Peter Schiff : The Irish Should Default On Their Debt, Not Become Slaves To Bankers

Tea Party Patriot

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Leading Austrian Economist Peter Schiff on why Ireland should default on it's debt.

For those of you unfamiliar with Schiff he was one of the first economists to call the current worldwide financial crisis. Here he explains that defaulting on our debt would mean nothing more than the government being unable to borrow more money in the short term, which he says would be "Good news for the Irish people"

YouTube - 11/24/2010 Peter Schiff : The Irish Should Default On Their Debt, Not Become Slaves To Bankers
 


Luigi Vampa

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Leading Austrian Economist Peter Schiff on why Ireland should default on it's debt.

For those of you unfamiliar with Schiff he was one of the first economists to call the current worldwide financial crisis. Here he explains that defaulting on our debt would mean nothing more than the government being unable to borrow more money in the short term, which he says would be "Good news for the Irish people"

YouTube - 11/24/2010 Peter Schiff : The Irish Should Default On Their Debt, Not Become Slaves To Bankers
Good Video.

More advice here. Screw the billionaires. It's time to default. The sooner the better

http://www.guardian.co.uk/commentisfree/cifamerica/2010/nov/22/ecb-ireland-bailout-argentina

http://www.guardian.co.uk/commentisfree/2010/nov/23/ireland-must-decouple-and-default

http://www.guardian.co.uk/commentisfree/cifamerica/2010/nov/19/ireland-bailout-brian-cowen
 
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Cassandra Syndrome

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Leading Austrian Economist Peter Schiff on why Ireland should default on it's debt.

For those of you unfamiliar with Schiff he was one of the first economists to call the current worldwide financial crisis. Here he explains that defaulting on our debt would mean nothing more than the government being unable to borrow more money in the short term, which he says would be "Good news for the Irish people"

YouTube - 11/24/2010 Peter Schiff : The Irish Should Default On Their Debt, Not Become Slaves To Bankers
He may claim to be Austrian School, but he isn't really. There is a tad of Chicago School there and he backed the war in Iraq and agrees with taking out Iran.

Austrian School is strictly anti war.
 

cocopoppyhead

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thanks for the link, seems the right people are talking to our gov, sadly their advice is falling on deaf ears.
 

JCR

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Leading Austrian Economist Peter Schiff on why Ireland should default on it's debt.

For those of you unfamiliar with Schiff he was one of the first economists to call the current worldwide financial crisis. Here he explains that defaulting on our debt would mean nothing more than the government being unable to borrow more money in the short term, which he says would be "Good news for the Irish people"

YouTube - 11/24/2010 Peter Schiff : The Irish Should Default On Their Debt, Not Become Slaves To Bankers
So default would mean the government couldnt borrow money, thats all. Ah great so. Peter Schiff of course couldn't careless about the Irish people. What does he suggest Irish people eat when the banks close down and public services fall apart and rioters and civil make any business that has cash reserves (not that many do) close down and just hoard the reserves. Is this basically just the same as all those people saying 'call in the IMF' and then they find out what the IMF actually do to countries? So we default and all this happens - ok maybe not all and maybe not to a dramatic degree but nonetheless people start to go hungry etc etc. He may be talking about an orderly planned default which would not be as bad maybe, but where does Ireland magically find people to borrow from in the medium term? Bond markets? Yeah right. The magical growth that would occur would make it all ok? yeah right. Just saying default default default is reckless. Contagion will mean the EU wont have the money to bail us out and the IMF is more concerned with the banks being bailed out than people. Who pays this guys wages? How many people would make a lot of money on an Ireland default? How many 'commetators' can be trusted? The only game in town is debt forgiveness, there is no other way possible.
 

Padraigin

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One additional benefit to a default:

As the economist Schiff points out, a default may hurt the credit rating of the Irish government and likely impair their ability to borrow more money from foreign banks.... which is excellent news to the Irish people. With government debt curtailed, the Irish economy will be free to grow and grow.

