7 November 2018 Vol. 20 No. 45 www.cecaust.com.au $10 (incl. GST)

Jesse Colombo, the American financial advisor who coined

the term “everything bubble” and had warned of a crash before

the 2008 global financial crisis (GFC), is now alerting

people that today’s even bigger bubble is about to burst. From

the US stock market bubble, the housing market, corporate

debt, leveraged loans, auto loans and energy junk bonds, to

emerging-market currency crises, derivatives and hyper-inflated

debt, the everything bubble is a truly worldwide phenomenon,

which is outside of the control of any central bank

or government. Unprecedented collusion between the world’s

central banks to save the system, exposed by former investment

showed various gauges, ratios and measures indicating similar

warning signals as prior to previous major crises in a You-

Tube video, “Why the stock market is heading for disaster”.

over US Federal Reserve rate rises, given that “the

markets have fallen out of bed”, and warned that regardless

of what the Fed does, such extraneous fiddling is “the only

game they know how to play”.

Yale economics professor Robert Shiller, co-creator of leading

house price index, the Case-Shiller Index, told Yahoo Finance

on 4 November that momentum in the US housing market

is slowing: “It reminds me of 2006”. “By the way, we’re

overdue for another recession”, he said, suggesting a housing

downturn could spark it.

Long-time market “bull” Ralph Acampora, known as the

“godfather” of chart analysis, is warning the US stock market

is “much, much worse” than most people think. He cited

the downturn of so-called FANG stocks—Facebook, Amazon,

Netflix and Google—as a sign the worm has turned,

saying the market reminds him of 1987.

One consequence of US attempts to boost the economy

with tax cuts is that this year share buybacks will exceed the

capital expenditure of businesses for the first time since 2007.

Goldman Sachs estimates over US$1 trillion will be spent by

companies buying their own shares, while capital expenditure

has also increased. But any optimism about earnings is

already built into stock prices, observed market guru Peter Schiff.

Following dramatic global stock market crashes in October,

Schiff told Fox Business that “the market is going to collapse”

as a result of the last Fed rate rise: “They just haven’t

figured this out yet, we have a gigantic bubble.”

Any number of triggers could blow this cluster of bubbles.

It could be the Italian crisis, where if one ratings agency

downgrades government bonds to junk, investment banks

across the world will be forced to sell all holdings. It could

be the detonation of the Australian housing bubble, which is

overdue. According to news.com.au on 23 October, nearly

1 million interest-only mortgages begin resetting to interest

plus principal in January, costing households an average extra

$400 per month they can’t afford. Morgan Stanley’s risk

indicator betrays that of major advanced countries, Australia

“leads the world in dangerous debt”; a massive wealth devaluation

is coming. Graham Cooke of finder.com.au commented,

“There are a lot of perfect storms brewing in the housing

market at the moment.”

Treasury boss Ken Henry expects a US recession “shortly”,

which would have a big impact on Australia. Our government

may have to take “emergency action pretty much

overnight” he warned, saying, “You probably cannot over-war-game

this stuff.”

The CEC’s Five-Point Program, available at cecaust.com.

au/5pointprogram, does not require a dry run. All the measures

are historically tried and tested and must be implemented

principal Martin North reminded viewers on his and economist

John Adams’ latest show on Australia’s “bail-in” law, in

the throes of a crisis there is no time for debate—vital decisions

must be made now!

Margin debt (borrowing to invest) spikes just before a crash. Current US

stock market margin debt is at record highs.

federally registered political party Citizens Electoral Council of

Australia.

Website: www.cecaust.com.au Email: cec@cecaust.com.au

Tel: 03 9354 0544 Fax: 03 9354 0166

Editor: Elisa Barwick Email: elisa@cecaust.com.au

Published & printed by:

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The party is over—prepare emergency program! 1

Reappointment of APRA boss perverts the course of justice 3

NAB perfidy in rural lending: the Priestley case 4

ABC Four Corners reveals glimpse of Windsor Inc. crimes 5

Morrison re-commits Australia to US military hegemony 6

Sydney academic shreds anti-China scaremongering 7

Chiang Mai Initiative expanded to tackle financial crisis 8

The Fed stokes ‘Bancomania’ 9

Bancomania produces ‘fog wealth’ 9

New revelations of British entrapment of Trump 10

Don’t bank on the Royal Commission! 11

Victoria defies intelligence establishment by joining BRI 12

9 (Fri) Laidley, QLD—CEC literature stand outside post office in the main street, 8:30 AM–1:00 PM

9-10 (Fri-Sat) Albany, WA—Albany Ag Show, CEC stand

16 (Fri) Gold Coast, QLD—Table site 10:00 AM–3:00 PM

17 (Sat) Collie, WA—Collie Ag Show, CEC stand

21 (Wed) Brisbane, QLD—National Agriculture Day, Raddacliffe Place. Distribute 5-Point Plan including debt moratorium,

from 8:00 AM

22 (Thu) Brisbane, QLD—Deployment 123 Eagle St under the big fig tree.10:00 AM–2:00 PM

26-30 (M-F) Melbourne—Royal Commission resumes and CEC teams deployed. Call 1800 636 432 to volunteer to activate.

1 (Sat) Melbourne, VIC—Victorian state seminar, Mercure North Melbourne, “Hotham Room”, registration $50,

9:00 AM–5:00 PM

8 (Sat) Manjimup, WA—Cherry Festival, CEC stand

* Boonah & beyond, monthly with Ron 0490 340 706

* Brisbane weekly, call Jan 0427 508 008

* Caboolture area call Bruce 0418 799 434

* Canberra, weekly, call Mary 0412 944 345

* Cleveland/Wynnum, call Graeme 0429 050 055

* Ipswich fortnightly with Des 0403 023 818

* Lyne electorate, weekly, call Graeme Muldoon 02 6553 4330

* Melbourne and regions call CEC office 03 9354 0544

* Nightcliff, weekly, call Trudy 0414 677 968

* Parap Market Saturday weekly 8:00 AM–2:00 PM

* Perth suburbs weekly, call Jean 0409 954 320 or Barry 0412 443 893

* Sydney, weekly, call Ann 0428 686 297 for when and where

* Toowoomba area call Jim 0418 728 240

7 Nov.—Prime Minister Scott Morrison and Treasurer Josh Frydenberg have delivered a message to Commissioner Kenneth Hayne that bank regulator APRA and its chairman Wayne Byres are untouchable. Their rush to reappoint Byres to another five-year term as boss of the Australian Prudential Regulation Authority, eight months before his current term expires, comes just weeks before he is scheduled to be grilled by the Financial Services Royal Commission for APRA’s failure to police the banks. Since 2014 Byres oversaw and ignored the banks’ crimes that led to the royal commission, but this rushed reappointment tells Commissioner Hayne that the government has no intention of holding APRA to account, whatever he recommends. This is a corrupt act and an attempt to pervert the course of justice, which should make Commissioner Hayne and the Australian people very angry.

