Time to Restructure the Banking System

Time to create a Rural Reconstruction and Development Bank

By: A North Qld Grazier (first published 2016 — updated by CIRNow’s True Blue Observer)

This article was originally written to support Robbie Katter’s bill to introduce state banking, under the name of a Rural Reconstruction and Development Bank.  

The Abstract of the research paper below by Cockfield and Botterill shows that agricultural returns in the past five decades have not kept ahead of increasing costs over which primary producers have little control.

Due to the foibles of a supposed free market system, (which should be referred to as a manipulated market) farmers are ‘price takers’ not price makers.

Nationwide, rural debt is said to be some $66 billion (estimated to have increased by $20 billion by 2018 –
editor )
largely owed to the banking industry.

This amount is unsustainable and mathematically cannot ever be repaid, unless more than 50 per cent of the total national farmland is sold all at once. Only the Rothschild Bank or perhaps the Chinese government would have the financial acumen to cover anywhere near such a massive debt.

The unsuitability of traditional trading bank finance for the farming industry has never before been so evident that such finance has all but killed primary industries.

Combined with drought, poor commodity prices, excessive government regulation and intervention, high road transport and marketing costs and a high dollar, primary producers have never before been so adversely affected.

Traditional bank finance cannot ever cater for such vagaries in farmers’ incomes and over the past decade the nation has experienced the highest rate of bank foreclosures ever seen.

Minute by minute, hour by hour, day by day, the interest debt clock keeps on winding up while there are 12 month or longer gaps in income.

Due to foreclosures, the loss of experienced farmers and graziers as wealth creators for the general good of the economy, has reached the point where growing food in an efficient, economic and environmentally sustainable way has threatened the viability of long-term food production of this country.

In most cases where I have had involvement, the unlawful, callous actions of bank-appointed receivers, contracted to do the banks’ dirty work, have been reprehensible.

Two major receiver companies and a financier, which I shall not name in this submission, have acted unlawfully, made false representations to a court, charged fees for services not undertaken, and exorbitantly debited clients’ accounts with massively overcharged fees.

They have unlawfully entered property and seized personal items without any authorisation.

Trading banks have a lot to answer for. I have assisted financially and environmentally stressed farmers and graziers for more than 30 years. Several of them went out with a blaze of glory, a few were saved and some committed suicide.

Political parties and courts also should share the blame for allowing this shameful practice to continue. Families have suffered generational scarring.

Time to explain the nuts and bolts of trading banks

“Today in Australia, as in most other modem economics, all money is a debt of the banking system. When a banker grants a customer credit by overdraft, the bank ‘opens an account’ in its books and gives the client the right to draw funds without first having to put money into the account. But bank deposits only increase when the customer actually draws on the account to pay his creditors. In the case of loans, funds are deposited directly to the customer’s credit and results in an immediate increase in the volume of money.

In either case the money supply increases as a result of the bank’s lending activities. As long as the debt remains outstanding the community’s quantity of money is increased.”

— An extract from the article, ‘Sources of Money,’ in the Bank of New South Wales Review, October 1978.

This above quote sums up banking practices in Australia today in a nutshell.

How is that banks can ‘legally’ seize a man’s property, a lifetime of work, for allegedly owing ‘money’ to a bank? Money that was never handed to him as legal tender,ie, notes and coins as minted by Treasury, in the first place?

“Banking was conceived in iniquity and born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of the Bankers and pay the cost of your own slavery, let them continue to create deposits.” 

— Sir Josiah Stamp (Chairman of the Bank of England in the 1920’s, and then the second richest man in Britain)

This criminal activity, explained by Sir Josiah Stamp, (above), has. in effect. curtailed one and a half centuries of growth in Australia.

Australia with its abundant natural resources should by now have been the richest country on earth.

A sea of debt

Here in 2019 we are languishing with more than $7 trillion debt (editor)and sit at about tenth place on the world’s wealthiest nations’ register, according to Business Insider magazine.

In 2016-17 when the economy felt the full impact of the mining industry collapse we slid much further down the list than ever before.

Our social security bill is said to be fast approaching nearly half of our GDP.

What has happened to the lucky country?

