Banking establishment lashes out at ‘effective’ opposition to cash ban

Australia’s corrupt banking establishment have used their cheap home-brand toilet paper, the Australian Financial Review, to attack the public opposition to the Morrison government’s $10,000 cash ban.

The sewer journalism by reliable bank shill Aaron Patrick, “Cash ban brings out the conspiracy theorists”, published on 13 September, was a panicked response to one thing, as AFR conceded: that the explosive public opposition to the cash ban has been “effective”.

Now’s the time to step up the fight. Members of Parliament who also oppose the cash ban, including one unnamed government MP reported by John Adams and Martin North on their Interests Of The People YouTube channel, are calling on Australians to redouble their efforts in calling MPs to object to this totalitarian policy.

Click here to watch “EXCLUSIVE: Government MP Will Oppose The Cash Ban!” https://www.youtube.com/watch?v=wf2j6JwH_5Q

‘Conspiracy theories’

In his dishonest and lazy attack, Aaron Patrick tried desperately to belittle the opposition to the cash ban as based on conspiracy theories—specifically the link between cash restrictions and negative interest rates—and associate the opponents and media that have reported on it with “anti-Semitism” due to the leading role of the Citizens Electoral Council, which he smeared as believers in a “global Jewish banking conspiracy”. To fabricate his slur, Patrick refused to talk to the CEC, and in his written communication with CEC Research Director Robert Barwick he dishonestly did not ask about a “global Jewish banking conspiracy”, just a “global banking conspiracy”, and he deliberately did not print Barwick’s reply, which read:

“The major banks in Australia and around the world operate as a private cartel. The regulators and central banks in almost every country, including the BIS, are captured by the private banking cartel, and as the royal commission showed they ignore and cover for the banks’ crimes, allow their reckless speculation, and prop them up when they fail, at the expense of taxpayers and their customers. The global system is broken. Do you deny it?”

Patrick’s attack is not aimed at convincing the general public, who don’t read the AFR anyway. It’s aimed at intimidating people, whether other opponents of the cash ban, other journalists who report on it, or politicians who oppose it, whose views on the matter might overlap those of the CEC.

Questions for Aaron Patrick

Ironically, if Aaron Patrick thinks the tactic of guilt by association (let alone fabricating slurs) is legitimate, it raises much bigger questions for him:

Does Aaron Patrick stand by the AFR’s track record of deliberately covering up atrocious bank crimes by attacking the innocent victims whose lives have been destroyed by the banks, attacking other media outlets that have exposed bank crimes, and attacking the politicians who tried to inquire into bank criminality and who fought for the banking royal commission?

Did Aaron Patrick support AFR’s opposition to the banking royal commission?

Was Aaron Patrick surprised by the evidence of banking criminality that emerged from the royal commission? If so, why? Wasn’t it his job as a senior finance journalist to investigate and expose such criminality? If not, why did he and AFR cover up banking crimes by not reporting them?

These questions show Aaron Patrick is either an incompetent, lazy reporter, or a shameless propagandist for the criminal and predatory banks.

AFR certainly is the latter. After failing to stop the royal commission from being called, AFR’s 12 February 2018 editorial made this statement: “The financial sector royal commission … is fundamentally a political response to the core problem of dysfunctional politics, rather than of fundamental problems in Australia’s banks. … [T]here is no evidence of systemic corruption, criminality or even widespread unethical behaviour in Australia’s big banks.” (Emphasis added.)

Even in May 2018, by which time the revelations from the royal commission had proven AFR’s editors to have been complicit liars for the banks, Aaron Patrick attacked the hundreds of BankWest customers who had had the rug completely pulled out from under their lives when CBA mass-foreclosed on their business loans following its takeover of BankWest in the middle of the global financial crisis in 2008. Perhaps reflecting a rushed analysis due to its too-short inquiry period, the royal commission wrongly found that CBA had no case to answer, but Patrick seized on this one case to slander bank victims by using terms such as “lie” and “conspiracy theory”. Retired Sydney University political economist and veteran bank victims’ advocate Evan Jones, in a 19 June 2018 article for Independent Australia, described Patrick’s attack as “an exemplar of gutter press journalism”.

