Congress Close To Nationalization of Federal Reserve
by Ellen Brown
Mainstream politicians have long insisted that Medicare for all, a universal basic income, student debt relief and a slew of other much-needed public programs are off the table because the federal government cannot afford them. But that was before Wall Street and the stock market were driven onto life-support by a virus. Congress has now suddenly discovered the magic money tree. It took only a few days for Congress to unanimously pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which will be doling out $2.2 trillion in crisis relief, most of it going to Corporate America with few strings attached. Beyond that, the Federal Reserve is making over $4 trillion available to banks, hedge funds and other financial entities of all stripes; it has dropped the fed funds rate (the rate at which banks borrow from each other) effectively to zero; and it has made $1.5 trillion available to the repo markeIt is also the Federal Reserve that will be picking up the tab for this bonanza, at least to start. The US central bank has opened the sluice gates to unlimited quantitative easing, buying Treasury securities and mortgage-backed securities “in the amounts needed to support smooth market functions.” Last month, the Fed bought $650 billion worth of federal securities. At that rate, notes Wall Street on Parade, it will own the entire Treasury market in about 22 months. As Minneapolis Fed President Neel Kashkari acknowledged on 60 Minutes, “There is an infinite amount of cash at the Federal Reserve.”
In theory, quantitative easing is just a temporary measure, reversible by selling bonds back into the market when the economy gets back on its feet. But in practice, we have seen that QE is a one-way street. When central banks have tried to reverse it with “quantitative tightening,” economies have shrunk and stock markets have plunged. So the Fed is likely to just keep rolling over the bonds, which is what normally happens anyway with the federal debt. The debt is never actually paid off but is just rolled over from year to year. Only the interest must be paid, to the tune of $575 billion in 2019. The benefit of having the Fed rather than private bondholders hold the bonds is that the Fed rebates its profits to the Treasury after deducting its costs, making the loans virtually interest-free. Interest-free loans rolled over indefinitely are in effect free money. The Fed is “monetizing” the debt.
What will individuals, families, communities and state and local governments be getting out of this massive bailout? Not much. Qualifying individuals will get a very modest one-time payment of $1,200, and unemployment benefits have been extended for the next four months. For local governments, $150 billion has been allocated for crisis relief, and one of the Fed’s newly expanded Special Purpose Vehicles will buy municipal bonds. But there is no provision for reducing the interest rate on the bonds, which typically runs at 3 or 4 percent plus hefty bond dealer fees and foregone taxes on tax-free issues. Unlike the federal government, municipal governments will not be getting a rebate on the interest on their bonds.
The taxpayers have obviously been shortchanged in this deal. David Dayen calls it “a robbery in progress.” But there have been some promising developments that could be harnessed for the benefit of the people. The Fed has evidently abandoned its vaunted “independence” and is now working in partnership with the Treasury. In some sense, it has been nationalized. A true partnership, however, would make the printing press available for more than just buying toxic corporate assets. A central bank that was run as a public utility could fund programs designed to kickstart the economy, stimulate productivity and generally serve the public.
Harnessing the Central Bank
The reason the Fed is now working with the Treasury is that it needs the Treasury to help it bail out a financial industry burdened with an avalanche of dodgy assets that are fast losing value. The problem for the Fed is that it is only allowed to purchase or lend against securities with government guarantees, including Treasury securities, agency mortgage-backed securities, debt issued by Fannie Mae and Freddie Mac, and (arguably) municipal securities. To get around that wrinkle, as Wolf Richter explains:
[T]he Treasury will create (or resuscitate) a series of special-purpose vehicles (SPVs) to buy all manner of financial assets, backed by $425 billion in collateral conveniently supplied by the US taxpayer via the Exchange Stabilization Fund. The Fed will lend to SPVs against this collateral which, when leveraged, could fund $4-5 trillion in asset purchases.
That includes municipal bonds, non-agency mortgages, corporate bonds, commercial paper, and every variety of asset-backed security. The only things the government can’t (transparently, yet) buy are publicly-traded stocks and high-yield bonds.
Unlike in QE, in which the Fed moves assets onto its own balance sheet, the Treasury will now be buying assets and backstopping loans through SPVs that the Treasury will own and control. SPVs are a form of shadow bank, which like all banks create money by “monetizing” debt or turning it into something that can be spent in the marketplace. The SPV decides what assets to buy and borrows from the central bank to do it. The central bank then passively creates the funds, which are used to purchase the assets backing the loan. As Jim Bianco wrote on Bloomberg:In other words, the federal government is nationalizing large swaths of the financial markets. The Fed is providing the money to do it. BlackRock will be doing the trades. This scheme essentially merges the Fed and Treasury into one organization. …
In effect, the Fed is giving the Treasury access to its printing press. This means that, in the extreme, the administration would be free to use its control, not the Fed’s control, of these SPVs to instruct the Fed to print more money so it could buy securities and hand out loans in an effort to ramp financial markets higher going into the election.
