Cross-posted from Macro Business:
It is one of the more weird characteristics of Australian economic commentary that the Reserve Bank of Australia enjoys an untouchable position. Bank economists and economic observers all hold the central bank in very high esteem, to the point where it is borderline criminal to question the monetary authority.
The reason for this is pretty straight forward. The world of employed economists in Australia is very small and you don’t want to be marked as a trouble maker if you intend, as many do, to move between public and private offices over your career.
Which brings me to last night’s Four Corners episode that recounts the allegedly corrupt histories of the RBA subsidiaries, Securency and Note Printing Australia, as well as at the bank itself.
If you missed the program I suggest you set aside 45 minutes to watch it in the near future. It is here. I’ve been aware of most of the allegations for years but to see the entire story told from beginning to end is really something else. It is shocking.
The program describes a culture of systemic lying and greed, of economics without ethics, of total failures of governance, of group think and entitlement throughout the elite levels of the RBA’s subsidiaries and perhaps at the bank as well. I have had my faith in the institution shattered and only a full and open inquiry has any hope of restoring it.
I have no idea if anything will come of the investigation. Probably not. But the stain upon the Reserve Bank of Australia will thus be all the more indelible.
Good.
It is this blogger’s fervent hope that this scandal will prompt many more people to begin to ask questions about the RBA.
Leading, most importantly, to the question of why we permit it to exist at all.
Barnaby Is Right 
Brian Hood and James Shelton deserve the gratitude of all right thinking Australians.
They have exposed (with the significant assistance of 4 Corners) the corrupt nature and tainted characters of the senior management of not only Note Printing Australia (NPA) and Securrency, but of the “Creature from Martin Place” , the Reserve Bank of Australia and those who oversee its’ operation and administration.
And as stated previously, who could NOT be enjoying watching the systematic exposure of things previously hidden from the light of day and public scrutiny. What’s next??
May the curtain continue to be drawn back.
The curtain is not being drawn back. Rather, another curtain is being drawn across the stage while the real crime continues unabated – inflation of the currency, check kiting, fraud. Call it what you will.
JMD, at least it’s causing people to actually look at the RBA. Many, for the very first time. Yes, this scandal is nothing compared to the bigger, fundamental issue. But perhaps some may begin to look more deeply as a result.
Those Macrobusiness people don’t have the faintest understanding of the monetary system. Who cares if the RBA was trying to sell plastic banknotes to Iraq? It was UN sanctions they were trying to get around, the same UN sanctions that are now crushing Iran, Syria & so on. Which is the criminal act, the sanctions or selling banknotes?
David Llewellyn-Smith says his faith in the institution is shattered? Meaningless tripe from a complete moron. He doesn’t even get it that the $ is the obligation of the Reserve Bank. So is he selling his Reserve Bank obligations, since he has no faith in the institution? Over his dead body!
Did you know that he was “co-author of The Great Crash of 2008 with (none other than) Ross Garnaut”? Hardly a commentator of repute.
“Those Macrobusiness people don’t have the faintest understanding of the monetary system.”
Agree. I’ve tried to argue the basics with them several times … not interested.
My point with the post is per my comment at the bottom — the hope that this scandal might trigger a process of questioning amongst the (former) faithful.
I’ll argue the exact opposite will happen & that people like Llewellyn-Smith are the problem.
C’mon JMD,
Cheer up!! Rome wasn’t built in a day. You sound angry and frustrated and I am too. I’d love things to happen faster.
This scam on humanity is at least 100 years old. (23rd December, 1913- The Fed) It has been replicated over and over in almost every country in the world.(except Syria, Iran, Libya,(under Ghaddafi) Cuba and North Korea ( I think) The ultimate Money Printing Franchise. Money out of thin air, then fractionally leveraged 10 to 1 plus, then lent to “We the People of the World”…you know the drill. Try explaining THAT to Joe Sixpack!! So, it’ll probably take a while for people to cotton on to the scam.
I agree with TBI. Better to expose to the people the criminal characters and nature of TPTB than overwhelming them with rocket science. Baby steps. First the people need to understand that something is wrong. Then they need to understand that the people running the show aren’t as virtuous as we have been led to believe.
It’s a slow process, but if you try to ram it down their throats, they’ll just shut down and close their minds.
“the hope that this scandal might trigger a process of questioning amongst the (former) faithful.”
Couldn’t agree more!
There is nothing criminal about trying to sell something to someone.
This whole affair is trivial & just throws yet another layer of obfuscation over what is already well & truly obfuscated.
People need to first understand that when they go to the bank for, say, a mortgage loan, the bank doesn’t have any money that it gives over to them, it rather created the ‘money’ out of thin air and then charges them interest on top!! Our money supply is created purely out of debt which now becomes a credit in the lending banks’ ledger. It gets worse from there. I read ‘Creature from Jekyll Island’ by G Edward Griffin as my education in this fraudulent monetary system. A good place to start.
Why would you have had faith in an unaccountable non transparent institution that manipulates markets, creates public debt and inflation and has a licence to create print and loan money to our government at interest? Our Treasury could do the same job at less cost to the tax payer and interest free. We would all be better off without the criminal RBA. Why does it create private companies to print the currency? Quite simply, so it can commit fraud and blame it on the directors and managers of their fraudulent note printing companies without the Board members being implicated in the fraud and or the poor corporate governance. The question remains, did they create – print more currency into circulation at hardly any cost to them in order to pay the bribes, and could it be possible that Australian Tax Payers are being billed for those bribes via the Tax Office? Who actually foots the bills for these bribes in the end? If these note printing companies are private companies, what entiries are all their profits going too, and how is this tracked and accounted for?