The real lie: the ‘black economy’

Clearly the main reason for the AFR’s hysterical attack on the CEC and other opponents of the cash ban is that the crooks at KPMG and the banks who want this ban hoped to avoid scrutiny, but now they can’t. And the problem they have is that under scrutiny, their claims are quickly proven to be bogus.

First, the claim that the cash ban is necessary to crack down on the black economy is a farce. The most authoritative study of black economies, by Medina and Schneider, shows that 1) Australia doesn’t have a serious black economy problem, being the 10th smallest of 158 countries; 2) the size of Australia’s black economy almost halved in 1991-2015, without any cash bans; and 3) near-cashless economies in Scandinavia, by comparison, have larger black economies than Australia does, and their black economies expanded after they went increasingly cashless. Click here for charts that prove this: https://cecaust.com.au/australia-doesnt-have-serious-black-economy

Second, the ulterior motive of restricting cash to trap people in banks so they can’t escape negative interest rates is hardly a conspiracy theory, as it comes directly from the International Monetary Fund, which was cited by the 2017 Black Economy Taskforce report that recommended the $10,000 cash ban.

Now’s the time to escalate the fight against this totalitarian policy:

Keep calling your MP and Senators, especially in the major parties to object to the law. Click here for contact details all Labor and cross-bench MPs and Senators https://cecaust.com.au/sites/default/files/2019-08/opposition_crossbench.pdf; click here for contact details for all government MPs and Senators https://www.change.org/p/scott-morrison-stop-scott-morrison-from-banning-cash-to-trap-australians-in-banks
Sign and share the Change.org petition: Stop Scott Morrison from banning cash to trap Australians in banks! https://www.change.org/p/scott-morrison-stop-scott-morrison-from-banning-cash-to-trap-australians-in-banks

Europe should ignore ‘treacherous promises’ of Facebook’s Libra currency, says central banker

Down_In_The_Mouth_Zuckerberg

Wow! Here is a tough call, the pot calling the kettle black here. Who would you rather trust, the chief crooks at the top of the financial criminal racketeers or the company that sells your personal data and censors truth that does not benefit its paying advertisers?

https://www.itnews.com.au/news/europe-should-ignore-treacherous-promises-of-facebooks-libra-currency-says-central-banker-530494

New Zealand heads into monetary madness to save banks

The Reserve Bank of New Zealand (RBNZ) slashed its interest rate by a drastic 0.5 per cent (50 basis points) earlier this month, to 1 per cent. RBNZ governor Adrian Orr then declared that New Zealand was prepared to follow Japan, Sweden and other countries that have gone below zero into negative interest rates, and is also thinking about quantitative easing and helicopter money—basically the full suite of extreme measures to prop up the financial system. NZ already has the world’s most explicit and extreme “bail-in” system to take deposits to prop up failing banks, called Open Bank Resolution (OBR). They won’t admit it, but this sudden escalation in RBNZ’s actions and rhetoric is a strong indication that NZ’s authorities fear their economy is heading off a cliff.

As the Citizens Electoral Council documented in a 1997 issue of the New Citizen newspaper, New Zealand once enjoyed a diverse, productive economy with a strong manufacturing base that even included car production. Unemployment in the 1960s was not measured in percentages, but in absolute numbers, reaching a maximum of a few hundred people. The global wave of neoliberal vandalism that started with Margaret Thatcher ripped through NZ in the 1980s. Known as “Rogernomics” after Labour Party Finance Minister Roger Douglas, neoliberalism privatised and deregulated NZ’s economy to death, smashing its manufacturing base, but feeding a massive growth in financial services. NZ became a Pacific paradise for Wall Street and London investment banks, such as CS First Boston, which trained up personnel in a new, aggressive financialised economy, who were then exported around the world. A phalanx of Kiwi bankers took key positions in Australian and London banks, including Australia’s CBA and the UK’s RBS. RBNZ acquired a reputation as a strict enforcer of monetarist policies, fiercely “independent” of government control. The result of three decades of this approach? An economy concentrated in a few agricultural commodities such as dairy production, a massive property bubble in the major cities, and financial services.

