# The monetary system only works if people don't understand it



## Tyler Durden (12 April 2012)

I was talking to my friend about money not being backed by gold, money being debt, and fractional reserve banking. He made an interesting comment, and said "the monetary system only works if people don't understand it".

What do you think?


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## rumpole (13 April 2012)

Tyler Durden said:


> I was talking to my friend about money not being backed by gold, money being debt, and fractional reserve banking. He made an interesting comment, and said "the monetary system only works if people don't understand it".
> 
> What do you think?




I think the monetary system has been complicated by too many alleged gurus, eg investment bankers , economists and share speculators who think up new formulas that they reckon explain the monetary system, when all they are doing is throwing dirty water over the whole issue. 

The system hasn't changed, it's just been hyped up to keep these gurus in a job and extend their mystique in the financial industry.


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## rumpole (13 April 2012)

rumpole said:


> I think the monetary system has been complicated by too many alleged gurus, eg investment bankers , economists and share speculators who think up new formulas that they reckon explain the monetary system, when all they are doing is throwing dirty water over the whole issue.
> 
> The system hasn't changed, it's just been hyped up to keep these gurus in a job and extend their mystique in the financial industry.




OK , it's changed a bit. e.g. Derivatives trading, which is just an extended form of gambling that I can't see adds any value to the market, but again just helps the gurus to stay in a job.


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## Glen48 (13 April 2012)

And when they find their system is not working they change the rules or some Fed  officer refuses to do any thing about it.


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## craft (13 April 2012)

Tyler Durden said:


> I was talking to my friend about money not being backed by gold, money being debt, and fractional reserve banking. He made an interesting comment, and said "*the monetary system only works if people don't understand it*".
> 
> What do you think?




The monetary system works despite people not understanding it.


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## lurker123 (13 April 2012)

Tyler Durden said:


> I was talking to my friend about money not being backed by gold, money being debt, and fractional reserve banking. He made an interesting comment, and said "the monetary system only works if people don't understand it".
> 
> What do you think?




I would rather have a slave for life (debt), than a useless chunk of gold which only has a small real value because of its useful properties, maybe 5% and lots of made up value because currently a large chunk of the population decided to value it highly at the current time.

The monetary system works regardless of whether people understand it or not. The question is whether the current system is a good system.


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## Starcraftmazter (15 April 2012)

Tyler Durden said:


> I was talking to my friend about money not being backed by gold, money being debt, and fractional reserve banking. He made an interesting comment, and said "the monetary system only works if people don't understand it".
> 
> What do you think?




*Correct.*


It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. ~ Henry Ford



lurker123 said:


> The monetary system works regardless of whether people understand it or not. The question is whether the current system is a good system.




All monetary systems "work" until they don't.


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## notting (15 April 2012)

Starcraftmazter said:


> Henry Ford



I prefer not to quote losers unless I'm being cynical.


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## lurker123 (15 April 2012)

Starcraftmazter said:


> All monetary systems "work" until they don't.




Just like money backed by gold would work, until it doesn't. 

You need to watch the source of all those quotes, instead of the second hand source of gold spruikers. 

http://topdocumentaryfilms.com/the-secret-of-oz/
which goes over the history of money and possible solutions the the problem.

http://topdocumentaryfilms.com/the-money-masters/
the older 1996 video which gives a more in depth look at the history of money.

http://www.youtube.com/watch?v=f6uuAupT4AQ
http://topdocumentaryfilms.com/money-as-debt-promises-unleashed/
http://topdocumentaryfilms.com/money-as-debt/
the money as debt series which properly details how money works.

The fact is that all the monetary systems that have been tried including money backed by gold have their weaknesses. The current system is still working, you just need to be in the class which the current system works best for. A goal which I and most of those in this forum are trying to attain, considering we are trading in shares.


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## Starcraftmazter (15 April 2012)

notting said:


> I prefer not to quote losers unless I'm being cynical.




Best not ever quote yourself then.



> Henry Ford (July 30, 1863 – April 7, 1947) was an American industrialist, the founder of the Ford Motor Company, and sponsor of the development of the assembly line technique of mass production. His introduction of the Model T automobile revolutionized transportation and American industry. As owner of the Ford Motor Company, he became one of the richest and best-known people in the world. He is credited with "Fordism": mass production of inexpensive goods coupled with high wages for workers. Ford had a global vision, with consumerism as the key to peace. His intense commitment to systematically lowering costs resulted in many technical and business innovations, including a franchise system that put dealerships throughout most of North America and in major cities on six continents.






