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"All that is necessary for the triumph of evil is that good men do nothing"
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30 May 2008 Thought for the Week:

"Every society in the modern world is confronting serious problems which have no simple, universal solutions. But many of the problems have a common root. Science, technology and the economy have been treated by modern societies as ends in themselves, rather than as important tools to enhance well-being.
The increase in scientific knowledge, the development of new technologies and economic growth are pursued as if they - and not well-being - should be the objective of human effort. Social stability and sometimes, entire cultures are sacrificed in the pursuit of these goals. I believe that this inversion of values is the cause of many of our ills."

- - Sir James Goldsmith in "The Trap" 1993


by Patrick O'Shea
When one has grasped the fundamentals of a Financial System with its usurious foundation, it can be seen that within such a system, the same things have occurred throughout history, time after time… after time. "It is like a car going around the block. One time it may be green, another time orange, another time black. After the 18th time it doesn't make any difference what colour the car is - you will recognise it," wrote Richard Kelly Hoskins in the introduction to his book, "War Cycles - Peace Cycles."

While Hoskins was writing on the 'boom and bust' of the economic cycles that occur around every fifty or so years under a usury-based money system, so a similar design can be seen operating within the International Grain Trade. This time round I am writing of the policy of the Federal Labor Party to throw Australia's grain growers into the waiting jaws of the International Merchants of Grain and Finance.

The Australian Farmer and the AWB:
Those with 'eyes to see through' the Federal Labor Party's legislation, and can make out the pattern of events, understand that Labor is set to betray Australian Wheat Growers once again - if the grain growers let them get away with it. This time round it is through legislation coming before Federal Parliament.

How? The Federal Government plans to accredit multiple wheat exporters, thus replacing the system under which the statutory Australian Wheat Board (AWB) had an export monopoly and served Australian wheat growers very well for over 60 years.
Historically, it was the mounting anger of farmers in the 1930s in their dealings with the International Grain Merchants - who dictated all aspects of the export of wheat and the prices paid - which finally brought about the wheat pooling system and the Single Desk marketing structure, thus providing the stability and continuity within the market place that farmers so sorely needed.
With the 'Single Desk' pooling system in place, farmers could then go about their real business, that of growing wheat, confident they would receive a fair price on the world market because just one marketer was selling Australia's wheat. It was the AWB's duty of care to do so.

First Advance payment:
Through the Federal Rural Credits Department, a cash payment was advanced on receipt of the farmers' harvest into the granaries. This First Advance payment on their grain was guaranteed under the scheme.
The finance for the First Advance, which was roughly 80 per cent of the estimated return for the crop, was issued by the Treasury and paid through the Federal Rural Credits Department at a cost to the Australian Wheat Board of 4 per cent interest charge. This would have covered cost of the administration of the service, possibly with a little over. This arrangement gave decades of assurance and confidence in the orderly marketing system to all wheat growers.
The AWB also served as a buyer of last resort, when quality slipped a bit, through natural disaster or the like, and was a great backstop for the farmer.
Farmers were confidant that at long last their interests were being looked after. They were not looking for government hand-outs - they were looking for stability and continuity in the market place. It is not just market-price fluctuations farmers have to work with, they must take into account weather extremes, real climate changes, i.e., a wet or dry season, drought-ridden years, etc., etc.

Federal Government withdrew Rural Credit guarantee:
However, 25 years ago the Federal Government 'in their wisdom' withdrew the Rural Credits guarantee and the AWB (the farmer's single marketer) was thrown on to the open financial markets of the world and the AWB then had to deal with the big financial structures, such as those in New York, who wanted 12 per cent interest to finance the First Advance upon harvest receivals. Again another unnecessary and costly betrayal for Australian wheat growers.

And now, there is already growing disquiet among the knowledgeable grain operators who are expected to manage this new 'open' wheat market. At best it is loaded with volatility in prices and uncertainties in supplies. They are privately saying this year's marketing will be chaotic, with billions of dollars worth of wheat to be exported.

