CONTENTS / BLOG (14), Just World Campaign

   VICTORIA, Australia:  WHAT is the current rural debt?  What is the current foreign debt? And where does money come from?  Those were the three questions I asked you and the other candidates at the recent meet the candidates meeting organised in Numurkah by the VFF [Victorian Farmers' Federatoion].
   The first question no one answered, the second question Diane Teasdale and Rob Bryant answered.
   You made a statement that the government had paid off some foreign debt saving taxpayers $5 billion a year in interest re-payments.
   Which in fact comes out of the pockets of hard working Australian men and women trying to support families.
   The third question you didn't answer, nor did Norm Kelly, Monica Morgan and Janine Maddill, however, Monica Morgan did say that if I had that information she would be prepared to listen.  Rob Bryant and Diane Teasdale did answer the last question.
   During the great depression, with untold suffering and hardship in the western world, which saw runs on banks, massive unemployment, civil unrest, long queues to places of employment and soup kitchens, the Scullin Government abandoned the gold standard on December 17, 1929.
   Then with the worsening international economic depression, Britain was forced to abandon the gold standard on September 21, 1931.
   America abandoned it on April 19, 1933.
   The gold standard was abandoned for one reason, there wasn't enough money in the economy to run the economy.
   Enter one bright economist - John Maynard Keynes (1883-1946).  Keynes was born at Cambridge, educated at Eton College and the University of Cambridge.
   He wrote such books as Indian currency and finance 1913, The Economic Consequences of the Peace 1919, Treatise on Probability 1921, A Treatise on Money 1930 and The General Theory of Employment, Interest and Money 1936.
   This book provided a theoretical defence for programs that were already being tried in Great Britain and in the United States by Franklin Roosevelt.  Keynes also wrote How To Pay For War 1940.
   In 1942 he was made a baron, 1944 he headed the British delegation to the United Nations Monetary and Financial Conference, the Bretton Woods Conference where he promoted the establishment of the International Bank for Reconstruction and Development and the International Monetary Fund.
   Keynesian economics is what the Western world's governments base their economic systems upon - boom bust inflation.  And that is driven by one thing.
   As in Australia and in most modern economies of the world, ALL money is created as a debt of the banking system with interest bearing to the banking system.  That's what Keynesian economics is, creating debt.  And putting us further into debt.  That is, as individuals, local government, state government, federal government.
   When a bank receives deposits, it keeps 25 percent in reserves and lends 75 percent.  The amount lent becomes a new deposit at another bank.
   The next bank in the sequence keeps 25 percent and lends 75 percent and the process continues until the banking system has created enough deposits to eliminate its excess reserves for every $100,000 at reserves.  Creates $400,000 at deposits but unfortunately it is all debt and that is why the whole Western world is going further into debt.

			Reserves	Loans	Deposit
Deposit $100,000
Reserves $25,000  Loan $75,000	25,000	75,000	100,000
Deposit $75,000
Reserves $18,750  Loan $56,250	43,750	131,250	175,000
Deposit $56,250
Reserves $14,060  Loan $42,190	57,810	173,440	231,250
Deposit $42,190
Reserves $10,550  Loan $31,640	68,360	215,630	271,440

Until it becomes 		100,000	300,000	400,000
	

   So, from $100,000 of money, $300,000 is created by banks out of nothing.  That is $400,000 of debt.
   That's how banks create money out of nothing.  Politicians allow it through silence and inaction and bankers perpetrate it on unsuspecting public.
   It is immoral, unfair, unjust and nothing more than a contrived way of obtaining people's property, business, farms or any other endeavour that they try to go into.  Some businesses will survive but most will fail.
   Sixty percent of small businesses fail and for politicians to stand by and watch their constituents, the people who elect them, pay them and hope that they will look after their interests and put their trust in them for them to stand back and do nothing about a sick contrived banking system only shows what politicians really are.
   This is what debt finance has done to rural Australia.
   Work it out for yourself.
   In 1960, Australia had 290,000 primary producers with a net rural debt of $77 million.
   By 1970, there were 250,000 primary producers with net debt of $1224 million.
   In 1985, the primary producers were reduced to 170,000 carrying between them a debt of over $6000 million.  By 1988, farmer numbers had dropped below 150,000 while their debt had spiralled to around $8000 million and in 1990, $11 billion debt.  And in 2002, $26 billion debt.
   Rural Australia now pays $2 billion a year in interest and repayments.  So much for golden soil and wealth for toil.
   And that was before the worst drought in 100 years.
   Are we as a nation under debt finance headed for economic collapse?  Will John Howard pull us out of it?
   Work it out for yourself.