Of the designated SPVs, none currently serves a public purpose beyond buoying the markets; but they could be designed for such purposes. The taxpayers are on the hook for replenishing the $425 billion in the Exchange Stabilization Fund, and they should be entitled to share in the benefits. Congress could designate a Special Purpose Vehicle to fund its infrastructure projects, and to fund those much-needed public services including Medicare for all, a universal basic income, student debt relief, and similar programs. It could also purchase a controlling interest in insolvent or profligate banks, pharmaceutical companies, oil companies and other offenders and regulate them in a way that serves the public interest.
Another possibility would be for Congress to fund these programs in the usual way by issuing government bonds, but to enter into a partnership agreement first by which the central bank would buy the bonds, roll them over indefinitely, and rebate the interest to the Treasury. That is how Japanese Prime Minister Shinzo Abe has funded his stimulus programs, with none of the predicted inflationary effects on consumer prices. In fact the Japanese consumer price index is hovering at a very low 0.4%, well below even the central bank’s 2 percent target, although the Bank of Japan has monetized nearly half of the government’s debt. Half of the US debt would be over $11 trillion. Assuming $6 trillion for the current corporate bailouts, that means another $5 trillion could safely be monetized for programs benefiting individuals, families and local governments. (How to do this without driving up consumer prices will be the subject of another article.)
Relief for State and Local Governments
State and local governments, which are on the front lines for delivering emergency services, have for the most part been left out of the bailout bonanza. While we are waiting for action from Congress, the Fed could make cheap loans available to local governments using its existing powers under Federal Reserve Act Sec. 14(2)(b), which authorizes the Fed to purchase the bills, bonds, and notes of state and local governments having maturities of six months or less. Since local governments must balance their budgets, these loans would have to be repaid, but the loans could be extended by rolling them over for a reasonable period, as is done with repo loans and the federal debt; and the loans could be made at the same near-zero interest rate banks can borrow at now. State and local governments are at least as creditworthy as banks – they have a taxpayer base and massive assets. In fact the private banking industry would have been insolvent long ago if it were not for the deep pocket of the central bank and the bailouts of the federal government, including the FDIC insurance scheme that rescued the banks from bankruptcy in the Great Depression.
There is a way state and local governments can take advantage of the near-zero interest rates available to banks even without federal action. They can set up their own publicly-owned banks. Besides giving them the ability to borrow much more cheaply, having their own banks would allow them to leverage their loan funds. A $100 million revolving fund issuing loans at 3% would gross the state $3 million per year. If that same $100 million were used to capitalize a bank, it could issue ten times that sum in loans, grossing $30 million per year. Costs would need to be deducted from those earnings, including the cost of funds; but the cost of funds is quite low for banks today. They can borrow to meet their liquidity needs from their own deposit pool, or at 0.25% in the fed funds market, or at about the same rate in the repo market, which is now backstopped by the central bank.
The blatant disparities in the congressional response to the current crisis have shone a bright light on how our financial system is rigged against the people in favor of a wealthy elite. Crisis is when change happens; this is the time for advocates to unite in demanding change on behalf of the people. As Greek economist Yanis Varoufakis admonished in a recent post:
[T]his new phase of the crisis is, at the very least, making it clear to us that anything goes – that everything is now possible.… Whether the epidemic helps deliver the good or the most evil society will depend … on whether progressives manage to band together. For if we do not, just like in 2008 we did not, the bankers, the spivs [petty criminals], the oligarchs and the neofascists will prove, again, that they are the ones who know how not to let a good crisis go to waste.
Customs Tax Goes From 10% to 12.5%
Gold Buyers in India Are Being Gouged By Modi Government
The Modi Government of India has just raised the Customs tax on Gold to an astounding 12.5 %. India, after confiscating billions of dollars of wealth from it’s citizens is now desperate to protect its failing fiat currency by jacking the Customs tax from 10% to 12.5%. This is a huge premium for India’s citizens to pay, but it shows that the people are not stupid. They know what the Modi Government is doing to them through fiat currency and want to own physical gold. The huge demand proves that gold is way too cheap, and is the subject of huge taxes to suppress the price.
LaRouche Was Opponent of Crooked Banking System
This obituary was originally published by EIR magazine. See also, “A Talent Well Spent.”
Lyndon H. LaRouche, Jr., the American economist and statesman who compiled, between 1957 and 2007, the most accurate record of economic forecasting in the world, passed away on February 12, 2019. The author of thousands of articles and over 100 books and book-length pamphlets and strategic studies, LaRouche was one of the most controversial political figures in all of American history.
One reason for this was LaRouche’s proud, vigorous, and enduring Presidential campaign, 1976–2004, to re-establish American Constitutional self-government following the 1963–1968 assassinations of John F. Kennedy, Malcolm X, Martin Luther King, Jr., and Robert F. Kennedy. Another reason was his successful establishment of an independent news service and intelligence gathering capability that allowed him and his associates an unfiltered evaluations capability, which equipped them to accurately report the true state of the American economy, and often, the true nature of otherwise mysterious American and international political processes.