> Ford astonished the world in 1914 by offering a $5 per day wage ($120 today), which more than doubled the rate of most of his workers.






> On Jan. 5, 1914, Henry Ford, head of the Ford Motor Company, introduced a minimum wage scale of $5 per day, more than doubling the wages for most employees. He also offered profit sharing to employees who lived a clean lifestyle, reduced the daily worker’s shift to eight hours from nine and declared that no employee would “be discharged except for proved unfaithfulness or irremediable inefficiency.”




Your ungrateful **** should thank Henry Ford for everything all employees worldwide have today.



lurker123 said:


> Just like money backed by gold would work, until it doesn't.




It worked perfectly well and better than this retarded **** we have going here now.



lurker123 said:


> The current system is still working, you just need to be in the class which the current system works best for. A goal which I and most of those in this forum are trying to attain, considering we are trading in shares.




That's the most perverted thing I've ever heard. You are a sick person to endorse slavery. Not to mention if you have watched money as debt like you claim, you should be well aware that the current system is coming at an end.


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## notting (15 April 2012)

Whoops!!
Sorry wrong Ford.
I am an idiot!
However revolutions normally don't happen until the people feel too much is being taken from them and that there is something they can do about it.
How monetary systems work - most don't give a rats.


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## Starcraftmazter (15 April 2012)

notting said:


> Whoops!!
> Sorry wrong Ford.
> I am an idiot!
> However revolutions normally don't happen until the people feel too much is being taken from them and that there is something they can do about it.
> How monetary systems work - most don't give a rats.




I'm very glad to hear it!!! I cannot imagine how anyone would not like Ford. 

In terms of the revolution, well let us see whether the GFC and the ongoing mess will deliver. Things might not be so bad in Australia (yet), but in the US and Europe it's a whole other story.


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## Tyler Durden (15 April 2012)

notting said:


> Whoops!!
> Sorry wrong Ford.
> I am an idiot!




lol I was wondering why you called Ford a loser


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## cynic (15 April 2012)

lurker123 said:


> The monetary system works regardless of whether people understand it or not. The question is whether the current system is a good system.




+1

I think it's fairly safe to say that society is starting to awaken to the various shortcomings of our current monetary system.


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## lurker123 (15 April 2012)

Starcraftmazter said:


> It worked perfectly well and better than this retarded **** we have going here now.




Shows you haven't watched the original videos and only the 2nd hand sources of gold spruikers. I won't explain the problem with money backed by gold as it is explained perfectly in the original videos. I have also posted other problems with it not mentioned in the videos, in the "The Global Economic Crisis and Its Effect on the Australian Currency" thread.



Starcraftmazter said:


> That's the most perverted thing I've ever heard. You are a sick person to endorse slavery. Not to mention if you have watched money as debt like you claim, you should be well aware that the current system is coming at an end.




Eventually it will come to a end, if we fail to achieve interstellar travel so we can start raping the resources of other planets. The question is when. I see a high chance of it persisting in my life time, so the fact that it might come to a end is irrelevant to me personally. Even if it comes to a end, the elites will just find a way to manipulate the new system that gets created. The elites didn't get where they are by being dumb. Successful psychopaths aren't dumb, hence the "successful". 

I'm just taking the defeatist attitude. The system we have now is what I have to deal with, so i just have to make the best of what we have. So yeah, humanity is ****ed, I don't give a ****, nothing I can do about it except try to become the class that benefits so i'm not ****ed myself.


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## Starcraftmazter (15 April 2012)

lurker123 said:


> Shows you haven't watched the original videos and only the 2nd hand sources of gold spruikers. I won't explain the problem with money backed by gold as it is explained perfectly in the original videos. I have also posted other problems with it not mentioned in the videos, in the "The Global Economic Crisis and Its Effect on the Australian Currency" thread.




Nothing that is a potential problem with the gold standard can even come close to the problems of fractional reserve banking and central banks which create all money and charge everyone interest, which goes to rich international banker families.



lurker123 said:


> I'm just taking the defeatist attitude. The system we have now is what I have to deal with, so i just have to make the best of what we have. So yeah, humanity is ****ed, I don't give a ****, nothing I can do about it except try to become the class that benefits so i'm not ****ed myself.




I for one refuse to sit idly by while myself and 7 billion others live as slaves, in the servitude of a few.


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## notting (15 April 2012)

Starcraftmazter said:


> In terms of the revolution, well let us see whether the GFC and the ongoing mess will deliver.



