After a year of unprecedented financial crises, it's no surprise that some people have become crisis addicts. Its not an easy habit to kick. Articles by uber glooms like economist Dr Nouriel Roubini remain compelling reading. Crackpot ideas – like the United States is going to collapse within five years under the weight of its own foreign indebtedness – will always have currency at the your average middle-class dinner party but it is time to get real.

With Ireland's GNP scheduled to effectively collapse by 8% in 2009, there is no need to summon up darker trends than those we're already dealing with. However, for some commentators and economists rampant inflation and rising interest rates via the ECB are the biggest problems, not a slide in GNP of that scale.

How anyone can envisage inflation in Ireland or the eurozone anytime soon remains a mystery. Forget about Ireland's bust, what about the wider eurozone? This is a trading and economic bloc which will shrink by an astounding 4% in GDP terms in 2009, hardly the most fertile soil for the weeds of inflation to grow.

Barclays does not expect the ECB to raise rates until March 2011 at the earliest and not by more than a quarter of a percentage point. Is this something Irish householders really need to be scared of? What they need to be more scared of is the plans of the Irish banks to raise their mortgage rate unilaterally in January, regardless of what is happening with base rates.

However, Deutsche Bank predicts rates could rise by late 2010.

But it must be ack­nowl­edged that Irish rate rises are likely be triggered not by events in Frankfurt, but by the passage of Nama through the Oireachtas.

This reporter must at this stage register a declarable interest. This column warned some months ago about interest rate rises and their impact on Irish mortgage holders, but the extent of the damage to the Irish economy and the world economy was not fully clear at that stage and now it is becoming clear that inflation and interest rates hawks are getting a little ahead of themselves.

The greatest cure-all for inflation, of course, is unemployment and there is plenty of that about in Ireland and in the wider eurozone. For example, unemployment in the eurozone recently hit an all-time high of 9.5% and you can expect it to get higher. When you've got unemployment on that scale, inflation will take care of itself.

Its really quite simple, there is so much spare capacity in the European, and indeed Irish, economies at present that inflation hawks will be waiting years to have their day in the intellectual sun. Capacity utilisation, effectively the number of spare factories and underemployed workers around, is at the lowest level recorded in the US since 1967, with Europe in a similar position. Ireland's live register, one must remember, only measures the number of unemployed and not the number of underemployed or those who have decided to step out of the labour market entirely because of the downturn.

The massive fiscal and monetary stimulus being engaged in by western governments is preventing mass deflation, not inflation.

Of course, there are some people who simply have to warn about higher interest rates and the possibility of plunging Ireland into an even darker place. Colm McCarthy warned about such an event recently in his Bord Snip report, but he has perfectly acceptable reasons for putting up a red flag – he needs to gather support for expenditure cuts and less government borrowing.

This country could do with a good strong blast of inflation to help ease away our debt worries. But even four years from now, the harmonised rate of inflation will be running at a not very scary 1.8%.