LaRouche also created an international philosophical association, on the basis of re-creating the knowledge about the millennia-old controversy between the Platonic tradition and the school of Aristotle, the fight between the republican model of state and the oligarchical system of empire.
LaRouche’s reach outside the United States was the result of his successful recruitment of hundreds of politicized students from many nations, particularly in Europe, Canada, and Central and South America. This self-selected intelligentsia gave him the power to originate and implement policy shifts through the deployment of modest but well-trained and extremely well-informed units that catalyzed much larger forces in various nations to sometimes act as “one mind across many continents.”
LaRouche was known for his insistence that each citizen of the United States, as well as citizens of any sovereign nation, have the responsibility to educate themselves on the crucial matters of policy that affect the future of their nations, and of humanity; to propose and defend only those policies that “promote the General Welfare of ourselves and our posterity;” and to defeat predatory financial measures enacted in the pursuit of racialist depopulation policies, sometimes disguised as “environmentalism” or “sustainable development” aimed particularly at the nations of Africa, Asia, and Central and South America.
Though prominent international persons and institutions have recently begun reporting about LaRouche, despite his having been one of America’s most prolific writers, no “major media source” has yet dared to quote Lyndon LaRouche’s actual views on any policy matter for which he was noted. This fear of LaRouche is notable, but not new. It was always true that the power of the ideas of LaRouche, as much as, or even more than the person of LaRouche, were deeply feared by his opponents. That fear will not abate with his physical demise.
LaRouche’s Four Laws, his proposal for a United States-Russia-China-India Four Powers Agreement, his invention of the 1983 Strategic Defense Initiative (SDI) announced by then-President Ronald Reagan, and his unique five-decade advocacy of thermonuclear fusion power cannot be allowed to be mentioned by “mainstream media” today, even upon the occasion of LaRouche’s death. Were the American people to now know about these policies, and therefore what they had been denied by the decades-long enforced conspiracy of silence around LaRouche, particularly during the financial crises and useless predatory wars of the past 15 years, they would immediately conclude that someone has been trying very hard all these years to keep them away from Lyndon LaRouche’s ideas.
“He’s a bad guy, but we can’t tell you why” will no longer suffice as an explanation for these people, as to why they should not, even now, know “who Lyndon LaRouche is.” In successfully breaking the confines of fake news at this moment, the real Lyndon LaRouche can finally be heard and become known. To that end, the following brief, very incomplete account of his life and work is supplied.
The Development of a World Statesman
LaRouche established himself over more than four decades as the foremost enemy of the British Imperial System, in both its pre-World War II and ongoing post-war Commonwealth incarnations. LaRouche’s service in World War II, particularly in the Burma theatre was personally decisive. “It was the experience in Calcutta, in 1946, which defined my principal lifelong commitment, that the United States should take postwar world leadership in establishing a world order dedicated to promoting the economic development of what we today call ‘developing nations,’ ” LaRouche wrote in his autobiography, The Power of Reason: 1988. LaRouche began to do battle with the “political economic theorists” and slave-traders of the modern-day British East India Company, whose theories dominated American university Economics departments in the aftermath of World War II.
LaRouche fiercely opposed the conception of man-as-a-beast advocated by Francis Bacon, Thomas Hobbes, Parson Thomas Malthus, and John Locke. Instead, LaRouche re-established the science of physical economy in the United States, a science invented in 1672 by the German philosopher Gottfried Leibniz, inventor of the calculus and co-inventor of the steam engine. Through an intensive period of study between 1948 and 1952, LaRouche advanced his independent studies in physical science in order to develop his method of economic forecasting. The 1983 book, LaRouche: Will This Man Become President? states: “What LaRouche first recognized during 1952, was that by adopting a conception of energy which is fully consistent with [bernhard] Riemann’s 1854 dissertation, ‘On the Hypotheses Which Underlie Geometry,’ it is possible to measure both technology and economic growth in terms of energy so defined. In LaRouche’s work, economic value—real economic growth—is measured primarily in terms of increases of the potential relative population density of society.”
LaRouche, however, looked at all of his work on physical economy as the specific expression of a deeper epistemological task. In his 1988 article “Beethoven as a Physical Scientist,” LaRouche writes:
“My most important discoveries, in every field which I have contributed, are based upon my successful refutation of the famous Kantian paradox reasserted in Immanuel Kant’s Critique of Judgment. Kant asserted two things of relevance here.
“First, he insisted that although creative processes responsible for valid fundamental scientific discoveries exist, these processes themselves are beyond all possible human understanding. That I proved to be false, and from that proof developed an approach to intelligible representation of those creative processes, and hence the implicit measurement of technological progress as such.
