LaRouche: "Don't They know That Bernanke Is Crazy?"

In discussions with two prominent economists who are closely monitoring the background noise leading to the April 27 FOMC meeting, it is clear there is increasing pressure on Federal Reserve Chairman Bernanke to end the policy of so-called Quantitative Easing. It is not only Kansas City Fed President Thomas Hoenig and Dallas Fed President Richard Fisher who are sounding the alarm over the acceleration of inflation, but numerous officials of small and medium-sized banks, and local representatives of manufacturing and business enterprises. One economist noted the reports of wholesale price increases last week, which will soon be passed on to consumers, while another pointed to the continuing record drop in new home sales, as indicators that QEII did not "stimulate" the real economy, but only produced a greater impetus for speculation, which caused the higher prices.

One of the economists reported that, despite these negative signs, and growing pressure from within the Fed, Bernanke is convinced that his policy is working. He speaks of the "wealth effect," from the continued bailouts of the banks, and low interest rates. His argument is that this "wealth effect" is improving consumer confidence, which is reflected in the rapid appreciation of stocks. As consumers become more confident that the stock market will continue to go up, and since so many Americans have now gone back to stock investments, according to Fed statistics, this "wealth effect" will soon spill over into higher consumer sales. This, in turn, will lead to more hiring, and the job-creation rate will pick up. Asked if he believes this, the economist said, "It doesn't matter what I believe. It's what Bernanke believes, and he seems convinced he's right."

When briefed on this, Lyndon LaRouche said, "What, is he (Bernanke) really that crazy? This is insane. The only thing that will work is Glass-Steagall." LaRouche added that Bernanke obviously has no idea what "wealth" is.

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/home

Ireland Was Forced by ECB to Take Bailout

An interview with former Irish Finance Minister Brian Lenihan leaves little doubt that the purpose of the Irish bailout was to save the Inter-Alpha banking system. Although he doesn't say it in those words, Lenihan made clear that it was the European Central Bank that forced Ireland into taking a bailout. In an interview with the Irish Times, Lenihan says it was, above all, the ECB that insisted on Ireland taking the bailout.

In addition, the Irish Times reports that the ECB got support in its efforts to force a bailout from the head of the Irish Central Bank Patrick Honohan, and from London's Financial Times. It was Honohan, who on Nov. 18th, 2010, just days before the decision was made, was the first Irish official to say that an aid package was in the works for Ireland. He made that statement on Irish Radio after he learned that the next day the Financial Times was going to run an editorial "saying effectively people should be planning on bank runs."

In what is clearly a confirmation that the bailout was for the banks, Lenihan said, "It became clear to us that the European solution was to stuff the banks with capital and see if that would generate confidence in them." He added that the amounts involved "stunned my officials in their sheer scale and size."

While Lenihan admitted that interest rates on the bailout were too high, he nonetheless defended his acceptance of the bailout and its terms.

Lenihan told the Irish Times that when the bailout talks were concluded: "I've a very vivid memory of going to Brussels on the final Monday to sign the agreement and being on my own at the airport and looking at the snow gradually thawing and thinking to myself, this is terrible. No Irish minister has ever had to do this before."

http://www.larouchepac.com/node/18025

LaRouche: “If You Do Not Push Glass-Steagall Through Now, Through the Congress, There’s No Way You Can Save The U.S.”

Speaking to an international audience at his webcast April 19, leading economist and statesman Lyndon LaRouche had an unambiguous message: Push through the Glass-Steagall bill (HR 1489) that's been introduced into the House of Representatives now, or humanity will not survive.

LaRouche structured his opening presentation by identifying two crises mankind faces: first, the ongoing collapse of the bankrupt British imperial financial system, and second, the galactic crisis that is leading to the proliferation of earthquakes, tsunamis, and other severe weather around the globe. But he honed in on the one act that must be accomplished first, in order to deal with both crises, the reenactment of FDR's original Glass-Steagall law.

We include a number of LaRouche's sharpest comments, all from his opening remarks, here. But all readers are urged to go to www.larouchepac.com, and review the event in full.

