Prof. Christen Sørensen’s speech at the European Schiller Institute Conference in Rüsselsheim, Germany on July 2, 2011

Prof. Christen Sørensen:
Thank you. I think my presentation will be very good after yours, because I appreciate many of the points you made. I will mostly review the “Angelides Report,” which is also called the “Financial Crisis Inquiry Report.” It was a Congressional report made by ten members, six Democrats and four Republicans. It has more than 600 pages, and more than 6,000 footnotes.

It contains a lot of information which I think is very good to have in mind when we are discussing “What next?” I have, in fact, written 60 pages about it, so, at least myself, I will claim that I know quite a lot about it. The report is a little special because it is mostly based on interviews, and not as much on statistical data analysis, as maybe one would suppose, and it’s also very important to notice that it only described how the crisis developed. There are no exact suggestions about what you should do next. But, of course, if you read the report, it’s very difficult not to get some impression about what to do, and that’s good.

My analysis of this report, I think it’s fair to say, is from a traditional point of view of an economist, even thought I have a critical point of view of the financial sector, I will say, as we already have heard. I think you can learn a lot from this report. One of the things is that you should always pursue a decent public policy, and you cannot get public services, unless you are ready to pay for them, and I think that is very important. That is the reality in the U.S., and it has especially been a reality in Greece, but I’ll not give a hint about this now, because I will specialize in this Angelides Report.

And furthermore, I will only take two things up, especially the failures, in fact, of the credit rating agencies, which we have already heard about, and also the failures of the financial supervision institutions.

I think it’s very important to speculate about why there were such big failures. As we have already heard, there are three important credit rating bureaus in the world: Moody’s, Standard & Poor, and Fitch, and in the Angelides Report, Moody’s has been chosen to represent them, but they claim that it is also a representative for the two others, and I will quote from what they found about work of the credit rating bureau:

“We conclude the failures of credit rating agencies were essential cogs in the wheel of financial destruction. The three credit rating agencies were key enablers of the financial meltdown. The mortgage-related securities at the heart of the crisis could not have been marketed and sold without their seal of approval. Investors relied on them, often blindly. In some cases, they were obligated to use them, or regulatory capital standards were hinged on them. This crisis could not have happened without the rating agencies. Their ratings helped the market soar and their downgrades through 2007 and 2008 wreaked havoc across markets and firms.” (Page xxv)

That’s what they conclude in the Angelides Report, and there were two key words which they used to market those toxic papers, securities. They were mostly based on sub-prime mortgages, or All-A mortgages, and they collected a lot of them in an entity, and on that basis, they made more than 20 different residential mortgage-based securities. If you had Priority 1, you got the right to get all your money, and only if number 1 got their money, they would go further to number 2. What Moody’s and the others did, was, even thought they were sub-prime mortgages, they could, by this process, turn it around so that 80% of the denominations got a triple-A rating from the bureaus.

How did they do that insane thing? They did that using very complicated models, and those who should supervise those models, didn’t understand them. We already know in Denmark that people don’t like to say, “I don’t understand.” We know from Hans Christian Andersen’s “The Emperor’s New Clothes,” that it was a child who said, “He has no clothes on.”

And the way they did it, was through two things. They assimilated quite a number of scenarios. On average, in those scenarios, they assume that house prices would increase by four percent a year, and this was the first very essential assumption. The second very essential assumption, was that they said that if the price of one house goes down, it would not have implications for the others, but everybody can see that if the housing prices go down, it is not only one person who owned a house who would be hit, but it would be all, and that was why, I would nearly say that it was a criminal act, the way it was done.

