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Already we are seeing evidence that the banks lied about the quality of the loans on their books. At the time of agreeing values on their toxic property portfolios the banks assured the government that 40% of their loans were income producing. Now we find out that the real figure is only 25%. What the percentage will be in a year's time is anyone's guess.
Apart from NAMA and the Anglo Irish Bank bailout, the Irish Government has already recapitalized other Irish banks and financial institutions to the amount of some 13.5 billion euro. This was supposed to release funds and provide much needed credit to Small Business and to mortgage seekers. But the banks which were bailed out by the people of Ireland are not responding in kind to the people of Ireland. They are holding onto their funds while businesses are failing in unprecedented numbers for want of working capital. Much of the bailout money is being used by the banks to strengthen their balance sheets or to make safe investments elsewhere.
(In the United States, banks find it more profitable and free of risk to borrow from the Federal Reserve at .25% interest and buy 5-year Treasury bonds at 2.5% return rather than lend money to cash starved businesses. They can make enormous profits while thousands of businesses go to the wall.)
When one adds up the amount of money committed to recapitalization and bailout of Irish banks one arrives at a figure of some 90 billion euro.
If the Irish Government had invested this 90 billion in a state owned bank they could have implemented that sleight of hand practice so beloved of banksters called "Fractional Reserve Lending" whereby they could create and lend some 12 times the amount of capital invested. This would exceed 1,000 billion euro!
Ireland would be awash with cash and with prudent management the economy would have been turned around very quickly. Small businesses would have adequate working capital, home seekers could buy homes, public projects and infrastructure could be easily financed, and Ireland would return very swiftly to full employment.
But the government did not take that option. Instead, they pledged a colossal amount of money to private banksters to save them and their investors from losses incurred by their own criminal recklessness. In doing so, they have mortgaged the future of Ireland and the Irish people for generations to come and crippled the economy to levels often seen in the Third World.
By giving billions of public money to maintain the fortunes of its former cronies in banking and property development the Irish Government has created a living hell for its struggling citizens: almost 500,000 people out of work, 200,000 emigrating in search of jobs, tens of thousands of mortgages falling into arrears, hundreds of small businesses going to the wall, and suicides alarmingly on the rise. The land is filled with misery and despair when it could so easily have been triumph and prosperity.
Is Michael O'Boyce and the GRA correct when they charge the Irish Government with treason?
You decide.
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