A War of Each Against All Has Erupted in Euroland

February 14, 2010 (LPAC)—In the aftermath of Thursday's disastrous European Union heads of state summit in Brussels, where a huge rift surfaced over how to deal with the imminent threat of sovereign default by a number of European states, the pages of the European financial press are filled with the spectacle of a true Hobbesian "each against all" war of survival among rival factions of bankers and other oligarchs.

In addition to Greek Prime Minister Papandreou's rant against Brussels bureaucrats who let the previous Greek conservative government get away with cooking the books and hiding the looming debt explosion, a deep rift seems to be building between France and Germany. The French are touting the bailout of Greece, Spain and the rest of the PIGS—so long as Germany puts up the cash. And at the summit, German Chancellor Angela Merkel put her foot down, refusing to cough up the bailout cash for Greece—at least until Greece makes a credible show of murderous Schachtian austerity. In reality, the German Constitutional Court has set the grounds for Germany's refusal, by imposing limits on how far down the road to extinction Germany can go in order to live up to the Maastricht and Lisbon treaties. And, as the London Financial Times was forced to admit, the German population are overwhelmingly in support of Merkel's refusal to be the piggy-bank of last resort for the weaker states of the EU.

Perhaps the nastiest words came from Albert Edwards, chief strategist for the Paris-based Société Générale, who told the Mail Online that the euro is doomed under any circumstances, so why should anyone spend a penny bailing out Greece or Spain. In a note to investors, Edwards wrote, "My own view is that there is little 'help' that can be offered by the other eurozone nations other than temporary, confidence-giving 'sticking plasters' before the ultimate denoument: the break-up of the eurozone. Any help given to Greece merely delays the inevitable break-up of the eurozone." Edwards went on to argue that Portugal, Ireland, Greece, and Spain are two weak to be in the European Monetary Union (EMU).

The weekend edition of the Financial Times was one big hysterical rant over the Thursday Brussels fiasco and the implications for the demise of the entire EMU. In a doom-and-gloom lead editorial, "Europe Stumbles Upon Closer Union," the editors actually made the opposite argument: Europe does not have the social cohesion to get its financial act together, through greater centralization and coordinate austerity and bailout policies. After warning that no new countries will wish to get involved in the European Union, if Brussels can't assert centralized fiscal controls, the editorial fell back on the same tired City of London position, throughout the past two years of crisis: Bring in the International Monetary Fund to impose the tough sanctions, and dole out the bailout loans. "It would be embarrassing for a member of the EU to receive help from the Washington-based Fund, so admitting the continent could not solve its own problems. But better that than sleepwalking into constitutional upheaval." In an accompanying news article titled "Trust Is Wearing Thin in Europe's Union of Opposites," Tony Barber ranted, "Merkel is determined to uphold the historic promise to German voters not to be a cash dispenser for villains."

Recalling last week's recommendation by UBS to their clients that they dump stock in Banco Santander, it is becoming clearer and clearer that Lyndon LaRouche is right: In times of systemic collapse, oligarchical bankers turn their knives on their closest friends, and Hobbesian warfare will continue until the last banker has fallen. Indicative of this warfare is an article in the Sunday, Feb. 14 London Observer, noting management changes at both Rothschild and Lazard, and anticipating that the two firms are about to go after some vulnerable big banks on Wall Street.

Senate Hearing Pushes EU Dictatorship for U.S., Too

February 14, 2010 (LPAC)—According to witnesses and Senators speaking at two hearings held by the Senate Budget Committee last week, the European Union's budget and deficit standards should be imposed on the United States as well. The mechanism pushed for this, is to either get the Senate to reverse itself and vote up the Gregg-Conrad bill for an unconstitutional deficit commission to usurp Congress's power, or else to do it through the austerity commission which President Obama has promised to create by executive order.

The drive for the EU standard was explicit at the second hearing, held on Feb. 11, on the topic of "Setting and Meeting an Appropriate Target for Fiscal Sustainability." The point was to try to establish a debt-to-GDP ratio to be used by the austerity commission to enforce brutal spending and entitlement cuts. Everyone agreed that a 60% debt-to-GDP ratio would be the best, along with a 3% deficit-to-GDP ratio—exactly the EU ratios.

