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EYE-BALL’s Guru on – The Debt Clock ticks … Tic Toc – Gillard just spent another $3,000 – counting the real cost of this ALP Disaster –

April 15, 2013
Latest GURU Posts:

– 5th Apr – Superannuation 2013-14 –  the Government’s new Slush Fund – Proposed Changes show SWAN and SHORTEN’s stupidity –

– 4th Apr – Australia’s Parliamentary Remunerations –
– Part III – Superannuation – The Future Fund –

– 3rd Apr – Government not happy about its tax collect – Claims Tax Minimisation deserves ‘Naming and Shaming’ –

– 31st Mar – The Cyprus Bail-out

– 31st Mar – Australia’s Debt – and the idiots Managing the Treasury –

– 20th Feb – Australia’s Parliamentary Remunerations – Part II – Entitlements and Allowances –

– 13th Feb – Australia’s Public Sector Remunerations Part I – Parliamentarians “Base-Salary” and “Additional” entitlements –

– 31st Jan – The Devil is in the Detail, there is none – Gillard chooses shock, awe & Spin over Policy –

– 23rd Jan – The Turmoil is Already here – We just have to accept what is coming –

– 22nd Jan – The Turmoil is beginning – Japan’s Economic Stimulus to tip the scales –

– 20th Jan – Wayne Swan Tips his hat at New Yorker’s

– 10th Jan – The ANZ Whitehaven Hoax –

– 5th Jan 2013 – Financial ‘Ghosts’ from the Past – Hawke and Keating v Gillard and Swan –

– 29th Dec – The Great Big Financial Swindle – Part II – The ‘Budget Surplus’ Backflip – Swan tells his own Porkies …

– 22nd Dec – The Great Big Financial Swindle – Part 1 – The ‘Budget Surplus’ Backflip – Swan serves up Senator Wong

– 14th Dec – The Walls are crumbling – Government admits High A$ policy is hurting –

– 4th Dec – Retailers and bureaucrats don’t understand – high A$ value responsible for off-shore purchases –

– 19th Nov – Government Expenditures Part I – Department of Prime Minister and Cabinet – DPMC – STAFFING –

– 3rd Nov – Shareholders – Holding back the world – scared money – scared boss’s –

To see more GURU posts: – click here …

– The Debt Clock ticks … Tic Toc …
– Gillard just spent another $3,000 –
–  counting the real cost of this ALP Disaster –
| Author: EYE-BALL Guru | 14th Apr 2013 |
Agood measure for any  Government, past or presence, can be assessed by the impact their policies have on an electorate, and imposed on any new incoming Government.

This Gillard led Government has debt as its legacy, and a hatful of policies that have not worked.   To help with the measure the Australian Debt Clocklinked here – is a must see presentation of ann Australian debt, both public and private.

The Global Debt Clock is also interesting – linked here … some $50.5 trillion is owed around the world – with a global population of 7.1 billion – source linked here – that means we each owe about $7,000.

Australia’s Public debt totals $466 billion – made up of $272 billion [Federal] and $194 [States], against a total public and private sector debt of $4.5 trillion.   That means every Australian owes $205,000, some 30 times the global average.

Debt is responsible for all the globes current economic problems.  A bit like saying religion is responsible for all wars.   Remember – ‘Greed is Good‘, out of the 1987 Oliver Stone produced ‘Wall Street’ – it was Gordon Gecko’s famous catchcry and definitely representative of the times … in fact it never went away despite the ’87 crash and beyond.

As the Corporate world became more prudential post ’87, Western Governments stepped up and filled the void of debt issuer’s and it continues today.   When Governments owe so much, and the interest cost on the debt owed has the capacity to break a Nation, i.e. the EuroZone P.I.G.S. and more to come, what vested interests ar at play to keep interest low to protect budgets.

A 1-2% rise in interest rates around the globe and almost all the Eurozone goes to the wall – America goes over the cliff much sooner then its current timing has forecast, and Swan and Gillard ride off into the sunset cheering along with their Union mates saying – ‘it’s not our problem now!’

When you put nutters in charge of the finances what else can you expect?

We the voters are to blame … we are so easily duped … this ‘red’ or ‘blue’ personality disorder in the way we think about electing our Leaders is so unrepresentative of an educated population … why can’t people seek out the truth rather than rely of others to tell it to them.

Idiot Swan posted this on his Facebook page yesterday – linked here

This Sunday, thought I’d share seven important facts about the Australian economy that often get overlooked:

1. Australia has a Triple-A credit rating from all three global ratings agencies for the first time in our history.

2. Since Labor came to office, our economy has added about 900,000 jobs – while 28 million jobs have been shed around the world over the same period.

3. The tax-to-GDP ratio will be under 22 per cent of GDP in 2012-13 – lower than every year of the previous Government. In fact, if tax-to-GDP stayed at the same rate of the last year of the Howard Govt, Australians would be paying an extra $23 billion in tax in 2012-13.

