Shakespeare’s
Merchant of Venice tells the tale of a merciless vindictive money-lender,
Shylock, calling in a bond against the Merchant of the title, the non-payment penalty for which was
A
pound of flesh, to be by him cut off
Nearest the
merchant's heart.
The deadline arrived, the bond
wasn’t paid, the matter ended up in court where the moneylender demanded his forfeit – the pound of
flesh -
The
penalty and forfeit of my bond.
There
followed one of the great Shakespearian sonnets, Mercy, which began
The quality of
mercy is not strained.
It droppeth as the
gentle rain from heaven
Upon the place
beneath. It is twice blessed:
It blesseth him
that gives and him that takes.
Shylock
is heedless, heartless, bound on having his pound of flesh and with it, the
life of the merchant. Just as he’s about to plunge in his knife, however, a
young lawyer (actually a young heiress, Portia, in disguise, the lover of the
merchant's best friend) intervenes:
Unto
the state of Venice.
Thus
is the merchant spared.
PROMISSORY NOTE BONDS
It was Einstein who said 'Make everything as simple as possible, but not simpler.' The
Promissory Note bonds are complex, maybe deliberately so, means most
people will simply (pardon the pun!) not bother to even begin to
understand them. But it's worth doing so, because they are breaking this
country, making debt slaves not just of this generation but of those
who will follow, for the next 40 years at least. So please, try to
follow this as I try to follow Einstein's directive.
The origin
During
2010 two Irish zombie banks, Anglo Irish Bank and Irish Nationwide, needed €31bn
to cover their liabilities, billions they didn’t have. At the time, and
eventhough we were now three years into the crisis, there was still no EU
structure in place to solve this crisis so the ECB and the EC allowed the
Central Bank of Ireland print the €31bn and accepted as collateral the hastily
drawn Promissory Notes from the Irish government. In doing so they bent and
twisted their own rules and regulations but so be it, needs must and this was
an emergency situation. They feared for many of the major creditor banks at the
core of Europe if those two Irish banks were allowed go under, the contagion
effect, feared even for the survival of the euro itself. So, the money was
printed, given to the two banks who duly distributed it to their creditors
world-wide – not a cent given to the Irish exchequer.
It
worked, the crisis was eventually stabilised and of course we should all live
happily ever after. But no.
Four
years on, the EC and ECB are in Ireland looking for their pound of flesh – they
want that €31bn taken back out of circulation, every cent of it. Already
they’ve had €3bn, when the first of those Notes fell due in March 2011, €3bn
borrowed and destroyed that year by this broken county. Now another €28bn sits
in bonds in the Central Bank, awaiting sale per a schedule that the ECB wishes
to see accelerated.
The P Note bonds schedule
Per
that current schedule, the Central Bank of Ireland will this year (2014) sell a bond
of €500,000,000, then take that money and destroy it.
This is worth repeating - they take those hundreds of millions of euro raised from the sale of that bond, millions this country sorely needs (think of the water charges now being imposed) and they then destroy those millions.
Immediately, we - the broke
Irish people - will start paying interest to that bondholder and in 24 years’
time, 2038, all the interest having been paid, that bondholder will come back
to the Central Bank of Ireland looking for the entirety of those millions.
That’s
just the beginning.
Next
year, another €500,000,000 Promissory Notes bond will be sold, the millions likewise destroyed,
then the same again for a further three years - five years at €500,000,000 per year, every cent destroyed.
Obscene, yes, when you consider that all this debt was to bail out the international creditors of two zombie failed banks.
But it gets worse. After 2018 the process accelarates - €1,000,000,000 a year for five years, then
€2,000,000,000 a year for eight years; finally, in 2032, a bond of €1,500,000,000, making a total of €25,000,000,000. In words, twenty-five thousand million euro, every euro destroyed, confirmed for us by none other than Patrick Honahan, Governor of the Central Bank.
Also
held by the Central Bank at the moment and already being sold (€350,000,000
sold and destroyed in 2013), a bond for €3,460,000,000 to cover the Promissory
Note of 2013, which means the Central Bank actually holds over €28bn in bonds - that's €28,000,000,000.
Possible solutions
Those
billions were printed for the benefit of the EU and specifically the EuroZone,
including Ireland. That money is already in circulation, has had no impact on
inflation or on anything else. It should be left there, the remaining
Promissory Notes bonds held by the Central Bank of Ireland destroyed, the
€3,060,000,000 already destroyed returned to the Irish treasury.
At worst the Central Bank should hold onto the bonds, not sell them into the market, let them die a natural death as they reach the 'maturity' rather than adding to the suffering and deprivation of the Irish people.
But
the EC/ECB continues to demand its pound of flesh from us and doesn’t
give a damn if in doing so, they drain the lifeblood from the Irish people. And
the lifeblood IS being drained. Anything else that Europe and the world is being
told is a mixture of lies/half-truths/exaggerations, spin by a dying and desperate
government.
Europe
is told Austerity is working, Ireland is the perfect example. We can
see how this impression is being created, the headline numbers being quoted to
back up that assertion. But look behind those numbers.
UNEMPLOYMENT
FALLING
The
world is told that Ireland's unemployment numbers are finally falling, corner turned and green shoots, and hopefully this turns out to be a genuine recovery.
What the world is not told is that when all the various government schemes are taken into account,
when all those who are on welfare but in part-time employment are taken into
account, and especially when emigration is factored in, the number soars to over 25%.