Why do they think so?
§ Establishing significant lines of credit with banks is another problem for the new players without definitive figures and projections to offer.
§ Traders will not expose themselves to uncertain or wildly fluctuating prices, or they will be very cautious about it.
§ So, while it may sound reassuring for farmers to be offered other grain merchants' pools, such pools will only be open for a short and specified time with limited tonnages.
§ The grain must meet certain quality criteria.
§ The initial pool payment could be as low as 50 per cent of the grain's initial value

Corporate people are, as yet, reluctant to tell the wheat growers this news. But bankers JP Morgan have warned that liberalising wheat export arrangements in Australia will certainly affect the working capital needed to market the Australian crop.

Alice's crocodiles welcomed little fishes in with gently smiling jaws:
Why do I have such a sense of déjà vu? It looks like the 'bad old days' are returning. Should it come about, the Australian farmer can thank the present Labor Party who simply continued on with the policy the Howard Government had set in motion. Just as the "Alice in Wonderland" sleepy crocodile, who rested and mused quietly near the river bank, "welcomed little fishes in with gently smiling jaws," so the big Grain Traders, particularly those in the USA, while resting and musing on the river banks, will 'welcome the Australian grain growers into their gentle smiling jaws' if Labor dismantles that single desk protection.

Farmers themselves must be musing:
Do the Labor senators realise what they are doing to Australian wheat growers? Against all odds, a belated but Spartan rear-guard action by some growers and National Party senators have been trying to 'hold the line' and keep the single desk. But there is very little time left before the proposed legislation closes the door on common sense and we enter Alice's world of great uncertainty.

While we are considering the precarious situation farmers will find themselves in once more, let's revisit the strong words on the subject by Arthur Calwell in "Be Just and Fear Not": Our older readers may still remember the Great Depression years of the 1930s, with the huge numbers of unemployed men with no means of gaining an income. So many Australians during that period faced extreme circumstances and excruciating hardships.

Calwell recorded that the Deputy PM and Treasurer Theodore, having probably "the coolest, best and most experienced financial brain in the southern hemisphere" had spoken of Sir Robert Gibson's (then Chairman of the Commonwealth Bank), proposal of a Fiduciary Note Issue to relieve the distress of both the farmers and the unemployed.
But, recorded Calwell, "The Senate troglodytes in New South Wales rejected the government proposal for a Fiduciary Note Issue of eighteen million pounds. Six million of which was to have been spent on guaranteeing five shillings a bushel for wheat then selling at fifteen pence which was far below production costs and one million a month on unemployment relief."
"The blood," Calwell continued, "for all the misery that was caused by the callous rejection of the Fiduciary Note Issue bill was fairly placed on the heads of the senators concerned."

Typical of the Marxist ideologues in the Labor Party, the senators rejected assisting the farmers because they were, in the senators' eyes, "capitalists and exploiters."

It's Time - to recall the Great Betrayal:
Labor's honourable senators need to be reminded of their predecessors' great betrayal of the farmers during the Great Depression as they now consider the circumstances of those on the land in 2008. Their predecessors refused assistance to Australia's grain farmers in a time of great need - are they going to do the same to today's grain growers?

So, what can we hope for at best?
The big corporations have been lobbying the Minister for Agriculture Tony Burke and outlining their assurances. Mr Burke is apparently taking the view that opening the wheat market to the jaws of Alice's crocodiles will benefit growers. Poor delusional disordered Mr Burke. Australia had, for sixty years, the world's most unique and stable marketing system for wheat, the structure is being torn down and the old world system imposed upon us once more.

Is there is still a chance?
The Wheat Exporting bill could fail. Could I pray that some Senators and Mr. Burke will be guided to renounce the Export Licensing bill and reinstate the statutory marketing authority, the Australian Wheat Board, for the benefit of all of Australia's grain growers - and in the long term, Australian families?

The 'Corn Laws':
My 1968 edition of the Encyclopaedia Britannica has four pages on the history of Corn (Grain) Trading reaching back over 4000 years and lists the clumsy mechanisms and brutal methods used in this cut-throat world of grain trading. I fear the 'London Corn Exchange' mentality will be imposed upon us once again. (The term corn, used in this sense, is a generic term for grain.)

The following terms outline the shady methods of the world's grain traders:
§ Regrators: those who buy and sell in the same market thus raising the price.
§ Forestallers: those who buy up before the market.
§ Engrossers: monopolists who command (or have 'cornered') the market.