4. Taxes under the coalition government grew at 7.5% on average, compared to average growth of 4% under this government.

5. Our net debt is 10% of GDP, which is around one-tenth of the expected peak across the major advanced economies (around 95% of GDP).

6. We have made $154 billion of saves in our five budgets – eight times what the Coalition delivered in their last five. And we’ve offset all new decisions since mid-09.

7. We have seen revenue write downs of more than $160 billion over 5 years, compared to $334 billion of upward revisions between 2004 to 2007.

Guru posted the following response …

There is so much crap written here – desperate people who have their belief system challenged often turn feral – of the seven points Treasurer Swan made – not one is true if you were to compare like with like …

1 – The AAA rating – who trusts Rating agencies anymore – they accept bribes for favourable ratings – was that not the reason for the sub-prime crisis in the first place …

2 – of the 900,000 new jobs only 400k are full-time – the rest is part time – the number of monthly hours worked has fallen to 140 hours down from 149 10 years earlier … check the facts here

3 – tax to GDP – common … when you spend some $300 billion over 3 years the impact on GDP is artificial at best … any measure of a tax base comparison has to be tainted …

4 – What is the premise – based on revenues … check this out and you will see that it was never a revenue problem but an expenditure problem … Treasurer Swan’s story tellers are fiction writers … see evidence here

5 – Debt to GDP is more like 21-25% depending on sources – see confirming link here

6 – Absolute poppycock – $154 billion in saves … robbing Peter to pay Paul and then spending another $300 billion over 3-4 years is not saving $154 billion – this is so crass … wake up Mr Swan – we are educated …

7 – and the biggest lie of them all – the revenue write downs … proven to be all lies here

… continues …

What a waste of energy reading the conversation thread that preceded the comment … how is Swan allowed to lie so openly … and why are people so gullible so as to defend Swan when they have no idea whether what he said is a falsehood or a misrepresentation … we truly are a numbed Nation and deserve everything we are served up with …

Liken it to a trip to the zoo – yea that’s right … we are the animals and it is the Politicians walking around throwing us a few peanuts, pointing, laughing, and saying how dumb are these animals to take the crap we feed them.

… Read on … you might just be convinced that there is a problem …

Gillards Spendathon:

This Gillard/Swan Government have spent some $3,000 a second, some $190k a minute, $11 million an hour,  and some $275 million a day every day for the last three years  – i.e. {$300,000,000,000/3/365/24/60/60} = $3,171… – it’s been a spendathon without peer in this Nation.

Where is the visible value in a $300 billion spend – where are the policy achievements, what do we have as a by-product value from this new debt creation – can anyone see any real tangible benefit?

Swan has been the facilitator and Gillard the deliverer of ill-conceived policy that has no accountability.  Together they make Bernie Madoff look positively tame.   This ‘PONZI’ spending Government has no idea where they will get the funds to pay back what they have wasted.  It will fall to future generations to pick up the pieces and that is a legacy no one can be allowed to forget.

The legacies of good Government are long remembered by historians, whereas the memories of bad Government are most reviled and forgotten in the short-term.  Ridding ourselves of bad Government is an election privilege  and ridding ourselves of this horrendous minority Government experiment is something we are all gasping for – the sooner the better.

Always – a bad Government leaves behind a string of expensive and unworkable policies that have to be fixed, un-legislated, or rewritten.   And then there is the debt overload bearing down on all of us.  Gillard – someone who openly admits she struggles with finances not remembering who deposited $5,000 to her account whilst she worked as a lawyer at Slater and Gordon … Gillard is responsible for the greatest fraud ever committed on Australian’s in our history.

When the performance of the Rudd and Gillard Governments are put into any true perspective, the most mitigating reasoning will surround the GFC and the management of the economy in and during the crisis.  Rudd had cause to be concerned about preventing en economic crisis – yet in 2010 when Australia’s performance beat all the forecast doomsayers – Gillard unseated Rudd and implemented her own socialist agenda spending programs using the GFC as a reason to continue pumping the printing of money.

The EuroZone crisis was upon us all and given what was happening to Greece and the other P.I.G.S. Nations, Australia was always insulated because China kept our mining and resource boom alive – why was there need to continue the spendathon after we escaped the worst of the GFC?

Assessment: – An abysmal failure …


As Gillard realised she needed funding to pay for her spending agenda,  new taxes – i.e. the Carbon Tax, and the revised MRRT – were introduced.

The original draft of the MRRT being unpopular with the Mining industry,  provided the catalyst for Gillard to move on Rudd as PM – she wanted his job.

To appease the miners and resolve the dispute over the original MRRT that made Rudd unpopular, Gillard went looking for ways to appease the miners and caved into their demands to lessen the impact of the MRRT, giving her a shot at winning the impending 2010 election.