It was the people who voted for tomorrows welfare pay packet at the expense of their country and who feasted on cheap goods from slave nations at the ultimate expense of their own and their childrens longer term employment/welfare that created the GFC, not the monetary systems, that accommodated it.  If the democratic people were honest with themselves they could only revolt against themselves.

The problem with the models is that GROWTH is God! Worshiped blindly in policy making.

If I had to put money on it, I'd probably go for heavier seas due to land glacier melts pushing down on the plates causing some major volcanic eruption that wipes out about a third of the living space on earth and causes a pretty major freeze up that will hit the reset button for the rest.
The growth model can continue on from there again. 
Pity we can't be smarter about it with educated social conscience.

Then again, a meteorite is of course a free radical that has no probability assignable to it, nor a  developable system to avert it.

But tomorrow we wake up and the game is still on, so we play the status quo.
Imponderables.
How much time is it worth investing in them?


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## Starcraftmazter (15 April 2012)

notting said:


> It was the people who voted for tomorrows welfare pay packet at the expense of their country and who feasted on cheap goods from slave nations at the ultimate expense of their own and their childrens longer term employment/welfare that created the GFC, not the monetary systems, that accommodated it.  If the democratic people were honest with themselves they could only revolt against themselves.




I'm pretty sure all the housing and other speculative bubbles around the world would not exist if we had a hard currency backed by gold, so people couldn't get infinity gold to bid each other up on overpriced assets


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## lurker123 (15 April 2012)

Starcraftmazter said:


> I'm pretty sure all the housing and other speculative bubbles around the world would not exist if we had a hard currency backed by gold, so people couldn't get infinity gold to bid each other up on overpriced assets




You might be right there, on the other hand we would have massive unemployment because there is not enough money around.

By the way, as stated in the original videos, gold backed money is even more easily manipulated by the international banksters. Your own link "Crash Course: Chapter 9 - A Brief History of U.S. Money by Chris Martenson" even mentions how the federal reserve was created when the US dollar was backed by gold. It even mentions how quote: "complete control of the gold supply of the most powerful and prosperous nation on earth was exchange for 11 billion dollars printed out of thin air." 

I thought it was understood that money attracts money. Under a limited money supply, as one backed by the gold standard, you would end up with those at the top accumulating all the wealth, in this case gold, a lot quicker than otherwise. Inflation as under fiat currency is a partial reset switch to this problem. Since it devalues money and discourages hoarding. Under the gold standard, deflation would be the norm, and deflation = massive unemployment such as during the great depression.


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## Starcraftmazter (16 April 2012)

lurker123 said:


> You might be right there, on the other hand we would have massive unemployment because there is not enough money around.




Buddy, that makes absolutely zero sense. Please do even try to explain it, and I promise I will without insult explain why you are wrong.

There can *never* be "not enough" money. Gold can be priced at anything required relative to other assets. When growth exceeds gold supply growth the miracle of *deflation* occurs. This is one of the key differences between our current system and the godly gold system - it benefits the people, whereas the current system benefits the elite. That is why they spread lies and other bull**** about gold.

In reality gold is by far the best way to go.



lurker123 said:


> By the way, as stated in the original videos, gold backed money is even more easily manipulated by the international banksters. Your own link "Crash Course: Chapter 9 - A Brief History of U.S. Money by Chris Martenson" even mentions how the federal reserve was created when the US dollar was backed by gold. It even mentions how quote: "complete control of the gold supply of the most powerful and prosperous nation on earth was exchange for 11 billion dollars printed out of thin air."




Yes, and this is why fiat currency goes hand in hand with central banking.

That is why if we are to have a gold standard, there must be no central banks, and money must not be capable of being printed by any bank. This is why the government must issue *all* IOUs for gold into the monetary system.



lurker123 said:


> I thought it was understood that money attracts money. Under a limited money supply, as one backed by the gold standard, you would end up with those at the top accumulating all the wealth, in this case gold, a lot quicker than otherwise. Inflation as under fiat currency is a partial reset switch to this problem. Since it devalues money and discourages hoarding. Under the gold standard, deflation would be the norm, and deflation = massive unemployment such as during the great depression.




No dude, just no. That is not how it works. Deflation *does not cause unemployment* under the gold standard without central banks - that is a fallacy which people are led to believe because it happens under out current monetary system which benefits the rich and screws over everyone else. The *Federal Reserve* was the primary cause of the great depression - not the gold standard. Hell, Bernanke himself has admitted this!
http://www.wnd.com/2008/03/59405/



> Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.




If the US was under the gold standard, it's currency *issued by the treasury*, none of the crap that caused the great depression would have ever happened.



