I am a 77-year old Australian citizen, married 50-years with four children and 11 grandchildren. We own our home, have a reasonable superannuation and own a small business. However, all this could disappear tomorrow because the law no longer limits how banks use our deposits.
Yesteryear, Australian deposits were protected through a government owned bank and the USA protected deposits through its ‘Glass-Steagall legislation’ that was introduced in 1933 to prevent a repeat of the great depression. Unfortunately, ‘Glass-Steagall’ was repealed in 1999 and banks then gained access to deposits for speculation and became like supermarkets handling many types of financial products including derivatives.
The Risk: As unsecured loans, our deposits and savings are now gambling money for the banks while $35 trillion of risky derivatives are secured loans. Banks also have a massive exposure to the property bubble and we are now at a higher risk than during the GFC.
The Government promoted its deposits guarantee of up to $250,000/person/bank but this is not activated and thus does not exist. Even if activated, deposits over $250,000 are simply confiscated and even the balance may almost totally disappear because the maximum allocation of only $20 Billion/bank pales into insignificance against the deposits of $400 Billion held by each of the big four and against their combined secured debt of $35 Trillion.
With the current structure, the Government simply cannot guarantee the total deposits and we would lose our direct savings and superannuation. Having lost most of the working capital, businesses would have to wind up or retrench many employees. This ripple down effect would result in a major depression.
The Solution: Australians are entitled to a safe haven for their total savings and ‘Glass-Steagall’ must be legislated. Those that have spoken publically for Glass-Steagall include Don Argus, former CEO National Australia Bank, Dr.Wilson Sy, former APRA executive and the late former Prime Minister, The Right Honourable Malcolm Fraser but Glass-Steagall will not happen without your support.
For a more complete story with links to revealing government documents, visit http://www.politicalalerts.org and sign the ‘Glass-Steagall’ petition. Take a printed copy of the evidence to your MP and Senators and demand their support for a private members bill.