08-20-2011, 11:16 AM
BREAKDOWN CRISIS OUT OF CONTROL
URGENT APPEAL FOR A GLOBAL GLASS-STEAGALL SYSTEM
Helga Zepp-LaRouche
http://www.larouchepub.com/hzl/2011/3832...gl-st.html
Aug. 12—It would be better if leaders found the courage to openly admit what is now obvious: The global breakdown-crisis of the financial system is out of control; it is global; there is a danger of a meltdown of the financial system and the real economy, which threatens to dwarf the Crash of 1929 and the subsequent Great Depression—and that governments have no idea what to do. Most of them have the dreadful suspicion that the European fiscal union dictated by London and the draconian austerity measures associated with it will not solve the problem, but indeed will create conditions throughout Europe such as those they are now seeing with the riots in Great Britain.
It is no wonder that we are also dealing with an unprecedented crisis of the credibility of governments, which have placed themselves at the mercy of "the markets" for the past four years, since the crisis erupted in July 2007. And instead of restraining these markets by re-regulation, they got roped in, with one "emergency" after another, to greater and greater concessions to the power of financial institutions, thereby transforming hundreds of billions of the private debt of the speculators into government debt, for which the population is now being punished, with huge austerity programs in the public budgets.
The financial sector, with one new "bailout" after another, expresses its gratitude by launching new speculative attacks, first against Greece and other EU "peripheral" states, and most recently against France and Germany, and by betting with credit default swaps (CDS) against these countries "as if the end of the world had come," according to Handelsblatt). At the same time, the credit downgrades of various countries by the rating agencies has produced a contraction of the completely uncontrolled so-called shadow banking, which, because of the leverage effect of credit derivatives, is causing a geometrically accelerating collapse. Ironically, it turns out that precisely the "most profitable"—and also the most risky—sector of the casino economy is the Achilles' heel of the system.
No to a European Fiscal Union
In this dramatic situation, the agents of the British Empire—whether the Financial Times, or European Central Bank head Jean-Claude Trichet, or European Commission President José Manuel Barroso, who, with his demand for an increase of the capital stock of the European Financial Stability Facility (EFSF), just two weeks after the July 21 EU summit, invoked a new "emergency"—are asserting that only the immediate establishment of a European economic government could stop the final collapse of the Eurozone. Only a European fiscal union would be bigger and more powerful than the markets, is the sophistical argument.
Of course, such a European economic government—as was planned from the very beginning by the architects of the European Monetary Union—would be able to enforce, supposedly more effectively, precisely what "the markets" want anyway, namely the most brutal cuts, as are now being imposed on Greece, Portugal, Italy, Spain, and France—except that the states concerned would then have absolutely no veto right to protect the common good of their countries, with such already mentioned social consequences as we see in the British riots.
Such elimination of the last remnants of national sovereignty would be the last step in a whole series of violations of the national constitutions of Europe, as was confirmed yet again in the 2009 "Lisbon verdict" of the German Constitutional Court in Karlsruhe, as well as even in the EU treaties of Maastricht and Lisbon. The ECB, violating its own statutes, has, for some time, been buying up the junk bonds of bankrupt states on the secondary market—thus causing hyperinflation instead of guaranteeing the stability of the euro—and acting clearly against the interests of European states and the general welfare of the citizens.
With this attack on constitutionality, which in the U.S. is taking the form of the White House-controlled "Super Congress," de facto destroying the power of Congress, and which in Europe is taking the form of an unconstitutional EU federal state, the representatives of this policy have deprived themselves of their own legitimacy. The evidence of their already visible failure is average youth unemployment of over 20%, which has produced a generation of the hopeless, with no future under the present system. A continuation and intensification of this policy, as would occur in a European fiscal union, would plunge the trans-Atlantic region into a new dark age, which would soon reach every nook and cranny of the Earth.
