August 19—The world’s present globalist, hyper-speculative
international monetary system is now imploding. It can
not be stopped; the only question
now is when it will finally
blow, whether it is next week,
in the next month or two, or
just slightly longer. Your superannuation,
which has been
invested in this system? Forget
it, it’s gone. Macquarie, and
other Australian banks? Forget
it, under the present system,
they’re gone.
The world’s financial markets
and central bankers exude
panic from every pore: The day
before we went to press, the
U.S. Federal Reserve suddenly
cut its lending rate to banks,
its discount rate, by 0.5%, from
6.25% to 5.75%, because the
hundreds of billions of dollars
which the world’s central
banks had poured into the crisis—
US$323.3 billion on August
9-10 alone—did almost
nothing to stop the implosion
of a speculative bubble estimated
at US$700 trillion. In 1998
a mere $2 billion loss by hedge
fund LTCM almost blew out
the system, while international
losses in this crisis are probably
already 1000 times that.
This is not a “sub-prime mortgage
crisis”, or a “hedge fund
crisis”, it is the banking system
itself which is blowing.
The end of the Bretton
Woods system
August 17, 1971, when a group
of international financiers convinced
U.S. President Richard
Nixon to take the U.S. dollar
off gold. This ended the Bretton
Woods system of fixed exchange
rates and national sovereignty
established by U.S. President
Franklin Delano Roosevelt
in 1944 (to which Australia
under Prime Minister John
Curtin and Treasurer Ben Chifley
had signed on) designed to
foster the growth of the world’s
physical economy. Instead, a
new system of unbridled private
credit creation through ever
more exotic debt instruments
and the looting of the physical
economy was unleashed.
The resulting crisis was already
uniquely forecast by
American statesman and physical
economist Lyndon H. LaRouche back then, as he also
forecast the steady succession
of crises from then until now,
such as the October 1987 collapse
of the world’s stock markets,
the 1997-98 “Asian crisis”
and LTCM collapse, etc.
At each point, the London/New
York financial oligarchy created
new forms of financial speculation
which bought the system a
few more years of life, only to
make its present, final explosion
that much more cataclysmic.
Such were the creation of
the “IT bubble”, the derivatives
markets, the speculative mortgage
markets and accompanying
real estate bubble, and the
yen carry trade. Recently, hundreds
of billions or trillions of
new money was pumped into
the system based upon mortgages
which could not be paid by
those losing their jobs in a collapsing
economy, while banks
and others can no longer borrow
hundreds of billions in zero interest
yen from Japan to speculate
with, because the yen is soaring
in value and they are losing their
shirts in having to pay back yen
worth 6% or more than the yen
they borrowed. Thus, the central
banks are flooding a bankrupt
system with credit in a fashion
unprecedented in history;
this may buy them some time,
but at the expense of a hyperinflationary explosion like that of
1923 Germany, and this time on
a world scale.