Tag Archives: us debt default

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

Tags: , , , , ,

I Told You So

6 Aug

From Reuters:

The United States lost its top-notch AAA credit rating from Standard & Poor’s on Friday in an unprecedented reversal of fortune for the world’s largest economy.

Five days ago, prior to the US raising their debt ceiling, I wrote this:

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

If you missed it, click on the link above to see the chart from the New York Times which explains why – whether it be now, or later – the US economy is doomed.

UPDATE:

Dow Jones Newswires comments:

Standard & Poor’s has taken the unprecedented step of downgrading the US government’s “AAA” sovereign credit rating, in a move that could send shock waves through global financial markets and potentially undermine world economic growth.

In a press release, S&P, today cut its top-notch long-term credit rating for the US Treasury’s debt to AA plus with a negative outlook. It is the first time in modern history one of the three main ratings firms has stripped the US of its coveted AAA rating.

S&P warned last month if the US government didn’t approve a credible medium-term plan to shrink its fiscal shortfall, it would downgrade the rating even if Congress approved a debt deal that raised the Treasury’s borrowing limit.

UPDATE 2:

The Wall Street Journal:

A cornerstone of the global financial system was shaken today when officials at ratings firm Standard & Poor’s said US Treasury debt no longer deserved to be considered among the safest investments in the world.

S&P removed for the first time the triple-A rating the US has held for 70 years, saying the budget deal recently brokered in Washington didn’t do enough to address the gloomy long-term picture for America’s finances.

It downgraded US debt to AA+, a score that ranks below Liechtenstein and more than a dozen other countries, and on par with Belgium and New Zealand.

What did then Opposition Finance spokesman Barnaby Joyce say, back in February 2010?

“If you do not manage debt, debt manages you”.

Barnaby is right.

Tags: , , , , ,

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.

Tags: , , , , , ,

Strewth! He’s Got It … “Joyce The Prophet”

28 Jun

At long last.

Well done James Jeffrey, author of the Strewth column.

From the Australian today:

REMEMBER back in 2009 when Barnaby Joyce pondered aloud the possibility of the US defaulting on its debt?

Just to recap in the concisest way, things went badly for Joyce. We found ourselves pondering this yesterday as we listened to the dulcet tones of the ABC’s Eleanor Hall on The World Today: “. . . the [US] Treasury has warned that Congress has only until August 2 to come up with a compromise to lift the $US14 trillion debt ceiling or risk a default and a default would have drastic consequences, not just for the US but for the global economy”.

Is the time approaching where Joyce must be acknowledged as a clear-eyed prophet?

Strewth found him in a reflective mood.

“Maybe they will retract their pillaging of me and hand back the shadow finance portfolio as the sun is blotted out with the return of the migrating pigs,” Joyce mused.

“Alas, Cassandras are rarely enjoyable company in any party. It was hardly the greatest feat of the prefrontal cortex amygdala [utilised for intuition, he explains] to foresee that one, but politically it had to wait for the economic karaoke to bravely sing all together prompted by the big bouncing cheque.”

Amen.

Just as this blog has been proving, with news articles and economic information from around the world, ever since Barnaby The Prophet bravely made the Big Call.

Barnaby was right.

Tags: , , , , ,

Barnaby Was Right – U.S. Congressional Budget Office, China Central Bank Confirm

20 Jun

From Bloomberg:

A U.S. government default on its debts would be a “dangerous gamble” that could easily cost taxpayers billions of dollars, the head of the Congressional Budget Office said today.

Doug Elmendorf told reporters that if the investors who buy federal debt begin demanding even modestly higher interest rates, to compensate for additional risk, it could quickly add more than $100 billion to the interest payments the government must make on its debt.

“It is a dangerous gamble because any government that has borrowed as much as ours has borrowed, and will need to borrow as ours will need to borrow, cannot take the views of its creditors lightly,” Elmendorf said today…

Indeed. One certainly can not take one’s creditors views lightly.

And America’s #1 creditor has said the USA is “playing with fire” in even considering a “technical” default on its debts (from Reuters):

Republican lawmakers are “playing with fire” by contemplating even a brief debt default as a means to force deeper government spending cuts, an adviser to China’s central bank said on Wednesday.

