Glass Steagall or.......Die.

 

Amidst a breaking point of the entire system, Europe has one choice: To join a Glass Steagall reform. The United States must initiate this.

 

 

THE FIGHT FOR GLASS-STEAGALL THIS WEEK IS OURS TO WIN

by Helga Zepp-LaRouche

July 11, 2011

The following is a strategic briefing, delivered by Helga Zepp-LaRouche, to a group of associates across the globe.

So, yesterday, Lyn basically said that this week may be the week where the whole thing comes down, and we may be right on target. Today's the 11th, so Lyn was wrong by one day — well, that happens, you know, but this thing is coming down, and the only question is what will be first, the collapse of the euro, or the collapse of the U.S. system, or both together, reinforcing each other?

Now, the run on Italian bonds and stock is fully under way: What preceded this was information that there was another hedge fund meeting in New York deciding that now was the time to make the attack on Italy, which is probably what happened in reality. The cover story given here was that it was the poisoned atmosphere in Italy between Berlusconi and Tremonti, where Berlusconi publicly made a statement that Tremonti believes he's a genius and everybody else is stupid; and he, in any case, would water his savings austerity down, so much that it would please the voters and not the markets. So this was supposedly the sign which got this herd running, with the expectation that Tremonti was about to be ousted, and basically now you have a big selloff of Italian state bonds but also other paper, like CDS; there is short-selling of Italian bonds, and there is a huge run.

So there is short-selling, where especially American hedge funds have started to bet on a collapse of Italian bonds; remember that short-selling is that you sell paper that you don't possess, but you only afterwards try to buy, by speculating on a falling price. And, the other thing which is going on is credit default swaps, by basically betting on the collapse as well.

• Lyndon LaRouche: Europe's Only Chance for Survival
• End of the Line for the Euro

So then there is a huge freakout that even a new bailout package or an increase of the umbrella could only stop the collapse in the very, very short term, and that even Merkel's intelligent remark that Italy should implement more austerity, would just have increased the insecurity in the markets, and that a stampeding herd can not be stopped like this at all.

So there is a flood of articles now — "To be, or not to be, that is now the euro question"; that the problem becomes worse the more bailout packages you put together, and now finally, the euro is at stake."

So, I think, they're now talking like we talk all the time, but now it's too late! [laughs] And Spiegel, for example, says that the ECB-speak is no more Euroland, but "Euro-Gebiet" and that the tension between the "Pleite-Griechen," — the bankrupt Greeks — and the "Euro-Nazis," has reached new peaks.

Then Welt online has four scenarios about the future of the euro: either chaos, continue like before, to double the umbrella; to make restructuring; or, fourth, that the Eurozone breaks apart.

So this is now all over the place. Welt, for example, had an article earlier, saying that the euro bailout can only end with a horror scenario, that neither an increase of the mechanism, nor making the Eurozone smaller could mean a solution. Then, they attack Juncker — I mean, here you go! — that Juncker had made irresponsible remarks that made the markets insecure: So there is no honor among thieves, they slit each other's throats. And then, they say the governments have put themselves in a position where even a doubling of the mechanism to EU1.5 trillion would no longer make any difference. So, I think the panic is here. And then it goes on and one like, that if there's anyone who believes they can solve it should please raise their hand. This is ridiculous. The cost for Germany will be gigantic, into two-digit, maybe three-digit billions in dimension, because the banks will go bankrupt.

And interesting in this context, is a parallel which previously only we made, namely that this is the end of the system, and that comes from James Galbraith, that unless it's reformed, Europe's project is doomed. And he makes the comparison that "Europe's political project will face the same fate as communism and the U.S. Confederacy." Hmm? Remember that's what we said in 1989 and '90, that if you made the mistake of imposing deregulation and free-market economy, you would have a collapse of that system much bigger than Communism.