The Glass-Steagall Solution
Faced with this existential threat, there is only one way out: a global, two-tier banking system in the tradition of the U.S. Glass-Steagall Act of 1933. The bill for a new Glass-Steagall Act, H.R. 1489, which was introduced by Democratic Rep. Marcy Kaptur (D-Ohio) in the U.S. House of Representatives, is now being cosponsored by 32 other Congressmen, and supported by the national trade union federation, the AFL-CIO; the National Farmers' Union (NFU); and numerous regional and local trade union and party institutions, city councils, etc.
I enumerate the necessary emergency measure:
All the countries of the trans-Atlantic region must adopt legislation for a two-tier banking system, based on Franklin D. Roosevelt's Glass-Steagall Act of June 16, 1933, the principles of which also existed in European countries until the early 1980s, with strict regulations under which the banking sector primarily had the character of industrial banks, and private savings could not be used for risky speculative operations.
As was the case before the repeal of Glass-Steagall in 1999 by the Gramm-Leach-Bliley Act, commercial banks, investment banks, and the insurance sector will have to be completely separated from each other.
The commercial banks will have to be placed under state protection; the investment banks will have to bring their balance sheets into order on their own, without the help of taxpayers' money, which in practice means that toxic paper in the trillions will have to be written off, even if it leads to the insolvency of the banks.
Those legitimate areas from the old system that deal with the real economy or the productive lives of working people will be identified, and be held valid in the new system. Some categories of these claims will have to be frozen at first, because of complex interdependencies, and then analyzed by a state institution, valued, and honored.
A national banking system in the tradition of Alexander Hamilton must then issue long-term loans, within the new credit system, with low interest rates for productive investment purposes, which, by an emphasis on increasing energy-flux density and scientific and technical progress, will raise economic productivity. The participating nations must immediately establish a system of fixed exchange rates.
For the reconstruction of the global economy, long-term cooperation agreements will have to be concluded among sovereign states, whose purpose will be to build well-defined infrastructure and development projects. These agreements represent de facto a new credit system, a New Bretton Woods system, in the tradition of Roosevelt.
Given the decades-long destruction of industrial and agricultural capacities as a result of the monetarist dogma, beneath the level required for decent living conditions for the world's current population of around 7 billion, the goal must be to achieve, through a science-driver, the next, higher platform of economic development, as Lyndon LaRouche has formulated this from the standpoint of physical economy. As an historical example, the increase in productivity achieved by President John F. Kennedy's Apollo program has lasted to the present day.
Join me in directing an urgent appeal to parliaments and governments to fulfill their constitutional duty and to protect the common good of those they represent, by adopting a two-tier banking system immediately.
THE ONLY SOLUTION IS TO FIRE OBAMA;
RESTORE GLASS-STEAGALL
http://www.larouchepub.com/lar/2011/3832...ality.html
We had an event, yesterday, a diplomatic event in Washington, D.C. The most significant part of that event is obviously the thing that was least on the schedule, and that is, as most of the diplomats there indicated, they have no comprehension of what the world situation is, or their immediate situation, right now. They're all trapped in a fantasy-land, which presumes that things aren't as bad as they are, a gross underestimation of the crisis which faces humanity now. For example, what we're dealing with immediately is the threat of, say, as early as Saturday, there could be a collapse of the entire world system, a chain-reaction collapse. We're on the edge now, of the decisions which will decide that. Perhaps some of these nations will be frightened enough not to do the stupid thing, the absolutely stupid thing, but none of them will be bright enough to know what to do, to be successful, in dealing with it.
And that's the mission before us. And that's the subject of the discussion here, today....
We are in a general breakdown crisis. And anyone who thinks there is not a general breakdown crisis, who does not think there's an immediate collapse of civilization, beginning in the trans-Atlantic region and extended to the rest of the world: We are looking at a breakdown crisis which has planet-wide, immediate implications. And all those people, who think there are little solutions on the way up there, or little things that can be worked out, or ways to postpone the crisis, are idiots!
We're now in a breakdown crisis. We do not produce enough, presently, to sustain people, in terms of the immediate needs of mankind! This is true in the United States, as in food supplies for the coming year; this is true in Europe; this is true in much of the rest of the world, they just don't know it. Their ignorance of reality is what seizes them and controls them, and controls their fate. That's where we are.
