INTEREST RATES
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The Interest Rate Game of International Profit
Thousands of Australian families are about to lose their homes, an experience already familiar to many Americans. It is all part of a game the banks play, with the willing collaboration of their client governments.
We refer to the foreclosure game, whereby Reserve Banks progressively raise interest rates forcing homeowners into insolvency and mortgagee sales. Since the installation of economic rationalism and the floating of currencies, the recognised seven year economic cycle of the past, around which consumers could plan, no longer exists.
Actually, although many economists and their disciples thought of this as a natural cycle much like the four seasons and periods of drought, the ‘cycle’ was really only ordinary people responding to non-comprehending politician’s formulaic economic management; the gospel according to Keynes. Now, with market movement manipulated from Wall St, the Reserve can indulge in free market manoeuvers any time it likes; justification being fabricated in the media.
The unchallenged argument presented for raising interest rates is that this reduces inflation and an ‘over-heated economy’, which is nonsensical. Current Australian inflation is primarily caused by rising fuel prices, which have forced one in three families to cut back on groceries in order to travel to work. High fuel prices have flowed on to drive every other product and service cost into high elevation.
If the Australian Government truly wants to alleviate this pressure, all it has to do is jettison the Fuel Price Parity Agreement, which forces Australians to pay exorbitant world prices for Australian-produced oil and diesel. A government that actually represented the people would then remove fuel tax, accumulatively resulting in an Australian petrol and diesel bowser price of about 12 cents per litre. American Lyndon La Rouche, patron of the Citizen's Electoral Council, estimates Australia's legitimate bowser price to be 25 cents per litre. Our Australian estimate is lower because it is based on Venezuelan refinery costs; both nations having the same high grade sweet light crude.
The second source of inflation is the high cost of accommodation. Raising interest rates will force investors to push rents up even further, making tens of thousands of families homeless and forcing surviving homeowners to transfer part of their domestic budget to mortgage repayments. Although the position has been relieved for the past 6 months, inevitably, the Reserve bank will recommence setting incremental rises.
If government really wants to remedy this situation all it has to do is reinvigorate the rural economy and one million people will be able to move back into regional towns, villages and farms; thus reducing demand for urban accommodation and services. Surveys show one in five city dwellers would move instantly to rural and regional towns if local services and jobs were resumed. One in four retirees would follow, to escape crippling rates and the fear of violent crime.
Over-centralised city populations did not just happen. Urban population drift was caused by Federal Government policies which decimated rural economies by reducing or removing tariffs that previously protected farmers from unfair subsidised foreign imports, which then led to the progressive closing down of rural schools and hospitals and to banks withdrawing branches; causing the entire rural economy to fold. Bankrupt family farmers and thousands of support industry employees were forced into cities to find work. The vast urban sprawl which accommodates these newcomers also swallowed valuable food-growing land. Accelerated demand for land forced prices sky high; thus, high inflation and massive mortgage and other debt.
And the famous northern drift, colourfully repainted as ‘sea-change’ by the real estate and land development industries, is more closely related to the withering of the Melbourne and Sydney manufacturing sector, with subsequent widespread unemployment; also a casualty of tariff reductions.
The raising of interest rates will remedy these disasters in no way whatsoever, in fact the opposite; high interest rates create poverty and homelessness, and deprive businesses of their cash flow. Mortgage-sale homes will be snapped up by foreign buyers and not by prosperous Australian workers, as claimed. This ‘prosperity’ is a myth propagated by government. Unemployment; far from the Government’s fraudulent 4%, is actually closer to 21%, if we use the criteria in use for a century (ie a job that pays a livable wage).
Although many economists reject figures produced by the Australian Independent (AI) in its published 2006 surveys, even more alarming statistics were revealed a decade ago in a published Morgan Bulletin survey (1999), demonstrating that AI estimates are, if anything, quite conservative. So how do our economists get away with collaboration in political lies?
This dysfunctional Australian socio-economy has evolved new inflationary pressures:
A shortage of urban water, caused by populations too large for inadequate catchments, which will eventually dramatically multiply water prices; and
Higher per capita national domestic maintenance costs (relative to those of rural living) which will add to national industry production overheads.