The idea of a technical default — essentially delaying interest payments for a few days — has gained backing from a growing number of mainstream Republicans who see it as a price worth paying if it forces the White House to slash spending, Reuters reported on Tuesday.

But any form of default could destabilize the global economy and sour already tense relations with big U.S. creditors such as China, government officials and investors warn.

Li Daokui, an adviser to the People’s Bank of China, said a default could undermine the U.S. dollar, and Beijing needed to dissuade Washington from pursuing this course of action.

“I think there is a risk that the U.S. debt default may happen,” Li told reporters on the sidelines of a forum in Beijing. “The result will be very serious and I really hope that they would stop playing with fire.”

Of course, the reality is that the USA is already defaulting on its debts.  By printing hundreds of billions of new dollars, they are devaluing the USD … meaning that holders of US Treasury bonds will be repaid in money that cannot buy as much as it used to.  2012 US Presidential candidate, and Chairman of the House Financial Services Subcommittee on Domestic Monetary Policy, Congressman Ron Paul has confirmed that this is exactly what is happening:

America is defaulting on its debts.  And the Chinese are not happy.

As a gentle reminder, here is what Senator Barnaby Joyce had to say about the US and its debts, almost 18 months ago (from the Brisbane Times, October 23, 2009):

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?

And from the Sydney Morning Herald, December 11, 2009:

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.

Barnaby was right.

100% right.

Tags: , , , , , , ,

Swan: Not Drowning, Waving

19 Jun

No, no … everything’s fine!  Really it is!  Just peachy!!

From AAP via Yahoo!7 News:

Economy strong despite global woes: Swan

Treasurer Wayne Swan says Australia’s economic prospects remain strong despite uncertainty about the recovery in the global economy.

Mr Swan said proximity to Asia would continue to fuel the national economy.

“Australia remains well positioned to benefit from robust growth in our region,” Mr Swan said in a statement on Saturday.

“Strong demand for our commodities is underpinning an unprecedented pipeline of business investment, with ABARES estimating a pipeline of $430 billion in resources alone.”

Australia’s economic prospects “remain strong”, ‘eh?

We are “well-positioned to benefit from robust growth in our region”, ‘eh?

An “unprecedented pipeline of business investment”, ‘eh?

Macquarie Bank begs to differ.

As does Michael Byrne, head of Linfox Logistics.

As does Nouriel Roubini, the economist made famous for predicting the GFC.

And many more.

Ever reliable Wayne Swan. Nothing changes.

Same hot air, every time.

Just remember to bookmark this page.

For the day fast approaching, when Wayne’s waving turns to drowning.

Tags: , , , , , , ,

Economist Who Predicted The GFC Warns Of “Perfect Storm”

15 Jun

From Bloomberg:

A “perfect storm” of fiscal woe in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may converge on the global economy, New York University professor Nouriel Roubini said.

“There are already elements of fragility,” he said. “Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest.”

Nouriel Roubini is the New York University professor who came to fame as one of the dozen or so economists – including Australia’s own Dr Steve Keen – who predicted the GFC.

Mind you, he was running a little late. Dr Keen began publicly warning of a GFC in December 2005.  Roubini issued his warnings from mid-late 2006.

Now he’s running a little late again, with this warning of a “perfect storm”.

Barnaby Joyce began warning of the risk of “economic Armageddon” nearly 18 months ago. And for exactly the same reasons – rising levels of public and private debt in the USA, and around the world.

It’s worth taking a minute or two to clearly recall just what Barnaby had to say.

From the Brisbane Times, October 23, 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.

In a Senate estimates hearing on Wednesday night, he asked Treasury secretary Ken Henry what would be the implications of an American debt default for the Australian economy.

Dr Henry warned that canvassing extreme scenarios could alarm the community.

”I don’t mind discussing hypotheticals in general … [but] one has to be careful not to discuss publicly hypotheticals that are that extreme,” Dr Henry said.

”I don’t, myself, consider that outcome to be a high probability outcome, certainly not one that I would want to say much about in a public forum.”

But 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?

And from the Sydney Morning Herald, December 11, 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.

Senator Joyce said that if the US recovered, global funds would flow back into North America. ”There will be only one way Australia will be able to keep funds here and that is by putting up interest rates, which will therefore bring real costs back to households,” he said.