Actionists needed:
Don't think this issue is only of concern to our grain farmers. The price you will end up paying for bread will be based on the stability of the market for our farmers. The farmers are not looking for 'hand-outs', they are looking for stability in the market place.
Email, ring, write or call your own State's Senators and express your concern that the AWB is under threat. Tell them you want them to help support the long-term viability of our farmers by retaining the AWB.


by Richard C. Cook USA
While Richard Cook is focussing on the precarious American situation, Australians would do well to take note because we are not far behind the US. He writes:
"Our economy is on an artificial life-support system, a barely-breathing hostage in a lunatic asylum. That asylum is the U.S. and world financial systems which are on the verge of collapse.
The inmates are the world's central bankers, along with most of the financial magnates big and small. The fact is that the economy of much of the world is in a decisive downward-slide which the financiers cannot stop because the systems they operate are the primary cause.
As often happens, the inmates rule the asylum. (In Australia one of the inmates recently received an $80 million payout for all his efforts in helping to bring the nation to its knees…ed) In such an environment, crime, warfare, terrorism, and other forms of violence are endemic.

"Only the most naïve, self-centred, and deluded jingoist could describe such a scenario in terms of the freedom-loving Western democracies being besieged by the "bad guys." Rather what is happening highlights the growing failures of Western globalist finance whose impact on political stability has been so corrosive. As many responsible commentators are warning, we are likely to see major financial shocks within the next few months. The warnings are even coming from high-flying institutional players like the Bank of International Settlements and the International Monetary Fund.

The root cause of the catastrophe:
How did today's looming tragedy come to pass? Looking for causes is like peeling an onion. What we are really seeing are the terminal throes of a failed financial system almost a century old. It's happening because, since the creation of the Federal Reserve System in 1913 - even during the period of the New Deal with its Keynesian economics aimed at full employment - our economy has been based almost entirely on fractional reserve banking.
This means that under the regime of the world's all-powerful central banking systems, money is brought into existence only as debt-bearing loans. Interest on this lending tends to grow exponentially unless overtaken by real economic growth.
The banks, along with the bank-leveraged equity and hedge funds, are preparing for the biggest fire sale in at least a generation.* Insiders are going liquid to get ready. If you think Enron was "the bomb," you won't want to miss this one.

What can be done?
"There are so many flaws in the system that it's time for real change. As I have been pointing out in articles over the last several months, the key to a rational solution would be immediate monetary reform leading to a fundamental shift in how the world conducts its financial business. It would mean taking control of the world's economy out of the hands of the private bankers and giving it back to democratically elected governments…

The banking system which rules the economy through the Federal Reserve System has produced the crushing debt pyramid of today. he system is a travesty. Banks, which can be useful in facilitating commerce, should never have this much power. Many intelligent people have called for the Federal Reserve to be abolished, including former chairmen of the House banking committee Wright Patman and Henry Gonzales and current Republican presidential candidate Ron Paul.

Some might call such a program a revolution. I prefer to call it a restoration - of national sovereignty. Central to the program would be the elimination of the Federal Reserve as a bank of issue and restoration of money-creation to the people's representatives in Congress. This is what our Constitution says too. It's the system we had before 1913.

The monetary prescription:
"The fundamental objectives of monetary policy should be to secure a healthy producing economy and provide for sufficient individual income. The objectives should not be to produce massive profits for the banks, fodder for Wall Street swindles, and a blank check for out-of-control government expenditures.
Note I referred to income. I did not say "create jobs." That is the Keynesian answer, because Keynes was a collectivist, and the main thing collectivists like to come up with is to give everyone more work to do, even if it's just grabbing a shovel and digging ditches like they did with the WPA during the Depression.

The idea of Income," as opposed to lobs," is a civilized and humane idea. When are we going to realize that everyone doesn't need a paying job in order for an industrial economy to provide all with a decent living? When are we going to realize that the productivity of the modern economy is part of the heritage of all of us, part of the social commons?

Why can't mothers have the choice of staying home with the kids like they could a generation ago? Why can't some people choose to do elder-care? Why can't others comfortably go into lower-paying occupations like teaching or the arts? Why can't some just opt to study or travel for a while or learn new skills or start a business without facing financial ruin as they often must today? Why can't retirees enjoy their retirement instead of having to stay in the job market or worrying about Social Security going broke?

The U.S. and world economies are on the brink of collapse due to the lunacy of the financial system, not because we can't produce enough.
Contrary to so many doomsayers, the mature world economy is capable of providing a decent living for everyone on the planet. It cannot because the monetary equivalent of its bounty is skimmed by interest-bearing debt.

