from CEC, Melbourne
The fight against “bail-in” is on! The Morrison government has released for consultation a new law that bans cash transactions over $10,000. The pretext for this law is to crack down on money laundering and tax evasion in the “black economy”. This is a shameless lie! The formal recommendation to ban cash comes from “big four” global accounting firm KPMG, which is an accomplice of the world’s biggest money launderers and tax evaders. The real purpose for the cash ban is to trap Australians in the banking system, so they cannot escape negative interest rates or having their bank deposits “bailed in”.
Scott Morrison first announced this measure in the 2018 budget, originally to come into force this month, but now scheduled for January 2020. It was recommended in the October 2017 Black Economy Taskforce Report by Michael Andrew AO (who died last month), a former chief of global accounting giant KPMG. The report revealed that the strategy is to: “Move people and businesses out of cash and into the banking system, which makes economic activity more visible, auditable and efficient.” (Emphasis added.) It gives the game away by noting that it may benefit “financial stability and the effectiveness of monetary policy”—code for policies like bail-in and negative interest rates. To achieve this it recommended: “Moving to a near cash free economy. A $10,000 economy-wide cash limit should be introduced.” But $10,000 is just the beginning: in June 2018, just after Morrison announced it, KPMG was already lobbying Treasury to lower the limit to $5,000 or even $2,000.
Deception and stealth
When Morrison released the exposure draft of his bail-in law in 2017, he did so on a Friday afternoon when there would be no media attention. Only a sharp-eyed CEC staffer spotted it and recognised it as bail-in, enabling the CEC to mobilise a massive nationwide campaign against it which continues to this day. The government is being equally sneaky with this law. Treasurer Josh Frydenberg quietly released the exposure draft of the legislation, called the Currency (Restrictions on the Use of Cash) Bill 2019, last Friday afternoon, 26 July, and has allowed only two weeks for public comment.
The exposure draft of the bill has two notable features:
- It bans ALL cash transactions over $10,000, enforced with a penalty of two years jail;
- Division 2 is blank, containing only the words “To be inserted”.
What is the government hiding by releasing an incomplete draft, on a Friday afternoon, and allowing only two weeks for public consultation?
The deception doesn’t end there. In its explanation of the law, the government has sought to make it palatable by emphasising that there will be exemptions to the cash ban, including depositing and withdrawing cash in banks, and, curiously, most consumer-to-consumer transactions, such as for a second-hand car. However, the exemptions are not in the legislation. They are in a separate regulatory instrument to be issued by the Minister after the legislation is passed. This means that they are not permanent, but that in the future, the Minister will be able to scrap the exemptions without requiring new legislation. This is the “salami tactic”: first pass the law in a form that is politically palatable, and then slice off key changes. In a bail-in scenario, for instance, under the current regulation people fearing bail-in may withdraw all of their money from the bank, but the Minister will be able to issue a new regulation that suddenly stops people from withdrawing more than $10,000.
Not about money laundering
This law is emphatically not about controlling money laundering and the black economy. The vast majority of money laundering and tax evasion is done by banks and corporations, not individuals. And who helps banks and corporations do it? The big four global accounting firms, including KPMG, whose boss Michael Andrew recommended this cash ban! The big four literally write the tax laws that enable corporations to evade tax, and dominate the offshore tax havens like the Cayman Islands that exist for tax evasion and money laundering. When Michael Andrew was the global boss of KPMG—the only Australian ever to lead the worldwide operations of a big four firm—two of KPMG’s biggest clients, British banks HSBC and Standard Chartered, were caught in 2012 by US authorities in massive money laundering operations. In other words, KPMG assisted its clients to launder money, but is using money laundering as the excuse to take away the rights of Australians to use cash!
The real reason: bail-in and negative interest rates
Money laundering and tax evasion are nothing new, that they would suddenly require this “solution”. What is new is the plunge in the public’s confidence in the banks, especially since the global financial crisis. But instead of properly reforming the banks to restore the public’s confidence, through policies such as Glass-Steagall, which separates normal banking from the financial gambling that causes crises, authorities around the world have resorted to insane and in fact criminal measures that further destroy confidence in the banks.
The two most egregious measures are the criminal bail-in policy and the insane move to negative interest rates; bail-in steals deposits to prop up failing banks, while negative interest rates force customers to pay to keep their money in the bank. Both are coming to Australia. Morrison snuck his bail-in law through the Senate in February 2018 with only eight senators present in the chamber and no recorded vote. The Reserve Bank of Australia has aggressively slashed interest rates to 1 per cent, and in the banking crisis that is brewing right now they will feel compelled to follow countries like Japan and Switzerland down past zero and into negative territory, as the International Monetary Fund is recommending.
Both bail-in and negative interest rates destroy confidence in the security of bank deposits, which motivates people to take their money out of the bank and hold it in cash. This is the experience in Japan and Europe. So like some European countries, Australia is banning cash to force people to use the banking system so they cannot escape these policies, under threat of two years jail.
Fascism is the use of state power to benefit private corporations; by definition, this is a fascist assault on the freedom of Australians to use cash and not private banks. The CEC is calling on all concerned Australians to demand the government scrap this law and reform the banking system instead!
What you can do
The government has allowed only two weeks for submissions, in order to avoid scrutiny. Don’t let them get away with it! We have until 12 August to swamp Treasury with letters and emails, demanding they drop this law. Write an email or letter today to the Treasury: state your objection to any law that removes your right to use cash, and demand the government restore confidence in the banking system by properly reforming the system, not by trapping people in the system so they can’t escape policies like bail-in.
Email: email@example.com with the subject line:
Submission: Exposure Draft—Currency (Restrictions on the Use of Cash) Bill 2019
Address written submissions to:
Black Economy Division
Parkes ACT 2600
from CEC, Coburg
Sensational information has surfaced that an Australian Treasury delegation travelled to Europe in February for discreet meetings with European countries on how they handled their banking crises.
Former Coalition economics advisor John Adams made the revelation in a 31 March discussion with Martin North posted on their Interests Of The People YouTube channel, entitled “Scandal – Australian Officials Caught In Covert Banking Meetings”.
Adams attributed the information to an unnamed source, who spoke with both him and Martin North.
This information emerged following news.com.au on 19 March reporting Adams and North for their explosive analysis that Australia’s plunging property market could trigger a banking crisis that could spread overseas, “Australia could be ‘first domino to fall’ in next GFC”, in which they compared Australia’s housing market and banking system to that of Ireland before its crash in 2008. Adams followed this up with a top-rating appearance on Peter Switzer’s Money Talks program on 25 March to debate establishment economist Chris Joye on “Is Australia facing a house price collapse?”, in which he also made the comparison to the banking crises in Europe.
The Citizens Electoral Council can attest that Treasury has consistently denied the likelihood of an Australian banking crisis, despite the growing number of signs. Treasury’s claim that a banking crisis is “unlikely” is one of its excuses for opposing the need for a Glass-Steagall separation of banks.
So why would a Treasury delegation be holding covert meetings in Europe to consult on how to handle precisely such a crisis?
Don’t tell the passengers the Titanic is sinking!
As noted on the latest episode of the CEC Report, the Australian government has a policy of not telling the truth about the economy. Their logic is they don’t want to “spook” the market, or “talk down the economy”. John Adams has reported that government MPs have asked him not to speak out about the economy.
More to the point, according to Adams, one MP admitted they are anticipating a crisis, but hope it would be triggered by an international financial shock, so the government can have plausible deniability and not have to admit that their domestic economic policies, centred on inflating the biggest housing and debt bubble in Australian history, caused the crash.
This amounts to: “If we don’t tell the passengers that the Titanic is sinking, maybe they won’t blame us.” The regulators are even worse. Their attitude is: “If we don’t find out whether the Titanic is sinking, maybe it will stay afloat”! This is evident in Reserve Bank of Australia (RBA) deputy governor Guy Debelle’s statement in December 2018 that when it comes to assessing Australia’s record debt, “there is little to form a strong conclusion about how much is too much”. It is also evident in the recent revelation by analysts at Deutsche Bank that the Australian Prudential Regulation Authority (APRA), the bank watchdog, has understated mortgage debt by as much as 40 per cent! This is not incompetence from APRA, but a result of its see-no-evil, speak-no-evil approach to regulation, even to the point of ignoring systemic threats. APRA in 2007 suppressed an internal report by its research department that warned lowered mortgage lending standards by banks had created a bubble, in which defaults were rising and were on track to cause a banking crisis and recession. In 2010 APRA went one step further and disbanded its research department.
Two possible explanations for the Treasury meetings in Europe are: 1) a genuine desire to learn from their experience so they can spot a crisis coming and take action to avert it—unlikely; 2) an opportunity to assess the “bail-in” system that is in force across all EU member states, the Bank Recovery and Resolution Directive (BRRD), which authorises financial authorities to contain a future financial crisis by seizing savings deposits to prop up failing banks, so they don’t set off a chain-reaction collapse.
In his 2018 budget Scott Morrison announced a ban on cash transactions over $10,000, originally to come into force in July 2019, but now January 2020.
With this measure, Australia has joined what outspoken former Liberal Party economics advisor John Adams, who is forecasting an impending economic Armageddon, calls the “war on cash”—nations deliberately moving to a cashless society.
Going cashless is commonly promoted as an efficiency measure driven by technology, but it coincides with the global push for “bail-in”—the policy of averting bank failures by seizing the savings and investment funds of depositors and other classes of creditors.
Bail-in is one of a number of sinister developments in the international financial system, including negative interest rates, which drive people to keep their money in cash.
If it’s not in the bank, it can’t be bailed in.
And you can’t be charged for having it there, which is how negative interest rates work.
Morrison snuck a bail-in law through Parliament in February last year, the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018, with only a handful of MPs and Senators present when it passed and no recorded vote.
It authorises the “conversion or write-off”, a.k.a. bail-in, of so-called hybrid securities which are better known as bail-in bonds, which have been sold to hundreds of thousands of unsuspecting mum and dad investors and self-funded retirees. They are at risk of losing, collectively, more than $40 billion.
But the law included a massive loophole that the Citizens Electoral Council’s legal experts, as well as John Adams, Digital Finance Analytics Principal Martin North, and former APRA Principal Researcher Dr Wilson Sy, identified could be used to conduct a back door bail-in of deposits by stealth.
When Pauline Hanson’s One Nation senators notified the government they intended to close this loophole with an amendment that explicitly excluded deposits from any bail-in, the government and Labor Party opposition rushed the bill through the Senate when the One Nation senators weren’t present in the chamber.
Now, as the CEC revealed 4 March, the International Monetary Fund is saying that the 2018 law isn’t enough, and is demanding the government enact a full statutory bail-in regime that explicitly includes deposits. Moreover, the IMF is demanding that the government scrap all democratic safeguards over the bank regulator APRA, by which the Treasurer can give APRA directions and the Parliament can disallow an APRA policy. The IMF wants these safeguards scrapped, so that in the event that APRA orders a bail in of bank deposits in a future crisis, the government will not be able to block the order to protect the public.
This bail-in policy is guaranteed to destroy the public’s confidence that their banks will keep their money safe, and will drive people to take their money out and hoard it in physical cash or other forms.
So what are we seeing around the world coinciding with the rollout of a global bail-in regime? A massive and draconian crackdown on the freedom to use cash.
This is most obvious across the European Union, where the EU bail-in system called the Bank Recovery and Resolution Directive (BRRD) came into force in January 2016.
According to a 25 February 2019 post by John Adams on his website entitled “The New Global Push for Negative Nominal Interest Rates”:
- France has legally prohibited cash transactions above €1,000;
- Spain has legally prohibited cash transactions above €2,500;
- Italy has legally prohibited cash transactions above €3,000;
- the European Central Bank ended the production and issuance of its €500 note at the end of 2018.
Also, the government of India eliminated 86 per cent of all physical cash throughout the Indian economy in 2016 by banning popular denominations of the currency. This created a political uproar in India, and fuelled suspicion of India’s bail-in law which was introduced the following year, the same time as Australia’s. The backlash was so great that the Indian government was forced to withdraw its bail-in law—the first time that has happened.
Sweden is 95 per cent cashless, and Vietnam has a plan to become 90 per cent cashless by 2020.
Another common justification for the war on cash is the need to crack down on the black economy, which is the Morrison government’s excuse. But this isn’t genuine. There are adequate measures in place to track cash-based criminality, which CBA and other banks have ignored, and the same Morrison government shamelessly protects those banks from real scrutiny and real consequences.
The fact remains that limits on cash trap people in banks where they can’t escape bail-in.
Join the CEC’s fight to defeat bail-in and force Parliament to pass the Separation of Banks bill that Senator Pauline Hanson introduced on 12 February, for a Glass-Steagall separation of banking from speculation, which will fully protect deposits from financial dangers and bail-in, and restore confidence in the banking system.
What you can do—fight for the Separation of Banks bill to stop bail-in
- Make a submission to the current Senate Economics Legislation Committee inquiry in support of the Separation of Banks bill. The submissions deadline is 12 April, but do it straight away. Click here for instructions on making a submission.
- Call the chairman and deputy chairman of the Senate Economics Legislation Committee to demand they hold public hearings on the Separation of Banks bill, so that the inquiry is transparent and they can get a proper understanding of the need for bank separation from real experts who are not beholden to the banks.