Hawke/Keating 1985/86		Howard/Costello 1997/98
Net external debt
% to GDP 32%				% to GDP 43%
Net external liabilities
% to GDP 40%				% to GDP 62%
	

   Australian Financial Review reported on January 27, 1998 'Foreign investment portfolio in Australia 1996/97 was $481.9 billion with a further $80 billion of privatisation projects in Australia should be strongly supported by foreign investors over the remainder of the decade.
   Thanks to a lower Australian dollar and the continuing turmoil in Asia, a new report has found, 'the report by investment bank J.P.Morgan found that Australia ranked second in the world in 1997 for privatisation activity boasting projects valued at $15 billion and beaten only by Brazil'.
   J.P.Morgan's figures didn't include the $14.3 billion sale of one third of Telstra by the Federal Government.
   Argentina is facing a compulsory 30 percent devaluation of the peso after defaulting on its $140 billion US dollars national debt thanks to the International Monetary Fund which has eliminated the savings of most of its people.  And you think that's bad.
   A bank's poverty policy (The Age, November 25, 1991), "thirteen million children a year die of hunger and disease of poverty.  To stand by and do nothing when the world has the resources to feed them could be a crime of genocide, Mrs Justice Elizabeth Evatt told a recent conference of the Freedom From Hunger Campaign."
   The world is doing something isn't it?  What about the billions of dollars of aid the West has poured into third world countries over the years?  Last year alone the developed world gave the developing countries US$50 billion in aid.
   It took back US$93 billion in debt repayments and unequal trade deals.  While rich countries plead compassion fatigue; the world's poor last year gave US$43 billion to the world's rich.
   The article further quotes Mr Kamal Malthotra, the director of overseas programs for Community Aid Abroad saying, "because the bank's major shareholder is the United States, it is accused of echoing US policies and being little more than a debt collector for American banks".
   At best, World Bank and [the] International Monetary Fund would have to be seen as something to be very suspicious of if it was set up to alleviate world poverty when in fact it causes it.
   What's that got to do with Australia? In the words of Ernest Roedeck AM, Paper Australia in a changing world, "if we continue to import more than we export, we will become poverty stricken and beholden to our creditors.
   Then the international monetary fund will come in and run the economy in the interest of our creditors and not in that of the Australian people."
   Access Economics was tipping the politically sensitive foreign debt will rise from $330 billion to $474 billion in one financial year ending 2001/02. Our children will inherit a debt of $24,000 per capita.
   The current foreign debt for 2003 is $597 billion, now a debt of 30,000 per capita.
   But debt finance doesn't affect you! You just go right back to sleep while our politicians sell our country out to international bankers.
   Not so, say the politicians. Well, who holds the mortgage on the foreign debt? International bankers can even manipulate how much foreign debt a country has by manipulating its currency up or down.
   Are we in trouble? Work it out for yourself.
   Australia's foreign debt in 1982 was $39 billion, in 2002 it was $330 billion and 2003, $597 billion.
   But some people still think that debt doesn't affect them.
   This is a question that every Australian should ask of his or her representative or make the statement "no sovereign government representing a sovereign people should have a government debt".
   For the smug self-centred people who think that Keynesian debt financial system won't affect them.  I'm sorry, it's already affecting you and it affects you through higher local government rates and levies, higher state government taxes and levies, and higher federal government taxes, levies, rates and under Keynesian debt finance governments will always have to raise taxation for local, state and federal government to pay for services, water, roads, hospitals, aged care, public transport.
   Look at what we've lost in Numurkah and district over the last 25 years. Court house, State Rivers and Water Supply depot and office, trains system to Melbourne, Lands Department, state electricity system office and depot, Grain Elevators Board depot, State Bank, and last but not least, Numurkah Shire Council - all of these were driven out by the one thing, Keynesian debt finance.