And, therefore, in my opinion, as you can follow based on your presentation, I think it can be very essential to introduce Glass-Steagall, but we also need to take a much broader view of what went wrong, and therefore, I think that the Angelides Report is very important.
As we already heard, the form of the credit rating bureaus were not listed companies. In fact, that happened in 2000, and after 2000, they completely changed behavior, and I again quote from the Angelides Report:

“Many former employees said that after the public listing [of Moody’s] (in 2000), the company culture changed – it went ‘from [a culture] resembling a university academic department to one which values revenues at all costs,’ … The former managing director Jerome Fons, who was responsible for assembling an internal history of Moody’s agreed: ‘The main problem was … that the firm became so focused, particularly the structured area, on revenues, on market share, … , that they willingly looked the other way, traded the firm’s reputation for short-term profits.’” (Page 207)

And it is further elaborated by people from Moody’s in the report, and I will quote one more, because I think that is very interesting, from [Andrew] Kimball, who was the chief credit officer at Moody’s:

“Ideally, competition would be primarily on the basis of ratings quality, with a second component of price and a third component of service.
Unfortunately, of the three competitive factors, rating quality is proving the least powerful given the long tail in measuring performance. … The real problem is not that the market does underweights  [sic] ratings quality but rather that, in some sectors, it actually penalizes quality by awarding rating mandates based on the lowest credit enhancement needed for the highest rating. Unchecked, competition on this basis can place the entire financial system at risk. It turns out that ratings quality has surprisingly few friends: issuers want high ratings; investors don’t want rating downgrades; and bankers game the rating agencies for a few extra basis points on execution.” (Page 210-211, Kimball memorandum from October 2007).

And that is, we have to learn a lesson from this, because the problem was that they became a listed company, and if they are depending on profit, and if your business depends on you giving good ratings, then we knew that you had moral hazard.
In economics, we also have another n for this. It’s called “Gresham’s Law,” because Gresham expressed that bad things eliminate good things. It’s from bimetallism, where we had both silver and gold, and many years ago, Gresham in London taught that lesson, and that is a very basic thing you have to notice – that bad things can eliminate good things.

And therefore, I think that it’s very essential to change – to maybe put the rating agencies under the supervision, or direct authority of the central banks, because it is the central banks which have to clean up the mess afterwards. So there should be a very strong reaction against that, and I think the Angelides Report tells that very clearly. So I think that what I say here is more or less in accordance with your presentation, at least that’s my interpretation.

The second thing is, why did the regulators also make very big mistakes? I will again quote from the Angelides Report:

“We conclude widespread failures in financial regulation and supervision proved devastating to the stability of the nation’s financial markets. The sentries were not at their posts, in no small part due to the widely accepted faith in the self-correcting nature of the markets and the ability of financial institutions to effectively police themselves. More than 30 years of deregulation and reliance on self-regulation by financial institutions, championed by former Federal Reserve chairman Alan Greenspan and others, supported by successive administrations and Congress, and actively pushed by the powerful financial industry at every turn, had stripped away key safeguards, which could have helped avoid catastrophe. This approach had opened up gaps in oversight of critical areas with trillions of dollars at risk, such as the shadow banking system and over-the-counter derivatives markets. In addition, the government permitted financial firms to pick their preferred regulators in what became a race to the weakest supervisor. [Prof. Sørensen added: “Gresham’s Law”]

Yet we do not accept the view that regulators lacked the power to protect the financial system. They had ample power in many arenas and they chose not to use it. … Too often, they lacked the political will – in a political and ideological environment that constrained it – as well as the fortitude to critically challenge the institutions and the entire system they were entrusted to oversee. (Page xviii)

Those are very tough words, I suppose. Here, I think, we can also learn a lesson, and I shall suggest two things. One of the big failures in the States was that there were so many regulatory entities, so nobody really has the responsibility for doing it well. “It’s not my problem. It’s the others’ problem.” And they not only have many regulatory institutions on one level, but they also have institutions on the federal level, and on the state level.

And they changed the law in such a way that the financial firms could choose their regulator, and, as they have to pay for their regulator, they chose those which offered the lowest cost, and therefore, it’s very dangerous to let the financial firms choose their own regulators. They should pay for it by paying into a common fund, and then the society should impose regulation on them. That is very, very interesting, so they [the regulators] would not be paid directly by themselves [the firms].