A default is good news all around.
 

Kalan

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Interest rate

A lot depends on the interest rate the IMF/EU will charge. Anything above 5% and the debt is unsustainable apparently.
"The more pressing question surrounding the bail out is the interest rate.
Numbers coming out of the City are that it will be somewhere above 6%, which economists say is unsustainable."
Ireland's austerity measures - next stop default? | Business | guardian.co.uk
 

Cael

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The private sector is too weak in Ireland to do anything - default or not. What we need to do is reject these bankers debts and the FF criminals who tried to saddle us with them, and begin a massive program of state enterprise. A state which has no debts will have no problem borrowing money, technology and equipment from a large variety of sources all over the world. Our oil and gas fields along with our nationalised land will ensure a bright future for all the Irish people - as opposed to the decades of debt-slavery and immigration that FF\FG\Labour have planned for us.
 

Padraigin

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So default would mean the government couldnt borrow money, thats all. Ah great so. Peter Schiff of course couldn't careless about the Irish people. What does he suggest Irish people eat when the banks close down and public services fall apart and rioters and civil make any business that has cash reserves (not that many do) close down and just hoard the reserves. Is this basically just the same as all those people saying 'call in the IMF' and then they find out what the IMF actually do to countries? So we default and all this happens - ok maybe not all and maybe not to a dramatic degree but nonetheless people start to go hungry etc etc. He may be talking about an orderly planned default which would not be as bad maybe, but where does Ireland magically find people to borrow from in the medium term? Bond markets? Yeah right. The magical growth that would occur would make it all ok? yeah right. Just saying default default default is reckless. Contagion will mean the EU wont have the money to bail us out and the IMF is more concerned with the banks being bailed out than people. Who pays this guys wages? How many people would make a lot of money on an Ireland default? How many 'commetators' can be trusted? The only game in town is debt forgiveness, there is no other way possible.


Default is more a currency crisis than anything else. If you know that a default is coming, you prepare for it to minimize the impact. Both governments, companies, and individuals can take steps to prepare for the default and, with proper planning, can avoid much of the pain. The main thing is to avoid holding too much money in cash in the old currency, as this could lose most or all of its value.

Prudent governments generally impose a temporary price freeze to maintain as much value in the old currency as possible until the new currency can be introduced. Ireland could take advantage of the default to get out of the eurozone altogether, restore its own currency, and regain its ability to set its own fiscal policy and regains some of its lost sovereignity.

The good thing about a default is that it is over relatively quickly, sometimes in a matter of weeks or months. Then everyone moves on with the debt cleared and with a new currency. A fresh start for everyone.
 

HOPE4EIRE

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Would it be possible to raise the required funds from the Irish people? Some sort of patriotic bond? I mean the money we need to keep the state running. Have i not heard/read that "there is still lots of money in Ireland"?

Am I just deluded?
 

Tea Party Patriot

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So default would mean the government couldnt borrow money, thats all. Ah great so. Peter Schiff of course couldn't careless about the Irish people. What does he suggest Irish people eat when the banks close down and public services fall apart and rioters and civil make any business that has cash reserves (not that many do) close down and just hoard the reserves. Is this basically just the same as all those people saying 'call in the IMF' and then they find out what the IMF actually do to countries? So we default and all this happens - ok maybe not all and maybe not to a dramatic degree but nonetheless people start to go hungry etc etc. He may be talking about an orderly planned default which would not be as bad maybe, but where does Ireland magically find people to borrow from in the medium term? Bond markets? Yeah right. The magical growth that would occur would make it all ok? yeah right. Just saying default default default is reckless. Contagion will mean the EU wont have the money to bail us out and the IMF is more concerned with the banks being bailed out than people. Who pays this guys wages? How many people would make a lot of money on an Ireland default? How many 'commetators' can be trusted? The only game in town is debt forgiveness, there is no other way possible.
To try and answer you questions:
1. I am sure he means an ordered and structured default primarily on the debt of the banks.

