What will be the impact of this Promissory Note deal?

Brendan Burgess said:

Hi Duke

The Central Bank pays a dividend to the Exchequer each year. They will be paying a higher dividend because their profits will be higher from this transaction.

There is no requirement on the government to begin capital repayments on the new bond for at least 25 years.

Nor is there any requirement, that I know of, on the Central Bank to start paying capital to the ECB.

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Boss hate to contradict. The CBI profits will be lower, much lower under the New Deal. That is the whole point. Profits in the CBI go to pay off ECB loans, lets keep them low.

Currently the CBI earns 8% on their assets and pay 1% on their liabilities. Big profit. But is it all paid back to the Exchequer? I don't think so. It is used to pay down ECB emergency finance. If the Exchequer could pocket this profit as a divi the New Deal would be an irrelevance.

Imagine you had lent an awful lot of money to a company, far more than you think is safe, would you be happy to see that company pay divies to its shareholder?

All a bit above my pay grade but I feel sure that the ECB has some sort of first call on any surplus in the CBI, otherwise none of this makes sense.

The Department of Finance has issued a "Transaction Overview"

Maybe it's late at night, but I find the charts very difficult to follow.

I don't see anything new in the Overview.

Brendan Burgess said:

The Department of Finance has issued a "Transaction Overview"

Maybe it's late at night, but I find the charts very difficult to follow.

I don't see anything new in the Overview.

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It's no longer late at night and they are still very difficult to follow. I'm none the wiser.

I don't see anything there about a guarantee that the net cost of financing will remain at 0.75% p.a. or 1% p.a. or whatever other rate is being plucked out of thin air by our esteemed leaders.

Is this really a good deal or have we just sold our children and grandchildren down the river?

Homer said:

Is this really a good deal or have we just sold our children and grandchildren down the river?

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I think that "kicking the can down the road" is a good result. The Germans themselves have only finished paying back for world war 2.
Also there are so many unknown things that could happen in the future to reduce the impact of the payments "going forward".

Clear as mud guys........
I noticed it on the various panels last night on TV. Everyone seems to have their own version of the internal workings of the new scheme and they're all a bit different..................

Alan Dukes was on Newstalk a while ago. He's lost his job with IBRC but he thinks what happened was well engineered.
He says that he had no fore warning of the IBRC liquidation.

RichInSpirit said:

The Germans themselves have only finished paying back for world war 2.

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I thing you'll find that they have only finished paying back for World War 1

mercman said:

I thing you'll find that they have only finished paying back for World War 1

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That's even worse

RichInSpirit said:

That's even worse

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Which makes a definite interaction to those that say 'People in glass houses shouldn't throw bricks'.