Wednesday, 30 December 2015


The ongoing cancellation of the IBRC Promissory Note bonds and subsequent destruction of the money raised is a three-part process: 
  1. The National Treasury Management Agency (NTMA) issues sovereign bonds from which it raises billions of euro – this becomes part of the national debt, interest paid on the bonds from the date of sale, the principal to be repaid when those bonds mature; 
  2. In increments (so far) of €500m, the NTMA uses some of those billions to buy the IBRC Promissory Note bonds held by the Central Bank of Ireland; 
  3. The Central Bank of Ireland destroys the hundreds of millions received from the NTMA and that portion of the €31bn Promissory Note debt is declared ‘cancelled’, thus satisfying the ECB. This is the most critical of the three elements, in fact the raison d'être for the entire exercise – Quantitative Squeezing is what MEP Luke Ming Flanagan has titled it, the ECB-ordained destruction of the entire €31bn used to bail out the failed creditors of two failed Irish banks, Anglo Irish and INBS.

This week, March 2016, the Central Bank of Ireland destroyed €500,000,000, half a billion euro, a sum it received from our National Treasury Management Agency (NTMA) that had been borrowed on the financial markets; last year, 2015, in four similar tranches of €500m, our Central Bank similarly destroyed a total of €2bn; in 2014, it was €1bn - all of those billions given to them by our NTMA from funds it had raised from sovereign bond sales.

NONE of our national media reported the above; those that did, reported only that an IBRC bond had been 'cancelled', while some even suggested it was a 'good news' story, that we had gained on the whole deal! 'A profit of €180m handed over to the Exchequer!' it trumpeted, never bothering to question whence this 'profit' originated - it came from our NTMA, the ones from whom the Central Bank was getting all those hundreds of millions, all of which is borrowed.
The actual Promissory Note bonds are easily explained and understood:
What happens to a house built on dodgy foundations, a house missing many critical support pillars and beams? It collapses. So it was with the euro and so it is that now, 17 years after the currency was launched in 1999 and several years after that collapse, the EU is trying to salvage what's left, trying to install those structural pillars and beams (Single Supervisory Mechanism, Single Resolution Mechanism etc. etc.) in a building that is still tottering on the brink.

When the banking crisis hit Ireland there were still no such structures in place to deal with troubled banks and as a direct result of that negligence, Ireland suffered a major hit

The EU, however, the ECB in particular, DID have a policy – no bank would be allowed fail. So in 2009/10 when Anglo and INBS were already (to anyone with even half a brain) obviously insolvent, a fudge was concocted between the Central Bank of Ireland, the Irish government and the ECB to save those banks. This involved the issuance of Promissory Notes by the Irish government, accepted as collateral by the Central Bank of Ireland/ECB, and funding eventually amounting to €31bn was issued to the two insolvent banks from the Emergency Liquidity Assistance (ELA) fund.

Despite the fact that this was done principally to save bigger banks across the eurozone, in Germany and France particularly (Anglo and INBS were non-systemic to the Irish banking system); despite the fact the ECB colluded in the circumventing of its own rules on use of the ELA; despite the fact all involved knew that Anglo/INBS (later combined to become IBRC) would never be able to repay those billions, the same ECB now insists that Ireland must take that entire €31bn back out of circulation.

We don’t have it (we’re broke, up to our necks in debt) so we borrow it, and tranche by €500m tranche our Central Bank destroys it – the three-part system described above.

Is all this too complex to understand? Why are not being told what’s happening? We in the Ballyhea Says No understand, we know what’s happening, down to the last sordid detail. 

We are determined that all in Ireland should also know, that all our friends in Europe (and we have many) should know. 

And we are determined that however long it takes, this wrong will be righted. Water under the bridge? The Central Bank of Ireland still holds €25bn in Promissory Note bonds, awaiting sale, that money then destroyed. That’s a lot of water yet to flow…

How the Irish Times sees the destruction of €500m

Regards and thanks,
Diarmuid O'Flynn

Monday, 28 December 2015


On December 21st, for the fourth time this year, the National Treasury Management Agency (NTMA) announced the ‘cancellation’ of a €500m bond which had been ‘issued in connection with the Irish Bank Resolution Corporation (IRBC) Act 2013’.

As with three previous such €500m bond sales earlier this year, as with two other such last year, the Irish Times carried a report of the ‘cancellation’ and it sang with positivity, nothing but good news for Ireland. Why, we even gained from the transaction – ‘It is known,’ sang the Times, ‘That the Central Bank realised a €180.3 million gain on the sale of €500 million of 2038 notes this day last year.’

Think about that for a moment – ‘realised a €180.3m gain’ on a €500m transaction. How? Well you see that's a secret, the Irish Times doesn't elaborate.

Incredible? Yes, but for those of us who closely track these events, even that isn’t the major howler.

