Global Financial Crisis Demands LaRouche’s Four Laws


Larouche Pac

imf-i

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.

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Emergency Christmas Eve Message: January 1st is Doomsday! Only an FDR Action Can Save You.


Larouche Pac

President Barack Obama and the entire U.S. Congress have betrayed you, the American people, by refusing, out of cowardice, to take the necessary emergency actions to prevent the greatest financial and economic crash — far worse than 1929 and 2008 — from happening in the hours and days just ahead. Unless you, the American people, stand up and demand immediate action, the nation and much of mankind is facing catastrophe at the start of the New Year.

The entire trans-Atlantic financial system is about to blow. In just the past few weeks, $15 billion in junk and investment grade bonds have been wiped out. This is but a harbinger of an imminent total crash of the trans-Atlantic financial bubble. As of Jan. 1, 2016, a $72 billion debt bubble is set to explode in Puerto Rico. Congress had the opportunity to act to prevent this before leaving town, but failed to act.

An estimated $5 trillion in debt, tied to the collapsing U.S. domestic shale oil and gas sector is blowing up. In Western Canada, this bubble has already been shattered, triggering the loss of 100,000 jobs in 2015 – the equivalent of 750,000 jobs lost in the United States — a crash of the real estate market, and a social breakdown. That same crisis is coming to the United States, at an accelerating rate, but on a much larger scale.

In Europe, starting on Jan. 1, 2016, new laws go into effect, eliminating all protections for bank depositors, who will have their savings stolen under “bail-in” regulations, as has already happened in Cyprus. More than 10,000 Italian depositors had their savings “bailed in” (expropriated] in the collapse of four banks this month. The same measures are included in the Dodd-Frank bill here in the United States. If your bank collapses, your life savings can be stolen to save the bank. It can and will happen here, thanks to the cowardice and corruption of your elected officials, who have kept you in the dark and violated their oaths of office.

Congress had the chance, before leaving town, to prevent this now onrushing crisis. They were warned. They could have passed bills, already introduced in both Houses of Congress, to reinstate Glass-Steagall, the FDR legislation that broke up the Depression era too-big-to-fail banks, by separating commercial banking from all of the gambling activities. But Congress was bought out by Wall Street and failed you. President Obama is a wholly-owned creature of Wall Street and London. Wall Street is hopelessly bankrupt, and they intend to cling to power by stealing your money, wiping out your health care, and shutting down what is left of the real economy. Within days or weeks, you could be facing food shortages, hyperinflation and a complete breakdown of everything you think of as normal.

President Obama, on behalf of Wall Street and London, is also provoking confrontation with Russia, driving the world towards global war, a war that some top American and Russian military commanders warn could rapidly become a war of thermonuclear extinction.

On Jan. 1, 2016, under U.S. and International Monetary Fund approval, Ukraine will default on $3 billion in debt to Russia, an act of open Western provocation against Moscow, on top of the already ongoing sanctions, the eastward expansion of NATO and other acts of direct military provocation.

This is all deadly serious. The world is on the cusp of a worse than Great Depression crash and a new world war. You must now act because your elected officials have abandoned you out of cowardice and corruption. They, along with President Obama, deserve your derision and anger, for their cowardly behavior.

There are solutions readily available. Wall Street must be shut down immediately. Not one penny more to bail out these criminals! Congress must remove Wall Street puppet Barack Obama from office, through impeachment or through invoking the 25th Amendment, which provides for the removal of a President from office who is mentally unfit to continue to serve. Glass-Steagall must be immediately reinstated, and a series of initiatives must be taken, all modeled on what the great American President Franklin Roosevelt did in his first months in office, to create millions of productive jobs, rebuild the nations collapsed infrastructure, and restore the nation’s dignity.

Congress can take these actions in a matter of hours, but they will only act in time if you wake up and demand it.

The alternative is Hell on Earth, by the start of the New Year. Do you, your friends, your neighbors, have the moral fitness to survive? That is the question on your table this Christmas Eve.

Join us at 8 PM eastern Wednesday night for an emergency webcast event featuring Jeff Steinberg & Matthew Ogden, followed by a live Fireside Chat discussion with Lyndon LaRouche at 9 PM. These back to back presentations are part of an emergency mobilization Mr. LaRouche launched Tuesday evening to marshal the sane and patriotic forces in the United States and Europe to handle the blow out of the transatlantic financial system on the eve of the New Year.

