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Would prices fall if the I.M.F. came in?

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    #32
    jimmmy
    Closed Accounts Posts: 2,539 ✭✭✭jimmmy


    MaceFace wrote: »
    This is just scare tactics by our leaders to force through unpopular changes.
    You have'nt answered the question : Do not think the ECB will lend 25 billion per year - and increasing - to the Irish govt forever? Would you ( if you were an EC banker or a Chinese or Middle Eastern banker, and had lots of safer places to invest in ? )


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    #33
    irish_bob
    Closed Accounts Posts: 4,271 ✭✭✭irish_bob


    jimmmy wrote: »
    You have'nt answered the question : Do not think the ECB will lend 25 billion per year - and increasing - to the Irish govt forever? Would you ( if you were an EC banker or a Chinese or Middle Eastern banker, and had lots of safer places to invest in ? )

    considering the ECB is dominated by germany , i cant see germany lending us **** loads of money indefinatley so we can spend it paying consultants double what they earn in the fatherland , our piss taking will only be tollerated for so long , the germans must have a good sense of humour that they tollerated us this long :D


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    #34
    Liam Byrne
    Closed Accounts Posts: 18,163 ✭✭✭✭Liam Byrne


    NewDubliner wrote: »
    Housing has certainly dropped in price. Plenty of cheap 2nd hand cars too. Interest rates can only go up though.

    Therein lies the problem....

    Say someone has a house loan (and let's forget about those people who bit off more than they could chew, and say that they're repaying €900 a month).

    If their wages - say €3,000 a month - fall by one-third, and "all prices" fall by one-third, then on the face of it they'd be no worse off.

    HOWEVER, in reality their disposable income has been more than HALVED, because the €900 is still off-limits, along with their insurance outlay.

    So basically, anyone who hasn't any commitments YET will be no worse off, but anyone who - in good faith - borrowed within their means is screwed, with the knock-on effect of not being able to spend as much (despite falling prices) and therefore in turn impacting on shops and services.


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    #35
    jimmmy
    Closed Accounts Posts: 2,539 ✭✭✭jimmmy


    Liam Byrne wrote: »
    anyone who - in good faith - borrowed within their means is screwed, with the knock-on effect of not being able to spent as much (despite falling prices) and therefore in turn impacting on shops and services.
    Depends on when they borrowed. For people who borrowed say 20 or 30 years ago, they were + are laughing, esp those on guaranteed ( defined benefit ) pensions.


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    #36
    NewDubliner
    Closed Accounts Posts: 1,615 ✭✭✭NewDubliner


    jimmmy wrote: »
    ???? Have any property speculators got a bailout out of public or bank funds ? Methinks not
    Think again.

    The NPRF is a public fund. 7bn was taken out of it and given to the banks. Where do you think the money to pay interest on these loans will come from? And if we end up paying more for the 'naughty' loans than they are worth, where will the money come from to pay off the money we borrowed to buy them? (Clue: Look in a mirror.)
    jimmmy wrote: »
    - the bank or Nama holds the deeds to any properties and the speculator / developer is not entitled to them or any proceeds of any sale unless the loan is paid off in full.
    Which may be 'never'...have you heard of 'limited liability'?


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    #37
    MaceFace
    Closed Accounts Posts: 1,697 ✭✭✭MaceFace


    jimmmy wrote: »
    You have'nt answered the question : Do not think the ECB will lend 25 billion per year - and increasing - to the Irish govt forever? Would you ( if you were an EC banker or a Chinese or Middle Eastern banker, and had lots of safer places to invest in ? )

    Of course not, just like the IMF will not lend us 25 billion per year and counting.
    The EU will do the job of the IMF but in a much different way. They will be more humanitarian in their approach but will get the savings required.
    They will tie it in with us altering our tax system to be less attractive to big business :-)


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    #38
    NewDubliner
    Closed Accounts Posts: 1,615 ✭✭✭NewDubliner


    MaceFace wrote: »
    The EU will do the job of the IMF but in a much different way. They will be more humanitarian in their approach but will get the savings required.
    So, will prices come down? And for what goods/services? What prices might go up?


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    #39
    Rockshamrover
    Registered Users Posts: 1,472 ✭✭✭Rockshamrover


    NewDubliner wrote: »
    So, will prices come down? And for what goods/services? What prices might go up?

