What is Dogmatism and Why Does It Matter? Wed Mar 21, 2018 08:10 | Sylvia Smith
The Case of Comrade Dallas Mon Mar 19, 2018 19:44 | Sylvia Smith
Review: Do Religions Evolve? Mon Aug 14, 2017 19:54 | Dara McHugh
Fake News: The Epistemology of Media Wed Jun 07, 2017 11:52 | Gavin Mendel-Gleason
Officials and Provisionals Sat Apr 01, 2017 22:54 | James O'Brien
Spirit of Contradiction >>
Interested in maladministration. Estd. 2005
Citizenship status has been removed from the Irish people
Tuam babies: Minister Zappone to opt for cover-up? Anthony
Michael Clifford and the dark evils of Social Media Anthony
RTE presenter accidentally tells the truth Anthony
Orwell’s 1984 arrives in 2018 Ireland Anthony
Public Inquiry >>
A bird's eye view of the vineyard
Are the mainstream U.S. ?news?media evil? Wed Aug 15, 2018 23:36 | The Saker
by Eric Zuesse for The Saker Blog William Binney, the U.S. National Security Agency?s former technical director for global analysis, has, for the past year, been globe-trotting to investigate the
Turkey?s Economic Crisis: Limited Options Wed Aug 15, 2018 23:28 | The Saker
by Gary Littlejohn for The Saker Blog It is said that when Groucho Marx was asked how he went bankrupt, he replied ?Slowly at first, and then much more quickly?.
The Russian ?soft power? is total crap (Anna Sochina) Wed Aug 15, 2018 15:56 | The Saker
(please click on ‘cc’ to see the English language subtitles) A big THANK YOU to Eugenia for translating and subtitling this excellent video!
All hands on deck: the Caspian sails towards Eurasia integration Tue Aug 14, 2018 23:59 | The Saker
by Pepe Escobar (cross-posted with the Asia Times by special agreement with the author) The five states surrounding the sea ? Russia, Azerbaijan, Iran, Turkmenistan and Kazakhstan ? have reached
What Really Happens to Nicaragua, Venezuela and Ecuador Tue Aug 14, 2018 02:52 | The Saker
by Peter Koenig for The Saker Blog Stories about corruption and internally government-generated violence concerning most unaligned countries abound in the MSM. These lies fuel hatred. And the public at
The Saker >>
People's News: Another housing bubble building!
Monday February 27, 2017 22:18 by 1 of Indyy
News Digest of the People’s Movement - No. 162 15 February 2017
The latest issue of People's News -for 15th Feb carries a lead article on the current housing bubble.
The free movement of capital has become one of the maxims of global capitalism. Along with the free movement of people, goods and services it is also one of the “four freedoms” of the EU’s single market.
But the removal of the policy instrument of capital controls has probably contributed to a succession of financial crises. Three decades ago, many people in the EU invested their hopes in a combination of free trade, free mobility of capital, a fixed exchange rate, and an independent monetary policy — dubbed an “inconsistent quartet.”
The combination is logically impossible. If Ireland, say, fixed its exchange rate to the German mark — which in effect it has done by adopting the euro — and if capital and goods move freely across borders, the Central Bank would have to follow the policies of the German central bank, the Bundesbank — or, in effect, the EU Central Bank in Frankfurt.
So we sacrificed monetary independence when we adopted the common currency. What has changed since then is the increasing importance of cross-border finance. Many emerging markets do not have a sufficiently strong financial infrastructure of their own. Companies and individuals therefore take out loans from foreign institutions denominated in euros; and that’s what the Irish banks were doing a decade ago.
Theoretically, it is the job of the Central Bank to bring the ensuing havoc to an end, which standard economic theory suggests it should be able to do so long as it follows a domestic inflation target. But if large parts of the economy are funded by foreign money, its room for manoeuvre is limited.
In the good times, credit flows into peripheral markets, fuelled by the massive German surplus, where it fuels local asset price bubbles, as we have experienced to our detriment. When, years later, liquidity dries up and the hot money returns to safe havens in Europe, the country is left in a mess.
Unless you accept financial instability as inevitable — and it increasingly seems an intrinsic part of the system as the time between crises grows shorter — you may soon be thinking about imposing capital controls that involve telling foreign investors that you don’t want their cash. The point is to prevent hot money flowing in during the good times and to stop it from draining out in the bad times.
This is not yet a subject of polite conversation among policy-makers. Central bankers have instead been peddling a concept known as macro-prudential regulation, a version of capital controls. The idea is to tweak incentives: when a housing bubble seems to be building up, the Central Bank imposes some ceiling on lending, for example by capping loan- to-value ratios. It might also ask its government to raise stamp duties or other transaction taxes.
Spain tried such measures during the precrisis years, and Ireland is trying it now. But it did not stop the buildup of one of the biggest housing bubbles in history.
More drastic action, such as leaving the euro or imposing controls on capital, might prevent the next calamity as rents and house prices soar. Spain did neither, but before long someone will — and it looks increasingly like it should be Ireland. Free movement of capital cannot be sustained as a point of principle when the economic costs are so devastating.
Some of the other articles in this issue are:
Two-speed EU back on the agenda!
Is there a trade war on the way?
Could the EU provide a solution to Ireland’s housing crisis?
EU banks have more than €1,000 billion in bad debt!
More euros to lend at low interest rates ?
The security industry is shaping EU legislation: lobbyists in action!
More austerity for the Greeks
What to do in Europe? Proposals from the left