“Second, on the basis of the first assumption, Kant argued that there were no intelligible criteria of truth or beauty in aesthetics. The toleration which has been gained so generally by all modern irrationalism in matters of art, has depended upon German and other acceptance of this thesis on aesthetics advanced by Kant and Friedrich Carl von Savigny later.”
The prolific nature of Lyndon LaRouche’s writings, in the fields of music, economics, history, language, and the physical sciences, inspired many collaborations and exchanges with people throughout the world. LaRouche, importantly, was a statesman—not a politician—a practitioner of statecraft, in the Socratic-Athenian sense. He established organizations through teaching, starting with a several-part lecture series in 1966, through which he advanced and debated his method of economic forecasting, especially on university campuses. Many first encountered LaRouche on one side of a debate, held with campus economic and political authorities of the 1970s. This stopped after LaRouche’s famous 1971 debate with economist Abba Lerner, who lost by admitting that if the austerity policies of German Finance Minister Hjalmar Schacht had been implemented in the 1920s, “Hitler would not have been necessary.” Within months, no one could be found to debate LaRouche, and no such debates ever again occurred.
LaRouche’s lectures on what were at the time called “dialectical economics,” were precisely that—dialogues between LaRouche and philosophical, economic and scientific figures from history, portrayed by him with storyteller precision, always done without notes, and often done without any books at all. Students were supplied with an extensive syllabus of reading material, with suggested readings detailed week by week. One student recalled that “passages were referred to from a work like Kant’s Critique of Practical Reason, for example. You would be told to read it. If you did so, and came to the class the next week, he would first describe what his idea was of the passage, which was persuasive as well as accurate. He would then proceed to destroy it piece by piece, and because you had read it, and accepted it, you got to discover the fallacies lurking at the bottom of your own mind. He demonstrated to you the difference between reading and thinking. They weren’t classes: they were soliloquies. And that’s how we got interested.”
LaRouche’s primary organization was the National (later International) Caucus of Labor Committees, a philosophical association organized as a “system of conferences,” usually held twice yearly. From this association sprang many other organizations, such as the Fusion Energy Foundation, the U.S. Labor Party, the National Democratic Policy Committee, the Anti-Drug Coalition, and others. LaRouche also founded and worked with organizations in France, Germany, Italy, Sweden, Canada, Denmark, Mexico, Colombia, Peru, Australia, and many other nations.
In December of 1977, LaRouche married Helga Zepp of Germany, later the creator of the Schiller Institute, a policy institution for the promotion of statecraft and a renaissance of Classical culture.
“In the fall of 1977, I suggested that we marry…. I was a little surprised, but pleasantly, when she agreed…. There was nothing ordinary about the lives of either of us, nor was it ever likely to be otherwise. We married in Wiesbaden on December 29, 1977. The service was in German; the official of the Standesamt asked me in German, if I knew what was happening. There was laughter about that question among my friends for weeks afterward.”They remained married for 41 years.
The combative nature and polemical style of the campaigns, electoral and non-electoral, of LaRouche and his associates were unique in American political life in the 1970s, 1980s, and 1990s. LaRouche’s 1976 half-hour broadcast, “Emergency Address to the Nation,” was the first time an independent candidate had ever purchased that quantity of television time in a U.S. federal election. LaRouche appeared on television fifteen times during the Presidential election of 1984 in 30-minute segments, virtually inventing what would later be imitated as the “infomercial.” The LaRouche Presidential candidacies, and the candidacies of his associates, including the running of 1,000 candidates for office in 1986 alone, both terrified LaRouche’s opponents in the United States, and inspired others to have the courage not merely to run for office, but to support policies designed to benefit all of humanity, not merely “their local mud-hole.”
One such policy was the International Development Bank (IDB), a 1975 LaRouche proposal to replace the International Monetary Fund, and to develop what was then termed “the Third World” through providing for the export of, not only American-built technology, but entire cities. These cities were to be built as training sites for the rapid development of the skills of developing-sector populations, enabling them to create their own “full-set” economies, rather than become debt-slaves, as in fact occurred.
Persons such as Frederick Wills, the former Foreign Affairs Minister of Guyana, advocated LaRouche’s IDB proposal in a 1976 session of the United Nations. Mexico’s President José López Portillo and India’s Prime Minister Indira Gandhi met with Lyndon and Helga LaRouche and adopted aspects of his proposals, many of which were presented as book-length treatments, such as “Operation Juárez” for Mexico and “The Industrialization of India: From Backwardness to Industrial Power in Forty Years” and a “A Fifty-Year Development Policy for the Indian-Pacific Oceans Basin”—all papers written by LaRouche in the early 1980s, and whose central outlook is still current, not only for today, but for the next decade or more.
