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The Australian Alert Service is the weekly publication of the Citizens Electoral Council of Australia.
It will keep you updated of strategic events both in Australia, and worldwide, as well as the organising activities of the CEC.

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In this week's Australian Alert Service
21 February 2018

'Bail-in' means a crash is coming—break up the banks now!

The way the Australian government spirited the APRA bail-in bill through Parliament on 14 February betrayed its whiteknuckle desperation to enact the law before a financial crash.

Passing such sweeping powers with only seven senators present (p. 3) was not a show of strength by the government and the banks—it was the only way they could get it through. The CEC's successful mobilisation of thousands of people to oppose the bill had forced the government, the Senate committee, and the regulators to scramble to coordinate their denials that the bill allows the bail-in of deposits. If all MPs and Senators had voted on the bill—as they should have—there was a real risk that more would have asked questions and would not have been satisfied with the flimsy answers. Not only were the parliamentary debates conducted "discreetly", but there is evidence that for this bill, the leaders of the major parties did not follow the usual procedures for discussing impending legislation in their caucus meetings. The only reason there can be for this is that they wanted to keep their members in the dark.

Overall it was a shocking demonstration of how undemocratic parliament can be, but also of the determination of Australia's ruling class and financial elite to insure their failing system before the crash. The passage of the bill has coincided with a sharp increase in warnings of an impending financial crash in Australia. A source has reported to the CEC that one of the Big Four banks is "on edge" about the financial system blowing up: "There is no dispute in the bank about 'if', it is about 'when'."

Economist and former Liberal Party leader John Hewson wrote a stern warning in the 15 February Sydney Morning Herald headlined, "When the next financial crisis hits, there will be little the RBA can do about it". Hewson wrote: "Rather than deal with its structural causes, the response of authorities to the last crisis 10 years ago was to flood the world with liquidity.... All this has now been magnified by massive (and unparalleled) leverage, with grossly overvalued stock and bond markets. ... Global debt has increased considerably since the GFC, almost by two-thirds, to some US$233 trillion ($294 trillion)— more than three times the size of the global economy."

"The complacency is staggering", he stated, concluding, "We in Australia are particularly exposed to another crisis with household debt (mostly mortgages) at historic levels, the cost of living blowing out, with household incomes constrained, and job insecurity mounting, our banks still importantly dependent on offshore funding, and having pursued risky lending practices. The Reserve Bank is powerless to do very much at all—probably just watch from the sidelines, and hope."

In news.com.au on 8 February, another economist, John Adams, spelt out "Ten signs we're heading for 'economic Armageddon'", an update of his original warning one year earlier. Adams warned that the $4 trillion "bloodbath" on the stock market was the opening act of a major crash being brought on by record debt levels, rising interest rates and derivatives.

While John Hewson is right that the RBA's usual tools won't work, there is something the government can do—a GlassSteagall break-up of the banks. As much as the banks hate it, this solution keeps coming up. "Royal commission chief Kenneth Hayne should break up banks", financial commentator Alan Kohler wrote in the 17 February Australian. In his defensive speech on the bail-in bill justifying his sell-out, Greens Senator Peter Whish-Wilson nevertheless called for an MP to introduce a private member's bill on Glass-Steagall, so there could be a debate. The CEC is drafting legislation right now for that purpose. We too are racing the clock to enact our reform before the next crash, the difference being that GlassSteagall will protect the public from the banks, and not sacrifice the public to save the banks.

Articles include the following:

  • Government sneaks through APRA 'Bail-in' law
  • CEC's response to Treasurer's 'talking points' on APRA law
  • Greens support bail-in but open debate on Glass-Steagall
  • APRA charade will increase risk, not lower it
  • Australian delegation to woo Trump on geopolitics, PPPs
  • Crescendo to crash that only Glass-Steagall can pre-empt
  • In effort to counter BRI, West forced to think infrastructure
  • Catholic Bishop praises 'extraordinary' China
  • Western Australia needs Belt and Road
  • An admiral goes to Canberra
  • Turnbull government's anti-China Jihad goes global
  • Beware the 'democracy' drumbeat
  • CEC's bail-in mobilisation goes viral!
  • Build the Clarence River Scheme!
  • The History of the Founding of Australia


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