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Citizens Electoral Council of Australia

Media Release  8th of September 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
 

U.S. Government’s unlimited bank bailout desperate, futile, & ‘tantamount to treason’

U.S. economist and statesman Lyndon LaRouche has denounced U.S. Treasury Secretary Hank Paulson’s ‘unlimited’ bank bailout announcement on the 7th of September, as “tantamount to treason” against the United States and its Constitution. Paulson’s action completely confirms the warning of the Lyndon LaRouche Political Action Committee—ever since authorisation of this Federal bailout action was demanded by Paulson in July—that the Treasury is not assisting Fannie Mae or Freddie Mac; it is using them to pass through a huge new taxpayer bailout to international banks holding Fannie and Freddie and other mortgage securities, including a number of Australian banks. These banks are being aided by the Treasury in postponing the inevitable write-off of trillions in worthless securities, which would expose their bankruptcy. The bailout will not work, except to worsen the ongoing financial crash.

Paulson refused to name a figure for the bailout over any time period: Both the new capital being put into Fannie and Freddie by the Treasury, and the Treasury “Secured Credit Lending Facility” opened up to them, are open-ended and unlimited (except by the current U.S. Federal debt ceiling). Worse, Paulson announced that the Treasury is mandating the two government-sponsored enterprises to use this Federal credit line to buy more, riskier toxic mortgage-backed securities (MBS), and more subprime and undocumented mortgages, through the end of 2009, than they have been buying in 2008.

Essentially, the government is bailing out the debt by doubling it, creating an even bigger pile of debt that will have to be bailed out, doubling again in a geometric progression. Since there isn’t enough money in the world to make this scheme work, it cannot succeed, and the attempt to do it will trigger a hyperinflationary explosion reminiscent of Weimar Germany, such that the very value of the dollar itself will vaporise.

The euphoria in the Australian market today, which greeted Paulson’s announcement, is irrational, and will be short-lived. Far from being a guarantee of a brighter future, it is an act of extreme desperation, which betrays the level of despair among policy makers and central bankers, over exactly how deep this crisis is proving to be.

The only genuine solution to this crisis is LaRouche’s Homeowners and Bank Protection Bill, which does not bail out private banks with public money, but puts all banks under federal government bankruptcy protection, in order to keep them trading, whilst the unpayable debts of those banks and their exposure to the U.S.$700 trillion global derivatives bubble are written off.

LaRouche’s bill puts the needs of the people first, ahead of the banks, by guaranteeing people keep their homes, whilst the system is reorganised.

Click here for more information.

For a complimentary copy of the Aug./Sept. New Citizen, “Banks Crashing Worldwide—Only LaRouche Knows What to Do!” which documents the latest phase of the global financial crash, and/or to become a New Citizen distributor, click here.


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