The unorthodox method for dispersing these ideas advocated by LaRouche was Socratic: talking to people one on one. This daily street organizing occurred at unemployment centers, post offices, airports and traffic intersections, street corners, downtown areas and shopping malls. This direct contact with the American population resulted in LaRouche having a better reading on what was happening in the United States “from on the ground” than any other political force in the country. Corrupt elements of the Justice Department, and “quasi non-governmental organizations” who were given the green light to illegally disrupt the Constitutionally-guaranteed right of LaRouche’s associates to organize were forced to resort to characterizing the organization as a “cult” in order to dissuade citizens from contributing to companies associated with the LaRouche political movement.
None of LaRouche’s detractors are able to deny his record of successful economic forecasts, including the collapse of the Bretton Woods System on August 15, 1971, the October 1987 collapse of the Wall Street stock market (which LaRouche forecast in May of that year), and his July 25, 2007 forecast, captured in webcast format, of what later became the September 2008 “trillions-dollar bailout.” Some of the most stunning of LaRouche forecasts, though, were not, strictly speaking, economic. On Columbus Day, October 12, 1988, Lyndon LaRouche, speaking at Berlin’s Kempinski Hotel Bristol, said:
“By profession, I am an economist in the tradition of Gottfried Wilhelm Leibniz and Friedrich List in Germany and of Alexander Hamilton and Mathew and Henry Carey in the United States. My political principles are those of Leibniz, List, and Hamilton, and are also consistent with those of Friedrich Schiller and Wilhelm von Humboldt. Like the founders of my republic, I have an uncompromising belief in the principle of absolutely sovereign nation-states, and I am therefore opposed to all supranational authorities which might undermine the sovereignty of any nation. However, like Schiller, I believe that every person who aspires to become a beautiful soul, must be at the same time a true patriot of his own nation, and also a world citizen.
“For these reasons, during the past 15 years I have become a specialist in my country’s foreign affairs. As a result of this work, I have gained increasing, significant influence among some circles around my own government on the interrelated subjects of U.S. foreign policy and strategy. My role during 1982 and 1983 in working with the U.S. National Security Council to shape the adoption of the policy known as the Strategic Defense Initiative, or ‘SDI,’ is an example of this. Although the details are confidential, I can report to you that my views on the current strategic situation are more influential in the United States today that at any time during the past. Therefore, I can assure you that what I present to you now, on the subject of prospects for the reunification of Germany, is a proposal which will be studied most seriously among the relevant establishment circles inside the United States. Under the proper conditions, many today will agree, that the time has come for early steps toward the reunification of Germany, with the obvious prospect that Berlin might resume its role as the capital.”
Targeted for Destruction
Two days after his Kempinski Hotel speech, federal indictments were issued against Lyndon LaRouche and several associates. Later, LaRouche, in speaking at the National Press Club on the indictments, stated: “One could say of the indictment itself, that all those that perpetrate offenses against God, or humanity, or both, are sooner or later punished.” The indictments followed by two years an October 6, 1986 assassination attempt against LaRouche, about which LaRouche wrote in his 2004 pamphlet titled “ ‘Convict Him, or Kill Him!’ The Night They Came To Kill Me,” the following:
“On October 6, 1986, a virtual army of more than four hundred armed personnel descended upon the town of Leesburg, Virginia, for a raid on the offices of EIR and its associates, and also deployed for another, darker mission. The premises at which I was residing at that time were surrounded by an armed force, while aircraft, armored vehicles, and other personnel waited for the order to move in shooting. Fortunately, the killing did not happen, because someone with higher authority than the Justice Department Criminal Division head, William Weld, ordered the attack on me called off. The forces readied to move in on me, my wife, and a number of my associates, were pulled back in the morning.
“This was the second fully documented case of a U.S. Justice Department involvement in operations aimed at my personal elimination from politics.”
Though LaRouche and six others were found guilty in an Alexandria, Virginia court in December of 1988, and were imprisoned on January 27, 1989, the international and national outcry against those corrupt convictions continues to this very day. Former U.S. Attorney General Ramsey Clark characterized the LaRouche case as “involving a broader range of deliberate cunning and systemic misconduct over a longer period of time using the power of the federal government resources than any other prosecution by the U.S. government in my time or to my knowledge.” Executive Intelligence Review’s September 2017 dossier, “Robert Mueller Is an Amoral Legal Assassin: He Will Do His Job If You Let Him” comprehensively reviews how the current special prosecutor against Donald Trump was a key component of the political persecution of Lyndon LaRouche in the 1980s.
During his time spent in prison, LaRouche continued to write, but by often dictating whole chapters of book manuscripts on phone calls, again without reference works of any kind. Apart from the collection titled The Science of Christian Economy and Other Prison Writings, LaRouche wrote or recorded many other documents, some of which have been compiled with other never-before-published writings.
