand for construction workers, who regularly took home pay packets of 100-150k per anum. Guess what they did with that money? Yep, many leveraged it up and reinvested in property.

    Given the loss in Irish competitiveness over the period (2001-today) due to the property boom and it’s associated feedback loop and the intense competition from the East – the Irish real economy seems to have held up pretty well.

    Dave
    Devaluing you currency is not a path to wealth. All you are actually doing is sell the same goods and services for less. So why not sell them for less, if you can only compete on price?

    Mick
    Don’t forget the excellent legal system with solid protection for property rights that exists in both Ireland and Singapore, but not many of those cheaper competitors.

    Also, as a commentator said recently (forget which one), would you rather buy a pace maker made in one of those economies – or one made in the well regulated EU?

  • kensei

    Dave

    It’s not “my” anything, I think you will find me quite free of responsibility for Ireland’s current mess. Britain and the US followed similar policies; there is no certainty that an independent Irish Central Bank would have done much differently. Nor have many other countries got themselves in as deep a hole as Ireland has. Rather than than trying to externalise blame, perhaps you’d be rather better laying at the door of the people in control of public policy for the past 10 years.

    Irish exporters think so, and that’s why the vast bulk of their business is now done within that backward zone and not outside of it.

    First up, are you asserting without evidence, or have you got anythign to back up what “Irish epxorters” think? Second, increased trade within Europe is a natural consequence of joining a free trade area and furthermore a single currency. That is 100% what you would expect to happen; you’ll find the UK does most of its business with the EU too.

    You might be right that it is all the fault of the EU and the Euro (with apologises to the “Shinners”, obviously). But you’ll need a somewhat better quality of argument.

  • Mack

    Driftwood
    Even the public sector workers in the republic probably about to receive a pay cut are looking wistfully at the secure Westminster subsidised jobs in NI and wishing they were in the same boat.

    Given the pay differentials (Irish public sector workers nominal pay is over 30% higher), differentials in working conditions (for example Irish teachers get paid an additional 2,000 euro if they agree to baby sit other teachers classes during their ‘free’ periods. They only actually need teach something like 21 hours per week), and much more generous pensions (Irish public sector pensions are linked to pay increases – not inflation) I very much doubt that they do.

    In fact it’s a pretty common tactic for their opponents in debates to compare their conditions to the UK – with apoplexy the response.

  • Mack

    Snapshot of Irish lending standards

    1999

    Second hand properties

    2.5 times main earners salary + 0.5 times second income

    New properties

    LTV < 90% often 80% or lessCapital Repayment loans onlyHistory with bankAs above2006Second hand properties6-7 the combined income of both couples. With absolutely any bonuses, overtime etc. included in the calculation of income when purchasingNew propertiesOften whatever the value of the property was - if you go through the 'nominated' deniable mortgage broker.LTV up to 120%Interest Only loansNo skin in the game (no history with bank)Huge loans available for investors / speculators.----------------- Developers could borrow pretty much whatever they wanted based on estimated unit sales price - regardless of the developers actual ability to repay in more difficult times.-------- The banks didn't fund this out of deposits - the borrowed heavily on the wholesale markets and leant the money out. As the borrowed wholesale money gets spent on Irish property, wages, services - that money then ends up on deposit (in Developers, builders, solicitors, accountants bank accounts) boosting the deposit base before getting leant out again. This was a huge feedback loop.---------- I hope these comments help clarify how the scale of the bubble was caused by loosening of credit restrictions in Ireland, by the banks, with the tacit support of the regulator.

  • PaddyReilly

    Does every EU state have Ireland’s bricks-and-mortar fetish? The answer is no. Irish people have a huge fetish for property. Other cultures do not.

    Irish people have, mainly through excessive exposure to the English language and Anglo-American culture, absorbed the prevailing property fetish within that culture. This has caused the value of property to be pushed upwards in a disastrously unsustainable fashion, creating a bull market which has eventually been replaced by a bear market, which is the root of all our present problems.