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This Week: Shut Down Wall Street, No More Suicides!


Larouche Pac

This Week: Shut Down Wall Street, No More Suicides!

With so-called “junk debt” markets plunging and experts warning of a “riot in the Wall Street casino” this week if the Federal Reserve raises rates, EIR Founding Editor Lyndon LaRouche made a very strong proposal yesterday; indeed, a demand on the elected representatives and citizens of the United States.

LaRouche said: “Close in on this and shut this Wall Street casino down, this week. Remember what is the effect on the people of this kind of crash. We cannot have more suicides, or any more of what happened in Italy last week.”

Italy is in an uproar since an Italian citizen committed suicide after an insolvent bank expropriated all his savings in an outrageous “bail-in” procedure, which also expropriated many others across four failing banks. This infamous “Cyprus-style” procedure has been repeatedly used in Europe as banks collapse, and more expropriations are coming. “People have been being murdered by their banking systems,” as LaRouche put it.

In the United States the sudden “junk debt collapse” is only a harbinger of a Wall Street collapse worse than 2008, with worse impacts on human livelihoods on a global scale.

LaRouche added:

“We cannot allow it to continue, you have worthless accounts, of so-called debt “assets” which are in collapse, and they’re being used to kill people’s income, their employment, potentially their food supply, and even to kill them. If you don’t shut down these Wall Street ‘funds,’ now, you will see what has just happened in Italy, on a grand scale.”I mean it is an ‘edge of death’ situation, if we don’t shut down those pretended assets. Close down the Wall Street system, bankrupt it as Franklin Roosevelt did during his Presidency.

“Then, countries have to create national credit for productivity and employment, again as Roosevelt did.”

It is Barack Obama who has blocked restoration of the Glass-Steagall Act, which is the key to bankrupting Wall Street and allowing productive credit to take effect on the economy.

The same Obama has brought in the “Paris climate agreement,” so-called, which — if it were to be carried out — would reduce the economy’s ability to support human life, by 80-90% in the next 35 years.

“This is a bold human genocide if allowed to occur,” LaRouche said. We can’t allow it to occur.

“That means closing out Wall Street — and that includes Donald Trump — and getting Obama out. Good people in both political parties can agree, to move the responsible authorities in Congress to get these objectives done.”

SUPPORTING MATERIAL

‘Riot in the Casino’ This Week?

That the was the forecast of former Reagan Administration budget official David Stockman, referring to the Federal Reserve’s apparent intention to raise interest rates — for the first time in 10 years — in the teeth of an accelerating junk-debt and commodity price collapse.

Junk debt (junk bonds and leveraged loans) in the U.S. economy, as a reminder, totals at least $2 trillion in “assets” mainly held by banks, although many mutual, pension, and hedge funds are also involved. The junk-debt market decline has become very sharp in December, with interest rates on middling (CCC-rated) junk bonds hitting 17.25% Dec. 10 and shooting upwards. This debt is essentially impossible to refinance. In recent weeks the ratings agencies and banks have charted a “spike” in defaults and bankruptcies of junk debtors — concentrated in oil and gas exploration and related services — and warned the “spike” will become a “wave” in January-February.

Now, two junk creditors have gone under. Two debt-invested funds have liquidated in the past few days. The first was actually a mutual fund: the $1.8 billion, “well-respected” Third Avenue Capital on Dec. 10. Its founder Martin Whitman is designated a “legendary vulture investor.” Just as that was being explained away (“it was investing in unrated debt”), the second went under on Dec. 11. It was Stone Lion Capital, a $2 billion hedge fund which was one of those investing in Puerto Rico distressed debt.

Some see a “Bear Stearns moment” — i.e., the bankruptcy of the two CLO-invested hedge funds in June 2007, which exposed the “non-containment” of the mortgage securities/derivatives meltdown. Vulture investor Carl Icahn gave a “keg of dynamite” interview on CNBC, saying “I believe the meltdown in High Yield is just beginning.”