Joe Wilkes is a British real estate and banking expert who lived through the panic of the global financial crisis in London, and moved to New Zealand a few years later with his Kiwi wife to raise their family. What Wilkes discovered in Auckland was exactly what he had experienced in London that had caused its real estate and financial crisis. For more than a year Wilkes has been a regular on Australia-based banking expert Martin North’s Digital Finance Analytics YouTube show, warning about the signs of impending disaster in New Zealand’s economy. Very similar to Australia, NZ’s major banks, which are owned by Australia’s, have recklessly lent seven, eight and more times income for mortgages in the major cities. In an 18 August DFA episode titled “Shock and Orr”, Wilkes reported that real estate sales volumes in the three major cities of Wellington, Christchurch and Auckland have fallen sharply in the last year, and the falls have been accelerating. Commenting on Adrian Orr’s panicked rate cut, Wilkes said he would have described it as “someone crapped the bed”.

While Adrian Orr wouldn’t admit RBNZ’s true motives, he is remarkably open about what the central bank is prepared to do, especially in comparison with the Reserve Bank of Australia and US Federal Reserve. Perhaps Orr is hoping to normalise the extreme measures under consideration, but they are far from normal. They include:

Negative interest rates. Orr emphasised in a 12 August interview with business reporter Bernard Hickey of online news service Newsroom that in countries with negative interest rates, like Sweden and Japan, “life continues, and monetary policy remains effective”. By effective, he means that it forces people to change the way they use their money: “[I]t makes people either bring spending forward or delay spending…. It also makes people think much harder about alternative investments.” Why it should be the central bank’s job to force people to change their behaviour like this, he doesn’t say—it’s a given.

Orr “belled the cat” on negative interest rates by noting that to make them work, you need to stop people from using cash. This connection between cash restrictions and negative interest rates is one that Australian authorities are trying to deny as they push ahead with a law to ban cash transactions over $10,000. They are lying. Orr suggested a way to “remove the arbitrage between negative interest rates and holding cash” (meaning how negative interest rates are an incentive for people to take their money out of the bank): “Let’s tax cash holdings, simple as that: we’re back to monetary policy as usual; people are disincentivised to be holding large lumps of physical cash; they are having to think harder about putting money to work.” He cited former IMF chief economist Kenneth Rogoff, who advocates removing large-denomination notes and other restrictions on using cash, to make negative interest rates work. RBNZ is conducting an inquiry into The Future of Cash, which is taking submissions until 31 August.

Quantitative easing (QE). Orr was reportedly more cautious about the electronic money-printing to buy government bonds that is known as QE, partly on the basis that there is a limited supply of NZ government bonds in circulation. This means that Orr believes the money-printing would need to be done on a massive scale to work. He expressed admiration for the way the Hong Kong Monetary Authority didn’t buy government bonds during the 2008 GFC, but printed money to buy private assets directly—no doubt fuelling the sky-high property prices that afflict Hong Kong today.

Mortgage-backed securities. In the context of discussing QE, Orr revealed the RBNZ was looking into establishing a permanent market for mortgage-backed securities. This is a dead giveaway that RBNZ’s real concern is for the property bubble. RBNZ’s intention is to be able to create money to buy up mortgage-backed securities from the banks, in order to shore up the bubble: “We’ve said, ‘well, let’s make sure that this market exists and it’s a normal part of our market’. And so, those different types of instruments that we can purchase to put cash out is great. So, you know, there’s mortgage-backed; there’s the government bonds; there’s a lot of different types of things if you need to be creative.”