”That is the first scenario, which is extremely bad for Australia. The worse scenario is where the US doesn’t repay its debt – the $2 trillion in debt it owes to the Chinese, the $1 trillion in debt it has to the Japanese and the $US1 trillion in debt to others – and then we are really nailed.

”The outcome is a shift away from the US dollar as the international trading currency and a shift to the Chinese yuan, and China becomes an immensely powerful player overnight.

”It’s the real financial crisis, and the real financial crisis will mean this preamble we have just had pales into insignificance.”

Asked what sort of contingency plan he would advocate, Senator Joyce said it was like trying to prepare for a tidal wave but the local economy should have more self-reliance.

”Things you look for in that economic Armageddon are the capacity to feed ourselves, the capacity to provide the fundamentals in medicines and basic fundamental requirements for our nation.”

Barnaby was right.

And noone took any notice.  18 months later, Australia has no contingency plan.  Just a dramatically weakened government financial position.

This blog was created for the express purpose of sourcing and sharing information from around the world, in support of Barnaby’s prophetic warning.

If you browse the pages here, especially over the past month or so, you will find many news articles referencing the US debt default crisis.

Watch and listen to this interview just 8 days ago, where respected US congressman and 2012 Presidential Candidate Ron Paul, the Chairman of the House Financial Services Subcommittee on Domestic Monetary Policy, openly confirmed that the US is defaulting on its debts.

The big risk event that Barnaby predicted was “distant but real” in late 2009 … is happening right now.

Barnaby was mocked and ridiculed out of his new job as Opposition Finance spokesman, for daring to speak out. For daring to talk publicly about risks contrary to the “received wisdom” of the “experts”.

Who were those “experts”?

Let’s begin a Name ‘n Shame list of all the pompous, know-it-all cretins who now owe Barnaby a wimpering, grovelling apology.

Naturally, we’re talking about the likes of former Treasury secretary (and now unconstitutionally-appointed personal adviser to Gillard) Ken “The GFC is over” Henry.

RBA Governor Glenn “I don’t know anyone who predicted the GFC” Stevens.

Treasurer Wayne “Half a million new jobs” Swan.

And former Finance Minister Lindsay “dark arts” Tanner.

And, pretty much the entire Canberra press gallery.

They were all wrong. Totally, utterly, catastrophically wrong.

Time is proving our country accountant Senator from Queensland to be a veritable modern day prophet.

With more wisdom, commonsense, foresight, and courage, than the entire Labor Party, Treasury department, RBA Board of governors, and Canberra press pack of financial “journalists” combined.

So let us all pay close heed to his most recent warning – that the government plans to steal our super to pay down debt.

Barnaby is right.

Tags: , , , , , , ,

McCrann: America Is Now Turning Darker, China Can Crash The Whole Economy

13 Jun

From the Daily Telegraph’s National Finance Writer, economist Terry McCrann:

The good news is that the Reserve Bank didn’t lift its official interest rate at its meeting on Tuesday and there’s now no prospect of a rise at its next meeting in July.

The bad news is that the RBA may – and I stress, may – have to turn to contemplating a rate CUT.

How’s that bad news? Just remember the circumstances when the RBA was last cutting – actually, slashing – rates in 2008. Your super was being shredded and we wondered whether we faced Great Depression Mark II.

How also does that square with my comments last week that Australia was in the middle of a boom? Albeit, a weird one, with many feeling it was more like a recession?

That’s the critical, connecting part. If we thought we were hostage to China for our future prosperity, we are now even more hostage to China to fend off chilling winds coming out of America and another potential meltdown.

We got a taste of that downside in the March quarter when the Queensland floods temporarily cut off coal exports and sent our economy diving at an annual rate of nearly 5 per cent. It is springing back now, right? Right?

Yes, of course. But what if it became a case of China not wanting to buy, rather than we not being able to ship the stuff out?

… America is now turning darker. The visible evidence of that is Wall St. It has now fallen for six weeks in a row – something it didn’t do even through the global financial meltdown.

While, the overall fall isn’t anywhere near as big, the problem is that the US Government and the US Fed have fired off all their anti-recession ammunition.

Worse, all the problems caused by, or just revealed by, the GFC are still festering.

