Ronan,
Thanks for the post. Even more interesting that there have been no comments to date. Having left Irl in 1993 and only returned in the last 18mths I have never been able to fathom the rip off prices here. Yes prices will reach a level the market will bear – but it’s still difficult to explain. I recall Nov 93 at a UK conf. colleagues marvelling at the margins enjoyed in Irl food business, so high food prices go way back before the bubble. In the meantime there was the Punt/Euro conversion inflation too, followed by only a 2% rise in the last 6 yr as you point out.
Given your interest in policy, I would like to see you extend your thoughts to price direction given various “what if” scenarios.
Given the following; in the last 18 months there has been monetary inflation of $>40% GBP>34% EUR>31%; The US EU and UK are in rag order and will undoubtedly have to print vast amounts of fiat money. How can the average joe or anybody for that matter cope with such an inflationary scenario? If we are already at 20% above average where next? And how does a Government even begin to address this from a policy pov, especially when they have no experience doing anything?
I realise Central banks may lie, but assume for a moment that their declared foreign exchange reserves are accurate. Irl 6 tonnes gold at <14% of foreign exch. res. equivalent to EUR205m, Greece 111 tonnes at 79% of res. EUR3.8bn, Portugal 382 tonnes at 84% of res. EUR 13bn. Who is the mug in this group? If the EUR collapsed what collateral would we have to back our own currency to pay for imports? Or even in a more benign scenario where is the wealth of this nation besides its people? What policy are these geniuses following, or does it matter?
[…] of the mantras of Celtic Tiger Ireland was that it was a rip-off Republic. And indeed, by 2006, Ireland had overtaken Finland to become the most expensive place in the eurozone for consumer […]
Diarmuid ,
Ronan,
Thanks for the post. Even more interesting that there have been no comments to date. Having left Irl in 1993 and only returned in the last 18mths I have never been able to fathom the rip off prices here. Yes prices will reach a level the market will bear – but it’s still difficult to explain. I recall Nov 93 at a UK conf. colleagues marvelling at the margins enjoyed in Irl food business, so high food prices go way back before the bubble. In the meantime there was the Punt/Euro conversion inflation too, followed by only a 2% rise in the last 6 yr as you point out.
Given your interest in policy, I would like to see you extend your thoughts to price direction given various “what if” scenarios.
Given the following; in the last 18 months there has been monetary inflation of $>40% GBP>34% EUR>31%; The US EU and UK are in rag order and will undoubtedly have to print vast amounts of fiat money. How can the average joe or anybody for that matter cope with such an inflationary scenario? If we are already at 20% above average where next? And how does a Government even begin to address this from a policy pov, especially when they have no experience doing anything?
I realise Central banks may lie, but assume for a moment that their declared foreign exchange reserves are accurate. Irl 6 tonnes gold at <14% of foreign exch. res. equivalent to EUR205m, Greece 111 tonnes at 79% of res. EUR3.8bn, Portugal 382 tonnes at 84% of res. EUR 13bn. Who is the mug in this group? If the EUR collapsed what collateral would we have to back our own currency to pay for imports? Or even in a more benign scenario where is the wealth of this nation besides its people? What policy are these geniuses following, or does it matter?
Keep up the good work,
D
Slow and steady: Ireland’s competitiveness, five years on | Ronan Lyons ,
[…] of the mantras of Celtic Tiger Ireland was that it was a rip-off Republic. And indeed, by 2006, Ireland had overtaken Finland to become the most expensive place in the eurozone for consumer […]