(Currently, according to committee chairman Kent Conrad, the public debt is now a bit over 60% of GDP, but the Congressional Budget Office (CBO) projects it to rise to 88% by 2020. The deficit is now at 10% of GDP.)

In her statement to the committee, Alice Rivlin, a former Federal Reserve Vice-chairwoman who now co-chairs the Bipartisan Policy Center's Debt Reduction Task Force, noted that the 60% figure has been approved by both the EU and the International Monetary Fund (IMF). Rivlin also said the 60% figure has been adopted by a number of commissions, including the Peterson-Pew Commission. Likewise, Maya MacGuineas, of the Committee for a Responsible Federal Budget, said that global markets are more likely to embrace a plan with credibility, and she stated in her prepared statement that the 60% threshold has become an international standard, adopted by the EU under the Maastricht Treaty, and also by the IMF.

The third witness, Rudolph Penner, a former CBO director and co-chair of the Committee on the Fiscal Future of the United States, agreed on the 60% figure, and said that a higher ratio "raises the risk of a total meltdown in the market for our bonds," and he warned, "If people want to see what could happen next, they should look to Ireland and Greece." This raises the question, Penner said, "Who would bail us out? The IMF? What would the American people think about having our policies dictated by a lender?" The way to avoid this, he suggested, is a choose a target even lower than 60%.

As with the Tuesday hearing, Medicare was a big target, with general agreement that the "sacred cows" of Medicare and Social Security must be slashed if the targets are to be met. Rivlin pushed for a Medicare Commission, and she predicted that, "in the end, we're going to have to worry about rationing, but I don't think we're going to get there for a couple of decades, probably." MacGuineas likewise, said that comparative effectiveness studies are important, but you have to use them to limit what health care will be paid for. "And I think one of the things, like Alice said, rationing doesn't have to happen immediately, but we can't make it a bad word."

More Reasons to Impeach Obama: President's Moves to Wreck NASA Are Breaking the Law

February 14, 2010 (LPAC)—On Feb. 12, twenty-seven Members of the House of Representatives—Democrats and Republicans—sent a letter to NASA Administrator Charlie Bolden, warning that the steps he is taking to preemptively start shutting down NASA's lunar Constellation program, before Congress has even held one hearing on what they will or will not support, "may be in direct violation of the Impoundment Control Act (as well as the appropriations language for FY10). That act resulted from the refusal of the Nixon Administration to allot funds to activities specified by Congress." (Nixon should have been impeached for ending the Apollo program.)

At issue, is the action taken on Jan. 23, before the FY2011 budget even went to Capitol Hill, to disapprove at least one major contract related to the Ares-1 rocket. In addition, the letter states, "there are disturbing reports of verbal instructions to Program Managers to begin the shutdown of Constellation programs." The letter states that it has been announced by Bolden that he has instructed "tiger teams" to work on shutting down Constellation and transition to the new program. The FY2010 appropriations law prohibits the Administration from taking any steps to end Constellation without the approval of Congress.

Mincing no words, the letter continues: "The termination of the Constellation programs is a proposal by the President, but it is Congress who will accept or reject that proposal." In the meantime, they insist, funds for Constellation "are to be spent as if the program will continue." The Representatives ask that Bolden send a letter to the NASA Center Directors, informing them that there will be no slow-down or termination of contracts. They give him until March 1 to reverse gears.

