Citizens Electoral Council of Australia

Media Release 5^th June 2007

Craig Isherwood, National Secretary
PO Box 376, COBURG, VIC, 3058
Phone: 03 9354 0544 Fax: 03 9354 0166
Email: cec@cecaust.com.au
Website: /

Bank of Japan Governor Toshihiko Fukui announced on May 31 that Japan will begin to gradually raise interest rates and spoke about the need for Central banks to inquire into the factors causing global imbalances. He warned that "asset prices tend to overshoot economic fundamentals from time to time, causing excessive volatility, which could in turn negatively affect the development in the real economy."

Only six days earlier Fukui had called for International controls on hedge funds, most of which are registered in off-shore tax havens, making it impossible for governments to regulate them. Hedge funds, which he described as "close to a virtual world", have greatly increased the risk to the global system, and this risk "could be explosive."

Lyndon LaRouche has expressed his full support for the call to impose new regulations on hedge funds, but went further, insisting that "the very existence of hedge funds is insane," and that they should be eliminated. Noting that the Japanese have revealed over the past month that the yen carry trade has been driven by hedge fund speculators, LaRouche added that it is time for Japan to "end the carry trade altogether and raise interest rates to international levels." Postponing the rate rise for fear it will undermine the international financial system, simply makes it worse.

In LaRouche’s new piece, "Rules of Survival," he reports on the full scale of the crisis and the necessary solution.