``The reenactment of Glass-Steagall in the U.S. Congress, just the passage of the bill, even if the President vetoes the bill, passage of that bill, now in the Congress, will set forth a chain-reaction which can save this nation. If you do not push Glass-Steagall through now, through the Congress, there's no way you can save the United States.

More: http://www.larouchepac.com/node/18006

Thanks for arriving early ! BE ONLINE.

Here is a preview of what to expect on April 19.

 

The present evidence is, that the ebbs, flows, and qualitative progress of living species on Earth, has been regulated by the processes ruling the galaxy which mankind inhabits. The known succession of those developments according to such metrics as a 62-millions-years pattern of net rise of living species to higher forms of living existence, states a principle of mankind’s relationship to that galaxy which we inhabit. Recent evidence indicates that not only is the evolution of living species, including the emergence of mankind, anti-entropic; the behavior of the Crab Nebula as a feature of, rather than merely a phenomenon within the galaxy, has clearly profound, although presently undecided outcomes for mankind.

 

Nonetheless, so far, the results of the developments within the bounds of the galaxy show that the effect has been an anti-entropic one, leading from the simplest forms of life, to the evolution of the conditions of planet Earth which have brought forth the successively higher orders of not only life on our planet, but the progressively anti-entropic evolution of the Earthly conditions for life, most notably for human life. Such is mankind’s destiny, to whatever the outcome this means for our species as such. Such is the pre-destined fate which the human being must follow.

-Lyndon LaRouche, April 2, 2011

If you are a leader in the mass strike process sweeping the globe, you should plan to attend the LaRouche webcast, which will be held in the D.C. area. Otherwise, you can view the webcast live at 1pm Eastern, 10am Pacific, on April 19th, right here.

Submit a question: [e-mail]

Webcast:  http://www.larouchepac.com/webcasts/20110419.html

Icelandic President Send Strong Messages to EU Imperialists, and To Their Victims

In his official statement following his nation's referendum, rejecting for the second time, bailing out Icesave investors, Icelandic President Olafur Ragnar Grimsson has a strong message for the European Union's fascist directorate and a strong lesson for Ireland, Portugal and Greece. Delivered at a press conference and posted on his official website, the statement reads in part:

"The Icelandic nation has now delivered its verdict and shouldered unequivocally the responsibility it is granted by the Constitution. The turnout was high by Western standards, and this, together with the extensive and thorough debate in the run-up to the referendum, shows clearly how important the issue was to the nation.

"The people have now spoken clearly on this matter on two occasions in accordance with the democratic tradition which is Europe's most important contribution to world history. The leaders of other states and international institutions will have to respect this expression of the national will. Solutions to disputes arising from financial crises and failures of banks must take account of the democratic principles which are the foundation of the constitutional structure of the West."

Even London's Financial Times writes that this part of the statement showed that Grimsson "seemed to be championing Iceland's defiant stance as a model for other crisis-hit countries facing similar debates over how to deal with crippling foreign debts."

Grimsson's statement also stressed, although the voters in this referendum rejected the "conclusions of the negotiations which took place last year... the British and Dutch authorities and agencies will still, notwithstanding this result, receive immense sums from the estate of Landsbanki ... in the equivalent of $7-9 billion....

"It is therefore not correct to maintain that the United Kingdom and the Netherlands will not receive any payments. The Icesave dispute has centered on interest payments and the interpretation of the European Union's regulations."

He reminded them, that "The Icelandic people have noted with satisfaction that our position has, during 2010 and 2011, met with broad international understanding and support. Decisive and negative judgment has been passed on the demands to which the governments of Britain and the Netherlands stuck throughout 2009; they lacked both fairness and logical strength."

He also pointed out that in the last two years, Iceland has been able to develop its own natural resources, including its energy, mineral, and fishery resources.

"The banking collapse resulted not only in severe economic and financial shocks; it also paralyzed the nation's will and sapped the courage of our people. The two referendums on the Icesave issue have enabled the nation to regain its democratic self-confidence and to express sovereign authority in its own affairs and thus determine the outcome in difficult issues. This is a valuable experience to build on in the future."

http://www.larouchepac.com/node/17949

A Letter to the President of Iceland.

