We took to the streets to talk to people about their thoughts and feelings on the Irish economy and the government. The opinions were varied and colourful, we hope you enjoy this vlog.
I have looked back at market crashes, the Dutch Tulip Bulb crash, the Railway crash in the USA, the Great Depression, the Oil Crisis in the 70’s, The 1987 Stock crash, the S&L crisis, the dotcom bust and our most recent and several things have become clear.
The ‘solution’ is whatever was done at the time thus meaning we try to find the answers of tomorrow by looking back at what worked in the past and applying it to the new situation, it is one of the most basic human methods of learning. Children will get a burn from a fireplace once and it is then engraved in their minds that fires are hot and can burn you. Thus we see the same happening with monetary policy and with businesses.
The question though is this: What if what we did in the past was wrong? Does it make a solution that appeared to work relevant? If for instance I was the sole solution provider for the Great Depression …
The Deposit Guarantee Scheme has been revamped as of yesterday to cover any depositer in an Irish institution for up to €100,000 per person. This move is being done to help restore confidence in the Irish financial markets.
The scheme was created in the mid 90’s and throughout its history cover was never index linked or adjusted for inflation and therefore it never increased. The recent move is designed to restore confidence in the Irish banking system, however, there is one small oversight that Mr. Lenihan has omitted from the story, namely, the amount of money in the scheme.
Prior to this the scheme covered people for 90% of their deposit to a limit of €22,000. This meant that in effect you could only ever expect to get a maximum payout from the scheme of €20,000, this was amongst the lowest levels of cover in Europe and now, in a pen stroke we are one of the highest (only Italy covers more).
However, there is still that issue I mentioned earlier of the …