Singers to the letter are: Robert Aderholt (R-Ala.), Ralph Hall (R-Tex.), Spencer Bachus (R-Ala.), Jo Bonner, (R-Ala.), Pete Sessions (R-Tex.), Gene Green (D-Tex.), Steven LaTourette (R-Ohio), Anli Cao (R-La.), Bill Posey (R-Fla.), Michael McCaul (R-Tex.), Ken Calvert (R-Calif.), Kevin Brady (R-Tex.), Mike Rogers (R-Ala.), Ron Paul (R-Tex.), Charles Gonzales (D-Tex.), Al Green (D-Tex.), Mike Coffman (R-Tex.), Steven Rothman (D-N.J.), John Culbertson (R-Tex.), Pete Olson (R-Tex.), Parker Griffith (R-Ala.), Lamar Smith (R-Tex.), Bobby Bright (D-Ala.), Jason Chaffetz (R-Utah), Rob Bishop (R-Utah), Artur Davis (D-Ala.), and Suzanne Kosmas (D-Fla.).

Briefed on the Congressional letter, Lyndon LaRouche said that, in effect, the behavior by the President, as described in the letter, is yet another reason why Barack Obama must be either impeached or forced to resign from office

European Banks' Exposure to PIGS Exceeds $2 Trillion—Without Counting Derivatives!

February 13, 2010 (LPAC)—Wondering why all the hysteria from London and allied European financial circles to force nations such as Spain and Greece to kill their populations off through fascist austerity, in order to "balance their budgets"—i.e., pay their debts?

Statistics just published by the Bank for International Settlements (BIS), and reported widely throughout the world's financial media, reveal that European banks have an exposure of a whopping $2.1 trillion dollars in the so-called PIGS nations (Portugal, Ireland, Greece and Spain). Of that, nominally German banks are out on a limb for about $540 billion (26% of the total), French banks for $370 billion (18%), and British banks for $350 billion (17%).

And among the PIGS, Greece is the least of it—as Lyndon LaRouche has insisted all along. They owe "only" $253 billion of the PIGS's $2.1 trillion in public and private debt. The lion's share —over 40%—is owed by bankrupt Spain.

"The exposure is enormous," Societe General economist Klaus Baader told Bloomberg nervously. "The crisis in Greece is...a concrete problem for Europe's whole banking sector. That explains the interest of finance ministers in stabilizing the situation."

But that $2.1 trillion is actually chump change, compared to the derivatives bubble built on top of it, which is larger by at least an order of magnitude. The real concern is that "Greece's economic woes will 'spook' the derivatives market because of concern the nation's banks may struggle to honor their credit-default swap trades," Bloomberg reported. "Banks' exposure could relate to a mix of sovereign, corporate and bank risks, and may have been hedged," they admit.

London mouthpiece Ambrose Evans-Pritchard also referred to this elephant sitting in the middle of the room: The BIS calculation on bank exposures "understates cross-border links. There are large loans between vulnerable states. The exposure of Portuguese banks to Spain and Ireland equals 19% of Portugal's GDP. Interlocking claims within the eurozone zone are complex. Contagion can spread fast."

To which Lyndon LaRouche commented: "He's got that right."

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# 4,139:

3:42 am PST, Feb 14, Juan Cervantes, California
Live free Iceland, and don't let those banking hyenas mortgage your future. For them it is never enough to take every cent, they want your lives.

# 4,137:

1:25 am PST, Feb 14, Vincent Ketelaar, Netherlands
Keep on fighting my corrupt "leaders"! I really like Iceland, also because you are not part of the EU: PLEACE KEEP OUT, if you want to live free! Just don't pay a single euro to our Bilderberg and Trilateral-leaders!!! Greetzz from one of the most mindcontrolled country in the world.

# 4,134:

10:36 pm PST, Feb 13, Jeff Blackmon, California
Way to stand up to the criminal banksters Iceland!

# 4,132:

4:52 pm PST, Feb 13, Name not displayed, Texas
Be strong, be courageous and stand up for your nation, your families, your future by voting against this paper debt these banksters have created!

Former Apollo Astronaut Harrison Schmitt: Cancelling the Moon Program is Unconstitutional

February 13, 2010 (LPAC)—Echoing the determination by Lyndon LaRouche that President Obama's proposal to cancel NASA's lunar exploration program is an impeachable offense, former Apollo astronaut, and former Senator, Harrison Schmitt says in a statement released after the budget was made public, "Expenditures of taxpayer provided funds on space related activities find constitutional justification in Article 1, Section 8, Clause 8, that gives Congress broad power to 'promote the Progress of Science and the useful Arts.'" In addition, he states, "The article 1 power and obligation to 'provide for the Common Defense,' relates directly to the geopolitical importance of space exploration at this frontier of human endeavor.

