POUNDING IT DOWN
In 2008 when the shit really started to fly here, some of our own leaders tried to show some actual leadership. Then a big size fourteen EU jackboot came crashing down, kicked several of them up the arse and imposed its own solution.
That solution was the imposition of huge debt on each and every one of us and it is so humungous that even the imposers of the debt agree we'll never be able to pay it back ………. EVER! Have you any idea what that really means? It means we will always being owing. It means some faceless bastards can put the squeeze on us for anything they want. It means enslavement by blackmail. That's what it means. And they parceled this so beautifully that we agreed to call it a bail-out! It is akin to a rape victim referring to rape as gentle love making. The ignorant group-think going on at the moment is staggering. Bail-out my hole!
There were a few wise voices of dissent though. Those clear-thinking individuals pointed to the biggest problem we had with crippling debt and that is the Euro. More correctly though, they meant the absence of the Irish 'Punt,' our old pound. Each time, and there's been a few of them, that the shit hit the National fan, we promptly devalued the Punt. This had two immediate effects. The cost of imports went up just as the cost of our exports went down. It made us more competitive internationally while stopping the flow of money out our the economy. A country's wealth is measured by its balance of payment deficits or surpluses so when you've more coming in than going out, you are on the right track.
Of course the foreign holiday might have to be postponed a year or two and the purchase of a brand new German or French car may not be made because a decent secondhand model already here will suffice nicely. Local produce is not affected though so you can still eat and drink well. But electricity generated by burning foreign fossil fuels does go up and everything in the newly arrived shipping containers will cost more. But the downswing is stopped and reversed by devaluation, business gets busier selling anything not nailed down to foreign currencies looking for a bargain. Pretty soon the markets see the impressive export figures and their effect of our balance of payments and confidence in Ireland Inc. goes up as does the value of the Punt. That's the working see-saw of economics. Devaluation is a temporary state but it's damned good to have the right to do it in dark times. The option of it gives control locally.
But we are trading in the currency of the strongest exporting economy in the Union. The Euro is an unsuitable currency for a little Nation like ours and it doesn't suit the boys down by the Med. either. There was a time when you got a bucket full of pesos for an Irish punt you know and you needed a wheelbarrow for the equivalent lira. Shallow thinking though would have you believe that a strong currency is the trademark of a strong Nation but that is not always true. There were times when the German mark was both strong and weak, (and everything in between). Our Irish Punt rode the Sterling wave, albeit ten to twenty per cent behind it but when we needed to, we could push it through the floor for a while.
So I'm tickled by the shock/horror stories about Sterling post-BREXIT. "Pound slips to a new low," a grave voice read on the lunchtime news today. Perhaps a collective gasp went around the country but I say, "Go for it." It is natural re-adjustment in this vacuum of uncertainty and the yo-yo effect will continue until it finds its right level or value. But savvy British exporters can make hay now.
Whatever junk the Brits have been making and selling to Johnny-Foreigner up until now will command less per unit for it tomorrow. But the unit orders will increase and that was the experience before too. The UK has several times purposely devalued the Pound just for this reason. If you don't understand that just think of the opposite case. Say that Sterling shot up to €10.00 to the £1.00stg? Would anyone buy a single British nut of bolt at that price? Fucking right they wouldn't but that's how it works. We cannot devalue the Euro here in Ireland even if we badly need to. As the Pound falls further, Irish Beef will become expensive in the UK supermarkets by comparison to South American or New Zealand beef.
But the UK was wise enough when under pressure to join the Euro because they opted to keep control of their currency. It should surely suit the British Government at this time to see the Pound fall against the Euro as imports and money flowing out would be reversed. If you think about the Irish situation, we have an over-valued Euro in our pockets but because our tax is so high to pay back, (the interest on,) our crippling debt, we don't have as many of those Euros to take abroad anymore.
Economics is not an exact science!