This Gillard/Swan school of economics and responsible financial management has proven to be an unmitigated disaster.  They could not balance a balloon flight – misjudging weigh ratio with air temperature In the three years since 2010 where they guaranteed a budget surplus in 2012-13, they have proved they have no understanding on how our economy works.

The original MRRT forecast was $5 billion, revised to $2 billion, and the reality is a poultry $130 million collected in the first 8 months.  Whoever the bureaucrats were who produced the forward estimates – unless they can claim they were acting under instruction from a Swan directive to fudge the numbers, they should be sacked for gross incompetence.

In fact – the reality has been that the ‘mining boom’ in A$ terms has been over for a number of years – the returns for our resources have diminished some 30-40% yet the volumes shipped are ever-increasing.   This is not good for Australian’s or for the future.

Prudent business’s often hold back selling their produce when the returns offered diminish.  Some of these miners are dependent on off-shore funding i.e. FMG [Twiggy], Clive Palmer, and the like and are locked in on delivery contracts that impact if not met.   Yet who owns the resources?

The miners only hold leases to mine the resources and pay a royalty to do so.  The people of Australia own these resources and the Government [State] hold them in trust on behalf of the people.   The Feds want in on the so-called ‘boom’ times, but it is just an easy cash grab with no real thought to prudent business practices.

If the returns on our resources are not at a premium, why does the State Government not raise royalties to discourage their sale?

Easy answer – the State Government’s can’t do without the revenue.  How fu_ked is that – Government’s are so desperate and dependent for any revenue source.

The Federal Government’s MRRT is such a pox tax – if the intent was to offset the high A$ value and its impact on A$ revenues – one could see merit, but it was not.   It was a tax grab in direct competition with the States and signaled an intention to mess with State Government revenues on a larger scale.

All that was promised with the revenues the MRRT would raise is now in the toilet – reduce Company tax, superannuation to 12% … etc …

Gillard and Swan stand before you with egg all over their faces and yet they still claim creditability in how they have managed the economy.

In fact, Federal and State Governments are heading for a show down over revenues.  They are all in the markets competing for and pressuring corporate borrowing costs to fund ongoing and new debt.   They don’t realise it but they are killing the mining industry to the exclusion of all the other industries compounding under the impact of the high A$ value.

If the Federal and State Government’s had any concerns over the reduced returns these natural resources are yielding – they would impose additional royalty tariffs to offset the currency impact and try to protect these resources and save them for future generations.  But when RBA’s advice is that they don’t see the A$ as overvalued – what can be done.

As reported countless times over the last three odd years – the high value A$ has cost miners, farmers, tourism, manufacturing, employment, education, somewhere between A$1 and A$2 trillion  in lost revenues since the early 2000’s when the rest of the world began to invest in the ‘cash and carry resource trade’.

Swan, Bradbury, Stevens, Lowe and the like know this and rather then act to correct the continued wealth transference off-shore, they all lie to protect themselves and their incompetence in managing a global assault on the Australian economy.

We are losing the global economic WAR and the resources being pumped and stripped to far off lands only to have the value added product imported back to Australia at a huge premium.

Assessment: – An abysmal failure …

Treasurer Swan and RBA’s Stevens at odds:

In recent days RBA Governor Glen Stevens has gone public over Treasurer Swan’s renege on a promise to leave RBA profits alone to shore up capital reserves – see story below:

Wayne Swan ‘went back on word’ in taking $500m from RBA

| Author: David Uren, Economics editor | Date: Apr 12th, 2013 | Link to On-Line Story. |

WAYNE Swan’s order forcing the Reserve Bank to pay the government a $500 million dividend last year overturned his earlier agreement that the bank should use its profits to rebuild badly depleted reserves.

The Treasurer demanded the dividend in the face of pleas from governor Glenn Stevens that it would leave the bank “significantly” short of capital.

Following the release of correspondence between the two men under Freedom of Information laws, Coalition Treasury spokesman Joe Hockey accused Mr Swan of putting his “political survival ahead of the national interest”.

“In raiding one of Australia’s most important and trusted institutions, Mr Swan has compromised both the integrity and functioning of the Reserve Bank,” he said.

In a letter to the Treasurer on July 13 last year, Mr Stevens pleaded with Mr Swan to honour his word, allowing the bank to transfer all its 2011-12 profit to its reserve fund.

“This would be consistent with your earlier agreement to this approach to begin the process of restoring the balance of this reserve, which had been largely depleted by the losses of the previous two years,” Mr Stevens wrote. The rise in the value of the Australian dollar has left the Reserve Bank with huge foreign exchange losses on the holdings of foreign exchange which it is required to maintain.

The bank recorded a loss of $4.9 billion in 2011-12 and $800 million in the previous year, reducing its reserve fund to $1.3bn. The reserve fund is essentially the bank’s capital, needed to cover any losses from its $80bn in assets.