A Lack of Willingness To Comprehend
We had a diplomatic session, in Washington yesterday, and that is what we found. It was the largest diplomatic turnout we've had—and among all these people, there was a general expression of absolute confusion and misunderstanding of what the world situation is.
This, of course, is helped by the press, and similar kinds of things. It's helped by the politicians: Our politicians, generally are absolute idiots; there are a few exceptions. But the Democratic Party, the Republican Party—the main body of them are absolute idiots. They have no comprehension, and they lack the willingness to comprehend! They lack the willingness to understand the crisis! They lack the willingness to face reality! And this is typically a Boomer problem. They will not face reality: The entire system is now coming down. If there's not a radical and sudden change in direction, civilization is going under.
It can go under now. It can go under, who knows what day? Who knows how soon? But the potential for an immediate collapse exists this week: It came into existence on Sunday [Aug. 7], when everything was set up for a general breakdown crisis of the entire international financial-monetary system. And in all the governments of the world, there's not one which has shown understanding of the nature of this crisis. And therefore, what we have to say here—even though we may be regarded as a small voice in the world—it's probably the only thing that's worth hearing at this time.
The whole thing is coming down. Everyone in government is generally, more or less, a fool. They're in a state of denial, and that's the kind of question we have to take up today. Because somebody has got to speak the truth, when you're on the edge of a potential slide into Hell. And that time is now. We don't know when it would happen; we don't know if it would happen at some particular time, or in some way or another. We do know what the potential is. We do know that under present principles, under present guiding policies of the governments of the world, there is no chance for the survival of humanity. And only if there is a change, of the relevant type, will mankind come out of this thing safely.
And Hell is beginning now. We entered Hell this week. That question, when you begin to feel the heat, is the only question, and why.
And that's what we face. And we've got to get ourselves up to scratch on this level. Don't talk about this solution, that solution, this solution—forget it! It's very simple: What has to be done, is simply to put the entire financial-monetary system through a breakdown crisis, a managed breakdown crisis, in which, first of all, Glass-Steagall is essential.
Without Glass-Steagall and without firing the President of the United States, there's no chance for civilization. This man has to be thrown out of office now! If he is not thrown out of office, very soon, there's no chance for humanity! Because he's jamming up the works under British control. The only thing we have in our favor, is that some of the Europeans, including some of the British, realize what they're doing: They're gambling with extinction. Not extinction now, but a process that leads to extinction.
And therefore, that's the question we have to take up now, the question I posed yesterday.
Denial of Reality
I saw, in that group of diplomats, there, I saw complete consternation, complete denial of reality, complete ignorance of reality! Which reflects the fact that the governments of the world are not in reality. They're in a fantasy-land. And the time has come when it's all coming down. Unless we can reverse it—and it can be reversed, by the right decision: Fire Obama! Get him out of there! We have all the grounds for doing so! If we don't get him out of there, you will not find a political force capable of removing him and removing his policy. If you don't throw him out, no United States! That's where it stands. He has to be thrown out now, and there are grounds for doing so; several procedures exist. That's where we stand.
Which means there's a change in thinking among the political forces, the leading political forces, in the United States, among other places, as well as in Europe. And it has to be a change from what they think. It will not be a negotiation with them, on compromise! There is no compromise.
Glass-Steagall is indispensable; it is not the solution: It's the precondition for the solution! And the precondition is to junk, entirely, the so-called Green movement. That's the problem. The Green movement is what's killing us; it's killing humanity. If you don't throw the Green movement out, if you don't throw Obama out now, you're not going to have civilization!
So, you don't have a right to negotiate this, because if you don't come up with the right answer, there is no civilization. Therefore, if you don't agree with what I'm indicating has to be done, your ideas are worthless; you're self-doomed by your own folly. It's come to that point: The habits you've acquired, the people out there, the habits they've acquired, are the thing that dooms them. And it's those habits, that kind of thinking, which must be thrown out the window, to get back to the American System, and what the American System represented under Franklin Roosevelt and similar kinds of leaders.
Without doing that now, without cleaning up the act now, in that way, there's no chance: You've come to the end of the line, and the decisions you make now will be either salvation or doom.
URGENT APPEAL FOR A GLOBAL GLASS-STEAGALL SYSTEM
Helga Zepp-LaRouche
http://www.larouchepub.com/hzl/2011/3832...gl-st.html
Aug. 12—It would be better if leaders found the courage to openly admit what is now obvious: The global breakdown-crisis of the financial system is out of control; it is global; there is a danger of a meltdown of the financial system and the real economy, which threatens to dwarf the Crash of 1929 and the subsequent Great Depression—and that governments have no idea what to do. Most of them have the dreadful suspicion that the European fiscal union dictated by London and the draconian austerity measures associated with it will not solve the problem, but indeed will create conditions throughout Europe such as those they are now seeing with the riots in Great Britain.
It is no wonder that we are also dealing with an unprecedented crisis of the credibility of governments, which have placed themselves at the mercy of "the markets" for the past four years, since the crisis erupted in July 2007. And instead of restraining these markets by re-regulation, they got roped in, with one "emergency" after another, to greater and greater concessions to the power of financial institutions, thereby transforming hundreds of billions of the private debt of the speculators into government debt, for which the population is now being punished, with huge austerity programs in the public budgets.
The financial sector, with one new "bailout" after another, expresses its gratitude by launching new speculative attacks, first against Greece and other EU "peripheral" states, and most recently against France and Germany, and by betting with credit default swaps (CDS) against these countries "as if the end of the world had come," according to Handelsblatt). At the same time, the credit downgrades of various countries by the rating agencies has produced a contraction of the completely uncontrolled so-called shadow banking, which, because of the leverage effect of credit derivatives, is causing a geometrically accelerating collapse. Ironically, it turns out that precisely the "most profitable"—and also the most risky—sector of the casino economy is the Achilles' heel of the system.
No to a European Fiscal Union
In this dramatic situation, the agents of the British Empire—whether the Financial Times, or European Central Bank head Jean-Claude Trichet, or European Commission President José Manuel Barroso, who, with his demand for an increase of the capital stock of the European Financial Stability Facility (EFSF), just two weeks after the July 21 EU summit, invoked a new "emergency"—are asserting that only the immediate establishment of a European economic government could stop the final collapse of the Eurozone. Only a European fiscal union would be bigger and more powerful than the markets, is the sophistical argument.
Of course, such a European economic government—as was planned from the very beginning by the architects of the European Monetary Union—would be able to enforce, supposedly more effectively, precisely what "the markets" want anyway, namely the most brutal cuts, as are now being imposed on Greece, Portugal, Italy, Spain, and France—except that the states concerned would then have absolutely no veto right to protect the common good of their countries, with such already mentioned social consequences as we see in the British riots.
Such elimination of the last remnants of national sovereignty would be the last step in a whole series of violations of the national constitutions of Europe, as was confirmed yet again in the 2009 "Lisbon verdict" of the German Constitutional Court in Karlsruhe, as well as even in the EU treaties of Maastricht and Lisbon. The ECB, violating its own statutes, has, for some time, been buying up the junk bonds of bankrupt states on the secondary market—thus causing hyperinflation instead of guaranteeing the stability of the euro—and acting clearly against the interests of European states and the general welfare of the citizens.
With this attack on constitutionality, which in the U.S. is taking the form of the White House-controlled "Super Congress," de facto destroying the power of Congress, and which in Europe is taking the form of an unconstitutional EU federal state, the representatives of this policy have deprived themselves of their own legitimacy. The evidence of their already visible failure is average youth unemployment of over 20%, which has produced a generation of the hopeless, with no future under the present system. A continuation and intensification of this policy, as would occur in a European fiscal union, would plunge the trans-Atlantic region into a new dark age, which would soon reach every nook and cranny of the Earth.
The Glass-Steagall Solution
Faced with this existential threat, there is only one way out: a global, two-tier banking system in the tradition of the U.S. Glass-Steagall Act of 1933. The bill for a new Glass-Steagall Act, H.R. 1489, which was introduced by Democratic Rep. Marcy Kaptur (D-Ohio) in the U.S. House of Representatives, is now being cosponsored by 32 other Congressmen, and supported by the national trade union federation, the AFL-CIO; the National Farmers' Union (NFU); and numerous regional and local trade union and party institutions, city councils, etc.
