The creme-de-la-creme of the bankrupt international financial elite gathered Friday in Washington, D.C. for the opening of the IMF/World Bank fall meeting—with absolutely zero idea of what to do about the onrushing collapse of their entire trans-Atlantic financial system, including the high-profile bankruptcy of Deutsche Bank, which could be the trigger for the general collapse.
They don’t know what they are doing, Lyndon LaRouche commented on Friday. They have no way to create the institutions of a secure international banking system, which can only be done by implementing LaRouche’s Four Laws, along with the Hamiltonian approach to credit that underlies those Laws. Adopting that policy, beginning with the immediate reenactment of FDR’s Glass-Steagall, would set the standard to define productive credit, and foster science-driver policies such as the space program, which would increase the productive powers of labor.
The only trace of sanity within a mile’s radius of the IMF meeting, was provided by a squad of LaRouche PAC organizers, who distributed 120 copies of the latest issue of the Hamiltonian— with its lead headline, “One Minute After Midnight… The Crash Is On!“—to conference participants, and found much serious concern with the global crisis, and significant support for Glass-Steagall and the policies of Herrhausen at Deutsche Bank.
Inside the event, as the Wall Street Journal put it,
“worries about Deutsche Bank AG and other potentially troubled European banks are casting a pall over the autumn meetings of the IMF and World Bank this week.”
Similarly, the New York Times ran a lengthy article fretting that “Deutsche Bank might be the next Lehman Brothers.” The bulk of the article cited numerous experts arguing unconvincingly that things really aren’t so bad, and that “there won’t be any contagion episode” related to Deutsche Bank. But the article had to admit, in conclusion:
“Should Deutsche Bank precipitate a financial crisis, it’s not clear how it would be resolved. It’s a European bank, so the Federal Reserve’s powers would be limited. ‘I hope there’s a global game plan,’ [Harvard University Law Professor Hal] Scott said, ‘because that’s what it would take. If Deutsche Bank set off contagion, it would start in Europe. Who would be next? This would require global coordination.'”
Meanwhile, there is frenzied activity behind the scenes, to stitch together some sort of a bail-out for Deutsche Bank. The German daily Handelsblatt reported that a number of “blue-chip” German companies are prepared to offer a capital injection of a couple of billion dollars. And Bloomberg reported that
“senior advisers at top Wall Street firms are speaking to representatives of the German lender about ideas, including a share sale and asset disposals,”
to the tune of some $5.6 billion.
None of these schemes, however, will work, nor do they address the underlying bankruptcy of the entire trans-Atlantic financial system, to the tune of a $1.5 quadrillion speculative bubble which can never be paid, and which must be written off and the economy reorganized as per the specifications of LaRouche’s Four Laws.