Dear President Grímsson,

 

Yesterday was a great day for democracy.

The Schiller Institute in Denmark, the Danish branch of the political movement led by Lyndon LaRouche, the American economist, and former Democratic presidential candidate, would like to congratulate you for insisting that a referendum be held, so that the people of Iceland could have their voices heard about the Icesave agreement. We are pleased that a referendum was held, and it is no secret that we are also very pleased that the outcome was a resounding “NO.”
Iceland has held the banner of democracy high, in the face of massive pressure from the financial world, which prefers dictatorship. They, and the politicians who bend under their pressure, would force populations to pay for the mistakes of private banks, without having a say in the matter. Your decision to require a popular referendum is a great help to constitutional forces throughout Europe, and the world, who would defend the general welfare, above the financial interests.

Sincerely,

Tom Gillesberg
President of the Schiller Institute in Denmark
[e-mail]
[phone]
www.schillerinstitut.dk

Ömurleg frammistaða Moody's

Iceland´s voting influences "faction" fight in London

An article in the Guardian: "Icesave repayment to UK investors splits Iceland voters", by Simon Bowers , Sunday 3 April 2011, shows that the outcome of Saturday´s referendum, and a possible following court decision on Iceland, is a concern also in U.K. Here is the relevant quote:

"Many in Iceland believe a court judgment could ultimately shatter the assumption at the heart of the Icesave settlement - that, under European law, a state must make up for any shortfalls in deposit guarantee funds. A clear legal ruling on this point would be extremely unwelcome internationally as it would throw a spotlight on huge funding shortfalls in depositor guarantee schemes in Britain, the Netherlands and indeed around the world."

http://www.guardian.co.uk/business/2011/apr/03/icesave-bailout-splits-iceland-voters

 

The matter centers around the effects of the deregulation of the banks, which blended the speculative activities of what was formerly called the "investment banks", with the retail and payment systems of the "commercial banks". The result became the so called "universal banks", with all their current internal conflicts of interest of handling deposits, while at the same time offering speculative investments, that also could be insured in the same house. The old system where these conflicting activities were kept in separate legal entities, was regulated in the U.S. by the Glass-Steagall Act of 1933. This Act was finally taken away 1999 and a similar process allowed the "universal banking" in most of the world.

Before, the depositors were only guaranteed if the put their money in the low risk "commercial banks", but after deregulation also deposits put into speculation became guaranteed. It is therefore the deposit insurance funds became much to small, which now threatens to be exposed internationally, if the Icesave issue goes to court, according to The Guardian.

In the Icesave crash, there was no regulation against speculation with the funds coming from the depositors. All the deposits were just reinstated by the governments of Holland and U.K. Now in U.K. there is an understanding, that this policy of guaranteeing depositors no matter of what the money is used for, is impossible if not the taxpayers shoulder it. It is clear that the Glass-Steagall principles must be reinstated, so the guarantees could be limited to only save the banking activities of the old style "commercial banks".

Also in the U.K. there is a strong faction led by the head of Bank of England, Merwyn King, to cut the "casino" away from the state guarantees. He proposes to impose a policy enforcing internal separation of retail and merchant banking--known as "ringfencing" on its banks. This policy is actually unsufficient as it is not the Glass-Steagall total separation into different legal entities. There are, however, a lot of indications that the Independent Commission on Banking will call for Merwyn King´s policy when it issues its preliminary report April 11.

How hot this issue is, can be seen from the brawl about Barclay´s Bank to leave London for New. Some people in the City want their money no matter what, even if it put unbearable burdens on the British people - and on Iceland.

 

Additional: My comment to the article:

What I see, is that there is a big faction fight in U.K over the Icesave issue. It seems that they are afraid that the implications of the a yes-vote on Iceland, could be disastrous for U.K. We have also picked up some indications of the faction fight, which is very public around the threat of Barclays to move out of London to New York, in reality is linked to the Icesave referendum. In our news slug below, it seems that behind that is the well known policy of Bank of England head Merwyn King to cut the speculation in the banks out of state guarantees.

