Just as the news breaks that the UK racked up another Â£10.3 billion in debt last month it is already sinking in that we will also be sending circa Â£7 billion across the Irish Sea to bolster up that economy.
The EU nanny is now gearing up (truly) to force its milk past the weakly clenched teeth of Ireland's now 'Celtic Kitten' economy. But one suspects as soon as the first taste gets past the throat there may well follow the sounds of greedy guzzling.
It transpires that our own UK banks are knee deep in Irish debt, so we have to bail the Irish out in order to safeguard our banks (that is our own) position.
Many people are asking why, if we have known of Ireland's problems for so long, are the banks still holding their debt in the form of bonds? The reason is probably two fold. Too much would be lost by selling them at a discount (cheap). And why sell them if you know they will be covered by the EU/IMF bail-out systems?
These banks have risk assessment strategies in place. They will have factored all of this in and made the decision to not divest themselves of Irish debt knowing they will get their money back.
So the UK government has been forced to wade in with its share(?) of the bail-out funds.
And when the money gets back to the banks to restructure their debts there will be much shuffling of paper money and huge bonuses all round!
Now some would argue that the bail-out is in fact just a series of loans and guarantees. But these will be provided to the Irish at an interest rate they can afford, or else what's the point? This may well be at about the same rate as the UK borrows it or, horror of horrors, even lower. So any ‘profit’ we stand to make would presumably be eaten up by our own interest payments.
The UK is £4.8 trillion in debt, so the money we 'lend' to any bail-out customer will have to be borrowed from somewhere else. The EU and IMF are effectively using our good(?) credit rating to find funds for other countries. That also means we wear a bit of the risk of Ireland in the eyes of investors pushing our risk rating up a notch in the process ultimately threatening to raise the interest rate at which we borrow as well.
This will last decades and it is our children and grand children who will be picking up any bills all the way down the line.
The next question is how far our banks are into Portuguese, Spanish and Italian debt. We had better start saving for those as well. Oh! Sorry, it's not savings that pays for it is it? It's debt and no worry there, our children and grandchildren's taxes will pay for that.
How much more debt are we willing to push down the road on their shoulders before we cry “ENOUGH”?
And so is it any wonder that so many people are now eyeing gold and silver as safe havens for their hard earned dosh.