Where are the jobs?

We cannot believe mainstream economists claiming there is a shortage of money. There has never been a shortage of money. If we were to tie the value of our resources remaining in-situ to the creation of our own credit, our standard of living and national wealth would be at the top of the list.

The Commonwealth Bank operated in this manner until the 1960’s when the illicit banking cartel hijacked our banking industry.

The first official history of the Commonwealth Bank, The Commonwealth Bank of Australia, by C.C. Faulkner, published in 1923, records that prior to World War I, the total of Australia’s Commonwealth and State public debt to London had built up to just over £230 million. Early in the war, the British government made it clear to Australia that the demands of war meant that London wouldn’t be able to keep financing Australia’s borrowing. Consequently, the newly-established Commonwealth Bank took up the challenge. It oversaw 10 War Loan and War Savings Certificate campaigns, which by war’s end had raised more than £250 million for the war effort from inside Australia. Moreover, because the government-owned Commonwealth Bank brokered these loans at cost, the administration expenses amounted to just £705,000, compared to fees to London banks that would have surpassed £5 million.

Firebrand NSW Premier Jack Lang later recounted in his book The Big Bust how the success of the Commonwealth Bank during WW1 threatened the private London bankers monetary control over Australia:

[Commonwealth Bank governor] Denison Miller had gone to London after the war finished and had thrown a great fright into the banking world by calmly telling a banker’s dinner that the wealth of Australia represented six times the amount of money that had been borrowed, and that the bank could meet every demand because it had the entire capital of the country behind it

A deputation of unemployed waited on him after he arrived back from London at the head office of the Commonwealth Bank in Martin Place, Sydney. He was asked whether his bank would be prepared to raise another £350 million for productive purposes. He replied that his bank was not only able to do it, but would be happy to do it. Such statements as these caused near-panic in the City of London.

But after Sir Otto Niemeyer, the Governor of the Bank of England, came to Australia and stole the Commonwealth Bank, including the savings of all the Australians who had entrusted their money with the bank, the international banking cartel has since owned Australia, on paper at least, and successive governments have mortgaged our children’s future to this financial oligarchy. –

According to the National Debt Clock (http://www.australiandebtclock.com.au/) as at January 2019 our international debt stands at more than $7 Trillion that we purportedly owe the international banking cartel. That means each Australian man, woman and child is $280,000 in debt today. (editor)

The total of this international debt also includes business, household, housing, owner-occupied housing, investor housing, personal and credit card debt.

Politicians have no answers other than to deliver up publicly-owned assets in response to the demands of financiers for interest payments. This is THEFT AND TREASON! (editor)

Instead of building a robust economy based on sound business principles, the politicians have simply borrow Peter to pay Paul, and given each one of the the debt they have created. (editor)

However, the political parties have forgotten one very important point: By separating us from our Commonwealth of Australia Constitution Act 1901 by deleting the Preamble in the Constitution they have re-written, and then created a fake corporate government registered to the Brigalow Corporation in the USA they have separated We, the People of the Commonwealth from their corporation. (editor)

Because ware not part of their corporation, and by signing these debts in the name of their fake government the political parties that have held power since the Australia Act 1986 are actually the only ones responsible for the debt.  (editor)

Operating under our present Keynesian financial system, combined with free trade policies and deregulation we can never repay this alleged debt. (But when we take back control of our government under the true Constitution, we can repudiate the debt and hold the political parties accountable to repay the debt…something they never thought would happen! – (editor) )

If Australian politicians had the intestinal fortitude to stand up to the usurious international bankers, we could opt out in the same manner as Iceland and Hungary. In 2013 these two heroic little countries kicked out the banking cartel.

An Australian Reconstruction and Development Bank is the only hope of survival. Click on the link to see the Advance Australia proposal for reforming our financial and banking sectors.

In a similar manner to the Rural Reconstruction Board of the 60’s and 70’s Queensland must re-establish this financial facility.