An expansion of the urban land development industry, resulting in this becoming more powerful than the state governments that are meant to contain and regulate these; thereby opening the door to unrestrained and inflationary profiteering.
All these coastal city pressures have been expedited and exacerbated by unacceptably high migrant and refugee intakes; people who move exclusively to cities and major towns but who have not contributed to infrastructure. Contrary to propagated belief, migrants on average are resident for two decades before their productivity exceeds investment in their arrival. Currently, most are a liability, not an asset.
On another dimension, the rural environment, national health and economy have suffered immeasurably as family farmers have been replaced by foreign dominated giant agri-business, which uses vast and damaging quantities of NPK chemical fertilisers, pesticides, and herbicides; and squanders precious water on contraindicated crops such as cotton and rice.
Readers might well ask why doesn’t government simply reverse policies, reinvigorate the rural economy and encourage people back to their farms and rural jobs? The reasons are factors that government is extremely anxious to avoid public scrutiny of:
Powerful foreign companies lobby government furiously against any moves which might reduce their profits; even though these contribute only 2% of national tax revenue;
Reinstatement of tariffs would impede the free trade agreements the US demands (even though the US retains almost all of its own tariffs);
The developers virtually own our state governments vis a vis their election campaign largesse, and developers want urban pressures (hence profits) to increase, not decline;
Overpopulation of cities promotes vast and impoverished dormitory suburbs, which in turn build a broader support base for the New Australian Labor Party which, only three decades ago, was the urban worker’s party, with policy formulated by middle and working class branches. Transferring rural populations to cities has created a permanent system of State and Territory Labour Governments; even though the workers have been repeatedly betrayed with crumbling public hospital and electricity services and high unemployment. Saturation media-advertising maintains the old beliefs that the ALP is the worker’s party, even though its hierarchy is dominated by university graduates.
International bankers; through the agency of the UN’s World Trade Organisation, World Bank and International Monetary Fund, want national economies to be dissolved and replaced with a globalised economy, which multiplies their profits enormously and transfers all political power to them. It is these entities that control Treasury and the Reserve Bank, yet Government has the legal capacity to order the Reserve Bank to lower interest rates by 7%, if this is what the constituency demands. It does not because we do not live in a democracy.
So it may be seen that, far from resolving issues, raising interest rates actually deepens and dramatically expands poverty, forces more farmers off their land, cripples private enterprise, and intensifies demand for urban development; concomitantly exacerbating the already serious city water crisis.
Hovering expectantly in the background, are the giant and sinister water corporations, Bechtel, Vivendi and others; who want water privatised and traded at the highest price possible. If all goes to their plan, in a decade we will all be paying for rainwater off our roofs.
Unless the people force governments to serve their needs rather than those of the international bankers, the current crises, including interest rate hikes, will intensify.
One simple first step will achieve around 70% of our desired objectives, and that is tariff restoration; especially if this is extended to include the new service and IT industries.
Tariffs protect farming, manufacturing, IT and service industries, worker’s jobs and employment conditions; and are the key to national prosperity. Tariffs also depress unwanted imports, thereby reducing the capacity of global recession to enter Australia. In other words, properly installed, tariffs create an impervious firewall against the global depression that many observers believe threatens the entire world.
How can we force government to reinstall tariffs?
What seems like a gargantuan task is in fact quite simple. We Australians should do one or more of several things:
E-mail or write to the Tariff Restoration Bloc (see addresses at top of page). This provides evidence of our support for tariff restoration; evidence which we can then present to Government.
Become a member of the major political party branch of our choice, and once we have made friends with many fellow members, have the Tariff Restoration Proposal tabled at the next meeting. A copy is downloadable from this site. Our research shows that 70% of Australians will support it. ALP membership will produce the highest impact result.
Write letters to the papers about tariff restoration.
Visit or write to our local politicians, demanding they support tariff restoration. If they will not, ask them to write down and sign their reasons for opposing tariff restoration.
Photocopy the Tariff Restoration Proposal and hand it out to our work mates, friends and associates. If we are really keen, hand it to people at shopping malls.
The beauty of becoming a Tariff Restoration Activist is that the reaction will be friendly; and as time goes by, we will become known as one of the Aussie Heroes who campaigned so successfully to save our nation. The older we become the more respect this action will command.
But we all need to move now, while we still have a country to save.
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