Fundamental monetary reform implemented to restore economic democracy is what America's real task should be for the twenty-first century. One thing is for certain. The out-of-control financial system that has wrecked the U.S. and world economies over the last generation cannot be allowed to continue.

* The following is for those who find the world of finance and its terms a mystery:
Hedge Fund: A flexible investment company for a small number of large investors (usually the minimum investment is $1 million); can use high-risk techniques (not allowed for mutual funds) such as short-selling and heavy leveraging
Leveraging: Investing with borrowed money as a way to amplify potential gains (at the risk of greater losses).
Equity: The difference between the market value of a property and the claims held against it.
Derivatives: A financial instrument whose value is based on another security


by Betty Luks
The ABC's 'The World Today' (20 May 2008), interviewed an Italian economist and author Loretta Napoleoni, about her book, "Rogue Economics" in which she seeks "to unravel what she describes as the rogue forces driving global capitalism." Why Sharia law? Because, she suggests, that Islamic finance is the key to challenging rogue economics.

We suggest the answer to 'rogue economics' has been known for at least the last eighty years. The problem is not that there is no answer from within the Christian West, the problem is the lack of will and want of understanding on the part of westerners. They have yet to band together and insist on legislative change through their political representatives.

Loretta Napoleani explained:
"Rogue economics is purposely ambiguous because it is a sort of umbrella under which you do find the terror economy, the criminal economy, the illegal economy but also the formation of grey areas. These are areas where there is no regulation. There is no law and inside this grey area, the globalisation outlaws, as I defined th(ese) new rogue entrepreneurs that reap the benefit of the great transformation of today which is globalisation."

Sub-prime crisis direct consequence of rogue economics:
Eleanor Hall the ABC interviewer asked: "A lot of these are sort of Mafioso type figures?" To which Napoleani replied: "Yes, but also individuals who are not necessarily breaking any law. For example the sub-prime mortgage crisis. It is very much the product of rogue economics. Nobody really broke any law because there were not any laws to be broken. If you look at how the crisis came about, it came about through the transformation of a growing debt into an asset and that was made possible by the usage of derivatives. Basically, applying th(ese) derivatives to mortgages was possible to transform this debt into an asset and sell the debt as an asset across the world. There was no regulation in place to prevent something like this to happen."

Pleased as I am to learn that economist Loretta Napoleani is studying and analysing the core of the sub-prime crisis and what brought it to a head, I turn now to Social Credit authority Mr. Vic Bridger for an edited version of his clearer explanation of the core problem.

The sub-prime crisis in the USA:
"Banks are businesses and as they deal in money, which is a debt, it is necessary for them to be as prudent as possible in their day-to-day operations. When there were controls in place to ensure they did not go beyond certain limits there was some measure of safety. Those regulatory controls, which have been gradually removed, allowed the banks to reduce the flat control from 18% to 12% to what is today a negligible %.

"When banks have reached the position of lending nearly 100 to 1, i.e. lending $100 for $1 in their possession, they reach a point where growth is restricted as well as leaving themselves open to substantial losses. Having reached this stage, banks resort to borrowing themselves from other banks and then can continue to lend on the same basis as before.
Add to this scenario banks lending to other institutions, who in themselves, are in the lending business. Such is the case with the banks putting together bundles of mortgages and sold as 'mortgage-backed securities'.

Growth of the sub-prime:
"The purchasers of these mortgages then use them as collateral to issue bonds in order to finance other deals. Such is the growth of what is called the "sub-prime market". The money originally lent homebuyers attracts interest and the idea is that this interest will cover the interest to be paid on the bonds issued. To add to this, the sub-prime market institutions have been lending to homebuyers on a 'no deposit and 100% financing' of their homes. Sometimes falsifying records to show the borrower's earnings greater than they were and locking them into low interest rate contracts, which escalated after the initial period.

As if this was not enough, some of these sub-prime market forms created new 'structured finance products' referred to as collateralised debt obligations (CDOs). They are in actual fact 'slices' of the other mortgage securities, issued as bonds.
To put it simply, it is operating on the principle that one debt can be split into two or more and offered on the market. Many of these CDOs were picked up by 'Hedge Funds' who in fact borrowed money to buy them. When people have been lent money for the purchase of a home and do not have the continuing ability to meet their commitments, for whatever reason foreclosures occur. When interest rates increase or when people enter into contracts with an interest rate that converts to a higher rate at a later date, for instance one, two or three years, more problems arise.