To take it to the next step, development funds at the cost of administration only must be made available through a newly created ARDB or a Queensland State Bank that legally does not have to borrow funds from anyone to finance primary and secondary industries. Such a Bank is permitted, indeed encouraged under Sections 51 (iv) and (xiii) of the Commonwealth Constitution of Australia (still in force)

The State should legislate to allow the State Bank entry to the trading banks’ clearing house, the Australian Payments Clearing Association to make its function similar to that of the trading banks.

Toxic trading bank debt must be offset with the newly created credit of the State Bank. This credit will have the same origins as the trading bank credit that was originally created and extended to borrowers as a debt.  It comes from nowhere but it is backed by the natural resource assets of the State. In reality it is a blip in a computer.

 Ben Chifley & John Curtin

Australias self-reliance in World War II was even more remarkable, again due to the Commonwealth Bank. After Labor’s John Curtin and Ben Chifley took over from Robert Menzies in 1942, the Commonwealth Bank used its powers as the national bank to create credit to fund the war effort, by purchasing Treasury Bills from the federal government. In the nine years prior to 1942, the private banker-controlled Lyons-Menzies governments suppressed the Commonwealth Banks power to use T-Bills to create credit, so it only created a net £5 million in that time, leaving Australia again reliant on London bankers.

As documented in H.W. Arndt’s 1963 reference book The Australian Trading Banks, under Curtin and Chifley in 1942 the Commonwealth Bank created £59 million; in 1943 £173 million; in 1944 £77 million; and in 1945 £68 million. On the back of this credit creation, government expenditure, which had hovered around £80 million for most of the 1930s, leapt up to £413 million in 1942, £661 million in 1943, £677 million in 1944, and £599 million in 1945. The result was victory in the war, and an economic miracle that transformed Australia’s economy from an agrarian backwater into an agro-industrial powerhouse.

Until Queensland and the other states recreate and force the introduction of a national bank of credit, in the same manner as the original charter of the Commonwealth Bank we will suffer, our children will suffer even more and our continued existence will come into question.

Quotable quotes:

“Those who create and issue money and credit direct the policies of government and hold in the hollow of their hands the destiny of the people.” — Rt. Hon. Reginald McKenna, former Chancellor of Exchequer, England

“Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.” — George Washington, in letter to J. Bowen, Rhode Island, Jan. 9, 1787

“The process by which banks create money is so simple that the mind is repelled.” — John Kenneth Galbraith, Money: Whence it came, where it went – 1975, p29

“Is there any reason why the American people should be taxed to guarantee the debts of banks, any more than they should be taxed to guarantee the debts of other institutions, including merchants, the industries, and the mills of the country?” — Senator Carter Glass, Author of the Banking Act of 1933

“The issue that has swept down the centuries and must be fought sooner or later is The People v. The Banks.” — Lord Acton Historian 1834 – 1902

“We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.” — David Rockefeller Baden-Baden, Germany 1991

“The last source differs from the first three because when money is lent by a bank it passes into the hands of the person who borrows it without anybody having less. Whenever a bank lends money there is, therefore, an increase in the total amount of money available.”  — Dr. H. C. Coombs the former Governor of the Reserve Bank of Australia, and economic adviser to every Australian Prime Minister from the 1940’s until his death in the mid 90’s, in the “E. S. & A. Research Address” at Queensland University on September 15, 1954.

“The other important function which is exclusive to the banking system, is to create the community’s money supply, and to administer the monetary system. The two functions are intimately connected since modern money is created by banks in the process of granting credit.” (Note: To create means to produce out of nothing.) – Professor Heinz Wolfgang Arndt, Professor of Economics at the National University, Canberra, writing on Banking in The New International Illustrated Encyclopaedia’ (Vol. 1, page 321)

“It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” — Henry Ford

“When a bank lends, it creates credit. Against the advance, which it enters amongst its assets, there is a deposit entered in its liabilities. (This is ‘double-entry’ book-keeping.) But other lenders have not this mystical power of creating the means of payment out of nothing. What they lend must be money that they have acquired through their economic activities.” — From his book, “The Art of Central Banking”, by Mr. R. G. Hawtrey. 

Rural Adjustment Schemes: Juggling politics, welfare and markets

Abstract of an Occasional Paper

The Commonwealth government has offered support to farmers in the form of structural or business adjustment-type schemes since the Loan (Farmers Debt Adjustment) Acts of 1935-1971. Since 1971 a series of more comprehensive rural reconstruction/adjustment schemes with a range of objectives from debt alleviation to encouraging some exits from agricultural industries, has been in place.

