What’s that Governor?


OPPOSITION Leader Brendan Nelson says comments made by Reserve Bank of Australia (RBA) boss Glenn Stevens, defending major banks lifting home loan interest rates above the official cash rate, are borderline “insensitive”. Herald Sun: Brendan Nelson criticises Reserve Bank comments on rate rises

Whether or not Glenn Stevens remarks are ‘insensitive’ or not is entirely missing the point Mr Nelson. The statements are outside of the range of what has traditionally been an institution to regulate ‘independently’ the money supply in Australia. It brings into question recent statements by Rudd to legislate the further independence of the RBA. Nelson’s statement as leader of the opposition is as peculiar as repeated statements by Treasurer Wayne Swan, asking the major banks to show constraint. To hear politicians make emotive statements about banking instead of proactive legislation to claw back de-regulation is quite laughable, unless of course you happen to be an Australian suffering from ‘mortgage stress’.

What we can learn from both Glenn Stevens remarks and the charade of compassion from Wayne Swan, is a form of complicity to aid and abet an industry granted a free licence to wreak financial havoc upon ordinary Australians. We are further learning that the Rudd government has no plans to use standard legislative powers to curb banking powers to protect Australian consumers from predatory activities unleashed in the last 30 years by Coalition and Labor governments. Dont forget it was Paul Keating who contributed major collateral damage as treasurer under Hawke by lifting the ceiling on interest rates on advice/pressure from the Australian Banking Association. Interest rates in Australia are amongst the highest in the world and in the country where the alleged ‘sub prime’ crisis is occuring money is almost free by comparison. Christopher Zinn of Choice media correctly points out that Mr Stevens’ comments:

…didn’t address the failure of banks to explain their decision-making on rates. We need to know what is the quantum of the added costs that the banks are facing — what was the tipping point for NAB to put up their rate? If we knew that, we could remind them to put rates back down again when the situation changes

Well said Mr Zinn, the problem we face is that the Reserve Bank, the Treasurer, the Prime Minister, and the Banks restrict themselves to a limited language of cliches, pre-digested for a dulled down public which has for some time been isolated from basic facts and the truth.

The fact is there is no surprises about banking in Australia or for that matter anywhere else in the world. Howard saw to this back in the seventies when he sowed the seeds of de-regulation, Commonwealth Bank privatisation and the entry of new international players including ABN Amro, Rothschilds, Babcock and Brown…the money masters list goes on – fueling and profiting from the wholesale extraction of mineral, soil and water wealth from this country. For the time being the reins of banking have been set free and its difficult to decipher exactly what the RBA does in relation to the new regulator APRA. The last instalment of the banking changes occured in 2006, when all major banks went on-line with a global ‘risk management’ system, Basel 2, which tracks the customer debt of the major banks globally. The privacy implications for this alone are enormous but when you ask the question why our government has enabled private banking details to cross our national boundaries, without consent, you are getting into the nitty gritty of global banking and what it means to Australians.

The appointment of the RBA board is also contentious and occasionally spills into the papers. The government may refer to the RBA as independent but ask who’s making the appointments and who monitors potential conflicts of interest?: Recent case in point:

On Tuesday, November 29, Wayne Swan, the Shadow Treasurer asked of Costello in the first question of Question Time about an apparent statement that Costello made to Gerard (proposed RBA Board ), namely, “I know there’s an issue with the Tax Office but I don’t have a problem with you on the board”. Costello responded that he had no problem with Gerard, noting that “he brings a great understanding of Australian manufacturing industry to the board”, and that the obligatory declaration of interest was “indeed was signed by Mr Gerard”.

But then it gets a bit messy and we see how bent these RBA appointments can easily become:

Later it was said by Swan in the House of Representatives that Gerard’s company was using “tax havens as tax avoidance schemes to the value of $150 million” and that the declaration of interest mentioned was only in regard to his personal affairs and on asking the Treasurer when he knew this, claimed that him actually knowing the information “would breach the secrecy act”. Later Swan revealed that Gerard “and his corporate vehicles” have been “substantial donors” to the Liberal Party. Costello maintained that the Government “[does] not think that supporting the Liberal Party is a disqualification from holding ministerial office, prime ministerial office, Treasury office or other offices in Australia” Wikinewsflash

As ‘mortgage stress’ tightens across Australia we are likely to see a continuation of the same Swan/Stevens charade. A government that has the power to legislate change but is unlikely to intervene given its active role in finance de-regulation spanning back to the Fraser years. The good cop bad cop sideshow will continue and Treasurer Swan will no doubt offer more ridiculous consumer advice (let your fingers do the talking) instead of taking responsibility to manage banking in Australia, in the interest of people. As for the RBA and its directors they will continue to meet once a month and continue to play the political line but they are very unlikely to give much away about the real drivers controlling interest rates in Australia.

