December 21, 2015

All set for a cracker of a Christmas

Posted in Sunday Business Post · 60 comments ·

This Christmas, many of us are heading to family in different parts of the country, lots are returning home and yet more are coming back to Ireland from abroad. Conversations in houses will vary, but lots of families, particularly those from the country, will look around their hometown or village and speculate as to what has changed.

In the past seven years, most of those conversations will have centred on what place closed up or who has left for where.

Might this year’s conversations be the first in a decade that talk about what businesses have opened up, who has bought something and who is coming home to start a new business?

The latest figures on the economy definitely suggest that the national conversation is beginning to change.

Last Friday, the ESRI published its most optimistic forecast in years.

The institute now believes that the domestic economy grew by 5.2 per cent this year and it forecasts that this will continue again next year. (I’m using GNP here, not the more distorted GDP figure.)

Most encouragingly, it forecasts a drop in unemployment towards 7 per cent next year, bringing the total number of people working to above two million.

These types of numbers have led to the usual warnings about overheating. Such worries are premature.

When you still have an unemployment rate twice that of your two biggest trading partners, the US and Britain, there is plenty of capacity in the economy.

We are in a deflationary world and this looks set to last.

Even the latest evidence about the amount of wages paid out in the economy shows that although the economy is growing and employment is rising, wages aren’t going up.

In fact, last week numbers published on the total amount of wages (compensation of employees – as it is known in the jargon) shows that total wages peaked at an average of €21 billion per quarter at the end of 2008 but are now €18.1 billion, having slipped down to around €17 billion in 2010.

Given we are seeing wages not taking off and unemployment still high, this slack in the economy suggests it is far too early to worry about overheating.

Until the rate of unemployment is down to as low as possible, there can be no talk of overheating. And this expansion should be allowed to go for some while yet.

But why is it happening in Ireland when the rest of Europe remains firmly in the doldrums?

Aren’t we supposed to be linked to these countries? After all, we are in a currency union with them.

The reason for this divergence between Ireland and the rest of Europe is that Ireland isn’t a European economy in any meaningful sense. As a result, it’s hardly surprising that we diverge economically.

We are an Atlantic economy, not a continental economy. We have deep trade, investment and family links to the English-speaking world.

Most of our imports come from Britain, Dublin-London is the busiest air route in the world and over 85 per cent of our exports are generated by American multinationals based here.

Our world is the Atlantic world. When we lose our jobs we don’t emigrate to Italy or France – we go to Britain, the US or Canada. This is our world and it is forged by deep historic, financial and human links. The Atlantic is and has always been our trade route.

We are not a continental race, but an Atlantic one.

So when the Atlantic English-speaking economies are doing well, we do well. In the past few years the US and Britain have been growing strongly and they have helped to drag us out of recession.

There can be no better indicator of how divergent the European and the US economy is right now than the fact that last Wednesday the Americans raised interest rates, while the ECB is still cutting.

Quite how we ended up using a continental currency is beyond me, but that’s what has happened and this means the economy will always be a bit lopsided.

Right now when Europe is weak we get very low interest rates and a currency that is falling against our major trading partners.

This makes us hyper competitive – as evidenced by the huge increase in British and US tourists in Ireland this year.

The lower continental interest rates will also coax people to spend if they feel a bit more confident.

Confidence is the other part of the jigsaw, which explains why the consumer is back in significance in Ireland.

I have always believed in “the buzz”. There is an economic buzz, like there are all sorts of other buzzes.

When you are self-employed, the economic “buzz” is perceptible. You know when it’s not there and, if the buzz returns, you can sense it too.

This isn’t the most scientific approach to the economy, but economics isn’t too scientific.

In fact, I’d go so far as to say that in economics what is important is rarely complicated and what is complicated is rarely important.

We are irrepressible social animals, prone to bouts of optimism and pessimism. We are deeply irrational and emotional.

We are the polar opposite of what economists contend we are, beings driven by rationality and calculation.

We are profoundly affected by each other’s moods and we get giddy together and depressed together too.

The confidence thing, or the buzz, is the collective feeling that only the deeply irrational get. And this giddiness is infectious on the up and the downside.

It’s the same giddiness that prompts us to fall in love, follow ridiculous football teams and be enormously influenced by each other’s moods, attitudes and notions.

The buzz is what Keynes referred to as the “animal spirits”, which dictate the ebb and flow of the economy.

Once people become confident after a long period of financial depression, the buzz is infectious and it spreads like a virus.

In the bust, people with money saved and those with debts tried to pay them back; the buzz disappeared and risk-taking plummeted. Bank deposits rose in tandem.

Now these savings are being dipped into as the buzz takes hold. This could go on for some time.

Happy Christmas, and let’s see if those conversations are changing?