2. The Government have €31 billion a year in tax revenues, they would have to live within their means, when you would knock off the ridiculus amounts of interest on the debt the cuts they would have to make would not be as harsh as the ones they are making now.

3. We may possibly have to leave the Euro, I don't see this as a problem as the Euro is on it's way out anyway. When Spain and Portugal have to be bailed out, possibly followed by an Itallian default then it's game over for the Euro as a currency. Mark my words within twelve months to two years the Euro will not exist, at least not in it's current form.

4. Schiff has been spot on with his calls to date and is respected as an independant commentator.
 

Padraigin

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A lot depends on the interest rate the IMF/EU will charge. Anything above 5% and the debt is unsustainable apparently.
"The more pressing question surrounding the bail out is the interest rate.
Numbers coming out of the City are that it will be somewhere above 6%, which economists say is unsustainable."
Ireland's austerity measures - next stop default? | Business | guardian.co.uk


All negotiations with the EU and the IMF should stop, as these are all predicated on the assumption that the Irish people "must" find a way to pay 80- 120 billion euros of (fraudulent and unlawful) bank debt to foreign investors. If all you are worried about is the interest rate, you are already accepting the destruction of the Irish economy.

Nobody should be agreeing to accept and repay this unlawful bank debt in the first place.

One very good reason is that it would destroy the economic base of Ireland for generations, and destroy the economic future of generations of Irish people.

The other very good reason is that it was unlawful for members of the Irish government to have gratuitously given such a blanket guarantee to foreign bond holders in the first place (1) without the requisite authority to do so and (2) based upon fraudulent misrepresentations by the failing banks.

In other words, this "debt" was void ab initio. The bond holders assumed the risk that the bonds could not and would not be repaid. They simply need to be told so clearly and unequivocally.

There is really nothing to negotiate. The EU and IMF should be told to leave and accept that they will need to collect that bank debt from the banks (good luck with that) and no one else.
 

JCR

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Whatever Pete says about the economy you do it.

JCR,

Its not his job to care about the Irish people. He's simply telling us about the facts. The children of Ireland are choking on debt for your services.
So whatever an economist says you do it? I don't think so, they are all grabbing at thin air right now because the truth is nobody at all knows what is going to happen next. I'm not suggesting keep racking up the debt at all. That game is over, thats the only sure thing. But what happens after we default? Growth? From what now exactly? Exporting what to who? From waht industries? Ones we start up? From what funding? Bond markets?
 

dent

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A lot depends on the interest rate the IMF/EU will charge. Anything above 5% and the debt is unsustainable apparently.
"The more pressing question surrounding the bail out is the interest rate.
Numbers coming out of the City are that it will be somewhere above 6%, which economists say is unsustainable."
Ireland's austerity measures - next stop default? | Business | guardian.co.uk
I invite you to peruse Morgan Kelly's article in the IT of Nov 8 2010, where he said