The third thing is that when you come to a big financial firm which makes a lot of money, and the CEO makes as much money as you never can dream about making during your whole life, you are very impressed by them. People are normally. Then [the Angelides Report] suggests that you should not take that attitude. Be more trusting in yourself -- to criticize. I think that that is very important.
I have taken those two points up here. I think that the Angelides Report has a lot of sources from which you can learn. How much money they used in lobbying, etc., etc. How silly they were. It’s incredible. What great bonuses they awarded to themselves. You get nearly sick reading it, but that is the question.

So I will stop my presentation here. We are a little behind, but I think that you can learn a lot from the Angelides Report about how we come out [of the crisis.] And the problem is, as you also stressed, how little there has been done afterwards – how little restriction there has been put on the financial sector, since the biggest crisis, at least since the 1930’s, and maybe even before! So that is really astonishing – that nothing more has been done, and, in fact, we have a bigger task to accomplish, because due to the financial crisis, the biggest firms are ever growing bigger, because there was a risk that some of them would go bust, so they were bought up by others. Maybe they were forced into it. At least two of the investment banks have been bought by the commercial banks. One went bust – that was Lehman Brothers. That is another question. But I think that we have a very big task there.

And in my own country, Denmark, I have asked for a financial commission to investigate what happened. It is quite amazing that we don’t even dare to investigate what happened in Denmark! Could we not learn anything about it? Our leading political leaders apparently seem to think not. That is rather astonishing, after such a big failure!

Video: http://schillerinstitut.dk/drupal/node/500

I thank you for listening to me. Thank you.

WAS IT NOT TREASON?

By Lyndon H. LaRouche, Jr.

July 1, 2011

Whether it were the fruit of ignorance or other folly, the 1999 repeal of the 1933 Glass-Steagall law, has had an effect comparable to that which might have been brought about through a explicit act of treason against our United States. Among nations other than our own, their lack of a standard of law equivalent to Glass-Steagall is, in effect, a fruit of either culpable malice or of a folly of ignorance. In the case of our own nation, the principle expressed as the 1933 Glass-Steagall law, had been a return to the argument which prompted the crafting of our Federal Constitution.

The resulting wave of wild-eyed, stampede of accelerating inflation, since the beginning of the 2001, has been the result of the termination of Glass-Steagall. The wild-eyed bubble of skyrocketing real-estate mortgage speculation, and related Wall Street forms of John Law-like hyperinflation in all speculative markets of the trans-Atlantic region of the world, has been the continuing consequences.

On this point, there was never an honest sort of ignorance in the implicitly treasonous motive expressed by J. P. Morgan’s agent Alan Greenspan, in launching the undermining, and subsequent repeal of Glass-Steagall. He, like many among that horrid pestilence known as the “Wall Street,” have represented, ever since Judge Lowell’s evil days following the Seven Years War, a horrid pestilence planted in the likeness of a filthy disease spread by our republic’s speculator class. The truth today, is “Glass-Steagall today, or die.”

I have been forecasting in a professional capacity since my first successful forecast for the national economy since late Summer of 1956, when I had first projected the most serious of the post-war depressions to break out at either the close of February 1957, or early March.

Both then, and in later forecasts, I have always rejected what is called “statistical forecasts.” During that interval from late Summer 1956, to the present day, the forecasts which I have made by physical-economic forecasting has always been accurate relative to the forecasts of those known to me otherwise. My advantage never depended on “better statistics”, but on my recognition of the inherent folly of presuming that financial-statistical methods had a consistent correlation with the movements in the physical effects of the economic process.

To make that point clearer, say that the real effects of economy do not lie within monetary systems as such, but in physical-economic processes which always, ultimately, reveal themselves to anyone. Statistical forecasting is fairly defined as a form of gambling, a form which is caught between the forces of physical-economic changes, or the lack of needed changes.