  1. Green Kiwi


  2. StephenKenny

    The headlines are nice, but I’m somewhat nervous about the premise. As an Atlantic economy, we should always be looking over our shoulder at the 900b gorilla in the room – the USA. For a fascinating, if somewhat lengthy, review of the place we are in, I recommend that you settle down in a comfy chair, and read David Collum’s ‘Year in Review for 2015′
    You can find the pdf here:

  3. Adelaide

    Bah Humbug! David’s reliance on official statistics is his Achilles heel, but still the best writer in Ireland by a long shot, keep up the good work. Happy Christmas to all.

    • michaelcoughlan


      Excellent as usual. Have a look at the link below it corrobates McWilliams observation “deflation here to stay……. an economy growing strongly”

      Irrespective of whether McWilliams believes in shadow stats or not the chart shows offical graphed data with shadow stats data and can be interpreted as follows;

      Both graphs are almost idendical except one is above the 0% growth axis and one is below. The trend for both is DOWN however meaning that it takes ever increasing quantities of newly printed fiat to get a smaller and smaller growth rate.

      Add to that the “size” of the US economy is measured in fiat which has GROWN expoinentially and I am more and more convinced that when I saw yellen happy out during her recent speech announcing an interest rate hike that the lunatics have indeed taken over the asylum!

      The graph has indicated a touch on a downward trend line meaning the economy will return to its downward contraction phase from here on till the fed are forced to maybe ring the bonbons and ask them for some ideas.


  4. galwayhooker

    We should look at aligning our currency with Sterling. We are in the same economic cycle, quarter of the island is in the sterling area, we speak their language,our legal system is the same, the bulk of our trade is with USA/UK, we all have family connections in USA/UK etc

  5. Sideshow Bob

    “(I’m using GNP here, not the more distorted GDP figure.)´´

    It this not an error? It is backwards is it not? GDP is the distorted one which takes the profits from multi-nationals earned abroad but booked here into account. Please correct me if I am wrong.

    Plus the GNP figure is 5% calculated of GNP not of GDP it comes back to 3% if so (because of the distortion I think).

    Anyone? There should be an ecoomist or two out there.

  6. Sideshow Bob

    “(I’m using GNP here, not the more distorted GDP figure.)´´

    It this not an error? It is backwards is it not? GDP is the distorted one which takes the profits from multi-nationals earned abroad but booked here into account. Please correct me if I am wrong.

    Plus the GNP figure is 5% calculated of GNP not of GDP it comes back to 3% if so (because of the distortion I think).

    Anyone? There should be an economist or two out there.

  7. Mike Lucey

    I’d like to think David is right but I fear its going to be more the case of ‘once bitten, twice shy’ as the country’s squeezed middle class is far too much indebted to get spending again.

    Also do we really need to see high spending on imports, cars in particular? With regard to cars, I say the government should simply ignore the influential motor trade lobby and bring in personalised number plates. I am sure they would make a pretty penny on the move with little outlay and at the same time help keep the cash in the economy.

    The building sector will be hard pressed to recover with huge numbers of its well trained tradesmen and apprentices abroad. Will be come back? From what I see they would be looking for some solid guarantees and I doubt these will be coming with the ‘floating in a saucer’ economy that we have at present relying on MNs that could and would leave at the drop of a hat if things don’t go their way or a better deal is to be had elsewhere.

    We need to build a foundation economy on our natural resources, the land and our huge territorial waters and look on the MNs as a temporary bonus that may or may not be their for the long haul.

    Stephen, cheers for the link. I glanced over the index and am curious.


  8. Merry Christmas from 29C Nelson in South Island NZ

    “”Ireland GDP Growth Rate 1997-2015 | Data | Chart | Calendar | Forecast
    The Irish economy advanced 1.4 percent on quarter in the three months to September of 2015, following a 1.9 percent expansion in the previous quarter. Personal consumption was the main driver of growth while capital formation slowed sharply and net exports declined. GDP Growth Rate in Ireland averaged 1.10 percent from 1997 until 2015, reaching an all time high of 6.20 percent in the first quarter of 1999 and a record low of -4.10 percent in the fourth quarter of 2008. GDP Growth Rate in Ireland is reported by the Central Statistics Office Ireland.”

    When a percent is quoted as an increase quarter over quarter is the per cent annualized (it usually is) or are the 4 quarters added together for the year total. (It may be here)

    See the graphs.

    What I do not understand is if the wages paid collectively are down 20% from 2008 , what are people living on to make ends meet. AH yes, spending savings. Are these the rainy days that savings wait for?

  9. Grzegorz Kolodziej

    Hi all,

    Lots of interesting comments to the last article – I’m strugling to keep abreast with reading all of them in this busy Christmas time and I do not know which ones to address, given my constraints.

    Juniorrjb wrote,

    “In fairness that’s only plausible if you believe that you receive no benefit when the taxes are spent – presumably, Gregorz and everyone else benefit from the roads, schools, hospitals, gardai, armed forces, fire brigade etc. and the structure and stability these make possible, in which case his point is pretty much misleading rhetoric.”


