Fasten your belts and brace for a crash landing!
Today's Irish Independent article :
The publication of the two reports coincide with the news that at least €10bn has been withdrawn from Ireland in the past week as the impact on Ireland's financial reputation emerges.
If the outflow of funds has begun as I wrote in my blog 3 months ago, if that is 10Beu/week then it is a matter of a few weeks before all Irish banks will run out of cash and the gov will have to either fork out that cash (if it has got any left), renege on the promise or let them all fail! In my back of the envelope estimate there is only 20-40Beu of cash reserves left with the Irish banks, perhaps even less!
I was off by 2 weeks. The banks ran out of cash after 6 weeks instead of 4 as I thought. Irish government managed to save their bacon, for the time being by injecting 90B eu of fresh money into their system, in the first week of April. Irish banks ONE : Irish taxpayers ZERO, everybody happy, all love! This should last them about 3 more months assuming that the cash bleed rate stays the same. We should expect some more interesting news in the middle of the summer. So far so good, go to a pub, drink beer...
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