Weekly Update: Bloody Friday, Corporatism, New Bretton Wood

Weekly Update: Bloody Friday, Corporatism, New Bretton Wood

hello everybody my name is Jeff Steinberg here with me in the studio is John hopeful senior economist with executive Intelligence Review magazine welcome to this week's edition of the LaRouche political action committee weekly report today is Friday October 24 2008 a day that has already been labeled by the international media as bloody Friday the day began with massive losses on the asian stock markets losing on average ten to twelve percent india the stock market completely crashed the russian stock market was shut down at the opening bell today and was not reopened at all europe lost eight to ten percent and when the markets opened on Wall Street up in New York this morning the circuit breakers went off almost immediately and quite clearly there was an intervention by the so-called plunge protection team because the US market rather than crashing by what was at one point projected a possible thousand point loss only fell by 231 points at the end of the day but nevertheless we're seeing financial chaos spreading around the globe this week we saw a massive flight capital pulling out of Hungary Poland Russia a number of South American markets and other parts of Asia as well so let's begin John with that situation you've got a major crisis centering around the hedge funds which have taken tremendous losses where some hedge funds are finding that investors are using the grace period to pull out lots of money and they're probably being hit all over the place with margin calls although these things rarely make the newspapers yeah hey what's what's going on overall is a giant liquidation of the leverage positions in the derivatives markets and the hedge funds are major players in this some of the big banks are major players in this and everybody is trying to sell everybody's getting hit with margin calls because when you and the nice thing about playing with borrowed money is that on the way up you can make a lot of money if you borrow a million dollars in by 30 million dollars worth of assets but when things start to go sour then you can lose not only your 30 million dollars that you borrowed but your original million dollars so you can you can have a million and you can lose 31 million so the losses are astronomical the losses are in easily in the trillions for the banks and for the hedge funds and they're all trying to sell in order to come up with enough cash to either cash out or meet their redemptions or meet their own margin calls and the whole thing is just melting down and there's no bottom in sight for it we discussed last week that you've got a kind of a phenomenon that has confounded a lot of so-called professional economist because on the one hand you have a massive hyperinflation in the emission of new monetary aggregates especially dollar-based aggregates and at the same time because you've got a substantial collapse in World Trade and therefore by extension world physical productive output you've got a collapse of some key commodity and strategic world material prices for example the collapse of oil from a speculative high of one hundred and forty dollars plus a barrel I think at one point it actually reached one hundred and forty seven dollars down to this week at one point it was about sixty four dollars a barrel so you have what would seem to be two contradictory phenomenon going on one of which is super hyperinflationary and the other appears to be deflationary but they're both part of what LaRouche is called a collapse function what you've got is you've got a violent deflation of assets in the financial market and the central banks are trying to save that with a violet hyperinflation injection of money so they're pouring bunny like crazy into the hole but the hole is much bigger than they have the resources to put money into and the hole is growing we have some reports that just really buttress John what you're saying number one the Federal Reserve yesterday on october 23rd issued their weekly report on how much borrowing from the discount windows took place on the part of commercial banks and investment banks and in the case of commercial banks it was about a hundred and six billion dollars this week borrowed from the Fed and that does set a one-week record the investment banks borrowed a hundred and twelve billion dollars and we have reports today that practically every afternoon there's a sort of a Death Watch at the end of the trading day on Wall Street for goldman sachs morgan stanley and merrill lynch the three so-called remaining brokerage houses i guess technically speaking two of them are now bank holding companies and Merrill is now owned as a division of Bank of America but clearly some of the financial institutions that are on the too-big-to-fail list are among the most significant bankrupt dead already financial institutions yeah just because you convert from an investment bank to a bank holding company doesn't mean you're still not bankrupt right and you know they're that's their problem the business there in has died and they haven't replaced it you know Merrill is thinks that you know that going with Bank of America may save some of it and it probably will save some of it for a little while until bank of america disappears but neither Goldman Sachs and Morgan Stanley have done anything yet to really come up with the new source of income right so you they're still dead the whole system is dead right and that's they say if you're dead you're dead once you're dead in the real world you know there's not much you can do after that and the rot is pretty advanced hit all right now let's go back to some basics and to some points of reality here yesterday the Senate Banking Committee had hearings where you had the head of the FDIC Sheila Blair coming up to the hill and in one particularly heated exchange with Senator Richard Shelby the ranking Republican on the committee he just said look you better do something fast in this great big bailout package to deal with the fact that we're about to be hit with another massive wave of home foreclosures and it's going to hit at exactly the wrong time and you know Blair basically announced that she was in conversations with paulsen / some kind of new bailout 40 billion dollar wingding that would involve some kind of guarantees to mortgage holders that they would not lose their shirts if they refinance mortgages at lower rates and lower property valuations but the reality is you know when I had a discussion earlier today with Lyndon LaRouche she said well look what did you expect there was an opportunity last September September 2007 to implement his homeowners in bank Protection Act people studied it in Congress former Treasury officials studied it they said yes this will work and furthermore it's doable and at that point you had a massive mobilization people like Felix row hot and George Soros and others arm-twisted Nancy Pelosi and Harry Reid and Chris Dodd and Barney Frank and what was a viable solution was basically left on the cutting room floor and so as the result we've got the mess that we're in right now LaRue said the other day had my hppa been passed by congress by a veto-proof majority forcing its passage whether bush signed it or