"In the case
of Ireland
the immediate motivation for austerity
is a high risk premium on government debt."
the mental june bug
" What potential investors in Irish
government debt
are worried about is not where debt is likely to end up,
but the
likelihood of default before we get there.
Here the credibility argument does
apply."
this is a nice example of
" first !....assume a scrooged up central bank "
and it proves yes
if you lose control of your currency you can get fucked
by what ever does control your currency
but what to do if you are in this spot ?
vote in a gubmint prepared to bolt the gig
if the currency controlers don't lighten up
in the case of ireland
the ECB needs to openly and enforceably
become a recourse channel...
an unconditional recourse channel
for all existing irish sovereign debt
