North Korea Increases Aid to Russia, Mos... Tue Nov 19, 2024 12:29 | Marko Marjanovi?
Trump Assembles a War Cabinet Sat Nov 16, 2024 10:29 | Marko Marjanovi?
Slavgrinder Ramps Up Into Overdrive Tue Nov 12, 2024 10:29 | Marko Marjanovi?
?Existential? Culling to Continue on Com... Mon Nov 11, 2024 10:28 | Marko Marjanovi?
US to Deploy Military Contractors to Ukr... Sun Nov 10, 2024 02:37 | Field Empty Anti-Empire >>
Promoting Human Rights in IrelandHuman Rights in Ireland >>
The Renewable Industry?s Dirty Little Secret Has Just Been Exposed Sat Jul 05, 2025 15:00 | Will Jones The cat is out of the bag, says Diana Furchtgott-Roth. The vitriolic reaction to Congress?s plans to cut tax credits for renewables lays bare how 'cheap' wind and solar really are, and how subsidies are never enough.
The post The Renewable Industry’s Dirty Little Secret Has Just Been Exposed appeared first on The Daily Sceptic.
Britain is Turning into a Hotel for the World?s Criminals Sat Jul 05, 2025 13:00 | Will Jones Britain risks becoming a hotel for?the world's criminals, warns Guy Dampier in the Telegraph, as new analysis?reveals that illegal small boat migrants are 24 times more likely to go to prison than the average Brit.
The post Britain is Turning into a Hotel for the World’s Criminals appeared first on The Daily Sceptic.
Germany is Not Being Honest About Who is Assaulting Children at Swimming Pools Sat Jul 05, 2025 11:00 | Eugyppius In the last 10 years, Germany has welcomed a lot of ill-behaved young men for no discernible reason, and along the way citizens have had the dubious privilege of discovering whole new categories of crime, says Eugyppius.
The post Germany is Not Being Honest About Who is Assaulting Children at Swimming Pools appeared first on The Daily Sceptic.
Defunding Gavi is Good for Public Health Sat Jul 05, 2025 09:00 | Dr David Bell The Left is in a panic over the defunding of the Gavi 'Vaccine Alliance'. But while the global vaccine industry has been lucrative, the biggest drivers of improved health are sanitation and nutrition, says Dr David Bell.
The post Defunding Gavi is Good for Public Health appeared first on The Daily Sceptic.
Pet Hates: Are Muslims in Britain Really Trying to Ban Dogs? Sat Jul 05, 2025 07:00 | Steven Tucker Are British Muslims trying to ban dogs? It's a rumour that's been swirling for years ? and it's true that in Iran hardliners occasionally moot the idea. But in this case the rumour seems to be false, says Steven Tucker.
The post Pet Hates: Are Muslims in Britain Really Trying to Ban Dogs? appeared first on The Daily Sceptic. Lockdown Skeptics >>
Voltaire, international edition
Will intergovernmental institutions withstand the end of the "American Empire"?,... Sat Apr 05, 2025 07:15 | en
Voltaire, International Newsletter N?127 Sat Apr 05, 2025 06:38 | en
Disintegration of Western democracy begins in France Sat Apr 05, 2025 06:00 | en
Voltaire, International Newsletter N?126 Fri Mar 28, 2025 11:39 | en
The International Conference on Combating Anti-Semitism by Amichai Chikli and Na... Fri Mar 28, 2025 11:31 | en Voltaire Network >>
|
People's News: Another housing bubble building!
national |
housing |
press release
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 ?
Trade secrets
The security industry is shaping EU legislation: lobbyists in action!
More austerity for the Greeks
What to do in Europe? Proposals from the left
|