Tuesday, 30 May 2017


1)      In 2009/10, using Promissory Notes (government guarantees issued by then Finance Minister Brian Linehan), the Central Bank 'created' €31billion for Anglo Irish Bank (€25.5billion) and INBS (€5.5billion);
2)      Those two banks were insolvent and were thus prevented by ECB rule from access to the Emergency Liquidity Assistance programme (ELA);
3)      The P Notes were accepted by the ECB/Irish Central Bank as collateral - clear breach;
4)      Everyone involved – the Irish Central Bank, the Government and most critical of all, the ECB – knew all this, knew those P Notes were literally papering over not just cracks but a fatal hole below the waterline of the two banks involved; however, in the absence of any formal structures to deal with troubled banks within the new euro currency area (fatal flaw in its design), needs must – it was a crisis situation;
5)      The banks went under, as was inevitable;
6)      The ECB insists that the €31bn 'created' as a result of the P Notes must be taken back out of circulation – Ireland forced to pay for the euro design flaw;
7)      Rather than challenge the ECB on the legitimacy of all this, in 2013 new Finance Minister Michael Noonan transposed those bonds to sovereign debt, created a schedule of destruction;
8)      Chunk by chunk, €500million by €500million, that schedule is now being followed (accelerated even) by the Central Bank;
9)      The process is this:
                                          i.      Using previously borrowed money, our National Treasury Management Agency (NTMA) buys one of the P Note bonds issued under the Noonan 2013 ‘deal’ from the Central Bank (usually a tranche of €500million);
                                        ii.      The Central Bank destroys that €500million (probably just the push of a computer button), declares that element of the €31bn P Note debt 'cancelled';
                                      iii.      The €31bn is reduced by that amount – we still have over €20bn remaining to be thus destroyed;
                                      iv.      The money that was used by the NTMA to buy that P Note bond will eventually have to be repaid and in the meantime we pay interest on it;
                                        v.      The critical thing to know, however, is that the Irish people get absolutely no benefit from that €500m. 

Burning billions but it's no joke...

Saturday, 27 May 2017


The Business programme on RTE Radio One today (May 27th 2017) had a segment devoted to what Michael Noonan and this government might do with the estimated €3billion from the prospective sale of 25% of AIB shares. Several possibilities were discussed as to how this massive sum – three thousand million euro – could be spent, from paying off part of the €200bn national debt to investing in badly needed infrastructure to building social housing.

NOT mentioned was the fact that last year, our Central Bank destroyed exactly that amount, €3billion, the same Michael Noonan’s new €31billion Promissory Note schedule of destruction now well in train.
This week also we had the collapse of the Seanie Fitzpatrick trial, widely reported on RTE and in all our major media outlets, replete with outrage real and false as the man who played a major part in the collapse of the Irish banking system walked away scot-free by direction of the trial judge, following Three-Stooges-like farce in the preparation of the case.

NOT mentioned in any of that coverage is the fact that this ongoing destruction of billions of euro every year is part of the Seanie Fitz legacy to this country.
Why not? It is truly baffling.
Day after day, week after week, month after month, we have programmes dedicated to discussion on all the ills currently afflicting this country – the homeless crisis, the HSE crisis, the Garda crisis, the almost total absence of national capital investment, etc etc, and in every one of those discussions, inevitably, someone (usually the presenter) will ask the killer question – ‘Ah yes, but where will we get the money to pay for all this, eh???’.

And never yet, NEVER, have I heard anyone say – ‘But maybe if we stopped destroying borrowed billions every year, we could use it for all those services and investments’. Why not?
This destruction of money is real, and it IS happening, so regularly now in fact that even the Irish Times has taken to simply cutting and pasting its own reportage on it – see the two screen-grabs below. Mind you, the Times would prefer ye didn’t know the full truth, so rather than publicise the fact that the latest €500million tranche has been destroyed, they just speak about a bond ‘cancelled’. 
But believe me, the billions borrowed by the National Treasury Management Agency and used to purchase those old Promissory Note bonds is being destroyed, and will continue to be borrowed and destroyed until the entire €31bn is gone. This is real money being borrowed, real debt being created, real interest being paid on that debt, and real money being destroyed – still around €20billion to go.

And yet not a word of complaint, not a single question the morality or the legitimacy of all this.
Later in that same The Business programme on RTE there was an interview with Dr Tasha Eurich on her book ‘The Power of Self-Awareness in a Self-Deluded World’. It made me smile, a little, and it made me wonder – is no-one in RTE aware that in tranches of €500million, legacy of the Anglo Promissory Notes and courtesy of the new Michael Noonan schedule, we’re destroying borrowed billions every year? Do they even WANT to know?
See if you can spot the part where they speak of what happens to the €500million...
Spot the difference...