61,000 NEW JOBS
CREATED IN 2013
An
utterly spurious claim, debunked by Finfacts and by Michael Taft of Unite. In fact the CSO's own press release refutes it, just over 30,000 more people in employment at the end of June 2014 than in June 2013. An improvement, certainly, but in what areas are those
jobs being created? And by whom? Certainly not by the government, whose only job
‘creation’ was in the areas of spin – with their multiple highly-paid advisers
– and the new quangos being created.
EMIGRATION
Never
spoken of when the above headline figure is being quoted but were it NOT for
emigration, where would Ireland be? People are leaving Ireland at levels not
seen since the 1840s, the Great Hunger, when the population almost halved in
only a few years.
In
a heart-breaking article titled Purging Ourselves Of Our Young, Michael Taft shows that in the
three years up to 2013 nearly 250,000 Irish people under the age of 29
emigrated - a small GAA club in Mayo recently picked a notional
starting 15, all of whom are gone. It’s
not just young people leaving either, it’s entire families, it’s people in their
50s and even in their 60s, forced out by the circumstances created by these
austerity programmes.
SUICIDE
Yet
another statistic overlooked when Europe, having been so misinformed by our own
officials, talk up how Ireland is doing under the austerity programme. There
are so many casualties at the moment but these are the ultimate, a growing number of people who feel trapped,
can’t see any other way out and thus act, not because they wish for death but
because they can't handle life, not the kind of life now being imposed on them.
RETAIL SALES
You
want to know how a country is doing, look at the retail sales, look to commercial vehicle sales and see how much confidence
business has in the immediate future; in Ireland’s case, little or none.
They’re the ones doing the highest and the heaviest mileage, they’re the ones
who need to keep their fleets up to date; they’re the ones now hedging their
bets.
DIY STORES IN
TROUBLE
Look
at the number of DIY chains gone into receivership – Homecare, Atlantic
Homecare and B&Q; not alone has the construction industry folded, people
can’t even afford to maintain what they have.
EXPORT-LED RECOVERY
Another
myth. Aside from the fact that as pointed out by the EU itself, many of those exports
aren’t actually fully produced here at all, there is a growing trend away from Goods exports to Services exports, the latter far less
beneficial to the Irish economy – high-end jobs, many of them filled from
outside the country anyway but certainly having very little impact on the local
unemployment figures.
DEBT SUSTAINABILITY
The
normal formula used when calculating national debt sustainability is GGD/GDP,
Gross Government Debt as a percentage of Gross Domestic Product. Our GDP and
GNP figures are distorted by the multinationals, massaged by the government to appear
better than they are but be that as it may, the more pertinent debt calculation
formula for Ireland is GGD/GNP, Gross Government Debt as a percentage of Gross
National Product.
Using
the GDP formula Ireland’s graph has been rising soaring into the
red zone for years, to the point that at the end of 2013 the ratio was at
123.7%. But what would it be if the more accurate GNP figure were used?
Our
GGD at the end of 2013 was €203bn, GDP in 2013 was €164bn, GNP was €135bn; this
would give a debt/GNP ratio of 203/135 x 100 = 150%.
Sustainable?
Given that we’re in recession, unlikely to see any real growth for years, that
debt figure increasing in bounds? Economist Michael Taft puts it very
succinctly – a bloody disaster. Constantin Gurdgiev, an
economist from the another side of the field, puts it as colourfully – the
light at the end of the tunnel is an oncoming train.
Add
in the SME
DEBT (€9bn now in default), HOUSEHOLD
DEBT (€166bn at
end of 2013, 123% of GNP), MORTGAGES IN
TROUBLE (we’re world champions apparently), STEALTH TAXES (a raft of these - Universal Social Charge rise, Carbon
Tax increase, Water charges, Property Tax, Pension levy hikes, Prescription
charges rise, Public transport hikes, Maternity Benefit changes, Excise Duties,
etc etc), and STEALTH CUTS, and where are we?
It
is claimed that the budgets of the last few years have been progressive,
hitting the strongest hardest – untrue, that claim has been dismantled, again by Michael Taft, one of
those trying to negate the lies. Even within Ireland itself, a compliant media
are contributing to the illusion that austerity is working, that compliance exposed
in a comprehensive study by Dr Julien Mercille of UCD.
The
world is repeatedly told that Ireland was bailed out in November 2011, that
Germany in particular saved the EuroZone. The opposite is the truth – Ireland
has helped to bail out Germany and in particular, the German
banks, and no country in Europe has profited from this crisis to the extent
of Germany. Where did the Greek ‘bailout’ billions go, to the Greeks? You would
assume so – you would be wrong. Much of it went to banks, to German Banks. So who is
bailing out who?
Our
government says the IFSC isn’t a tax haven – independent studies suggest otherwise, the
IFSC facilitating tax avoidance on a grand scale. Those in the most senior
positions in the IFSC have the ears of those in the most senior positions in
government, outlined in an article in the Financial Times, while that same government is
heedless of the cries of its own people.
I
could go on, and on and on and on. But enough. No matter how it happens, we –
the people of this little nation – will work our way out of this and in doing
so, we don’t need anyone’s charity. We do however need to have this unjust
burden lifted from our shoulders, we do need someone to step in and challenge
the EC/ECB on their determination to have their pound of flesh.
Regards,
Diarmuid O'Flynn.
