Over the past 6 weeks since I began tracking the AOFM’s government debt auctions, Wayne’s pack of lunatics have borrowed no less than $2 Billion, and as much as $2.75 Billion.
Every single week.
And we can see here, that ever since JuLIAR Gillard knifed KRudd, she has been on a borrow-and-spendathon that puts even the jet-setting Mr Stimulus to shame.
The following chart shows only the value of Treasury Notes auctioned by Labor. These are “short term” debt “instruments”, that typically must be repaid within 30-90 days. They are supposed to be issued only when necessary to “smooth” cashflow requirements of the government.
Most of the government’s primary funding comes, instead, from the auction of Treasury Bonds, which are longer term debt “instruments”, that must be repaid over durations of anything up to 20+ years.
We take particular interest in the blowout in borrowing using Treasury Notes, because it indicates a government that has completely lost the plot. An utterly incompetent government, that has no idea what it is doing. Has no planning. Cannot even manage to balance the weekly cashflow needs of government. And so is constantly going back to the international debt markets, to borrow $2+ billion per week on the “short term” national credit card (click to enlarge):
Source: Australian Office of Financial Management (AOFM) - to end April 2011
Note carefully that this chart only goes up to end of April this year. During May, the government borrowed another $5.8 Billion using Treasury Notes. To picture this – since I’m too lazy to update the chart right now – just imagine another blue line on the end of that chart, one that is double the height of the tallest blue line.
So far in June – a mere 3 days in – they have already borrowed another $500 million using T-Notes.
And next Thursday 9th June, they will borrow another $1 Billion using T-Notes.
Shadow Treasurer Joe Hockey questions The Goose on the G8 meeting, where Russia, Canada, and Japan all refused to resign Kyoto CO2 emissions reductions targets, and the world’s biggest economy, the USA, refused (again) to sign up at all.
Nothing but obfuscations, dancing around the issue, and rank “denialism” from the Goose, natch. But then, we’ve all come to expect that. He’s a lunatic who appears to be genetically incapable of honesty:
Continuing our recent peek into the world of government confiscations of citizens’ superannuation, we find that France too is indulging in grand theft.
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:
It’s long past due time that Wayne Swan formally adopted the name of his alter ego, Frank Spencer.
From ceiling insulation to school halls to “green” loans to computers in schools to set-top boxes, every “investment” that our Treasurer touches, ends up totally ‘Franked’.
From the SMH:
Arrears on mortgage repayments spiked to a record high in the first three months of 2011, as more Australians struggle with rising costs, Fitch ratings agency says.
Arrears on prime residential mortgage-backed securities (RMBS) of 30 days or more hit a record high of 1.79 per cent in the first quarter, from 1.37 in the final quarter of 2010, the group said, as Christmas spending and the Queensland floods forced more Australians to struggle in repaying their mortgages.
As we have seen previously (“How Australia Will Look When The SHTF“), Wayne has “invested” $20 billion of borrowed money into Australian RMBS since the GFC, to prop up our housing bubble.
Including an extra $4 Billion which he approved in April – (ie) after the period of increasing arrears that is mentioned in the SMH article.
This news gets much worse though:
The increase in arrears for the most fragile band of mortgage borrowers, low-doc loans, with payment delays of 30 days or more hit 6.74 per cent in the first quarter, up from 5.7 per cent in the final quarter of 2010, a higher level than December 2008 quarter, when the financial crisis hit and the Reserve Bank began rapidly lowering rates.
Low-doc mortgages are written for riskier borrower than prime mortgages, which are written for customers who have a reasonably safe ability to borrow.
Delinquencies of three months or more on conforming low-doc mortgages, which are used by people who are self-employed for example, soared past 5 per cent in the March quarter, from about 3 per cent the December 2010 quarter.
Would our Wayne have “invested” any of that borrowed $20 Billion in low-doc RMBS? Or, did he stick with “prime” RMBS?
RBA deputy governor Ric Battellino said today there were concerns that buyers who bought into the market in 2009, when the federal government grant was increased, may have over-committed themselves.
Are any of those hundreds of thousands of “vulnerable” first home owner mortgages actually “low doc” loans, Wayne?
Are any of them packaged up in the $20 Billion worth of RMBS that you “invested” borrowed money in … Wayne Frank?
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).
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?
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.
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?
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.
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?
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.
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”.
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
It was exotic “mortgage-backed investments” that triggered the GFC in America. And as you just saw, they are still very much at the heart of their terrible ongoing crisis, where 1 in 7 (44 million) are now living on food stamps.
Just as in the USA and other countries, our Labor government responded to the GFC by “stimulus”. And, by propping up our “safe as houses” bankstering system.
This is the same “best in the world” bankstering system that has just $2.67 Billion in On-Balance Sheet Assets, versus $15 TRILLION in Off-Balance Sheet “business”. The bulk of that off-the-books “business” is exotic “derivatives” bets on interest rates, and foreign exchange rates.
How exactly did Labor prop up our bankstering system?
For more shocking revelations on this story of bankstering corruption of the mortgage finance markets – and now even the courts of law – see this exposé by Rolling Stone’s Matt Taibbi:
The foreclosure lawyers down in Jacksonville had warned me, but I was skeptical. They told me the state of Florida had created a special super-high-speed housing court with a specific mandate to rubber-stamp the legally dicey foreclosures by corporate mortgage pushers like Deutsche Bank and JP Morgan Chase. This “rocket docket,” as it is called in town, is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on — securitized mortgages and labyrinthine derivative deals of a type that didn’t even exist when most of them were active members of the bench. Their stated mission isn’t to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity. They certainly have no incentive to penetrate the profound criminal mysteries of the great American mortgage bubble of the 2000s, perhaps the most complex Ponzi scheme in human history …
And if you missed it, check out Matt’s infamous exposé of one of the big banks at the heart of the ongoing mega-fraud, Goldman Sachs:
The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who’s Who of Goldman Sachs graduates …
What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy …
When you consider our relatively small population, and our strong but comparatively tiny economy, that means we are punching well above our weight in the spendthrift stakes. In fact, total foreign debt easily outstrips national income. The CIA reckons we owe the rest of the world 132 per cent of our annual gross domestic product.
That’s not too far behind Greece which, at 165 per cent, finally appears to have tipped the balance and is heading towards bankruptcy (more politely expressed these days as a debt refinancing).
Bloomberg savages the hypocrisy and incompetence of Labor’s budget:
All in.
That’s essentially the message Treasurer Wayne Swan is sending about Australia’s odds-defying bet on Chinese growth. The government’s latest budget pledges to deliver the quickest improvement in the nation’s finances on record — without specifics about how that will happen.
Hypocrisy was in the room last month when Australia rejected a Singaporean offer for its stock exchange. Swan called slapping down Singapore Exchange Ltd. (SGX)’s $8.8 billion bid for ASX Ltd. a “no brainer.” The whole shareholders-come-first vibe that pervaded before the global crisis lost its oomph among voters.
The debate distracted attention from a far bigger takeover happening by stealth: China’s designs on all things down under. Down under the ground, that is.
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Barnaby Is Right 
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