I enumerate the necessary emergency measure:
All the countries of the trans-Atlantic region must adopt legislation for a two-tier banking system, based on Franklin D. Roosevelt's Glass-Steagall Act of June 16, 1933, the principles of which also existed in European countries until the early 1980s, with strict regulations under which the banking sector primarily had the character of industrial banks, and private savings could not be used for risky speculative operations.
As was the case before the repeal of Glass-Steagall in 1999 by the Gramm-Leach-Bliley Act, commercial banks, investment banks, and the insurance sector will have to be completely separated from each other.
The commercial banks will have to be placed under state protection; the investment banks will have to bring their balance sheets into order on their own, without the help of taxpayers' money, which in practice means that toxic paper in the trillions will have to be written off, even if it leads to the insolvency of the banks.
Those legitimate areas from the old system that deal with the real economy or the productive lives of working people will be identified, and be held valid in the new system. Some categories of these claims will have to be frozen at first, because of complex interdependencies, and then analyzed by a state institution, valued, and honored.
A national banking system in the tradition of Alexander Hamilton must then issue long-term loans, within the new credit system, with low interest rates for productive investment purposes, which, by an emphasis on increasing energy-flux density and scientific and technical progress, will raise economic productivity. The participating nations must immediately establish a system of fixed exchange rates.
For the reconstruction of the global economy, long-term cooperation agreements will have to be concluded among sovereign states, whose purpose will be to build well-defined infrastructure and development projects. These agreements represent de facto a new credit system, a New Bretton Woods system, in the tradition of Roosevelt.
Given the decades-long destruction of industrial and agricultural capacities as a result of the monetarist dogma, beneath the level required for decent living conditions for the world's current population of around 7 billion, the goal must be to achieve, through a science-driver, the next, higher platform of economic development, as Lyndon LaRouche has formulated this from the standpoint of physical economy. As an historical example, the increase in productivity achieved by President John F. Kennedy's Apollo program has lasted to the present day.
Join me in directing an urgent appeal to parliaments and governments to fulfill their constitutional duty and to protect the common good of those they represent, by adopting a two-tier banking system immediately.
THE ONLY SOLUTION IS TO FIRE OBAMA;
RESTORE GLASS-STEAGALL
http://www.larouchepub.com/lar/2011/3832...ality.html
We had an event, yesterday, a diplomatic event in Washington, D.C. The most significant part of that event is obviously the thing that was least on the schedule, and that is, as most of the diplomats there indicated, they have no comprehension of what the world situation is, or their immediate situation, right now. They're all trapped in a fantasy-land, which presumes that things aren't as bad as they are, a gross underestimation of the crisis which faces humanity now. For example, what we're dealing with immediately is the threat of, say, as early as Saturday, there could be a collapse of the entire world system, a chain-reaction collapse. We're on the edge now, of the decisions which will decide that. Perhaps some of these nations will be frightened enough not to do the stupid thing, the absolutely stupid thing, but none of them will be bright enough to know what to do, to be successful, in dealing with it.
And that's the mission before us. And that's the subject of the discussion here, today....
We are in a general breakdown crisis. And anyone who thinks there is not a general breakdown crisis, who does not think there's an immediate collapse of civilization, beginning in the trans-Atlantic region and extended to the rest of the world: We are looking at a breakdown crisis which has planet-wide, immediate implications. And all those people, who think there are little solutions on the way up there, or little things that can be worked out, or ways to postpone the crisis, are idiots!
We're now in a breakdown crisis. We do not produce enough, presently, to sustain people, in terms of the immediate needs of mankind! This is true in the United States, as in food supplies for the coming year; this is true in Europe; this is true in much of the rest of the world, they just don't know it. Their ignorance of reality is what seizes them and controls them, and controls their fate. That's where we are.
