Tag Archives: GFC

“Money Has To Serve, Not Rule!” – Pope Francis Is Right

17 May

From the Age (my emphasis added):

francis-620x349

Vatican City: Pope Francis has denounced the global financial system, blasting the “cult of money” that he says is tyrannising the poor and turning humans into expendable consumer goods.

In his first major speech on the subject, Francis demanded Thursday that financial and political leaders reform the global financial system to make it more ethical and concerned for the common good. He said: “Money has to serve, not to rule!”

I suggest that, if ‘Frank’ is frank about his rhetoric, that he begin by carefully, prayerfully, and conscientiously reexamining ‘his’ church’s teaching, right back through its entire history, on the key question of Usury.

He might like to purchase Michael Hoffman’s “Usury In Christendom: The Mortal Sin that Was, and Now Is Not” to save him spending an eternity in research purgatory.

When ‘Frank’ humbly recognises that he, along with all his preceding “Infallible’s” since the Renaissance, are — by practice and decree of the church in its first millennia and a half — all flagrant heretics on the question of Usury, then this blogger might begin to take his preaching seriously.

In the meantime, I will continue pontificating my own “vision” for an alternative “money” system. One that would indeed “reform the global financial system to make it more ethical and concerned for the common good” -

Imagine A World With No Banks

The People’s NWO: Every Man His Own Central Banker

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Decaying Monument To The Epic China Bust To Come

15 Dec

From Reuters:

China’s deserted fake Disneyland

Along the road to one of China’s most famous tourist landmarks – the Great Wall of China – sits what could potentially have been another such tourist destination, but now stands as an example of modern-day China and the problems facing it.

Situated on an area of around 100 acres, and 45 minutes drive from the center of Beijing, are the ruins of ‘Wonderland’. Construction stopped more than a decade ago, with developers promoting it as ‘the largest amusement park in Asia’. Funds were withdrawn due to disagreements over property prices with the local government and farmers. So what is left are the skeletal remains of a palace, a castle, and the steel beams of what could have been an indoor playground in the middle of a corn field.

All these structures of rusting steel and decaying cement, are another sad example of property development in China involving wasted money, wasted resources and the uprooting of farmers and their families. It is a reflection of the country’s property market which many analysts say the government must keep tightening steps in place. The worry is a massive increase in inflation and a speculative bubble that might burst, considering that property sales contribute to around 10 percent of China’s growth.

And here is little old Australia, staying (barely) afloat in unprecedentedly turbulent global economic seas, by wearing Floaties bought with the proceeds of flogging iron ore and coal to China.

A China whose steel mills apparently aren’t needing so much of our product anymore.

From ZeroHedge (emphasis in original, underline mine):

Forget Copper; Steel Is The True Indicator Of The Chinese Hard Landing

“The investment landscape for industrial metals is becoming increasingly more difficult to navigate. As highlighted in last month’s letter, we are continuing to see a rapid deceleration of growth in China, specifically within the cyclical industries. A recent trip to visit steel companies outside Beijing underlined the impact of extremely tight liquidity and continued restrictive policy in the Chinese housing market. Steel capacity cuts – through idling or accelerated maintenance outages – are now commonplace and the speed of these cuts has certainly surprised the market. Construction is the principal end-market blamed for this weakness…

…

Zoomlion, China’s second largest construction machinery company, recently said, “Demand for construction  machinery has shrunken drastically and growth will no doubt continue to slow next year.” Within the context of declining housing starts, plummeting transaction volumes and the beginning of a meaningful move down in housing prices, these shifts in the steel market have been an interesting harbinger of more substantial problems in the Chinese economy. Our principal concern is the extension of housing weakness into the banking system through the mechanism of both failing developers as well as the opaque and informal lending. We are concerned that the recent strength in iron ore, steel and copper has been misinterpreted by the market. In our view, any suggestion that the Chinese market is undergoing a substantial restock is misplaced.” Today, we get a confirmation of just this warning courtesy of Citigroup which has charted weekly Iron Ore China port inventories and of broad steel inventories. Needless to say, domestic steelmakers, who better than anyone know the state of domestic end product demand, have seen the writing on the wall, and have one message for the world: short Brazil and Australia.

