THE MADNESS TERMED 'SOUND FINANCE'

by Eric D. Butler
I have long felt that what the world needs is a satirist of the calibre of the famous Jonathan Swift to describe the lunacy of what is described as "sound finance". Let us consider the following headline on the front page of The Age, Melbourne, of September 22nd:
INFLATION DEAD, BUT PRICES STILL RISE.
The average housewife along with those involved in real economic activities have never been convinced that inflation has been either eliminated or "controlled"; they know that if inflation is measured in terms of rising prices, then prices continue overall to increase. Price rises can be slowed down for some production, but this is generally at the expense of producers or retailers. Food prices have, for example, been held relatively stable for some time, but this has been achieved by forcing primary producers to accept uneconomic prices for their production.

One of the superficial arguments used to justify "free trade" is that the Australian consumer gets the advantage of cheaper imports. But this argument overlooks the fact that the closing down of Australian industries generates increased costs to those consumers left with paid work, in the form of higher taxes to finance the welfare payments of those displaced from the Australian production system.

And how do we measure the increasing financial cost of attempting with various welfare and law enforcement agencies, to deal with the effects of growing social disintegration. The Governor of the Reserve Bank, Mr. Ian Macfarlane, says that inflation is dead. But the same Governor and his advisers have felt it necessary to have a number of reductions in the interest rate- what for? To "stimulate" a "sluggish" economy.

There are now speculations concerning whether a further reduction is necessary as the much publicised economic upturn, with a reduction in unemployment, fails to materialise. One headline reads, BLEAK YEARS AHEAD: BHP CHIEF
Similar statements have come from the representatives of small businesses who have made their contribution towards lower price rises by subsidising prices out of lower profits, with many going bankrupt.

Those who have made it their business to understand how the present banking system works, know that an enormous amount of debt is written off by the banking system as a result of bankruptcies. As pointed out in this column previously, while lower interest rates give some short-term relief to some people, every reduction in interest rates seriously affects those who in the past managed to build up some savings. This means that their purchasing power is reduced. Lower interest rates of themselves are not going to result in any economic upturns.

Irrespective of the interest rates, who is going to take risks in the present economic climate? Recent figures reveal that the collective debt of Australians has reached a new record high. There is no known way that the present finance economic system can operate without a total expansion of debt. This is the basic fact, which everyone must bear in mind as he considers what are the best options.

If, as the "experts" say, inflation is dead, then why are the prices of many basic goods and services increasing at least at the same rate that they were 10 years ago? In spite of the brave words of the Federal Health Minister, stating that private health charges would not be allowed to rise, he had to capitulate last week and permit a 20 percent increase in health insurance charges. Over the last year, the price for milk, cream and icecream increased by 10 percent. The cost of entertainment has increased. The cost of taking the family to see a game of football has skyrocketed. And what about increases in transport, car registration and associated costs?

Everyone knows that they have steadily gone upwards; while in Jeff Kennett's economic rationalist State, ratepayers are about to feel the impact of higher rates from those more "efficient" amalgamated councils. "Greater Geelong" was the pioneer in the field of amalgamation.
A recent headline in the Geelong Advertiser states, SAVAGE HIKE IN COUNCIL CHARGES.
The Kennett Government has now announced that the amalgamated Councils may now all increase their rates - but not too much! And while the rates go up, the services continue to decline.

The picture right around the developed world is basically the same. In desperate attempts to prevent a complete breakdown, centralisation is held up as "inevitable". The economic waste is horrendous. Mass production has replaced quality production. Quality has been submerged by mediocrity in every sphere. In many areas of human activity it has almost become the norm to "do" your neighbour before he "does" the same to you. If it were not for the smaller and genuinely more efficient organisations, who have managed to maintain standards in spite of the enormous pressures, the general position would be much worse than it is.

The overall situation is one in which in some areas prices have remained stable, or even gone down (as witnessed by car prices), the great majority were finding their standard of living steadily eroded. One inevitable result is that a relative few are becoming richer while the great majority are bearing the brunt of the pressure of the debt system.
As the problems of the "Asian Tigers" become more acute, it is not surprising that Malaysian Prime Minister Mahathir has hit out blaming Western currency trading for his problems. Another headline reads, DEBT, CORRUPTION THREATEN CHINESE MIRACLE.
To which the realist can only respond: "Well, what's new."

The fast growing economies of Asia have been fuelled by the International Bankers. The currency manipulators may be described as immoral, as the Malaysian leader charges, but they can only operate with the co-operation of the International Bankers. The international paper-shufflers are not going to be outlawed while the whole world bows down to the major debt merchants.

Foreign Minister Alexander Downer's contribution to the growing madness is to announce that Australia is prepared for Australia to increase its support for the turbulent Asian currencies. Perhaps a modern Jonathan Swift could provide a new version of the mad rush of the swine of the New Testament story.

But Australians do not need to follow the mad rush towards the abyss. They can insist that "Enough is enough", and put their own house in order. The first necessary step is stop heeding the nonsense flowing from the certified economic experts. The first answer to black magic is to stop believing in it.

