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Western Europe Hangs by a Thread

by Gary McGowan Fri Sep 22nd, 2006 at 06:13:23 PM EST

I apologise for posting this without much pithy comment of my own, but I expect reader comments might fill the gap. I presume that generally, Europeans think, like most Americans, that yes there are some economic bubble problems, but everything will sort itself out. On the other hand, I have some hope that at least older Europeans have some sense of history and know that economies and civilizations do collapse. What those of you who actually work day-to-day in or near the derivative mine-fields are seeing these days, I know not, but look forward to learning.

Western Europe Hangs by a Thread
by Lyndon H. LaRouche, Jr.
September 19, 2006

The recent crisis in France's oncoming Presidential elections exposes the fragility of all western and central Europe in face of the onrushing, global strategic crises caused, chiefly, by the failure of the U.S.A., so far, to rid itself of the succubus of the current Bush-Cheney Administration. Germany hangs by a thread; Italy's economy is sitting, rocking on the porch, waiting for the arrival of the economic undertaker with the right prices; the former Comecon regions of eastern Europe are dying on the vine; Germany's potential role in resistance to the catastrophe menacing it from current U.S. policy, depends upon partnership with a government of France, a combination which can say a definite "No!" to the pressures of both the U.S. Bush Administration and London.

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Jacques Cheminade

by Gary McGowan Mon Jul 17th, 2006 at 09:14:34 AM EST

Well, what can I say? I know little of Mr Cheminade, but I'm starting to become interested.

It will be difficult for the English-speaking reader to grasp the implications of Cheminade's use of the French language. To begin with, despite the ghastliness of the apparent subject, which is that yet another fascist takeover of France is now in process; nevertheless, the French-educated reader will immediately sense that the article and its author alike are actually tremendous fun.

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World Cup Disruptions Warning

by Gary McGowan Sun May 28th, 2006 at 03:23:24 PM EST

(I apologise for the quickness of this as well as it's negativity, but I do want to get the word out, both as a warning and as shining more light on the potential problems may help prevent them.)

European security sources have issued dire warnings of serious terrorist disruptions of the scheduled World Cup soccer tournament, which takes place in a dozen German cities from early June through early July. These widely publicized soccer events are believed to be targeted by so-called hooligan gangs, neo-Nazi youth, and possibly by "Islamist" organizations, according to these security specialists. LaRouche pointed out that all of these countergangs have strong ties to the same European Synarchist financial circles who financed the Mussolini, Hitler, Franco, and Vichy fascist organizations during the 1922-1945 period. The heirs of those Synarchist financiers today are actively involved in promoting a resurgence of a new international fascist apparatus, which was already linked to the Madrid, Spain bombings of March 11, 2004,...[SNIP]

"The security operations for the World Cup would be technically adequate and competent if the threats were coming exclusively from domestic sources, or even agencies like those behind the infamous 1972 Munich Olympics attacks. However, those capabilities are not geared to dealing with a fifth column operation, of the sort being contemplated by Shultz, Rohatyn, Cheney, and their European Synarchist allies. No conventional defense is adequate to stopping that kind of assault."

"Again, speaking bluntly," LaRouche concluded, "the gravest danger to the world today comes from the Synarchist International -- including Shultz, Cheney, and Rohatyn. They are seeking a Reichstag Fire or 9/11-type incident to give them the psychological leverage to launch their pre-planned attack on Iran. That can only be prevented by placing a very powerful public spotlight on their schemes, in advance. That is why I am speaking out today."

Above is from

A bit more background info in a May 27 one hour radio show (download mp3)

2:20 a.m. here. I'm off to bed.

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The Economic Time Bomb, Economists Amateur and Professional

by Gary McGowan Sun Apr 16th, 2006 at 03:01:27 PM EST

Recently I posted a brief rant of a comment
to Jerome's post, "Oil & Commodities at record highs - but the bears are fighting back."  While quite agreeing  with, and admiring, Jerome's closing remark, "...I'll open myself, as usual, to criticism that I have been crying wolf for a while and growth is still around. I think that the financial bubble will burst, not deflate, and that we will have a nasty economic crisis on our hands...," I am impatient with the monetarist view of economics. So my sense of duty demands I try to put something together explaining, or at least pointing towards, an alternative.

The Economic Time Bomb, Economists Amateur and Professional

Tick... tick... tick... tick...  

"In the background, the Fed, you'll recall, is less interested in maintaining 'honest money' [e.g. money that will have the same purchasing power tomorrow as it does today] than it is in maintaining predictability of monetary performance.  In other words, the Fed's deep thinkers know that if we have some measure of inflation, the country can survive with its power class holding on to the reigns of power and to some extent, the retirement savings of the Baby Boomers intact ...

"Of course, the $64 gazillion dollar question is whether this global inflation plan will work."

Carry Trade Ticking

"Say what you will about Lyndon LaRouche, they've gotten it exactly right on the impact of Japan starting to charge interest again when it comes to funding the Yen carry trade which has been keeping the world afloat financially.  The way it works is this: Big investors go to Japan, borrow money at essentially zero interest, then buy US bonds (or whatever with a high yield), and pocket the spread.  Got it?  Now that may be about to change as Japan is facing pressures to end the free ride for fat cats.