    “He is misleading. He quite clearly states that for 6 months of the year we reap no benefit i.e. we receive NO benefit for our taxes. Obviously, this isn’t true.”

    as well as

    “From a logical point of view the analogy depends on the validity of a premise that is untrue. It really is there in black and white. Now, it might seem that there is a bit of wiggle in this because we are discussing something that has a rhetorical and figurative dimension, but the analogy itself as expressed leans on the idea that somehow taxes are taken from us without any return benefit – this goes far beyond the idea that we are unhappy with the share some of us receive and seems to be designed to make the extremist point that all taxes are akin to theft and coercion.”

    The latter comment touches on interesting philosophical question of the nature of the state and social contract.

    But let’s start first with what I have actually written.

    On October 29, 2015 at 2:21 pm (my comment to “Great Expectations”, I wrote:

    “in 1520 peasants had to work ONE day a year for their lords within the feudal service system, at the beginning of the 16th century peasants had to work 104 days a year while Poles nowadays have to work 164 days for the state – certainly some progress has been made”.

    At no point I have written that working 164 days a year we receive no benefit for our taxes – so if anyone is at odds with logic, it is Juniorrjb, because he thus constructed a straw man argument – which is a rhetorical figure.

    One of my points in quoting historical data was to show the level of enslavement we have endure, even compared to serf peasant labour. Is this an extreme point of view or rhetorics?
    Surely even Juniorrjb would agree that 164 is bigger than 1 and 104.
    Or is this what he is questioning in his argument?

    But there is another weakness in Juniorrjb’s reasoning – he writes about benefits we receive from the state in return for our taxes, but he assumes that a serf peasant who had to work 1 day a year – as opposed to 164 days – for his law enforcer had not been receiving any benefits; on the other hand, he seems to overestimate the value of the benefits we receive from the state.

    This assumption is simply wrong.

    What do expect from the state in first place?

    Most of us would say that the most basic service we require from the state is to make sure, inasmuch that is possible, that there law and order, in other words we won’t be shot by a madman on a heavy metal concert, that we won’t be bombed by Luftwaffe on South Circular Road, 2 January 1941 and that we will get a fair trial in the court of law.

    Now, better or worse, this was within the unwritten social contract between a peasant who worked 1 day a year for his lord and whoever was a sovereign (I recommend Juniorrbj to get familiar with the story of the miller of Sanssouci).

    I cannot help but share with you some observation which had been germinating in mind for many years, which is that whatever European country I live in – and I had lived in 3 – I have noticed that while the glorious 19th century espoused the idea of the state as a watchman, limited to the police, the army and courts of law, since the state has taken other responsibilities, the state – let’s call it the State as I am not even talking about the Irish state in particular – has been really deficient in delivering in these three crucial areas.

    So, when we consider that “Gregorz and everyone else benefit from the roads, schools, hospitals, gardai, armed forces, fire brigade etc.”, I won’t break my lance in saying I do not benefit from some it at all.

    The thing that Juniorrbb does not seem to understand that that the state has to ALWAYS take more from us in taxes than it will give us back (and even if one argues from a leftist point, which I do not, that we will tax a rich and they will provide medicare for the poor, this still does not work because in every country it is the poor and the middle class who contribute the most in taxes as a percentage of the budget, not the really rich – obviously you do not see that, because you cannnot envisage the world in which an annual bus and rail ticket would cost 200 euro rather than 2,000 (the different comes from taxes in petrol and benchnarking – read taxes and taxes), in which bread would cost 20 cents and not 2 euro (CAP) and in which childcare would cost 100 euro per month and not a 1,000).

    Furthermore, I question whether my life is considerably safer with Gardai than without them. I dare to argue that there is no difference (and I had an opportunity to verify that hypothesis as I used to live in a small Irish town where they closed Garda station).

    The town I live in now, there is a burglery or mugging or shooting or all of them in one every week – local newspapers cover it extensively. One of them was even carried out using a sword, and in a daylight too,.
    10 years ago there used to be a bunch of teenager hanging out at thye petrol station, terrifying passers by by throwin cans and bottles at them. A group of houses where I live was robbed, one of them belongs to a ex FF TD no less, so one would thing that Gardai would act and do something about it, but they are probably busy listening to people’s phone conversations, of course the senior ones as I shared a house with a young Garda myself and it is not job which one can describe as rewarding, at the start anyway.

    But there is one aspect of our lives which Gardai and the courts of law left an imprint on – that is that we cannot organise ourself in small communities to defend ourself from these bastards, because first of all the Irish state made everything it could to disarm us (and the EU is after new proposals to further restrict gun ownership in Europe), and secondly, if we were to shot some of them bastards, the courts would prosecute us, the innocents, not the intruders, armed with an army of legal aiders and social care workers).