One websites viewpoint –
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http://cluesforum.info/viewtopic.php?t=1197
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“…..The Reserve Bank has total control over our nation’s interest rate rises and inflation.
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The Reserve Bank is considered by many to actually be a conspiracy against the people of Australia. It is claimed by these conspiracy theorists that the RBA is NOT a federal body and the Australian people have no control over it, neither does any politician in Australia have any control over it. The Reserve Bank is, it is claimed, actually operated and controlled by the international corporate elite, it is a privately owned entity, and is a law unto itself. The Reserve Bank in this view is controlled by international corporations, who have serious interests in most private banks in Australia, the reason the Reserve Bank is making interest rates so high is because it’s in the International Corporatist’s interests to do so. The following is an exposition of this argument for you to consider.
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It is chilling stuff:
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When the interest rates go higher, the private banks can make more money and the poorer people lose their homes and assets while the rich get richer. The rise in interest rates is causing poorer families to give up their homes at a loss, and the wealthier areas are experiencing an increase in property value. So the interest rates rises in Australia are part of an agenda, the agenda is to create a much larger gap between the poor and the rich, as the international corporations seek to make Australia a third world country.
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The current Prime Minister of Australia and all the political parties in Parliament are funded by multinational corporations who control the politicians like puppets. Without the corporate money flowing into the political parties; the political party will die, so it’s in the politician’s interests to let the corporations pull their strings. Our politicians have become nothing but corrupt self seeking leeches that have no care or interest for the future of the Australian people. Politicians get elected when the samemultinational corporations who own the Reserve Bank fund a particular politician’s political party, because that politician has made a commitment to the international cartel and will allow himself to be controlled by them. The politician will never defy what the international cartel tells him to do, otherwise they will cut off funding and organize a smear campaign against the politician through the media outlets they control, and often they will actually kill a politician if he goes against and defies their will for control over the nation’s money supply……..
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International corporations manipulate the politicians by getting them to:
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sell off nations assets to private corporations so they can seize control of all publicly owned assets worldwide (water, gas, electricity, railways etc),
also they sternly advise the politicians to go along with Reserve Bank decisions of higher interest rates that force families onto the street.
A politician’s job is to keep the population distracted with absolute nonsense and lies, while the international cartels fulfill their agenda’s in the shadows. Their agenda is to: buy up a nation’s assets, control the money and interest rates, control the media and flow of information, and to use nations to wage war against the countries they don’t control.
………..”
http://rainmakers-ozeania.com/4-the-immediate-economy/who-really-owns-the-reserve-bank-of-australia.html
Qld is open for business
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If one is to be prosecuted by ‘government’, which ‘government’ is doing the prosecuting? Is it the corporation called the Commonwealth of Australia registered with the U.S. Securities and Exchange Commission or the Commonwealth of Australia operating by the presumed authority of “The Australian Constitution Act 1900 (UK)” ?
http://www.sec.gov/cgi-bin/browse-edgar?company=Commonwealth+of+Australia&CIK&filenum&State&SIC&owner=include&action=getcompany
Australia, from what I have learned is a Chapter 11 bankrupt, which means that the controlling bank allows it to continue trading.
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http://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_States_Code
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Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities. In contrast, Chapter 7 governs the process of a liquidation bankruptcy (although liquidation can go under this chapter), while Chapter 13 provides a reorganization process for the majority of private individuals……………
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Features of Chapter 11 reorganization[edit]
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Chapter 11 retains many of the features present in all, or most, bankruptcy proceedings in the U.S. It provides additional tools for debtors as well. Most importantly, 11 U.S.C. § 1108 empowers the trustee to operate the debtor’s business. In chapter 11, unless a separate trustee is appointed for cause, the debtor, as debtor in possession, acts as trustee of the business.[2]
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Chapter 11 affords the debtor in possession a number of mechanisms to restructure its business. A debtor in possession can acquire financing and loans on favorable terms by giving new lenders first priority on the business’s earnings. The court may also permit the debtor in possession to reject and cancel contracts. Debtors are also protected from other litigation against the business through the imposition of an automatic stay. While the automatic stay is in place, most litigation against the debtor is stayed, or put on hold, until it can be resolved in bankruptcy court, or resumed in its original venue. An example of proceedings that are not necessarily stayed automatically are family law proceedings against a spouse or parent. Further, creditors may file with the court seeking relief from the automatic stay.
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If the business’s debts exceed its assets, the bankruptcy restructuring may result in the company’s owners being left with nothing; instead, the owners’ rights and interests are ended and the company’s creditors are left with ownership of the newly reorganized company.
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All creditors are entitled to be heard by the court. 11 U.S.C. Sec. 1109 (b). The court is ultimately responsible for determining whether the proposed plan of reorganization complies with the bankruptcy law.
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One controversy that has broken out in bankruptcy courts concerns the proper amount of disclosure that the court and other parties are entitled to receive from the members of the ad hoc creditor’s committees that play a large role in many such proceedings.[3]
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The Chapter 11 plan[edit]
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Chapter 11 usually results in reorganization of the debtor’s business or personal assets and debts, but can also be used as a mechanism for liquidation. Debtors may “emerge” from a chapter 11 has the first opportunity to propose a plan. With some exceptions, the plan may be proposed by any party in interest.[4] Interested creditors then vote for a plan.