it's monday, page-23

everything will be ok! NOT!

Derivatives junkies

Craig Isherwood pointed out that one clear measure of the central bank money printing was the splurge in speculation by Australia?s banks in the very instruments that caused the Global Financial Crisis?financial derivatives.

The latest RBA figures reveal that the ?off-balance sheet? business of Australia?s banks?aka derivatives?hit an all-time high of $15.195 trillion in the June 2010 quarter.

The previous high was $14.208 trillion, reached in ? September 2008, the month the derivatives obligations of giant Wall Street investment bank?and investment manager for many Aussie local councils?Lehman Brothers, blew out the global financial system.

Following the Lehman Brothers collapse, and the government and central bank bailout to avert a global meltdown, derivatives speculation contracted?for a while.

In Australia, bank derivatives shrank to a low of $12.829 trillion as of June 2009, before skyrocketing by almost $2.4 trillion in just one year?the fastest growth rate in history (see graph), fuelled by central bank money printing.

Mr Isherwood joked, ?What does an economist call it when the activity that caused the crisis returns to and surpasses pre-crisis levels? A recovery!?

He continued, ?This is nuts! The so-called authorities?Swan, the RBA, the U.S. Fed, etc.?have one interest: preserving the globalised, City of London-controlled financial system, which demands free trade and no regulations on trade in derivatives and the like so they can loot nations and their peoples.

?And they would happily destroy the world?s physical economy and people?s living standards through hyperinflation to do it.

?And then the people will be made to doubly pay, through brutal austerity measures like those causing uproar in Europe?all to bail out bank gambling debts, derivatives.?

Mr Isherwood called on all Australians to rally behind Lyndon LaRouche?s and the CEC?s campaign for a global Glass-Steagall reorganisation of the banking system, so that hyperinflation is stopped and the people are protected from the consequences of the derivatives gambling of the banks.