In other words, the prosperity or deep decline in a national economy of the trans-Atlantic regions, has always been a physical-economic decline in all its essential features. A financial collapse is an effect to be expected when the financial growth outruns the net physical-economic growth. It is when the discrepancy of the effect of the growth of the margin of difference between a physical and a financial increases in a self-feeding form, that the severe monetary crisis takes the chronic form known as either a trend toward hyperinflation or depression.

It is when such patterns are competently examined from their underlying physical, rather than merely financial forms, that a true physical law of economy is brought to our attention. That principle is brought to the surface as a true physical law of economy which acts in direct contradiction to the fraudulent concoction called a “Second Law of Thermodynamics.”

The correct law, is one of the necessity of anti-entropic long-term trends, over the recent half-billions years of life on Earth. That is the requirement that the effective net energy-flux density of living processes must increase, in the effect of the combined living species of our planet, of an increase of the energy-flux density expressed by the evolution of living species. In other words, a society which seeks to enforce a rule of fixed energy-flux density as a whole process in evolution of content and practice, is a condition of life proceeding in the direction of extinction of leading species, such as mankind.

In the science of physical economy, as distinguished from a merely monetarist economy, the requirement for the survival of the human species, is the increased energy-flux intensity of the mode of existence of that species, as from lower forms of chemistry to increasingly higher rates of “capital-intensity” of the development of human society generally.

Without an accelerating density of nuclear-fission, thermonuclear-fusion, and matter-anti-matter, in forms of increasing capital-intensity of both production and the higher platforms that requires, mankind would have made himself just another species to join the census of the vast ration of eliminated species, which went extinct largely because they ceased to progress in effective energy-flux density of effect per capita and per square kilometer of the Earth’s surface area. Today, mankind is the only species which has the potential of remaining a leading, living species.

This document presents the opening argument, as a completed statement here. However, in subsequent publications, there will be more on this subject to come.

IS IT NOT TREASON?

By Lyndon H. LaRouche, Jr.

June 30, 2011

The argument presented by Senator John Kerry, in defense of President Barack Obama’s guilty violation of the Federal Constitution is, in itself, beyond all reason. The argument which the Senator presented in defense of his own shocking, utterly incompetent argument, has been one of the most disgusting pieces of sophistry on record. The question is, was that Senator blackmailed in some fashion? Certainly, submission to blackmail gives neither the Senator nor the Senate exculpatory credit. Clear and plain evidence by the errant President himself might be explained by death threats against the Senator. Since the culpability of the President himself is so clear, and so clearly proximate to treason on behalf of the British monarchy against our United States, the lack of credible explanations offered by Senator Kerry, is most troubling for those among us who had remembered him as being neither a traitor nor a fool. The President had violated the law, and that with the most flagrant shamelessness. This fact raises the question: “Is this President, whose popular support is being that of a decimated minority, willing to lie his way into a coup d’etat conducted in British interest as a betrayal of our United States to a foreign tyrant?”

A most fundamental, and clear, historical, and living principle of our Federal Constitution, is the issue at stake in this morally shabby affair:

In the matter of the Senator’s culpable actions in this instance, the process leading from the victory of the original Thirteen States, to the adoption of a Federal, constitutional form of our Republic, was a carefully deliberated movement of our republic, out from under existence under a European style of parliamentary monetarist system, into a sovereign republic whose only competent basis for a continuing defense, was by a credit-system, against British and other foreign predatory powers waiting to strike us afresh.

At the same time, our most ancient foe had been then, and now, the same British imperial system which became the ruling authority in all major wars experienced by our sovereign nation since the February1763 Peace of Paris through the launching of the U.S.A. into the British-lain, imperialist trap of the prolonged U.S.A. warfare in Indo-China, as also the most recent Iraq and Afghanistan wars, that Iraq war organized through a lying British Prime Minister, Tony Blair, who has been among the most disgusting of the official, stinking eggs lain by the present British Empire in its recent history.