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Pedal To The Metal – Gillard Shows Rudd How To Drive Up Debt

13 Dec

As an avid motorcyclist and former GT Falcon owner, your humble blogger can certainly vouch for the thrilling adrenalin rush one experiences from serious acceleration.

But it seems I have a thing or two to learn from our flame-haired PM about getting thrust in the back.

Former PM Kevin Rudd knows all about it, as the chart below demonstrates:

Click to enlarge

Interesting, is it not?

The epic acceleration in government debt under Kevin Rudd abruptly halted for two months, immediately after Gillard knifed him.

She was distracted, you see. Eyes off the road.

Too busy bending over trying to quickly tune in radio 1ETS and 2MRRT before the 2010 election.

Election over, and deal done with the Greens and “Independents” to form government … then instant pedal to the metal.

Given it was then 2 years since the first GFC peak had passed us by, one can only wonder just what Julia was accelerating away from.

It is certainly clear what we are now rapidly accelerating towards.

In case you were wondering, that little flat spot about $20 billion below the $200 billion line?

Yep … it’s the period around the May 2011 budget.

Can’t be racking up the debt at a rate of $1 – $2 billion per week when the big Budget night is coming up. Especially when you are trying to distract everyone’s attention from the upcoming record deficit announcement, by lying about jobs creation.

Budget passed, provisions to steal your super enacted, debt ceiling raised by 25%, financial year ended … and it’s pedal to the metal again.

On the fast track to hit the $250 billion debt wall by mid-2012.

The chart above shows monthly CGS outstanding up to end November 2011.

So far this month, Julia has added another $4.5 billion to the total – now $223.4 billion.

With another $3 billion to be added this Thursday 15th.

$7.5 billion in a fortnight.

Forget CO2 … I reckon she’s flicked on the N2O.

Otherwise known as “laughing gas”:

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Company Bankruptcies Exceed GFC Peak

11 Nov

Yup.

It’s a perfect economic climate to introduce the bankers’ carbon derivatives scam otherwise known as a tax-on-thin-air (h/t MacroBusiness):

ASIC released September quarter bankruptcy data today and despite what Fairfax’s cheerleader in chief would have [you] think, company bust number surged past GFC levels…

And in pictures:

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When “Outspoken” Is A Perjorative For “Truth-Teller”

12 Aug

Outspoken former RBA board member Warwick McKibbon (emphasis added):

Ditch the delusion that stimulus saved us from GFC

The sell-off in global sharemarkets reflects the realisation that debt problems in advanced economies are serious, but it reflects more than this. For some time the fiscal fragility in the global economy has looked like a slow-motion train wreck …

Australia is now likely to be hit with a second global shock. This is different from the GFC in a critical respect. It is a concern over excessive government debt so the response in Australia should not entail a new fiscal package …

Bad fiscal design always has an unexpected cost. Why is a flood tax being introduced just as the economy slows? The forecast that this would help dampen the boom is now likely to be wrong. There clearly should be an urgent review of the mismatch between spending commitments in the pipeline and highly uncertain revenue. This is essential to better understand future fiscal vulnerability.

The delusion that what saved the Australian economy from the GFC was entirely fiscal policy needs to be jettisoned.

Outspoken chairman of the Future Fund – the government fund containing public servants’ super, that Barnaby has warned will be raided to pay down debt – says that the global sovereign debt crisis could take 20 years or more to “play out” (emphasis added):

The chairman of the $75 billion Future Fund has warned the debt crisis engulfing Europe and the United States could take at least 20 years to resolve, causing ongoing market volatility.

David Murray warned the post-global financial crisis environment would continue to be characterised by a series of market shocks, with investor uncertainty heightened by concerns over the ability of political systems to contain any emerging meltdown.

And he sounded the alarm on the level of government and private sector debt in Australia, saying they both needed to be reduced, given the capacity of Australia to be caught up in a new global financial rout.