Mr Stevens acknowledged Mr Swan’s earlier agreement that the bank could transfer all its profits to the reserve had been “in-principle” and subject to formal approval, which he sought.

Mr Stevens underlined the bank faced critical shortage of capital.

“If you were agreeable to such a transfer, the balance of the Reserve Fund — the bank’s permanent capital — would stand at $2.4bn, a balance that remains significantly below a level appropriate for the risks held on the bank’s balance sheet in the medium term,” he wrote.

Mr Stevens noted that in June 2009, before the bank incurred huge losses, the reserve fund stood at $6.9bn. However, in an undated letter, Mr Swan rejected Mr Stevens’s request.

“Consistent with long-standing practice, the government believes it appropriate that taxpayers receive a dividend from the Reserve Bank where circumstances permit.”

He said he agreed it was prudent the bank should work towards rebuilding its reserves and said that for this reason it should retain “a portion” of its 2011-12 profits; however, he said he had decided that $500m should be “made available to the commonwealth as a dividend, to be paid in the 2012-13 financial year”.

A spokeswoman for Mr Swan said last night that by leaving more than half the bank’s earnings to be put into reserves, the government had ensured the bank’s reserve fund was “appropriately capitalised”. She said it was not the government’s intention to take a dividend from the bank this year.

This Steven’s ‘pissed-off’ story has been about for several months and continues to gain traction on the back of Swan’s desperate needs for budget savings.

This is a serious issue – the $2.4 billion RBA reserves, down from $6.9 billion in 2009 is hardly a solid stake to play the global currency game.  To expect the RBA to manage the global risk exposures on a $80 billion book of assets with a $2.4 billion capital base makes a complete mockery of prudential risks.

The gearing ratios involved here go far beyond those considered acceptable for Commercial Banks and the like.   There is no wonder the RBA does not intervene in currency markets to stem the high value of the A$.   The RBA is broke people, and the Government does not understand what it does not understand in what the true nature of the RBA’s position represents.

Having lost $4.9 billion in the 2011-12 year should signal to the Government the risks involved – with a poultry $2.4 billion left – the $500 million Swan wants to take shows how desperate he is, and more importantly how little he understands financial management.   That $500 million is a days revaluation,  for a Central Bank to be operating with so little capital reserves already puts us in the ‘third-world’ category.

An IMF policy paper published Feb 2011 on Central Bank Balances and Reserve Requirementslinked here – gives reasoning and effects on managing and mis-managing Central Bank reserves.

Swan should be shoring up Central Bank reserves rather than looking for ways to strip funds to balance his budget – is ‘dunce’ too strong a word?

Assessment: – An abysmal failure …

Financial Management – Budget Control:

The size of the budget forecast for 2013-14 being put together now is already being mooted to be another large deficit, as will the next four (4) years of budget forecasts.

Given the creditability swan dive this Government suffered over its 2010 guarantee of a ‘surplus’ for 2012-13, and now looking to be close to a $25 billion deficit, Treasurer Swan’s personal creditability with remaining Caucus members hangs by a toenail.   The poll indicators show he is on track to lose his own seat of ‘Lilly’ in metropolitan Brisbane at the upcoming election.

Will that really be enough to reflect Swan’s true incompetence and the ‘debt’ legacy he will leave for the next Government to try and fix?

Swan will live the rest of his life with a guaranteed pension around $175k per year with additional parliamentary perks to top it up.

Swan will be allowed to walk away and pay no dues for the legacy he will leave behind.

Assessment: – An abysmal failure …

Labour Force Costs and the Global Economic War:

There is a global ‘WAR’ now being waged – now a military war as most of us understand – but a ‘financial and economic war’ that plays itself out on the global markets.  This market place trades in labour costs, returns on investment, political stability,  economic management, and currency value, all contributing and impacting on the global investment community and the choices they make.

Australia’s domestic employment as seen from within seems normal – yet from an overseas investment perspective it is high risk.  Australia have priced itself out of the global labour market and that means 100k’s of job losses in coming years.

Gillard and Swan keep talking about ‘jobs, jobs, jobs,’ and they have backed it up with a spending program that in effect subsidised wage costs.

Even this has not stemmed the flow of corporations now relocating workforces off-shore because of the cheaper labour costs in doing so.

Australia is at the top of the ‘labour cost’ market.  Australia has become the most uncompetitive place for investment – a historical high currency, an unstable Government, an escalating Debt/GDP forecast, an absence of restructuring programs,  and a labour force unionised under a Gillard led Socialist Government intent on a blinkered protectionist policy’s.

Treasurer Swan carries in his back pocket a list of ‘investment pipeline’ projections that he keeps telling us is some $500 billion.  He pulls this rabbit every time he is cornered over his broken promises.  He trumpets this ‘investment pipeline’ rubbish trying to convince us we are the envy of the world.