    The high value of the Euro making Irish exports uncompetitive

    Currency deflation is like swallowing acid to cure cancer. Having a fixed currency like the € prevents governments from taking this easy but ultimately ineffective route to reducing prices.

    It’s not that Irish exports are uncompetetive: as a 1st world country Ireland specialises, in the same way as Switzerland, in producing luxury and techno goods and services which are not subject to the same forces of competition that 3rd World Countries have to put up with. If you’re a banana republic, you’d better make sure your bananas are the cheapest in the world, or the buyers will go elsewhere. Hence devaluation characterises 3rd World economies.

    With Switzerland, the actual price of the watches produced is irrelevant: but you have to make sure your watches are the best and most fashionable in the world, otherwise the buyers will go elsewhere. Hence, deflation is not particularly useful to a 1st World economy.

    The problem is more that irish labour costs have become uncompetitive, hence the exit by Dell. This is because the Irish minimum wage is too high, because Irish goods and services are too high, because Irish property costs are too high. The rectification will come, as the man said, when Irish property loses 80% of its value.

    do these conditions advance the prospects of unity or set them back?

    Given that the UK and Republic and US are all in this mess together, logically it would make no difference.

    But there is one way in which it could be of use. The number of unemployed in the Republic is now huge, 300,000 likely to rise to 400,000. How many of these are of Northern origin?

    All we need is legislation which allows persons unemployed in the republic to reside in the 6 counties. Then that proportion of the workforce which originates in that area will want to return home, because costs are so much less there, their money will feel more like a wage than the dole. If this happens the fragile Unionist majority will probably disappear overnight, paving the way for Nationalist control if not unity.

  • Driftwood

    Mack
    Surely those public sector wages in the Republic are unsustainable. Any idea of the differential on unemployment benefit between the 2 jurisdictions?

  • PaddyReilly

    Mack. Good post. But try to remember to write per annum not per anum. By the year, not by the arsehole.

  • Greenflag

    Mack ,

    Excellent post. Blaming the Euro for the greed of our banking , construction and building investor sectors is a cop out . Dave knows it to but it suits his ‘political ‘ viewpoint which is neo con

    paddyreilly,

    ‘But try to remember to write per annum not per anum. By the year, not by the arsehole. ‘

    LOL;) -perhaps mack was subconsciouly addressing at least one ‘anum ‘ .

    Mack

    ‘Devaluing you currency is not a path to wealth.’

    You might think that . The Weimar German Government did’nt and the present day Zimbabwean Govt don’t . The latter two regimes are were and are not noted for their great ‘wealth’.

  • Glencoppagagh

    Driftwood
    I was just thinking that if the dismal prognosis for the Irish economy is validated, it looks like an exceptional opportunity for SF to make electoral hay. If they can’t then surely they have no long-term future south of the border. How might that affect their own thinking on reunification?

  • George

    Dave,
    you’re ignoring the VAT carousel fraud impact on those export figures post 2000. Unless you strip this out the figures you cite are meaningless.

  • Driftwood

    Glencoppagagh
    The Irish and UK economies are both in dire straits. I dont see any of the local parties making capital out of a global crisis/downturn that was merely exacerbated by the ‘head in the sand’ groupthink of both governments.
    NI, with its huge public sector financed by the GB taxpayer, may have a lot to be thankful for to them.
    Mack has posted on the generous salaries paid to public sector workers in the RoI, but the golden goose is about to stop laying there.
    The Stormont Executive has little power to do anything except dole out the Treasury subvention.

  • Mack

    Glencoppagh

    There is little in this for Sinn Fein. The Anglogate scandal is highlighting Fianna Fail corruption and cronyism. SF may try to point fingers, but in the real world everyone knows their history. That’s not to say they may not get votes from the disaffected, but it would be political suicide for other parties to coalesce with them at the minute.