My own guess is that he is very afraid of a Yes vote, as this would mean that the British deposit guarantee system would have to cover all the depositors in the foreign subsidiaries of the British banks, something that must be enormous compared to the former Icelandic banks.

What I think, is that there are some British factions around Bank of England, that for the survival of U.K., actually want a No-vote in the Icelandic referendum, which could actually be a first step to reinstate fully the Glass.Steagall principles.

Best Wishes, Ulf Sandmark

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

Dictionary Definition."Faction"

1. a group or clique within a larger group, party, government, organization, or the like: a faction in favor of big business.

2. party strife and intrigue; dissension: an era of faction and treason.

 

U.K. government could end up like Iceland

U.K. government could end up like Iceland
April 1, 2011, (EIRNS) - The United Kingdom government could "find itself
in a situation like Iceland," in the not-too-distant future, a
City of London analyst told {EIR} today. With the international
markets even worse-prepared now for crisis than they were before
2008, the United Kingdom could find itself hosting a group of
huge, bankrupt international banks based in the City of London.
There is a good possibility that the U.K. government will
impose a policy enforcing internal separation of retail and
merchant banking--known as "ringfencing" on its banks, the
analyst said. This is being promoted by Bank of England Governor
Mervyn King, and there are a lot of indications that the
Independent Commission on Banking will call for such a policy
when it issues its preliminary report April 11. These measures
would protect customer deposits, small and medium-sized
businesses, and other essential functions, from the disasters of
the 2007-08 credit crisis, and commit the government only to
bailing out these functions.
This is by no means any full scale Glass-Steagall banking
reform, but the whole banking system is so rotten, that even
tentative measures such as ringfencing are causing friction in
the City of London. The big international bankers want absolutely
no changes whatever from the pre-2008 situation, the analyst
said: nothing that would in any way inhibit profits, especially
their personal profits. There is a faction, however, including at
the Bank of England, which wants to get back to "old style"
central banking, akin to what Paul Volcker has been promoting in
the United States.
In the run-up to the Independent Commission's report, there
is a lot of politicking in the City, most notably Barclays
publicly flirting with shifting its headquarters to Wall Street
(New York Mayor Bloomberg gave a press conference March 30
"welcoming" them any time they want to come). The Commission will
make its final report in September. UBS has put out a report
earlier this week, claiming that "Rather than Barclays being too
big, it may well be that the U.K. is too small." UBS made the
point that Barclays balance sheet is about the same size as the
entire U.K. economy, the {Daily Telegraph} reported March
30--bailout would be impossible. Barclays is essentially anyway a
U.S.-capitalized operation, since its marginal profits come from
Barclays Group, the result of its takeover of Lehman Brothers in
2008.
London could "hive off" retail banking, which is not large
in comparison to other operations. RBS would be the biggest
concern, but it is already 80% government owned; Lloyds is 45%.
Another factor is the widespread outrage in the population
at the excesses of the banks, and the scale of the bailout, as
drastic cuts are being imposed on every vital social service
across the board. The David Cameron-Nick Clegg coalition
government is making big political mistakes. They are imposing
20% cuts on the police force, which will obviously undermine
police support for the government. The scale of the cuts was
reflected in the huge TUC demonstration in London March 26, which
brought out not only public sector unions, but also constituency
groups from all over Britain, many of them conservative, ie, not
pro-union, but outraged at the deep cuts in social services.
Because of differences between the Tories and the Lib Dems over
pet programs, the agreement has been to impose across-the-board
cuts, to avoid a battle that could bring down the government.

Letter to FSCS UK, from Iceland.

Dear Sirs.

I am a Citizen of Iceland, and want to ask you some questions.
1. Have the depositors of Icesave accounts of Landsbanki been fully compensated as per EEA Top-Ups ?

"An investment services firm established in another EEA state will be a member of that state's compensation scheme, which will protect customers of that investment services firm in that EEA country, and those dealing with branches of that investment services firm in other EEA countries".

Sincerely
Birgir Runar Saemundsson
Astjorn 9
800 Selfoss
Iceland