With a sufficiently low interest rate on what we owe to Europe, a combination of economic growth and inflation will eventually erode away the debt, just as it did in the 1980s: we get to survive.
How low is sufficiently low? Economists have a simple rule to calculate this. If the interest rate on a country’s debt is lower than the sum of its growth rate and inflation rate, the ratio of debt to national income will shrink through time. After a massive credit bubble and with a shaky international economy, our growth prospects for the next decade are poor, and prices are likely to be static or falling. An interest rate beyond 2 per cent is likely to sink us.
This means that if we are forced to repay the ECB at the 5 per cent interest rate imposed on Greece, our debt will rise faster than our means of servicing it, and we will inevitably face a State bankruptcy that will destroy what few shreds of our international reputation still remain.
Why would the ECB impose such a punitive interest rate on us? The answer is that we are too small to matter: the ECB’s real concerns lie with Spain and Italy. Making an example of Ireland is an easy way to show that bailouts are not a soft option, and so frighten them into keeping their deficits under control.
Given the risk of national bankruptcy it entailed, what led the Government into this abject and unconditional surrender to the bank bondholders? I have been told that the Government’s reasoning runs as follows: “Europe will bail us out, just like they bailed out the Greeks. And does anyone expect the Greeks to repay?”
The fallacy of this reasoning is obvious. Despite a decade of Anglo-Fáil rule, with its mantra that there are no such things as duties, only entitlements, few Irish institutions have collapsed to the third-world levels of their Greek counterparts, least of all our tax system.
And unlike the Greeks, we lacked the tact and common sense to keep our grubby dealing to ourselves. Europeans had to endure a decade of Irish politicians strutting around and telling them how they needed to emulate our crony capitalism if they wanted to be as rich as we are. As far as other Europeans are concerned, the Irish Government is aiming to add injury to insult by getting their taxpayers to help the “Richest Nation in Europe” continue to enjoy its lavish lifestyle.
As usual, Morgan Kelly is hitting the spot again, no matter what that buffoon Liarehan and his cronies might say.
 

Goban Saor

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So whatever an economist says you do it? I don't think so, they are all grabbing at thin air right now because the truth is nobody at all knows what is going to happen next. I'm not suggesting keep racking up the debt at all. That game is over, thats the only sure thing. But what happens after we default? Growth? From what now exactly? Exporting what to who? From waht industries? Ones we start up? From what funding? Bond markets?
Peter Schiff isnt just any economist. He's one of the few that gets it right.
 

JCR

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To try and answer you questions:
1. I am sure he means an ordered and structured default primarily on the debt of the banks.

2. The Government have €31 billion a year in tax revenues, they would have to live within their means, when you would knock off the ridiculous amounts of interest on the debt the cuts they would have to make would not be as harsh as the ones they are making now.

3. We may possibly have to leave the Euro, I don't see this as a problem as the Euro is on it's way out anyway. When Spain and Portugal have to be bailed out, possibly followed by an Itallian default then it's game over for the Euro as a currency. Mark my words within twelve months to two years the Euro will not exist, at least not in it's current form.

4. Schiff has been spot on with his calls to date and is respected as an independant commentator.
Well maybe you are sure he means an orderly default but how do you suggest that takes place right now? How does he? Just saying default now isn;t much help at all.

As reagrds point 2 - I think that it is not possible to have a viable state next year if the government tries to live off its tax revenues alone. At least not a modern one, it would be more like a collapse into a third world economy. Yes we need to live within our means, it can't be done overnight which is what a default would enforce us to do. Its not possible - where would funding come from - the IMF - thats where default countries go for funding.

Point 3 - the euro may not exist in two years, that doesn't feed people tomorrow when we have no banks.

Point 4 - He may be respected but these times are a totally new ballgame, one country defaulting when the world economy is doing ok is very different to defaulting when all is in chaos.
 

JCR

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Default is more a currency crisis than anything else. If you know that a default is coming, you prepare for it to minimize the impact. Both governments, companies, and individuals can take steps to prepare for the default and, with proper planning, can avoid much of the pain. The main thing is to avoid holding too much money in cash in the old currency, as this could lose most or all of its value.

Prudent governments generally impose a temporary price freeze to maintain as much value in the old currency as possible until the new currency can be introduced. Ireland could take advantage of the default to get out of the eurozone altogether, restore its own currency, and regain its ability to set its own fiscal policy and regains some of its lost sovereignity.

The good thing about a default is that it is over relatively quickly, sometimes in a matter of weeks or months. Then everyone moves on with the debt cleared and with a new currency. A fresh start for everyone.
All well and good. But were does funding come from in this day and age after default? And what industries in Ireland will provide the growth necessary after default? Its no magic bullet and with the kind of politcians we have its just as possible we slip into third world economics as anything else. Would you lend to Ireland? Would you?
 


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