Helicopter money. This idea was first put forward by the late monetarist economist Milton Friedman, proving that the supposed differences between monetarists and Keynesians is purely superficial. Friedman suggested cash could be dropped from a helicopter so people could pick it up and spend it to stimulate the economy. Orr endorsed the policy: “So being able to do the helicopter kind of money concept would just simply be around being able to inject cash into the system whichever way we chose to use a ‘helicopter’ … there’s nothing mystical or magical about it, it’s just a different instrument.” 

The extreme measures that RBNZ is planning bespeak an economy in crisis. They also demonstrate the NZ authorities’ preparedness to ride roughshod over the civil liberties of New Zealanders, in order to force them to conform to the emergency measures to save their banks. This is part of a broader assault on civil liberties in NZ, in the wake of the Christchurch massacre in March, especially in regard to censorship targeting the online dissemination of information. This has even affected the New Zealand shows on the DFA channel on YouTube, even though it is purely an economics discussion, and in no way related to radicalised content. But economic breakdown leads to a loss of political control, which is always the reason that authorities resort to extreme, totalitarian measures. As NZ is such a small country, these developments are hard to disguise, so outsiders should pay attention to what is happening there, because it is certain the same thinking is under way in other countries, especially in NZ’s close cousin across the ditch, Australia.

Click here to sign and share the change.org petition, “Stop Scott Morrison from banning cash to trap Australians in banks!”.

https://www.change.org/p/scott-morrison-stop-scott-morrison-from-banning-cash-to-trap-australians-in-banks

Morrison is banning cash so Australians can’t escape bail-in, negative interest rates

The fight against “bail-in” is on! The Morrison government has released for consultation a new law that bans cash transactions over $10,000. The pretext for this law is to crack down on money laundering and tax evasion in the “black economy”. This is a shameless lie! The formal recommendation to ban cash comes from “big four” global accounting firm KPMG, which is an accomplice of the world’s biggest money launderers and tax evaders. The real purpose for the cash ban is to trap Australians in the banking system, so they cannot escape negative interest rates or having their bank deposits “bailed in”.

Scott Morrison first announced this measure in the 2018 budget, originally to come into force this month, but now scheduled for January 2020. It was recommended in the October 2017 Black Economy Taskforce Report by Michael Andrew AO (who died last month), a former chief of global accounting giant KPMG. The report revealed that the strategy is to: “Move people and businesses out of cash and into the banking system, which makes economic activity more visible, auditable and efficient.” (Emphasis added.) It gives the game away by noting that it may benefit “financial stability and the effectiveness of monetary policy”—code for policies like bail-in and negative interest rates. To achieve this it recommended: “Moving to a near cash free economy. A $10,000 economy-wide cash limit should be introduced.” But $10,000 is just the beginning: in June 2018, just after Morrison announced it, KPMG was already lobbying Treasury to lower the limit to $5,000 or even $2,000.

Deception and stealth

When Morrison released the exposure draft of his bail-in law in 2017, he did so on a Friday afternoon when there would be no media attention. Only a sharp-eyed CEC staffer spotted it and recognised it as bail-in, enabling the CEC to mobilise a massive nationwide campaign against it which continues to this day. The government is being equally sneaky with this law. Treasurer Josh Frydenberg quietly released the exposure draft of the legislation, called the Currency (Restrictions on the Use of Cash) Bill 2019, last Friday afternoon, 26 July, and has allowed only two weeks for public comment.

The exposure draft of the bill has two notable features:

  1. It bans ALL cash transactions over $10,000, enforced with a penalty of two years jail;
  2. Division 2 is blank, containing only the words “To be inserted”.

What is the government hiding by releasing an incomplete draft, on a Friday afternoon, and allowing only two weeks for public consultation?

