Punt Nua

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Firefly

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We all know the state of the nation here. We're borrowing a fortune to pay for current spending and we've heaped the banking debt onto the people - a double whammy. Perhaps ditching the Euro and going to Punt Nua (PN) should be discussed.

Would it not make sense to:
- Introduce Punt-Nua (PN) over-night on a one-to-one basis and convert all bank balances in the state.
- Immediately print 64bn in additional PNs the next day and pay the bond-holders this money. This will immediately wipe 64bn off our national balance sheet whilst at the same time devaluing our currency which will help exports & tourism.

Printing PN will lead to devaluation anyway so why not make this happen from the off by printing this additional 64bn and using it to pay off the banking debt?

Those working/retired in/from the public sector and those on social welfare will still be paid the same in PN but this will be less of a cost to the government as the currency has devalued.

Those with savings ("the rich" as they are known to some) will lose out, but at least this will keep the socialists happy.

We leave the euro, but we are still in the Europen Union - ie we still have free trade, just like the Danes.

Am I missing something obvious?

Firefly
 
The answer is yes. First of all €64 billion is not enough to pay off debt which is more than twice that. The next problem is the €64 billion of newly created money itself. According to the Central Bank of Ireland, the countries contribution to the Euro area money supply is €94 billion (M1). So you would be devaluing the monetary base by 70%. I think the actual devaluation of the currency would be at least the same.
This certainly would allow businesses to sell their current inventory very cheaply on international markets, but just wait until they have to restock their input goods.
Oil, petrol, diesel and gas would all go up by 70% (or whatever the actual devaluation would be); computers, electronics and cars would go up in price by the same. Clothes, many fruit and veg up by the same; steel, coal and industrial machinery all up.
Basically it would be a total disaster and it would be time to pack up and leave.
 
truthseeker said:
How would the bank do that though? Because whoever they owe money to internationally is not going to convert to Punt Nua.
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I take the point - but the fact remains the same. It's not an equitable scenario if ones savings are converted whereas debts remain in Euro.

In any event - if they don't, then would we not be talking about mass default? If we start getting paid in punt nua - and are trying to make payments in euro? Therefore, one way or another, the banks will have to take the hit - either directly or indirectly...?
 
Firefly said:
Am I missing something obvious?

Firefly
Click to expand...

The fact that the government has no authority to do so! Irish citizens are EU citizens and like all such citizens their right to the free movement of their capital is guaranteed, you can't simply go around converting their Euros without their agreement via a change to the treaties - meaning a referendum in Ireland.
 
Jim2007 said:
The fact that the government has no authority to do so! Irish citizens are EU citizens and like all such citizens their right to the free movement of their capital is guaranteed, you can't simply go around converting their Euros without their agreement via a change to the treaties - meaning a referendum in Ireland.
Click to expand...

They couldn't simply go around nationalising private debt either.
 
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