Experienced banking analyst Martin North of Digital Finance Analytics and former Liberal Party economics advisor John Adams slammed Byres’ reappointment in a 6 November video post. Adams questioned whether the move was demanded by the international financial cabal centred in the Bank for International Settlements (BIS), where Byres worked before taking over APRA. The BIS is the global authority dictating “bailin” laws by which ordinary bank deposits can be stolen to prop up failing banks, which the government rushed through Parliament in February for Wayne Byres and APRA to use in a crisis. Watch “Adams/North: Shock Announcement Collapses Confidence And Trust In Australia’s Financial System”.

Absolute rubbish! APRA has defined financial stability as the four too-big-to-fail banks that control 80 per cent of the financial system making massive profits. It is time to recognise, in light of the revelations of the royal commission, that those profits have not been real! The banks’ profits have not come from legitimate activity, but have been fuelled by massive fraud in mortgage lending, and industrial-scale gouging of their customers. Bank analysts, commentators and the government have all warned that cracking down on the banks would reduce credit and hurt the economy, but the real fear is that it would prove that far from being stable, the banks are a house of cards. This has implications for their credit rating and their ability to borrow internationally, which in turn raises the prospect of higher interest rates that will have a massive knock-on effect on the housing bubble and economy.

Incredibly, therefore, we are witnessing the government’s early moves to ignore the royal commission and continue with business as usual, and Wayne Byres represents business as usual. Are they afraid that if the banks can’t defraud and gouge their customers, they might go under?

For years APRA and Byres, and his predecessor John Laker, consciously ignored the banks’ crimes and misconduct that led to the royal commission, and even incentivised some of the misconduct, because those practices made the banks more profitable, and supposedly more stable!

APRA’s lower risk-weighting for mortgages made mortgage loans far more profitable than other loans, and incentivised the mortgage fraud that banks resorted to in order to lend money to people who couldn’t afford it. APRA ignored an internal warning in 2007 that lower lending standards could lead to a crash, and when Byres eventually initiated an inquiry into mortgage fraud in 2017, he kept it secret and even misled the Senate to do so, to protect the banks.

APRA ignored internal warnings that bank-owned retail superannuation funds were massively overcharging for financial services provided by in-house divisions of the same bank, allowing them to extract billions of dollars a year in hidden fees and charges.

APRA ignored CBA’s money laundering for drug syndicates and terrorists, which it would have known about under its 2007 Memorandum of Understanding with the Australian Transaction Reports and Analysis Centre (AUSTRAC) that provides for the “full and timely exchange of information”. When the money laundering scandal prompted Wayne Byres to appoint an inquiry into CBA’s culture in 2017, he stacked it with former APRA chairman John Laker, and two former investment bankers, Graeme Samuel and Jillian Broadbent, who slapped CBA with a wet lettuce.

The only way there will be genuine reform of Australia’s banking system is if the Australian people demand it. Contact your Member of Parliament today to demand an explanation for this corrupt decision, and their commitment that they will support the overhaul of the banking system, beginning with Bob Katter’s Banking System Reform (Separation of Banks Bill) 2018 for a full Glass-Steagall separation of deposit-taking banks from all other financial activities.

National Australia Bank

evicted siblings Claire and

Chris Priestley from their

Northern New South Wales

beef, wheat and cotton farm

in 2013. NAB had gone from

being very supportive of the

Priestleys’ enterprise, to determined

to ruin any chance of

its success. Their farm, which

had been in the family since

1969, ended up in the hands

of one of Australia’s biggest

and most politically-connected

agricultural landholders. It

is a case study in the power

banks have to make and break

family farmers, on criteria that has nothing to do with farming.

And it is a glimpse into possible, although unproven, financial

corruption extending down to regional bank branches.

In 2004 NAB made a significant loan to Claire and Chris to

buy their father’s 7,100 hectare property near Walgett, Northern

NSW, close to the Namoi and Barwon rivers. This was in

the middle of the massive 10-year drought on the East Coast,

when the property was unproductive, indicating the bank’s

confidence in their future prospects. Confirming that confidence,

in 2006 with no signs of the drought breaking, NAB

loaned them more money to buy the neighbouring 1,700 hectare property.

The drought finally broke in December 2009. In the

meantime, NAB had been able to recoup money on their

loans to the Priestleys from the NSW government’s drought

relief program. In a comprehensive 16 January 2013 report

on the Priestley case for bankvictims.com.au, Associate Professor

Evan Jones described the $470,000 that NAB received

in drought relief payments from their loans to the Priestleys

as a “bonanza” and noted it was “a widespread practice by

the banks in extracting ready revenue from the NSW and

Queensland governments via their drought relief authorities

on mortgaged land then unproductive”.

At this point the story should end. The Priestleys had benefited

from NAB’s loans and were finally able to put their land

to work, and NAB, which had already received impressive

revenue on the Priestleys’ loan via drought relief payments,

would be able to expect repayments from the farm’s production.

That didn’t happen.

NAB refused to finance a cotton crop, even though cotton

prices were at a 10-year high; the bank recommended Claire

and Chris sell the properties. Local and regional branch staff refused

to come and inspect the properties, to see the lush grass

and conditions ripe for production. The regional manager got

cranky when the Priestleys emailed him photos instead. The

bank defaulted their loans, and imposed crushing default and

penalty interest rates from April 2010 onwards. They were put

into farm debt mediation, which is a process that the banks

can manipulate, and which had the effect of legitimising the

penalty interest rates and the bank’s default timetable.

Evans reported that Claire and Chris persisted with farming,

only to suffer bad luck: “In the meantime, the Priestleys

went ahead with a wheat crop, without the bank’s assistance.

The bountiful crop was manna from heaven. Alas, what the

gods giveth, the gods also taketh away. The rains came and

persisted, floods ensued and what crop was left was partially

lost due to transportation difficulties (the NAB being non-cooperative

in payment of contractors). Millions of dollars literally

down the drain. The Mediation ‘agreement’ required the

repayment of $1 million by 31 January 2011. The natural disaster-

driven crop failure ensured that the Priestleys’ default was further entrenched.”

NAB’s hardball tactics forced Claire and Chris to attend

court hearings in Sydney which the bank refused to reschedule

even when their father had a stroke in February 2012.

While they were away in Sydney for their second futile hearing

in a month, their father passed away.

At a December 2010 court hearing, an expert testified that

if NAB had financed the Priestleys 2010 cotton crop, they

would have had a major turnaround in their financial position:

“The net operational surpluses that could have been realised

if operating capital had been forthcoming to the River

Station Partnership from 2009 until the present time is in the

order of $3.67 million for grain enterprises and $5.42 million

for the irrigated cotton enterprise. In total these equate to a figure

of $9.09 million [with supplementary income obtainable

from grazing]. ... This is not an insignificant amount and one

that … would have been sufficient for the River Station Partnership

to meet its obligations with financiers and other creditors,

pay down debt levels and allow it to progress to a more

secure basis of operating into the future with greater equity.”

