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Citizens Electoral Council of Australia

Media Release  14th of May 2008

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
 

Going, going.... How soon before an Australian bank collapses?

Sunday’s 60 Minutes story on Channel 9, of foreclosed houses in Sydney that have collapsed in value by up to 50 per cent, underscores the desperate plight facing the 750,000 mortgage-stressed families in Australia.

However, Australia’s banks are in even bigger trouble.

A fortnight after the Reserve Bank of Australia injected close to $1.5 billion into one or more of Australia’s banks, buying worthless residential mortgage-backed securities (RMBS), as a bail-out, the Commonwealth Bank of Australia announced on May 8 it would sell $15.6 billion of the same worthless RMBSs to the RBA, to raise capital.

(These RMBSs are worthless, because they are backed by mortgages that are in default, on the properties that are collapsing in value.)

Yet earlier that day, CBA CEO Ralph Norris sparked a share market rally when he told a Macquarie Capital Conference his banks had “No current plans (or need) to raise additional capital”.

Why the lie?

This week, the big financial news is the intended merger between Westpac and St George, the financial equivalent of two staggering drunks propping each other up—the merger will create the biggest mortgage business in Australia, and hence the biggest exposure to the collapsing property prices.

Homeowners and Bank Protection Bill the only hope

Nobody is safe from the fall-out from this housing and banking crisis: 750,000 families are currently suffering from mortgage stress, all five million or so mortgage holders are at risk from the accelerating collapse in property values, and every Australian will suffer from a collapse of the nation’s banking system.

(In 2005 international credit rating agency Fitch Inc. ranked Australia as second most likely to suffer a national banking collapse if its property market collapsed in the very way it is now.)

There is hope: American economist Lyndon LaRouche’s Homeowners and Bank Protection Bill (HBPB) will put an immediate moratorium on all foreclosures, so that nobody loses their home, their farm or their rental property. The banks will be put under federal government protection so that they do not shut their doors, while the government reorganises the entire financial system, by writing down all of the unpayable debt.

The Citizens Electoral Council’s mobilisation for the Australian version of this legislation has won the support of 260 councillors, and thousands of Australians.

If you want to help make this bill law:

  • Call your federal and state MPs, and local councillor, and ask them to support it too.
  • Join the CEC as an Associate Member.
  • Take bulk copies of the New Citizen to distribute in your area.

Sign our HBPB petition; you will receive a free introductory literature package.


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