    Are there no examples of other countries who have gone through what we are going through now? What happened to them when the IMF showed up?

    The post about people having massive mortgage repayments is very valid. Not just for people purchasing their own homes but for investors too. There must be tens of thousands of people in this situation.

    They will have a massive drop in their standard of living in having to service massive dept with a reduced income.


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    #40
    darkman2
    Banned (with Prison Access) Posts: 8,632 ✭✭✭darkman2


    MaceFace wrote: »
    Well to start with there is no chance the IMF will be invited into a Eurozone country.

    oooh I think that is incorrect. I can see Ireland being turfed out of the Euro soon enough if we don't get our act in gear. The ECB is not going to just fund Ireland's existence because it is in the Eurozone indefinately.


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    #41
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    darkman2 wrote: »
    oooh I think that is incorrect. I can see Ireland being turfed out of the Euro soon enough if we don't get our act in gear. The ECB is not going to just fund Ireland's existence because it is in the Eurozone indefinately.

    We'll get our act in gear. The ECB is our friend. I don't believe in the bogeyman.


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    #42
    nesf
    Registered Users Posts: 27,645 ✭✭✭✭nesf


    MaceFace wrote: »
    I wish you are/were right jimmy but I see a couple of problems:
    The government will not go after the developers as aggressively as the b anks would have. There will be a lot of hush hush going on I fear.

    Actually one of the major problems reported was that the banks weren't pursuing the developers enough about repayment of their loans.


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    #43
    eddiehobbs
    Closed Accounts Posts: 156 ✭✭eddiehobbs


    MaceFace wrote: »
    Well to start with there is no chance the IMF will be invited into a Eurozone country.

    First time for everything and unless the government come up with something special in the budget they could well be here in less than 6 months time


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    #44
    NewDubliner
    Closed Accounts Posts: 1,615 ✭✭✭NewDubliner


    eddiehobbs wrote: »
    First time for everything and unless the government come up with something special in the budget they could well be here in less than 6 months time
    And if they did, would prices come down & which ones?


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    #45
    MaceFace
    Closed Accounts Posts: 1,697 ✭✭✭MaceFace


    Can people calm down and stop with the sky is falling in crap.

    Do people even have the slightest clue of what the IMF actually are, bar the bogeyman stories that are so popular these days?

    If things to uterly pear shaped in this country (no, we are nowhere near that yet), then we can ask the IMF for a loan of money. They will agree as long as we reform according to their guidelines.

    However this will not happen as we will first go to our European neighbours and ask them for help. They will agree for two main reasons:
    1. they will get a lot of benefit from our misfortune.
    2. What will it say about the Euro if the IMF has to rescue one of its members?

    And as for us being booted out of the Euro - thats total crap. I don't know where even to start with that except refer you to your local library. Seriously, if the discussions are going to be at such a basic level, then whats the point.


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    #46
    nesf
    Registered Users Posts: 27,645 ✭✭✭✭nesf


    MaceFace wrote: »
    Do people even have the slightest clue of what the IMF actually are, bar the bogeyman stories that are so popular these days?

    No but then there are still a very very large number of people who don't seem to grasp why you can't run a 25 odd billion deficit with 35 odd billion tax receipts so I wouldn't hold your breath. :P


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    #47
    eoinbn
    Registered Users Posts: 799 ✭✭✭eoinbn


    Do not think the ECB will lend 25 billion per year - and increasing - to the Irish govt forever? Would you ( if you were an EC banker or a Chinese or Middle Eastern banker, and had lots of safer places to invest in ? )

    I have said this a number of times already. The ECB is not funding our deficit. The ECB cannot lend a country 1 cent, it's illegal. What it can do is lend to banks and that money can then be borrowed by governments. This year our banks borrowed €7bn from the ECB, which was then borrowed by the government to make up the deficit. The other €18bn was borrowed from international markets.
    If things to uterly pear shaped in this country (no, we are nowhere near that yet), then we can ask the IMF for a loan of money. They will agree as long as we reform according to their guidelines.

    I don't think you understand how close we are to the edge. All it would take is a change of mind by investors. Very little has to change for that to happen.


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