The question is, what explains NAB’s actions in this case?

When they were finally evicted in 2013, with a $1 million

debt still hanging over their heads and still being charged penalty

interest rates for another nine months, Claire and Chris’s

property was purchased by Peter and Jane Harris of P&J Harris

and Sons, one of Australia’s biggest landholders. The Harris

family is very well connected to the ruling National and Liberal

parties. In November 2016, ABC Lateline exposed that

the Harris business was brazenly flouting NSW’s draconian

land clearing laws, which in the Harrises’ case NSW’s Liberal

government refused to enforce, raising questions about their

political connections. However the Harris family is now facing

criminal charges for water theft.

to foreclose on us and treat us like criminals and sell the land

to the Harris business which is now on criminal charges.” The

Priestleys cannot prove what motivated NAB, but their case,

one of thousands across rural Australia, demonstrates Australia’s

need for a public banking institution that can assist family

farmers through the hard times, and not prey on them in the good.

survive droughts and floods—but they can’t beat the big banks driving them off their land.” Right: Claire (striped

shirt) being evicted from their farm in 2013. Photo: Supplied

A glimpse of the British Monarchy’s actual power was revealed

on 29 October in ABC’s Four Corners “Windsor Inc.”

documentary. While revealing enough to ensure Her Majesty

would not be amused, Four Corners nevertheless ignored

Prince Charles’s arms deals with Saudi Arabia; Crown

sponsorship of terrorism; the House of Windsor’s control of

Britain’s intelligence agencies; and the murder of Princess

Diana, judged an “unlawful killing” by the jury of the official Inquest.

“For the past two weeks, Australia has felt the full force

of a Royal charm offensive”, said presenter Sarah Ferguson

to introduce the documentary. “Tonight we explore how

the House of Windsor has rebuilt its reputation and reinvented

its brand.” In particular, Four Corners notes the Way

Ahead Group (WAG) which was designed to “salvage the

Monarchy’s reputation” after a series of family scandals became

public. The WAG, established by the Queen, included

senior members of the Royal Family. The Queen ordered

her children to sort out their private lives and WAG meetings

started in November 1992 just prior to Prince Charles

and Princess Diana’s official 9 December announcement of their separation.

On Princess Diana’s death, Four Corners ran with the

usual media focus on the paparazzi: “The death of Princess

Diana as she was chased by paparazzi in a Paris tunnel was

a turning point for the House of Windsor.” But as the late

forensic investigator John Morgan documented in ten comprehensive

has zero credibility. Morgan concluded the Crown ordered

the 1997 assassination, and MI6 carried out the order. Conspicuously,

Prince Charles is the Royal Patron of the Intelligence Services.

out Prince Philip as central to the Windsors’ campaign

against Diana and Dodi. “Prince Philip, in particular”, reporter

Andrew Golden wrote, “has made no secret as to

how he feels about his daughter-in-law’s latest man, referring

to Dodi as an ‘oily bed hopper’.” But the Queen herself

next week, the Queen will preside over a meeting of

The Way Ahead Group where the Windsors sit down with

of Harrods and its royal warrants is also expected to be

discussed. And the Fayeds can expect little sympathy from Philip”. (Emphasis added.)

the film the British won’t get to see”, Allen writes: “Strangest

of all was the media coverage of the verdict. Inquest

evidence showed conclusively that the crash was caused

by an unidentified white Fiat Uno and several unidentified

motorcycles, vehicles that were certainly not paparazzi,

because uncontested police evidence confirmed that the

paparazzi were nowhere near the tunnel at the time of the

crash. The jury understood this, bringing in a verdict of

“unlawful killing” by unidentified “following vehicles”; yet

within seconds, the BBC was misreporting that the jury had

blamed the paparazzi, and the rest of the media meekly followed

suit. Which is why—three years on—barely anyone

realises what the jury’s troubling verdict really was.”

Four Corners does give away a little. Patrick Jephson,

former royal private secretary, says: “What we see and read

about the Royal Family is pretty much controlled by them.

And they do that by heavy investment in digital media,

through a very sophisticated series of trades and favours

with their favourite news outlets.” ABC reporter Louise Milligan

also notes Royal threats: “We’ve spoken to Royal correspondents

who say they’ve received an extraordinary dressing

down from Royal spin doctors for seemingly innocuous

stories, and they get threatening legal letters from the

Queen’s London law firm, Harbottle and Lewis.” Author of

are probably the Praetorian Guard of the Royal Family. The

Royal Family is an institution which has very little accessibility

… ultimately they are an opaque body of people.”

The Four Corners coverage of Prince Charles’s personal

Duchy of Cornwall exposed the anachronistic and undemocratic

essence of the House of Windsor. Established in the

14th century to fund future Kings, the Duchy of Cornwall

controls massive land holdings in Britain. House of Lords

member Tony Berkeley said the Duchy is “very anachronistic

and totally unsuitable for the 21st century. It should have

changed a hundred years ago or so”. The Duchy doesn’t pay

the 19 per cent Corporations Tax. Instead Prince Charles

choses to pay only income tax, at a rate nominated by him.

Additionally, “the Crown Estate owns vast swathes of land

around the United Kingdom”, reported Milligan. “But one

of the most surprising things that it owns, dating back centuries,

is the entire British seabed, stretching out 12 nautical

miles from the coast.” One quarter of offshore wind farm

profit goes to the Palace through the Sovereign Grant. Such

profits flowing to the Royals would not be possible without

taxpayer subsidies and legislation to enforce so-called

“renewable energy”. When Prince Charles lectures governments

and business they must act on climate change, he

doesn’t reveal that he personally profits from public spending on renewable energy.

the inescapable reality is that MI5 and MI6 swear allegiance

to the Crown and report to the Crown and its Privy

Council. But this is the same Crown which, in the person

of Prince Charles, supervised the construction of the Saudi-

funded mosques that spread Wahhabism in the UK from

the 1980s on, bringing into being the terrorist infrastructure

within the country, while Charles is also the Patron of MI5,

MI6 and GCHQ, which have blocked serious attempts to investigate

that network. All of this was just a bit hot for Four Corners’ otherwise useful report.

Charles and Camilla with Saudi Prince Bandar bin Sultan, who is implicated

in the 9/11 terrorist attack and has been a central figure in arms trading,

which Princess Diana campaigned against. Photo: AFP/Fahd Shadeed

Recent media reports would have it that Prime Minister

Scott Morrison is presiding over a “thaw” in Australia-

China relations, as ministerial visits to Beijing resume after

an eighteen-month hiatus brought on by the needless

antagonism of his predecessors. Morrison’s first speech

on foreign policy, however, confirms that nothing of substance

has changed: Canberra remains committed to everdeepening

military entanglement with the United States,

and is actively encouraging the expansion of US forces

and arms manufacturers in Australia, and the broader Asia-Pacific region.