Chairman: Senator Jane Hume – Liberal
(03) 9428 1773
Deputy chairman: Senator Chris Ketter – ALP
(07) 3881 3710
This weekend the G20 <http://www.examiner.com/topic/g20> nations will convene in Brisbane, Australia to conclude a week of Asian festivities that began in Beijing for the developed countries and major economies. And on Sunday, the biggest deal of the week will be made as the G20 will formally announce new banking rules that are expected to send shock waves to anyone holding a checking <http://www.examiner.com/topic/checking> , savings <http://www.examiner.com/topic/savings> , or money market account in a financial institution.
On Nov. 16, the G20 will implement a new policy that makes bank deposits on par with paper investments, subjecting account holders to declines that one might experience from holding a stock or other security when the next financial banking crisis occurs. Additionally, all member nations of the G20 will immediately submit and pass legislation that will fulfill this program, creating a new paradigm where banks <http://www.examiner.com/topic/banks> no longer recognize your deposits as money, but as liabilities and securitized capital owned and controlled by the bank or institution.
In essence, the Cyprus template <http://www.forbes.com/sites/nathanlewis/2013/05/03/the-cyprus-bank-bail-in-is-another-crony-bankster-scam/> of 2011 will be fully implemented in every major economy, and place bank depositors as the primary instrument of the next bailouts when the next crisis occurs.
On Sunday in Brisbane the G20 will announce that bank deposits are just part of commercial banks’ capital structure, and also that they are far from the most senior portion of that structure. With deposits then subjected to a decline in nominal value following a bank failure, it is self-evident that a bank deposit is no longer money in the way a banknote is. If a banknote cannot be subjected to a decline in nominal value, we need to ask whether banknotes can act as a superior store of value than bank deposits? If that is the case, will some investors prefer banknotes to bank deposits as a form of savings? Such a change in preference is known as a “bank run.”
Each country will introduce its own legislation to effect the ‘ bail-in’ agreed by the G20 this coming weekend.
Large deposits at banks are no longer money, as this legislation will formally push them down through the capital structure to a position of material capital risk in any “failing” institution. In our last financial crisis, deposits were de facto guaranteed by the state, but from November 16th holders of large-scale deposits will be, both de facto and de jure, just another creditor squabbling over their share of the assets of a failed bank. – Zerohedge <http://www.zerohedge.com/news/2014-11-12/russell-napier-declares-november-16-2014-day-money-dies>
For most Americans with savings or checking accounts in federally insured banks, normal FDIC rules <http://www.bankrate.com/finance/savings/fdic-insures-bank-deposits-to-250-000-1.aspx> on deposit insurance are still in play, but anyone with over $250,000 in any one account, or held offshore, will have their money automatically subject to bankruptcy dispursements from the courts based on a much lower rank of priority, and a much lower percentage of return.
This also includes business accounts, money market accounts, and any depository investments such as a certificate of deposit (CD).
What makes this sudden push to securitize cash held as bank deposits is the pending question of whether the central banks or sovereign governments know that a crisis is forthcoming, especially in light of Europe’s rapid decline into recession, and Japan’s need to monetize their entire budget through central bank easing?
Just as people thought the ownership of gold and silver was inviolate prior to 1933 when the government ordered it confiscated <http://en.wikipedia.org/wiki/Executive_Order_6102> to bailout the banks and Federal Reserve during the Great Depression, we are all now faced with the realization that the money we thought was our own, and protected in our checking and savings accounts no longer is. And after Sunday at the G20 meeting, the risks of holding any cash in a bank or financial institution will have to be weighed as heavily and with as much determination of risk as if you were holding a stock or municipal bond, which could decline in an instant should the financial environment bring a crisis even remotely similar to that of 2008.
Political evolution is over – only revolution remains
Merchant Bank Goldman Sach’s Australian Parliamentary representative Malcolm Turnbull is considering overturning media cross ownership laws for media moguls Murdoch and Fairfax in return for favourable treatment given to the Liberal Party during the federal election.
Turnbull told ABC Radio he was not opposed to the changes saying he could understand the frustration of American national Rupert Murdoch not being able to own a newspaper and television station in the same capital city.
Cairns News warns there is so little media diversification in capital cities and regional towns that consumers have been conditioned for more than two decades into thinking that by reading a Murdoch or Fairfax newspaper or watching a Foxtel TV program they have been kept abreast with the ‘news’.
Fortunately the internet has brought much needed diversification to national consumers that many readers are now dumping hard copy newspapers instead switching to independent internet news bulletins.
For example if one reads a Murdoch article about the ‘marvellous’ US President Barrack Obama and then reads a similar story on CLG net news, one could be forgiven for asking the News Ltd reporter why he omitted to mention the open hostility and derision in which Obama is held by a vast majority of American people.