   We have to become more efficient.
   We've just become the highest taxed group of Australians in Australia's history with a $4.6 billion budget surplus.
   The average Australian worker now pays $6500 a year in indirect levies and taxes or works 96 days a year to pay tax. 99.9% of the population doesn't know where money comes from.
   They either don't know or don't care or are just plain too stupid to understand. Which one are you?
   In my next letter I will explain the principles of Douglas social credit, Clifford H Douglas (1879 - 1952).
   Born in England, Douglas was a civil engineer, a man versed in mathematics and mathematical formulae.
   He was the first person to see the flaw in the money system that Keynes was promoting and he did a world lecture tour at that time.
   He toured England, Canada, America, Australia and New Zealand.  He came to Australia in 1936 and he warned back then that under Keynes debt finance "that at some time into the future under ever increasing taxation, ever increasing government debt, ever increasing personal debt, ever increasing cost of production, that maybe 60, 70 or 80 years time, not only would there be a 'debt crisis', but it was inevitable that it would get progressively worse to the point where society will slowly collapse into a state of total chaos and suffering under the extreme financial pressures".
   We are seeing the start of it now through a hospital system that can't, cope where doctors and nurses are pushed to the limit just to carry out everyday chores, through the record breakdown of marriages, increase in alcoholism and violence, record bankruptcies, record suicides, youth included, record homelessness, degradation of the environment and river systems.
   Farmers have been pushed to use large volumes of irrigation water to increase production just to remain viable.
   And who now are about to have the rug pulled out from underneath them if 1500gl of water is returned to the Murray River environmental flows?  It is pointless to talk about sustainable agriculture and sustainable environments when the production system is distorted by an unsustainable banking and money system.
   Sooner of later, even Dumb and Dumber will wake up to the flaw in the money system.
   The Reserve Bank's own official figures once showed that there was only $15.201 billion in currency in Australia, yet there was $333.730 billion of credit collateralised to the banks.
   How can you pay off $333.730 billion of debt with $15.201billion of money, I would like someone to tell me!
   Perhaps we could ask the man responsible for monetary policy in Australia.  The treasurer, he seems to think he knows the answers to everything, but I don't think he could answer that one.
   For every $1 of credit, there is $22 of debt. How can you pay that off?  Not only is it a mathematical impossibility to pay off debt, it is also a physical impossibility that is the flaw in the money system, the money con, the money trick.
   Australia's money supply has increased $100 million dollars every 24 hours since the coalition government gained office.  And banks make $27 million profit every 24 hours.
   The banking and money system is nothing more than a corrupt, contrived, immoral, unfair and unjust way of obtaining people's property.
   Sooner or later, there is going to be a lot of angry people around when they realise that they have lost their farm or their business, or their home or their family through the breakdown of their marriage but I guess that's nothing to the people who could see no way out under the crippling burden of debt but to take their lives and leave behind their families to suffer a life of guilt and not knowing why.
   1. What is the answer?  Create a Commonwealth Rural Bank with long term, low interest fixed rates for all primary producers, rural business, rural councils and shires to be able to borrow money at between that of our trading competitors, Japan at zero percent, America at base rate of 1.5 percent and Britain at three percent which equals two percent, to cope with seasonal fluctuations and conditions such as drought, floods, bushfires and storm damage to crops.
   2. Have a three-year debt moratorium with no interest and no principal repayments.
   If you fix the banking-money system, then all the economic, social and environmental problems will begin to fall into line.
   Allow it to continue and as sure as the sun comes up in the morning, rural Australia will be headed for economic collapse.
   Money is only a medium of exchange, not a commodity. #