Further Information: 

Who Really Owns the RBA? (Reserve Bank of Australia)

6 Comments on "What’s that Governor?"

  1. Glen Stevens is not boss of the RBA he is just a stooge, as is the whole RBA board, its not the board that is the problem but the very nature of the RBA, everyone things it owned by the Treasury or the Government but its not! The government is a client of the RBA.


    The RBA is not a government department or a quasi-government organization and was not created by the government either, its actually a privately owned enterprise and so the RBA board must do what its owners desire and act in the interests of its shareholders, not its customers. The RBA is owned by the Commonwealth – the Crown, not the Commonwealth of Australia, see http://www.rba.gov.au/FAQ/role.html

    The ‘Australia Act 1986’ http://www.aph.gov.au/Library/handbook/constitution/australia-act.htm, Australia became a lawfully “Sovereign Nation Independent” from England in 1986. So we are Sovereign and independent from the Crown. The owners of the RBA and also the Commonwealth (Queen Elizabeth II inc.) lays in what happened in 1815 when the Royals stocks were bought out by another private bank owned by The Rothschilds (whom back then called the Royals “puppets”) after the defeat of Napoleon. The British & in turn the Commonwealth have never gained control of their market since.

    To assist in the deception, The Government are silent of the root problems caused by the RBA. The RBA uses a taxpayer funded suffix of .rba.gov.au and should be .com.au, its web pages are “© Reserve Bank of Australia. All rights reserved.” and not “© Commonwealth of Australia” The RBA issue the Australian bank notes – our currency – and and control the interest rates – not exactly independent and not exactly immune to corruption of our economy, as such they have a complete monopoly on economic contraction(depressions) and growth, through this “Business cycle” the real money (the interest) is collected by the RBA for its shareholders.

    So when the Government needs money, it issues Commonwealth Government Securities and Bonds and sells them to the RBA who supplies money to the Government and that money is nearly 100% made out of thin air by the RBA, the government pays back the thin air to the RBA with interest (actual value). When a Bank needs money, it buys Government Securities or Bonds on the open market and so $1M of virtual thin air is bought by the Banks which is the basis through the instrument of FRACTIONAL LENDING to create an interest bearing loan of $10M the $9M part of the loan is made out of more thin air. And the whammy – 90% of our inflation is created this way! The thin air money becomes as real as anything when it becomes a deposit in a customers account.

    All the Australian money is supplied from a debt to the RBA and the RBA can flood the market with cash so cheap loans are abundant, then when everyone is over exposed they call in the loans and withhold making more loans causing – depression – the banks call in the customers assets bought with the loans and pay the RBA with real money.

    Only 10% of any loan is real to a Bank and probably 10% of that is real to the Reserve Bank. 99% of the economy is of no real value secured by actual reserves of assets like gold. Also there is a gap in where the RBA profit goes – it doesn’t go to Treasury, check the http://www.rba.gov.au/PublicationsAndResearch/RBAAnnualReports/2007/Pdf/fin_statements.pdf and tell me where the $218 million in operating costs is justified? The Australian treasury gold was sold before gold it started its boom, the IMF was the end recipient of the gold, they are the only bank with substantial actual real reserves!

    Also the COMMONWEALTH OF AUSTRALIA CONSTITUTION ACT – SECT 115″ clearly states: “A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts.” so the Government or a State cannot issue paper or plastic money, requiring someone else to do it, flawed from the beginning. Just about all except the isle of Gurney have Central Banks that are owned and operated this way, the IMF, World Bank and the Trade organizations (GATT etc) are the Global equivalent (head) of the Central Banks model and owns over 70% of the worlds gold reserve. So going to a gold standard as the reserve is not the answer as the same control would be exercised over the gold market!

    Milton Freedman has the solution – Government mints its own currency at no interest to Banks, transitions from the Reserve Bank currency and the Banks hold cash as the reserve rather than a debt. Fractional Lending is outlawed and the rate of money creation is held in lock step with population growth, as thats the only required growth factor in cash creation.

    The Government are a pawn in a straight jacket of global economic deceit.

    Wars only serve to inflate the loans to governments with the only winner in Australia being the RBA and its shareholders and any industry that profits from supplying the consumables of war. Its worth remembering that both sides of a conflict are borrowing from the same “shareholders”, and the winner gets to pay its debts through the reporation process, as the looser has to pay the winners costs.

