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Citizens Electoral Council of Australia

Media Release  11th of November 2010

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

Banks are desperadoes—lock ’em up!

The hysteria from Australia’s banks over the debate about interest rates reflects how close the Australian banks are to blowing out altogether, declared CEC leader Craig Isherwood today.

“The banks are in a bind,” Mr Isherwood said. “The politicians whom they own—their house-pets the Liberals and now the ALP since Hawke and Keating sold out—are bashing them for raising rates, but the banks must keep jacking up rates, because they are trapped in the collapsing global financial system.

“As for Joe Hockey, Wayne Swan and the other major party politicians, their bank bashing is cynical populism—those spineless wimps have no intention to do anything serious about the mess their policies created.”

Mr Isherwood detailed the crisis Australia’s banks are in:

  • Collectively, Australia’s banks have $15.195 trillion in exposure to the very “derivatives” financial instruments that in September 2008 collapsed Lehman Brothers and blew out the global financial system;
  • Since October 2008, only the federal government’s guarantees have kept them afloat;
  • Their balance sheets are “unbalanced”—of all the money they have lent as mortgages in Australia, they borrowed about 45 per cent from wholesale markets, mainly from overseas, mainly on short-term, 90-day terms, and mainly before the September 2008 “GFC”, when such money was dirt cheap; they constantly must roll over those liabilities, but now at much higher rates;
  • If the banks’ foreign creditors refuse to roll over their loans, i.e. lend them new money to pay out the previous 90-day loan, the banks are goners, exactly as happened in September/October 2008, when the banks ordered the Rudd government to guarantee them or they would “be insolvent sooner rather than later”;
  • For most of the past decade, the banks used the cheap overseas credit to lend wildly into domestic property in Australia, which drove the cost of housing close to 7.5 times annual household earnings, compared to the historical average of 3.5, i.e. a bubble;
  • The banks—led by the CBA—hysterically deny this undeniable bubble, because it means that the properties that are collateral for their mortgage loans, which are their “assets”, aren’t worth the money loaned against them, and therefore as much as half of the value of the bank’s assets could be wiped out in the kind of property bubble collapse that virtually all other nations have recently experienced—which the banks won’t survive!

Mr Isherwood pronounced, “The banks are desperadoes. That explains why they act as they do, jacking up rates as high as possible, and imposing more and more charges to extract enormous profits from the misery of their customers, etc. But you don’t let desperadoes run loose. You lock them up. You put them somewhere they can’t hurt themselves or anybody else—the Homeowners and Bank Protection Bill jail, with cell bars made of the very toughest Glass-Steagall.

He continued, “This farce shows the whole system is out of control. The whole banking system is bankrupt; the banks are only standing upright because the ‘independent’ central bank and the government are propping them up with public funds, yet because there is a ‘free market’, those so-called authorities have no power to keep the banks in line? Rubbish!

“It is time the government took charge, the way ‘old’ Labor’s warriors John Curtin and Ben Chifley fought to do, the way Franklin Roosevelt did, and the way Lyndon LaRouche has mandated for today: end the City of London’s control over the globalised, private banking system, put the banking system into receivership so it can be cleaned out, and then only allow the banks to function under strict government regulations enforced by a government-owned, government-controlled national bank.”

For a full run-down of the CEC’s policies to reorganise the banks, click here for a free copy of the CEC documentary, the Homeowners & Bank Protection Bill—The Only Solution.

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.



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