The deception doesn’t end there. In its explanation of the law, the government has sought to make it palatable by emphasising that there will be exemptions to the cash ban, including depositing and withdrawing cash in banks, and, curiously, most consumer-to-consumer transactions, such as for a second-hand car. However, the exemptions are not in the legislation. They are in a separate regulatory instrument to be issued by the Minister after the legislation is passed. This means that they are not permanent, but that in the future, the Minister will be able to scrap the exemptions without requiring new legislation. This is the “salami tactic”: first pass the law in a form that is politically palatable, and then slice off key changes. In a bail-in scenario, for instance, under the current regulation people fearing bail-in may withdraw all of their money from the bank, but the Minister will be able to issue a new regulation that suddenly stops people from withdrawing more than $10,000.

Not about money laundering

This law is emphatically not about controlling money laundering and the black economy. The vast majority of money laundering and tax evasion is done by banks and corporations, not individuals. And who helps banks and corporations do it? The big four global accounting firms, including KPMG, whose boss Michael Andrew recommended this cash ban! The big four literally write the tax laws that enable corporations to evade tax, and dominate the offshore tax havens like the Cayman Islands that exist for tax evasion and money laundering. When Michael Andrew was the global boss of KPMG—the only Australian ever to lead the worldwide operations of a big four firm—two of KPMG’s biggest clients, British banks HSBC and Standard Chartered, were caught in 2012 by US authorities in massive money laundering operations. In other words, KPMG assisted its clients to launder money, but is using money laundering as the excuse to take away the rights of Australians to use cash!

The real reason: bail-in and negative interest rates

Money laundering and tax evasion are nothing new, that they would suddenly require this “solution”. What is new is the plunge in the public’s confidence in the banks, especially since the global financial crisis. But instead of properly reforming the banks to restore the public’s confidence, through policies such as Glass-Steagall, which separates normal banking from the financial gambling that causes crises, authorities around the world have resorted to insane and in fact criminal measures that further destroy confidence in the banks.

The two most egregious measures are the criminal bail-in policy and the insane move to negative interest rates; bail-in steals deposits to prop up failing banks, while negative interest rates force customers to pay to keep their money in the bank. Both are coming to Australia. Morrison snuck his bail-in law through the Senate in February 2018 with only eight senators present in the chamber and no recorded vote. The Reserve Bank of Australia has aggressively slashed interest rates to 1 per cent, and in the banking crisis that is brewing right now they will feel compelled to follow countries like Japan and Switzerland down past zero and into negative territory, as the International Monetary Fund is recommending.

Both bail-in and negative interest rates destroy confidence in the security of bank deposits, which motivates people to take their money out of the bank and hold it in cash. This is the experience in Japan and Europe. So like some European countries, Australia is banning cash to force people to use the banking system so they cannot escape these policies, under threat of two years jail.

Fascism is the use of state power to benefit private corporations; by definition, this is a fascist assault on the freedom of Australians to use cash and not private banks. The CEC is calling on all concerned Australians to demand the government scrap this law and reform the banking system instead!

What you can do

The government has allowed only two weeks for submissions, in order to avoid scrutiny. Don’t let them get away with it! We have until 12 August to swamp Treasury with letters and emails, demanding they drop this law. Write an email or letter today to the Treasury: state your objection to any law that removes your right to use cash, and demand the government restore confidence in the banking system by properly reforming the system, not by trapping people in the system so they can’t escape policies like bail-in.

Email: blackeconomy@treasury.gov.au with the subject line:
Submission: Exposure Draft—Currency (Restrictions on the Use of Cash) Bill 2019

Address written submissions to:
Manager
Black Economy Division
Langton Cres
Parkes ACT 2600