House of Cards:
"It is like a house built out of a stack of playing cards or those structures built with dominoes. When one starts to go, the rest follow. When foreclosures increase and homes have to be sold to obtain cash, the value of the homes decrease, which exponentially increases the problem. Because many banks around the world have been lending money and buying into Hedge Funds they eventually feel the crunch when things go wrong. Banks in Australia, Canada, and Europe have been affected by the recent collapse of the sub-prime market.
Authorities, particularly the Central Banks have been attempting to keep the problem under wraps but finally had to concede that it was a big problem:

Injection of money into the tottering system:
"The US Federal Reserve, the European Central Bank, the Central banks of Canada, England, Switzerland, the Bank of Japan and Sweden's Riksbank got together to work out a plan to create money to inject into commercial banks to stave off what could develop into a massive collapse of the world's financial structure.

In keeping with the usual question that is put to Social Creditors we can ask: "Where is the money coming from?" The answer is quite simple: "They create it out of nothing like the commercial banks do." The whole exercise in the debt lending game is for the banks to offload their risks out of the banking system. It has been estimated by the US Congress's Joint Economic Committee that although there have been 1.7 million foreclosures in the first eight months of 2007 it is expected that probably 2 million families will lose their homes over the next two years. That statement is sufficient to indicate that the problem is going to get worse.

It is interesting to note the resort to the idea of a "Change of Heart" creeping into the debate on the problem. C.H. Douglas in his book Social Credit wrote:
"No one, having devoted any consideration to the subject, can fail to feel the exasperation at the exhortation of the confirmed sentimentalist forever clamouring after a 'change of heart'. What effect on his particular difficulties is it going to have, if the miner, abandoning self-interest, goes to his employer and offers to accept half his present wages?
Or the mine-owner, faced with a loss, who raises his men's wages? What effect on the dividends of the shopkeeper already in debt to his bank, and in doubt as to the source from which he shall pay his next week's rent, and meet the difference on his overdraft does it have, if smitten with the sudden desire to apply the golden rule to business, he sells his goods at half their cost to him, because he knows his clientele, who are coal miners, cannot afford more?" Source: http//www.ecn.net.au/.

Back to Sharia Law:
Loretta Napoleani thinks we should look at Islamic finance. And the reason being, she believes it to be "the sole force to challenge rogue economics." Why? "Because it has a built-in code of ethics which we do not have anymore in western finance and this code of ethics comes from the Sharia law…"
The Sharia code of ethics "is very similar to the code of ethics of the classic British economist Adam Smith..For example, money should not produce money. Money should be invested in the real economy and through the growth of the real economy, produce money."
(She is wrong in her terminology here. Producers do not 'produce' money. They produce goods, and when sold, get money from somebody else. It is the Banks that 'make' money - out of nothing!...ed)

Well the good lady is right about one thing that is certain - if I have understood her correctly. She said: "The sub-prime crisis, it is created by an instrument which is based upon lending money that creates money."
But then, the League of Rights has been saying that for the last sixty years! The instrument in question is the power of banks to create money out of nothing, claim it as their own for which they demand repayment, plus with added interest and other charges.

A very special feature now on the website is the Video series "Social Dynamics" which can be downloaded. www.alor.org


Welcome to the Union of Soviet Socialist Australia:
To the Editor, Herald Sun 15/5/08:
Women who stay home to look after their children are pointedly denied the advantages of their working counterpart. The Government wants to encourage mothers to participate in the work force. Why? Latchkey children miss out on comfort, cuddles, routine, Mum's day-time cooking, her voice, teaching by example and warmth. I would have given anything to have been a stay-at-home Mum. Doesn't the Government care that the future citizenry, once in their teens and twenties, let out their frustrations with graffiti, drinking, drugs and irresponsible driving? Not only should the State exist for the individual rather than the other way around, but government, by ignoring qualitative care by mothers for their own, are being cent-wise, dollar-foolish.

- - -Valerie F. Budge, Ferny Creek Vic.

© Published by the Australian League of Rights, P.O. Box 27 Happy Valley, SA 5159