The US is running a budget deficit of close to $US1.5 trillion. That would be the equivalent of about $100 billion down here – and we think $50 billion is huge. They have a zero official rate, ours is 4.75 per cent. And the Fed has just finished printing $US600 billion of paper money.

The one thing all that seemed to achieve was to put the stock market up and now it’s going down. And all Fed head Ben Bernanke can say is that economic recovery has been “frustratingly slow”.

That brings us back to China and Martin Place in Sydney. That’s where the RBA resides and your home loan rates are set.

Right now the RBA believes the China boom is the biggest thing in our future. On that basis it believes it’s going to be fighting an inflation problem through 2012 as the money pours in and demand for skilled labour threatens a wages-price breakout.

On that basis it believes it will have to raise rates by at least 50-100 points over the next year and a half. Even if that’s brutal to large parts of the economy.

The initial key will be the June quarter inflation date at the end of July.

A bad number would see it raise at its August meeting.

…

It will watch events out of the US – and Europe and Japan – very closely. If the US turned seriously dark, if Greece imploded, all rate bets would be off.

It will also be watching China very closely. The US can send our market down as it did in 2008.

China can do it to the whole economy.

We’re toast.

Terry McCrann is right to point to the USA … as Barnaby did nearly 18 months ago … and voice concern that an implosion in America may well mean that China stops buying raw materials from us.

But I fear Mr McCrann is missing the wider dangers in focussing on the USA. Because China may well fold up like a playing card pyramid, all on its own. Without any “help” from America at all.

As we saw yesterday, Nouriel Roubini, the economist who gained the most fame for having predicted the GFC – predictions that RBA Governor Glenn Stevens claims not to have known anything about – has now sounded the alarm bell on China.  On the weekend he predicted a “hard landing” for the Chinese economy in 2013, just two years away. For reasons unrelated to America’s woes.

Moreover, we have our own internal risks to consider.

One could almost be forgiven for thinking that Mr McCrann’s fellow Finance Writer for the same paper, Nick Gardner, has been reading barnabyisright.com, in light of the following article published right above Mr McCrann’s column in The Sunday Telegraph yesterday (sorry, no link):

A bubble market

According to new data from RP-Data Rismark, the housing analysts, property prices have been declining in “real” terms since 2004 – in other words, they have been failing to keep up with inflation.

In terms of capital growth, you’d have been better off stashing your money in the bank than buying a home.

As The Sunday Telegraph reported last February, a quarter of people who bought and sold their properties within the past five years lost money.

The average shortfall was $54,000, but in some areas the losses reached almost $300,000, according to Residex, another property analyst.

Such statistics stand in sharp contrast to the broader public view that house prices have been consistently shooting up, and reveal signs of market weakness that, if continued, could undermine the entire economy.

Although experts are split about the outlook for property, it is clear the Reserve Bank needs to tread carefully.

… it is a delicate balancing act; a hike too far could cause the housing market to crash as it has in the USA and UK.

Shane Oliver, chief economist at AMP Capital, says the housing market is Australia’s “Achilles heel”.

“House prices here are overvalued by about 30 per cent, and it would not take too much to tip them over the edge.” Oliver says.

Overseas, many big institutional investors such as pension funds and hedge funds – which our banks rely on to borrow money which they lend out on mortgages – share Oliver’s concerns.

That’s one reason why the Big Four were downgraded by credit-ratings agency Moody’s from AA1 to AA2 last month.

Trevor Greetham, asset allocation director at Fidelity International in the UK, which has $3.4 Trillion under management, said: “If the global economy recovers strongly, that could push interest rates up a lot. That’s a real risk for Australia, because house prices are becoming an issue.”

The London-based Russell Investments fixed-income portfolio manager Gerard Fitzpatrick said he was more cautious about lending to Australian banks, citing the recent catastrophe in Ireland, where the house-price bubble effectively broke the banking system.

“I’m not saying Australia is the same as Ireland but there are definitely similarities.”

With such powerful voices becoming so worried, a credit crunch in which mortgages are rationed and buyers must put down much bigger deposits remains a possibility. The consequences could be disastrous.

That’s exactly what this blog has been arguing.

Basically, we’re screwed no matter what happens.

“Good” news or “bad” news, is all bad news for us.

