Tag Archives: debt ceiling

If I’m Mad, So Is Obama

27 Nov

More Barnaby brilliance.

From Farm Weekly (emphasis added):

QLD Nationals Senator, Barnaby Joyce, has given US President, Barack Obama, another good reason to laugh and smile during his visit to Australia, following his presidential address to a special joint parliamentary sitting in Canberra yesterday…

As he exited the chamber afterwards, President Obama shook hands with many of the Federal MP’s and Senators who jammed the chamber for the hour-long event, including Senator Joyce and other Nationals, such as Shadow Agriculture Minister, John Cobb.

If given an opportunity to get within earshot of the President, Nationals NSW Senator, John Williams, promised to make known his views on the US government cutting its Farm Bill in response to domestic spending pressures, to improve export trade conditions and opportunities for Australian farmers.

But while the exchange between President Obama and Senator Joyce didn’t deliver on the National’s Farm Bill demands in pursuit of liberalised trade, it did produce a typically colourful and poignant moment, albeit brief.

According to sources close to Senator Joyce, he told the US President as they shook hands, “Barnaby Joyce, you might remember me from WikiLeaks. I hope you read it all.”

Senator Joyce was referring to diplomatic cables exposed through WikiLeaks in August, which focussed on comments from the US Ambassador to Australia, Jeffrey Bleich.

The cables were written when Tony Abbott took over as Opposition leader in 2009 and suggested the QLD Senator’s appointment as shadow finance spokesman at the time threatened the Coalition’s economic credibility due to his “protectionist views” and the National Party’s reputation for pork barrelling on behalf of rural constituents.

Mr Abbott dumped Senator Joyce from the role after four months giving him water and regional development.

Despite perceptions the QLD Senator struggled in the finance role and may have been too outspoken or more suited to a portfolio that focussed on specific rural issues, rather than broader economic policy, not everyone agreed with the reasoning behind the decision.

Too bloody right!

In particular, Senator Joyce was widely mocked in December 2009 after warning the US government could default on its debts.

But he was vindicated earlier this year sparking no surprise from his supporters, when renowned credit rating agency Standard & Poor’s placed the US government on notice to introduce policy measures that would reduce national debt and budget deficits, or risk losing the country’s AAA credit rating.

“The joy of vindication on the prospect of a US government default is bittersweet; I was right, Wayne (Federal Treasurer Wayne Swan) was wrong,” Senator Joyce said in a recent opinion piece in The Australian newspaper.

“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.

“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.”

As this blog has documented loud and long since the days when he was Shadow Finance spokesman …

… Barnaby is right.

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Australia On Target To Hit Debt Ceiling By Mid-2012

2 Nov

Click to enlarge | Source: Australian Office of Financial Management (AOFM)

Your humble blogger met Senator Joyce for the first time on 1 July this year.

On introducing myself and mentioning this blog, Barnaby’s very first words to me … were words of humility.

He immediately referred self-deprecatingly to his now-famous warning in late 2009 about the risks of rising US Government debt leading to “possible” default.

You remember. His was the warning that no one wanted to hear; that drew the wrath and mockery of Rudd, Swan, Tanner, Chris Bowen, then Treasury Secretary Ken Henry, and of course, all of our lamestream media economic “experts”. Ignorant, arrogant, foolish ridicule, that prompted the launch of this blog.

Barnaby was quick to volunteer that his warning about US debt was nothing special; rather, in his opinion it was simply obvious that the rising trajectory of US Government debt must eventually run smack into their debt ceiling.

As we all know from the early August kerfuffle over raising the US debt ceiling, a political crisis that threatened to blow up the world economy … Barnaby was right.

Since this blog began in early 2010, we have seen time and time again, that when it comes to matters financial, Barnaby is the only one on the ball.

Doubtless a big contributing factor is that he is an experienced Chartered Accountant, and not a lawyer cum union hack, or a career political hack with an Arts degree.

In May, for example, Barnaby was the first to rail against the Green-Labor minority government quietly sneaking in a budget provision to raise Australia’s debt ceiling by 25%, to a quarter of a Trillion dollars ($250 Billion). Even though no one is supposed to dare question Wayne’s authority:

As Treasurer Wayne Swan was congratulated by colleagues after Tuesday’s budget speech, Assistant Treasurer Bill Shorten introduced draft laws allowing the government to increase the amount it can borrow from $200 billion to $250 billion.

The proposed legislation would also remove a requirement that the Treasurer explain why the extra money is needed.

In recent weeks, Barnaby has upped the ante in continuing to make good on his pledge to never rest in pointing to the dangers of rising government debt.  And fair enough too, when they’re continuing to borrow on the national “credit card” at a staggering rate.

Indeed, Wayne and Co have blown out our total Gross Debt Outstanding by over $7 billion a month in September and October, to a new record $215.6 Billion.

Which begs the question, “When will we run into our new debt ceiling of $250 Billion?”

That is, the new one Wayne set only 5 months ago, in May this year.

The chart above tells the story.

Our debt trajectory suggests that our Green-Labor government will bang into our new debt ceiling around mid-2012.

Unless something goes pear-shaped first, of course.

Like, say, a big fall in our Terms of Trade? Due to a big fall in the price of our biggest export, the iron ore sold to Chinese steel mills, perhaps?

Steel China Iron Ore Fines cfr main China port USD/dry metric tonne (MBFOFO01:IND)

Oops.

Like, say, a 32 month low in the latest measure of Chinese manufacturing? (h/t ZeroHedge)

China Manufacturing PMI prints at 50.4, down from 51.2, when consensus was expecting an increase to 51.8. This is the lowest print in 32 months, and the lowest since February 2009. But wait, before concluding that this is very bad news, uh, ahem… well, sorry, we haven’t taken the CNBC spin school yet. It’s bad news and the hard landing is coming. We leave the spin to the professionals.

Click to enlarge

Oops.

And there’s a lot more “oopses” where they came from. Including internal “oopses” … like Australian house prices and sales both falling … and the Reserve Bank starting to cut interest rates again; which means trouble’s afoot, and they are hoping their action will prompt you to be a complete idiot and start borrowing and spending like a drunken sailor Green-Labor politician.

Dear reader, the signs are all there that a real SHTF moment draws near once again, a la 2008.

Only worse.

Much worse.

Can you say “stimulus”?

Wayne can.

Do you think our government will stop spending more than they bring in from taxing us when they smack into our new debt ceiling?

Not if new Treasury Secretary and former student of US Federal Reserve chairman “Helicopter” Ben Bernanke has anything to do with it.

We already know his views on endless debt.

Here’s what happened back in June, when Barnaby kicked up a stink over our government jacking up Australia’s debt ceiling on the sly:

On Wednesday in Senate Estimates, our [new Treasury Secretary] Martin Parkinson was challenged by Senator Barnaby Joyce over this utterly incompetent and reckless Labor/Green government’s decision, just before the Budget, to sneak in new legislation to raise our debt ceiling too.  By $50 Billion – a 25% increase. To a new all-time record debt level of $250 Billion.

Just like America. The only difference is the scale.

And what did Mini-me Parkinson have to say?

Nationals senator Barnaby Joyce wanted to know what would happen if the government was prevented from lifting its gross debt ceiling by a further $50 billion to $250 billion, as proposed in the budget.

“I couldn’t imagine that parliament would be so foolish,” Parkinson replied.

It would have “serious ramifications” for the operation of government.

So, dear reader, you already know what is going to happen in this country.

Green-Labor are firmly on course to bang up hard against our new debt ceiling, in 2012.

Even without another round or two of “stimulus” borrow-and-spending, to prop up the economy.

The all-knowing genius of Treasury Secretary Mini-me Parkinson will (of course) support the government in raising the debt ceiling even higher.

Our interest-on-debt bill of $1.59 million per hour will rise even higher.

And at some point … sooner rather than later, your humble blogger would suggest … the great external debt-driven forces of the USA, Europe, and/or China, will send the wave that collapses our own financial house of cards.

You can bet your falling house price on it.

“If you do not manage debt, debt manages you”
~ Barnaby Joyce, February 2010

Barnaby is right.

UPDATE: 12:41am

Ummmm, what was that I was saying? … “the signs are all there that a real SHTF moment draws near once again, a la 2008. Only worse. Much worse” …

Greek Prime Minister George Papandreou plunged the euro and stock markets back into crisis on Monday [evening, northern hemisphere time] with a shock announcement that he would put a hard-fought rescue deal to a referendum…

All of Europe’s main stock markets registered sharp falls at the new risk of Greek default and contagion, with the German blue-chip DAX 30 stocks index slumping by more than five percent, French shares were down over four percent and London’s stocks fell more than three percent.

