THE EDITOR: Please help me make sense of this NIC Bonds issue, because I am not very good at accounts and the figures I am seeing and hearing just don’t make sense to me.
A friend tries to explain it to me by forwarding the following FB post from another friend. Check this out:
‘NIC loaned the government money to redeem the bonds. Government plans to roll the bonds over to get cash to pay back the NIC
‘NIC buys the same government bonds, which generates cash for the government.
‘Government uses that money received from the NIC’s bond purchase, which was spent by the NIC in buying their bonds, to pay back the NIC for the money loaned from the NIC.
‘NIC now gets their loan paid off, using NIC money which was used to buy the bonds that their loaned money paid to be redeemed…
‘So NIC, in effect, paid-off the original bondholders, but this is covered-up under a quick loan payback scheme orchestrated to dazzle and deflect… and NIC is now still left holding the bonds bag…
‘But there’s more…
‘The government buys government bonds, to provide monies to government, to allow the redeeming of government bonds…’
But waaaaiiiit a dawgonne minute!
I don’t know about you, Mr Editor, but I am still asking myself: ‘Whakinda bush-doktor financial madness is this?’
Ouch, my head hurts… (Dizzy NIC Contributor)