"The repeated hypocrisy of this President continues to astound. His campaign promises endorsed what he now proposes to cancel. His July celebration of the 40th anniversary of the first Moon landing now turns out to be just a photo op with the Apollo 11 crew. With one wave of a budget wand, the Congress, the NASA family, and the American people were asked to throw their sacrifices and achievements in space on the ash heap of history.

"How the mighty have fallen," he observes.

What should then be the focus of our national space policy? "Some propose that we concentrate on Mars. Without the experience of returning to the Moon, however, we will not have the engineering, operational, or physiological insight for many decades, to either fly to Mars or land there."

Schmitt describes the painful process by a cowardly Congress and worse Administrations which led to this final destruction, but shortsightedly advises that the 2010 elections "offer the way to get back on the right track." In fact, by then it will be too late.

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Hysterical Santander Economist Responds to LaRouche; Says Eurozone Crisis Won't Touch Brazil!

February 13, 2010 (LPAC)—Speaking from within the bowels of Banco Santander's Brazilian branch, chief economist Alexandre Schwartsman told Exame magazine that the crisis of the Eurozone, and countries such as Greece and Spain, won't have the slightest effect on Brazil's wonderfully-growing economy. Schwartsman's interview was published in Exame's Feb. 9 edition.

Lyndon LaRouche laughed at Schwartsman's "insanity," and remarked that his own warnings of a meltdown crisis throughout the Eurozone, in the middle of which sits British-run Banco Santander, must have "scared the s—t" out of Mr. Schwartsman.

Schwartsman insisted that there have only been a few minor blips in Brazil reflecting the European crisis, but nothing significant. Brazil's economy is dynamic, he lied, based on consumption and investments in the internal market, and it cannot be derailed by any European events.

The Brazilian economist was insistent that Greece is the big problem—not Spain—and worried about a sovereign default, which he said would be a "worst-case scenario." The key question there, he added, is, who holds Greece's debt paper? He ventured that the majority must be pension or investment funds, but not banks. So if Greece does default, "no bank's health would be affected."

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LaRouche: "It's A Breakdown Crisis, and They're All Lying Their Heads Off! And, They're Silly on Top of Everything Else!"

February 13, 2010 (LPAC)—The fast-unravelling EU crisis is not a crisis of government budgets. It's the bank exposure, not government budgets; the budgets are only the excuse to impose fascism. "Absolutely," replied Lyndon LaRouche. "The banks are bankrupt. Exactly!— because they own assets which are worthless." European banks' exposure to public and private debts of Portugal, Ireland, Greece and Spain is estimated at $2.1 trillion, with Spanish debt by far the largest part. But the bigger problem is their derivatives exposure, at least an order of magnitude larger. "Absolutely," said LaRouche, "that's exactly it."

EU conditions on Greece will include imposing a law under the Lisbon Treaty, that Greece must provide reliable economic statistics. "Who's going to make sure they're reliable?", LaRouche asked. "Because if they reported reliable statistics, it'll sink the whole system." Other conditionalities include Greece's establishing a contingency fund for "budget emergencies," amounting to 10% of current public-sector expenditures. LaRouche's diagnosis: "Let's just call this masturbation. It's pure masturbation. There's no reality to it whatsoever; it's a compulsion to lie. Everybody is now put under a compulsion to lie. The system is finished! It's over!"

As British forces have tried to put forward the so-called BRIC alliance of Brazil, Russia, India and China as an alternative to LaRouche's Four-Power Initiative, no less an authority than Banco Santander's chief economist for Brazil, assured the public that the Eurozone crisis would not affect Brazil. LaRouche laughed uproariously at this, and finally said "The guy's nuts! Boy, I must have scared the pants off them!" This expert went on that Greek debt is probably owned by investment and pension funds, so banks won't be affected. "Banks won't be affected?", laughed LaRouche. "These guys are really idiots, nuts! Brazil is not affected, and there'll be no contagion,— they'll keep the bank breakdown inside Brazil!"