All through the years since the outbreak of our American Revolution, the intention of the British Empire, to the last report of today, the British monarchy, has been the subversion of our republic as the chief obstacle to its ambitions for becoming a global imperial power in the tradition of the original Roman empire under Augustus Caesar. That was made the doctrine which Lord Shelburne had deployed in creating the original British Foreign Office, and which continues as a doctrine of intended practice up to the latest report of the present day.

The fact that imperialism is the characteristic of the British monarchy of today, was made clear afresh by the currently reigning Queen of England, by her public utterances in world affairs during the period of the recent Denmark proceedings on Her Imperial Majesty’s behalf. It was made clear by ugly threats made on behalf of the British Foreign Office, threatening the United States should there be a probable intent to re-act the original Glass-Steagall (domestic) U.S. law. The current U.S. President, a contemptible lackey known as Barack Obama, is at the beck and call to heel by the agents of the current British imperial Queen. Our disgusting President and his lackeys were successful in preventing that vote from being brought to decision under the preceding term of the U.S. House of Representatives.

Presently, the very continued existence of the United States is on the verge of extinction in its present, constitutional form. It is precisely here, on this point, that the disgusting behavior of Senator John Kerry et al. is brought home.

The crucial fact of this matter, at the present moment, is that the present international monetarist system is at the brink of the self-destruction of both the current European system, and also the ruin of the collection of formerly sovereign nation-states now kept in bondage to a British imperial domination and accelerating economic ruin by a European system which is itself careening into general chaos throughout the continental states of western and central Europe.

The crucial point at strategic issue, at this present moment, is that the pending re-enactment of the 1933 Glass-Steagall law, would transfer the corrupt form of a mass of inherently fraudulent speculative debt, from the domain of the responsibility of the Federal government and states of our Union for those specific varieties of gambling debts, back into the accounts located outside the obligations of both the Federal government and out from the obligations now crushing the states of our Federal, Constitutional union. The effect of that urgently needed, and fully valid reform, under our Federal Constitution, would create the conditions under which our looted Federal states, and the Federal Government, too, would secure, and that immediately, the ability to restore our economy, and to return justice to our presently looted and menaced citizens.

The question is thus posed: “Who in Hell is Senator John Kerry serving with the corrupt attempts to assist the British imperial Monarchy to destroy our freedoms and reduce our citizens to a most murderous form of destitution?”

Senator John Kerry must answer that question honestly, with no slippery evasions of the type made in his search of the appearance of legality in an action which goes to the heart of the violation of our Federal Constitution. Throw the usurers out of the Temple, John, and abandon your recently wicked ways!

WHAT IS OUR CONSTITUTION?

The history of our Federal Constitution dates to the processes both leading into, and as a result of the Fifteenth-century Great Ecumenical Council of Florence. That was the Council from which Cardinal Nicholas of Cusa emerged to become the most significant figure for modern European science and law. It was Cusa who launched that commitment to development of new civilizations across the great oceans on which Christopher Columbus premised his famous voyages.

 

However, for reasons chiefly located in the Habsburg dynasty’s apparently inherent disposition for corruption of the Spanish and Portguese systems, the realization of the essentials of Cusa’s intentions first appeared in the founding of Massachusetts by the combined actionss of the Mayflower party, and of the Massachusetts Bay Colony under the leadership of the Winthrops and Mathers. It was here, that the future United States emerged as a form of nation-state which has been unmatched in its quality of political-economy, since the revival of that Massachusetts colony’s actual intention as the original Constitution of our United States.

What has happened to us since those times? What happened to tend to ruin our Federal Constitution up to the present day? What might be the remedy near at hand for the failures which our nation is suffering presently? I explain.

More: http://www.larouchepac.com/node/18270

Gagnrýndi bónusgreiðslur bankamanna ??