"If you don't happen to admire Lyndon LaRouche (he's sometimes painfully on point), maybe the report in the Business Telegraph (UK) will be a little more palatable."

- from UrbanSurvival, (which I'm not endorsing generally.)

Well, that or the housing bubble, or a list of other scary happenings hidden behind all the phoney statistics put out by Enron accountants. But we'll muddle through somehow... Thank God there are experts like Greenspan, and what's his name, Burn a key, who do understand these things. Yes, they are suspicious characters, but they are experts in the field of economics... and this is a cycle... and things will get better... they always have...

Like such Anglo-Dutch Liberal ideologues as John Locke, Bernard Mandeville, the obscene François Quesnay, Adam Smith, and the utilitarian Jeremy Bentham, they seek to explain the physical behavior of economies on the assumption that the rules of economy are being set by extremely immoral, imaginary "little green men" casting dice under the floorboards of the universe. For Locke, the dice were known as "property"; for Mandeville, the unbridled enjoyment of private vice; for Quesnay, the magical powers of property titles to feudal estates; and for Adam Smith, the invisible hand of greed reaching, Enron-style, into other people's purses.

On a slightly higher level, virtually all popular economic theories of modern times, including the wild-eyed statistical recipes of hedge-fund lunatics today, assume, axiomatically, that economic processes are Cartesian kinds of mechanistic processes, rather than dynamic processes such as the real Biosphere and societies are.

On a still lower moral and intellectual level, it is assumed that economic values are money values, or even, by those such as fanatically fascist madman Ezra Pound, that there is a natural value for some kind of "honest money."

Most statistical practices in the abused name of economic forecasting, Marxist or other, are products of all three of these axiomatic elements of utter incompetence in what passes for them as scientific method. It is Merlins like that, whose advice leads once-great nations such as our own into the kind of Hell threatening the world today.

The typically university-miseducated professional economist of today refuses to recognize the elementary fact, that anyone with a monetarist, or similar ideological approach to maximizing profit deludes himself, or his client, into ignoring the fact that cutting essential physical costs of production, including essential costs of hard and social infrastructure, actually shrinks the real economy, as this pattern has been the leading feature of the U.S. economy, in particular, since 1971-1972. The effect of the practiced thinking of such professional economists and their dupes in government and industry, is comparable to the behavior of the hungry man who adds meat to his diet by eating parts of his own body.

-from End-Game 2005 by Lyndon H. LaRouche, Jr., October 2005

But common sense dictates we have to cut spending on health care, education, and maintaining hard infrastructure if we are running deeply in the red, right? That's what FDR , umm... did... ummm, right?

The possibility of a recovery from the condition presently bequeathed to us by the combination of the floating-exchange-rate IMF system and the wildly aberrant behavior of central banking systems of nations, depends upon a massive supplement of long-term credit for capital formation, with initial emphasis on capital formation in basic economic infrastructure. To sustain such a program of expansion over two generations, as we must, requires a system in which fundamental borrowing costs must be no higher than between 1-2% simple-interest rates. This can be achieved only under conditions defined by a fixed-exchange-rate monetary-financial system. Therefore, this means a "gold reserve system," but not a revival of a British-style (or looney Ezra Pound's) "honest money" sort of gold standard system. This also means a system of long-term trade and tariff agreements among nations, to an effect consistent with such goals as long-term growth of capital formation.

Only government, or concerts of governments, have the power to resist demands by "special treatment" of "special interests," resistance which is indispensable for preventing the abortion of the new system, virtually at birth. Only the power of government to resist the clamor of special private interests, can secure the successful functioning of such a new world monetary-financial system. Therefore, the relevant special interests must learn to behave themselves. The welfare of us all demands nothing less than that.

There is no competent argument for shutting down any program or institution, public or private, which plays an essential part in preventing further injuries to the general welfare. Lowering of the budgets of nations, or political regions of nations, is morally and economically unacceptable. The remedy is cancelling the doctrines of "fiscal austerity" which have already done so much to ruin nations and the general welfare of their people. The policy must be to debride, or suspend what is not relevant to the general welfare, while both increasing the level of total productive employment and shifting the composition of employment, increasingly, toward those activities which are more productive, as measured in physical-economic terms.

- from On the Subject of Tariffs and Trade by Lyndon H. LaRouche, Jr., January, 2004

I've never heard of anything like that. I'm hoping if we can chase or vote the Bush administration out of office and if we can somehow take the edge off the neverending wars and terrorism, then Europe will somehow surely help, right?

... The only way that Europe is going to be saved, is by action from the United States to transform the international monetary-financial system, and economic policy, to eliminate globalization! To eliminate free trade! To eliminate central banking systems. And to go back to the original Washington-Hamilton model of a Federal Presidency, in which, according to our Constitution, the power to create money, the power to utter, is a monopoly of a sovereign government, not a private central bank, or syndicate of private central banks.

