WIZARDS OF WISDOM

Forwarded from Irish Freedom Party - Official Channel

When the Euro was created, economists such as Nobel Prize laureate Milton Friedman warned that the currency was a mistake, and that the Eurozone, even back when it only composed of the original eleven member states, was far from an optimal currency area.

In fact, Friedman specifically cited Ireland all the way back in 2001, as an example of why the euro was such a disaster in the making. Friedman argued that Ireland needed to tighten up its monetary policy by raising interest rates, but that because it was now a member of the Eurozone, it couldn’t do so. Ireland, like the other members of the currency union known colloquially as the Eurozone, no longer had an independent central bank and was thus unable to set its own interest rates.

The problem, as Friedman and others knew, was that it was simply impossible to find one interest rate that could suit all these vastly different countries. And the more countries joined the Zone, the harder it would be. The interest rate set by the European Central Bank (ECB) would always be too high for some member countries, and too low for others.

Friedman sadly died before he could see his prediction come true. In the early 2000’s, after the dotcom bubble burst and September 11 attacks happened, the ECB lowered interest rates. Like Friedman had predicted, this was a disaster for Ireland. The Irish economy had quickly recovered and did not need the stimulus boost provided by cheap credit.

What followed was an epic overheating of the Irish economy. Cheap credit combined with a naturally-strong economy caused the housing market to go to the moon, and like all things that go up, it did eventually come down, in a devastating crash. This isn’t completely unlike what happened in the U.S., but unlike the U.S., Ireland lacked the option of raising interest rates when the housing market began to overheat. And once it crashed, it also did not have the ability to cut interest rates enough to stimulate the economy.

The truth is that the ECB is mostly controlled by the large members of the Eurozone, and in particular by Germany and France. This does make sense: In just about every international organization, large countries have more influence than small countries. This is something small countries must take into account before joining. Unfortunately, Ireland didn’t. The low-interest policy of the early-mid 2000’s suited Germany’s sluggish economy just fine, but caused the strong Irish economy to become overstimulated.

It was not a coincidence that it was Ireland’s economy that was out of sync with the major players of the Eurozone. Overall, compared to most other member states, Ireland just doesn’t trade much with the rest of the Eurozone - or, for that matter, with the rest of the EU. Less than half of Irish exports go to the Eurozone, and less than half of Irish imports come from the Eurozone. Ireland’s two biggest trading partners were and still are the U.K. (which kept its own currency) and the U.S. It should not surprise anyone that Ireland might from time to time need to conduct a different monetary policy than the countries that make up continental Europe.

https://johngustavsson.substack.com/p/the-eu-and-the-gaslighting-of-ireland

The Hepatica by John Gustavsson, PhD

The EU and the Gaslighting of Ireland

How a nefarious campaign of emotional manipulation and historical revisionism convinced the Irish people of their dependency on the EU.

4 viewsLeo I am that I am, 13:56