Speaking 1 November at a meeting of the Asia Society

Australia in Sydney, Morrison opened his discourse with

the bizarre statement that “Our foreign policy defines what

we believe about the world and our place in it.” It might

be thought that he meant it the other way around, but his

further remarks suggest that in this, at least, he can be taken

at his word, given he then defended Australia’s various

pointless, counterproductive and outright evil foreign

military adventures as the necessary result of our having

“sought to be a citizen that plays its part in the world”.

“This has been particularly true in the Middle East”, he

said, “from the Great War a century ago [read, Gallipoli]

to Iraq and Afghanistan more recently. We have turned

up, we have played our part, we have done our share and

we have paid the price through great sacrifices. We have

done this because we believe it is right.” Presumably this

means Morrison shares then-US Secretary of State Madeleine

Albright’s 1996 assessment that the needless deaths

of half a million Iraqi children just from the first Gulf War

and subsequent sanctions were “worth it”. Be that as it

may, he certainly must believe that the 2003 invasion of

Iraq on false pretences and in violation of international

law—which to date has killed at least another 204,885 civilians,

caused a mass exodus of refugees, and led to the rise of ISIS—was “right”.

It is unsurprising therefore that Morrison did not once

refer to international law when elaborating his government’s

foreign policy, instead peppering his speech with

references to the “values”, “beliefs” and agreed “rules” that

serve our perceived interests—which must be enforced by

US military might, since Australia lacks the ability to do

so. The United States, he said, “remains vital to the sort of

[Asia-Pacific, a.k.a. ‘Indo-Pacific’] region we want to see.

… A strong America—centrally engaged in the affairs of

our region—is critical to Australia’s national interests.” He

hastened to add, however, that “Australia does not seek a

free ride when it comes to regional security and prosperity.

We support the strongest possible US political, security

and economic engagement in the Indo-Pacific in tangible

ways, including by lifting our defence spending” to

2 per cent of GDP, just as though Australia were a member

of NATO (which to all intents and purposes we are).

Per the so-called Defence Industry Capability Plan, published

this May, in the next decade Australia will spend

$200 billion on military hardware almost wholly sourced

from American and European “global prime” contractors,

entrenching Australia’s reliance on foreign suppliers

1. “‘Sovereign’ defence industry plan entrenches Australia’s colonial

Plan itself, is to support “a

larger, heavier, and more

complex force operating

at a higher tempo … [and]

the US Force Posture Initiatives

in Northern Australia”,

which make it a

forward base for war with China.

Morrison labelled China

“the country that is

most changing the balance of power, sometimes in ways

that challenge important US interests”—and therefore, according

to him, our own. He offered platitudes that the

US-China relationship must not “become defined by confrontation”,

and that “there must remain room for dialogue

and cooperation”; but his already stated commitment to

the “strongest possible” US military engagement in the region

demands that the concessions all be on China’s part.

Moreover Morrison went on to invoke the 2016 Defence

White Paper, which—as Beijing is surely aware—explicitly

subordinates Australian defence policy to that of the

USA, and dubs China the greatest threat to the “rules-based

global order” of globalised Anglo-American neoliberalism

White Paper was written before Donald Trump’s shock victory

over war-hawk Hillary Clinton in the November 2016

presidential election. But despite a promising start in which

he developed a good professional relationship with China’s

President Xi Jinping, Trump has continued the US Navy’s

provocative “freedom of navigation operations” in the

South China Sea, and has added a raft of punitive tariffs

and trade sanctions. This suggests the success, thus far, of

the Anglo-American establishment’s plan, laid out in the

Australian government’s November 2017 Foreign Policy

Yet for all this, Morrison acknowledged that China is

“vitally important” to Australia’s economy (ironically, because

the neoliberal policies of Morrison and his ilk have

destroyed Australia’s industrial base), and announced that

he will meet with Chinese leaders to discuss “deepening

our Comprehensive Strategic Partnership” later this month.

How long this cognitive dissonance on China can last is

anyone’s guess; but if the Anglo-American-Australian war

party gets its wish in the meantime, we will never find out.

If we are stupid enough to start a war with China, the US

military installations we host—especially Pine Gap near

Alice Springs, which provides targeting data for America’s

intercontinental ballistic missiles and global ballistic missile

defence system—will make Australia a target for Chinese

ICBMs in turn. As the late former PM Malcolm Fraser

2. “‘Black-is-White’ Paper singles out Russia, China as threats to ‘global

3. “Foreign Policy White Paper: Australia begs Trump to stick with

PM Morrison speaking at the Asia

Society. Photo: Screenshot

Have you been spooked by constant negative media

coverage into a reflexive fear and distrust of China, or

do you find yourself arguing with friends or family who

have? If so, Professor James Laurenceson, deputy director

of the Australia-China Relations Institute (ACRI) at

the University of Technology Sydney, has provided you

an invaluable resource. In a research paper entitled “Do

the claims stack up? Australia talks China”, published in

late October, Prof. Laurenceson dissects the key claims

made against China by media, pundits and politicians

over the past several years, and shows that all have been

either blown drastically out of proportion or, more often,

are altogether unfounded. The report is available to

download at www.australiachinarelations.org/content/

do-claims-stack-australia-talks-china. Laurenceson has

his own misgivings about China, as is evident in his report;

but if anything this lends more credibility to his positive

findings. The most important are summarised below.

investigation in June 2017, and amplified by the cashfor-

comments scandal that brought down Labor Senator

Sam Dastyari six months later, it has become generally

accepted that, as Prof. Rory Medcalf, director of the Australian

National University’s National Security College put

it, “[Australian] political parties have become dependent

on foreign funding”, with a “persistent increase” in Chinese

donations since 2006-07, “spiking in each federal

election from 2006 to 2017”. Laurenceson shows that in

cycles have ranged between 0.03 per cent and 6.13 per

cent of total donations, of which Chinese donations in

most years comprised only a small fraction. Moreover the

two most prominent “Chinese billionaire” donors could

not fairly be called Chinese at all. One, Dr Chau Chak

Wing, had been an Australian citizen for 20 years; the other,

Huang Xiangmo, retains Chinese citizenship but has

been a permanent resident of Australia for many years—

a residency the government has recently extended. In answer

to allegations of buying influence, Mr Huang has

pointed out that both major parties approached him for

donations, not the other way around. “This has not been disputed”, Laurenceson observes.