    Fine Gael will benefit, Labour will mop up the socialist vote (that wants to get into government) and the public sector will turn them for protection.

    One idea floating around is a government of national unity. I’d support that – but Fine Gael and not FF should be in the driving seat. The country needs cleaned up.

    http://www.thepropertypin.com/viewforum.php?f=46&sid=17f3cfaf08f38efac89c7ca75e9967e7

    Driftwood

    How sustainable the gap is depends on what happens in both economies. Also remember personal tax rates are substantially lower in the south.
    There will undoubtedly be cut backs of some sort. Whether it evens pay and conditions up between the two states will depend on the relative seriousness of the collapse in the two economies.

    Ireland’s GDP per capita is about 30% above the UKs. (Although it is taxed at a lower rate, in particular corporation taxes on profits earned by multinationals in the EU)

  • Mick Fealty

    A minor footnote to that Mack, Labour is giving Arthur Morgan a third of their segment to speak in the Dail debate this afternoon.

  • Oilifear

    Dave, Ireland joined the Eurozone in 1999, not 2002. 2002 was when coins were issued. Don’t you ever get tired of blaming the EU for everything? In the same way that we get tired of listening to you? Change the record or at least do to us the favour of getting your facts straight.

    The real sting is that the current crisis is home-grown. We got lazy and drove our energies into the false economy of a property boom rather than concentrating them on what actually mattered: the competitiveness and business focus that enabled the boom to begin with.

    Property booms look great on paper – high growth, high net worth – but without a genuine economy behind them they day will come when you are left jobless in a big house you cannot afford. The headiness of the last days of the Celtic Tiger, the blinding arrogance of it all, has cost us dearly. It will take another half decade to turn that around.

  • Mack

    Driftwood

    Unemployment benefit is around 200 yoyos per month in the south. I’m not sure, but I would guess that would be higher than in the north.

    This crisis aside the south should have some combination of better benefits and lower taxes than in the UK because of the higher GDP per capita and a better dependency ratio (more workers per dependent).

    Paddy Reily

    A couple of hundred thousand despondent economic migrants to the north may also provide some ripe pickings for non-tribal Unionism should that situation come about. Why migrate from one state to another, only to vote yourself back into the state from which you just came – particularly if that state has collapsed?
    I could see this happening with respect to the bankruptcy laws in Ireland – with newly bankrupt ex-jumbo mortgage holders heading north for a clean slate. How likely would they be to vote themselves back into bankruptcy?
    It is already possible to claim unemployment benefit for a period in another juristiction – as long as you are looking for work.

  • Dave

    “Just making things up doesn’t lend credibility to any other arguments you may present.” – Mark McGregor

    And it might help if you (a) followed the argument, (b) acquainted yourself with the facts, and (c) learned how to read your own linked chart.

    In regard to (a): the argument is why other states within the eurozone (and not states within the EU) did not invest as much borrowed money into property as Ireland did due to the monetary policy of the ECB (not appliacable to EU states who are not members of the eurozone).

    In regard to (b): Ireland has one of the highest home ownership rates in the world, with 80% of households living in the tenure. In addition, that fetish was reflected in it having the highest per capita house building rate within the EU.

    In regard to (c): your chart refers to those who own their home without a mortgage.

    “Devaluing you currency is not a path to wealth. All you are actually doing is sell the same goods and services for less. So why not sell them for less, if you can only compete on price?” – Mack

    The success of a currency devaluation depends on whether or not the fall in price is offset by the increase in the quantity of exports. The other advantage is that is discourages imports, creating opportunities for import substituion among smaller Irish manufacturers. In addition, control of the currency gives a country the flexibility it needs to stimulate and generally regulate its economy through appropriate monetary policy. In a country like Ireland which made a decision to attract foreign manufacturers here, removing the ability to use monetary policy to regulate exports was a demented decision. The last time Ireland devalued was in 1993, and that boost to out competitiveness was the start of the export-led Celtic Tiger. If you think struggling Irish manufacturers (afflicted with the second highest wage rates in the EU and an insanely high euro) can afford to cut their prices, then you are out of touch with reality.