During 1989, as it became clear that the Soviet Union’s Comecon sphere was experiencing increasing economic difficulties, LaRouche and his wife Helga cooperated intensely on a program called the “Productive Triangle Paris-Berlin-Vienna,” which after the disintegration of the Soviet Union was extended into the “Eurasian Land-Bridge.” After the elimination of the Iron Curtain, this program suggested the integration of the population and industrial centers of Europe with those of Asia through so-called development corridors. It was the only comprehensive peace plan for the 21st Century on the table at that time, an option which was fiercely countered by British and the Anglophile neo-cons in the United States, who instead pushed their policy of a unipolar world and neoliberal system. The Eurasian Land-Bridge, very early on, became known as “The New Silk Road.” Over two decades later, the Chinese Belt and Road Initiative, which grew out of this concept, has become the primary locomotive of world physical economy.
Changing Thousands of Lives
Upon his release from prison on January 26, 1994, LaRouche continued his career as a forecaster. He developed his “Triple Curve” pedagogy in 1995 to illustrate to non-economists how the process of “Weimar Germany-like hyperinflation” had gripped the trans-Atlantic world, and had so looted it that nothing could be done to preserve the dominant money system; It would have to be reorganized from the top down, utilizing Franklin Roosevelt’s New Deal-era Glass-Steagall Act to begin the process of bank reorganization. He warned in January 2001 of the danger of a violent terrorist attack on one or more American cities, placing this warning within the context of reviewing why and how the financial system had entered a phase of a “high-tech bubble” during 1999–2000.
LaRouche spoke of a “Reichstag Fire” possibility in light of the emerging ungovernability of the United States, under conditions of deepening economic ruin. And, as with his May 1987 forecast of a collapse of the stock market in October of 1987, on July 25, 2007 LaRouche stated, one year before the Lehman Brothers/AIG meltdown of September 2008:
“The world monetary financial system is actually now currently in the process of disintegrating. There is nothing mysterious about this; I’ve talked about it for some time, it’s been in progress, it’s not abating. What’s listed as stock values and market values in the financial markets internationally is bunk! They are purely fictitious beliefs. There is no truth to it; the fakery is enormous. There is no possibility of a non-collapse of the present financial system—none! It’s finished, now!
“The present financial system cannot continue to exist under any circumstances, under any Presidency, under any leadership, or any leadership of nations. Only a fundamental and sudden change in the world monetary financial system will prevent a general, immediate chain-reaction type of collapse. At what speed we don’t know, but it will go on, and it will be unstoppable. And the longer it goes on before coming to an end, the worse things will get.”
LaRouche, as evidenced from the above forecast, produced at 84 years of age, not only continued to be uniquely productive. At the turn of the millennium, LaRouche spearheaded a movement to recruit youth—a movement which became so successful that the Democratic Party in various parts of the country even attempted to co-opt it. Thousands of youth went through this educational process. Groundbreaking contributions in the presentation of the work of physicist Johannes Kepler, in the practice of bel canto Classical singing both for general secondary school education and as an antidote to cultural self-degradation, and the presentation of American history, including American current history (rather than “current events” or the even more degrading term, “news”), in video format such as the program 1932, were produced by the LaRouche Youth Movement.
From the time of his emergence as a public figure over fifty years ago, the only tragedy that characterized Lyndon LaRouche’s life, is that he was never permitted to carry out, either as President or as an adviser to the serving President, the economic reforms that would have improved the lives of tens of millions of Americans and hundreds of millions around the world.
Although Lyndon LaRouche has many friends who were leaders in the fields of science, music, economy, and politics, his greatest friend, apart from his wife, Helga, were the forgotten men and women of America and other countries.
Since 1955 The U.S. Dollar Has Dropped About 66% Against the Japanese Yen – Yet U.S. Politicians Claim No Inflation
This card was given out to American Tourists in 1955. The reverse side of the card has the official yen – dollar exchange rate.
Notice 400 yen is about $1.11. Today, the exchange rate to get $1.11 would be only 133 yen! Don’t believe Washington’s hype about “The Strong Dollar.” The U.S. is the worst debtor nation in history, printing fiat money to prop up the insolvent Banks.
Ellen Brown Interviewed by James Corbett
Secret Transfer of Ukrainian Gold Reserves Is First Step to International Bankers Control of Ukraine
The gold reserves of the Ukraine were secretly transferred to the United States, according to information from GATA, the Gold Anti-Trust Action Committee. Citing sources in the Ukraine, it is apparent that the IMF has organized the looting of the gold reserves for “safe-keeping”, just in case the Russians invade. The European Troika has worked with western banks to loot the gold reserves of other countries, the last one being the seizing of the Cyprus gold reserves during the bankster caused collapse of the Cypriot economy and the looting of the bank deposits held by churches, businesses, pensioners, and other ordinary folk.
The report from Ukrainian news sources reads as follows:
From Iskra News, Zaporozhye, Ukraine
Friday, March 7, 2014
At 2 a.m. this morning an unmarked transport plane was on the runway at Borispol Airport. According to airport staff, before the plane came to the airport, four trucks and two Volkswagen minibuses arrived, all the truck license plates missing.
