US Collapse - what risk Ireland?

[Norfolk Enchants]

I was going to post this on the €4,500 p.m. decreasing house price thread but Kerrynorth is making points re. M3 etc. and I didn't want to go off track.

Century Finance's collapse and the troubles being had by others are indicative of the coming to an end of US growth. Is The Celtic Tiger a myth and merely a dependency of the global economy? I believe so, and we will follow suit soon, except that our reliance on the construction sector will mean a much harder landing, and that there are no measures in place to soften the landing.

Fianna Fail/PDs may indeed be happy if they are not in government when this happens.

US Lenders Implode

What Irish Financial institutions are exposed to the greatest risk? I don't think that 100% mortgages have been around long enough for Irish institutions to be exposed to substantial risk and individuals will bear the brunt.

[Henry Joy]

I've been pondering this recently too. Ireland's economy does appear to be trailing on the coatails of the U.S.

1929 style depression, anyone?

[irishpeoplearewhingers]

The key is whether the troubles in the sub-prime sector spread to the US economy as a whole, of which there is no evidence as of yet. The latest news suggests that construction hiring in the US has rebounded somewhat, but of course, we cannot really assume much from one set of figures. Norfolk, as you say we are dependant on the global economy, but that is true of most countries thesedays. Imagine what will happen to China if the Yanks stop buying their exports? Germany, the world's leading exporter and also the most easy to parody, is similarly exposed. The real long-term issue is how the US deals with their twin deficits, and how that may impact on both global demand and the value of the Euro. Countries who use the Euro have been getting screwed lately because many countries peg to the dollar, which means that the cost of our goods have appreciated for all those countries. Having said all that, real competitive advantage, based on producing better products/services than anyone else, can survive currency appreciation so perhaps we should be focusing our efforts there. This would require large scale R&D plus significant upgrading of our capacities, and I am far from optimistic that we can pull it off in the scale required. The governments of developed nations are not as economically focused as they should be- a symptom of of complacency born from easy successes in a world order that is no longer relevant. We seem to have forgotten the fact that remaining economically competitive must be the overwhelming priority, since that is what pays for social spending and all the other luxuries that many other nations cannot afford. We are globalized now whether we like it or not, and the challenge is to be flexible enough to remain relevant in the face of huge changes. If we do not approach this reality with the seriousness that it merits, we are finished.