    “But you’ll need a somewhat better quality of argument.” – Kensei

    Either that or you’ll have to make your way to the Irish Exporters Association and the CSO website as no-one is paying me to be the link runner boy. 😉

    “you’re ignoring the VAT carousel fraud impact on those export figures post 2000. Unless you strip this out the figures you cite are meaningless.” – George

    Funnily enough, I thought of this but now on earth can it be shown when the figures I used are from the CSO and they make no such adjustment for VAT fraud? Someone will have to do the math.

  • Dave
  • Mack

    Dave – They could if they cut wages & headcount, or invested in new technology. If they hadn’t let costs run out of hand. What you are proposing is that everyone take a paycut and a drop in their savings just to help out businesses that let their costs overrun in the good times.

    It’s not that the Euro is string it is that Sterling is weak. Exporters import costs are not rising (if they import parts from the UK – ? no didn’t so! – those prices would be falling too). Prices of all UK imports will likely rise soon too.

    If they are not competitive, can can’t manage to compete – they will go out of business and what remains will be stronger.

    To reduce the arguments for competitive devaluations in absurdium – why not devalue the currency such that we are the poorest country in the world with the lowest standard of living? That way we can beat everyone on price.

    Time to up our game and figure out a better way to compete, no?

  • niall

    glencoppagagh,

    I think the collapse of the southern economy is an opportunity for the Unionists if they can behave like grown ups.

    They could gloat and bang on to the tune of “stick with the union and be safely subsidised by London” or they could go with “the Celtic Tiger was great but would you ever trust the politico’s in Dublin?”

    I’m a northern nationalist and yet the arrogant partitionist arseholes I have had the misfortune to work with in Dublin in recent years which has been indicative of a consumer culture has turned me right of the new ireland project.

    Also I’d like to think that with the right attitude NI could emerge as a leading economic force. The cards are stacked in our favour over our our southern cousins.

  • Greenflag

    niall,

    ‘The cards are stacked in our (NI’s )favour’

    ‘I’ll raise you a 70% public sector economy linked to sterling faced with budget cuts, against a lower income tax rate and 30% higher incomes in euros ‘

    Looks to me like ‘beggar my neighbour ‘ will eventually rebound on those holding a deck of 6 cards instead of 26 😉

  • PaddyReilly

    Why migrate from one state to another, only to vote yourself back into the state from which you just came – particularly if that state has collapsed?

    Well obviously, it wouldn’t be a migration, because they would merely be returning home, temporarily, when there was no money in the big smoke. And continuing to take the Republic’s wages.

    The Irish Republic has not collapsed, is not going to collapse. It merely does not offer as many jobs as it used to do. The worst that will happen is that it will be no richer than the U.K.

    And as for the absurdity of voting yourself back into the economic circumstances you have just come from, that is a well established part of human behaviour. Think of Black Africans, who moved to white areas in South Africa to escape the endemic poverty created by African run states: and then rioted and voted themselves into an African run state! Think even of Northern Irish Protestants who migrated from England and Scotland to take up the opportunities in Ireland, and then voted themselves back into a British state! Why?

    How likely would they be to vote themselves back into bankruptcy?

    Perhaps not. But this presupposes that political unity means immediate extinction of separate jurisdictions. As the Union of Crowns in Gt Britain shows, this is not the case: nearly 300 years later Scotland & England are still separate domiciles, and beginning to diverge again. But what they would do is vote a Fenian government into power in the north, and when their 7 years was up, join with the unity vote.

  • British Barry

    I predict that within the space of 10 years, the Irish republic will have returned to the motherland. ie UK

  • Driftwood

    Unemployment benefit is around 200 yoyos per month in the south. I’m not sure, but I would guess that would be higher than in the north.

