Ummmm. About our $250 Billion debt ceiling.
I wrote only yesterday that we are on track to hit it by mid-2012. Unless something went pear-shaped first.
I was right. Something has gone pear-shaped.
The rationality of Australia’s ruling politicians:
Julia Gillard has offered extra cash for the International Monetary Fund to help prop up the ailing European economy and prevent another global financial crisis.
The prime minister made the offer as she arrived in France in the middle of a worsening European financial crisis that is set to dominate the Group of 20 nations meeting this week, The Courier-Mail reported.
“For Australia’s part, we stand ready for an increase in IMF resources,” Ms Gillard said after arriving in Cannes.
“We”? Who’s “we” Julia?
Oh I see. “We” means our unrepresentative overlords in “Canberra” (h/t Wall Street Journal):
Australia’s Prime Minister Julia Gillard arrives in Cannes on a mission — she wants fellow G-20 governments to give more cash to the International Monetary Fund to help it deal with Europe’s crisis.
“I will be raising the need to increase IMF resourcing, both at the G20 meeting itself, and at my bilateral meetings, starting today at my bilateral meeting with the President of Brazil,” Gillard tells reporters on her arrival in Cannes.
Canberra has been a vocal advocate of the need to boost the IMF’s resources. The government has one of the developed world’s strongest sovereign balance sheets so is in a good position to donate more cash.
A “good position” to donate more cash!?!
“Good” compared to who, exactly? Greece? The USA? Zimbabwe?
Of course, silly me.
We only have a record budget deficit.
An economy that only survived the GFC solely on the back of China’s massive money-printing “stimulus”:
… that created a temporary artificial demand for our iron ore and coal – a demand that is now slumping:
Steel China Iron Ore Fines cfr main China port USD/dry metric tonne (MBFOFO01:IND)
Canberra is only borrowing money from foreigners at a record rate to fund Green-Labor’s insane spending … an extra $7 billion per month borrowed through September and October.
And doing favours for foreigners … and foreign banks … assures politicians of a life of ease and comfort upon retiring or being kicked out of office.
So “sure thing” Julia.
You are in a great position to throw bad money (borrowed) after even worse money (insolvent PIIGS).
Let us be perfectly clear, dear reader.
Europe is stuffed. Totally and utterly stuffed.
As is the USA. The UK. Indeed, as is the entire Western world’s financial system.
You simply can not fix a debt problem, by borrowing more money.
History bares witness time and time again, that the so-called “rescue” packages that globalist entities like the IMF offer to over-indebted nations, are no rescue at all.
In exchange for a non-solution – some “free” money, and “better” terms of repayment on existing debts owed – the IMF takes ownership over national infrastructure (ports, railways, toll roads, electricity grids, airports, etc) as collateral … and, effectively takes over dictating the national budget. Hence, “austerity measures”.
It’s called “asset stripping” and “loss of sovereignty”.
The IMF is evil.
And it is beyond appalling to this blogger, that we have reached such a low point in the governance of Australia .. egged on by the general apathy of our citizens … that we now have a minority government that not only blatantly lies to and ignores the will of its people (carbon tax).
It is a government that is so totally beholden to the World Government aspirations of the Green ecoloons, that it would offer to give borrowed money to the IMF, in order to aid and abet their stripping yet another nation of its assets and sovereignty:
Make no mistake, dear reader.
By taking Australia ever deeper into record debt, this government is fast-tracking our nation into the arms of the IMF, World Bank, and other assorted power-crazed “We want to rule the world” lunatics.
Click to enlarge | Source: Australian Office of Financial Management (AOFM)
It could not be clearer where we are headed.
Can’t see it?
Don’t want to believe it?
It’s time to take the Red Pill.
The Matrix: "You take the blue pill – the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill – you stay in Wonderland and I show you how deep the rabbit-hole goes." - Morpheus
Barnaby Is Right 
Australia is going down the gurgler quick smart unless someone with some brains and insight takes over from this useless, senseless government. This is ther last straw,the Prime Minister offering to donate more cash to the evil IMF resources, on behalf of whom? Not Australians. Just to make Julia Gillard look good. Hasn’t she eyes to see that Australia has an enormous debt and yet she is still throwing money around as though Australia has billions to spend. Foreign aid is increased etc. All this money sent on a wild goose chase is decimating Australia. How about spending something on Australians some of whom have paid money into the governments coffers for more than 45 years. There are plenty of Australians who are in genuine need. And China, is laughing all the way to the bank.