    So a loser of a war is doubly in debt to the reserve systems “shareholders”, what a great way for the USA et al to get the oil in Iraq for free, the more all invaders rack up the more Iraq loses when victory is declared, a depression will only enable the oil to be greatly devalued enabling much more to be stolen through this method.

  2. Some illuminting research findings Zombinol, your ‘degree’ of knowledge of all this is quite remarkable…whether or not you are a renogade within the ‘rothschilds’ clan is quite a seperate matter from what you reveal. I am interested in the timing of the 1986 Act and its implication vis a vis the ‘republic’ debate and whether this means Australia became an independant franchisee at this point and also what franchisee fee’s are paid back to the crown?

    Prior to 1986 my understanding was that the RBA was a government agency to manage what is ‘fractional lending’ and the key instruments were the exchange of government bonds as you describe. The system as such. though technically illegal if one is to follow the yellow brick road back to kansas…or the US Federal Reserve Act (was it 1907 or 1913). Here, Stat Reserve Deposits (SRDs) and Liquid Reserves Deposits (LRDs), was the benchmark to determine operating solvency of the banks under the fold of the RBA (all except credit co-ops at that point), but since Howard rushed in the changes to RBA in 1997, APRA became the prudential regulator but failed that test with the HIH collapse begging two questions 1/ what APRA does and 2/ what is the actual current net liquidity of the OZ banking sector (bonds, notes, coins, gold, silver)? Next question related to your point above is the registration of the RBA…ie is it regulated under the normal framework here (ASIC) or is it privately listed?

    Given the vested interests I can now relate to Dorothy and Toto’s woeful realisation because yes Milton Friedman and any economist would agree that the right of a sovereign nation is the issuance of currency backed by the state and if that issuance is ‘debt free’ and managed in such a way as to facilitate the trade of real items the notion of ‘inflation’ becomes fiction as does the basis for the existance of the RBA which uses inflation as the basis for its maintenance of high interest rates.

    Now that we have a clearer understanding about the RBA the media commentary from Swan and Stevens is looking to be absolute nonsense…as ABC MediaWatch are keen to pick up their game they can now offer some valuable critique of the media who dont seem to mention at all any of the actual facts or history of banking…but continue to report and support the charade of federal reserve banking in Australia. Note tommorrow night 4corners is set to cover the mortgage stress issue…will be a litmus test again for the ABC and their ability to cover this issue in its total reality.

    Thanks Zombinol for the contribution.

  3. Looks like the RBA instantiated in 1960, with HC “Nugget” Coombs as the first governor.

    Also the path to final US Federal Reserve banking instrument is littered with assassinations and untimely deaths.

    I understand that people die, but I wonder if any of the “deaths in office” and resignations at the RBA are associated with proposed or actual policy changes that would have curbed the non Australian aspects of the RBA shareholding or interests.


  4. “Coombs” yes…I recall that name on some old fivers I had when i was collecting a bit of currency…was the same time the ‘star’ notes were around…that is the serial numbers had a star with the serial code of each note…the nixon ‘star enquiry’ to look into ‘fort knox’ (early 7os)…yes indeedy…the battle to maintain the integrity of the original greenback was a rough road for democracy in the US but the Fed Res system prevailed but its not too late for Obama as ‘the people man’ to go back to a debt free currency…’the lord she giveth and the lord she taketh away’…

  5. Poor Dorothy. Do you think her friend Metal-Mining Man has a chance at getting a heart? Or Wheat-Board Man getting a brain?

  6. Thats the $49 question penny (or indexed for inflation $76.60)!

    If Tin man were locally made out of stainless steel or brass he would be more upwardly mobile…as it stands he is made out of cheep imported steel and thus seizes up at the worst possible moments and has become dependant on the ‘oil can’ to get moving again. The role of Wheat Board Man (ala scarey crow) is questionable anyway outside the paradigm of monocrop petrochemical farming practices – Dorothy (dot) as she starts to work all this out gets depressed when she realises the Wiz(ard) of OZ has somewhat inflated himself and has been taking a ‘lend’ of everyone. When the house lands with a thud (housing crash) it thankfully lands on a witch (which witch?), but she has to pull back the veil before realising that the yellow brick road (the money trail) leads only to treachory and all that she was seeking was already at the farm back home. Yes..the wizard of oz is a brilliant work of art revealing the hopelessness of greed and globalism 🙂

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