A Lack of Willingness To Comprehend
We had a diplomatic session, in Washington yesterday, and that is what we found. It was the largest diplomatic turnout we've had—and among all these people, there was a general expression of absolute confusion and misunderstanding of what the world situation is.
This, of course, is helped by the press, and similar kinds of things. It's helped by the politicians: Our politicians, generally are absolute idiots; there are a few exceptions. But the Democratic Party, the Republican Party—the main body of them are absolute idiots. They have no comprehension, and they lack the willingness to comprehend! They lack the willingness to understand the crisis! They lack the willingness to face reality! And this is typically a Boomer problem. They will not face reality: The entire system is now coming down. If there's not a radical and sudden change in direction, civilization is going under.
It can go under now. It can go under, who knows what day? Who knows how soon? But the potential for an immediate collapse exists this week: It came into existence on Sunday [Aug. 7], when everything was set up for a general breakdown crisis of the entire international financial-monetary system. And in all the governments of the world, there's not one which has shown understanding of the nature of this crisis. And therefore, what we have to say here—even though we may be regarded as a small voice in the world—it's probably the only thing that's worth hearing at this time.
The whole thing is coming down. Everyone in government is generally, more or less, a fool. They're in a state of denial, and that's the kind of question we have to take up today. Because somebody has got to speak the truth, when you're on the edge of a potential slide into Hell. And that time is now. We don't know when it would happen; we don't know if it would happen at some particular time, or in some way or another. We do know what the potential is. We do know that under present principles, under present guiding policies of the governments of the world, there is no chance for the survival of humanity. And only if there is a change, of the relevant type, will mankind come out of this thing safely.
And Hell is beginning now. We entered Hell this week. That question, when you begin to feel the heat, is the only question, and why.
And that's what we face. And we've got to get ourselves up to scratch on this level. Don't talk about this solution, that solution, this solution—forget it! It's very simple: What has to be done, is simply to put the entire financial-monetary system through a breakdown crisis, a managed breakdown crisis, in which, first of all, Glass-Steagall is essential.
Without Glass-Steagall and without firing the President of the United States, there's no chance for civilization. This man has to be thrown out of office now! If he is not thrown out of office, very soon, there's no chance for humanity! Because he's jamming up the works under British control. The only thing we have in our favor, is that some of the Europeans, including some of the British, realize what they're doing: They're gambling with extinction. Not extinction now, but a process that leads to extinction.
And therefore, that's the question we have to take up now, the question I posed yesterday.
Denial of Reality
I saw, in that group of diplomats, there, I saw complete consternation, complete denial of reality, complete ignorance of reality! Which reflects the fact that the governments of the world are not in reality. They're in a fantasy-land. And the time has come when it's all coming down. Unless we can reverse it—and it can be reversed, by the right decision: Fire Obama! Get him out of there! We have all the grounds for doing so! If we don't get him out of there, you will not find a political force capable of removing him and removing his policy. If you don't throw him out, no United States! That's where it stands. He has to be thrown out now, and there are grounds for doing so; several procedures exist. That's where we stand.
Which means there's a change in thinking among the political forces, the leading political forces, in the United States, among other places, as well as in Europe. And it has to be a change from what they think. It will not be a negotiation with them, on compromise! There is no compromise.
Glass-Steagall is indispensable; it is not the solution: It's the precondition for the solution! And the precondition is to junk, entirely, the so-called Green movement. That's the problem. The Green movement is what's killing us; it's killing humanity. If you don't throw the Green movement out, if you don't throw Obama out now, you're not going to have civilization!
So, you don't have a right to negotiate this, because if you don't come up with the right answer, there is no civilization. Therefore, if you don't agree with what I'm indicating has to be done, your ideas are worthless; you're self-doomed by your own folly. It's come to that point: The habits you've acquired, the people out there, the habits they've acquired, are the thing that dooms them. And it's those habits, that kind of thinking, which must be thrown out the window, to get back to the American System, and what the American System represented under Franklin Roosevelt and similar kinds of leaders.
Without doing that now, without cleaning up the act now, in that way, there's no chance: You've come to the end of the line, and the decisions you make now will be either salvation or doom.