So he compares the European Union to the Confederacy, that this model didn't function, and all this austerity which Greece has imposed — for what? Along the road lies a future of defaults, panic, disillusion of the Eurozone, hyperinflation in the existing countries, and a collapse of export markets. And the final consequence will be large population movements, as happened from the American South, basically people fleeing from poverty.

So then, I don't know how this picture will look by the end of the day, because Commerzbank some hours ago had lost 9% in one day; and all the DAX [stock market] is going down as well.

Now, as I said, this may lead to sudden, complete changes, because this thing is untenable.

And no less dramatic is the situation in the United States, where basically the situation with Obama and Republicans on the debt ceiling has ended in a complete stalemate, but nobody can say what will be the result of it, other than this thing is exploding as well. So basically what was the discussion was that the Republicans and Obama wanted to cut $4 trillion from the budget, and obviously this is totally insane. And when the job figures were released on Friday, they were shockingly bad, and so it was clear that the so-called recovery was a fraud. And basically, then, it was clear that Obama was willing to completely cut Social Security and Medicare, which the Democratic Party had in general tried to not touch. And when they saw what the bargain with what the House Republican Leader Boehner had been, that he was ready was to settle for a ratio of $3 of spending cuts for every $1 of extra tax revenue, which the Republicans also did not accept, at all.

So rather than having a strong position, he was ready to move three-quarters of the way to the Republican position, and the Republicans would not even take that, who demanded nothing less than unconditional surrender. And as a result of this, basically, both Obama and Boehner have lost.

And then the FT here has an unbelievable article, saying "Could Mr. Obama's calculation have been more devious than this? Could this breakdown have been the White House plan all along?"

And I think — it's difficult to say, but if you look at this insanity, here the whole world is disintegrating and these governments are such unbelievable bunglers, that one can not really escape the idea that maybe this is the British trying to pull the system down? You know, pulling the string on Obama, pulling the string on the EU — in any case, this is the instrument has fulfilled its usefulness, because basically, this makes Obama really looking bad. And this thing is not settled. It's not settled and the clock is ticking, and this is going to be a terrible thing — UNLESS THERE IS GLASS-STEAGALL, QUICKLY, THIS WEEK.

Now, fortunately, we have a growing momentum towards Glass-Steagall in the United States, and obviously one can not only count the number of congressmen and senators who are in favor, but there is a dynamic right now, where it's either chaos and total anarchy, or Glass-Steagall.

Now, here is another thing to show what cynical bastards these people are, and that there is no question that the British Empire does want to use this crisis for massive population reduction. And this is coming out now, in the most blatant form, namely in the form of a UN report, that in Somalia and other East Africa countries, there is the worst catastrophe worldwide, according to the UNHCR chief, where 12 million people are about to die, right now; and that obviously didn't happen overnight, but this has been coming, and it was not reported.

So this guy then reports that children who are without any strength are lying on the floor; women, who pull themselves and their family with their ounce of strength forward. It's absolutely earthshaking. This is the worst humanitarian catastrophe in the world: "Never, ever have I seen, in a refugee camp, human beings in such a desperate condition," said the chief of the office, Antonio Gutierrez [ph]. And he said that hundreds of thousands of people are fleeing drought and lack of food from Somalia, Kenya, and Ethiopia. That alone in a place called Dadap [ph], in Kenya, there are presently 380,000 in one camp! which is the largest refugee camp in the world! Can you imagine, 380,000, that's like a city the size of Stuttgart. And it continues that mothers are losing three children in a day — so obviously, this has not been new! And the scandal is that one day, you look in the newspaper and they say there are 12 million people about the die! When there is no way how this was not clear for months, and these things, these droughts and so forth is building up, but 12 million people, that's not newsworthy. But newsworthy is that the Linkspartei demands a speed limit on the highways!

I mean this is so bankrupt, so absolutely — and you have to get the rage of the people directed against this, because this is criminal activity, this is criminal energy, this is mass murder, when we said, almost 40 years ago, that the IMF policy is 100 times worse than Adolf Hitler, that was absolutely on the mark! Maybe not only the IMF, but the whole system, but you know, they are killing people off! It's the Four Horsemen of the Apocalypse, and that's what they're going for.