Athens witnessed a meltdown as stocks plunged 6.31 percent amid warnings that a rejection of a deal that is deeply unpopular in Greece would force it to leave the 17-nation bloc which uses the euro single currency.

“This is a referendum, in which they’re effectively voting on Greece’s euro membership,” Alexander Stubb, the Europe minister for Greece’s fellow single currency member Finland, told the commercial MTV3 network.

In a sign of the deep unease in European capitals, French President Nicolas Sarkozy and German Chancellor Angela Merkel were to hold talks by phone.

Italian Prime Minister Silvio Berlusconi, another leader under pressure as a result of the eurozone crisis, registered his sense of shock and annoyance.

“There is no doubt the Greek decision to hold a referendum on the European Union’s rescue plan is having a negative effect on the markets,” he said. “This is an unexpected decision that generates uncertainties after the recent European Council and on the eve of the important G20 meeting in Cannes.”

Italian stocks plunged 6.12 percent, led by big falls for banks…

In an online commentary, the Moneycorp currency broker said Papandreou had presented Greeks with “the ultimate Hobson’s Choice”.”

“They could either have their financial eyes ripped out by austerity measures or by the chaos that would follow the total bankruptcy of Greece and the wipe-out of its financial institutions,” it said.

Nicola Rossi, an opposition senator in Italy, warned the mounting cost of borrowing for the government in Rome had the potential to further scupper attempts to safeguard the euro.

Under last week’s deal, the eurozone plans to increase the stockpile of cash in a bailout fund to some one trillion euros but many observers suspect that it will be an insufficient firewall if a country of the size of Italy collapses.

“The Greek government’s decision has unleashed havoc on the markets. It wasn’t very well thought through,” Rossi, an economist, told SkyTG24.

“The problem is that Italy is the weak link in the euro chain so we are under particular scrutiny.”

“We all know that when our borrowing rate is close to seven percent our debt risks becoming unsustainable. The situation is extraordinarily serious.”

And from Bloomberg:

Greece’s referendum poses a threat to financial stability in the euro region and increases the risk of a “disorderly” default, Fitch Ratings said. Papandreou’s grip on power weakened before a confidence vote on Nov. 4 as six senior members of the ruling party called on the prime minister to step down, state- run Athens News Agency reported, without citing anyone.

“The risk of a Lehman-style disorderly default now looms a bit larger than before, including some residual risk that Greece may leave the euro zone if it rejects the offer of orderly debt relief in exchange for harsh new spending cuts and reforms,” Holger Schmieding, chief economist at Joh. Berenberg Gossler & Co. in London, wrote in a note…

The cost of insuring against default on sovereign debt surged the most in almost four months with the Markit iTraxx SovX Western Europe Index of credit swaps linked to 15 governments jumping 29 basis points to 333 basis points. Contracts on Italy soared 46 to 498 basis points, France was up 16 at 192 and Germany climbed 10 to 94 basis points.

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Why The US Is Doomed, And The Debt Ceiling “Crisis” Is Irrelevant

1 Aug

One chart from the New York Times explains why it no longer matters what US politicians decide to do about raising their debt ceiling even higher:

Exponential rise = unsustainable bubble.

Whether now, or later, the US economy is doomed.

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Labor Dodges Scrutiny To Lift Debt To $250 Billion

12 Jun

We covered this topic a month ago ( “Swan Raises Govt Borrowing Limit By Another $50Bn – And Don’t Ask Questions” ) – immediately after the budget, in fact.  But still, it’s nice to see the Liberal Party formally commenting on it:

The Gillard Government is pressing ahead with its plan to ramp up the Commonwealth debt limit to $250 billion while avoiding proper parliamentary scrutiny.

“Today Labor arrogantly opposed an amendment I moved to give the parliament the opportunity to consider separately and vote on the proposed increase in the borrowing limit,” Shadow Minister for Finance Andrew Robb said.

“Just two years ago the government raised the debt limit from $75 billion to $200 billion citing ‘special circumstances’ post GFC. They did this through a standalone proposal which was rightly considered by the parliament.

“This time they want to lift the debt ceiling to $250 billion and have buried the proposal – which includes the repeal of the ‘special circumstances’ clause – under the primary budget bill in a secondary Appropriation Bill.

“This tricky move denies the parliament the opportunity to debate the proposal in detail, to amend it, support it or oppose it,” Mr Robb said.