The Wall Street Journal wrote Dec. 11, “The move is also a sign of how much the market for [all —ed.] corporate debt is deteriorating. “‘Investors have been dazzled that yields on bonds have climbed so high, even while default rates remained low,’ said … a longtime junk-bond analyst. ‘Currently, though, the ability to sell a large position is especially poor. When that tension gets especially high, you can see something snap.'”

The century-old British colonial looter Anglo American, which was making “energy-junk” loans on a large scale, is suddenly at the brink of junk itself, with Moody’s downgrading it Saturday to one step above junk for all its divisions and placing a negative advisory on all of them. Credit default spreads on both Anglo American and Glencore rate them at more than a 50% chance of default, requiring $1,000 cash up front to insure $10,000 of their debt.

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LaRouche Mobilizes to Shut Down Wall Street, As Bankers Shriek: “The System Is Cracking”


LaRouche Pac

Statue of Liberty

As you read this report, a strong delegation of LaRouche PAC organizers from New York City—seasoned veterans of Lyndon LaRouche’s “Manhattan Project”—has arrived in Washington, D.C. to head up a day of organizing and lobbying on Capitol Hill on Oct. 7, to urge key responsible Congressmen and Senators to act at once to shut down Wall Street, and implement Glass-Steagall. As LPAC’s 7-point statement, “For Urgent Attention of Congressmen, Senators and Other Members of the U.S. Government” specifies: “There is now an acute emergency which threatens to kill millions of Americans, primarily, and also citizens of other countries,” which requires action now, this week.

Panic among Wall Street and City of London bankers is evident just barely below the surface. The lead article in the Oct. 3-9 edition of the Economist, the banner publication for City of London financial interests, warns that “the system is cracking,” and calls for a massive effort to backstop the bubble with new waves of quantitative easing—exactly as Lyndon LaRouche has warned is their intention. Similarly, Forbes magazine frets that “there are over $600 trillion in OTC [over-the-counter] derivatives outstanding” on the books of the mega-banks (although the real number is probably twice that amount), which could blow the entire system apart, once a run begins. “For the likes of JP Morgan, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley, these issues remain a topic of life or death.”

The British Empire is also panicked because their errand-boy Barack Obama is sinking, and sinking fast, both inside the United States and internationally. The impact of the United Nations General Assembly, and Russian President Putin’s bold actions in Syria, are rumbling around the planet, and people are waking up to the fact that a new international order is possible. They have watched as Putin took Obama to the cleaners in Syria, and not only survived to tell the story, but is going strong, while Obama is flailing about in frustration. The idea that “maybe we don’t have to suffer Obama any more; maybe we don’t need to submit to Wall Street and watch our nations die,” is a growing force across the planet.

This is a historic moment pregnant with potential, Helga Zepp-LaRouche has emphasized. It is a moment when we can not only sink Wall Street and reinstate Glass-Steagall, but also shift radically towards the policies of the World Land-Bridge and global reconstruction. The fact that leading scholars, think- tankers, and others in China have publicly endorsed the LaRouches’ Land-Bridge policy, that the second largest economy in the world has essentially adopted that policy, is of dramatic import globally. Now that the Chinese-language edition of EIR’s book “The New Silk Road Becomes the World Land-Bridge” has been published with such powerful endorsements, we will bring that message back home to the United States, with a large-run publication of the Special Report, priced for broad circulation across the country.

Lyndon LaRouche stated what is at stake, in his Oct. 5 weekly webcast with the LPAC Policy Committee:

“We can no longer tolerate the risk which is involved in the renewal of Wall Street’s conditions. And therefore, for that reason, we have to shut down Wall Street, in order to protect the people of the United States… We must take preemptive action. What we’ve done, and what I’ve pushed for, is to have an immediate decision, by relevant members of the Congress, to assemble and deal with the situation as such. That was, foreclose against Wall Street without letting them get a bail-0ut effort. Because the giving another option for bail-out to Wall Street would almost certainly ensure a great catastrophe of the people of the United States.””So therefore, we have to protect the population. We have to cancel Wall Street. And we have to proceed to restructure the organization of our employment for the intent of actually getting productive processes going into effect, essentially, a more exigent sort of requirement which Franklin Roosevelt did. But what Franklin Roosevelt suffered, and had to face and deal with, is minor compared to what this condition is of the United States right now.”

