More drilling down to the bedrock of what we are faced with on this ‘rock’ in the Atlantic Ocean.
Can I add the following.
The ‘debts’ private interests generated by running the banking system as a ‘POnzi property bubble making credit out of thin air machine’, these ‘debts’ these ‘lending black holes’ to crony networks, these debts, are, been, passed, transferred, over, too, the, national debt, the sovereign debt, the private banking debts are been crossed over onto the sovereign, national debt of Ireland.
So, the question then becomes the following……………………………………………..
How far can the NATIONAL DEBT, THE SOVEREIGN DEBT be elasticated.
What elasticity is there in Irelands NATIONAL DEBT < SOVEREIGN DEBT in taking ‘lashings of the ‘ol’ private debt slung onto it.
This is *what* the private interests and elites are gambling away on, how much more extra private debt can be mounted onto the sovereign debt before it CANNOT BE.
There are 2 limits. The first is how long international bond holders will send us more money or whether they refuse to lend anymore. Second is related to this, how much can taxpayers be put on the hook to service their debt before refusing or unable to take anymore. How much pain can be withstood? There is the question of whether the euro will have an almighty bang/implosion call it what you will.
But, this be the case, the ‘insiders’, the ‘bankocracy’ are purposely pushing their private debts astronomical quantities onto these limits which means are they deliberately pushing debt ratios passed the GDP 100% demarcation point?
Irelands plunging GDP
Ireland’s debt to GDP up to 2009 http://bit.ly/b4bBBc
Read the reports here http://www.irisheconomy.ie/
Morgan Kelly forecasts debt to GDP for Ireland to rise to 115%
wills> How much elasticity is there in Irelands NATIONAL DEBT
It depends on how well the euro countries can manage the debt as a collective and in unison. In theory, the debt level could strrrrrrretch as high as Japan’s for the eurozone, so 200% of GDP euro debt for euro land.
Debt has NO limit (in theory) IF (and thats a BIG IF) there is trust by the loaner to the loanee. A country, as long as it has sufficient people, doesnt (in theory) go bust forever – forever being the keyword. When Argentina, Russia defaulted, etc, those countries and their people still exist and are today still paying off debt – and newer debt!
In Japan, their debt is well managed internally it would seem, with Japanese Banks trusting Japanese Gov, and the banks being supported by the Jap Central Bank. Its a fiat money system. The Yen lost a lot of value from their credit bubble implosion back in 1988. The eurozone could follow the Jap model, and bring Ireland with it. It could also all implode into a debt spiral too and the eurozone system could break up. Its all about management and cohesion. So far, they aint doing so well. If the yanks are focussed on Greek debt we in euro-land are doing a very bad communications and pr job. And perception is everything in a trust fiat money system. Everything!
anon> There are 2 limits. The first is how long international bond holders will send us more money or whether they refuse to lend anymore. Second is related to this, how much can taxpayers be put on the hook to service their debt before refusing or unable to take anymore.
The first can be handled within the eurozone. We can credit ourselves! Yes, we can make money. Its fiat. Easy! The 2nd depends on people, politics, culture, etc. To change any economic and financial system would require MAJOR political change, upheavel, etc, revolutionary in nature. People, so far, are not rebelling and have been paying off the debts of their nation whether in the 1960’s, 70’s, 80′, 90’s, 00’s and well before that too. Debt is a tool. But a dangerous one if misused!
wills> which means are they deliberately pushing debt ratios passed the GDP 100% demarcation point?
There is no demarcation point. The 60% euro debt level target is just made up, as is 100%. You can easily live with a large debt as long as you are paying it off (at least the interest or some of it) or at least if its not ballooning out of control. So, its the rate of change of debt level (ie: dx/dy) rather than the absolute level in percentage terms. Japan is happily exporting away at 200% debt-to-GDP ratio.
Ironically, when the US gov took on 5 trillion (yes, thats a trillion) of ‘bad debts’ from Fannie and Freddie’s loan book of 12 trillion and ballooned the US gov effective debt by a whopping 35% or so, no-one batted an eyelid. When Greece fessed up that their debt was a few billion worse and about 14% negative this year, the perception was that Greece was near collapse. Perception folks.