“The Gillard government should be embarrassed, that despite all their talk about fiscal consolidation, they clearly have no control over the nation’s finances hence the need to borrow yet another $50 billion.

“They are trying to slip this through on the sly to fund their extraordinary $135 million-day-borrowing habit. The budget papers show that the face value of government debt is expected to be $192 billion at 30 June, so they are on the verge of running out of money under the current limit.

“When the Rudd-Gillard government came to office it inherited a budget which was not only debt free, but had $70 billion in reserves. To go from this situation to approaching $250 billion in debt in less than four years is simply extraordinary and highlights the true extent of Labor’s reckless and wasteful spending.

“Considering the vulnerability of the economy, to external shocks, as demonstrated by the first quarter of negative growth in more than two years, I would urge the government to split its budget bills before a final vote and allow proper scrutiny of its plan to saddle taxpayers with yet another $50 billion in debt,” Mr Robb said.

Barnaby was on to this – in a very public op-ed article – the day after the budget in which it was (quietly, sneakily) announced.

And that was also when he pointed out the emperor’s clothes once again.

To wit, the fact that Labor’s ever-rising debt means that our government will, like the rest of the West, in the end, steal our super to pay down debt.

He’s proven himself to be the only one who is truly on the ball.

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Our New Treasury Secretary Is America’s Mini-Me

5 Jun

America’s Treasury Secretary, Tim Geithner – the former IMF bankster who Paul Keating rightly called a “gigantic fool” – now  has his very own Mini-me right here in Australia.

New Treasury Secretary Martin Parkinson. Former student of money-printing madman, US Federal Reserve Governor “Helicopter Ben” Bernanke.

What do Tim and Martin share in common?

An insistence on raising our respective nations’ debt ceilings.

The only difference between these two #JAFA lunatics, and the public (taxpayer) debt levels over which they preside … is one of scale.

Consider.

Recently we have seen the USA run into its $14.3 Trillion debt ceiling. And giga-fool Geithner has been loudly proclaiming the dire consequences if the US Congress refuses to raise it even higher.  In another ominous warning of where Australia too is heading, Geithner has started stealing federal employees pensions to keep the government running until August 2, when America will default on its current massive debt unless the #JAFA’s in their Treasury department can get “permission” to borrow-and-spend the American people even deeper into oblivion.

And in Australia?

On Wednesday in Senate Estimates, our Mini-me Martin Parkinson was challenged by Senator Barnaby Joyce over this utterly incompetent and reckless Labor/Green government’s decision, just before the Budget, to sneak in new legislation to raise our debt ceiling too.  By $50 Billion – a 25% increase. To a new all-time record debt level of $250 Billion.

Just like America. The only difference is the scale.

And what did Mini-me Parkinson have to say?

Nationals senator Barnaby Joyce wanted to know what would happen if the government was prevented from lifting its gross debt ceiling by a further $50 billion to $250 billion, as proposed in the budget.

“I couldn’t imagine that parliament would be so foolish,” Parkinson replied.

It would have “serious ramifications” for the operation of government.

It gets worse.

According to Mini-me Parkinson, he is simply not concerned about our ever-rising, all-time record high national debt. And, it seems he would only begin to view our national finances from a position of “concern”, if our national debt level was the highest in the world:

During a budget estimates hearing, Nationals Senate Leader Barnaby Joyce asked the Treasury secretary if increasing government debt concerns him.

But Dr Martin Parkinson says it does not.

“If you were to say to me that Australia had the highest level of public debt in the world… if you were to say that to me, then I would start from a position of much greater concern,” he said.

Brilliant.

Our nation is held hostage to the “genius” of yet another ivory-towered, disconnected-from-reality,”theory”-obsessed, white-collared, smarmy idiot.

A #JAFA.

This former head of the Department of Climate Change, no less, is now the new “Sir Frank Gordon” responsible for advising the Goose, Wayne Swan, about how to (mis)use the billions of dollars that this Government is borrowing every week from China, et al:

Given the abundantly clear evidence that America is rapidly swirling its way down the financial toilet bowl, the last thing we need is a Mini-me of Timmy, and a former student of money-printing madman, “Helicopter Ben”.

Another useless #JAFA – just like Senator Joyce’s previous nemesis at the Treasury department, the green cargo-cult member, Ken Henry – one whose towering, commonsenseless intellect insists that the government be permitted to keep borrowing-and-spending our nation into oblivion too.

