Patience Wheatcroft’s article in the Wall Street Journal on the death throes of the Irish economy highlights a major concern of a small country in a mass market world. The situation in Ireland will be dire for a long while yet. In order to pay back the £85 billion bail-out loan, further cuts will see the same level of Irish austerity as was experienced there in the 1950s and 1960s. The issue here is- will European economies continue to work as individual nation states?
An Irish banker recently told me that he could see the current situation coming, but was forced to adopt the instruments that are used in the UK and US. If he didn’t he would be sacked. Ireland is a small economy. In order to create longer term infrastructure investments as required in the UK and US a unified Europe is needed. [...]

I was intrigued by this article in the Times last month about Nicholas Sarkozy. At first glance, Sarkozy appears unbelievably arrogant, denigrating other leaders and feeding his own insatiable ego, saying France is fine but everyone else isn’t. However there’s much more to Sarkozy’s comments under the surface. [...]

It is little wonder that banks are reluctant to offer credit to the citizen, to businesses or to each other when bearing in mind the level of debt that currently exists. Official estimates of the American debt currently sit at $10.6 Trillion Dollars. A boutique investment analyst in Moscow considers the US debt to be nearer $11 Trillion dollars. However, two well known US investment banks are far less optimistic and unofficially estimate the debt level to be $26 Trillion Dollars, in effect 250% of US GDP.
In the UK, informed sources place UK debt levels nearer £2.5 trillion pounds. By the way, the UK’s GDP stands at about £1.5 trillion pounds.
What debt are we talking about? – Housing debt, credit card debt and debt ridden financial instruments, such as derivatives, all of which undermine the confidence of the market.
What value is better [...]