If the global economy recovers, then we’re screwed because rising interest rates will crash the housing market (if it hasn’t already), and wipe out our banks. Meaning, the government will come after our super to prop them up.

If the global economy stalls, then we’re screwed because China will suffer the “chilling winds coming out of America”, and crash our economy. Meaning, the government will come after our super to prop up the economy through more ‘stimulus’.

Both sides of politics know they will do that. Both sides of politics are already implementing policies for it.

Barnaby has often warned that we cannot rely on a never-ending China boom to pay down Labor’s never-ending debt. Former Treasury secretary Ken Henry pompously disagreed. Labor and the mainstream media all climbed aboard the “Barnaby is wrong” train.  And Barnaby lost his job as Shadow Finance spokesman

Once again … as always … Time tells.

Barnaby warned of a bigger GFC almost 18 months ago. He said that Australia needed to stop borrowing and wasting billions, and make a “contingency plan” against the very real risk of more trouble hitting our shores from abroad.

Barnaby was right.

Tags: , , , , ,

2012 U.S. Presidential Candidate Ron Paul Agrees: Barnaby Was Right

10 Jun

U.S. Republican Congressman Ron Paul, the Chairman of the House Financial Services Subcommittee on Domestic Monetary Policy, who is again running for President in 2012, confirms that the USA is already defaulting on its debts.

From Think Progress, 6 June 2011:

Paul, who is running for President, claimed we are already in default but that the government was mitigating the effects through inflation.

KEYES: Congressman, there’s been a lot of heated rhetoric about this upcoming debt ceiling fight. Do you think it’s really going to be that bad if a default were to happen come August 2nd?

PAUL: Well, they’re not going to let it happen. They’re going to do it. But I try to tell people, a default is already occurring, it’s just how they do it. Governments always default, but most of the time, they don’t quit paying their bills because they’ll just print the money. They default by giving you money back that doesn’t have as much value and that’s when prices go up. So that’s how they’re defaulting and since there’s inflation back and hurting us, there’s plenty of default going on right now.

Barnaby was ridiculed up hill and down dale in late 2009 / early 2010, for daring to forewarn of the risk that the USA “could” default on its debts. He even lost his job as Shadow Finance spokesman, thanks to the flack he received from smart-arse, all-knowing and all-wise “experts” on all sides.

Not one of whom had the simple commonsense to see and predict the onrushing GFC.

Even I – a humble small businessman, and lowly blogger – was able to see that coming easily. Backed my intuition and commonsense, and put all my super into cash in May 2007, in defiance of “expert” financial advice.  And completely avoided any losses in the global sharemarket crash:

If even I could see that coming, then why – after millions of Aussies lost billions in the GFC – why do we continue to bend our knees and doff our caps to the very same so-called “experts” in the Treasury department, the Reserve Bank, and the financial media, who all completely and utterly failed us?  And, massively overpay them for crappy / wrong / non-existent “advice”?

Barnaby foresaw the risk of a coming US debt default back in late 2009, and had the courage to warn that Australia should have a “contingency plan”.

Now, a highly respected longstanding US congressman and 2012 Presidential candidate has outright conceded the truth … that Barnaby was right.

Perhaps some Australians might now think to heed Barnaby’s most recent warning.

Both of our major political parties are planning to steal our super to pay down ever-rising debts.

Just like the USA, France, Ireland, Poland, and many more have done, and are doing right now.

Tags: , , , , ,

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

7 Jun

From the Liberal Party’s website, Latest News, 3 June 2011:

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.

Senator Barnaby Joyce writing for The Punch, 13 May 2011:

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.

So you won’t vote for the Coalition then?

There’s no salvation on the Left.

Labor has already introduced legislation in the 2011-12 Budget that aims to grab your super too.

In fact, Labor’s Minister for Financial Services and Superannuation, Bill Shorten, published an op-ed a month ago stating that he views your super as “our sovereign wealth fund”.

There is a wave of government confiscations of private retirement savings rolling around the Western world right now.  The first ripples have quietly rolled onto our shores already.

Your super savings are not safe.

From either party.

Learn the full story, in “No Super For You!!”

Tags: , , , , , , , , , , , , , , , , , , , , ,

← Older Entries

%d bloggers like this: