The reason for this stagnation theory in the US is because real GDP growth has only been around 2% per annum over the last 15 years. 2% is considered mantance with 3..4% really needed to grow the economy. China, in a bad year is at 7% but that's a bit of an unfair comparison. What economist are looking at is Japan. They see an economy there that has reached "maturity" and despite a 20 year battle to produce growth they have failed. Now they are in the process of throwing the kitchen sink at it with poor results so far. The US and Europe is coming to a point of maturity now and that's beginning to worry some analysts. Actually European countries like German Italy and France at at the biggest risk. that's where Mr Draghi comes in or should have come in. Germany may have technically seeded control but they have been pulling his strings so far. Europe is seriously at risk of been left floundering by inaction. Japan has in one way or another devalued the yen by 30%. The dollar and sterling have devalued also and Europe is now left with an uncompetitive currency at a time of that borders on depression. German fears of inflation have set the agenda, not Draghi. Until this Russian situation directly impacted on the German economy they were prepared to leave the euro just sit there. I think maybe now they have a different perspective.
Ireland will benefit from qe big time. Money for infrastructure will be freed up. Broadband with speed at last maybe? Growth of 4% by 2017 is possible. You are right that house building won't safely sustaine the economy but it will definitely super boost it. The knock on effect of a new house goes deep into an economy. Hardware, furniture, garden centres, electical goods even babies. Thats what generates GDP. It produces taxes that IF wisely used can be invested in education or infrastructure or what ever is needed to build a stable economy.
Getting back on topic, this can all plays into the future prosperity of bkir. Cheap money to lend to eager customers in an economy where every cent you spend generates a % fee for a bank. The vast majority of the fees will be electronic and at minimum cost. Look, its not going to be all plain sailing and I'm long enough holding these shares to know this is a long journey, but, but the omens are good. Imo.
Got in early this am - after a fair bit of research - wanted SP to step back a bit before doing so but glad to get when did as seems to be breaking out (early call) but I guess gov will off load some of their lot soon. For those of you thinking of further Irish investments - check out Kingspan - IMO that's a share that is sure to go places - in there quite heavy. Good luck Eire Abu
500m adjustment is peanuts with respect to Troika recommended 2-3bn. Would be extraordinary turnaround. If they can also renegotiate terms of Troika loans woudl be a further significant boost to future debt servicing costs.
John, I think the answer for me would be USA. Largest, most flexible economy of the 3, own (global reserve) currency too big to bet against, capable of generating internal demand, yes huge debt bow wave, but enormous servicing capacity, major R&D capacity, always first out of global recessions. Too big to be allowed to fail, so I would lend them money at the lowest rate.
Of course the negatives are there, but on a relative scale with Ireland and the UK? The demographics in the US may point to "secular stagnation" but people want a return on their money and if there are no productive investments to be made they will have to accept a very low return, this will inevitably rekindle a virtuous capital usage cycle, even if necessary with capital flight.
You may be right that Ireland is a good answer, but I think the reason would be Mario Draghi and not a temporary housing boom of no lasting structural value-generating benefit to the economy (unless it also involves building roads, communications, and the civic infrastructure required to make the small open economy more competitive in the global market).
Hats off to Mario: an Italian at the helm of the Institution that replaced the Bundesbank precisely in the moment in which periphery economies' malaise threatened the very values of German fiscal order and the Euro itself. Who would ever have believed it 20 years ago?
Hats off to the Germans too for accepting it. They get a lot of bashing here in Italy for their excessive focus on austerity and good economic management without indebtedness but people have no idea what it means to the Germans to relinquish control over their monetary policy to an intergovernmental institution headed by an Italian.
No idea at all.
By the way John, the UK is not in the Eurozone, but I understand what you mean. I don't see them leaving the EU though, too much at stake and not enough independent ability to be outside the main trading bloc and market on the planet.
Traditionally the post office in Britain has an association with small post office savings schemes and stamps etc. Among other things. You could pay license fees, collect pension payments and buy stamps too obviously. As such it's target market was old age pensioners and people who wanted to post items. The main advantage to Bkir in this case is that these post offices are established already and there are over 3000 of them. Additionally for convenience the opening hours include weekends too. The new services (new in most cases to the post office) they offer coupled with opening hours and local convenience make this a very obvious but well rounded idea. The British people will use this new service based on convenience more than on the principle that banks screwed them. After all you still need a savings and loan service either way.
Happy idea from radar to do a meet and greet here.. I am based in Switzerland.50+ I used to lounge here a lot a couple of years ago. Stumbled onto this place when I was actively day trading BOI and AIB in the midst of the credit crunch. Became a serial poster in that period. Invented something called the BKIR CUP, which we ran for about 6 months together with a fella called Cranfield. Still follow this place, as it is still one of the happier forums, despite the archaic forum platform. Tried posting limericks in the past, but gave up. But radar still does his poems, and that's good to see.
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