In a related development, the Brazilian government is receiving all international flights by offering free condoms to the passengers, to "prevent contagion" during the Carnival.

"It's hilarious," LaRouche summed up. "It's obvious that mass insanity has taken over the financial markets. That's what the truth is. Like this thing from Brazil: nothing bad can happen to us, because we're too big to collapse. We're Brazil! You're wrong, buddy: you're going to have a bigger collapse, because you're big.

"This is the end-game" he said. "The world is in an end-game.

"I know the truth," he added. "Others don't wish to know the truth. It's like they're putting their hands in front of their eyes.

"The whole thing is coming down," LaRouche said. "There's no way. And the only way you can deal with it, is a general wipe-out, off the books, by a Glass-Steagall type of standard. Without that measure, there's no chance of civilization surviving this crisis. So, therefore, there has to be a global Glass-Steagall type wipeout of these fictitious assets. What is called the claims, is largely fictitious assets, and what you must do, is wipe it out, as Roosevelt did with the Glass-Steagall Act. It has to be a global one, and it means a lot of speculative banks will go under. So what! We're going to save the economy; we can't save all these banks. We can only save the ones that can pass the Glass-Steagall standard. All others are subject to re-assessment, shall we say.

"There is no solution," LaRouche continued. "It's a general breakdown crisis of the entire international system, and there's no way that this is going to be miraculously cured, nor is anybody going to be able to save a lot of these worthless assets. What's needed is a global Glass-Steagall cleanout of the entire international financial system. Then we can start all over again, and we'll have all these happy, bankrupt ex-bankers, who now finally are able to take a lo-o-ong rest, from the strain of their careers. That's simply the reality. The reality is, that there has to be a global Glass-Steagalll, which means that there'll be nothing left of places like Wall Street. And people have to get used to that: We don't need Wall Street. It's going to have to go, because there's no way you can carry out a Glass-Stegall type of reform at this time, which is the only way the economies of the world can survive, without wiping out financial centers such as Wall Street. The effect will have to be that. That, regrettably for some people, is the price we have to pay for a recovery. And that's the point to make. Watch'em suffer! Let'em squirm! Squirm, worm!

"It's a breakdown crisis," he concluded, "and they're all lying their heads off. And they're silly, on top of everything else!"

LaRouche Addresses Imminent Hyperinflation Threat

Bailout will bring "New Dark Age". Most of the general citizenry still living today, among the nations of both the Americas and Europe, in particular, were born too late to have been given any semblance of a competent insight into the origins and nature of the changes in national cultures and prevailing currents of public opinion which have since occurred, during the course of the 1945-2008 period to date. Thus, they, excepting, chiefly, a sprinkling of figures from among those presently in their eighties and nineties, lack any effective, adult experience of what went wrong, in the process of creating what is presently occurring as the greatest general economic breakdown-crisis in modern history. The typical citizen today, accepts the changes in thinking which have produced today's disaster, accepting these as being almost some universal truth since the beginning of Creation; they accept this without any efficient sense of the origin, nature, and effect of what has become a traditional outlook among each of the generations in their forties, fifties, and sixties today. The lesson to be learned from that experience of those born to form the post-World War II generations, is the lesson of that principle of all great Classical tragedy since the Homeric Iliad , which presumes, insightfully, that it is a generation's own acquired habits, and the influence of whatever supposed gods or demi-gods they worship, which are most likely to be the causes of its own, systemically tragic, self-destruction.

