May 2009: Irish Recession Still in Deflationary Phase
We’ve got new central bank figures:
Monthly statistics from the Central Bank show the first net fall in mortgage lending since 1990. The figures also show a sharp fall off in credit card spending…
It is the first time that repayments on existing mortgages has been greater that new mortgage lending since the Central Bank began this monthly statistics series in 1990. The figures show that, overall, mortgage lending fell by over €100m last month.
Contrary to what most people think, deflation is a good thing. Under a free market monetary system, this imaginary digital “credit” would never have been brought into existence in the first place. As loans are paid in faster than they are being created, with the most speculative loans already in a state of default and evaporating from the system entirely, the money supply more closely reflects that which would prevail in a deregulated, decentralised system (however a pale imitiation it might be).