    Mack, unless you mean 200 euros per WEEK, then NI/UK benefit at just over £60 per week (£240 per month)would make NI a better option to be on the dole. And vice versa (big time)if you did mean week.
    It would seem some unemployed people would be well placed to take advantage of this anomaly in the current climate, in either jurisdiction…..
    A lot of people in Kilburn will deffo be on the next Ryanair flight to Dublin, or a lot of people in Dublin will be heading back east.

  • Mack

    Sorry Driftwood it’s around €200 per week. €800 per month with an additional €1000-€1200 rent allowance per month.

    http://answers.yahoo.com/question/index?qid=20080611004749AAQkYyJ

  • Oilifear

    Mack and Driftwood, I think you are comparing apples and oranges.

    Mack, that’s about how much a single person not living with at home gets in Ireland. If they were in a relationship or living with their parents they get around about £60 that Driftwood is offering.

    Driftwood, that sounds like the basic rate. If you tot up all of the benefits a single person not living at home would come out with it comes to about the same as what Mack is offering.

    http://www.welfare.ie/EN/Schemes/JobseekerSupports/JobseekersAllowance/Pages/ja.aspx

    http://www.jobcentreplus.gov.uk/JCP/stellent/groups/jcp/documents/websitecontent/dev_015666.pdf

  • Mack

    Ollifear – I don’t know about that. According to that link – deductions only apply to those under 24 – based on parents incomes.

    I went through the process of signing on in the UK some years ago, living away from home, my total weekly dole was less than Driftwood’s figures (I guess it has increased since then). Friends of mine wound up signing on the south a few years later during the tech bust. They were getting a lot more than I was just a few years earlier in the UK.

    What additional benefits (aside from either Income Support or Job Seekers Allowance – only one of those – and housing benefit) would a 30 year old living in rented accomodation in Belfast be entitled to?

  • PaddyReilly

    Fresh concerns about the British economy and fears for the stability of the UK’s financial system pushed sterling to new record lows against the dollar, euro and yen yesterday.

    One of the world’s leading investors voiced the markets’ concerns. Jim Rogers, of the Singapore-based Rogers Holdings and co-founder of the Quantum fund with George Soros, told Bloomberg Television:

    “I would urge you to sell any sterling you might have. It’s finished. I hate to say it, but I would not put any money in the UK.”

    Mr Rogers added that the pound will fall below its record low of $1.0520 reached in February 1985.

    http://www.independent.co.uk/news/business/news/jim-rogers-sell-any-sterling-you-might-have-its-finished-1452384.html

  • Mack

    Paddy – he also reckons the Dollar is headed the same way once this period of forced selling ends and that although he prefers the central bankers running the Euro that political tensions will spell it’s doom. Time well tell I guess.

  • Mack
  • RepublicanStones

    “Even the public sector workers in the republic probably about to receive a pay cut are looking wistfully at the secure Westminster subsidised jobs in NI and wishing they were in the same boat.”

    As one of the aforementioned ‘public sector workers in the republic’ I would have to disagree. As my representative body/union is still in negotiations with Biffo’s boys and the final decision is still pending as to whether it will be everyone or if it will be beginning at a certain rate. There is also discussion of axing proposed benchmarking which is IIRC currently frozen and certain subsidies, all this before is up in the air before we even get to the pay. Allegedly people earning between 50-100k in the public sector outnumber those in the private, so perhaps the brunt of any attempt to fasten the public sector belt will be beared by people in this bracket. (Hopefully…poor me :()

    Also as the ISME claims “there has been a 118% increase in public sector pay and pensions in the last eight years.” There is a few retired ex public servant personnel recieving pensions in excess of any salary they ever recieved. It will be interesting to see if the govt decides these are for downsizing as well (would that be legal?)

  • eranu

    i was on the dole in dublin in 2003, it was about €116 a week if i remember right. i think its about €211 a week now. they love giving money away down south!