    To anyone who counterargue that things were still worse in the past, I would say this: once a months we organise a public meeting where we read the local newspapers from 100 and more years ago, and one thing which emerges from those perusals is that there was fuck all crime in rural Ireland 100 and more years ago compared to now – and the Irish certainly were not working 164 days a year for the state (if they did, they would have organised a REAL uprising – I am talking back then when people where not that dumb to get a swine flue vaccine because someone on RTE has said so).

    Finally, “From a logical point of view the analogy depends on the validity of a premise that is untrue”,

    Here Juniorrbb confounded deductive reasoning with inductive reasoning. Analogy is the latter type and as such, it depends on three factors:

    1. The relevance (positive or negative) of the known similarities to the similarity inferred in the conclusion.
    2. The degree of relevant similarity (or dissimilarity) between the two objects.
    3. The amount and variety of instances that form the basis of the analogy.

    (Salmon, Merrilee (2012), “Arguments from analogy”, Introduction to Logic and Critical Thinking, Cengage Learning, pp. 132–142, ISBN 1-133-71164-2).

    This is another example how the demise of Catholicism in Ireland does not necessartily lead to clarity of thought, because had the reader studied St. Thomas Acquina, he would not have confounded these types of inference.

    David’s article would require a separate comment from me and reference to Rimmland, geopolitics of the sea trade, the new Silk Route, Ireland’s relationship with Britain and Britain’s relationship with the US, China and Europe, as well what makes Ireland competitive (or not), which for reasons I have not quite deciphered yet, is in the Irish newspapers viewed divorced from the said geopolitical constraints (i.e., what’s even a point discussing how much tax we can get from multinational corporations in Ireland if the whole routes of the global trade are about to change and Ireland has not taken any decision as to who to join against who, and it can no longer be neutral in this global fight for the slicing the cake of the global trade and manufacturing; what’s the point of being an Atlantic country if one is dependent on the whim of the US President or the EU Commission regarding whether to tolerate the double Irish or not; what’s the plan for Ireland if both the Atlantic and continental economies were to do badly and the real wealth would go to China; finally – did we give up manufacturing for good? Is it trade only from now on? I still have hi-fi headphones made in Ireland (Sennheiser) I bought in Poland in the 90s for a considerable equivalent of what would be 150 euro nowadays – I bought them because they were the best in the class at the time – is Ireland fine with being a mega expensive uncompetitive country with no manufacturing dependent on trade, German Bundestag that reads the Irish bills before they are discussed in the Dail, Australian visas for those who, at the moment, are not in a position to pay Monaco prices for renting housing whose fungi state would move Charlers Dickens to tears, and Boston tolerance of the illegal Irish).

    I mean, is that the big oidea – selling overpriced houses to ourselves for borrowed money and buying them from vulture hedgefunds?

    Ireland is and will remain an Atlantic country. But that is not a real question – the real question is how Ireland should position herself to become a real player AS A RIMMLAND state (David, you had this idea in the past of new Hansa, which you have abandoned)? Because no matter how much soft power we can project, we cannot go to bed with the US, China and Germany at the same time, so we should have a look at who will be the breadwinner not in the perspective of the next election, but of the next generation (and for that we need manufacturing industry, not debt).

    Why should we go to bed with that breadwinner for free (consider the issue of Shell on the one hand and the fishing industry on the other hand – Poland got an equally bad deal with fishing)? And worse than for free, paying debts of the streetwise Anglo Merkel she had gambled in the thatched house rented by cute black hair Eirin niece?

    Ireland being an Atlantic country, there seems to be an assumption that Ireland should go with the US and the UK. But what if UK and US interest branch off, which I pointed out many times referring to Chinese investment in the UK?
    Will there be only Ireland in Europe in that case of other countries re-alligning with China (and maybe Poland under a new regime and Romania) as the US aircraft carrier in Europe (what, an Israeli style aircraft carrier state without an army and police?). And what if the US is too weak for that?

    While I am in favour of multinationals presence in Ireland (though why the presence of medicine producers in Ireland had to come at the cost of Ireland having, along with Greecem most expensive medicines in Europe, a deal struck by teflon Bertie – some of them, like melatonine, are even 10 times more expensive in Ireland than in Poland (funny enough, Dublin made Nizoral shampoo is actually even more expensive in Poland), which is actually a curse for both countries), I do not like the uncertainty of that arrangement – great’s mens favours are uncertain.

    I mean, we have to have more things going in this country than multinationals and the housing bubble with its animal spirits…

    Anyway, Nollaig shona dhaoibh, but in particular to:

    David, Cooldude, DB4545, Deco, Michael Couglan, Adam, Tony, Joe Sod, Adelaide, Home Counties Girl, Reality Check and that Polish-American guy Stan who disappeared from the blog as suddenly as he had appeared. I have a terrible feeling I have dropped someone, but I am not immune to detrimental effects of aging and lack of sleep.