Bear in mind that the Irish Times claims to be ‘The Paper of Record’. Now, know this.

The most important element in all these NTMA IBRC bond ‘cancellations’, in fact the whole raison d'être for those bonds in the first place, is what happens to the money the NTMA gives to the Central Bank of Ireland to buy out those bonds.

That money is destroyed.

That’s right, my friends – destroyed.

In a nutshell:
NTMA borrows billions on the finance markets through the issuance of sovereign bonds; in tranches of €500m the NTMA then uses that borrowed money to buy the IBRC bonds from the Central Bank of Ireland and thus ‘cancels’ those bonds – that much IS reported by the Irish Times; what’s NOT reported, the Central Bank of Ireland then destroys those borrowed billions. Every cent.

Even as we headed into a festive season that sees record numbers of people evicted, on the streets, below the poverty line, record numbers fed by charity organisations, record numbers on waiting lists in a health service that has all but fallen apart, this broke and heavily indebted money is destroying borrowed money by the hundreds of millions.

And even in its own reports of those incidents, the Irish Times omits to mention this, the most critical element of all.

Last year, the NTMA gave the Central Bank of Ireland €1,000m of borrowed money, €1,000m on which we are now paying interest, €1,000m which will have to repaid by a future generation of Irish people when those bonds mature; this year, 2015, the NTMA gave the Central Bank of Ireland €2,000m of borrowed money, €2,000m on which we are now paying interest, €2,000m which will have to repaid by a future generation of Irish people when those bonds mature.

And the Central Bank of Ireland immediately destroyed those hundreds of millions of euro, all three billion.

Those three billion are just the start – the Central Bank of Ireland still holds €25bn of IBRC bonds for sale, that €25bn then also to be destroyed.

The reason for all this destruction of money? In 2009/10, to prevent the collapse of two insolvent banks (Anglo Irish and INBS), the Central Bank of Ireland, the Irish Government and the ECB colluded to bypass the ECB’s own regulations and allowed the creation of €31bn to bail out the creditors of the two banks; a couple of years ago those banks were finally wound up and as was known even at the time, didn’t have the wherewithal to cover that €31bn; the ECB now insists that our Central Bank has to take that entire €31bn back out of circulation. We don’t have it of course, so we borrow it and, tranche by €500m tranche, destroy it.

The irony, as we head into 2016 – if this were to happen now, under the new ECB banking ‘Single Resolution Mechanism’, those two banks would be bailed out using funds raised from the banks themselves. All too late for Ireland of course; those structures SHOULD have been in place from the launch of the euro, but weren’t.

That the government would much prefer you didn’t know any of this is understandable, for obvious reasons; that the Irish Times, that ALL our major national media, would so misrepresent it, is an utter disgrace.

They would also have you all believe that the bank-debt ship has sailed, all water under the bridge.

In the Ballyhea Says No campaign, we know otherwise. For 252 weeks, every week since March 6th 2011, we’ve been trying to get our message across, the real story as outlined above. We don’t have the audience of The Irish Times; you can help us. Copy this, share it, tweet it; let people know.

This coming Sunday, January 3rd 2016, 10.30am in Charleville, we march again; the first Sunday of another year, another milestone on a journey that will end only with bank debt write-down. Join us.
Manipulation by the media - happening world-wide

Tuesday, 15 December 2015


Last Sunday we marked week 250 of the Ballyhea Says No campaign against the imposition of odious bank-debt on the Irish people. In the days before and after I was asked many times – how have ye kept going? How do ye persevere with a cause that gets so little publicity? My answer, and it’s rhetorical, not a question – having learned what we’ve learned over the last 250 weeks, knowing what we now know, how can we not.

And God, what we’ve learned.

The message broadcast is that this is a home-grown problem (our Taoiseach leading that particular chorus), that it all began with the Blanket Bank Guarantee of September 2008.

We know it did not.

  • We know it began with the launch of the euro, a currency union which even the European Commission and the ECB admit lacked many of the most crucial structural elements, elements they are now trying to install, pillars such as the Single Resolution Mechanism (for troubled banks), central bank deposit guarantee scheme, full Economic Monetary Union/Banking Union/Fiscal Union;
  • We know that the catastrophes that befell the eurozone subsequent to the launch of that flawed euro (five near-bankruptcies, record debt/GDP levels in most other euro area countries) were foreseen, predicted as far back as 1998 by renowned economists such as Paul De Grauwe of the London School of Economics;
  • We know this crisis was NOT home-grown, it was an EU-created problem in which yes, we have a share, but ONLY  a share.

We read that the ECB were livid with Brian Lenihan and the then Irish government for offering that blanket bank guarantee. 

We know this to be nonsense. 

