Citizens Electoral Council of Australia

Media Release Wednesday, 26 February 2014

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au

In reply to Clive Palmer: Not ‘Quantitative Easing’, but National Banking!

“Clive Palmer is mistaken to call for Australia to emulate the United States’ quantitative easing (QE) stimulation program, because it is a scam that has fattened up the Wall Street and London banks but has starved the U.S. economy of credit,” Citizens Electoral Council leader Craig Isherwood said today.

“However,” Isherwood continued, “Palmer is right to warn against ‘European-style austerity’ and call for the government to get the economy moving. The very best way to do that is establish a national bank that can direct credit into nation-building infrastructure projects and into productive industries.”

In an early February letter to all MPs, and again on ABC TV’s 24 February Q&A program, Palmer United Party leader Clive Palmer praised the U.S. Federal Reserve’s $75 billion per month quantitative easing, which he credited to Barack Obama, for stimulating the U.S. economy.

“Palmer is completely mistaken about the benefits of QE,” Isherwood said. “That’s not his fault necessarily, because the U.S. authorities are lying their heads off.

“Here’s the truth about QE: the $3 trillion that the Fed has pumped into the too-big-to-fail (TBTF) banks since 2008 has all been kept by the banks, and not lent into the economy. The $2.2 trillion increase in deposits in the Big Six TBTF banks since 2008 can be tracked back entirely to the Fed’s QE money printing, which is recorded in the Fed’s own data on ‘excess reserves’.

“Those six banks are now 40 per cent larger than in 2008, but the QE money has not gone into the real U.S. economy. None has gone into infrastructure, none has gone into investments in manufacturing and farming, and none has been loaned out. In the same five years that ‘excess reserves’ of the big six banks have increased by over $2 trillion, lending by those banks has fallen by $700 billion!

“So where has the QE money gone?” Isherwood continued. “Into speculation: in financial derivatives, securities, swaps, repo loans to other banks, and financial companies and funds. For instance, over $900 billion of JPMorgan’s $2.2 trillion in assets as of 2012 was invested in derivatives and other gambling instruments associated with the ‘London whale’ derivatives bet on which it lost billions.

“Meanwhile,” he declared, “the real U.S. economy is on its knees!”

Isherwood cited U.S. physical economist Lyndon LaRouche’s Executive Intelligence Review magazine, on the true state of the U.S. economy:

Unemployment isn’t falling, as is claimed. The participation rate is plunging because so many people are giving up looking for work.
The labour cost component of GDP, i.e income for America’s working families, has fallen in ten years from 66 per cent to 57 per cent. Real wages of manufacturing workers have fallen by 3 per cent under Obama.
Last year, the number of Americans officially living in poverty passed 50 million. 40 per cent of all working Americans are officially in “low wage employment”. 48 million Americans copped a 5 per cent cut in their food stamps last October, and another cut in January.
All across America workers are seeing big cuts to their pensions and/or health care plans, or losing them altogether.
Senior citizens’ access to health care has declined for three consecutive years.
The U.S. Conference of Mayors reported on 11 December that in 2013, 20 per cent of the need for emergency food assistance to American families went unmet.

Only solution is Glass-Steagall, national banking

Isherwood said, “There are only two actions that can revive the economy. First, an immediate Glass-Steagall separation of retail banks from the casino of investment banking. There are presently four bills before the U.S. Congress to restore the strict banking separation mandated by the Glass-Steagall Act 1933, which lasted 66 years until Wall Street arranged its repeal in 1999. When banking is separated this way, the retail banks can’t divert precious credit off into speculative gambling, so they have to lend it into the real economy.

“Second, and even more important, is a national bank, like Australia once had with the original Commonwealth Bank from 1911 to 1959, which served Australia so well during both world wars. The CEC has drafted legislation for a Commonwealth National Credit Bank which would direct credit into physical production in manufacturing, in agriculture, and in infrastructure.

“The national bank could issue low interest loans to the family farmers who right now are being driven off the land by the high interest rates they are struggling to pay on their collective $70 billion burden. It could lend at low interest for capital upgrades to boost the productivity of the crucial manufacturers who are getting smashed by free trade. The bank could issue long-term credit to finance major public infrastructure projects, such as great water diversion schemes, high-speed railways and nuclear power—a far better way to finance infrastructure than the Macquarie Bank scam of Public-Private Partnerships which burden the public with high tolls and charges.”

Isherwood said the CEC is mobilising to get legislation for a Glass-Steagall separation of Australia’s banks, and its legislation for the Commonwealth National Credit Bank, introduced into parliament. He called for all Australians who support the policies of Glass-Steagall and national banking to join the fight by becoming members of the CEC.

Click here for a free copy of the CEC’s new pamphlet, Glass-Steagall NOW!, which shows how stopping the global financial meltdown begins with Glass-Steagall.

Click here to join the CEC as a member.

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