The new Australian Opposition finance spokesman, Barnaby Joyce, does not believe the threat of total global economic collapse has passed, and is demanding the Australian government prepare for the day when, or if, the United States defaults on its debts and an angry China cuts off the credit supply.
From The Age :
(Joyce) proposed that the Federal Government should introduce laws allowing it to break up the assets of the four main banks - and use them to force banks to hold down interest rates.
...Senator Joyce said he did not want 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 an Australian 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?'' he said.
''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.''
Joyce said if the United States failed to repay its $2 trillion debt to China, the yuan could replace the US dollar.
''If America collapses there will be no more sale of Chinese products to America and therefore very little purchase of Australian resources by China.''
''The whole pulse of trade is compromised because people say, 'Why would I trade with the US when it might not pay its debt back?' ''
Joyce said to prepare for an "economic Armageddon" Australian should ensure we have "the capacity to feed ourselves, the capacity to provide the fundamentals in medicines and basic fundamental requirements for our nation.''
Read The Full Story Here
(Joyce's) 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''.