In a capitalist country with a gold standard, and no central banking and free markets - then high unemployment would be literally *impossible*, with very rare exceptions, where it wouldn't last long - certainly not as long as it has in USA and Europe since the GFC.

In reality virtually all panics and recessions are caused by mal-investment and speculation, which cannot occur to a devastating enough degree without fractional reserve banking and the ability of someone to print money. The worst thing that happened back in the day was that a few stupid banks (out of hundreds) went bankrupt, and in 1-3 years the economy got over it.

Did that suck? Yes
Did unemployment temporarily spike? Yes
Did the government need to bail anyone out? **** no
Did the government need to tax people to make up for their own failures? **** no
Did the gold standard ever stop America from growing faster than China and having the biggest and richest middle class in the whole world? *No it damn well did not*


Not only did the Fed cause the Great depression and the GFC, but almost all of the recessions in between, with the only major exception being the oil shock of 1979. And to be perfectly fair, that was a direct result of US and UK puppetry intervention in Iran (surprise surprise, ****'s happening again).


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## lurker123 (16 April 2012)

Starcraftmazter said:


> Buddy, that makes absolutely zero sense. Please do even try to explain it, and I promise I will without insult explain why you are wrong.
> 
> There can *never* be "not enough" money. Gold can be priced at anything required relative to other assets. When growth exceeds gold supply growth the miracle of *deflation* occurs. This is one of the key differences between our current system and the godly gold system - it benefits the people, whereas the current system benefits the elite. That is why they spread lies and other bull**** about gold.




Deflation never has and never will benefit the people. Deflation benefits those with money and ****s up those without it. I have mentioned it before and I will mention it again, money attracts money. If I recall, it has been mentioned elsewhere in this forum. If you have a group of people, and you give $100 equally to each one of them. In the end you will end up with only a few of the group having all the wealth. Those few with the money do not consume enough to redistribute the wealth, and in fact are more likely to try and acquire more wealth with their current wealth than to destroy their wealth through consumption. This results in hoarding, hoarding results in the shrinkage of the money supply, without the corresponding decrease in the price of goods. Under a limited money supply such as the gold standard, all the gold would quickly end up in the hands of a very few, thus meaning there is a lack of money in the system for everyone else to facilitate exchange. Lack of money, not enough to facilitate exchange = unemployment.

I would appreciate it if you would watch the original videos, before making further comments based on information you got from gold spruikers.


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## Starcraftmazter (16 April 2012)

lurker123 said:


> Deflation never has and never will benefit the people. Deflation benefits those with money and ****s up those without it.




Everyone who works has money.



lurker123 said:


> Those few with the money do not consume enough to redistribute the wealth, and in fact are more likely to try and acquire more wealth with their current wealth than to destroy their wealth through consumption. This results in hoarding, hoarding results in the shrinkage of the money supply, without the corresponding decrease in the price of goods.




In a true free market economy, it is not possible that a shrinkage in the money supply does not cause deflation in the price of goods. That is simply not possible.

Furthermore, gold doesn't magically shrink. The money supply can never shrink with gold.



lurker123 said:


> Under a limited money supply such as the gold standard, all the gold would quickly end up in the hands of a very few, thus meaning there is a lack of money in the system for everyone else to facilitate exchange. Lack of money, not enough to facilitate exchange = unemployment.




Gold would not end up in the hands of a few. Again, the US has existed under the gold standard for a very long time, and it has made it the most prosperous country on the planet at the time. Since being taken over by central banks, it has been ruined. What you say is simply not true historically.

The only and only way you can have those with disproportionate wealth steal the rest is with central & fractional reserve banking . Without it, the gold standard can exist fairly for all.



lurker123 said:


> I would appreciate it if you would watch the original videos, before making further comments based on information you got from gold spruikers.




Alright, link precisely which videos make whatever point you want, and I will be happy to refute them.


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## Julia (16 April 2012)

Just an observation:  SCM you have rather avoided saying whether you're actually employed or not.  Given the time you spend posting on this forum, if you do have an employer he/she is hardly getting value for money.

Probably more likely that you're an unemployed uni student with nothing better to do than troll internet fora.


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## Starcraftmazter (16 April 2012)

Julia said:


> Just an observation:  SCM you have rather avoided saying whether you're actually employed or not.  Given the time you spend posting on this forum, if you do have an employer he/she is hardly getting value for money.




Pretty sure I have, not that it's anyone's business. Whether you think so or not is not really relevant to me. Seems like all people around here do when they've been proven wrong is take threads off topic with personal insults and such.