Fifteen people in black uniforms, masks, and body armor stepped out, some armed with machine guns. They loaded the plane with more than 40 heavy boxes.
After that a mysterious men arrived and entered the plane.
All loading was done in a hurry.
The plane took off on an emergency basis.
Those who saw this mysterious special operation immediately notified the airport officials, who told the callers not to meddle in other people’s affairs.
Later a returned call from a senior official of the former Ministry of Income and Fees reported that tonight, on the orders of one of the new leaders of Ukraine, the United States had taken custody of all the gold reserves in Ukraine.
The bad news for the people of the Ukraine is that their chances of ever seeing this gold again is slim indeed. Many other countries have asked for their gold back from the U.S Federal Reserve recently, including Germany. There is a world-wide struggle for gold at the present time, a secret war pitting China against the U.S.- Euro block. The bankers know full well that their fiat money system could collapse at any time, and are in a furious struggle to stockpile gold for future operations.
Western Looting Of Ukraine Has Begun
Paul Craig Roberts
It is now apparent that the “Maiden protests” in Kiev were in actuality a Washington organized coup against the elected democratic government. The purpose of the coup is to put NATO military bases on Ukraine’s border with Russia and to impose an IMF austerity program that serves as cover for Western financial interests to loot the country. The sincere idealistic protesters who took to the streets without being paid were the gullible dupes of the plot to destroy their country.
Politically Ukraine is an untenable aggregation of Ukrainian and Russian territory, because traditional Russian territories were stuck into the borders of the Ukraine Soviet Republic by Lenin and Khrushchev. The Crimea, stuck into Ukraine by Khrushchev, has already departed and rejoined Russia. Unless some autonomy is granted to them, Russian areas in eastern and southern Ukraine might also depart and return to Russia. If the animosity displayed toward the Russian speaking population by the stooge government in Kiev continues, more defections to Russia are likely.
The Washington-imposed coup faces other possible difficulties from what seems to be a growing conflict between the well-organized Right Sector and the Washington-imposed stooges. If armed conflict between these two groups were to occur, Washington might conclude that it needs to send help to its stooges. The appearance of US/NATO troops in Ukraine would create pressure on Putin to occupy the remaining Russian speaking parts of Ukraine.
Before the political and geographical issues are settled, the Western looting of Ukraine has already begun. The Western media, doesn’t tell any more truth about IMF “rescue packages” than it does about anything else. The media reports, and many Ukrainians believe, that the IMF is going to rescue Ukraine financially by giving the country billions of dollars.
Ukraine will never see one dollar of the IMF money. What the IMF is going to do is to substitute Ukrainian indebtedness to the IMF for Ukrainian indebtedness to Western banks. The IMF will hand over the money to the Western banks, and the Western banks will reduce Ukraine’s indebtedness by the amount of IMF money. Instead of being indebted to the banks, Ukraine will now be indebted to the IMF.
Now the looting can begin. The IMF loan brings new conditions and imposes austerity on the Ukrainian people so that the Ukraine government can gather up the money with which to repay the IMF. The IMF conditions that will be imposed on the struggling Ukraine population will consist of severe reductions in old-age pensions, in government services, in government employment, and in subsidies for basic consumer purchases such as natural gas. Already low living standards will plummet. In addition, Ukrainian public assets and Ukrainian owned private industries will have to be sold off to Western purchasers.
Additionally, Ukraine will have to float its currency. In a futile effort to protect its currency’s value from being driven very low (and consequently import prices very high) by speculators ganging up on the currency and short-selling it, Ukraine will borrow more money with which to support its currency in the foreign exchange market. Of course, the currency speculators will end up with the borrowed money, leaving Ukraine much deeper in debt than currently.
The corruption involved is legendary, so the direct result of the gullible Maiden protesters will be lower Ukrainian living standards, more corruption, loss of sovereignty over the country’s economic policy, and the transfer of Ukrainian public and private property to Western interests.
If Ukraine also falls into NATO’s clutches, Ukraine will also find itself in a military alliance against Russia and find itself targeted by Russian missiles. This will be a tragedy for Ukraine and Russia as Ukrainians have relatives in Russia and Russians have relatives in Ukraine. The two countries have essentially been one for 200 years. To have them torn apart by Western looting and Washington’s drive for world hegemony is a terrible shame and a great crime.
The gullible dupes who participated in the orchestrated Maiden protests will rue it for the rest of their lives.
When the protests began, I described what the consequences would be and said that I would explain the looting process. It is not necessary for me to do so. Professor Michel Chossudovsky has explained the IMF looting process along with much history here:
One final word. Despite unequivocal evidence of one country after another being looted by the West, governments of indebted countries continue to sign up for IMF programs. Why do governments of countries continue to agree to the foreign looting of their populations? The only answer is that they are paid. The corruption that is descending upon Ukraine will make the former regime look honest.