    Wesolych Swiat! And I hope that noone in Ireland is hungry at Christmas; may your Christmas dinner make all of you feel replete with food like this:


    • coldblow


      Yes, you missed me off your list. Never mind, I’ll put it down to your age.

      I agree with you about the state. I guess that David and others would like to see equality enforced through more legislation and higher taxes. I’d rather put up with the equality we have and our pampered elite than go down that road.

      When I was young I was puzzled by American survivalist red-necks bunkering themselves against the Feds or heading into the wilderness with guns and ammunition. I appreciate their views more now.

      Leaving aside the intellectual and economic arguments against the state (I find Crotty’s to be insightful) it has just become a disaster, especially in recent years.

      In the health service it is eating up resources while the service goes down (or seems to).

      As for the police, I agree with you. Peter Hitchens wrote that if he ever caught burglars in his house he’d offer them tea and ask them to sign a disclaimer that they had suffered no harm or injury while there. Apparently people just aren’t bothering to report many robberies. However, while they might take a relaxed approach to trivial crime they take vigilantism very seriously and all forms of water protest. This also applies to thought crime. I personally look forward to strict laws about online bullying and trollery so that people can’t just say what they like (however hurtful) about their fellow citizens and their elected representatives (especially female and transgender ones).

      ‘To anyone who counterargues that things were still worse in the past’

      Everyone knows that Ireland was a backward and superstitious laughing stock until civilization arrived with television. With progressive teaching methods, including learning by discovery and continuous assessment, our young people are increasingly better educated and independently minded. Education Minister Jan O’Sullivan (Labour – who else?) is to build on these achievements, going forward, by introducing a new course of religion and ethics, which will be shoved into the time currently provided for Catholic education. This will allow them to study religion as a quaint (if residually dangerous) anthropological curiosity rather than a living faith (I mean, what would they think of us?). Have you noticed a sudden, curious burst of media babble recently about the compelling need for teaching computer coding in primary school? Well, Jan mentioned this in her recent launch of the new religion course. And I saw a nice little girl in the paper over the weekend who said it is fun and that she’d definitely recommend it. Coincidence? Who cares. Only the other day I was asking myself what was it that my son’s primary education had been lacking in. Bring it on!

      Meanwhile the State is busy building an Ireland fit for the 21st century, where every citizen is empowered to fully develop and express his, her or its sexuality. Plans are in train to eradicate sexism, transphobia, islamophobia and racism (as well as other disorders which haven’t even been discovered yet). For the latter the Angelus will be repealed and a white paper is at the committee stage for the phased abolition of Christmas beginning the year after next. (As a mature and confident democracy we should break free from those outdated and bigoted stereotypes about Cromwell.)

      A ‘raft’ of legislation will be drawn up to deal with the menace of racism and it is hoped to have this in place in the near future. Then it is just a question of providing a large, vibrant immigrant population to avail of it and everyone will be overjoyed. Exciting times!

      I also welcome the enlightened measures which have been drawn up to save the planet by reducing carbon emissions. I’m going to dye my hair, put on my big red sunglasses and head off to Kildare St to join the delirious crowds who are already gathering and we’ll outdo Ireland’s Greatest Day Ever To Date (it was last May in case you are wondering).

      Oops! I forgot to mention the role of Germany and the EU in all this. Thanks guys!

      I’m heading off to Athlone on Wednesday, God willing, where my mother’s street next to the river is still being pumped to keep the water at bay, and will probably continue to be pumpted into the New Year. They might even ask me to do a 6hr stint. So I doubt I’ll be popping in here for a while. Happy Midwinter Festival to all.

      • Grzegorz Kolodziej


        I have to admit that I have actually included you on my list, but I have mixed you up with Cooldude, which frankly speaking I do from time to time as the two nicknames have similar flow in them – so I was going to write Coldblow and Cooldude, got distracted, had a quick look if everyone is included, but was still left with a feeling I was going to add someone, and then pressed submit comment under time pressure.

        Your comments set a standard on this blog (which tends to wobble sometimes when it gets inundated with one-line comments) and I certainly would not have ommitted you.

        As to,

        “Everyone knows that Ireland was a backward and superstitious laughing stock until civilization arrived with television.” one thing which really worries me (and I am not that old) is that when I was a kid we, naturally, thought that parents listen to a wrong music etc., but there was this general feeling that the young ones have something to learn from the elderly, about life, peeling potatoes and changing chains in bicycles.

        I look at kids nowadays and there are not as inhibited as we were and happy to talk, but most of them are convinced they have all the answers (provided by pop-culture), which comes primarily from not asking any valid questions. Same with 1 year students – they are more active in debates than my generation was (this was Eastern Europe, mind you), but have nothing to say (this goes for both Ireland and Poland).
        At the same time such is the level of kids resillience to stress nowadays that they cry with frequencies which would warrant a name of a “faggot” among 10 year olds in my days, and I am not picking on any sexual minority – just pointing out to puzzling complacency which became a new norm (therapists had never had it so good).