Financial Newsletter – From a person I know…


Last week I published the July issue of The Hard Truth. The issue was on the new crypto currency created by Facebook called Libra. I think what Facebook did with the creation of Libra is very cool. They created an actual crypto currency that will act as money. Meaning that the currency will have solid assets backing it up and it will be able to be used for the purchase of goods and services and will provide the ability to send money across the planet as if you were sending a text. Bitcoin and other crypto “currencies” are not really currencies. They have become investment assets like gold or silver. What merchant is going to accept Bitcoin in payment of say, a car, when the price of Bitcoin can fluctuate as much as $1,000 a day? The person pays the dealer in Bitcoin for a new Mercedes and the currency has fallen $1,000 before the car gets off the lot. Now, I thought it was very clever how they structured Libra as money and if you read the issue, you’ll see what I mean – www.thehardtruthmag.com. I got some very nice acknowledgments on the issue, which is always appreciated, but also got a few emails from people who think that I have the confront of Mary Poppins. I was upbraided for seemingly not understanding that the CIA “created” Facebook or that Facebook users were subject to government surveillance. I didn’t paint the potential dark side of Libra in the issue because I thought it was a work of considerable skill. It bypassed banks and governments and remained a stable digital currency – and still do. But for those who think I was promoting Facebook as the savior of the global financial system or that I am unaware of the gift that such a currency would provide the US intelligence spooks, please think again and subscribe to The Hard Truthand read some of our other issues. In the first two issues of The Hard TruthI dealt with the Snowden disclosures in great depth. We described Stellar Wind the CIA’s program that is plugged into the routing equipment of the major telecom companies and captures virtually all U.S. telecom and email traffic and “sniffs” it for “bad” words, sending offending phone traffic to the FBI, and the rest to a million square foot, billion dollar digital storage facility in Utah to be sniffed in more depth later. The NSA’s PRISM program monitors traffic to the social media world, including Facebook, Twitter, Instagram, etc. as well as Google, Apple, and rest of the cyber hierarchy. We also covered X-Key Score, the CIA program that combines Stellar Wind and PRISM with your bank account to create a digital portrait of US citizens. In addition, subscribers that have been with us a while would have received in issue #9 an in-depth article on how CIA, NSA and DARPA (the Dr. Strangelove of military weaponry) funded the initial research for the Google algorithm when Sergei Bryn and Larry Paige were doing their PhD research at Stanford. That issue also covers the migration of top government spooks from DARPA and the CIA to the stock-rich executive suites at Google. And how Google is a front for government intelligence. That issue also covers the meetings of the infamous Highland Forum, the unseen hand of government intelligence. Issue #9 is my favorite. If you want to get a peek at the activities of U.S. government intelligence and have an eyepopping look at the new American Police State, a subscription not only gets you the new “controversial” issue on Libra, but all published issues: subscribe here for the article on Libra and the entire archive. www.thehardtruthmag.com. And in case you read the recent issue of The Hard Truth and were under the impression that I was unaware of the extent of government intelligence surveillance activities and their digital fingers in social media or the clear intention by the Bank for International Settlements and the IMF to turn the global financial system into an internationally controlled monetary system of zeros and ones…. think again. The Hard Truth is primarily a financial newsletter. But periodically, I venture into government, politics and help expose some of the dark corners of government surveillance. Solutions are available in the articles. At $34.95 it’s a hell of a deal. John Truman Wolfe

Politicians who deny economic reality destroy their constituents

Mandurah

The local mayor, state MP and federal MP for Mandurah, Western Australia, have attacked the Interests Of The People (IOTP) show “The Economic Massacre of Mandurah” for exposing that their city is the leading edge of Australia’s housing and economic crisis.

The show featured independent economist John Adams and CEC Research Director Robert Barwick briefing host Martin North on their recent visit to Mandurah, where they witnessed streets littered with For Sale signs, and were informed by locals of the area’s serious economic and social problems, including the worst drug problem in the state. Martin North shared his comprehensive survey data of Mandurah’s 30 per cent house price falls, and more than 40 per cent unemployment and underemployment.

In the 17 July Mandurah Coastal Times, Federal Liberal MP for Canning, Andrew Hastie, attacked the show as “over the top”.