Martin Mini-me Parkinson.

Remember the name.

So you know who (else) to blame, when we all get flushed down the green-tinted economic toilet bowl.

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Grand Theft Pēnsiō – French Edition

2 Jun

Continuing our recent peek into the world of government confiscations of citizens’ superannuation, we find that France too is indulging in grand theft.

From eFinancialNews:

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.

The move reflects a willingness by governments to use long-term assets to fill short-term deficits, including Ireland’s announcement last week that it would use the country’s €24bn National Pensions Reserve Fund “to support the exchequer’s funding programme” and Hungary’s bid to claw $15bn of private pension funds back to the state system.

Think our government would never resort to stealing your super to pay down its debts?

Think again.

So far we have found that Argentina, Hungary, Bolivia, Poland, Ireland, France, and now the mighty USA have all either confiscated or “borrowed” their citizens’ retirement money to pay for government debt problems.

And our very own Senator Barnaby Joyce has given early warning of the same thing happening right here in Australia:

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.

Learn more about the growing trend for governments to steal your retirement savings, in these earlier articles:

“No Super For You!”

“Grand Theft Pēnsiō”

“Grand Theft Pēnsiō – Europe’s ‘Economic Superstar’ Steals 5% Of Private Super Funds”

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CDS Traders Agree – Barnaby Was Right

28 May

From the Financial Times:

Traders and investors have stepped up purchases of insurance against a US sovereign debt default, amid heated political wrangling over raising the US debt ceiling.

The gross value of derivatives contracts that pay out in the event of a US default has doubled from year ago levels, according to the Depository Trust and Clearing Corporation, which collects data on global trading of credit default swaps (CDS).

http://video.ft.com/v/959355486001/US-default-no-longer-unthinkable

Traders and investors are putting their money where their mouth is, in joining with Ronald Reagan’s budget director David Stockman, the Wall Street Journal, the U.S. Treasury, Southern Cross Equities’ Charlie Aitken, ANZ chief Mike Smith, global currency expert Savvas Savouri, ABC’s Inside Business and Business Spectator Alan Kohler, credit rating agency Standard & Poors, CNBC, Deutsche Bank, and Barack Obama, in conceding that when he forewarned of the risk of US debt default way back in 2009 (“Barnaby Warns of Bigger GFC“) …

Barnaby Was Right.

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No Super For You!

18 May


What will you do when they take away your super?

From the Washington Post, 17 May 2011:

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.

Treasury Secretary Timothy F. Geithner has warned for months that the government would soon hit the $14.3 trillion debt ceiling — a legal limit on how much it can borrow. With that limit reached Monday, Geithner is undertaking special measures in an effort to postpone the day when he will no longer have enough funds to pay all of the government’s bills.

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.

The USA is taking public servants’ pension funds, to pay government bills.

Note that well.

Because last week, Senator Joyce made a very disturbing revelation (below).

Think it could only happen in America?

From Reuters, 21 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.

From Bloomberg, 26 November 2010:

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.

“This is effectively a nationalization of private pension funds,” David Nemeth, an economist at ING Groep NV in Budapest, said in a phone interview. “It’s the nightmare scenario.”

But Argentina and Hungary are not like us, right?  That couldn’t ever happen in a mid-level “advanced economy” like ours … right?

From Business Insider, one week ago:

Irish Bombshell: Government Raids PRIVATE Pensions To Pay For Spending

But the Irish had a big housing bubble, didn’t they?  No way anything like that could happen here … right?

From the Sydney Morning Herald, 4 March 2011:

Australian house prices remain the most overvalued in the world, according to the latest quarterly ranking of global house prices by The Economist magazine.

But our housing market could never fall.  Not like it did for Ireland … or the USA … or the UK … or Spain … right?

From AAP, 29 April 2011:

Capital city home prices have posted their biggest quarterly fall in at least 12 years, as more stock in the housing market allows prospective buyers to wait for bargains, a survey shows.

Capital city dwelling values fell by a seasonally adjusted 2.1 per cent in the first quarter of the year, according to the latest RP Data-Rismark Home Value Index.

The quarterly change was the steepest since the index series began in June 1999, RP Data research director Tim Lawless said.

And from the Sydney Morning Herald, yesterday:

Australian real estate, long the subject of global concern, bears all the symptoms of a market that simply has run out of puff.