“But we have the means available, right at this critical point; we have the means internationally to create a solution for this problem.”


SUPPORTING MATERIAL

Wall Street Bankers Openly Discuss the Coming Crash: “The System Is Cracking”


As the LaRouche movement goes into high gear to shut down Wall Street and return to Glass-Steagall before a crash strikes, Wall Street and City of London bankers are now openly discussing the coming crash… and quietly panicking over how to handle it.

The lead article in the Oct. 3-9 edition of the Economist, the banner publication for City of London financial interests, warns that “the system is cracking,” and calls for an all-out effort to backstop the bubble with new waves of so-called quantitative easing—exactly as Lyndon LaRouche has warned is their intention. The article frets, however, that this hyperinflationary bailout policy may not work as it did in 2008, because the U.S. Congress might go instead for more regulation of the banks—although the article studiously avoids mentioning the feared words, “Glass-Steagall.”

A major problem today, the Economist writes, “is the lack of a backstop for the offshore dollar system if it faces a crisis. In 2008-09 the Fed reluctantly came to the rescue, acting as a lender of last resort by offering $1 trillion of dollar liquidity to foreign banks and central banks. The sums involved in a future crisis would be far higher. The offshore dollar world is almost twice as large as it was in 2007. By the 2020s, it could be as big as America’s banking industry. Since 2008-09, Congress has grown wary of the Fed’s emergency lending. Come the next crisis, the Fed’s plans to issue vast swap lines might meet regulatory or congressional resistance.”

The Economist article concludes: “There are things America can do to shoulder more responsibility–for instance, by setting up bigger emergency swap lines with more central banks. More likely is a splintering of the system, as other countries choose to insulate themselves from Fed decisions by embracing capital controls. The dollar has no peers. But the system that it anchors is cracking.”

Similarly, Forbes magazine’s Antoine Gara wrote on Oct. 2 about the danger of a new blowout, which unusually admits that the underlying problem is the gigantic pile of derivatives sitting on top of numerous nominal debt bubbles. Gara, in reviewing the current Glencore crisis, tries to whistle past the graveyard, arguing that “Glencore’s unraveling won’t turn into the next Lehman Brothers crisis.” He says that is because Glencore does not have the derivatives exposure that Lehman had.

But, he admits, “were Goldman Sachs, Morgan Stanley, or any other large investment bank to be thrown into Glencore’s current predicament, there would be good cause to worry about a Lehman 2.0. There are over $600 trillion in OTC derivatives outstanding [in actuality, there are probably double that amount–ed.], a greater number than prior to the crisis, and many of those contracts continue to trade bilaterally among banks, linking firms together.”

Gara concludes: “For the likes of JP Morgan, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley, these issues remain a topic of life or death. Last quarter, each firm disclosed trillions, if not tens of trillions outstanding in OTC derivatives contracts. No amount of rising retained capital would
protect those firms if there were a messy Lehman-like bankruptcy.”


 

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The First Crack: Deutsche Bank Preannounces Massive Loss, May Cut Dividend

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THE BRICS SUMMIT: Half of Humanity Launches a New World Economic Order


lp

By Dennis Small

A PDF version of this article can be found here.

In mid-July, as the planet was being wracked by growing war horrors in eastern Ukraine, Iraq, and Gaza, and by economic depression caused by the death throes of the trans-Atlantic financial system, heads of state representing half of humanity gathered in Brazil and took the first steps toward creating a New World Economic Order.

The leaders of the BRICS nations (Brazil, Russia, India, China, and South Africa), met on July 16 in Fortaleza for the VI BRICS Summit, and the next day they were joined by the heads of state of South America in the capital city Brasilia. The BRICS account for 43% of the world’s population and 27% of the planet’s land area; when Ibero-America is added in, they jointly represent 48% of the human race, and one third of the Earth’s land area.

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The BRICS & economically allied nations.

At the summit and its numerous associated bilateral and multilateral meetings, that half of humanity adopted a project that is premised on rejecting the current casino financial system, and replacing it with one providing credit for high-technology development projects; on educating and training youth to meet the growth challenges of the future; on full respect for national sovereignty, banishing the imperial policy of regime change and wars; and on explicit promotion of the common good among nations—the Westphalian principle.