“The global financial crisis was caused by excessive debt which had built up in the world at both the government level and in the private sector in developed countries,” Mr Murray told ABC radio.

“The sorting out of that problem is something that could take up to 20 years. As that post crisis environment unfolds we will see continuing events such as we’ve seen in the past couple of weeks.”

“Outspoken” is another of those words wielded as a weapon.

In modern, politically-correct Unspeak, it is the latest putdown label for “truth-teller”.

When someone speaks the truth, contrary to the “mainstream wisdom” – especially someone like Warwick McKibbin or David Murray holding a public position, who cannot be “politely” attacked more viciously – then they/their viewpoint is labelled as “outspoken”.

The unspoken implication of labelling someone as outspoken … is that we should not speak out.

That we should all be good, silent, obedient slaves.

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Barnaby: “Waiting For Swan Dude To Mutter The Word ‘Surplus’”

11 Aug

Senator Joyce writes for the Canberra Times (emphasis added):

Debt is now a long-term problem

In the mall outside the City Hall gathered the Socialist Action Alliance; speeches, placards, all fairly predictable, about 80 of them.

The zealot loud hailer core were looking a little tired, and a bit passe, but the students were revelling in experimenting with another illicit substance, communism.

Across from them was the Ban the Burka group. There were fewer of them, all in blue, special King Gee Ban the Burka shirts with a motif on them that looked like they wished to ban Pac Man.

Then there was just a cacophony of noise which, from where I was standing, while waiting for my wife and daughter to return from a shop, sounded something along the lines of “Bigot stoning Moslem ban”. The amalgam of the two mantras had led to a perfectly reasonable request.

Into the midst of this came another undergraduate dressed all in black with a cape and a black-winged motorbike helmet. “Bat Thief” was emblazoned across his chest.

He cut quite a dashing figure. Beside him stood plain clothes Boy Wonder with a placard on a stick offering “free hugs”. They were obviously a duo – it was outside City Hall after all.

Bat Thief stood beside me, observed the scene and muttered “racism”.

Which group he was referring to and exactly what he was going to do next shall remain a mystery.

Anyway it appeared to be either too much or too inconsequential for Bat Thief.

He and his coterie of skateboard super heroes exited behind the Ban Pac Man crowd.

The constabulary was also there and had managed to apprehend three felons; the charge, riding a push bike in the mall, mitigated by their combined ages being less than that of the youngest protester.

This was the day that Standard & Poor’s downgraded the US Government. The mall appeared oblivious to the fact that the world had changed. A fire that was lit by debt and had never gone out had come raging back over the horizon and could financially take all before it.

Australia has been distracted from the main issue. I have more faith in Bat Thief and the Free Hugs boy wonder than I do in Wayne and Julia to get us through this one.

If you put your face too close to the painting you can’t see the picture, and to see this picture you have to go back to 2008.

I remember reading some very prescient articles that formulated my belief that debt had gone from a transient problem to a long-term structural problem.

William White, from the Bank of International Settlements, started to raise serious concerns about interbank liquidity. Dr Paul Woolley and Eric Janszen argued that people had been borrowing money to gamble on derivatives. A very dangerous thing.

I remember when studying for my CPA, it was one of the first lessons taught, learning that Toyota once decided they could make more money trading options than selling cars and almost went broke. Unfortunately we had whole nations trying to do it.

It always amazed me that if a humble accountant from St George was reading this then why wasn’t the Treasurer? At the time he seemed too busy fighting a war on inflation, in an attempt to embarrass the previous government, rather than tackle the problems facing the world.

Now, the problem then was debt and the problem now is debt.

Southern Europe doesn’t want to pay their taxes but they want the social protections of a benevolent government. The problem for the Germans is that they are sick of bailing them out. They may no longer have a choice because the problem is becoming too big for anyone.

America’s debt is at a level that is beyond the human mind to actually fathom; it has become a form of mathematical metaphysics worthy of Donne or Dryden.

Here in Australia we are led by an apparently fiscally conservative government that has increased public debt by 150 per cent since 2007.

Only those other noted fiscal conservative governments in Iceland and Ireland have grown their debt at a faster rate.

Our Treasurer’s promise to deliver a surplus is as much of a show as Bat Thief’s cape and skateboard trick. I am waiting for Swan dude to mutter the word “surplus” and then disappear down the street with the Labor party on their skateboards.

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I Should Have Listened To Barnaby Joyce – Sure Beats Listening To The “Experts”

10 Aug

A really great article by journalist Jill Singer.

Filled with honesty.

Humility.

And humanity.

From the Herald Sun:

Experts did nothing to prevent fall

It’s not so very long ago that only the wealthy invested in shares.

Nowadays, though, it seems even the lowest-paid workers must monitor the All-Ordinaries Index if they want to know how their final years will play out.

Will their super funds provide them with enough to live out their allotted years without relying on the kindness of strangers or the vagaries of government largesse?

Or will they work for as long as their bodies and minds allow before succumbing to a lesser life of niggling poverty, insecurity and guilt over being a “burden” on others?

Little wonder that the world seems engulfed by fear and greed.

In this age of compulsory super and self-managed funds, life has become a terrifying gamble.

Having money tied up in superannuation has become akin to being caught in a high-rise building during a bomb scare.

You know that if everyone starts running for the lifts the odds are that people will get crushed. Then again, wouldn’t it be nice to be the first one out of the door?

If we earn an income, we have no choice but to invest in super. But how on earth are ordinary folk expected to manage it when we know that if you have two economists, you’ll get five opinions?

I was like most small investors when the proverbial hit the global economic fan yet again last week – torn between the squirrel-like urge to shift my rapidly dwindling super into cash or to swallow the Government’s line that we are a privileged and robust economy.

In the end I chose the path of least resistance and did nothing.

I’m just not going to look at the damage and will only uncover my eyes when the fire has finally passed …

There are lessons for us all in this.

I should have listened to Nationals senator Barnaby Joyce when, in 2009, he warned about the potential (and then unthinkable) dangers of the US coming close to defaulting on its debt.

I should also have listened to Kenny Rogers: “You’ve got to know when to hold them, know when to fold them. Know when to walk away and know when to run.”

Sure beats listening to the advice of “experts”.

UPDATE:

One wonders whether Jill might now begin to reconsider her murderous devotion to the “experts” of the global warming cargo cult:

Then there’s David Murray, chair of Australia’s $71 billion Future Fund and recipient of a $28 million golden parachute from his time running the Commonwealth Bank. Murray states there’s no link between global warming and carbon dioxide emissions because carbon dioxide is necessary for life, colourless and odourless – and therefore can’t be considered a pollutant. It’s a popularly held view.

Andy Semple of the Menzies Institute claims it’s “refreshing” for someone with Murray’s standing to take on the global warming “scam” by expressing such views.

Really? I’m prepared to keep an open mind and propose another stunt for climate sceptics – put your strong views to the test by exposing yourselves to high concentrations of either carbon dioxide or some other colourless, odourless gas – say, carbon monoxide.

You wouldn’t see or smell anything. Nor would your anti-science nonsense be heard of again. How very refreshing.

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Barnaby: To Those Who Called Me Fool, Who’s Laughing Now?

8 Aug

Senator Joyce writes for the Australian.

Listen up this time!! -

The joy of vindication on the prospect of a US government default is bittersweet; I was right, Wayne was wrong. To those sucked in by the Treasurer, placing wishful romantic theory above clinical reality, then saying “you wouldn’t cut it with the Bloomsbury group if you talk like that at our soiree”, I suggest this, get real.

Do not confuse tackling a problem with delaying when it comes to debt. If while out on the tiles on a Friday night you discover a septic gash on your leg, and in response down another five jagermeisters, pain gone, problem gone, keep dancing, that is delay. Going to hospital to avoid amputation is dealing with the problem.

Tim Flannery said that the impact of climate change policies won’t be felt for at least a thousand years. The impact of a catastrophic default this time was avoided by a mere 10 hours. When prioritising threats I know which one I would be concentrating on.

Swan has given 25 speeches this year and mentioned climate change 24 times. Debt has only been mentioned 16 times, and eight of these in one speech made last month. A year and a half ago I implored the government to prepare contingency plans for the threat of a US default stating the prospect was “distant but real” but if it eventuated the fallout would be a financial Armageddon making the GFC look like a mere preamble. US President Barack Obama also used the term Armageddon in the past month, so if I’m mad, so is he.

When asked on ABC radio whether the government had prepared for a potential US default, our Treasurer could point to no specific actions taken. But we do have parts of Treasury modelling climate change. The Treasurer believes I have been captured by “Tea Partiers”. Disagree with him on climate change you’re a denier, disagree with him on economics you’re a Tea Partier.

Ken Rogoff, obviously another of Swan’s Tea Partiers, but also moonlighting as a professor of economics at Harvard University, has been warning about these problems since we were first introduced to the term sub-prime. The Global Financial Crisis involved ordinary people and silly governments taking on too much debt. There was nothing unique about it, the same process has been repeated over and over again with tulips, railroad stocks, Florida real estate, dot-com investments and our modern example, collateralised debt obligations.

A couple of years ago Rogoff wrote a book titled This Time Is Different, showing actually it’s almost always the same. Public debt crises are more common than economists tend to acknowledge and financial crises in particular place extreme stress on government finances.

Rogoff wrote a paper a couple of months ago titled A Decade of Debt in which he measured the increase in public debt in different countries since 2007, when we voted in these current economic luminaries. No surprises, Iceland and Ireland, are one and two but Swan got the bronze, Australia is third, with a 150 per cent increase in our public debt since 2007. As I previously said we can’t keep going on like this, but we are. We have just extended our debt ceiling to $250 billion.

In 2008, before the GFC’s nadir, Ireland’s net public debt was 12.5 per cent of GDP according to the OECD. The Treasurer boasts that our net public debt is low compared with others. The parliamentary library estimated last year our net public debt will be 12.3 per cent of GDP in 2012-13, the same year Swan predicts surplus.

In the political sphere the person who drives via the rear vision mirror, with a wonderful recitation about everywhere you have been and why, but not a clue where you are going, is dangerous. When, with a coterie of bureaucrats, they cannot keep the car on the black stuff but seem to be targeting the trees, you are in for the economic ride of your life.

Things changed for Ireland after it guaranteed the debt of its banks during the GFC. We have done that, too. Three years ago the Treasurer introduced the financial claims scheme which guarantees $730 billion in deposits. It’s up for review in October but there is barely a discussion about how we might mitigate the risks of such taxpayer exposure. We are too busy trying to cool the planet from a room in Canberra.

Barnaby is right.

Take very careful note of that last paragraph.

Moody’s ratings agency has already warned our government – when it downgraded the credit rating of all our banks in May – that the government’s guarantee was worth two ratings notches.

In other words, without the government guarantee – the our-future-earnings guarantee – our banks’ credit rating would be slashed even further.

Meaning higher interest rates for you.

The long overdue collapse of our housing bubble.

The collapse of our banks.

The bailout of our banks.

And Australia looking exactly like the rest of the Western world.

Oh yes …

And your super stolen by our government – both “sides” – to bail out the banks, and/or finance the floundering government.

Don’t believe me?

Fine.

Piss off then.

Or…

Read. And learn.

Start here -

Stealing Our Super – I DARE You To Ignore This Now

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Fairfax Media: He Prophets Best Who Heeds Joyce

8 Aug

From Scott Rochfort at the Sydney Morning Herald:

Illustration: John Shakespeare

In these increasingly desperate times on global financial markets, faith in the ability of politicians to solve the world’s economic problems has been in short supply.

But after searching around for answers, CBD was relieved to find a website highlighting the past predictions (and warnings) of the Nationals leader in the Senate, Barnaby Joyce.

The founder of the blog barnabyisright.com, who asked not to be named, said the recent concerns that the US could default on its $14.3 trillion of national debt vindicated the comments made by Joyce to the Herald in late 2009.

”A default by the US means complete economic collapse around the world and the question we have got to ask ourselves is, where are we in that,” Joyce said at the time. The senator also raised the alarm about Australia’s government debt in the interview.

The S&P downgrade of the US government’s AAA credit rating at the weekend prompted barnabyisright.com to post the entry ”I Told You So”.

The creator of the blog, launched in February 2010, said it was driven by his anger over the treatment of Joyce during his brief tenure as Tony Abbott’s numbers man.

”Anger at the dishonest, and economically ignorant treatment that Senator Joyce was receiving as then newly promoted opposition finance spokesman, due to his courageous and prophetic voicing of concern over US (and Australian) debt levels, and the risks that these debts (foreign and domestic) pose to Australia’s future.”

WHO’S NAIVE?

When contacted by CBD yesterday, Joyce said he also felt his past warnings about US debt had been vindicated. ”I don’t get enjoyment out of it. There’s no joy out of the pain it’s going to cause,” he said about the world’s level of indebtedness.

Barnaby said he was annoyed at the economists who branded him as ”naive” and ”absurd”.

”You should Google search me for that period of time. And you should Google search them too,” he said.

It was only last month that the founder of barnabyisright.com said he was contemplating the future of the blog ”in that wonderful place where our latte-sipping, concrete-jungle-dwelling, holier-than-thou, ‘green’ totalitarian-wannabe paragons-of-hypocrisy never actually venture (the bush)”.

It seems the S&P downgrade has guaranteed the future of the Barnaby tribute site for some time yet.

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Stealing Our Super – I DARE You To Ignore This Now

8 Aug

Caricature by Zeg | click to enlarge

My sincere apologies, dear reader.

I understand that you are probably a little concerned about the future for the economy right now.

If you own shares, then you are probably worried about last week’s bloodbath in global sharemarkets.

But I have a very important question to ask you.

It’s a bit of a reality check, I’m afraid.

Do you think your Superannuation “nest egg” is safe from the greedy hand of government?

If you answered “yes”, then …

I dare you.

I dare you to ignore the rest of this blog.

I dare you to ignore the fact that Senator Barnaby Joyce – the only Australian politician who foresaw and forewarned about America’s present debt nightmare – gave this warning on 5th May 2011:

In response to a question I put in Senate estimates, Treasury revealed that $64 billion of the difference between our gross debt and our net debt is made up of the cash and non-equity investments of the Future Fund. The Future Fund is there to cover the otherwise unfunded costs of public servants’ superannuation.

That is a little fact that the people of Canberra might be interested in. When Wayne mentions net debt translate that to, I am going to pay his debt off with my retirement savings.

I dare you to ignore the fact that Barnaby repeated his warning on May 13th, straight after the Budget:

Of course, the public servants will not be happy when we use their retirement savings, put aside in the Future Fund, to pay off some of Labor’s massive debt.

I dare you to ignore the fact that the US Government has been stealing federal workers pensions since May this year:

Treasury to tap pensions to help fund government

The Obama administration will begin to tap federal retiree programs to help fund operations after the government lost its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt…

Geithner, who has already suspended a program that helps state and local government manage their finances, will begin to borrow from retirement funds for federal workers.

I dare you to ignore the fact that the US Government has been planning to steal their private citizens’ super too, since at least February 2010:

The plan, as sketched in the 43-page document, calls for the creation of something called  “Guaranteed Retirement Accounts” (GRAs). Biden slyly shifts the onus for the idea through weasel words typical of the federal government: “Some have suggested the creation of Guaranteed Retirement Accounts (GRAs), which would give workers a simple way to invest a portion of their retirement savings in an account that was free of inflation and market risk, and in some versions under discussion, would guarantee a specified real return above the rate of inflation.”

These accounts would be “free of inflation and market risk” because they would be under the direct and absolute control of the federal bureaucracy.

I dare you to ignore the fact that Argentina’s government stole their citizens’ super in October 2008:

Argentina’s center-left President Cristina Fernandez on Tuesday signed a bill for a government takeover of the $30 billion private pension system in a daring and unexpected move that rocked domestic markets.

I dare you to ignore the fact that Hungary’s government nationalised stole their citizens’ super in November last year:

Hungary is giving its citizens an ultimatum: move your private-pension fund assets to the state or lose your state pension.

Economy Minister Gyorgy Matolcsy announced the policy yesterday, escalating a government drive to bring 3 trillion forint ($14.6 billion) of privately managed pension assets under state control to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim.

I dare you to ignore the fact that France began stealing their citizens’ super in late 2010 as well:

France seizes €36bn of pension assets

Asset managers will have the chance to get billions of euros in mandates in the next few months for the €36bn Fonds de Réserve pour les Retraites (FRR), the French reserve pension fund, after the French parliament last week passed a law to use its assets to pay off the debts of France’s welfare system.

I dare you to ignore the fact that “Europe’s economic superstar”, the one EU nation that (like Australia) came through GFC1 with positive economic growth, began stealing their citizens’ super in May this year:

It appears moving backwards on pension reforms has become the thing to do on both sides of the Atlantic.

Hungary last year moved much of its private pension assets to the state. Last month, new rules came into effect in Poland diverting 5% of the 7.3% of salary going to private pension funds to the state.

I dare you to ignore the fact that Ireland too, began stealing their citizens’ super in May this year:

Irish Bombshell: Government Raids PRIVATE Pensions To Pay For Spending

“The various tax reduction and additional expenditure measures which I am announcing today will be funded by way of a temporary levy on funded pension schemes and personal pension plans.”

I dare you to ignore the fact that the UK Government announced plans to steal public sector workers’ pension entitlements in June this year:

Thousands of teachers, lecturers and civil servants joined a UK wide strike yesterday in a mass protest over pension reforms.

…

The government … wants to impose a 3%-of-pay levy on public sector workers’ contributions to help reduce the budget deficit. This amounts to a pay cut to follow on the heels of the current pay freeze.

I dare you to ignore the fact that the Liberal Party of Australia quietly announced a new policy on June 3 this year – sneakily disguised as a helpful “reform” – that should make your hair stand on end:

Further relief for small business

The Coalition will relieve the red tape burden from Australia’s small businesses by giving them the option to remit the compulsory superannuation payments made on behalf of workers, directly to the ATO.

Small business will be given the option to remit superannuation payments to the ATO at the same time as they remit their PAYG payments.

This will require only one payment to one agency – rather than multiple cheques to multiple superannuation funds. The ATO will be responsible for sending the money to superannuation funds directly.

I dare you to ignore the fact that an “option”, can very easily become a “non-option”.

I dare you to ignore the fact that our Green-Labor Government announced plans in the May Budget that should also make your hair stand on end:

The Gillard government’s 2011-12 budget has proposed a raft of initiatives aimed at encouraging superannuation fund and private investment in infrastructure projects.

I dare you to ignore the fact that “encouraging”, can very easily become “enforcing”.

I dare you to ignore the botched “school halls” program, and the white elephant NBN, as you ponder whether or not you really trust this government to wisely and prudently invest your super in Government infrastructure projects, and achieve a reasonable return on your money, when even so-called “experts” have doubts:

The government’s plan to use tax incentives to encourage superannuation funds to invest in new infrastructure could be thwarted by inadequate returns on projects and a reluctance by the states to take on project risk, experts say.

I dare you to ignore the fact that the government’s white elephant NBN is a(nother) Green-Labor thought bubble, drawn up on the back of Kevin Rudd’s in-flight napkin, with no cost/benefit analysis:

Trust us with the NBN; we’re politicians

I dare you to ignore the fact that Bill Shorten, the Minister for Financial Services and Superannuation, already thinks of your super as a “significant national asset” … a kind of “sovereign wealth fund”:

Superannuation is our sovereign wealth fund

This week marks 12 months exactly since the government announced plans to take compulsory superannuation from 9 per cent to 12 per cent.

… our superannuation savings place Australia fourth in the world. Its $1.3 trillion in funds under management through superannuation significantly boosts national savings and provides greater retirement security for millions of Australians. Superannuation is also a significant national asset because it strengthens our financial sector.

I dare you to ignore the fact that our government has guaranteed our banking sector using the promise of your future earnings as collateral, and that Moody’s ratings agency has put our government on notice that our banks are Too Big To Fail – just like in the USA, UK, and Europe:

Heavens to Betsy.  It’s finally out in the open. The big four are too big to fail and Moody’s rates the Australian government’s implicit guarantee of the banks’ wholesale debt (as well as the explicit deposit guarantee) as worth two ratings notches. Moreover, by phrasing it this way, Moody’s has essentially put the Australian government on notice that if it dares back away from that guarantee then it can count on the result. The further implication is that the Budget had better remain shipshape to provide the guarantee.

I dare you to ignore the fact that the government’s carbon pricing scheme scam includes a new “independent” Clean Energy Finance Corporation (carbon bank) that will be permitted to borrow against future government revenue - your future tax dollars – in order to invest in “green” energy projects:

The Clean Energy Council will today release a discussion paper proposing the carbon bank, which it says could be allowed to borrow money to invest in renewable energy projects against the future revenue of Labor’s proposed carbon tax and emissions trading scheme.

…

The Gillard government is examining the creation of a multi-billion-dollar carbon bank to drive renewable energy technologies as the Greens demand “complementary measures” to cut emissions in return for accepting a lower starting price for the carbon tax.

…

6.2.1 The Clean Energy Finance Corporation

The $10 billion Clean Energy Finance Corporation will invest in businesses seeking funds to get innovative clean energy proposals and technologies off the ground. These Government-backed investments will deliver the financial capital needed to transform our economy.

…

A variety of funding tools will be used to support projects, including loans on commercial or concessional terms and equity investments.

…

The Corporation will be independent from the Government. The Government will appoint an independent Chair who will have appropriate banking or investment management experience.

I dare you to ignore international banking’s core philosophy, now rendered infamous by GFC1: “Privatise the profits … socialise the losses”.

I dare you to ignore the fact that another sharemarket collapse – like in 2008 – would be a perfect pretext for nanny-state, “Big Brother knows best” governments everywhere to step in and “safeguard your retirement”, by taking and “investing” your super in Government-approved “safe investments” … just like the US Government’s planned, doublespeak-titled “Guaranteed Retirement Accounts”.

I dare you to ignore the fact that this blog has documented in detail the wave of super confiscations that is already rolling around the Western world, and the clear evidence that both sides of Australian politics already have their own quiet, sneaky plans to do the same.

I dare you to not bother reading any of my many articles on this topic -

No Super For You!!

US Treasury “Borrowing” Of Federal Pensions Brings Theft Of Private Pensions One Step Closer

Now The UK Government Is Stealing Super Too

Fresh Evidence Our Banks In “Race To The Bottom” Means You Can Kiss Your Super Goodbye

Fitch Ratings: Australian Banks Most Vulnerable To Europe’s Debt Crisis

Our Banks Racing Towards A “Bigger Armageddon”

Money Morning Agrees – Your Retirement Savings Under Threat

The Pricing Carbon Choir – Why Should *Any* Sane Person Trust Economists After The GFC?

Why Would Any Sane Person Believe Treasury’s Carbon Tax Modelling When Its Budget Forecasting Record Is This Bad?

How Wayne ‘Franked’ Another $20 Billion

Wayne: OOPS! I Did It Again

Liberal Party’s Sneaky Plan To Steal Your Super To Pay Labor’s Debt

Dear reader …

I dare you to ignore, mock, and ridicule Barnaby Joyce’s warnings … again.

I dare you to bend over … grab your ankles … bury your head in the sand … and keep telling yourself that “She’ll be right mate”.

I dare you to ignore the fact that …

Barnaby is right.

* A hearty “Thank You” to the inimitable Zeg for his brilliant cartoon drawn especially for this post, and at very short notice.

Please follow him on Twitter – @Zegcartoonist and subscribe to his blog – http://zegsyd.blogspot.com/

Better still … hire him!

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