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## wayneL (16 April 2012)

Starcraftmazter said:


> Pretty sure I have, not that it's anyone's business. Whether you think so or not is not really relevant to me. Seems like all people around here do when they've been proven wrong is take threads off topic with personal insults and such.




Your standard of 'proof' obviously does not match up to the rest of us. 

Re your employment, it goes to your credibility, which seems to be at a low ebb right now. 

You just have to realize that many of the members here know about stuff via experience, you should respect that and perhaps a little bit of respect might be reciprocated.


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## Starcraftmazter (16 April 2012)

wayneL said:


> You just have to realize that many of the members here know about stuff via experience, you should respect that and perhaps a little bit of respect might be reciprocated.




I'm sure they do, and if you haven't noticed, not once have I argued with anyone about their stock valuations of stock analysis or anything else like that.

Certain other things however, people sure do say a lot of crap about here, which is only going to result in some unfortunate people losing a lot of money. Like the property spruiking by a lot of members


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## lurker123 (16 April 2012)

Starcraftmazter said:


> Alright, link precisely which videos make whatever point you want, and I will be happy to refute them.




I suggest that when you have time to spare on the weekend to watch the money masters, the original 1996 video, link is in the previous post. Gold spruikers take bits and pieces from the video and conveniently leave out all the rest which conflicts with their view that gold is good. 

The federal reserve came into existence under the gold standard, the fed is simply a tool the elites developed to control the wealth. The fed is not part of fiat currency, fiat currency came after the fed was already formed under the gold standard. All the bankster families, acquired their wealth under the gold standard. It is even mentioned in the video in your link, that after the panic of 1907 JP Morgan intervened as the lender of last resort. How were all these bankster families able to create the fed in the first place, how was JP Morgan able to intervene as the lender of last resort? The answer is that the banksters were able to acquire massive amounts of wealth under the gold standard, hence JP Morgan backed by the wealth of the bankster families was able to intervene. Which eventually led to the creation of the fed. Going even further back in time to the 15th to 19th century, under the gold standard, gold smiths were already manipulating money. All this history is detailed in the money masters.


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## Starcraftmazter (16 April 2012)

lurker123 said:


> The federal reserve came into existence under the gold standard, the fed is simply a tool the elites developed to control the wealth. The fed is not part of fiat currency, fiat currency came after the fed was already formed under the gold standard. All the bankster families, acquired their wealth under the gold standard. It is even mentioned in the video in your link, that after the panic of 1907 JP Morgan intervened as the lender of last resort. How were all these bankster families able to create the fed in the first place, how was JP Morgan able to intervene as the lender of last resort? The answer is that the banksters were able to acquire massive amounts of wealth under the gold standard, hence JP Morgan backed by the wealth of the bankster families was able to intervene. Which eventually led to the creation of the fed. Going even further back in time to the 15th to 19th century, under the gold standard, gold smiths were already manipulating money. All this history is detailed in the money masters.




Yes, that is why I'm against central banking. I have never said I want a gold standard under central banking, it would clearly be almost as bad.

That's why I keep saying that only the government must be able to issue currency, not any central bank.

And yes, JP Morgan was a scumbag, but it's not as though the gold standard made him a scumbag. What do you suggest, and his kind can't make money under the current system? At least back then people didn't have to deal with inflation and tax.


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## Tyler Durden (9 July 2012)

The recent Lie-bor story is a good example of what I was trying to say.

I reckon if I told my colleague today "OMG did you know all these bankers colluded to set their own interest rate?!??!?!" she'd be like "so?" not really (bothering) understanding what the hell I was going on about. I mean, this should be huge, huge news for everyone, but I don't think anyone outside of the finance world would be reading about it.

However, imagine if everyone in the world cared about how the interest rate was set...I reckon the odds of them even daring to do this would be so much slimmer.


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## Tyler Durden (4 October 2012)

> Attempts by Opposition Leader Tony Abbott to compare Australia's economy to struggling European economies are ''absurd'' and ''grossly irresponsible'', according to Prime Minister Julia Gillard.
> 
> Mr Abbott today backed comments from the former Future Fund head David Murray that Australia risked a European-style economic downturn if debt was not addressed, sparking the ire of senior Labor figures, who claimed such comparisons were dangerous.
> 
> ...




http://www.smh.com.au/opinion/gilla...ponsible-economic-warning-20121004-271hb.html

This is on point with my original post - it looks like from what Swan and Gillard say, it gives the impression that they are trying to keep Australians in the dark, and that if the truth came out, then it'd be "downright dangerous".


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