not we would not be in any of the kind of mess that we're in right now we'd have some problems we'd have some serious reconstruction requirements infrastructure rebuilding but we would not be looking at the collapse of the entire international financial system so John let's walk through what it was that LaRouche proposed a year ago because presumably it's never too late even at this late date for getting the bailout for getting all of this hype and going with the hppa would start to address the underlying problem so what was LaRoche's idea well to start off with the problem we have is that we have shut down our the productive side of our economy and we have accumulated enormous debts globally we've accumulated enormous debts debts that are so large that they will never ever be paid day so the starting point of the HBP a is to admit that and say okay we can't pay these debts so what we're going to do is we're going to use the bankruptcy proceeding and we're going to write these debts off that you know because what you have to protect is not the money you have to protect the people so you're really talking also about a distinction between federal and state chartered commercial banks that are the banks that people actually deal with versus the brokerage houses the hedge funds and some of these esoteric and crazy insurance swindles like yeah whatever these yeah so so you write off so you you protect the people you have to stop the foreclosures one of the key parts of this is put up a firewall stop foreclosures that what we have is a banking system which ran out of control that you're not going to penalize ordinary people by throwing them out of their houses because they can't beat these artificially pumped up our mortgage payments and things like that we're going to reorganize the banking system and basically you're going to get rid of all of this nonsense all of the speculation we're going to have a regulated banking system chart state-chartered banks federally chartered banks that do nothing but act as highly regulated banks taking deposits making loans that sort of thing no more derivatives we shut down the complete derivatives marker just declared derivatives null and void they don't exist anymore therefore that problem is solved the parasites may not like it but then this is not a save the parasite operation that's what could have fooled what days when it's also something have done yeah well you know they that's their plan they save a swindler for Christmas yeah so you just you freeze all this paper until you can go sort through it what is real what is not real in the meantime you make sure that the the physical economy functions that the services that the people require continued that you have police and fire department and health care the school's stay open the deliveries of food to the grocery stores continue that sort of thing people have jobs you know you protect that side of the real economy and you just write off all this financial paper just banned derivatives outright and just simply just wipe them off the books altogether yeah you just you just declare that they're not derivatives contracts are all null and void so you know as if they never occurred so there's no settlements there no claims there's no none of that and that's tough who should have done it in the first place mm-hmm I understand that John you're working on an article for this upcoming issue of the e ir headline something like the Russian to corporatism why don't you give us a preview of that and give an idea of what what this new push for corporatism looks like an well if you look at what's being done with the banking system under this paulsen / british plant they're going to use this money that was supposed to go into buying bad assets which was a bad enough idea and now they're injecting it into banks this to bolster the bank's capital but what they're really doing is they're giving it to select banks to fund purchases and solid ation of the banking system they want to dramatically reduce the number of banks they want to create a class of giant banks then that you know through through what they consider economies of scale which are really you know consolidation of holes in the ground into a much bigger smoking hole but that's the plan too and you can already see this at work the bank of america purchase of merrill lynch which is being assisted by this plan the takeover of wachovia by Wells Fargo is being assisted by money from this plan the takeover that was announced today where pnc is buying national city of Cleveland that this the government is going to give PNC seven point seven billion and PNC is going to pay 5.5 billion to take over national city so in other words they're getting two plus billion dollars to take the bank over and this is the model and so what you're building are these giant financial cartels and this is happening on a worldwide basis you're going to see consolidations in all of these major countries as the banking system is merged to try to hide the fact that they're bankrupt and to create these giant banks which then will effectively become an international cartel which is the heart of the British plan to create a global system of cartels run by international agencies or you know they're not really international agencies they're really imperial agencies and this is this is corporatism and this is the even if they don't intend it as some people may not this is the end result of what they're doing now corporatism is a form of fascism that comes from Mussolini Mussolini's Italy it comes from the Venetians who used Mussolini as a front but its its enormous consolidations of financial power which control everything now in the meantime as some of these bank consolidations were occurring there were at least a few people in the Senate I think Charles Grassley was one of them screaming and yelling about the fact that Paulson effectively facilitated these merger take over things by changing the treasury department rules and allowing banks that take over bankrupt financial institutions to take a full tax write-off so that in effect what's going on in addition to the money that they're being outright given in the bailouts there's another massive bailout at taxpayers expense of allowing these write-offs of all of the losses for example Washington Mutual was completely in the tank so this is something that under our Constitution is the exclusive domain of the Congress yet this is being done unilaterally out of the Treasury Department and it's another piece of this same kind of corporate of a'stache 'used move that you're describing in order to have something in the domain of Congress you have to have a Congress that is willing to do something this Congress capitulated they're a bunch of cowards yeah exactly and they gave they basically made Henry Paulson the financial dictator of the United States and they're not going to buck him they may make a little noise they may hold a few hearings they may say well we're not sure about this but they've already capitulated you know we don't have when it comes to our financial system we do not have a constitutional system anymore in practice the Constitution is still there it's still the law but it's just being ignored mm-hmm well as all of this is occurring one of the significant countervailing factors