        An interesting hypothesis to explain this and other things was put forward by this guy (again I am not sure if I have attached the link in the past or not):–gsPQ4MUY

        As to global warming, I am nearly convinced that people’s reaction to me would have been kinder if I said to them that I have just robbed a house in Dublin or that I am addicted to peyote (they might have said things like “things are tough in Eastern Europe” or “are you ok now?”) than if I say I am skeptical about the whole thing (and I do not even declare myself as a climate denier whatever that means, I merely say I would love to hear the other side, preferably debating the man-made global warming side, of which other side there is precious little in the media, though there was this famous skeptical documentary).

        All I can say is that we should consequently spend Christmas at the UNESCO climate change conference in Brussels, to which we would arrive by jets in faux furs, production of which kills 10,000 butterflies approximately each in chemical plants, as every self-respecting Greeny. There we should drive in Toyota Prius, for which cars toxic materials are shipped through half of a planet until it ends in Hollywood’s environmentally aware superstar beside his jet.

        Which (peyote and being “aware”) reminds me of another crazy hypothesis (about military origins of counter-culture):

    • Home Counties Girl

      Cheers G. Merry Christmas to you too and best wishes for 2016 :-)

      I’ve hardly followed the last few articles on this blog I’ve been very busy and probably won’t be tapping in for a while – I’m going away to Nepal in January for a few weeks before heading off to Darjeeling and then the Far East for a few months. Keep up with your comments, they’re highly entertaining.

      Good luck.

  10. cooldude

    Good post as usual Grzegorz. you are right about the nanny state mentality that is so prevalent in this country.

    Here is a post from Egon Von Greterz who I know you also admire. As usual he does’nt pull any punches in his analysis. He was on Max Keiser recently and it was a really good show.
    Happy Christmas to yourself and all the other excellent contributors to the blog

    • michaelcoughlan

      Happy Christmas coolude. Regards to all.


    • Grzegorz Kolodziej

      I read the link and I am just a bit worried whether Ireland will not end up getting caught in the crossfire of bubble-bursting US and self-induced export shrinking Germany (self induced because they made their exports to peripheral Europe a zero-sum game)…

      This amidst rumblings of discontent coming from the US about Irish taxes…

      And even David does not take into account that when the debt bubbles start to burst the economies on both sides of the Atlantic may be doing badly (perhaps he does, but thinks that then there will be nothing we can do)!

  11. “follow ridiculous football teams”

    Yeah – Leeds – you said it David!

    • I was at the Emirates last night for a Xmas Cracker of a match, lots of Gooners in Santa hats to watch a 2-0 lead halved by a dazzling Yaya Toure goal ten minutes to full-time. The fear and anxiety emanating from the North Bank was overwhelming. 4 minutes of extra time then eruption, hugs, tears and wishes of a happy Xmas. Sing songs on the tube to Holborn, then back over to Shephard’s Bush and a bit of last-minute bling shopping in Westfiled where the ‘buzz’ was as loud as an airplane revving up. The entire caravansarai of the Babylon that is London on display and no jihadi nonsense. It takes ages to get into the Emirates since Paris, you have to open your jacket in case your a suicide bomber. Etc.

      Shepherd’s Bush used to have an Irish faction, as did Fulham Broadway but it’s muted now. I flew back to Dublin after the FA Cup Final to join the celebrations with the Dublin Arsenal cadre. There’s a reason why Arsenal are the true world team and it’s to do with London as a melting pot. An the hidden story of the London Irish Gooners is deeply moving, far more than the usual plastic paddy nonsense of Celtic, Man U. Ask Dermot O’Leary for a brief overview.

      All my Irish descent mates in Brum religiously follow The Villa as an article of faith just as my Peaky Blinder chums in Small Heath/Sparkhill stick with BCFC. They are baffled at twin alliance with the Blues and the Reds but it’s pointless explaining why I drive 250 miles and navigate the chaos of orbital London traffic twice a month to watch The Arsenal. I explain that it’s Art. Opera. That watching Arsenal is watching a Gesamtkunstwerk. It’s not just a football match it’s a celebration of the C21st metropolis of London that now defines the world.

      Art is rare, valuable and important. Some mates paid £300 to get the best spot at Madonna’s Xmas Party in Brum last week. I turned up at the door and got the same area for £70, that’s capitalism, lads! But Madonna is also sui generis, like Arsenal and anyone who thinks that Arsenal tickets are ‘expensive’ isn’t looking at what Taleb called Extremistan in sports. Ridiculous to spend such money? Maybe, but YOLO.