Steingrímur J. Sigfússon, fjármálaráðherra, sagði á vorfundi OECD í París í gær að algjör umbylting verði að eiga sér stað hjá fjármálastofnum og þeirri hugmyndafræði sem hafi verið við lýði við stjórnun þessara stofnanna. Nefndi hann sérstaklega bónusgreiðslur til bankamanna.

Samkvæmt upplýsingum frá fjármálaráðuneytinu flutti Steingrímur erindi í gær á málstofu um endurreisn trausts á fjármálakerfum þar sem lögð var áhersla á fjármálareglur, eftirlit og neytendavernd.

Fjallaði Steingrímur þar um reynslu Íslands af fjármálakreppunni og hvaða lærdóm megi draga af þeirri reynslu. Sagði hann meðal annars í erindi sínu að vandinn sem mörg ríki standa frammi fyrir verði ekki aðeins leystur með því að herða á regluverki og eftirliti. Algjör umbylting verði að eiga sér stað hjá fjármálastofnunum sjálfum og þeirri hugmyndafræði sem hefur verið við lýði við stjórnun þessara stofnanna.

Steingrímur sagði einnig, að svara þyrfti erfiðum spurningum um innstæðutryggingakerfi, á borð við hvort slík kerfi nytu ríkisábyrgðar eða væru eingöngu á ábyrgð bankanna.

Í viðtali við Reutersfréttastofuna sagði Steingrímur, að verið væri að undirbúa endurkomu Íslands á fjármálamarkaði. 

Skrár tengdar þessari bloggfærslu:

• Skýrsla Fjármálaráðherra til Alþingis

Drastic Warning in Germany against New Bailout

An interesting episode may shed some extra light on the ongoing international faction-fight over the bailout issue: at a special hearing of the Bundestag financial policy committee on May 5 (that is one day before that "secret" meeting in Luxembourg), Jochen Sanio, head of the German financial market watchdog BaFin, categorically balked against running another big bailout: "We did it once, and we cannot do it a second time, we simply can't." Asked why it could not and should not be done a second time, Sanio said, "Then the taxpayers would come and hang all of us." Apparently, the word got around in the Bundestag, because the weekend after, rumors began to have it that Merkel was running short of her majority in the parliament for passing the permanent euro bailout fund.

http://www.larouchepac.com/node/18233

Behind the Strauss Kahn Soap Opera: A War Is Raging Over the Collapse of the EMU

A senior U.S. intelligence source has told EIR that the real story behind the Dominique Strauss Kahn rape allegations is a total brawl inside the entire European oligarchy over how to deal with the imminent blowout of the EMU and the euro.

"Behind the scenes, Strauss Kahn was the most powerful man in Europe," the source explained. As head of the IMF at a time when the bailout of the PIGS countries is the top priority, Strauss Kahn was actually enroute to Paris to finalize crucial details of the new bailout of Greece, Portugal, and Ireland, when he was arrested by New York City Police, on charges of sexual assault of a hotel worker. The source explained that "There are at least 100 top European bankers and leading powerbrokers who had every reason to sink Strauss Kahn. This had little or nothing to do with the upcoming French Presidential elections," the source noted. "This is about the survival of the entire European banking system."

 http://www.larouchepac.com/node/18211

EMERGENCY RESOLUTION: Glass Steagall Now!

The current weight of trillions of dollars in gambling debts, foisted on the U.S. taxpayers in the 2008-2011 bailout of Wall St. and the City of London, is currently obliterating and destroying the economy of the United States and its people. We must change course immediately.

The first step is to reinstate Glass-Steagall. Without a return to the original Franklin Roosevelt Glass-Steagall standard, there is no possibility of the continued existence of the United States, as economist Lyndon LaRouche has insisted. Only the re-imposition of the FDR Glass-Steagall principle will separate commercial from speculative banking, thus freeing the nation from obligations to Wall St. and the City of London, and re-establishing a credit system for rebuilding the nation.