is that around the United States in Congress within many sections of the Democratic and Republican parties among even some professional quote-unquote Economist's there's a growing both recognition and willingness to admit that Lyndon LaRouche has been right about this phenomenon about this systemic collapse process for a very very long time and you're seeing a pattern of international coverage of LaRouche as the one economist who brings a real sense of Science and physical economy to the table and who's called the shot on exactly what's happened really going back to the collapse of the Bretton Woods system a willful British move run through the Nixon administration in August 1971 we had for example on Monday Corriere della Sera the newspaper of record the New York Times if you will of Italy ran a lengthy interview with the finance minister julia Tremonti in which Tremonti said that the proposal that he's bringing to the November 15th meeting in Washington the so-called New bretton woods conference is a proposal that he got directly from Lyndon LaRouche Tremonti spoke in detail about his debate with LaRouche in Rome in 2005 their convergence of agreement that LaRussa's proposal for a new Bretton Woods system based on a massive debt write-off and restructuring a bankruptcy reorganization and then the reestablishment of a fixed exchange rate system was the only way to go two days ago on the twenty-second of October one of the major newspapers in Kuwait ran a lengthy article comparing Greenspan's recent remarks claiming nobody could have known about the financial crash with long-standing warnings by Lyndon LaRouche again mentioning LaRouche by name describing him as the leading scientific economist alive today and going back to some of the earliest proposals by LaRouche for the convening of a new bretton woods conference well here it is it's the 24 worth of October in a little over two and a half weeks there will be the first of what's being billed as a new bretton woods conference right here in Washington DC well know by then the results of the u.s. presidential elections Bush was sort of armed twisted into agreeing to such a conference when he was visited last Saturday at Camp David by French president Sarkozy and Barroso the head of the European community John what do you expect to see coming out of this conference well what I hope to see is a big fight where the where some of the attendees will actually put up a fight for the principles of Bretton Woods as advocated by FDR we know what the Brits will do they'll go for their global dictatorship plan they'll want to go with the say they'll call it Bretton Woods you know what we call it as the New Britain woods face but there won't be anything you know there was a fight at bretton woods between FDR and Kane's late the British American fight and the British want to win this time so but they will do what they do the real question is what will the others do what will the Italians do what will the French do of what will Henry Paulson do you know because if there is no fight over this issue and you basically have to declare war on this anglo-dutch liberal system in order to get anything done so if you have a big fight then that opens the door for things if they don't have a fight then you know it's just like Congress might as well be just a rubber stamp in the last 48 hours a number of new items have been posted on the LaRouche political action committee website a short but very very important item on what are the cultural implications of the case of tony rezko we spoke a little bit about that last week when we did last week's show it's either already posted will be posted within the next day or so a discussion about the point that John just mentioned namely they it there was the FDR Bretton Woods system and then there was the John Maynard Keynes FDR system which were diametrically opposite FDR won the fight at Bretton Woods in 1944 but with his death in April 1944 met April 1945 and the accession to power of Harry Truman who became very rapidly a pawn of the British we had more and more of a transition over to the Keynesian idea to the point that today most economics courses teach that it was John Maynard Keynes who was the author of the Bretton Woods system so you'll find something on the LaRouche PAC website that will debunk that lie and give you further critical backdrop information going into this first of what will likely be a series of international treaty discussions on a new financial architecture now also as we speak now it's probably about four pm on October 24 Lyndon LaRouche is hard at work putting the finishing touches on a major policy paper it will be published in the next issue of the e ir and this policy paper will address some of the fundamental issues that must be understood if there is to be a successful establishment of a new Bretton Woods system based on the FDR American system principles and one of the major discussions that LaRouche focuses on in this new paper what we've seen of it so far is a deep appreciation of what the actual nature is of imperialism today what the brutish Empire is actually all about and how it's a follow-on to the original Venetian system that spawned the anglo-dutch liberal monstrosity that we've been living with by and large since 1763 so this is going to be a critical paper it will circulate widely among every government on this planet it will be studied in major think tanks University economics departments every member of Congress will be looking at this document and you as informed citizens will need to be prepared to also take this in study it read it carefully talk about it circulated among your friends it may very well prove to be the most crucial and pivotal document of this period and if the ideas presented by LaRouche are carefully studied and understood particularly by those world leaders who will be gathering in Washington on November 15th then we stand the chance of averting what is otherwise a certain plunge into a dark age far worse than what was experienced in Europe in the 14th century when a third of the population was wiped out and half of the parishes disappeared what LaRoche has described and has warned about is that the collapse of physical production currently and it's accelerating by the day has reached the point where we no longer have sufficient food production energy production water availability medical care to sustain the present population of six and a half billion people and as John can attest there are certain people particularly in London led by Prince Philip among others who openly say that they want the population of the world to be reduced from the current level of six and a half billion in rising to a figure below 1 billion probably within the course of one generation the next quarter of a century so it's going to be tough reading but I urge all of you to stay tuned this document will be posted on the LaRouche PAC website as soon as it's been completed and I would suspect that that could be as early as this coming Monday October 27th so with that urgent challenge out there to all of you let me just thank John for being here again and we'll be back next week for the next edition of the LaRouche political action committee weekly report and today is Friday October 24 2008 my name is Jeff Steinberg