They envy our climate most of all you dumb fu_k.

Assessment: – An abysmal failure …

Currency Wars:

The shock awaiting us all in coming months will be a ‘flight of funds’ as the rest of the world realises the party they have been celebrating on Australia’s dime has run its course.    This flight will hopefully correct the A$ and take the pressures off our labour force costs.  It is something we should all wish for …

Woodside announced through the week the cancellation of their $45 billion Gas project that was on Swan’s list. Shell announced the closure a an oil refinery mid-week. Ford and GMH have put the Government on notice they need more subsidies to keep the auto industry producing cars in this Nation. Tourism operators and staff are deserting the industry, housing has flatlined, manufacturing is moving off-shore, Telstra and several other customer service help lines have already moved off-shore – and as quoted above by Glen Stevens in an address he gave in Jun 2012 to the Prime Minister’s Economic Forum – see below for extract:

Mr Stevens told the Prime Minister’s Economic Forum in Brisbane that the high exchange rate was not necessarily a bad thing, but it did mean that businesses and governments must look at how workplaces can become more efficient.

He says Australia should stop “pretending” it can compete against the low-wage economies of Asia, and instead focus on productivity gains.

“Better productivity is the imperative to survive,” Mr Stevens told the audience.

“The test really is how many of those enterprises can get the productivity up, because that’s really the way out in terms of coping with a high exchange rate.”

The RBA governor issued a challenge to business leaders to adapt to the new economic environment, and for governments to ensure there were no impediments to such adaptation.

Mr Stevens says productivity growth has fallen in the past six to eight years, and it will take unpopular decisions to turn it around.

He is urging the Government to carry out the Productivity Commission’s “long list” of reform ideas, although he warns that some of the changes will be very difficult to implement, and “politically hard” for governments to achieve.

… Full audio of address can be heard using this link

The timeframe span will take some 20-30 years before any assessment of performance will be truly judged.

For those of us who know better – subjective judgement can and will be delivered as reflected in the September 2013 election, or not sooner.

Assessment: – An abysmal failure …

Forward Estimates:

One thing can be said of the John Howard and Peter Costello 11 years of Government, they left Australia in financially better shape than at any other time in political history.

Since – and under successive ALP Government’s for the last six years, Prime Minister’s Rudd and Gillard have created destruction across all the forward budgetary estimates. They claim it is because of revenue shortfalls. Yet the spending programs have accelerated at blinding speed based on new taxes introduced that have failed to produce revenue estimates.

You measure any financial situation, if you were to spend the projected incomes before the incomes materialised – that would create debt right. Well when debt is accumulated and the cost of that debt increases and the revenues still don’t arrive – what do you think a prudent Banker would do?

For starters the Banker would not have lent the money in the first place any anything like a prime rate cost – there would be risks. The head of those risks would be the creditability and track record of the clients, in this case the ALP Government.

There is no assessor to these spending programs other than the Treasury bureaucrats putting together their numbers on forward estimates to support the public policy legislation. Cooking the books is a criminal offence in the Private Sector – anyone loading up a prospectus with forward estimates known oto be unachievable will go to jail – regardless whether it was done knowingly and with vested interest motives.

PM Gillard, Treasurer Swan, and the whole of Cabinet are responsible for the so called budget ‘revenue writedowns’. Let us call it by its true assessment – ‘complete and utter incompetence’.

In addition – Finance Minister Penny Wong is out there telling us all about the reasons why the budget will continue to run at deficits for the next four (4) years – read below:

No early recovery, government warns

| Author: David Uren, Economics editor | Date: Apr 13, 2013 | Link to On-Line Story. |

SOFTENING individual income tax revenue is the latest headache for the government with the latest Finance Department report showing the budget is still in deficit by more than $20 billion.

The government is warning there will be no early recovery, with a spokeswoman for Finance Minister Penny Wong saying the revenue shortfall will affect the budget for at least the next four years.

The government’s February financial statement shows revenue in the first eight months of the financial year is $6.3bn lower than Treasury expected when it updated the budget last October, mainly because of disappointing company, superannuation and resource tax revenue.

The statement shows that the government’s debt is now up to $165.3bn, which is already more than $20bn higher than Treasury expected for the full financial year.


link to Feb 2012 OFM Statement

This horse has bolted and the Gillard Government is intent on blaming everyone but themselves. What reputable Treasurer, one who had the title as ‘Best Treasurer in the World’, would not accept their responsibility for getting their forward estimates so horribly wrong?

Gillard herself is most responsible as a ‘shopaholic’ type spendthrift – she can’t help herself in front of a microphone – she just has to promise more spending so the crowds will cheer. Her Cabinet has the same disease and as they try to make Australia a socialist regime their intent cannot be misunderstood.