Various pundits have insisted that a large proportion of

Australians of Chinese descent are loyal to Beijing rather

than Australia. Notably, former Greens candidate turned

academic Clive Hamilton, author of the China-bashing

or up to 210,400; while former deputy defence secretary

and unreconstructed Cold Warrior Paul Dibb claimed

that “the last 10-15 years [intake] of highly indoctrinated

young Chinese” into Australia—about 315,600 of them,

by Laurenceson’s count—“are going to create a problem”.

Laurenceson wrote: “When Clive Hamilton was challenged

about the estimates he cited … he responded that

he had asked two friends to ‘take an educated guess’

and, in his opinion, ‘the guesses seemed plausible’.”

Dibb’s evidence, meanwhile, turned out to comprise two

items: an open letter on the South China Sea issue from

an apparently fictitious “community group” called the

Federation of Chinese Associations of the Australian Capital

Territory, which has no known membership, no website

in either Chinese or English, and has made no other

representations of any kind; and “a musical concert [in

honour of People’s Republic of China founder Mao Zedong]

that never materialised”—due to the objections of other Chinese Australians!

Beginning August 2017, media began reporting that

Chinese students had elicited “forced apologies” from

their professors for perceived slights against the Chinese

Communist Party, and that academics were “walking on

eggshells” for fear of giving further offence. “The evidence

base reveals a mere four incidents”, wrote Laurenceson.

“Meanwhile, in 2017 there were 133,891 Chinese students

at more than 30 Australian universities.” None of

the four (minor) incidents that did occur involved forced

apologies, and “In not a single case was freedom of expression

compromised or classroom discussion stifled.

There is, however, evidence to support the proposition

that the freedom of expression under threat is not that

of Australian academics, but rather that of Chinese students

as they are labelled as ‘brainwashed’ or identified as carriers of ‘racial chauvinism’.”

Vanuatu about building a permanent military presence

in the South Pacific in a globally significant move that

could see the rising superpower sail warships on Australia’s

doorstep.” Every major media outlet picked up

the story and ran with it, no questions asked. Defence

pundits piled on in droves. But it never happened. Laurenceson:

“Pacific island experts all confirmed Vanuatu

was a committed member of the non-aligned movement.

Nowhere was Chinese or Vanuatuan interests in provoking

this strategic competition explained. Vanuatuan officials

with detailed knowledge of the relevant matters

swore they’d never even heard hints of talk of a Chinese

military base.” Even PM Malcolm Turnbull acknowledged that this was the case.

ABC News reported in October 2015 that “the highest

levels of the Australian Defence Force (ADF)” had expressed

concerns over the “security implications” of the

99-year lease of the Port of Darwin to Chinese company

Landbridge. Australian Strategic Policy Institute director

and former deputy defence secretary Peter Jennings and

ANU visiting fellow Geoff Wade (a career anti-China propagandist)

claimed that Landbridge was controlled by

the Chinese government, which would use its access to

the port to monitor Australian and US ship movements,

and could even take over the port and use it as a base

of operations for its navy. The heads of the Defence Department,

Australian Security Intelligence Organisation

and the Australian Defence Force all stated before Parliament

that they had approved the lease arrangement.

Then-Defence Secretary Dennis Richardson dismissed

Jennings’ spying claim as “absurd”, and Wade’s notion

that the Chinese Navy could gain access to the port as

“alarmist nonsense … without foundation in any way”.

Among the agreements signed

by the leaders of China and Japan

during Japanese Prime Minister

Shinzo Abe’s visit to Beijing on

25-27 October was a US$30 billion

currency swap arrangement.

The agreement, made at the first

formal Sino-Japanese summit in

seven years, re-launches bilateral

cooperation to defend Asian

economies in the event of a new financial crisis. China

and Japan were key participants in the so-called Chiang

Mai Initiative, a series of bilateral currency swap agreements

initiated in May 2000 following the 1997-98 Asian

financial crisis. The agreement between China and Japan

lapsed, however, in September 2013 as tensions between

the two nations, mainly over territorial disputes, reached

a high point. The renewed cooperation is a sign that nations

are willing to rise above their differences and work

together to face the perilous economic conditions ahead.

Japan and China, with their large US dollar reserves, underpinned

the original Chiang Mai Initiative (CMI), which

had been preceded by the 1997 Association of Southeast

Asian Nations (ASEAN) Swap Arrangement between five

ASEAN nations. The CMI included all ASEAN countries—

Indonesia, Thailand, Singapore, Malaysia, the Philippines,

Vietnam, Myanmar, Cambodia, Brunei and Laos—plus

China, Japan and South Korea. The group effectively created

a pool of foreign exchange reserves upon which any

member nation facing currency destabilisation or liquidity

problems could draw. Borrowers from the fund would receive

US dollars loaned at a fixed interest rate in exchange

for local currency; after three months the swap could either

be renewed or the loan paid back.

In 2010 the CMI was formalised as a multilateral contractual

agreement and was strengthened thereafter as a

functional financial safety net which was tested and is operationally

ready. A crisis prevention facility was established in 2014.

The original aim was to prevent a recurrence of the

Asian financial crisis, or in the event of a crisis to provide

a mechanism for Asian nations to deal with it regionally

rather than relying on the International Monetary Fund

(IMF) and other global organisations. As Malaysian prime

minister during the Asian crisis Dr Mahathir Mohamad

has fulminated at length, currency speculators set off that

crisis, subverting Asian economies and forcing them into

With two crisis reference points at ten year intervals,

1997-98 and 2007-08, another ten years later Asian nations

are wary of a new financial crisis, combined with a

reversal of currency “carry trades” which were greased by

the cheap credit of “quantitative easing” (QE) pumped out

by the world’s major central banks, including the Bank of

Japan. Carry trades pick up near-zero interest rate credit in

one location and channel it into higher-rate markets elsewhere.

When this goes into reverse the consequences of

tightening credit and loaded debt will be dire. With a sea

of cheap US dollar-denominated debt suddenly becoming

more expensive as QE is wound up and rates are raised,

emerging markets have already been hit hard.

On 26 October Japan and China signed a US$30 billion

currency swap arrangement, in order to strengthen financial

stability and spur economic activity in both nations,

according to the Bank of Japan. The two countries have

been in talks to allow for the exchange of their currencies

between the two central banks since May. The previous

arrangement, as part of the CMI, was worth US$3 billion.

Having established a yuan clearing house in Japan, the

two central banks also signed a memorandum of understanding

(MOU) to share information on the offshore market

for the Chinese currency. Following the 2008 global

financial crisis, the Chinese government had challenged

global dependence upon the US dollar, moving to internationalise

its own currency as a counterweight. Its first preference,

however, was to establish the IMF special drawing

rights (SDRs)—a basket of currencies comprising the US

dollar, the euro, the yuan, the yen and the British pound—as a reserve currency.

Overall, more than 50 MOUs were signed, with both

the Japanese and Chinese leaders pronouncing their intention

to work together more closely for peace and stability

and in the spirit of cooperation rather than competition.

