Governor can safely pack away his bubble-popping tools
We should not be afraid of ending credit famine and return to prudent growth in lending
'We have a toolbox of measures which can be used to cool down credit-fuelled demand…We will not hesitate to use them". With these words, Central Bank Governor Patrick Honohan today reminded readers of this paper that, just as it is the Pope's job is to be a Catholic, a Central Bank governor's job is to nip credit-fuelled inflation in house prices - or any other prices for that matter - in the bud.
No problem there. But context is everything. He may not wish to create that impression, but his remarks lend fuel to say that there is credit-fuelled demand when in fact there is nothing of the sort. Nowt. Nada. Nichts.
Sure, house prices are up by 12.5pc nationally in the year to June and 23.9pc in Dublin, according to figures released on Friday. These rates have not been seen since the boom that preceded the crash. According to the "my dog has four legs, all cats have four legs therefore my dog is a cat" mindset of some commentators, this means another boom is upon us. And possibly, in their way of thinking, another crash.