THE DIRTY DOZEN w/e Dec 23rd 2012

Two sides of the same coin - those pesky Promissory Notes just won't go away.

 I hate to go back over well-harrowed ground, but there still appears to be much confusion over what exactly happened last March. Herewith then one final attempt to explain, using the allegory above - two sides of the same coin.

One side of the coin, and let there be absolutely no doubt about this - the Promissory Note was paid in full to the so-called IBRC (Anglo etc), who then paid it to the Central Bank, who destroyed it as per the terms of the agreement with the ECB.

Second side of the coin - by whom was it paid, and how? Deep breath here: 

1) The government issued a sovereign bond which matures in 2025, which Minister Noonan 'asked' NAMA to purchase; that was the €3.06bn given to IBRC to give to the Central Bank - our money, as we effectively own NAMA;

2) Bank of Ireland then 'bought' that bond from NAMA, earned interest of 5.4% on it for the year;

3) However, there is a 'repo' clause in the bond, under the terms of which IBRC must repurchase the bond at face value (€3.06bn) before Mar 31 2013 - again, our money.

4) If a buyer can be found for the bond in the meantime, the next generation will pay, and because the bond actually cost €3.46bn (don't even ask...), that's what the kids of 2025 will pay on Mar 31st that year; in the meantime, we'll be paying interest of 5.4% on that €3.46bn.

Put very simply, we've taken out a loan at exorbitant interest to make a payment on an existing loan on which we're already paying interest - chasing our own tail, and it looks like this government is planning to do exactly the same for the 2013 Promissory Note. What Pat Rabbitte means when he says 'we didn't pay in 2012, we won't pay in 2013' is that 'we the government' didn't pay. One way or another, however, we the people will pay, and will continue to pay, thus persevering with what is now the most expensive bank bailout in history, a nation enslaved.

On that note, a link to a little video, an application just submitted to the Guinness World Records people. A humourous video, a deadly serious situation

No change in the bonds this week but please have a look at what's coming on Jan 14th 2013.