Following Abe’s return to Japan, Indian Prime Minister

Narendra Modi visited Tokyo, and on 29 October the leaders

signed a US$75 billion bilateral currency swap agreement,

to bring greater stability to foreign exchange and

Indian capital markets, according to an Indian statement,

Reuters reported. This significantly expands upon Chiang

Mai arrangements, and in conjunction with the Japan-

China shift, is evidence of an effort to create a new financial

architecture ahead of the oncoming financial crisis.

At the BRICS summit in South Africa on 25-27 July,

progress was made towards denominating trade in national

currencies rather than the US dollar, which is steadily increasing.

Russian Minister of Economics Maxim Oreshkin

has spoken about the need for a “deep integration of the

financial systems of [the BRICS] countries” to make this

work. The plan to expand BRICS with a broader BRICSPlus

circle of nations will enhance the capability to ensure

economic stability if the dollar system crumbles (“BRICS

Pakistan and China also agreed to trade in their own

currencies during new Pakistani PM Imran Khan’s visit to Beijing on 3-4 November.

In October Abe and Xi revived their agreement initiated at Chiang Mai, Thailand in 2000. Right, ASEAN

Plus Three nations. Photos: AFP/Japan pool/Jiji Press; Wikipedia

1 Nov.—It should be no surprise that at its 31 October

(Halloween) meeting, the Federal Reserve decided to

loosen regulations not only for the banks with a US$250

billion net worth, but also for those with assets up to the

US$700 billion level. This decision reflects a phenomenon

called “Bancomania”, a term coined by First Treasury

Secretary Alexander Hamilton back during the speculative

rampages of 1791-92.

Hamilton took aim at the speculators thus: “These extravagant

sallies of speculation do injury to the government

and to the whole system of public credit by disgusting all

sober citizens and giving a wild air to everything. … The

superstructure of credit is now too vast for the foundation.

It must be gradually brought within more reasonable dimensions

or it will tumble.” He added that such “banking

activity” reflected “a spirit of gambling”, and promptly took action to defuse it.

Not since Franklin Roosevelt has the United States had

a President who shared Hamilton’s (and President George

Washington’s) contempt for speculators, and was willing

to do something about it. It was FDR who shepherded

through banking regulations such as Glass-Steagall (which

was specifically aimed at reducing speculative excesses)

and the rules of the Securities and Exchange Commission

(SEC), thereby setting the stage for the “golden age” of US

economic productivity. When the Wall Street banks refused

to invest in the infrastructure, industry, and agriculture

which the country needed, FDR then added a new

source of government-backed credit through the Reconstruction Finance Corporation (RFC).

These historical precedents point to the alternatives

available to the deregulation mania being exhibited by

the Congress and the Fed. One need only rely on the

American System principles exhibited by Hamilton and

FDR to find the means to crush the speculators, before

they bring on a new, more severe financial and economic collapse.

Protagonists of the liberalisation just announced by the

Fed will argue that the new measures will aid the economy

by encouraging expanded investment. That argument defies recent experience.

As JPMorgan Chase CEO Jamie Dimon predicted after

the Trump tax cut passed last December, the increased cash

flow into the corporate sector during 2018 has flowed not

into jobs and capital investment, but into stock buybacks.

The total spending on that form of purely financial speculation

is expected to amount to anywhere between US$800

billion and US$1 trillion dollars for 2018. According to

stock buybacks as the key driver of not only the current

stock market highs, but of the nine-year bull market.

Stock buybacks do absolutely nothing to build the

physical economy of the country; rather they create what

can accurately be described as a bubble. Even worse, under

current circumstances, many corporations are borrowing

money to buy back their own stocks (at higher prices,

as a necessary incentive). It’s the banks who are lending

them that money, as well as “investing” in stock buybacks

themselves. Indeed, former FDIC vice-chairman Thomas

Hoenig excoriated the top four banking behemoths

(JPMorgan Chase, Bank of New York Mellon, Citigroup,

and Morgan Stanley) for spending more than 100 per cent

of their earnings on dividends and buybacks back in August

of 2017. That trend has certainly not changed.

For this reason, FDR’s SEC outlawed such transactions

as stock market manipulation. That prohibition held until

1982, when radical free marketeers succeeded in getting the SEC to allow the practice.

And what about capital investment? According to Goldman

Sachs (CNBC, 17 Sept.), share buybacks will amount

to more than capital expenditures for the year. The last

time this happened was in 2007, the year before the entire

speculative mess came crashing down.

Estimates of the much-touted increase in capital investment

have been varied. The Bureau of Economic Analysis

presents its figures as GDP, a flawed measure for analysing

physical processes. The most sober analysis I’ve

seen came from the chairman of the Atlanta Federal Reserve,

who, in a 26 July Bloomberg article, was reported

to have estimated that the increase would be below 5 per

cent year-on-year. Kiplinger on 25 October estimated an

increase of 7 per cent year-on-year. No one could credibly

characterise this as a “surge”. Numerous analysts note

that the major increase in investment in plant and equipment

has come in the oil and gas industry, as prices rebounded.

The reopening of a number of steel and aluminium

plants in the wake of Trump’s tariffs has improved the

lives of some Americans, especially in small towns, but

does nothing to change the overall picture.

Nothing in what the Federal Reserve just did will encourage

investment to correct the country’s massive infrastructure

deficit, or aging plant and equipment. By reducing

the amount of money that a whole set of major banks

(excepting only the top nine) have to keep on hand, and

the frequency of stress testing, the Fed has simply given

more banks free rein. They will use it to increase their gambling, at the nation’s peril.

King O’Malley, the American

founder of the Commonwealth

Bank, called himself the Alexander

Hamilton of Australia. In a 1939

that Australia needed a national

bank because speculation,

which Hamilton called bancomania,

only produces “fog wealth”:

“Permanent wealth is produced

by the slow process of industry,

combined with skill and the manipulation of

capital. Fog wealth is produced by the rapid process

of placing one piece of paper in the possession of a

bank as a collateral security for two pieces of paper.

Some of the enormous quantity of fog wealth which

is being created will sooner or later collapse. But

with the Commonwealth Bank capable of sustaining

legitimate credits, there can come no panic which

will again destroy the market value of intrinsic values,

ruin debtors, deprive workers of work, and produce general distress.”

K i n g O ’ M a l l ey.

Photo: Wikipedia

On 25 October, George Papadopoulos appeared before

the House Oversight and House Judiciary Committees to deliver

a closed-door account of his role in launching the Russia-

gate probe of Donald Trump. If anyone was at the very

centre of the allegations that candidate Trump colluded with

the Russian government to steal the 2016 presidential election, it was Papadopoulos.

• Papadopoulos briefly worked as a foreign policy advisor

to the Trump presidential campaign beginning in March 2016.