“History tells us the law of the jungle isn’t the way of human coexistence,” Chinese President Xi Jinping stated on July 16.

“Every nation should obey the principle of equality, mutual trust, learning from each other, cooperating and seeking joint benefits … for the construction of a harmonious world, sustained peace, and joint prosperity.”

The British Queen was not pleased by these developments, seeing in them an existential threat to the Empire. Lyndon LaRouche was pleased—for the same reason. For 40 years, the renowned American statesman has devised programs, and organized for them internationally, of global financial reform and great development projects—most recently his “Four New Laws To Save the U.S.A. Now!”—of precisely the sort that have now been placed on the agenda by the BRICS.

“The BRICS and allies are building a world system based on real value, not phony paper value,” LaRouche stated July 18.

They are deciding what real value is, and they are imposing it, which is the cost of the productive powers of labor in a changing situation.”

The underlying problem that we have to deal with today, LaRouche elaborated, is the “asymmetry of value in the world,” which is coming from two distinct systems that are operating with a different logic and different metrics: They are totally incompatible.

The first system is the trans-Atlantic system. “These bastards,” LaRouche stated, “who hold pieces of paper that they say are worth quadrillions, and they’re prepared to kill for that,” as the case of Argentina’s battle against the vulture funds shows, as does the pro-vulture ruling of the Aristotelian idiot otherwise known as Justice Antonin Scalia of the U.S. Supreme Court. What these people are holding, this paper, LaRouche added, is absolutely worthless. “It’s like taking rags out of a bucket and trying to sell them”; or even worse, it’s just the promise of future delivery of derivatives on those rags, that they’re saying actually has value.

This is the dead hand of the past, trying to stop humanity from creating any future for itself.

On the other side, we have an emerging system, incompatible with the first, which is building a market based on real value. And real value, LaRouche elaborated, comes from, and is measured by, the development of the productive powers of labor—that is, through the introduction of scientifically created new technologies, implementing productive processes which increase the energy-flux density through the physical economy in such fashion as to immensely increase the productive powers of labor. That new system will create a process whereby the increase in energy-flux density will itself increase at an accelerating rate.

This role of technological progress and scientific advance, LaRouche specified, is what the human species uniquely does. Such creativity is actually the source of value in an economy, and it is the way in which our action to create the future defines present value. It is the central concept of the American System of Political Economy, on which the United States was founded.

The decisive strategic question today, LaRouche concluded, is whether the United States will join that emerging New World Economic Order, or will remain joined at the hip to the British Empire—as it is under the impeachable President Barack Obama—and bring destruction down upon itself and the rest of the world. The same existential issue faces Europe.

Building a Nuclear Future

The BRICS Summit issued a 72-point Fortaleza Declaration (see below), which announced the formation of a New Development Bank (NDB), initially capitalized at $50 billion, to fund infrastructure projects in BRICS and other countries; as well as a Contingent Reserve Arrangement (CRA) with $100 billion to help nations deal with capital flight and other forms of financial warfare.

Most international commentators have engaged in endless contortions, dissecting sentences from the Fortaleza Declaration and speeches at the summit, to try to determine whether these new BRICS institutions are meant to merely complement the British Empire’s International Monetary Fund and other institutions, or to replace them with a new financial architecture. But the answer to that question lies not in parsing written or spoken words, but in the intent behind the creation of the new institutions, which is best reflected in two fundamental issues which were pervasive throughout the discussions: the future and youth, and nuclear energy.

Indian Prime Minister Narendra Modi was most eloquent on the first of these, emphasizing to the plenary session of the Summit “the uniqueness of BRICS as an international institution. For the first time, it brings together a group of nations on the parameter of ‘future potential,’ rather than existing prosperity or shared identities. The very idea of BRICS is thus forward-looking.” He urged the BRICS to now go beyond “being summit-centric,” proposing that the youth of the BRICS nations should take a lead in expanding people-to-people contact between their nations. He suggested establishing a BRICS Young Scientists’ Forum, setting up BRICS language schools “to offer language training in each of our languages,” and exploring the creation of a BRICS University.

Modi concluded:

“Excellencies, we have an opportunity to define the future—of not just our countries, but the world at large…. I take this as a great responsibility.”

