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In this week's Australian Alert Service
11 January 2016
2017 must usher in Glass-Steagall pathway to a future
The majority of Australians may not know it, but their future
depends upon the banking reform known as Glass-Steagall.
Our immediate mission in 2017 is to make that idea a
household name, as it is in the UK and USA. Teamed with
our aim to revive the debate on Glass-Steagall reform in the
UK, and secure the bill's passage through the US Congress,
we have a platform that will change the world.
Will it happen? Consider the alternative.
The European bail-in policy has died in infancy, as we
predicted, with Italy's refusal to "bail in" ordinary savers, i.e.
steal their money to save the banks. The collapse of Italian
bank Monte dei Paschi di Siena (MPS) therefore threatens
to detonate the entire European financial system. American
banks are exposed to the European banking system to the
tune of US$2 trillion, all underpinned by the same dodgy
dealings that brought the system to the brink in 2008, just
on a more massive scale. The Organisation for Economic
Co-operation and Development (OECD) has warned that
overinflated property bubbles could burst in the coming period.
For no nation will this be more destructive than Australia,
where it will also bring the major banks to their knees.
More voices are warning of the inevitable crisis to come.
Banker James Rickards, who was a lawyer for Long-Term
Capital Management when its collapse nearly brought down
the global financial system in 1998, is warning of a new
crash "of unprecedented scale and damage", with GlassSteagall
and banning derivatives the only solution (p. 4).
"[T]he crisis is inevitable and coming soon", he said in his
interview with MarketWatch.
Financial expert Ernst Wolff went further, telling Sputnik
Deutschland that the collapse of MPS can bring on "financial
fascism". Whatever bail-in/bail-out pathway is chosen
in Europe, "the problems are only postponed and will
reappear", inevitably leading to financial collapse accompanied
by "popular uprising" and "social explosion". To
maintain control, financial authorities will have no choice
but to use "force against citizens—the reason why the police
and military are currently being deployed everywhere
(on the pretext of combating terrorism)", Wolff says. If this
is not enough, the remains of democracy will be abolished
and the route of fascism pursued, he concludes.
The implementation of Glass-Steagall would force banks
to specialise in either commercial banking, i.e. lending into
the physical economy, or investment banking—but not both.
This will immediately separate the pool of ordinary "mum
and dad" investors from the towering mountain of gambling
debt which is set to explode. This will keep the average
citizen safe, while letting the chips fall where they may
in regard to speculation. Investment banks we can afford to
lose, people we cannot. As Rickards explained, Glass-Steagall
would have an immediate impact if implemented now,
before the new oncoming crash: It would "mitigate systemic
risk in the same way that setting off controlled dynamite
explosions on steep ski slopes mitigates avalanche risk".
Even if implemented in just one country, due to the interconnected
nature of the entire global financial system the
effects would spread across the world, forcing other nations
to join the Glass-Steagall solution. This would, in turn, provoke
the immediate necessity for the recreation of national
credit banks in order to create public credit to rebuild the
productive economy, generating a real economic recovery,
with a particular focus on new technologies that will drive
the economy and mankind's knowledge forward.
Don't ask whether we can make this happen—we have
to! In one of his final speeches, the US President who first
implemented Glass-Steagall, Franklin Roosevelt, left some
sound advice: "The only limit to our realisation of tomorrow
will be our doubts of today. Let us move forward with
strong and active faith."
Articles include the following:
- Good grounds for optimism—a new paradigm in 2017!
- Wall Street insider: 'next crisis much worse than the last'
- Campaign to make Trump keep Glass-Steagall promise
- Open letter to President Donald Trump
- Wall Street banks have $2 trillion European exposure
- Political fracturing between Italy and EU
- US Intelligence delivers political construct on 'Russian hacking'
- Obama's 'Russian hacking' lie unravels
- UN Report disproves war crime accusation against Russia
- Efforts to break Russia-Turkey collaboration
- Andrei Karlov—critical leader in Russia's foreign service
- Time running out for Aus housing bubble
- Government caught in welfare extortion racket
- 2016 as 'hottest' year not significant
- Schiller Institute honours victims of Tu-154 disaster
- In Memoriam—Russia's Alexandrov Ensemble
- Message of Condolence
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