Three years of Gillard post GFC spending has seen some $175 billion of new debt, and the promise of another $100 billion or so of future debt. Where is the revenue forecasts to balance this expenditure – oh … that’s right – the forward estimates can be blamed.

The problem with Federal, State, and Locally elected members who have no financial creditability or understanding – is they can lead you over a cliff in a very short space of time.

Ignorance or stupidity can never be the excuse, yet that is what is demonstrated time after time … look at some of Treasurer Swan’s response to a simple questions about economics and finance when asked …  [Nov 2008]

… and again here … [5th Mar 2012] – make sure you count the times Swan obfuscates over the question and does not respond directly …he really is a poor performer in front of a camera and when speaking without his graphs and script to work from.

… and if you want to spend more time watching Swan make a fool of himself, check out the collection at this link

All highlighting the fact that Swan is no natural financial wizard … he has no clue just how bad he really is …

Assessment: – An abysmal failure …

Financial Management – Currency:

Global conflict has been a historical precedent for 1.000’s of years. It is not always a military conflict in traditional terms.

In modern times we’ve had the ‘Cold War’, ‘War on Terrorism’, and in most recent times we have had a new type of global conflict – ‘currency warfare’, and ‘labour cost warfare’.

These are not open conflict where troops are engaged in a traditional sense. The currency war ia about obtaining financial advantage by having a devalued currency to make your output cheaper to overseas buyers. The ‘labour force war’ is about the cost of production and how that impacts on domestic employment against overseas competition.

There is no doubt this ‘financial warfare’ has been going on for 15-20 years in a very aggressive way. The concept has been alive and well for 100’s of years happens since the ‘market forces’ concept was born.

Supply and demand is the center of the ‘capitalist dream’. In recent times the supply part of the equation is governed by who can supply the goods at the cheapest price. The demand follows the supply costs and whoever controls that cost base productivity controls the demand and the margins of profitability.

Add to this basis capitalist greed a currency market that in a free market would reflect the supply and demand equation – the relativity of a balanced global economy would be much fairer. However – we have those who enter the market with intent to manipulate their currency value for the purpose of gaining an advantage over all the other suppliers.

Now add to that the might of military power and a population almost 4-5 times that of their main competitors, and a labour force stuck in third world living standards – you can see why the Western World is in a manufacturing quagmire, and unable to compete with the Asian presence.

There have been mumblings about China and their pegged to the US$ advantage. Nobody can do anything about it unless China want to feel generous.

Does China have reason to want to be generous – other than a complete meltdown of the capitalist network if they don’t look to share – history would indicate that the West have plenty of reason not to expect unconditional favours from China.

Now we come to Treasurer Swan, previous Treasurer Costello, and RBA head honcho Glen Stevens.

In another speech on currency by Phil Lowe – RBA Deputy Governor – he spoke on ‘intervention’ and how the RBA viewed such action – his comments were reported in part and appear below: link to On-Line Story

October 30th, 2012:

THE Reserve Bank of Australia (RBA) says the conditions are not right for it to intervene in currency markets to reduce the value of the Australian dollar.

Reserve Bank of Australia (RBA) deputy governor Philip Lowe told the Commonwealth Bank’s Australasian Fixed Income Conference in Sydney the Australian dollar is not overvalued.

“The major influence on the currency is the terms of trade, the commodity prices,” Dr Lowe said.

“That’s why the exchange rate is high.”

Dr Lowe said in answer to questions at the conference that the current conditions were not right for an intervention.

“While it’s a bit surprising that the currency hasn’t come down – the outlook for the world economy has softened and interest rates have gone down – the currency is still not at a point where I think you can make a strong conclusion that it is fundamentally overvalued,” he said.

“Really you’re talking about whether the Reserve Bank should undertake a very large scale intervention in the currency markets.

“The argument for doing that would arise if we thought the currency was fundamentally overvalued and was having a really adverse affect on the Australian economy.”

A recent case when the RBA intervened in currency markets was in late October 2008, when it spent $3.15 billion propping up the Australian dollar after it fell below 61 US cents as the worst of the global financial crisis was setting in.

“Historically, we’ve been prepared to intervene for short periods of time when there is market dislocation or where the exchange rate has been fundamentally away from where it should be,” Dr Lowe said.

“So that possibility is not ruled out but it would be a very big step moving away from a system that has serve us very well for a very long period of time.”

Dr Lowe said the floating of the Australian dollar in December 1983 was one of the most fundamental economic reforms Australia has made over the past 30 years.

“It has been an incredibly stabilising influence, there have been periods where people may feel very uncomfortable about the movement but if you look back over the history it is difficult to escape the conclusion that a floating exchange rate has been a tremendous benefit to this country,” he said.

“A decision to to intervene by the Reserve Bank would be a very big one.”