Ever since America’s housing bubble burst in 2007, setting off a chain reaction in Britain and across Europe – which then infected the global financial system – international pundits have been warning of a similar catastrophe here.

Do you remember what our government did the last time our real estate market began to fall sharply?

It was during the 3-month peak of the GFC, in late 2008 / early 2009:

Steve Keen's Debtwatch

They guaranteed to use taxpayers’ future earnings to underwrite our banks’ trillions in foreign loans.  Poured $20 billion in borrowed money into Residential Mortgage-Backed Securities.  And borrowed billions more to prop up the housing market. By bribing thousands of young people into massive debt, thanks to the government’s double-trouble First Home Owners Grant.

If you think “it could never happen here”, if you think that our government would never take away your super to pay for its massively wasteful spending, then it’s time to think again.

Were you one of those who ridiculed Barnaby’s warning in late 2009, about the possibility of a US debt default?

It’s coming to pass right now.

So pay close heed to another prescient warning from Barnaby, given just one week ago:

On Tuesday night’s budget, Labor sneaked in an Amendment of the Commonwealth Inscribed Stock Act 1911. Here is the most telling statement for where our nation is going under this Green-Labor-Independent Alliance. Under Part 5 Section 18 subsection 1 “omitting ‘$75’ and substituting ‘250’ ”.

Now that is in billions ladies and gentlemen and it is real money that really has to be paid back. If we have all this money stashed away under the lower net debt figure that is always quoted by Labor, then why not use some of this mystery money to pay off what we owe to the Chinese and others who we are hocked up to the eyeballs to.

The reason why we can’t is at least $70 billion that makes up ‘net’ debt is tied up in the Future Fund and student loans.

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.

!??!

That is exactly what is happening in America.  Right now.

And Barnaby is warning that it could happen here too.

The first steps in that direction have already begun.

From Global Custodian (Australia edition), 11 May 2011:

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

In light of the botched “school halls” program, and the stalled white elephant NBN – which so far has only achieved a 12% takeup rate, versus their predicted 58% –  would you really trust this government to wisely and prudently invest your super in Government infrastructure?

Others have their doubts.

From The Australian, 12 May 2011:

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.

First, a little “encouragement” for super funds to invest in government spending programs.

Then, when the costs blow out, or when the government debt becomes unmanageable?

“No super for you!”

Barnaby is the only one on the ball.

This blog will be following this story of government confiscations of public and private retirement funds in future posts.

A final thought for now.

Yesterday I commented on the proposal that Australia should have an “independent” Carbon Bank (“Our ‘Squeeze Pop’ Carbon Bank“).  One that …

…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.

In other words, a Carbon Bank where the government … meaning taxpayers … becomes the guarantor for any losses made on those “investments”.

Does that prospect concern you?

Can you see where this is all heading?

This is a government that has racked up nearly $200 Billion in gross debt.

Is running a “forecast” $50 Billion annual budget deficit.

Is presently borrowing at a rate of over $2 Billion per week.

And has now moved to raise our debt ceiling by another $50 Billion, to a new record quarter of a Trillion dollars.

This is the same government of completely unqualified economic incompetents behind a string of costly disasters – electrified ceiling insulation, overpriced school halls, “green scheme” rorts, the problem-plagued Nation Bankrupting Network … and now, free set-top boxes.

Do you honestly believe that this government would not end up burying taxpayers with even bigger losses from their carbon dioxide “air tax” scheme too?

Do you honestly believe that this government would never follow the lead of Argentina, Hungary, Ireland, and now the superpower USA … and steal your super to pay for massive debts that they have racked up?

These are just some of the many sound reasons why Senator Joyce has persistently tried to raise public awareness of the real and grave peril of ever-increasing Labor government debt and deficit, in a (supposedly) post-GFC world.

Your retirement savings depend upon your taking notice of his warnings.

Barnaby was right.

Barnaby is right.

UPDATE:

Labor’s PM-in-waiting, the Minister for Financial Services and Superannuation, Bill Shorten, already thinks of your super as a “significant national asset” … a kind of “sovereign wealth fund”.

From The Australian, 4 May 2011:

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.

UPDATE 2:

About the USA’s new edition of Grand Theft Pēnsiō.

From ZeroHedge:

It’s Official: DTS Discloses Total Debt Hit Ceiling Yesterday; Government Draws On $14.3 Billion From Retirement Funds

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US Treasury: August 2 Deadline To Avoid Debt Default

14 May

This Monday, the US government will hit its $14.3 Trillion debt ceiling.  By August 2nd, it could default on its mindboggling debts. So says the US Treasury (below).