By contrast, the show struck a chord among WA locals, with many expressing that they know the show is right. “We’re seeing exactly what they say as fact in this town”, said local sport store owner Hayden Burbidge to Perth’s biggest radio station, 6PR, on 12 July.

The online Daily Mail also covered the show, in an 18 July article headlined “Economists drive through WA town counting endless ‘for sale’ signs on properties revealing the true extent of Australia’s housing crisis”.

The problem for Andrew Hastie, who is known to be personally very concerned about the situation in Mandurah, is that if he publicly acknowledges the crisis, he will be contradicting the claims of his own government. The Morrison Coalition government is both denying the crisis, and hustling the population to scam them into thinking that another housing boom is about to start and so they should rush out and buy houses.

They are preying on young households in particular, to lure them into thinking now is the right time to buy their first home. To do so, Assistant Treasurer and Housing Minister Michael Sukkar is trying to spread fear among young families—fear of missing out!

He is urging them to rush out and buy their first home now, before the government’s 5 per cent deposit scheme starts in January. Prices will skyrocket, Sukkar is implying.

“Housing Minister Michael Sukkar has urged first-home buyers to try to snap up a property now, ahead of the government’s signature loan deposit scheme starting next year, warning that housing prices are likely to increase”, Rosie Lewis reported in The Australian on 18 July.

“If you’ve got an opportunity to get a foot in the market before then you should take it, given I think the market is starting to improve,” Mr Sukkar told The Australian. “People who buy now I don’t think will regret it at all. A re-elected Morrison government has put a lot more confidence into the market. We’re seeing green shoots in Melbourne and Sydney in the last quarter and I think with low interest rates, with APRA reducing service-ability buffers, all those factors combine to confirm that optimism.” (Emphasis added.)

Sukkar might be confused. There are green shoots in the housing market—green shoots of weeds taking over abandoned greenfield developments in Sydney and Melbourne from the more than 25 per cent defaults from people walking away from their deposits, unable or unwilling to pay the balance and start building a home.

More likely, Sukkar is not confused, but along with the rest of the government is desperate to con people into the market, in the hope that a rush of buyers will start pushing up prices again.

The question is, if it doesn’t work to drive up prices, and the thousands of buyers who’ve followed Sukkar’s advice find themselves trapped in negative equity, will the Morrison government pay their debts for them?

WA shows that negative equity is a very real danger from these low-deposit schemes. The state’s Keystart program helps people into the housing market with a 2 per cent deposit, but a higher introductory interest rate. After a few years of building equity, the borrowers would refinance at a lower rate with a commercial bank. It worked for years… while prices were going up. Since prices have been plunging, however, all it is doing is trapping borrowers in negative equity and high interest rates, because commercial banks are unwilling to refinance their loans if they have no equity.

The insanity of the Morrison government’s approach is that it is trying to put off a crash by reinflating an already overstretched bubble. In reality, the bubble will burst, and it must burst, and house prices must fall a very long way so that once again they become truly affordable, without households chaining themselves to huge, unpayable debts. The longer politicians put it off, the worse the eventual crash will be, and they will destroy their constituents.

Solutions

What politicians should be doing is implementing economic solutions before the crash. The CEC has drafted a number of pieces of legislation:

to reform the banks and protect their customers through a Glass-Steagall separation of banking from speculation;
to put a freeze on foreclosures on family homes and family farms while the unpayable mortgage debt is reorganised and written down to affordable levels matching the true value of the property;
to direct the Auditor-General to urgently audit the banks to ascertain their true exposure to this crisis, and what needs to be done to clean up their books; and
a national bank to invest in productive infrastructure and industries, in order to restructure the economy away from its current focus on financial services, housing construction and raw materials exports, and back to being a powerhouse of manufacturing and agricultural production. 

To fight for these solutions, join the CEC!

Click here to watch the IOTP response: The Mandurah Establishment Attacks Adams and North https://www.youtube.com/watch?v=et8N33RbOzw&feature=youtu.be