Is the world credit party over? View from Ireland (home of the mother of all housing bubbles!)

Eventually, all good bubbles die when there's no more easy credit. Turn out the lights - the party's over.

Here's another report, from Ireland this time:

On a daily basis, the work of many bank staff involves the provision of fresh credit to people who want to buy or build property only. As a country we were able to consume more than 80,000 new housing units last year. Demand for new housing is running at about six times the level seen in Britain. The housing stock is growing by close to 5.5% annually. About 13% of the workforce is now involved directly in construction and 20% of the government’s revenue flows directly from the activities performed by this army of workers. These are the interlocking circles that underpin the Celtic tiger economy.

For the moment the mood is euphoric. But anybody who tells you that we are not witnessing a credit bubble — and an associated asset price bubble — is simply wrong.

The key considerations when this time comes will be twofold: the weight of debt already accumulated and the average cost of servicing that debt. The perceived potential gain accruing from further speculative investment in property will also act to determine the economic mood. If the property sector stalls, or even retreats slightly, the appetite for fresh credit creation could wither away quite quickly.