While having little direct impact on the structure of these industries, the various schemes have been politically important and an indicator of how core values relating to agricultural production and rural life have changed.

A review of the schemes shows an increasing focus on improving farm productivity and sustainability, accompanied by a discourse emphasising the need to promote the ‘farm business’, rather than to protect the ‘family farm’. On the other hand, governments have also used these schemes to deliver ‘welfare’ outputs.

In common with agricultural producers throughout the developed world, Australian farmers have faced declining farm terms of trade for decades as their costs of production have increased faster than prices received for their output. Unlike their Western European and North American counterparts, Australian governments from the 1970s sought to ease the process of adjustment to changing conditions, rather than insulate farmers from market signals.

One of the important mechanisms for facilitating adjustment while ameliorating its worst impacts has been a series of rural adjustment schemes. These rural adjustment programs have generally provided short to medium term funding, as either grants or loans, intended to induce the re-deployment of labour, movement out of an industry by some, usually smaller firms (farm businesses), and the business and/or physical restructuring of the remaining firms. An explicit goal of the programs is the creation of a sector in which most of the remaining firms operate efficiently and more importantly, self-sufficiently.

According to the most obvious indicators the programs have contributed little to achieving this objective. There has been an unbroken sequence of modern rural adjustment programs for more than 33 years, with debt relief dating back further to the 1930s, with little prospect that these programs will be phased out anytime soon. Indeed, the Commonwealth government delivered yet another ‘rescue’ package for the sugar industry in 2004, a mere three and a half years after the last $83 million was allocated, ‘…to work towards positioning the industry to ensure its long term viability’ (Truss 2000). Neither ‘rescue package’ rescued anything! In fact, they only worsened the situation as Australian sugar cane farmers were priced out of the market by cheaper imports. – (editor)

Over the years, the various programs have been regularly reviewed and altered but never wound up, as has been the case with most other sectoral adjustment packages. Adjustment programs are maintained as base level funding vehicles into which additional money can be poured during periods of peak political demand, as was the case with the sugar adjustment package following the conclusion of the ‘free’ trade agreement with the US. That is, when there are biophysical or political ‘shocks’ in particular agricultural industries or regions, governments can increase funding, thereby helping to preserve the family farm. If, where and when there are reasonable financial conditions or limited political agitation, then programs are adjusted so as to encourage farmers to be more ‘business like’.

Nonetheless, the programs have struggled to meet the apparently conflicting objectives of meeting the welfare needs of the farm family while encouraging the farm business to become more productive and self reliant.

Conclusions by editor: The simple fact is that political party governments are not designed to serve the needs of the people or the nation. Their sole function is to perpetuate their power over us and continue to introduce ever more arduous Legislation to extract as much money from us as possible.

The Political Parties are, in turn, in thrall to the banks which dictate policy and keep an iron grip on policy, legislation, and our laws to benefit themselves.

Even though we do not want or support any political party, there are a few, a very few, politicians who are worth our support. Senator Fraser Anning is one of them. He is dedicated to protecting the people of Australia from the rapacious banks. He has pushed for the Royal Commission into banking. Unfortunately, he has not yet realized that he is in the wrong arena. He can never beat the system while he is a part of it.

Despite this, he is doing some good work to stop the banks, and to speak out about the many injustices being done against the good people of Australia. And, as a good representative should, he is encouraging Australians to take responsibility for their own actions, to stand up for their rights, and to put pressure on the banks at their General Meetings to behave responsibly. The time has come for a large number of Australians to unite and stand together against the oligarchs, the traitors, and the thieves.

The Senator explains how he has been fighting to get justice for the many bank victims, and to make the banks accountable:

We can only regain our rights and freedoms and bring about a lawful government under the Commonwealth of Australia Constitution Act 1901 by acting lawfully to make the criminals accountable for their crimes.

You can help fix the broken political system by uniting with other Aussies in a Common Law Assembly. Find out more here:

The future is in your hands!

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