Pt.1 Paul Keating on global financial crisis

http://www.abc.net.au/lateline/content/2008/s2480345.htm

Once described as the world's greatest treasurer, former prime minister Paul Keating joins Lateline to discuss the current global financial crisis, and thus the world's economic future.

Transcript excerpt:

TONY JONES, PRESENTER: And joining us now in the studio, is the former Prime Minister, Paul Keating. Thanks for being here.

PAUL KEATING, FORMER PRIME MINISTER: Tony.

TONY JONES, PRESENTER: Now let's start with a "very" big picture, if we can? Does this global financial crisis, look to you like a two year crisis, a five year crisis, or something much worse, and much more prolonged?

PAUL KEATING, FORMER PRIME MINISTER: Oh well, it's a catastrophe. It's way worse than it appears. We've had an expansion of credit running for 60 years, from 1947 to 2007. This is the first time, 2008, and now '09, where we have had a contraction of credit.

Ah, the top 200 financial institutions in the world have suffered an average loss of value, of 74 per cent -- the top 200, average loss of 74 per cent. We've gone through a bull market which began in 1982, went for 25 years, a bull market, in the stock market to 2007.

What we need is a completely new global political, and economic settlement. We need to get rid of the old G7. We've got to be rid of the old IMF (International Monetary Fund). Ah, we've got to bring the surplus countries, into the political framework.

You see, the G7 is made of debtor countries, countries like the United States, Britain, France, Italy; these are all borrowers, there's no surplus countries in that. And if you look at the structure of the IMF, the Chinese get 3.7 per cent of the vote, the Indians get 1.9, the Europeans and Americans get 51 per cent.

And there's just no way the Chinese Communist Party is going to hand over control of their currency, and their political fortunes, to a Washington-based US Treasury run institution. So unless there's going to be a complete resettlement --

TONY JONES, PRESENTER: You talk about a new Bretton Woods agreement?

PAUL KEATING, FORMER PRIME MINISTER: A totally new Bretton Woods agreement. We're not going to get out of this. I mean this is the United States Budget 'cannot' reflate the world.

We've always lived in a position where the United States Budget could reflate the world -- this is not going to happen now. The Budget this year was going to be $850-billion, now look President Obama is talking about another trillion, so $1.8-trillion, their GDP is 13-trillion, so they'll be running a Budget deficit this year of 15 per cent of GDP, they'll have to do this for three or four years.

Sixty per cent of American GDP, who is going to buy the bonds? Now every serious American policy maker knows that they are not going to be returning value, in the end they'll inflate their way out. So in other words, you'll buy American Treasury bond, but what you get back in return will be an inflated dollar, so you'll get back 50 per cent of real value, or something, in other words the debt will be so overwhelming that it cannot be repaid.

And you'll start to see in the price of gold, if this goes on for a couple more years, the real serious question of an American default, a default by the United States Treasury. So this is what we are dealing with now.

Category:

Education

Tags:

• Paul
• Keating
• Brettons
• Wood

[therealshlong]

This man could not run a tap in his own garden for God sake!

If he was in the corporate world not only would have he been sacked, he would be sacked, then sued, then put in jail for a long long time!

[jerepah]

@therealshlong Last i heard he was worth about $35 million, and he dropped out of high school at 17. Lol, go figure........

[btbking]

You are only 16 and most probably brainwashed. For every day Australia remains in the first world, you must thank PK for his works. A man of foresight he was.

[galactuslives]

@therealshlong WHAT!!!! Where are your facts? Because of this man you will retire with Super Savings that should make sure you live comfortably through retirement. Because of Hawk/Keating and their policies of tariff reduction, regulation for banks, independence of the reserve bank and floating the dollar our economy was able to withstand the Asian Financial Crisis, the crash after 911, and the biggest credit crunch since the great depression! The only SHIT I see here is your own vitriol

[galactuslives]

@therealshlong rubbish, this man ran some of the most important reforms this country has ever seen. No CEO or political leader of that time had the ticker and the b@lls that Hawk and Keating had. Look at the long list of achievements, they speak for them. You can attack his character BUT you cannot deny his achivements, they far outshine any other leader we have had.

[imlay1992]

hmmm... one part of this video when he mentioned "whos going to buy the (US) bonds, they wont be returning their value"...

and was it today (10/3/2011) that PIMCO ("The world's largest bond investor") dumped/sold off 100% of their US government related bonds?? (please do correct me if im wrong/inaccurate)

It just shows... the man (Paul Keating) knows what hes talkin about! (especially with the video being a few years ago)

[Dangermouse6340]

this man is wise.....

[therealshlong]

@gotmyfingerrscrowsed True, that's my point though, he can talk the talk, but he certainly cannot walk the walk.

Anyhow what i do know is the libs are without a doubt a great deal more capable when it comes to fiscal policy, any graph produced over 50 years in any facit would prove this point.

Why? Because socialism doesn't work, taking from Paul to pay Peter is a false economy, whereas when both Paul and Peter are doing well, there is no borrowing going on.

[therealshlong]

@gotmyfingerrscrowsed Words are one thing my friend, action is another, the labour party i believe is the best by far at words, if i was to give awards out for spin it would go to them every year in row for the last 30 years.

Acton however is something different, why? because their focused more on the action than the words!

Look my friend, the old saying still holds true as you will yourself will admit "proof is in the pudding" This man's pudding was SHIT! If you disagree you weren't there!

[therealshlong]

@gotmyfingerrscrowsed No i didn't because as a business man i know all you need to look at in someones resume is their past, tells the story, he ran this into the ground, so no i didnt bother.

But i thought, why not? Maybe he changed..lol, so i watched.

Yes he is a fabian through and through, loves the concept of the NWO and people are a statistic.

And yes that is why those that are off the same belief manipulate markets which lead us all down that path.