      ‘AndrewGMooney’ is now a retired Autofiction. The real ‘Andy Mooney’ will be surfacing in Dublin next year as the initial stage of introducing his own Gesamtkunstwerk. He’ll be there to facepalm at St Paddy’s Day and then for the entire 100 year commemoration of the 1916 Uprising. He’ll also be working with his friends and associates to move forward on #RepealThe8th after the triump of marriage equality. This will be part of his “Proclamation of the 2nd Irish Diasporan Republic” which will be read outside the GPO on O’Connell Street to an audience of methadone addicts, confused American tourists and eye-rolling Dubs. But it will be recorded for future video transmission on YouTube and on stage. Etc.

      Thanks to David McWilliams for allowing the revolutionary ideas of ‘AndrewGMooney’ to percolate on this site. Now it’s all set to bring them to the stage as the ‘real’ man behind the masks, known as “Andy Mooney”.

      Solstice Greetings and a Happy Xmas to you, Adam, and to everyone else on this site who responded, challenged, provoked, dismissed or LOL’d at my provocations this past decade.

      best wishes
      The Artist Formerly Know As “AndrewGMooney”

      “The Eighth Amendment of the Constitution of Ireland, Article 40.3.3 inserted in 1983, has prevented our doctors and our legislators from providing proper care to women in Ireland.

      The resulting physical and emotional trauma inflicted on women is inexcusable and an ongoing cause of shame for Irish citizens.

      The Eighth Amendment undermines the status of the Irish Constitution. It is a key source of Ireland’s failure to reach international human rights standards and of the state’s failure to meet its obligations to vindicate women’s human rights.

      We, the undersigned artists, call for the repeal of the Eighth Amendment of the Irish Constitution and for action by our elected legislators to provide women in Ireland with modern reproductive health services in line with best medical practice and international human rights norms.”
      6th December 1,748 artists have signed the Artists’ Campaign to Repeal the Eighth Amendment statement.”

      • Forgot to add: I was listening to Gerry Diver’s “Speech Project” as I drove home. I miss London but whenever I get nostalgic for the real Ireland, I can just pop to Brum. Here’s Shane McGowan with Gerry explaining how and why the London Irish evolved to deliver the genius of The Pogues:

        “Music for Tape loop – by Gerry Diver feat Shane MacGowan”

      • Nice one Andy, might see you in Ipswich and/or Devon in January – you’re invited to both ‘dos’ anyway.

        I’ll be back in Antigua in late January, then making my first visit to Montserrat for St. Patricks Day – looking forward to that.

        Talk soon, I have no voice (literally), I hope it clears up by Christmas.

  12. Stealing the world can be fun
    It doesn’t require a gun
    Just hire some guy
    To print to the sky
    Then buy all the assets and run!

  13. Bamboo

    I hope All this positive news about the economic forecasts is not going to be used to lure people with very happy lifestyles abroad too coming back into Ireland.

    • SMOKEY

      If it is, they can live in a 40 sq meter apt for €800.00 a month in Dublin or Cork. That will make them happy Im certain. Alan Kelly should have to live in one of his micro units for a year before being allowed to legislate anything. What a tosser this guy is. What a f’kn tosser.

      • Bamboo

        That is because Ireland and Dublin in particular is sooooooo overpopulated. It is now another Tokyo. That is the reason the government wants to coax people back into Ireland.

  14. DJR

    “When you still have an unemployment rate twice that of your two biggest trading partners, the US and Britain, there is plenty of capacity in the economy.
    We are in a deflationary world and this looks set to last.”

    Is it not dangerous to just look at headline figures?

    How many unemployed software developers/biochemists are there? The cost of hiring in the high-value sectors of the economy are gone through the roof. Once the tide goes out with a new global tax agreement we won’t look very clever.

    And a deflationary world it may well be, but tell that to anyone renting in Dublin. The biggest component of any persons expenditure is housing. Ireland’s official cpi inflation figures have always been a fix – nominally low interest rates make it look low, while sky rocketing rents have mysteriously little impact. As for the price of commercial rents…

  15. Greece started the year in ruins and ended it in total obscurity. Its debt
    market was collapsing by the end of 2014. The four largest banks needed a
    bailout in January.191 The debt-to-GDP ratio was 175% with a numeratordenominator
    double whammy (debt soaring, GDP collapsing).192 Unemployment
    was running at 25% (50% for youth).193 Professional women—doctors and
    lawyers—were turning pro (prostitution). The equity markets were tanking,
    eventually prompting authorities to shut them down. Not shockingly, when they
    reopened, they were getting clipped 25–30% per day (Figure 30). The country’s
    entire sovereign wealth was in ruins—quite literally. The ruins were all it had

    Quoted from a post in Miles Franklin

  16. US recovery as quoted from Andy Hoffman

    Or how about yesterday’s abysmal Chicago Fed National Economic Activity report – including a way below expectations, significantly negative number for November, and a massive downward revision for October? “Surpassed” only by this morning’s horror of a November existing home sales print – which was “supposed to” have been flat from October, but instead plunged 11%. For that matter, how about the “strange” fact that, despite the Fed having “raised rates” last week, actual money market rates are still below 0.25%? In other words, in reality, they haven’t executed what they claimed.