Russian President Vladimir Putin struck a similar note in comments to the press on July 17, evaluating the results of his trip:

“The BRICS are all young states, and the future belongs to the young.”

As for the issue of nuclear energy, discussion of it and conclusion of numerous concrete deals permeated the summit and related bilateral meetings, especially those of Russia’s Putin with Argentina’s Cristina Fernández de Kirchner and Brazil’s Dilma Rousseff. This, despite the fact that the Fortaleza Declaration itself—in many ways a “consensus document” typical of such international gatherings—does not mention the matter, other than to defend Iran’s right to develop peaceful nuclear energy.

The true measure of value in an economy, LaRouche has emphasized, is the impact of science and technology in continually increasing the energy-flux density of the productive processes. Although the required science-driver for the world economy is the development of thermonuclear fusion energy, the current insistence on nuclear fission among the BRICS and allied countries is highly significant, as it reflects a commitment to raising the economy’s overall energy-flux density.

Far better than any monetary or GDP-based measure, energy-flux density and other physical economic parameters best indicate the BRICS’ direction.

Figure 2 shows nuclear energy as a percentage of total electricity generation—which is an indicator of overall energy-flux density—in a number of BRICS countries (Russia, India, and Brazil), as compared to representative European countries (Germany and Spain), looking at both current and projected levels. In the case of Germany, for example, the British Empire’s criminal green policy of de-nuclearization has already led to a drastic collapse of nuclear from 28% of total electricity in 1990, to 15% today. The German government of Angela Merkel has adopted a policy of reducing that to zero by the year 2020! Spain is almost as bad.

Compare that to what Russia has done, increasing its proportion of nuclear from 11% in 1990 to 18% in 2013, with a policy of raising that proportion to some 27% by 2030. Other BRICS countries have smaller proportions of nuclear to total electricity today, but they are defiantly committed to a nuclear future. Brazil, for example, plans to increase nuclear from 3% to 15% by 2030. As President Rousseff stated just before the summit began: “Our countries are among the largest in the world, and they cannot be content, in the midst of the 21st Century, with any kind of dependency. Recent events demonstrate that it is essential that we seek for ourselves our scientific and technological autonomy.”

South Africa has also just announced that it is resuming its nuclear program, with plans to build six new nuclear plants.

It is of note that China has the largest nuclear construction program in the world today—a distinction which in the 1970s went to the Roosevelt-created Tennessee Valley Authority. In fact, of the 66 nuclear plants currently under construction worldwide, 50 of them are in the BRICS countries. In other words, 43% of the world’s population is constructing 75% of the world nuclear plants; or, the rate of nuclear construction is 4.3 times greater per capita in the BRICS than in the rest of the world.

The reality is, of course, much starker than those simple numbers indicate, because nuclear energy is being actively destroyed in much of the trans-Atlantic sector (and Japan), as a direct result of the British Empire’s suicidal green policies. The BRICS and allies have made it clear that will have none of it: They have taken the British Queen’s green agenda, as reflected in the Copenhagen Resolution, and thrown it in the trash can.

LaRouche put a fine point on it:

“What about Frau Merkel of Germany?” he asked July 18. She represents the worthless view of value; she’s tearing down nuclear energy, destroying her economy and making it absolutely worthless, he said. “What’s the value of her opinions? Not much.” The BRICS and Ibero-America are building a world market based on real value, and they are already far more productive than Europe and the United States, which insist on values being set by some crazy judge—Scalia in the Argentine case.

Great Infrastructure Projects

Also reflective of the BRICS’ focus on real value, was the emphasis placed on creating a credit system to fund major infrastructure investment. Two important such projects moved forward in and around the BRICS Summit.

The first was the idea of fulfilling the centuries-old dream of building a transcontinental railroad to connect the Atlantic and Pacific coasts of South America. This took shape in the discussion between Chinese President Xi and Peruvian President Ollanta Humala, and then with Brazil’s President Rousseff. An agreement was reached to open bidding for foreign, including Chinese, companies, to participate in the construction of one critical segment of that project: the “T”-shaped Palmas-Campinorte-Annapolis/Campinorte-Lucas route in central Brazil.

landbridge

World Land-Bridge

The importance of that segment within the overall project is clear from Figure 4, a schematic map first published by EIR back in 1988. The northern terminus of Palmas is a stone’s throw from the famous Carajás project in the middle of the Amazon jungle, the world’s largest (and purest) iron ore deposit, which is now connected by rail only to the Atlantic port of São Luis.