H.R. 1489, the Return to Prudent Banking Act of 2011, is now before the House of Representatives, which aims "to ... revive the separation between commercial banking and the securities business, in the manner provided in the Banking Act of 1933, the so-called 'Glass-Steagall Act.'"

We, the undersigned, therefore demand that Congress immediately act to pass H.R. 1489, and identical legislation in the Senate, as the indispensable first measure to save the nation.

http://www.larouchepac.com/glass-steagall

Skrár tengdar þessari bloggfærslu:

• Glass Steagall

If Everybody's Borrowing, Where's the Money Coming From?

We've watched with considerable interest—no pun intended—the way everyone is rushing to borrow money. The banks need to borrow money to cover their growing losses, the governments need to borrow money to lend it to the banks and pay for other activities, the corporations need to borrow money to cover their debts. Virtually every major institution needs to borrow cash, and lots of it. And, according to published reports, they are getting their loans. Which raises the question: If everybody's borrowing, where's the money coming from?

Take the U.S. Government, for example. It raises its money by selling bonds through the Federal Reserve. Now we know the Fed has been buying some of those Treasuries itself, but it claims it is doing so for interest-rate management reasons, not because it can't find buyers. We suspect that's not quite true. Is it possible that the Fed is buying far more than it admits, because the market for hyperinflating U.S. debt is drying up? One way this might be done is for the Fed to loan money to the primary dealers to buy the debt at the auctions, and then loan money to the banks or other parties to buy them from the primary dealers. Or the Fed could simply be buying more than it admits, and faking its books, just like the banks. We don't know, but we do know the Fed is capable of such deception, and we see no reason to believe a damn thing it says. It has lied too many times.

It should be pretty obvious that when everybody is borrowing, there is no one to lend. Which means that the claims of borrowing are phony. The whole system at this point is nothing more than a shell game, propped up temporarily by lies and perceptions. We can't say for sure what specific games are being played, but it is obvious that the truth is far worse than has been revealed so far. And that's saying a lot. This is the last gasp of a dead system. As we said back in July 2007 when the system blew up, it is not possible for a bankrupt monetary system to bail itself out. The more money the central bankers create, the faster it loses its value.

http://www.larouchepac.com/node/18129

Europe Playing "Hide the Bankruptcy"as Fascism Grows

European finance ministers are holding secret meetings to discuss how to deal with the debt crisis in Greece, Portugal, and Ireland. The European Union is threatening everyone with dire consequences if they do not capitulate to its austerity demands, even as voters in places like Iceland, Ireland, and Finland make it clear they want no part of bailing out the banks. The Scottish nationalists want to split off from the United Kingdom. Nations are falling like dominoes all across Europe, and everyone knows Spain is next. We are told that nations are being bailed out, but that is a lie: What is being bailed out are the banks, with the nations getting stuck with the tab. The nations are being destroyed, deliberately.

Ignore the soap opera of official announcements and media spin, and look at the truth. In nation after nation, the economy was turned into a part of the giant global casino run by the Inter-Alpha Group on behalf of the Brutish Empire. Economic productivity was destroyed, replaced by financial gambling. When the casino collapsed, the empire began demanding that the nations cover the bankers' gambling debts, and impose savage austerity upon their own populations to cover the costs. Now, faced with huge deficits and no productive economy to support those debts, the nations themselves are hopelessly bankrupt and politically paralyzed, and are being tricked into fighting among themselves, instead of working together against their common adversary, the British Empire.

Europe is sinking into chaos and ungovernability, and the smell of fascism is again in the air. The European Union is being turned into a fascist dictatorship, as the core of a new global dictatorship. The same is happening in the U.S., under Obama. The antidote to this is the assertion of national sovereignty, beginning with the passage of Glass-Steagall. The existing monetary system is gone, but we need not die with it. We beat the fascists before, and we can do it again.

 http://www.larouchepac.com/node/18127