Australia’s super funds are set to record a collective loss of over $50 billion, or 5.2 per cent, for 2007/2008, their worst return in 20 years, according to the research firm SuperRatings.

But it will soon get even worse: The Royal Bank of Scotland has issued an alert that there will be a “global stock and credit crash” over the next three months, which will likely drag the S&P 500 Index (the top 500 Wall Street companies) down by 300 points, or around 25 per cent, by September.

RBS spokesman Bob Janjuah warned London’s June 18 Daily Telegraph, “A very nasty period is soon to be upon us—be prepared.”

He predicted the trouble will begin by the end of July, at which point the Federal Reserve and European Central Bank will panic because they are in a catch-22: cutting rates will fuel inflation, while raising rates will blow out the credit markets.

The RBS prediction echoes the June 6 statement by the American physical economist Lyndon LaRouche, the world’s most accurate economic forecaster: “By the end of July, the world situation, as also the situation inside the United States, will have changed radically as we approach the first anniversary of the late-July 2007 outbreak of the world’s presently accelerating, inflationary, general financial breakdown-crisis.”

What is unfolding is the hyperinflationary blow-out of the entire global financial system, as the $700 trillion global derivatives bubble goes into meltdown, and the London-controlled hedge funds, which created the bubble, drive up the price of oil and resources to bail themselves out.

This is proving to be the final straw for the world’s physical economy, which is now passing breaking point; 850 million people in the world face death by starvation, because of the acute world food shortage, which is the most obvious manifestation of this breakdown.

This economic breakdown crisis is systemic, and will be impossible for individuals or nations to “weather”—governments must intervene.

Governments like Australia’s Rudd Government, which refuse to intervene, but leave the situation to be resolved by the “free market”, are betraying their people, condemning them to bankruptcy and death.

What is required is not a bail-out to save paper investments, but government intervention to save the physical economy; starting with protectionist measures to keep our farmers in business and the Homeowners and Bank Protection Bill (HBPB) to keep people in their homes.

Click here to join the CEC to support that fight. Click here to receive an information pack on the HBPB and 9 point program to save our family farms.