Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19
Central Banks’ Gold Buying and Repatriation Spree - 28th Nov 19
Another Precious Metals’ Reversal Coming Right Up! - 28th Nov 19
Stock Market 100% Measured Moves May Signal A Top - 28th Nov 19
Don’t Look for Investing Advice in the Media - 28th Nov 19
Why You Should Buy Trailer Park Stocks - 28th Nov 19
Will YouGov General Election Forecast 2019 be as Wrong as their REAL Forecast was for 2017? - 28th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Irish Financial Crisis Worsens, Peter Sutherland and Ireland’s Sovereign Wealth Fund

Interest-Rates / Credit Crisis 2010 Oct 02, 2010 - 09:38 AM GMT

By: Christopher_Quigley

Interest-Rates

Last week, on “black Thursday” the Irish government in essence finally nationalized Allied Irish Bank. In response to the horrific national financial picture painted by Mr. Brian Lenihan, Ireland’s finance minister, Peter Sutherland, former Irish attorney general, hit the media road. Mr. Sutherland’s mantra was similar to that previously presented by his acolyte Mr. Honohan (head of the Irish Central Bank). This mantra stated that though the figures were lamentable they were “manageable.”


Now I have had a great deal of regard for Mr. Sutherland but as current events unfold I must respectively question his judgment. He points out that Ireland is not in “desperate” shape. He points out that: “Ireland has funding up to 2011 and has 24 billion Euros in its Sovereign Wealth Fund.”  Thus, in his estimation, Ireland will not go broke until 2013, at least. According to his policy it is “OK” for the government to continue to fully guarantee, and pay as they fall due, “retail” banking bonds. It is my argument that these bonds should have been negotiated down in September of 2008 when the Irish bank guarantee was first issued ( See article: “ A Bank Guarantee Too Far”). Should we adopt the course advised by Mr. Sutherland it is quite conceivable that Ireland will go completely bankrupt around 2013-2014, with no practical strategy for recovery on offer. This gruesome fact has even been acknowledged, publically, by non other than Mr. Bill Clinton former President of the United States of America.

The former attorney general’s approach flies in the face of alternative prudent council and public opinion. This council takes the view similar to that of aged grandparents who have saved all their lives and wish to present a legacy to their grandchildren. These grandparents want these savings fostered, cherished and grown. However, Mr. Sutherland wants to treat this treasure as if he were a spoilt teenager. He seeks to squander it immediately and gamble this resource away on reckless bailing out of bondholders who lent money on risky land deals. Public opinion and international experts have pointed out that these sovereign wealth funds are the base through which Ireland could build its future. These funds could be used to set up a new, free and unencumbered National Irish Commercial Bank. This bank would get Irish credit and Irish commerce moving again. And the maths of this strategy makes sense. Under the new Basle banking agreement banks may lend up to 33 times their unencumbered cash base. This means that the sovereign wealth fund could be used to create credit in the amount of 24 Billion multiplied by 33, which equals 792 billion. Almost a trillion Euros. This is the productive legacy the grandparents want for their savings. Not the squandering of hard saved assets wasted on transient speculators. These assets are Ireland’s Phoenix resource. The sovereign wealth fund is a pension fund not a teenage holiday stipend.

If Peter Sutherland’s views continue to be adopted as policy by the Department of Finance, Ireland without its sovereign wealth fund intact, will be broke and vulnerable. In its inevitable bankruptcy Ireland’s “family silver” will eventually be put on the auction block by the IMF and the ECB. Irish banks, airports, power plants, power grids, sea ports, roads, air space, semi-states, media assets, railways, forests, lakes, water, remaining mineral rights, all will be up for grabs. The only folk with money or credit to fund such acquisitions will be the friends, associates and financial alumnae of Mr. Sutherland who, as you may know, is the non-executive chairman of Goldman Sachs International, one of the biggest “vulture” banks in the world.

By Christopher M. Quigley
B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley was born in 1958 in Dublin and holds a Batchelor Degree in Accounting and Management from Trinity College/College of Commerce, Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the Stock Market in 1989. in Belmont, California where he lived for 6 years. He developed the Wealthbuilder investment and trading course over the last decade as a result of research, study, experience and successful application. This course marries Fundamental Analysis with Technical Analysis and focuses on 3 specific approaches. Namely: Momentum, Value and Pension Strategies.

Mr. Quigley is now based in Dublin, Ireland and Tampa Bay, Florida.

© 2010 Copyright Christopher M. Quigley - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Christopher M. Quigley Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules