I Was Right – Our Banks Begin Preparing Carbon Derivatives Market

Australian banks are eyeing opportunities to cash in on the proposed carbon tax by developing new financial products and services that capitalise on a market seen to be worth billions of dollars annually, according to a report by the Australian Financial Review.

Australian financial firms that have experience in European carbon markets, such as Macquarie Group Ltd, Westpac Banking Corp Ltd and ANZ Banking Group Ltd are particularly keen to establish their presence in the Australian market.

The initial three-year fixed carbon tax period from 2012 will serve as time to prepare for the release of ETS permits by 2015, when opportunities will really open up for banks to capitalise on the carbon market.

ANZ’s head of energy trading said the value of the derivatives carbon market would dwarf the $10 billion initially raised by the government, according to the AFR.

I was right.

On Carbon Sunday, I dissected the Government’s newly-announced “carbon pricing mechanism” (see “Our Bankers’ Casino Royale – ‘Carbon Permits’ Really Means ‘A Licence To Print'” ).

Here’s a couple of quotes from that article. The first is in reference to the “initial fixed price period” that the Government would have you believe is “like a tax”:

I was right.

The carbon permits will have no expiry date.

They are an artificial construct – “an electronic entry” – that is deemed by government decree to be a new “financial product”.

Moreover, note carefully the sentence I have bold underlined.

The “creation of equitable interests”, and “taking security over them”, simply means this.  The carbon permits can be used as the basis for bankers to create other, new financial “securities”.

Carbon derivatives, in other words.

Derivatives (or “securities”) are the toxic, wholly-artificial financial “products” that were at the heart of the GFC.  The same bankster-designed “widgets” that the world’s most famous investor, Warren Buffet, spoke of as “a mega-catastrophic risk”, “financial weapons of mass destruction”, and a “time bomb”.

You can stop reading this piece right now if you like.

Because from that Table 6 alone, you now have conclusive proof that this is nothing whatsoever to do with the climate.

It is all – and only – about global bankster profits. At the direct expense of the common people of planet earth.

Note well. The banks do not have to wait until the “flexible price period” commences after 3 years, to begin creating their “securities” (ie, derivatives), based on the notion of the underlying “value” of the “fixed price” carbon permits.

The Government’s scheme allows this from Day 1. Naturally. Because that is what the banksters – and their “leading economist” shills – are all salivating over. A government-decreed excuse, to create a whole new kind of “derivatives” market.  It is the whole point of the scheme.

In specific reference to the “flexible price period” to follow three years later, I wrote this:

Now, why have I bold underlined “borrowing“?

And why have I bold underlined “advance auctions of flexible price permits…”?

Because these are the key words from the “banking and borrowing” section. The words that tell you all you need to know.

That this SCAM is nothing whatsoever to do with the global climate.

And that it is 100% about creating a new, global, CO2 derivatives-trading market for the banksters.

The world’s biggest-ever financial cesspool.

Of toxic, intrinsically-worthless, humanity-raping financial “instruments” called derivatives.

Non-existent, digital “widgets”.

That can be borrowed from the future – ie, before these artificial carbon “widgets” are even issued – and leveraged by scum-of-the-earth banksters.

And then, traded by these parasites at multiples of hundreds and thousands of times more than the underlying, artificially-created “value” of the carbon permit.

Furthermore, the “advance auctions of flexible price permits in the fixed price period” proves beyond all shadow of doubt, that I was right.

That this “carbon pricing mechanism” is the bankers’ CPRS by another name. From Day 1.

Why does it prove it?

The advance auctions of flexible price permits “in the fixed price period” means this.

From Day 1, the government is effectively allowing the setting up of a futures trading market, for Australian CO2 permits.

Futures trading of nothing. Before the nothing is even created.

The banksters’ wet dream.

Australia – you have been monumentally conned.

The Green-Labor-Independent Alliance’s plan to “save the planet”, is a gigantic scam.

It is the bankers’ Casino Royale.

Where “carbon permits” really means, “A Licence to Print”.

Thank you, Australian Financial Review and Business Spectator.

For confirming that I was right.

Oh … just one more thing.

To help give you some idea – a picture in your mind – of how gigantic the new (government-rigged) “market” for the banksters’ carbon derivatives can become, take a look at the following chart, sourced from the RBA’s Statistics data.

It shows the size of our banks’ current holdings of Off-Balance Sheet derivatives bets, on the future of Interest Rates, and Foreign Exchange Rates:

Click to enlarge

Yes, that’s $3.98 Trillion in Foreign Exchange derivatives bets. And a whopping $11.68 Trillion in Interest Rate derivatives bets. Off-Balance Sheet. At March 2011.

Here’s another chart – also sourced from RBA data – showing our banks’ current On-Balance Sheet “Assets” (66% of which are actually loans) – the blue line – compared to their total Off-Balance Sheet “Business” (ie, derivatives) – the red line:

Click to enlarge

Yes, that’s $2.68 Trillion in “Assets” (mostly loans). Compared to … $16.8 Trillion in Off-Balance Sheet derivatives gambling. Mostly on Interest Rates, and Foreign Exchange rates.

Just try to imagine the size of the brand new carbon dioxide “hot air” derivatives market casino that our banksters’ will create, in the form of leveraged bets on the underlying so-called “value” of carbon permits.

It is Armageddon waiting to happen.