  17. And…

    To wit, we are unquestionably amidst the end game of history’s largest; broadest; and most global fiat currency Ponzi scheme. Amidst the chaos of exploding debt, collapsing economic activity, and imploding commodities, currencies, high yield bonds, and even equities, we’ve reached the point where it’s becoming common knowledge that Central banks not only have been dead wrong in everything they’ve predicted and promised, but that the world sits at the precipice of economic ruin as a consequence of their policies. Led, of course, by the world’s printer-in-chief, the Federal Reserve.

  18. Headline for Atlantic trade

    “Something strange taking place in the Middle Atlantic Ocean – Oil-filled tankers crossing the ocean, turning around and heading back home”

  19. Finally!

    The essence, the ultimate summary, the “all you need to know”, the only single essay that you need to read to get all the Bullshit McW creates over the course of a year.


    Atlanticists, a species doomed by extinction, caused by themselves, like someone drowning in the atlantic and still denying the very existance of water.


  20. Isis understands the difference between corrupted money and honest exchange.

  21. bigmcd

    “Dublin-London is the busiest air route in the world”. It’s not. Not even close. Something like the tenth busiest in Europe, and well well down the Worlds busiest tables.

  22. Deco

    Greece is more integrated into the Eurozone economy than Ireland.

    How is that working out for Greece ?

    Maybe 2016 might be the year when the “leadership” in Athens wakes up and realises that the smartest think they can do is
    - leave the Eurozone, and relaunch the Drachma
    - leave the EU
    - leave NATO
    - default on all debts
    - adopt a flat business tax rate
    - close the border with Turkey
    - sell an island to the Russians, and another to the Chinese

    - and watch while the rest of the world implodes in another asset bubble price crash.

    Greece is bleeding itself to death trying to save a ponzi-racket that is no longer sustainable.

  23. Deco

    Money printing is what is sustaining Ireland’s economy, currently.

    Money printing in other currency blocs.

    It has nothing to do with the circus in Kildare Street.

    • All currency blocs are printing to infinity. all pumping air into the balloon that will burst unexpectedly at some indeterminate point of time no one can accurately predict. Nobody, central banker or politician, will see it coming of course: Except those informed on this blog and other enlightened souls.

      • McCawber

        And they most certainly wouldn’t admit that they saw it coming either. 2008 is history and history has a habit of repeating itself.
        Looking forward to the New Year, when hopefully some of my questions and your answers will enlighten us (well me anyway) further.
        I’ve asked another one just below.
        Don’t be shy!

  24. McCawber

    Season’s Greetings and a prosperous New Year to you ALL.
    It is interesting that David is almost accepting that deflation is the way of the future. That’s a start.
    The key tho’ is to get the CBs to realise that this is in fact the way things should always have been (Certainly since the beginning of the modern industrial age and in particular, mass production.)
    This raises one very fundamental issue (no doubt there are others) for the CBs (or their replacements if you prefer Tony – just so not to get hung up on CBs)
    WHAT should the target Deflation rate be? An interesting topic for conversation over the holiday period perhaps.
    Someone, in a pub the other night, pointed out that Greenspan, Bernanke and Yellen are all of the same ethnicity.
    Is that significant?

    • michaelcoughlan

      Hi mccawber.

      Context needs to be defined better to get a better answer to your question on deflation.

      Don’t confuse deflation with economic contracion.

      The shadow stats website indicates economic contraction despite McWilliams assertion of a us economy growing strongly. This will drag down prices causing deflation.

      Prices drop in a healthy econmomy when expanding through extra wealth being created and reinvested/spent into that economy creating better efficiencies etc.

      A small inflation rate in the currency is desirable to keep up the velocity of the currency and prevent hoarding so long as some item like gold or shares are used to act as a store of value ( money) for savings.

    • michaelcoughlan

      Hi mccawber.

      Context needs to be defined better to get a better answer to your question on deflation.

      Don’t confuse deflation with economic contracion.

      The shadow stats website indicates economic contraction despite McWilliams assertion of a us economy growing strongly. This will drag down prices causing deflation.

      Prices drop in a healthy econmomy when expanding through extra wealth being created and reinvested/spent into that economy creating better efficiencies etc.

      A small inflation rate in the currency is desirable to keep up the velocity of the currency and prevent hoarding so long as some item like gold or shares are used to act as a store of value ( money) for savings.

    • Having a target is is a concept of a centrally planned economy. Leave the market to set its own rate. It is the foolishness of mankind to think that an expert can do better than the collective efforts of millions making decisions their own self interest.

      It is unparalleled conceit for an individual or committee to think they are such an expert.

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