Secret Treaty Now Threatens Our Way of Life
Paul Craig Roberts
The economy has been debilitated by the offshoring of middle class jobs for the benefit of corporate profits and by the Federal Reserve’s policy of Quantitative Easing in order to support a few oversized banks that the government protects from market discipline. Not only does QE distort bond and stock markets, it threatens the value of the dollar and has resulted in manipulation of the gold price. See article – click here.
When US corporations send jobs offshore, the GDP, consumer income, tax base, and careers associated with the jobs go abroad with the jobs. Corporations gain the additional profits at large costs to the economy in terms of less employment, less economic growth, reduced state, local and federal tax revenues, wider deficits, and impairments of social services.
When policymakers permitted banks to become independent of market discipline, they made the banks an unresolved burden on the economy. Authorities have provided no honest report on the condition of the banks. It remains to be seen if the Federal Reserve can create enough money to monetize enough debt to rescue the banks without collapsing the US dollar. It would have been far cheaper to let the banks fail and be reorganized.
US policymakers and their echo chamber in the economics profession have let the country down badly. They claimed that there was a “New Economy” to take the place of the “old economy” jobs that were moved offshore. As I have pointed out for a decade, US jobs statistics show no sign of the promised “New Economy.”
The same policymakers and economists who told us that “markets are self-regulating” and that the financial sector could safely be deregulated also confused jobs offshoring with free trade. Hyped “studies” were put together designed to prove that jobs offshoring was good for the US economy. It is difficult to fathom how such destructive errors could consistently be made by policymakers and economists for more than a decade. Were these mistakes or cover for a narrow and selfish agenda?
In June, 2009 happy talk appeared about “the recovery,” now 4.5 years old. As John Williams (shadowstats.com) has made clear, “the recovery” is entirely the artifact of the understated measure of inflation used to deflate nominal GDP. By under-measuring inflation, the government can show low, but positive, rates of real GDP growth. No other indicator supports the claim of economic recovery.
Consumer Inflation is now 9%
John Williams writes that consumer inflation, if properly measured, is running around 9%, far above the 2% figure that is the Fed’s target and more in line with what consumers are actually experiencing. We have just had a 6.5% annual increase in the cost of a postage stamp.
The Postcard Test
The Fed’s target inflation rate is said to be low, but Simon Black points out that the result of a lifetime of 2% annual inflation is the loss of 75% of the purchasing power of the currency. He uses the cost of sending a postcard to illustrate the decline in the purchasing power of median household income today compared to 1951. That year it cost one cent to send a post card. As household income was $4,237, the household could send 423,700 postcards. Today the comparable income figure is $51,017. As it costs 34 cents to send one postcard, today’s household can only afford to send 150,050 postcards. Nominal income rose 12 times, and the cost of sending a postcard rose 34 times.
Just as the American people know that there is more inflation than is reported, they know that there is no recovery. The Gallup Poll reported this month that only 28% of Americans are satisfied with the economy. http://www.gallup.com/poll/166871/americans-satisfaction-economy-sours-2001.aspx?version=print
Secret TPP Treaty Will Enable Corporations to Further Loot America
From hard experience, Americans have also caught on that “free trade agreements” are nothing but vehicles for moving their jobs abroad. The latest effort by the corporations to loot and defraud the public is known as the “Trans-Pacific Partnership.” “Fast-tracking” the bill allowed the corporations to write the bill in secret without congressional input. Some research shows that 90% of Americans will suffer income losses under TPP, while wealth becomes even more concentrated at the top.
TPP affects every aspect of our lives from what we eat to the Internet to the environment. According to Kevin Zeese in Alternet, “the leak of the [TPP] Intellectual Property Chapter revealed that it created a path to patent everything imaginable, including plants and animals, to turn everything into a commodity for profit.”
The secretly drafted TPP also creates authority for the executive branch to change existing US law to make the laws that were not passed in secret compatible with the secretly written trade bill. Buy American requirements and any attempt to curtail jobs offshoring would become illegal “restraints on trade.”
If the House and Senate are willing to turn over their legislative function to the executive branch, they might as well abolish themselves.
The “Cypress Model” Coming Sooner Than You Thought
The financial media has been helping the Federal Reserve and the banks to cover up festering problems with rosy hype, but realization that there are serious unresolved problems might be spreading. Last week interest rates on 30-day T-bills turned negative. That means people were paying more for a bond than it would return at maturity. Dave Kranzler sees this as a sign of rising uncertainty about banks. Reminiscent of the Cyprus banks’ limits on withdrawals, last Friday (January 24) the BBC reported that the large UK bank HSBC is preventing customers from withdrawing cash from their accounts in excess of several thousand pounds. Click Here to read report.
If and when uncertainty spreads to the dollar, the real crisis will arrive, likely followed by high inflation, exchange controls, pension confiscations, and resurrected illegality of owning gold and silver. Capitalist greed aided and abetted by economists and policymakers will have destroyed America.