"informal hearing" by Lyndon LaRouche to the Finance Committee the Chamber of Deputies
Rome, June 17, 2009
What I'm about to tell you is not something that you are prepared in terms of legislative action, but I think it is relevant to what you consider when you face certain issues. I have to give you a relatively good news: we are essentially at the stage of general collapse of the international monetary and financial system. This is not something that concerns the future, but rather is a process in place since July 2007. Just recently has been accelerated due to the fact that the United States have not adopted the measures that could be adopted in 2007. The second news is that the policy of the President of the United States is catastrophic, even if we are trying to remedy it.
Lyndon LaRouche and Sen. Mario Baldassarri in the Senate Finance Committee June 18 '09.
start talking about the first question. What happened? On July 25, 2007, during my international videoconferencing, announced that within a few days began the general collapse of the international financial system. This collapse, which said it began with the failure of his weaker side - that of the mortgage banking system in the United States and elsewhere, actually began three days after my prediction, a result very quickly, and a process that has not yet interrupted. At the time, the contagion that began has reached a point that threatens the collapse of the entire international financial and monetary system. The remedy is, but the question is: Who will implement?
The collapse can happen at any time, in the coming days or months ahead; speak of a collapse similar to what is affecting California: we speak of a crisis to which governments large proportion the planet will collapse, mainly due to financial reasons. In other words, will no longer be able to make payments and maintain the institutions function in normal and essential, in one or more countries. Like many European countries, the United States are on the verge of such a collapse. They have not yet reached the point of collapse, but they are to move to a situation they do not have the income necessary to feed its core functions. So, quite simply, the government will abandon its responsibilities, because of utter helplessness. For example, governments subject to the dictates of the European Union lack the necessary authority to increase its capital account. So nell'erompere crisis, unable to raise the question of the creation of emergency funds for activities that allow you to reverse course. This is the context. While we are in a deflation, because of the drastic reduction in employment and output (in the U.S. the situation is worse than we had in the crash of 1929-31), risking hyperinflation (in the style of Germany in 1923), because of repeated rescue packages of certain highly speculative financial transactions. What could break out at any time. Thus, the characteristic of the system is given by the coincidence of a crisis of declining physical economy and a crisis of massive inflation due to an attempt to prop up certain types of institutions. My remedy, of course, was proposed in July of 2007, resort to bankruptcy reorganization required by the U.S. Constitution. Get an institution and state that it is bankrupt. Is not closed, but operates under a form of receivership. Inside, then, distinguishes among the things that must be paid immediately and sustained, so that society can continue in his post, and things that should be put in limbo. Gradually, therefore, put order into the chaos. In such a situation out of an economic depression, exactly the situation that Europe and other countries will face, this means that they have to undergo a lot of things to regulation. At the same time, you should take measures that result in growth, in this situation. So, establish priorities for investment capital at low interest rate and long-term, so that the institutions can start over again and the income generated again become a way to finance the recovery process. The question therefore is whether there is a desire to do such a thing. The second question is whether that will be shared among nations in order to define a system of cooperation to address the crisis. Consider China, for example. It has been used for years as a market of cheap labor force to replace the production of Europe and the United States, with a mode deflationary / inflationary downward comparison with those markets. China has been used to relocate the production, which is the basis of national income, and investment capital. The result is that the United States and Europe no longer have the source of income and national unemployment rates have exceeded those of the legendary Great Depression and that number is constantly increasing, in fact. We are, in essence, accelerating toward the crisis. Instead of using the administration, to submit their national economies to reorganization proceedings aimed at economic recovery, we're going in the opposite direction: we provided to save the forms of speculative investment, now called simply 'investment' in market of financial derivatives. Our banking, insurance and finance is full of such rubbish, and this will close the taps of the credit needed to sustain real income and legitimate, established in terms of production and investment the creation of real wealth further. After throwing away 13 trillion dollars to save insurance companies rather than submit them to the bankruptcy reorganization, the U.S. government is going to cut funding for health care, the extent of 1 trillion dollars and it is not finished yet! We expected something worse instead. If certain laws proposed by President Obama will be endorsed, the health system will be amputee and will reduce the number of people destined to live: in other words, we are copying the model of the NICE [National Institute for Clinical Excellence, ed] in Britain that you are trying to impose in Germany. It means that whole classes of ill will private assistance, and this will greatly increase the mortality rate. This will be the result of cuts in health programs, health care, hospitals, etc.. It is certainly nice to live in such a horror show. The remedy, I repeat, is to submit the entire global financial system to a bankruptcy reorganization, which requires a concert of nations to agree on what lies ahead. On this road, there should be some stability, both politically and economically. The most influential nations, therefore, must agree as follows. Since Europe is no longer working in conditions of freedom that once characterized, because the process of monetary union, for which governments can not create more credit aimed at the resumption of its industries and carrying out long-term investment capital, I have proposed that the U.S. will join China, Russia and all ' India, key nations should adhere to the project with ease. China is dependent on the United States, for its economy. Russia, if he uses his head, depends on the United States to stabilize the nation. All three countries need a long-term reorganization of its financial and banking system if they want to regulate and manage the situation. The management, however, must be comprehensive, not run by a nation at a time. Some groups of nations must agree on a common banking system, characterized by fixed exchange rates between currencies. In this way we can address the issue and generate fifty credit necessary to maintain certain industries, infrastructure construction, salvage and prosperity of their economies. It's a doable thing. I propose simply to be done. At the same time, I admit that this is a difficult decision, in political terms. When giving hope that we can begin to think in these terms, seeking some form of cooperation to this end. The problem, however, is the rapid evolution of the crisis. We're not talking about future projects, we are not by the theoretical speculations: I can assure you that in the context defined by the system and with the policies of governments in Europe and America, we are bound by the worst slump since the dark age of the fourteenth century, this time on a global scale. It is therefore important that all of us, even before the feasibility of such a move becomes clear, to develop the idea of \u200b\u200bits necessity, and that it is very clear to the mind. So there is hope, as the collapse worsens, people will recognize your willingness to respond, which would not do before. We are talking about a necessary thing. Another problematic side of this is that the majority of people, both inside and outside by governmental institutions, not at all understand the situation. We need to clarify and explain to them what is happening. You can not, in fact, obtain voluntary agreements about the type of measures requests without understanding the problem and its solution. I conclude by saying that I can not suggest to do these things, but I suggest you think of them. In this way we can build support for such cooperation in relatively quickly, in order to take the necessary action. I think that Italy is one of the places where the discussion should be continued. This is, today, my aim and my speech ...
THINK THAT THIS APPEAL WILL 'HEARD?
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