  • We know that when the then government and the government that succeeded them tried to burn senior unguaranteed unsecured bondholders, they were told in no uncertain terms by the ECB heavyweights – try it and see what happens;
  • We know that in 2008 the ECB had no structures in place to deal with bank failure but they had a policy – no bank will be allowed fail, no burden-sharing will be allowed. In effect, the ECB’s own policy was also a blanket bank guarantee.

It has now become accepted fact that in November 2010 Ireland got a bailout from the Troika. 

We know the truth. 

  • We know Ireland got loans of €67.5bn from the Troika (€22.5bn each from the IMF and two EU funds), loans on which the Troika were making big profits (charging Ireland a few percentage points above what they themselves were borrowing for), loans that didn’t even cover our full bank bailout cost of €69.7bn; 
  • We know also via a Bloomberg/Bank of International Settlements report that in 2007/08, German and French big banks were exposed to Greece, Italy, Spain, Portugal and Ireland to the tune of nearly $800bn, that if even the relatively small Irish banks defaulted it could start a process that would end with the fall of the banking system even in Germany and France; 
  • We know that now, in 2015, well over 90% of that exposure has been transferred from those big German and French banks to the shoulders of the sovereign in Ireland, Portugal, Spain, Italy and Greece. 
  • Yes, we know who did the bailing out, we know who got bailed out, and it wasn’t us.

The Irish people are told over and over that Michael Noonan did a fantastic deal for Ireland on the Promissory Note debt, that he saved us tens of billions.

We know different. 

  • We know that under the old schedule Michael and his government were under enormous pressure to come up with €3.1bn every March, billions the Central Bank of Ireland would then destroy, legacy of the bailout of the failed creditors of two failed banks, Anglo and INBS; we know the destruction of the first €3.1bn sneaked in under the radar in March 2011, the election just over; 
  • We know the pressure Michael came under in March 2012, the publicity being generated by the proposed destruction of another €3.1bn, the stunt he pulled to get around that, one debt swapped for another; 
  • We know that what Michael Noonan and this government then did, in February 2013, was betrayal on a scale not seen before in the short history of this state; rather than challenge the ECB on what even he himself admitted on national radio was ‘totally’ illegal debt, to ease the pressure of having to find that €3.1bn every March, and the attendant negative publicity, he borrowed the entire remaining €25bn and created a new schedule of destruction, a schedule that lifted the burden from this government’s shoulders and transferred it to future generations, the final payment due to take place in 2053; 
  • We know that 100 years after the generation of 1916 sacrificed life and liberty to win freedom and independence, the legacy of this government is decades of debt-slavery to the EU, our freedom and independence surrendered without even an argument, never mind a fight.

We’re told that we must live within our means.

We know that under this new debt regime, we will be living well BELOW our means for many decades.

  • We know we paid around €9bn in national debt interest last year; 
  • We know also that around €2.5bn of that is bank-debt-related. Given the record low interest rates prevailing at the moment, we know this will only get worse.

When the Central Bank destroyed two tranches of €500m each last year, three more this year, a total of €2.5bn received from the sale of Promissory Note bonds, our national media was silent, no comment.

But we know. 

We also know the Central Bank of Ireland is holding a further €25.5bn of Promissory Note bonds to be sold (includes the balance from the 2012 bond), the billions thus raised also destroyed but all those billions eventually to be repaid, along with the interest accrued.

We’re told that nothing can now be done about any of this, that it’s all too late, water under the bridge, and sure aren’t we out of the woods now, unemployment falling, everything hunky-dory and this government proven right.

Again, we know the truth. 

  • We know how the unemployment numbers are massaged and manipulated, that the true figure is nearer 20% than 10%, that if it wasn’t for the traditional safety valve of emigration, Ireland would now be destitute; 
  • We know how we’ve gained from the collapse in value of the euro against the British pound the US dollar, two jurisdictions to which we are major exporters; 
  • We know that interest rates are at a record low and have been for a record period, which has helped enormously to keep our payments down; 
  • We know how our recovery is exaggerated by the dark dealings in the IFSC and by the tax-avoiding antics of the multi-nationals.

Over the last several years we too have been adversely affected by all that’s gone on, we too have lost loved ones to emigration, to suicide; we want desperately to see a recovery, a real recovery. But we know, what was done to us from 2008 to 2011, the transfer of all that bank debt, was wrong and that wrong has never been righted; we know that much of the pain that has been inflicted on us is directly related to that odious debt. And we know, lift that burden and Ireland will soar.

Knowing all this, how can we stop?

This is a fight that MUST be won, a fight that will be won. How? Stop the sale of those P Note bonds immediately and the subsequent destruction of billions, challenge in the European Court of Justice the legality of the entire arrangement.

In the meantime, our first challenge is to shine a light on what has happened, to let people know. When that’s done, when YOU all know what we know, we’re certain – you will be with us on this campaign.

Regards and thanks,
Diarmuid O'Flynn.