• He allegedly told Australian diplomat Alexander Downer

that the Russians had obtained emails from Hillary Clinton’s

account—months before WikiLeaks made those emails public.

• It was Downer’s account of his London meeting with

Papadopoulos that was cited as the justification for the FBI to

open a probe of Trump-Russia connections on 31 July 2016.

• On 27 January 2017, Papadopoulos was interviewed

by the FBI, a critical step towards the appointment of Robert

Mueller as special counsel, probing Russian interference in the 2016 election.

• On 28 July 2017, Papadopoulos was arrested at Dulles

Airport near Washington and charged with lying to the FBI.

• On 5 October 2017, Papadopoulos reached a plea

agreement with Special Counsel Mueller, requiring his cooperation in the Russiagate probe.

• On 7 October 2018, after one year of “cooperation” with

the Mueller probe, Papadopoulos was sentenced to 14 days

in jail, 200 hours of community service and a US$9,000 fine.

• Almost immediately after sentencing, Papadopoulos appeared

on Fox News and other conservative news outlets to

accuse the FBI and British intelligence of having entrapped

him as part of a premeditated plan to sink the Trump campaign

and later, the Trump presidency. He charged that all the

events which had placed him at the centre of the Russiagate

probe were run by FBI informants, British intelligence agents

and other Western spies, including several Israelis.

The man who allegedly told Papadopoulos that Russia had

possession of Hillary Clinton’s damning emails was a Maltese

professor named Joseph Mifsud, whom the anti-Trump forces

have labelled a Russian spy. The only trouble with that is

that there is no evidence that Mifsud had ties to Russian intelligence

agencies, but there is abundant evidence that he

worked for Western intelligence—most likely British MI6.

Mifsud worked for two obscure training centres of Western

intelligence agents and diplomats: the London Centre for

International Law Practice, and Link Campus in Rome. According

Campus was a site for regular CIA non-classified conferences,

including a conference on international terrorism he attended in 2004.

Mifsud counted among his closest colleagues and friends

Claire Smith, who served for years on the UK Joint Intelligence

Committee, which had oversight over all branches of British intelligence.

When the Russiagate probe became centred on Mifsud’s

April 2016 meeting with Papadopoulos in London, where

he allegedly revealed the Russia-Hillary email tale, a former

foreign and interior minister of Italy, Vincenzo Scotti, quietly

advised Mifsud to disappear. This was soon after Mifsud had

been invited to Washington to consult with the US State Department in February 2017.

Since disappearing from public sight in early 2017, Mifsud

has been represented by a former business associate,

who says he is Mifsud’s attorney, Stephan Roh. Roh and another

Mifsud colleague, Thierry Pastor, co-authored a book

“only one master: the Western Political, Diplomatic and Intelligence

World”. Roh was co-owner of Link Campus, the

Rome training centre where the CIA and other Western intelligence

agencies hold regular conferences.

In a recent interview with Tucker Carlson of Fox News,

Papadopoulos insisted that Mifsud had not been working for

“the Russians”, but operating under the guidance of the FBI.

He cited Mifsud’s attorney Roh as one source of his belief.

Papadopoulos first became an FBI target on 21 March

2016, when the Trump campaign named him as one of its five

foreign policy experts. At the time, Papadopoulos was working

at the London Centre of International Law Practice, part of the

London-Rome nexus of spook-training centres. He had never

met Mifsud until he announced he was leaving London to

return to the USA to work for Trump. Officials from the Centre

invited him to be part of a delegation to Rome before his

return to the USA and he gladly accepted the offer. At Link

Campus, he was introduced to Mifsud, who soon afterwards

came to London to meet Papadopoulos. That is when the purported

conversation took place about the Hillary Clinton’s

emails and alleged Russian plans to disrupt the US elections.

Two weeks after his Mifsud encounter, Papadopoulos was

asked by an Israeli diplomat and his Australian diplomat girlfriend

to have drinks with Alexander Downer, the ex-Australian

high commissioner to the UK. Downer has claimed

that Papadopoulos told him about the Russians having Clinton’s

emails and Downer passed the information to Australian

intelligence, which passed it along to the FBI. Thus began Russiagate.

Several months later, Papadopoulos was invited to London

to meet with another FBI informant and MI6 asset, Stefan

Halper, who had been born an American, but had lived for

decades in England and had taught at Cambridge University.

Halper was formerly the son-in-law of Ray Cline, a top CIA

official. Halper flew Papadopoulos to London and offered him

US$3,000 to prepare a paper on energy investments in the

Mediterranean, and then attempted to entrap Papadopoulos

about his knowledge of Russian operations against the Clinton

campaign. This clumsy attempt failed.

As late as March 2017, in the midst of the FBI probe of

Papadopoulos and his knowledge of supposed Russian interference

in the 2016 US election, Papadopoulos was contacted,

through a mutual Israeli friend, by another shadowy

figure with a history of ties to US intelligence and the FBI:

US-Israeli dual citizen Charles Tawil. In July Tawil asked Papadopoulos

to meet him in Israel, to finalise a contract for research on energy issues. He gave Papadopoulos

US$10,000 in 100-dollar bills. Tawil’s Israeli friend was David

Ha’ivri, an ally of Prime Minister Benjamin Netanyahu.

Papadopoulos had suspicions about Tawil’s money, so

he deposited it with his attorney in Greece before returning

to the United States. When he landed at Dulles Airport

on a flight from Munich on 27 July 2017, he was arrested upon exiting the plane.

Was the FBI hoping to catch Papadopoulos bringing

US$10,000 in cash into the United States without declaring

it at customs? Papadopoulos believes this was the case.

When he appeared before the House committees to tell his

story, he asked for a determination of whether the US$10,000

consisted of marked bills and had originated with the FBI.

A 2006 State Department cable published by WikiLeaks

identified Charles Tawil as a “protected” informant, providing

information on South African government activities.

Why does the bizarre saga of George Papadopoulos

matter? The brief Downer-Papadopoulos encounter at a

London wine bar was the alleged basis for launching the

entire FBI/Mueller Russiagate probe. If there had been no

alert to the FBI from Downer, the sole basis for the Russiagate

investigation would have been the widely discredited

Christopher Steele “dodgy dossier”.

George Papadopoulos is convinced he was the target

of a series of FBI/MI6/Israeli sting operations. It

now appears that some Republican members of Congress

are taking his version seriously and are probing

the events he described in his House testimony in late

October. Representatives Mark Meadows, a North Carolina

Republican, and John Ratcliffe, a Texas Republican,

both heard Papadopoulos’ testimony and intend

to dig deeper.

www.cecaust.com.au Vol. 20 No. 45 7 November 2018 Australian Alert Service 11

Glass-Steagall bank separation will be a political decision and can only become law through parliamentary legislation.