It is the responsibility of government to regulate the circulation of that money, by law, by tariffs, by taxation, and other means, in order to ensure that the money does not go awry. Because money has no intrinsic reason. Money is a piece of paper; it's a fiction. It's an idiot. It can sometimes be a useful idiot, in the hands of government. We need to create money in order to foster, as the Massachusetts Bay Colony did in creating scrip as a kind of sovereign currency, back in the 17th Century, to promote employment, production, investment in capital. But we must regulate it. We must not let the money-changers, with money as such, transform the physical economy on which we depend for life, into a house of prostitution, which is what this monetary system is today.

Therefore, we must restore honest money. Now, money is not honest by intention, because money has no intention. ...  you have to supply to money the intention which it lacks. And that is the function of the policies of government. The government has two functions: to build up the essential infrastructure upon which all of the functions of all of the territory and all of the people depend. And to consign to private entrepreneurs, the responsibility for using their ingenuity and intention to make those useful improvements which we would encourage, through government, upon which the general growth of the nation depends.

That is essentially the American System of political economy, as defined, either explicitly or implicitly, by Alexander Hamilton, during his term of service as the Treasury Secretary of the United States.

- A Moment of Epic Decision
LaRouche's keynote to the Labor Day conference of the International Caucus of Labor Committees and Schiller Institute, Sept. 4, 2004. (Audio and video archives  available.)

God-damned governments! I've had it with @!!%!* governments! I've got gold coins, a gun, food stores... I and my family will just have to be self-sufficient and we'll band together with neighbors and community in so far as possible.

Steinberg: You mentioned Julius Caesar, and that's the famous play about vox populi as a disease. That populism that we were speaking of earlier this week, on the fallacies of the American population. What's wrong with populism? Let me get right to the point.

LaRouche: A populist is an idiot, who thinks that the government is bad, and therefore, he wants to elect a government that he can hate, and which will do damage to him, and justify his hatred. And then protest, and propose another idiot--probably a fascist, this time--who he can hate even more, to replace the existing government. Populism is idiocy. It's an asocial tendency. It's one who doesn't care but about the neighbors. "I got to take care of my neighborhood, I got to take care of my family, I got to take care of my money, my money, my money, my money. I want honest money. I don't want a government money. I want gold, honest money. I want to own it myself. I want to control the world with honest money, which I own."

... They do not accept the idea that there is a social process, in which man is not enemy of man. And government shouldn't be our enemy. We shouldn't hate our government. We should control it. That was the purpose of our Constitution. The people can control it, not because of their personal whims, or the whims of some minority, but they control it because they demand accountability from government, from the process by which policy decisions are made. And the effects of those policies considered in terms, not of the benefit of this guy or that guy, or this group or that group, but the benefit of the general welfare.

Populism is a disease. One of the biggest problems I have to fight, is exactly that: populism. You go to people who are otherwise sane, who have an intelligent view on this or that matter, or the other matter--like farmers, for example--and then you run across a glitch, on something on which they become absolutely insane, fanatically insane. "Government is bad. We want gold. We want the gold system." Not a gold-reserve system. They want the gold system. They want honest money. They want something for them. It's an old problem; it's selfishness.

... Gambling, one of the greatest diseases in the United States today is the spread of gambling. Gambling is the spread of psychosis. It's a deadly moral disease. It turns people into virtual vegetables, or beasts. Gambling ought not to exist. In a sane society, gambling would not exist, not gambling for money. It's one of the greatest sources of corruption. Look what people do on the stock market. They're gambling. Real estate. They're not buying, they're gambling. What do they want? They want short-term mortgages. Why? Because they think that if they get a three-year mortgage, that may be they'll be able to sell it at a profit, to some sucker who comes along and buys it from them down the line, and they don't want to be burdened with that mortgage. They're gamblers! They're not investors. ...

And my fellow Americans, whom I love dearly, like bad children, often, have got to cut this out. They've just got to cut it out, and realize that what they find in themselves, which would be considered the qualities of redemption, the qualities of humanity, the quality of being looked at by future generations as having made a contribution; that's what's important.

- A Race Against Time:
Victory For LaRouche's Program, Or War And National Disaster
, August, 2002

A Credit System or a Monetary System?

Reports on some European reactions to my "Tale of Two Bozos," say that some of the locals there complain that they do not understand the substance of my objections to Felix Rohatyn's latest scheme for luring and looting prospective investors. The problem is not that they do not understand; their problem is that, for special reasons, they do not wish to understand what should be quickly obvious to any intelligent and literate adult person.

The motive for those complaints, is, simply, that very few Europeans wish to know the fundamental difference between the American System of political-economy, which is based on a system of state credit, and European monetary systems, such as that of John Maynard Keynes, or the system of allegedly "honest money" ...  Prevalent ideas about money and credit, throughout Europe today, [continue to follow] the Venetian tradition of usury. Therefore, they do not know that difference between a credit system and a monetary system, simply because they do not wish to know that difference.

- More on Rohatyn by Lyndon H. LaRouche, Jr., December 18, 2005

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