Monetary Crash
New Ireland Bank
1st: We should all show our appreciation to Seanan, James Keiller, and D-Glennon for there contributions to the "Good To Have Friends" MPP FUND". I won't disclose the amount without their permission, but I would consider the size of the donation 'Considerable'.
2n😛
I recommend you read Stranger's Article for a good summary of the new economy module's impacts.
3r😛
I would like to thank my my Finance Interns for the work they have done so far this month. Especially Patrick O'Leary and Ian Coleman. They're not exciting tasks, but the information they have been compiling has proved useful and will grow ever more potent.
Now a quick breakdown of IEP's world rating by day:
*It should be made clear, while pushing Ireland's currency value to one of the best in the world, the bank was actually making a PROFIT during this period. Every single transaction by the bank has either made profit or just broke even to keep the market liquid.
May4th: 40th (took management of bank)
May5th: 29th
May6th: 18th
May7th: 11th
May8th: 6th (that's right, 6th most valuable in the world!)
May9th: 5th (Our best rating in recent history...But this is the evening war initiatives began)
May10th: 8th
May11th:10th
May12th:11th
May13th: 7th
May14th: 8th
May15th: 6th
May16th:30th
May17th:47th
*It's worth pointing out that headway in world ranking does not in all cases represent an actual gain in IEP value as other economies were also experiencing currency collapse.
During this period we were also able to aid the Croatian economy during one of it's most important battles by bridging the cash/gold trading discrepancy on their market.
Saving our allies 20% on the price of gold, at no cost to Ireland.
So What Has Happened To Our Economy Recently? WAR happened
In 2 days the majority of the bank's capital was spent on MPP's. This combined with our need to keep a large protectionist cash reserve crippled the bank's ability to manage the market.
During this time foreign currency speculators abandoned our MM for fear of being 'locked in' to a dead currency. Believe it or not, currency speculators are a positive force in currency exchanges; they help close cash/gold trading gaps.
However the predominate cause of IEP's fall is really a mechanic of war. The war caused normally complacent citizens to tank as though soldiers in defense of the nation. As tanking can consume an infinite amount of gold our nation was quickly stripped of the majority of it's standing gold. As a rough estimate, I believe the bank would have needed to hold 70% of the nations entire currency to counteract the 'tanking effect'.
So What Now?
Unfortunately the prognosis is not good. Lots of IEP has circulated through the economy at too low an exchange rate. And it will take a long time for the nation as a whole to recuperate the gold drained during this war. Combined with the fact that the new company module has not helped our companies improve their competitiveness on the world market, it could take months for our currency value to recover. Unless a large amount of IEP were to mysteriously disappear from the game.
Suggestions?
Personally I am 'Long' IEP and a few other currencies. If your gold strong this is a great opportunity to buy'n'hold currency at an amazing discount. However this is a medium term investment only to be undertaken if you have the gold available to wait out the monetary recovery. There is at current exchange rates no fear of a nation like ours in printing more currency. This combined with ingame currency burners like MPP's, RW's and certain company grades will over time dispose of large amounts of standing cash.
Specifically to IEP: British hostility is unlikely to abate anytime soon. Ireland can be expected to burn 30-40,000IEP monthly on MPP's for the foreseeable future. This will eventually push the exchange rate up and offer gold investors substantial return on investment.
How is Sw33t doing as Minister of Finance?
Personally I rate my performance as: A Moderate Failure
Though some of my programs have been quite effective. I did raise a respectable amount of profit at the start of the month. However I was unable thus far to achieve the market stabilization that was my primary goal. I'm not awarding myself an Epic Failure medal (yet) because my department was overtaxed, under-capitalized, and overwhelmed by events outside my control. However you know what they say about excuses....
So feel free to post your own opinions below
Comments
It's been a hard month to be a MoF. Good article, and good work so far this month.
Voted!
Thanks for the update man, recent events have been disasterous for us as a nation. Hopefully we can repair all damage done but it will take a few months to do.
no one in egreece ever rated his term as a failure! only for this you get a huge v from me!!!
also, exporting is a good way to get foreign gold into eireland
vote 8 sub 30
Vote from exAmbassador ; )
Maybe ill be back..?
Considering the fact that my Q1 house is sold yesterday, I think 'dear bot' visited us too.
Who is this noob?
Great job!
v
vote, and you better put this in use for IA http://economy.erepublik.com/en/company/defense-munitions/188763
Ur shite, feck off 😉
Nice article man
really...
sw33t
Sweet, I think you did a very good job, and your awesome insight to monetary issues is a real asset to eIreland. What made your term a 'moderate failure' was not your performance but the combined effect of recent changes and the state which the eIrish economy is due to the mismanagement and incompetence of past administrations. What you did was actually the job of the chairman of the central bank, and you managed it well. The problem is that the eIrish economy has serious structural flaws, which could have only be healed by taking a more holistic view of the economy. You are only partially right when saying "currency speculators are a positive force in currency exchanges", as that applies only to the old fashioned monetary players, but - with the opition of trading now open - there was a new, and more dangerous type of speculation born, dealing with predatory behaviour on the monetary markets combined with goods arbitrage. I know these methods pretty well, as I use them myself - elsewhere. It's not that visible, but if you know the usual suspects, you have a chance to spot some of their activities. Ireland, due to our taxation system and the current state of our economy is very much prone to these attacks. And we have been under those attacks for weeks now, draining Gold from our economy, and adding heavily to the effects you listed here. So again, you did a wonderful job, but it could only have been successful if paired with the necessary fiscal and economic measures. (inb4yousayideclinedtheposition: yes, I did, and all due respect to you for accepting that extreme challenge).
@Oktam.
The issue of the Q5 company has been discussed at length. I have forwarded a proposal through which it could be activated. However it was determined that as the company will not receive the citizen's bonus within the org, it is currently not viable to open operations.
Hopefully it can be migrated to a more suitable home soon.
@SHM You correctly assess my monetary leanings. I had hoped to target the commodities market after stabilizing the currency at an acceptable level and measuring the impact of that. Unfortunately the currency went thermonuclear before that time.
I understand you don't desire the job. In lieu of that, your observations and insights would be invaluable to my continued attempts to stabilize our economy.
Considering the major challenges facing you, I think you've done pretty well.
Great article. Gotta love Transparency in government.
Keep up the good work
DerBrad x2
very good article, thank you for the transparency, hard work and modesty
Wait...what is this I don't even....😃
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