So, it is totally disgusting. You really feel like vomiting when you see this.

Now, there are more reports, that the ECB is continuing to violate the Maastricht Treaty, Art. 18, because they keep taking junk bonds, they have been taking junk bonds from all these countries — Ireland, Greece, Portugal, and so it's an untenable situation.

Okay, now, on other issues: Important is that the former French Gen. Vincent Desportes basically blasted the Libya war for being another example of the failed "revolution in military affairs," namely the idea that you can win such wars by air raids alone, without ground troops, and that this was the same policy which would have been tried in Iraq in 2003, and in Israel against the Hezbollah in 2006. And that obviously, the pretext that it's supposed to protect the population of the rebels is a phony argument because there are domestic policies which are really behind it.

And then he says, that Qaddafi by trying to sit this situation out, could very well end up winning, because, except for luck, meaning to hit Qaddafi by chance, there would have to be a strong ground offensive of several thousand men, which is strictly impossible to do. So there you have another example of this absolutely insane empire doctrine.

Now, Mrs. Merkel obviously totally oblivious to what I just said about the refugee crisis in East Africa, she is now on a three-day trip to Africa, taking exactly three days to visit three countries, and she will make speeches about "good governance," in Africa: So, forget it.

All right, so, now, there is an article by one of the Öko-fascists, Harald Weltzer [ph], whom we know already because he's the director for the Center for Interdisciplinary Memory Research in Essen, and he feels compelled to write an article in Spiegel, that those people who speak about the danger of an eco-dictatorship, like Juergen Grossman and Fritz Fahrenhold [ph], who even warned about the Jacobinism of the Greenies, who are these people to speak about human rights? Is a human right the right for a living standard, which allows for vacations every year, three cars per family, and daily throwing away food, several flat-screen TVs, airconditioning, American refrigerators with ice cube makers, and so forth. I mean, this is so insane! For whom is this the case? Who does this fit? It's for the hedge funds? And these people who give money to people like this guy Weltzer.

So, anyway, I think we are in for the really big one. There is no way how this can be stopped. I don't know if they managed to get through this week or, not, but I think we really have to really think in terms of getting a mass effect, by telling people that they have to oppose this, because this is going to kill people! This is not fun and games, this is going to kill people if there is no Glass-Steagall!

So I think we should really think about what leverages we have to change the situation, and to get people to reflect on the fact that the only way is Glass-Steagall. But given the condition of Europe at this point, given the French government, the German government, the Italian government, I mean, I can not see that it can happen, unless you have a big shock from the United States! And that's what we have to tell people: They should prepare for that, because as Lyn was saying the last couple of days, is that the momentum for Glass-Steagall is absolutely picking up steam, and all we can do is spread our role. Lyn is in the middle of all of this: The fact that the Kerry resolution had to be pulled back, which had been put in in the first place to make sure that our influence would not explode, that was defeated. Senator Reid had to pull it back, because he realized he didn't have the votes, and now you have this complete impasse, and this thing in this week, it will change.

That's all I can see: This is the moment. So don't do anything but think how we can put our agenda on the table, and use the fact that we had a conference, which is really the only thing people can relate to. We can pull these things off any time, if we had a little bit more collaborators and a little bit more money, it would be so easy, we would know exactly what it is necessary to undo this. We would know who to pull together to fix it, which engineers, which scientists, which Mittelstand people should be entrusted with the job to bring the economy back into shape. We have the programs: We have the World Land-Bridge, the New Bretton Woods, all of these things are there, but everything depends upon will people have the intelligence to now step forward and move together with us?

So I think that is making the picture extremely clear. The world is insane, it's totally crazy, but this is the test: Can we get our solution, which is the only realistic solution through?

Okay that's really all I wanted to say, because that's the only thing which is relevant.

LaRouche Webcast Thursday 21. July  1 PM EASTERN

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