Although Iceland was the worst case, Iceland refused to make their taxpayers cover the debts of insolvent private companies, and their economy is well on the mend. Now Ireland is considering the same. If all countries refused to tax citizens to keep billionaires in their billions, then the result would be prices would start falling faster than wages, and productive society would benefit from the action. The malinvestment would be wiped out and the decks clear to recover. Econ 101.
There is another way that Ireland could pay off the debt, using the bad guys own policies...
Mish Shedlock reads this and says, buy up as much gold as Ireland can with unlimited credit at 1%, and then repudiated their debts. Here is a salient quote:
Under pressure from investors to lead the charge against the spreading sovereign debt crisis, Trichet said the ECB will keep offering banks as much cash as they want through the first quarter over periods of up to three months at a fixed interest rate. ... Trichet told reporters after the ECB’s Governing Council left its benchmark interest rate at 1 percent today. “We have tensions and we have to take them into account.”
OK... here is a plan...
Borrow 10 billion a month, and buy gold and silver... go as far as Ireland can with the offer... the very buying volume will jack the price up... but in any case every time the price of gold and silver goes up, goes up 10 %, sell 10%, paying back principal of the new loan and paying down the old. Since gold will easily go to $4000 in the next couple of years, the debt will be wiped out in a year of two. I wonder if someone can spreadsheet this for me... it would be a fun graph to update... call it the Free Ireland Scheme...
0 comments:
Post a Comment