Citizens Electoral Council leader Craig Isherwood today called on the Australian government to take Germany’s lead on banning naked short-selling, but outlaw all financial derivatives trading.
“German Chancellor Angela Merkel’s ban on naked short-selling is a move to defend her nation from the global financial meltdown, overriding opposition from the City of London—exactly the kind of action that is necessary to survive the crisis,” Mr Isherwood said.
“It is time the Australian government took similar moves to defend the people of Australia against international speculators, but I’m calling for Rudd to go all the way and ban all financial derivatives.”
The CEC National Secretary pointed out that when Rudd did temporarily ban short-selling following the September 2008 financial crash, it was only on financial stocks, and only to save bankrupt investment banks like Macquarie Bank, who were allowed to keep shorting other non-financial companies while the government stopped anyone shorting their stock (see Dracula’s Bank).
By contrast, on Tuesday, the German government moved to extend their short-selling ban on all stocks.
Austria and Belgium, and perhaps even the Netherlands, may follow the German example, and legislation to split up banking activities between savings and investment banks (i.e. akin to Glass-Steagall) has already been proposed in the Belgian senate. Last week, the European Parliament’s Economic and Monetary Affairs Committee passed a resolution, calling for a total ban on naked short selling. The resolution is to be decided on by the EU Council of Ministers next week.
Mr Isherwood also pointed out that Australia’s banks carried some of the highest derivatives exposure in the world—total obligations amounting to around $13.4 trillion.
“Our whole financial system is actually bankrupt, only existing as part of the global derivatives bubble of over a quadrillion—thousand trillion—dollars, which is unpayable,” he declared.
“Last week’s 10 per cent plunge of the dollar drove up our foreign debt and foreign off-balance-sheet (derivatives) obligations by the same percentage—our $1.232 trillion gross foreign debt soared by $120 billion—which shows what speculators can do to a national economy in a short time.
“Financial derivatives speculation is worse than useless,” he said. “It is a parasite feeding off the productive physical economy which produces the goods and infrastructure that provides our living standard, and we’ll only have a future if national governments move to defend their people and destroy this speculative trading.”
Mr Isherwood said the growing recognition among U.S. congressmen that America must return to Glass-Steagall regulations—which was only stopped from becoming law last week because President Obama stopped it coming to a vote—is also motivated by a desire to defend their nation-state.
To find out about the massive fight to reinstate Glass-Steagall regulations in the U.S., click here.
To find out about the measures required to put Australia’s banks into bankruptcy reorganisation, click here for a free copy of the CEC’s feature production, the Homeowners & Bank Protection Bill—The Only Solution.
(Or, click here to purchase a copy, $10.)
To buy a copy of What Australia Must Do to Survive the Depression, click here.
Click here to join the CEC as a member.
Click here to refer others to receive regular email updates from the Citizens Electoral Council of Australia.