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Lyndon LaRouche International Webcast-- 02.11.2009

LaRouche Calls Russian Eurobond Sales Really Dumb

February 12, 2010 (LPAC)—As promised, the Russian government is moving to sell its first state foreign debt since 1998. On Feb. 5, Bloomberg.com reported, Kudrin's Finance Ministry announced via its web site that Russia has hired Barclays Capital, Citigroup, Credit Suisse Group AG, and (its own) VTB Capital to organize the bond flotation. Finance Ministry officials have said Russia wants to raise up to $17.8 billion through Eurobond sales this year. Said Deputy Finance Minister Dmitri Pankin on Feb. 5, "Our goal is to show that we're different from Greece or Portugal, which have to borrow to cover their budget deficits."

Lyndon LaRouche said of the Krudrin crowd behind this move: "They are dumb. They don't learn."

In a major speech on economic policy, delivered Jan. 13, former Prime Minister, Academician Yevgeni Primakov, reported that Prime Minister Putin himself has been opposing the push by Kudrin's Ministry of Finance to return to the Eurobond market and favoring internal generation of long-term credit for real economic development.

 

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# 4,112:

4:56 am PST, Feb 12, Calvin Keats, Canada
People of Iceland, you are not alone in the struggle. The whole world is being cornered into subjugating to the banking system more and more. I truly hope that you the people of Iceland will fight against the IMF and put a stop to debt-slavery. There truly is no need for money - especially the money created out of thin air for the elite and corporations while you the common people have to remain in perpetual servitude with your skills and labor. We in Canada are on your side.

# 4,106:

8:41 pm PST, Feb 11, Leslie Braun, Canada
We're with you. Keep your strength and vote for freedom, and we all win with you. We are awakening, and Now is the time to take back our planet for our children and Ourselves!

Spanish Banks Told To Devalue Housing Assets

February 12, 2010 (LPAC)—A week after Lyndon LaRouche exposed the fact that assets of the British-controlled Spanish-language Banco Santander were fake, according to El Mundo all Spanish banks, including Banco Santander, were told on Wednesday by the Bank of Spain to devalue the housing assets on their books by 20 percent. The Bank of Spain was not immediately available for comment.

However, El Mundo reported that Spain's banks hold property valued at an estimated 100 billion euros ($137.1 billion) taken on over the last couple of years as property companies went bankrupt and their creditors were forced to mop up their unsold assets. Clearly the country's banks have been keeping a lid on losses by valuing the homes on their books at pre-collapse levels, while real property prices have dropped by more than 14 percent from their high in 2007.

As Lyndon LaRouche has said, the overvaluation of the fake assets of banks like Santander is far greater than 20 percent. The Bank of Spain is clearly deliberately understating the extent of the problem through the delusionary hope of still being able to control the situation.

Mass Strike Grows Against EU Fascist Austerity

February 12, 2010 (LPAC)—As the British-controlled EU bureaucracy attempts to impose a fascist austerity dictatorship upon not only Greece, but the rest of the Euro-zone, a mass strike is building in Greece that is threatening to spread throughout the nations of the European Union.

On Wednesday, the public sector union ADEDY carried out a day-long work stoppage in opposition to the EU-dictated Greek government austerity measures. Coverage in the Guardian reports that the protesters chanted: "We are not Ireland, we will resist." Former communist MP Kimos Koumbounis is quoted as saying: "We are at war with the government because it is clearly at war with us. The working class will respond with ever greater force and intensity to overturn these unjust and antisocial policies." One union leader, Vasiillis Stamoulis, said: "There should be no sacrifice for the plutocracy. Those who are responsible should pay for the crisis: the bankers, industrialists, shipowners, big merchants, the oligarchy of this country."

On Thursday, the day after the strike, it was announced that Greek unemployment hit its highest rate in nearly five years on Thursday and the public sector unions said they were stepping up strike action. Greece's unadjusted unemployment rate jumped to 10.6 percent in November from 7.8 percent a year earlier, reaching its highest level since March 2005. The jobless rate was particularly high among the young, with 27.8 percent of 15- to 24-year-olds unemployed. ADEDY said it would join another one-day stoppage by the private sector union GSEE on Feb. 24 in protest against wage and pension freezes and job cuts, announced earlier this week. The two unions comprise half of Greece's 5 million workforce.

The End of the Obama Administration

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