Once built, the western rail terminus of Lucas would then be halfway to the Brazil-Peru border, where the projected rail line would link up with a Peruvian branch that would cross the Andes at Saramirisa—the lowest pass in that giant mountain range—and from there, to one or more Peruvian ports for shipment across the Pacific Ocean. This would drastically cut shipping time and costs from Brazil (and other Southern Cone countries like Argentina) to Eurasian powerhouses like China, India, and Russia.

Even greater efficiencies and growth and productivity can be achieved as this South American Transcontinental Railroad is able to connect directly by rail with Asia, as high-speed maglev rail lines are constructed and opened up through the Darién Gap and the Bering Strait.

There are various possible routes for a South American Transcontinental Railroad. (The one under discussion among China, Brazil, and Peru centers on São Paulo-Santa Fé do Sul-Cuiabá-Porto Velho-Pucallpa-Saramirisa-Bogotá-Panamá. Another viable option is São Paulo-Santa Fé do Sul-Santa Cruz-Desaguadero-Saramirisa-Bogotá-Panamá, which has long been studied.)

In fact, earlier versions of precisely this project were drawn up by the Intercontinental Railway Commission, started by U.S. Secretary of State James Blaine, which employed U.S. Army engineers to survey and project lines tying the United States through to Argentina and Brazil, presenting a completed map of the intended route project to President William McKinley in 1898. The strongly pro-American System McKinley commemorated Blaine’s plans as the future of humanity, speaking in 1901 at the Pan-American exposition in Buffalo—where McKinley was shot dead in a British-run operation.

Another great project, the construction of an Interoceanic Canal through Nicaragua, was announced on July 9 by Nicaraguan President Daniel Ortega. The massive project will be carried out by the Chinese company HKND, but President Putin also made an unannounced stopover in Nicaragua on July 12, on his way to the BRICS Summit, to offer Russia’s support.

The canal will run 173 miles from the mouth of the Brito River on the Pacific Coast in southeastern Nicaragua, to the mouth of the Punta Gorda River on the Caribbean side. It will include two locks, and 65 miles of it will pass through Lake Nicaragua, and have a projected passage time of 30 hours, coast to coast, for the 5,100 of the largest ships in the world that will be able to use this canal.

Project engineers report that over 50,000 construction workers will be required, and that once in operation it will generate 200,000 jobs, including its sub-projects (airport, two ports, tourist center, etc.).

President Ortega, in announcing the selected route, stated that the country’s entire educational system was being revamped to produce the engineers and skilled workers that the project will require, He also held up a book containing the feasibility studies for constructing such a canal produced by the United States government and adopted by the U.S. Congress 118 years ago, in 1896, detailing the benefits such a canal would bring.

The irony was lost on no one. China is actively involved in massive job-creating economic projects in Central America—the United States’ proverbial “back yard”—while the U.S. under Obama has helped destroy that area with his policy of drug legalization, on top of decades of the British Empire’s free-trade economic devastation. Today, one-third of the population of El Salvador has been forced to emigrate to the U.S., in a desperate search for the means of survival; while official unemployment in neighboring Honduras now surpasses 60%.

The broader commitment to infrastructure development was emphasized in the last of the multiple historic summits which took place in Brasilia in mid-July, that of the heads of state and special representatives of the Community of Latin American and Caribbean States (CELAC), who met with Chinese President Xi and the Unasur heads of state on July 17. Their joint declaration (see below) emphasized the “important opportunity for mutual development” which exists, announcing

“the establishment of a broad partnership of equality, mutual benefit, and common development between China and Latin America and the Caribbean.”

The New Development Bank

There is little question that the New Development Bank (NDB) and Contingent Reserve Agreement (CRA) are the seed crystals of an entirely new, international financial architecture—although a major political battle lies ahead in order to force this policy through, over the violent objections of the City of London and Wall Street, including their agents within some of the BRICS countries. The founding document of the NDB cautiously sticks to the idea that the NDB and CRA are only meant to “complement” existing institutions like the IMF; but the principles on which they were founded not only contradict those of the IMF, but mutually exclusive.