Your end paragraph reveals all and Australians should wake up and wake up quickly. Our soverieignty is being taken from us by this government.
“By taking Australia even deeper into record debt, this government is fast-tracking our nation into the arms of the evil IMF, World Bank- ex Nazi Bank BIS, (owned by WEALTHY banksters wanting a mononation) and other assorted power (and wealth) crazed lunatics who want to rule the world”. The wealthy will be wealthier and the poor poorer. STOP NOW AUSTRALIANS and take heed before it is too late.
I think the mechanism is that the government also does not have to mark the value of its debt to market. Through the fraud that is central banking the government can give ‘profits’ to the financial speculators by lowering interest rates (rising bond prices), thus keeping the speculators in the game, whilst ignoring the fact that rising government bond prices is increasing the burden of the governments own EXISTING debt. Of course the ‘profits’ are in an endlessly depreciating currency but so enormous that the game continues. You can never have enough money.
That’s why I think the game may continue until longer term yields (interest rates) approach zero. At some point the ‘risk to reward’ ratio will make the speculators nervous but pond prices more or less double for every halving of interest rates, so it’s hard to say when that point will be.
The relevance to this article being that the government will be able to borrow for as long as it gives ‘profit’.
Or until the broader global system freezes up (again), and there are no more / not enough “lenders” … except the IMF / BIS / World Bank … ?
It wasn’t the government bond market that froze in ’08 it was the ‘private securities’ market – MBS, CDO etc, etc. In fact government bond prices soared, short term yields even went negative for the first time since the great depression. Government bonds were about the only ‘asset’ not to drastically lose their ‘moneyness’ at the time.
The Australian dollar fell heavily against the USD which means Australian government debt was losing value against US government debt but Australian government bond prices, in AUD, rose significantly as the RBA slashed the interbank rate, the rate at which it will lend against government bonds.
“Government bonds were about the only ‘asset’ not to drastically lose their ‘moneyness’ at the time.”
That’s what I mean. Surely the time must inevitably come when the “moneyness” of govt bonds loses it’s lustre too.
Yes, my theory is that will be when the yield on longer term government bonds approaches zero. Until then there are still vast ‘profits’ in government bonds.
Of course the burden of debt increases all the while, weakening the credit of the government. Since the government does not mark its liabilities to market value, it gets away with fraudulent accounting, until the day it doesn’t.
“..until the day it doesn’t.”
Beautifully put.
Speaking of puts… 😉
This is unbelievable. Gillard might as well set fire to the money she plans to donate, it would save a lot of bureacratic churn. A greek default is now very much on the cards, I hope everybody is strapped in for one hell of a bumpy ride.
Yet another excellent article from Doug Noland
http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10589
He delves into the infinitness of money & ‘moneyness’ of debt, including sovereign. If you haven’t yet bookmarked this guy, you really should.
Thanks JMD … you’re right, I need to remember to follow Doug; his stuff is generally very good.
Well what do you know. I thought, initially, it would be Penny W(r)ong our Finance Minister who volunteered Aussie taxpayer support for the cronies in Europe at the G20 meeting.
I should have realised Julia would upstage her..can’t let an opportunity like a G-20 summit go un-utilised to get some international exposure.
How much more evidence do we need before we realise that “there is something wrong with Julia”??
Yes indeed, something very, very wrong.
.
The G20 what a joke! The simple fact is that we have a western world that is stony broke. The money supply is not backed by anything other than the ability to raise taxes and leverage banks balance sheets, the IMF gets $6b from this wood duck Australian PM and that will give them the capacity to leverage the $6billion many times over just like a CDO. Australian councils lost hundreds of millions of dollars investing in CDO’s and this has all the characteristics of the same scheme. This time $6 billion though and to make matters worse no one in this pathetic Government understands this blatant rip off of Australian tax dollars. Let we not forget that the European Common Market was a trade protectionist concept which was designed to stuff the trade of countries outside of Europe and now the G20 has the cap out for Euro donations. Forget these delusioned Europeans who are now so captive to an unfunded welfare system which will only lead them to complete ruination. This era requires leaders with real economic intellect and offering to hand over $6 billion when straight off the plane is not our elected leader should do with our money.
Spot on Mitchell!!
Barnaby for PM!!