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November 23, 2010 / passiveprogressive

The Ire of Ireland: Big Bonds from other Countries

The debt crisis in Ireland has caused some alarm amongst investors this past week, making many wonder if another nation has joined the ranks of Greece and Italy as Europe’s worsening economies.

There is a lot to read out there on the subject, but I wanted to contribute a simple graph to this discussion. It show the bond holders by nation, and the relative size of their investments. At this time many Irish are wondering how long they will be stuck paying off debts to this holders, so it’s helpful to see where the funding has come from.

The biggest annoyance – which might be an understatement – for the Irish is that as opposed to the US banking crisis where the failing banks were within the United States, the Irish bailout will likely go to bond holders outside of the country.

Of course, because the bailout is coming form the IMF (and the IMF gets 20% of its funding from the US), it will really be citizens of the United States who bear the brunt of Ireland’s default in the short term. In the long term however, many Irish are simply asking how many generations will be paying off colossal amounts of debt.

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