Most significant, the NDB is clearly geared to lend money for real development, without the hated austerity conditionalities and green policies associated with the IMF and World Bank. For example, the CELAC-China joint declaration contains a radical departure from IMF/World Bank conditionalities, calling “to make good use of the concessionary loans granted by China, in accord with the necessities and priorities of the recipient countries…. We stress the importance of building and modernizing infrastructure.”

Argentine President Fernández, who was given featured billing (after host Rousseff) at the BRICS-Unasur Summit, issued the clearest call for a new world financial order: “We, sirs, are posing then, a new global financial order, one that is not just fair and equitable, but indispensable…. What we demand from the world, is precisely the creation of a new global financial order which will permit sustainable and global economic growth…. Thus, the appeal to all nations is to join forces in this real crusade for a new global political, economic and financial organization that will have positive social, political, economic, and cultural consequences for our nations.”

President Putin—who, like Argentina’s Fernández, is no stranger to being the target of economic warfare—presented a complementary proposal: “BRICS nations should cooperate more closely in commodities markets. We have a unique resource base: Our nations hold 30-50% of global reserves of various resources. Therefore, we believe it is imperative to develop cooperation in mining and processing, and organize a center for training experts in the metals industries in BRICS nations.”

Such an agreement would break the British Empire’s stranglehold on world commodities, and their ability to speculate with nations’ livelihood and their very existence.

To be viable for these purposes, the NDB and CRA would have to function with a firewall against the cancerous dollar-denominated system. It is noteworthy that the NDB is authorized to both receive additional capitalization in non-dollar currencies in the future, as well as to issue loans to BRICS and other nations in non-dollar currencies.

Once three, four, or more countries are involved in great projects receiving such non-dollar loans, a new currency will have in effect been created, in which fixed exchange rates among the national participants will also follow. That step alone would instantly bring about a return to the pre-1971 Bretton Woods system of fixed (predictable) exchange rates, wiping out, with the stroke of a pen, trillions of dollars of speculation on currency futures.

But for the NDB to be able to truly take on the tasks of global reconstruction, the United States must become a full partner in its capitalization and functioning as the centerpiece of a global Hamiltonian credit system, of the sort specified in LaRouche’s Four Laws. Today’s “dollar,” which is no longer the sovereign currency of the United States, but rather a supra-national betting instrument under the control of the British Empire, must also return to its proper role as the Treasury-issued “greenback.”

In short, the central strategic question posed by the mid-July BRICS Summit, is: When will the United States rid itself of President Obama, and return to the American System policies it was founded on, and which half of humanity, led by the BRICS, is now implementing?

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Obama Accomplishes Little In Malaysia


lp

April 28, 2014 • 7:51AM

After a clear failure to accomplish anything in South Korea (except to say bad things about North Korea), President Obama’s stop in Malaysia looks to be another wash out.

After a meeting with Malaysian Prime Minister Najib, the two leaders have agreed to upgrade diplomatic ties to a “comprehensive partnership.” The content of this is not clear, although Najib said this would entail greater collaboration on the economy, security, education, science, and technology. No economic or strategic agreements of note were announced.

International coverage of Obama’s Malaysia visit centered on the lack of a meeting between Obama and opposition leader Anwar Ibrahim, but in fact his national security adviser, British trained “regime change” expert Susan Rice, will meet British-Saudi agent Anwar on Monday, extending Rice’s role in allying the U.S. with Saudi jihadists. Obama will meet other “human rights” and dissident groups, including the sometimes violent Bersih.

On the Trans-Pacific Partnership (TPP), which again was on the agenda, Prime Minister Najib gave Obama a very polite “maybe.” Xinhua reported that Najib indicated that trade deals were always complex — therefore don’t expect a straight “yes.” Najib said the two countries were committed to resolving the remaining issues and he expressed his appreciation for Obama’s understanding of Malaysia’s sensitivities — that is, Najib laid out all the aspects of the TPP that Malaysia found objectionable, while Obama had to listen. Najib also said Malaysia was committed to the process of getting the acceptance of the people before signing the TPP. But opening the TPP–which has been negotiated in deep secrecy–to public scrutiny beforehand, is tantamount to outright rejection of the treaty.

…and I agree

 

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