Audio replay of full speech –

It would seem that the RBA are not overly concerned with the impact of a high A$ value – Stevens and his Deputy are bureaucrats and as such are a part of the problem. They are political appointments as is the make up of the RBA Board.   ALP friends and there to serve the cause …

When China pegged their currency to the US$ in the early 1990’s it was a master move by a regime with a 200 year agenda.  They knew that their biggest asset was their cheap labour.  Rather then have them serve as soldiers in a modern war game – they used their poverty to their advantage to beat the rest of the world on production costs and output.

Cheap and plentiful labour will always beat competing economies as evidenced in this and every other Western Nation in the last 10 years or so.

When the currency trap is added that favours weaker currencies – and the US$ weakness not only helps the USA economy, it keeps China so far ahead of everybody else, the rest of the Western world is fighting over the scraps left behind.

Yes folks – it is a War, a war of a different kind that will see populations turn on themselves as poverty bites … it’s a genius plan and the knots are would so tight with the over burden of debt attributed to Western Governments now fixed to the anchor dragging them all over the abyss … it is only a matter of time … and then China may have won a victory – but they will have no one left to trade with and they too will implode and that will be the ball-game.

It might take 50 years but that is small time scales when you think about history …

Assessment: – An abysmal failure …


Do you think Treasurer Swan or any other Politician serving under Gillard has thought this through 10 years hence … thinkers are few and far between in this world and it is a case of ‘shoot the messenger’ from where Gillard stands and surveys her future …

She will not and cannot be convinced her time is done … or that she is bad for the Nation.  She intends to lead us all over that abyss in some majestic vision she has about her own place in history …

What a slapper she is … an idiot with extreme and gargantuan egotistical issues … she has never accepted she did anything wrong in the early 1990’s when connected with the AWU fraud – and ever since she has been driven to try to prove everybody else was wrong to punish her for the way it went down – and this Nation has and will continue to paid the price for her misguided socialist agenda for generations to come.

This whole Gillard minority Government hs been:

– An abysmal failure …

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Have your say where it counts: – contact your Local Federal Representative via the links below and let them know how you feel about this, or any other topic that you feel strongly about – or you can just post a comment below and let off some steam.

The EYE-BALL Guru …

  1. Barry
    April 15, 2013 at 9:58 pm

    Australia has let these idiots , and in particular this imbecilic clown , run up this debt for over 5 years.
    And no one has even “attempted” to stop it ……

    If this doesn’t wake up Aus from slumberland ,they will be woken in a few years time .

    And then they will “really ” have a problem on their hands.

    Labor has never been a productive government , and once again , we see them propped up by the”intelligentia” that suck from the public purse.

    And they think this is the way to run a country.

    Any jackass knows , if you keep sucking on the straw, eventually the bottle empties.

    Even Swan must know that now.

    Do you think?

  2. April 16, 2013 at 10:51 am

    Dear Dorothy Dix,
    My partner has a long record of money problems. She runs up huge credit-card bills and at the end of the month, if I try to pay them off, she shouts at me, saying I am stealing her money. She says “pay the minimum and let the next lot worry about the rest”, but already we can hardly keep up with the interest.

    Also, she has been so arrogant and abusive toward our neighbours that most of them no longer speak to us. The few that do are an odd bunch, to whom she has been giving a lot of expensive gifts, running up our bills even more.

    Also, she has got religious. One week she hangs out with Catholics and the next with people who say the Pope is the Anti-Christ, and the next she’s with Muslims. Finally, the last straw: She’s demanding that before anyone can be in the same room with her, they must sign a loyalty oath. It’s just so horribly creepy! Can you help?
    Lost in Canberra
    Now……………….. for the reply!
    Dear Lost:

    Stop whinging Tim. You’re getting to live in the Lodge for free, travel the world for free, drink the finest wines for free and have others pay for everything for you. You can leave her any time you want. The rest of us are stuck with the bimbo until September!!!!

  3. April 16, 2013 at 11:45 am

    It’s like a time warp of emotions – I thank Jeannie for the levity … and understand how something so serious becomes something we all try to make light of …

  4. April 16, 2013 at 12:44 pm

    The events in Boston overnight have prove yet again how serious are the times we live in …

    Gold falls US$200 an ounce, Nth Korea points a hollow gun at the world, the EuroZone limps closer to their own financial abyss, and all on cue global New services light up their $dollar signs as they do with any crisis … and the world moves on …

    Messages of regret and condemnation by Leaders are purely pandering to a media cycle with a different slant of electioneering …

    Genuine concerns are contained within the Military and other clandestine agencies because they think it is better we don’t know …

    The freer this world becomes, to more impounded we are … we take freedoms for granted until they are lost and then it is too late …

    The shock and awe of 9/11 when 3000 people died is again being reflected upon with the deaths of 3 people from these Boston bombings –

    Overnight some 400 people died or were injured in Baghdad from terrorists attacks … the Syrian conflict continues and already has over a million dead, the coalition military deaths Afghanastan continue without the same fevor as the Boston bombings …