Recommendations by the Financial Services Royal Commission for structural change that could stop the banks’ vertical integration practices does not automatically guarantee parliament will legislate for it. The government’s reappointment of APRA Chairman Wayne Byres for another five year term, before he testifies at the royal commission hearings in Sydney 19-23 November, and eight months before his term expires, is a clear message to the royal commission (p. 3). From the getgo, neither the government nor APRA wanted a royal commission, which is why the commission’s terms of reference stated that prudential policy, overseen by APRA, was off-limits.

Every week, evidence mounts that depositor’s funds are on the line if bail-in is triggered ???. In a series of videos discussing bail-in by economist, John Adams and principal of Digital Finance Analytics, Martin North, the path of investigation to get to the truth about bail-in is revealed. These discussions are very important, so watch these videos and forward them to your MP (search for “Walk the world” on YouTube), and in particular the cross-benchers who hold the balance of power in parliament. Ask your bank if your deposits are safe! Adams and North did, and received ambiguous responses—

the bank will be guided by APRA! Take the bank’s response to your MP along with today’s media release which poses the question: is the reappointment of Wayne Byres an attempt to pervert the course of justice?

At a public forum in her local town in support of the State MP Thomas George, NSW supporter Aileen Goldthorpe was hoping to put the question to Barnaby Joyce: what would he do to promote Bob Katter’s bill for Bank Separation? While Barnaby was a no-show, the state MP, the Tenterfield mayor, deputy mayor and other community representatives, as well as an audience of about sixty turned up. Walking to the front of the room in question time, Aileen announced her issue was of a federal nature, not so much state politics. In about five minutes of “uninterrupted silence” she elaborated: first her frustration with Barnaby’s party-line response to her questions about bank bail-in of deposits and the necessity for bank separation, and failure to reveal his position on the CEC’s bill before parliament that would make the banks accountable.

Not one person interrupted, questioned or disagreed with what she had to say. Later, one lady congratulated her for her courage. The only way to defeat lies and complicity is to expose them!

To help gain a better knowledge for organising in Sydney one activist is spending this week working with the field team in Melbourne. Anyone who is keen to organise is welcome to join the team for a day, a week or longer. Fighting for universal truth and solutions requires perseverance and determination.

Organising at the Ipswich Gun Show.

Australia’s second most populous state, Victoria, has

been heavily criticised for signing a Memorandum of Understanding

with China on its world-spanning Belt and

Road Initiative (BRI), with commentators spewing out unfounded

claims about ulterior motives embedded in China’s

“Trojan Horse” project to expand its influence and entrap nations in debt.

Sky News, which sacked Australian TV’s only pro-China

commentator, Ross Cameron on 2 November, has run

wall-to-wall coverage bagging Victorian Premier Daniel

Andrews’ apparent decision not to make the text of the

MOU public, although the Department of Foreign Affairs

and Trade has been provided with a copy.

Victoria for joining the “busted arse club”, claiming

that 33 of the 68 nations which have joined BRI are not regarded

as credit-worthy by major agencies, and that eight

of them are in a state of severe financial risk. As CEC research

director Robert Barwick responded, “that’s precisely

why China wants them to join—so it can help raise their

standard of living through investment in infrastructure”, going

on to point out that Hartcher’s and conservative commentator

Paul Kelly’s comments—who referred to China’s

“strategic agenda to build China’s influence”—are “straight

out of CIA-ASIO talking points”.

Hartcher’s line that we are not allying with a private sector

company or even a Public-Private Project (PPP) here,

but a “one party state”, betrays the real agenda. China is assisting

in building economic development projects which

should have been facilitated by international development

and finance agencies over the last several decades. Instead,

a massive infrastructure deficit has built up, so China is

sharing its method for success—which involves applying

state credit to the task—a policy in fact pioneered by the

young American republic, following its War of Independence,

which became known as the American System of

Political Economy. Using public credit to fund infrastructure,

which the USA developed in defiance of the British

imperial free trade system, is seen to be breaking the rules

of the liberal economic order in which private finance has

dominance over public credit.

The Anglo-American-Australian agenda, to defend the

current “our”-rules-based order, was spelled out clearly

when Australia recently ratified the Trans-Pacific Partnership,

or TPP11. The TPP was always the economic arm of

US President Barack Obama’s British-inspired “Asia Pivot”

Stop nuclear war!”, Oct.-Dec. 2012). The UK has openly

stated its agenda to use Australia, and the TPP, to gain influence

over trade in the Asia-Pacific region. (“HSBC minister

Asian power with the help of former colony Australia in

its biggest foreign policy shift since the Cold War.” In January

2011 Foreign Secretary William Hague told Aussies

that though “our partnership with Australia is one of our

greatest assets in world affairs already”, the UK will further

upgrade the relationship as part of a “decisive change” in

foreign policy towards Asia.

As the TPP was ratified, talk centred around the TPP

consolidating the “rules of the road” for trade. Then-Prime

Minister Malcolm Turnbull admitted in a February address

to the US National Governors’ Association (NGA) that the

TPP is about more than trade; it is a political and strategic

Trans-Pacific Partnership so strongly not just because of the

market access it delivers—which is very beneficial, creates

Turnbull linked the TPP to the US-Australian proposal

for an “Indo-Pacific” infrastructure initiative, which would

also fulfil the task of reinforcing the liberal order. “[W]e

need to get on with the post-war project of shaping an environment

in which the most competitive and rule abiding

companies can succeed”, he said.

One wonders if the arbiters of these “rules of the roads”,

the unwritten standards for project vetting, transparency,

sustainability and finance which China is supposedly

breaching so unceremoniously, will make them publicly

available. And, among other things, will it include the precise

mechanisms by which PPPs—which originated with

Italian fascist leader Benito Mussolini and were perfected

by Macquarie Bank—blatantly rip off the public and profit

investment banks? In Australia, governments routinely hide

the details of their PPP infrastructure deals, using the excuse

that they are “commercial-in-confidence”.

China’s record of development over the last 30 years is

clear: an incredible array of rail projects—20,000 kilometres

of high-speed rail, to be 30,000 km by 2020 (“China’s

highways and bridges; canals and dams galore, including

the Three Gorges Dam which boasts the world’s largest

capacity power station, and the South-to-North Water Diversion

Project to water dry areas (“Moving water: By land

and space programs. Between 2011 and 2013 alone, China

poured as much concrete as the USA did in the entire

20th century; China has built new housing for 80 million

people in the last eight years; built numerous new cities;

and lifted 700-800 million people out of poverty. And that’s

just domestically. (See “China: Great Infrastructure Projects

These results cannot be faked, which is why, in choosing

between working with China economically, or kowtowing

to the Anglo-Americans for security, Victoria has

broken ranks.

An overpass above high-speed rail line, Xiangyang City. Photo: AFP/Li Fuhua