by Mark Davis
December 11, 2009
Serious Armageddon warning ...
THE OPPOSITION finance spokesman, Barnaby Joyce, believes the United
States
government could default on its debt, triggering an ''economic Armageddon''
which will make the recent global financial crisis pale into insignificance.
Senator Joyce said yesterday he did not mean to alarm the public but
there
needed to be a debate about Australia's ''contingency plan'' for a
sovereign debt default by the US or even by a local state government.
''A default by the US means complete economic collapse around the world
and
the question we have got to ask ourselves is where are we in that,''
Aussie Senator Joyce said.
His warning came as the Rudd Government ramped up its attack on Senator
Joyce as an economic extremist by highlighting his strong opposition
to
Chinese sovereign investment in Australia.
The Treasurer, Wayne Swan, said it was a cause for concern that Senator
Joyce had been elevated ''from the reactionary fringe of our economic
debate to the second-most senior economic policymaking job in the alternative
government''.
The scrutiny of foreign investment bids was adequate and ''if we were
to
follow the advice of some of the extremists on foreign investment,
it could
cost something like 20,000 jobs right across Australia''.
Senator Joyce said the chances of a US debt default were distant but
real
and politicians were not doing the electorate a favour by refusing
to
acknowledge the risk.
He said the Federal Government's debt would push up interest rates and
predicted that some state Labor governments would not be able to repay
their borrowings.
''The Federal Government has $115.7 billion in debt, Australian government
securities, notes and bonds on issue, and the states have another $170
billion in debt.
''We have to ask whether the states have the capacity to repay that.
I
would say in some instances they do not, particularly Queensland.''
Senator Joyce said that if the US recovered, global funds would flow
back
into North America. ''There will be only one way Australia will be
able to
keep funds here and that is by putting up interest rates, which will
therefore bring real costs back to households,'' he said.
''That is the first scenario, which is extremely bad for Australia.
The
worse scenario is where the US doesn't repay its debt - the $2 trillion
in
debt it owes to the Chinese, the $1 trillion in debt it has to the
Japanese
and the $US1 trillion in debt to others - and then we are really nailed.
''The outcome is a shift away from the US dollar as the international
trading currency and a shift to the Chinese yuan, and China becomes
an
immensely powerful player overnight.
''It's the real financial crisis, and the real financial crisis will
mean
this preamble we have just had pales into insignificance.''
Asked what sort of contingency plan he would advocate, Senator Joyce
said
it was like trying to prepare for a tidal wave but the local economy
should
have more self-reliance.
''Things you look for in that economic Armageddon are the capacity to
feed
ourselves, the capacity to provide the fundamentals in medicines and
basic
fundamental requirements for our nation.'
* * * * *
A
Brit researcher, journalist commented to me online: "Joyce is a realist.
The American meltdown has merely been taped over with bandaids without
cleaning the wound, and the wound continues to fester underneath; the gifts
to the banksters, healthcare tax and Climategate were some of those bandaids
and the homes and businesses foreclosures showed the festering wound. Total
collapse is a foregone conclusion, its just a matter of when."
====================