Citizens Electoral Council leader Craig Isherwood today charged that the latest aluminium smelter to close in Australia, at Point Henry near Geelong, is another victim of multinational banks fraudulently gaming and manipulating the currency and commodity markets, under the cover of the deregulated and globalised financial system.
Isherwood called on the government to intervene to save one of the most crucial industries in Australia, through an emergency nationalisation.
“The future of these plants and their employees must not be left to the boards of foreign multinational corporations,” he said. “This industry is so crucial to our industrial economy that we mustn’t let it be lost.
“Abbott and Hockey must snap out of their ideological free trade stupidity, recognise that rigged global financial markets are smashing up crucial parts of Australia’s economy, and nationalise on an emergency basis the smelters that have been closed in the last few years, and any future ones slated for closure.”
Isherwood noted the Australian dollar was partly to blame, but also blamed the gaming of the commodity markets, including the aluminium industry, by the London Metal Exchange (LME) and the London/Wall Street banks.
Last year, Goldman Sachs was caught out manipulating the stockpile of aluminium in U.S. warehouses it had bought, delaying orders by weeks and months, to both charge more for storage—a percentage of which charge went to the LME—and to push up the retail price (the LME spot price for producers continued to fall).
Goldman Sachs and the other giant banks which have been exposed for this type of commodity market gaming—JPMorgan has been caught gaming the copper market, and electricity prices—were unleashed when the U.S. Glass-Steagall Act was repealed in 1999; previously, commercial banks were forbidden from trading in commodities.
“So much for Hockey’s free market,” Isherwood scorned. “It is, and always has been, a fraud. It is equally criminal that both major parties are responsible for exposing the Australian economy to such financial looting, from when Hawke, Keating, Howard and Hewson conspired to deregulate the financial system beginning with the float of the dollar in 1983.”
Isherwood explained why aluminium smelting was so crucial to Australia’s economy, by pointing out that without aluminium smelting, Australia would be left exporting only the raw material bauxite, which would rob the economy of immense wealth.
He cited the Gorton-McEwen government’s 23 January 1970 Cabinet paper on the establishment of the Australian Industry Development Corporation (AIDC), which was intended to invest in value-adding industries.
The paper calculated the value difference in exporting bauxite vs. processed aluminium, in 1970 dollars:
- exporting 1 million tonnes of bauxite, the raw material, earned $5 million;
- processed one step into alumina earned $27 million;
- processed again into aluminium earned $125 million;
- and processed finally into aluminium products earned $600 million!
“These figures show that public support for the aluminium industry, or temporary public ownership, is not a subsidy—the value-adding this industry does subsidises the entire economy,” he said. “It makes a massive contribution to our standard of living. As do all manufacturing industries, including car manufacturing, food processing, refineries, etc.
“The Australian government is being criminally negligent if it lets such crucial industries fall victim to manipulated markets.”
Isherwood concluded, “As well as emergency nationalisations, the government should join the growing global push to restore the Glass-Steagall principle of separating retail banking from speculative investment banking. That way, when crooks in investment banks are caught out gaming the system, they won’t be too-big-to-fail and too-big-to-jail, as they are now. They will be able to be put out of business, without any risk to the real economy.”
