August 4—With banks and
related financial institutions
crashing in the U.S. and worldwide
almost by the minute,
American statesman and physical
economist Lyndon H. LaRouche, Jr. opened his July 22
international webcast (see pp.
2-3) with the following pronouncement:
“The first thing
to settle, is that the present international
monetary-financial
system will die, and will never
recover. This system is finished.”
Indeed, even as U.S. Treasury
Secretary Henry Paulson
tried to arm-twist the U.S.
Congress for hundreds of billions
or trillions of dollars to
attempt to bail out mortgage
giants Fannie Mae and Freddie
Mac, along with the entire
U.S. banking system, a
Wall Street insider privately
informed LaRouche’s political
action committee (LPAC),
that there are now over 1400
banks on the U.S. government
“watch list” of endangered institutions!
Panic is setting in,
in the U.S., in Europe, here in
Australia, and elsewhere, as
even sober-minded businessmen
have started pulling their
money out of the banks.
LaRouche speaks with
unparalleled authority. The
world’s leading economist,
he has forecast the twists and
turns of the present crisis for
decades, since even before U.S.
President Richard Nixon took
the dollar off gold in 1971,
ending the postwar Bretton
Woods fixed exchange rate system,
and ushering in the present,
London-centred free trade,
“globalist” system of monetary
speculation, which has savaged
the actual physical economy of
most of the world. LaRouche
devoted his July 22 webcast,
whose opening echoed his prescient
webcast of almost precisely
one year before (see
box), to the three-part solution
which must be adopted worldwide,
beginning with the U.S.:
1) His Homeowners and Bank
Protection Bill must be passed
immediately, for a moratorium
on all home foreclosures and
to put the U.S. banking system
under bankruptcy reorganisation,
to keep banks’ doors
open for essential community
functions, 2) A two-tier credit
system must be established to
provide federal credit at 1-2%
for productive enterprises and
infrastructure, while letting
rates float up for other, nonessential
purposes, 3) The U.S.
must take the lead to organise a
“Four Power” alliance of itself,
Russia, China and India, to inaugurate
a new world monetary
system, to replace the present,
disintegrating British imperial
“globalist” system.
Meanwhile, here in Australia...
Like the major U.S. banks,
each and all of Australia’s
“Big Four” (National Australia
Bank, ANZ, Commonwealth
Bank, and Westpac), are utterly,
and irrevocably bankrupt,
both because Australia’s own
free-trade centred economy
is bankrupt, and because the
“Big Four” are integral parts
of a global speculative bubble
measured in the hundreds of
quadrillions of dollars, which
is now exploding.
Contrary to the earlier hype
that “Australia will be insulated
from a U.S. downturn”, because
of its allegedly great financial
management, the word
is now out internationally that
Australia, like its imperial master
in Britain, is in far worse
shape than the United States.
Typical was a July 31 article
in Britain’s Daily Telegraph,
“Australia faces worse crisis
than America”, by its widely-
read International Business
Editor, Ambrose Evans-
Pritchard. He catalogued just
a few of Australia’s problems:
that National Australia Bank
was just forced to admit that
“its AAA-rated securities are
virtually worthless”; that Australia
has an astounding “current
account deficit of 6.2% of
GDP”; that “household debt
has reached 177% of GDP, almost
a world record”; and that
our high interest rates and resulting
inflow of foreign “investment”
(speculation) means
that Australia “will now have to
generate 4% of GDP to meet
payments to foreign holders
of its assets ... twice as high as
the burden faced by the US”.
He could have added that our
foreign debt is a staggering
$1.039 trillion, and that one
million Australian households
will be “mortgage stressed” by
December, many of them already
in foreclosure. Oh, and
$60 billion of our $1.3 trillion
in superannuation has just officially
vaporised—which is just
the tip of the iceberg. In fact,
barring the kinds of sweeping
bankruptcy reorganisation outlined
by LaRouche, you can
forget your super, full stop.
But the good news is this:
LaRouche’s associates in the
Citizens Electoral Council
have been preparing for this
moment almost ever since we
were founded twenty years
ago. So see below and page
4 for some of the LaRouche-inspired
measures which this
country must urgently adopt,
if we are to survive the worst
financial crash in human history.