Remember when Barnaby was widely ridiculed for warning that the US could default on its debts, and for suggesting that Australia needed a contingency plan?

He lost his new job as Opposition Finance spokesman as a result.

October 2009 (emphasis added):

The Nationals Senate leader Barnaby Joyce is openly canvassing an economic upheaval that would dwarf the current global financial crisis, triggered by the US defaulting on its sovereign debt within the next few years.

In unusually pessimistic comments for a senior political figure, Senator Joyce said the US Government was running such large deficits and building up so much debt that it was in a similar position to Iceland or Germany before World War II.

… Senator Joyce insisted yesterday that the dangers to the global economy from the run-up in US private and public sector debt were real and should be debated.

“It is the elephant in the room,” Senator Joyce said.  “This is a huge risk that Australia faces. What is the game plan, what happens if it comes unstuck?”

December 2009 (emphasis added):

The opposition finance spokesman, Barnaby Joyce, believes the United States government could default on its debt, triggering an “economic Armageddon” which will make the recent global financial crisis pale into insignificance.

Senator Joyce told the Herald yesterday he did not mean to alarm the public but there needed to be a debate about Australia’s “contingency plan” for a sovereign debt default by the US or even by a local state government.

“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,” Senator Joyce said.

His warning came as the Rudd Government ramped up its attack on Senator Joyce as an economic extremist…

Senator Joyce said the chances of a US debt default were distant but real and politicians were not doing the electorate a favour by refusing to acknowledge the risk.

Tick.

Tick.

Tick.

From the New York Times, May 9, 2011 (emphasis added):

Speaker John A. Boehner said Monday that Republicans would insist on trillions of dollars in federal spending cuts in exchange for their support of an increase in the federal debt limit sought by the Obama administration to prevent a government default later this year…

[Senate leader] Mr. Schumer and Roger C. Altman, an investment banker and former Clinton administration Treasury official, said the consequences for the nation’s economy could be dire if the government defaulted for the first time in its history or if the debt-ceiling talks were pushed to the brink.

“If America were to default, even for 24 hours, that would have an unprecedented and a catastrophic impact on global financial markets and on American markets,” Mr. Altman said.

From Reuters yesterday, May 13 2011 (emphasis added):

The United States is set to reach its $14.3 trillion debt limit on Monday, and will only be able to avoid default until Aug. 2, according to the U.S. Treasury. Efforts to forge a bipartisan deficit-reduction package as a step towards Congress raising the borrowing limit are in turmoil.

A thicket of plans to cut the deficit, which is expected to hit $1.4 trillion this year, have emerged in recent days with virtually no chance of passage in Congress.

The US Treasury now joins Southern Cross Equities’ Charlie Aitken, ANZ chief Mike Smith, global currency expert Savvas Savouri, ABC’s Inside Business and Business Spectator Alan Kohler, credit rating agency Standard & Poors, CNBC, Deutsche Bank, and Barack Obama, in conceding that Barnaby Was Right.

Does Labor have a contingency plan for a US debt default?

Hardly.

They don’t even have a plan on how to achieve a single year of budget surplus.  Instead, they are increasing Australia’s debt ceiling by another $50 Billion to $250 Billion.

And counting their budget chickens way before they’re hatched.

The “surplus” that Labor are proudly talking about as though it is fact, is nothing more than a “forecast”.  One based on Labor “estimates” of years of continuous record-high minerals prices and record-high terms of trade … in other words, on a never-ending China boom.  Even the Americans are laughing at them!

This not going to end well.

Barnaby is right.

UPDATE:

Add American centrist think tank Third Way to the growing list.  They will release a study on Monday regarding the likely impacts of a US default.

From Reuters again:

The Treasury Department is expected to hit its $14.3 trillion borrowing limit on Monday, making it unable to access the bond markets again.

The Treasury Department says it can stave off default until August 2 by drawing on other pots of money to pay its bills.

Treasury officials have warned of “catastrophic” consequences if Congress does not approve a further debt-ceiling increase by then, but have declined to say exactly what would happen.

The Third Way report, based on a survey of existing economic research, spells out the details…

“Defaulting on our debt is not an abstract idea that might affect a few institutions on Wall Street; it would harm tens of millions of Americans in profound and lasting ways,” the report says.

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