“The fevered efforts to save the financial system, typified by Tuesday’s panicked three-quarter-point interest rate cut by the Federal Reserve and the Bush/Paulson stimulus plan not only will not work, but will backfire spectacularly, and soon, economist Lyndon LaRouche warned today. The financial system is dead, and any attempt to save the fictitious values of the trillions of dollars of worthless financial paper will not only fail, but will destroy any nation foolish enough to attempt to do so,” LaRouche said.

“The global financial system, emphatically including the United States, is entering a period comparable to that of Weimar Germany in the Autumn of 1923, but on a far larger scale. Whereas the damage from the runaway hyperinflation in Weimar Germany was largely restricted to Germany itself, the current crisis is global in scale. No national system will survive its effects, and the nations might not even survive the present year,” he warned.

“Under the Versailles Treaty ratified at the end of World War I, Germany was hit with war-reparation payments so high as to make it impossible for the nation to function. To meet its obligations, Germany began printing money, funding its reparations payments and the needs of its economy at the cost of debasing its currency. The monetary stimulation soared to such unprecedented heights that the term hyperinflation was coined to distinguish its debilitating horror.”

(The German Reichsmark hyperinflated from six to the US dollar in 1917-18, to 20 to the dollar in 1919, 63 in 1920, and 105 in 1921. Then it exploded to 1,886 to the dollar in 1922, and an unbelievable 535 billion Reichsmarks to the dollar in 1923.)

None of the official government responses will solve this crisis. The foreshadowed budget cuts and interest rate rises coming out of the Australian Government, and the Reserve Bank of Australia, in response to the newly-discovered threat of “inflation”, will prove as useless as the U.S. “stimulus” and rate cuts.

The only solution is LaRouche’s Homeowners and Bank Protection Act, which will erect the fire-walls necessary to protect the public and essential aspects of economic infrastructure to keep the economy functioning as the damage is sorted out. For information on the Australian version of the Homeowners and Bank Protection Bill, go to /hbpa/.