ASIAN 'TIGERS' GETTING COLD FEET

by David Thompson
Another glimpse of future developments emerged last week when East Asian and European Union Finance Ministers met in Bangkok. The Thais, recent beneficiaries of a $24 billion IMF currency bailout, proposed an Association of South-East Asian Nations single currency, modeled on the proposed "Euro-dollar". The Thai Finance Minister argued that the recent currency crisis in countries like Thailand and Malaysia demonstrated that single nations were poorly equipped to resist speculative attacks from the new global market financial sharks. This was a major concession that the nation-state was threatened by globalisation, and a concession that national currencies were becoming obsolete in the new world order.

The previous week, Dr. Mahathir of Malaysia was forced into a most embarrassing retreat in the face of a speculative attack on the Malaysian currency. Mahathir, bitterly attacking speculative foreign interests, conceded that "The Market" could now intimidate the nation-state in the new global economy. This was the reason that Thai representatives called for a new regional single currency, warning of "future dangers to all international currencies from the huge currency flows that have accompanied market globalisation".

Catholic columnist B .A. Santamaria, who has increasingly acknowledged the role of global banking groups in the subversion of national economies, finds his views progressively vindicated by events. Santamaria has been able to use his column in The Weekend Australian to point out some of the realities concerning the creation of credit with apparent impunity. Last weekend (20/9/97) he referred to the plight of the "Asian Tigers" who the economic gurus confidently predicted would form the engine room of global economic prosperity. Santamaria noted that when the financial powers that had built up the Asian "tigers" began to become nervous about stability and growth, they quickly moved to pull out their "global investments".

He wrote: "The results showed who were the masters and who the servants for economies relying on continuous foreign borrowing. Like Marxism-Leninism, the theory of globalisation provides an ideological camouflage for the pursuit of power and wealth by those who control the basic mechanisms of power, the markets: pre-eminently, the multinationals and the great international financial houses."

Unless the nation-state can devise some new means to protect itself from the banking predators in the global market, further international centralisation of power is inevitable. Santamaria has seen this, and is one of the few voices raised in warning, to his credit. We would not always agree with his solutions, but he is adept at identifying the problem.

Last week's Asia-Europe Finance Ministers meeting saw a number of the Asian Ministers express reluctance to open their economies to further globalisation, as required by the Europeans and the IMF Faced with the reality concerning the "global market", the Asians are now feeling the pressure, and wish to use whatever protective mechanisms are available to them. They are refusing to lower tariffs and dismantle other restrictive trading practices in fear of what might happen to their economies.

It is ironic that while the "Asian Tigers" are baulking at globalisation, Australian Ministers have had to be bludgeoned into retaining the last few shreds of industrial (tariff) protection available to us.

MULTICULTURAL CRIME WAVE

The fruits of the open-door immigration policy, together with the multicultural dream, are beginning to resemble a drug-driven crime nightmare in Sydney. The NSW police have been forced to direct more resources to the Asian Organised Crime Group in an assault on the prolific South-East Asian drug syndicates operating in Sydney, and monopolising the heroin trade. Since the heroin comes from South-East Asia, it is to be expected that the crime syndicates are Asian. But it is clear that the immigration policy of the last 20 years has facilitated the emergence of an Asian crime problem, which police believe accounts for 90% of Australia's heroin supply and distribution.

The "30 principle Asian heroin dealers in Sydney" are now under attack by special police drug squads, who need to be able to speak at least three Asian languages between them. It is no coincidence that much of the drug activity centres around the Sydney Harbour Casino, which is heavily patronised by Asian gamblers. Police Commissioner Tony Ryan has banned 30 "undesirable people" - including suspected heroin dealers who may be involved in money laundering - from the casino premises.

NAB AND BHP STRUGGLE FOR TITLE OF 'BIG AUSTRALIAN'

CLIVE JAMES ON CHARLES

Since the death of the Princess of Wales, every attempt has been made by the (basically republican) press to use this "unrehearsed event" to undermine the Royal family, and hence the Crown. The attack by Philip Adams on the Queen in his last Weekend Australian column was as shallow as it was vicious, and indicates a malicious rising of the heat on the question of the monarchy. The Prince of Wales, however, is forced to bear the brunt of the attack, being depicted as slowwitted and dull, with Adams and others like him openly scathing about him and his role as future king.

But those who know the Prince tell a very different story. One of those who knew the Prince and Princess of Wales personally is Australian television figure and monarchist Clive James. James once wrote that everything should be done to encourage the Wales' to hold their marriage together, and last weekend his own eulogy to Diana was published in The Weekend Australian. In passing, James referred to Prince Charles, and his own agony in the wake of Diana's death: "As for the man who knew her most intimately of all, Prince Charles, he is a man as good and honest as any I have ever met, and I know him well enough to be sure that today he is on the cross, and wondering whether he will ever be able to come down. . . I had wanted to see her beside Charles on the day when he took his proper place as the most intelligent and concerned monarch this country has ever had..."

FROM THE PRESS