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9 thoughts on “Weekly Update: Bloody Friday, Corporatism, New Bretton Wood

  1. the fall of capitalism can claim little space in the modern psyche when media hammers us constantly with such gripping saga as the death of Michael Jackson.

  2. The answer to that is no of cause not,But as you know The Constitution is suspended as the "Government" have declared a State of Emergency which allows for its suspension, and COG (continuity of government) is what is now in effect,and has been for quite a number of years. I very much appreciate the good work of LLPAC and would like to thank Mr. Larouche and Co. Please,if possible could you guys cover COG and its implications for American Law at this important time in World History.

  3. This financial collapse is no accident. It's being used to justify creating an international central control system. The time has been chosen to make the move by the elite because their is little awareness of the agenda. If Lrouche, JBS, RP etc can create enough awareness their is a chance the empire will fall.

  4. This team, John Hoefle & Jeff Steinberg, are doing excellent work, and we need to have as many Americans as possible view their weekly updates. Lyndon LaRouche has provided direction and leadership over the years, and now there is a growing body of people who can grasp the ideas he and associates have presented all this time. I urge and exhort viewers to forward and thus inform as many of their friends and fellow Americans as possible.

  5. This team, John Hoefle & Jeff Steinberg, are doing excellent work, and we need to have as many Americans as possible view their weekly updates. Lyndon LaRouche has provied direction and leadership over the years, and now there is a growing body of people who can grasp the ideas he and associates have presented all this time. I urge and exhort viewers to forward and thus inform as many of their friends and fellow Americans as possible.

  6. The Larouche team are the best option but they have failed to address the imbalances and inequities of American society

    I support their effort
    for there is no other logical choice
    other than armed insurrection

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