    What is it about American civilian deaths … how many civilians were murdured across the USA yesterday, how man died in car accidents, there is no perspective in any of the news reporting … each death is horrific and contains a story …

    No .. these crisis moments become news for profit and the global news services are mercenary in their pursuit of profits …

  5. April 16, 2013 at 1:29 pm

    Truly provocative. Almost mandatory. A timely reality check!
    There are so many threads.
    Removing the discount on fees paid upfront at Australian universities shows a total lack of understanding of time value of money. 10% is neither reflective of annual interest nor compounded over several years. It was a proxy of something in between. It rewards those on the highest disposable income, and penalises the most modest.
    On the one hand you reward those most able to pay, on the other hand you encourage welfare recipients to study obtaining useless degrees, where job prospects are not improved and the other two cardinals are;
    • young aspiring part time students who study and work to pay their way are penalised; and
    • trying to make this system more realistic will become a complexity beyond the comprehension of those it is intended to help.
    Sounds just like superannuation. All are reduced to playing at the margin to survive. All are reduced to the lowest common denominator.
    On the financial war.
    In China, the politics was positive. In Indonesia not so. The Nielsen poll remains static. The news hounds are confounded.
    What does a market expressing the AUD :CNY mean?
    Currency spreads are controlled by the market forces. So if political leaders say that converting both Yuan and Aussie through USD means two spreads, how will that market respond to a threat to it’s profit margin? Who will police it?
    If I go to Sydney airport on my way to Shanghai and want to buy say AUD200 in Yuan I will still be quoted a bid offer spread of nearly 20%. If I go to the local bank branch, after having warned them of what I require, I will still get a 4 – 6% bid offer spread trended against me plus a flat fee of $10 -$15. If a LNG exporter wants to express their export sales in AUD or CNY, what will the banking intermediary do? Just bull crap!
    In Indonesia all talk of tighter border policing and joint military initiatives fell on deaf ears. Indonesia might be a rapidly growing economic force in our region, but their socio economic problems are far different to ours. So why do they need to divert their focus to our problems? The cynical will claims people trafficking is a reliable source of foreign income to Indonesia.
    Meanwhile on the domestic front, Shell announce the closure of the Geelong petrol refinery only months after they have finally decommissioned their Clyde refinery, and Caltex are in the process of transforming Kurnell to an import facility and the markets are framed about will Lytton in Brisbane be the next or will BP and Exxon join the game.
    All the while Jac Nasser, (former Ford CEO) has finally conceded domestic car manufacture is over and now going through its death throes. But our government still maintains the mantra JOBS JOBS JOBS. Yes civil servant jobs, that are highly subsidised living in a utopia, of expert reports, and industry consultants, and industry experts, which means the rest of us are fools. Throw the monkeys some more peanuts. JOBS JOBS JOBS is a euphemism for DEBT DEBT DEBT.
    Then arrives good old Glenn Stevens. The biggest goose not standing for re election at the pending federal election. A central bank that is thinly capitalised! A central bank whose reserves have been run down. Which goose waited for the gold price to fall from USD 800 per ounce in 1980, only to sell most of Australia’s gold stockpile at $280 only moments before gold price skyrocketed well over USD1,000 peaking over USD1,800? What does Glenn Stevens know about risk? Are his thinly capitalised dictates the same BIS capital adequacy guidelines that has lead to both the GFC, and the British banking collapse and the Euro debt crisis? Oh I forgot, he now relies upon Basel III. That is going to fix all the mistakes before 2010.
    He is merely representative off all of the civil service.
    On election day, we can throw out Gillard and Swan, and Conroy, and Garrett and so on, but we will still have Glenn Stevens until 2018. That goes for all the other schmucks that run treasury, and immigration, and industry and work place, and education.
    The measure of success of the new parliament will be how they can deal with the sychophants in the civil service. Abbott has promised to move deregulation out of Treasury and into DPMC. Should I say Psycho- phants? Can anyone drag them into the new century?
    The author above hits the nail on the head where he states our greatest imbalance is subsidised wages. Under David Ricardo’s highly debated theories on tariffs and quotas, this labor governments snowballing debt, is only attributable protection. Protection of inefficient industry. The most inefficient industry of all, government. Their mates and vested interests.
    Cheap labour will be exported or imported (equalised) but at what cost? Blind Freddie could see this one coming!
    In what bank did Glenn Stevens cut his teeth on trading in the financial markets? The RBA can intervene in financial markets and keep all kudos for themselves, and pass all losses to the government, the taxpayer. Tell us one more time how the RBA became undercapitalised?
    The same cuts for teachers. They can flake off, blame their underperformance on resourcing or the students or their parents and not recognise personal responsibility.
    Labor Front bench, it all starts with those tiny words, I am sorry! But mean it.

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