Lyndon LaRouche

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Mass deaths and economic devastation are now on the immediate agenda for the population of the United States, as well as Europe, as the effect of Wall Street's policy as implemented under the Obama Presidency. "There is no possibility of keeping people alive, under the present trends of conditions," Lyndon LaRouche warned in a discussion with the LaRouche PAC Policy Committee today, emphasizing that the collapse of the international financial system of which he had warned in mid-December, is fully underway.

"Your economic policy of the United States, and of the British Empire in general, demands the immediate mass genocide of the people of the trans-Atlantic community," LaRouche stated. "That's a fact! If we expose that now, we still have a last moment of chance to reverse that effect by shutting down Wall Street and removing Obama from office."

The fact is, that every single dollar of Wall Street's $2 quadrillion speculative bubble is totally worthless, and must be wiped off the books without recompense. Otherwise, under the "bail-in" policy now being implemented, everything you and your family may have-savings, pensions, food, health care, jobs, homes, everything-will be seized in the name of protecting the criminal British Empire system which created that speculative bubble.

Therefore, Wall Street has to be shut down now, LaRouche insists, and Franklin Roosevelt's Glass-Steagall law reinstated. That then has to be followed up with a supporting action, a Franklin Roosevelt solution, "to organize mass funding for people who have lost their sources of income; for people who have been tortured to death" by lack of food and the conditions under which they live and work.

"The people must also know that there's a hope of reversing the kind of treatment of their employment-or non-employment-which is hitting the people today, as in the early 1930s, when Franklin Roosevelt moved in, to give the people a hope of existence." LaRouche pointed to the actual root of the problem: that people fell for the lie that money is actual wealth, and an entire financial system has been built on that lie. But, "money is not something which has a self-evident value. Value depends upon the creative powers of mankind, to make better the conditions of life of mankind."

Death Spiral

LaRouche issued this clarion call to arms on Jan. 11, even as the trans-Atlantic financial system was sinking into a death spiral. In the first week of 2016, global markets crashed by 6.5%, wiping out $4 trillion in worthless paper; the price of oil plunged by 10%, and is now headed to under $30 per barrel; Puerto Rico defaulted on a chunk of its $72 billion debt, which could create a crisis that could quickly spread throughout the entire municipal bond market; and the Jan. 1 activation of the British Empire's bail-in policy across Europe is leading to a freezing-up of the bond market, with early indications that even inter-bank lending is seizing up.

Lyndon LaRouche, the world's leading economic forecaster, had warned in mid-December that precisely this would occur. In a statement that was widely circulated internationally, LaRouche on Dec. 17 warned that the planet stood at the edge of the abyss of a general collapse of the trans-Atlantic system, and that this would strike "shortly after the first of this next year." He stated that the British Empire's policies under these conditions, especially its bail-in thievery of trillions of dollars of citizens' assets, scheduled to go into high gear in Europe on Jan. 1, would unleash genocide on a level not seen since the Fourteenth Century New Dark Age, which wiped out nearly half of the European population. And he warned that this general collapse would happen suddenly, as it now is.

Do not look for the cause of the crisis in proximate effects, such as Puerto Rico's default, the blow-out of the shale-oil and related bubbles, or in the Federal Reserve's incompetent decision to raise interest rates by 0.25% in December. And for sure don't be so imbecilic as to blame China for the meltdown of the trans-Atlantic financial system, supposedly because its GDP growth rate for 2015 came in at "only" 6.9%, as compared to an expected 7%. Asia, led by China, is the only sector of the world economy which is doing relatively well in physical economic terms today, and will be partially-but only partially-shielded from the trans-Atlantic meltdown.

Read the Article Here

As LaRouche Said, `This Is Much Worse Than 2008'

Jan. 18(EIRNS) -- The market mudslide and commodity collapse continued Monday despite U.S. markets being closed for the Martin Luther King holiday; the collapse is moving faster, to the point of drawing admissions that "it's worse than 2008," as {EIR} Founding Editor Lyndon
LaRouche announced it would be one month ago.

In a sign of the rapidly growing fears of a financial blowout, the habitual Wall Street cheerleading network, CNBC-TV, carried two commentaries, "Oil Credit Crunch Could Be Worse Than The Mortgage Crisis," and "A Recession Worse than 2008 Is Coming." The latter, by investment manager and author Michael Pento, is a straightforward forcast that the Federal Reserve will soon be desperately resuming money-printing (quantitative easing) to save the Wall Street and European banks, although its author shows considerable confusion about the cause of the collapse. The former commentary, by 33-year oil industry consultant Mark Harrington, is a much more detailed crash prospectus.

A flood of "hard defaults against bank lenders and bondholders" is coming immediately and throughout 2016, Harrington says, and each will create cross-defaults with other securities. [{The Economist} this week estimates half of all U.S. shale oil/gas production/exploration companies will go bankrupt in 2016, not to mention those in North Sea oil which have already cut 55,000 jobs in the U.K. alone.] "Even more importantly, most oil-price hedges, price swaps/derivatives, also have cross-default provisions. Thus, counterparty credit risk [among banks] begins to escalate as those parties are forced to disgorge cash payments on those instruments. Given the ferocity and rapidity surrounding this meltdown, can lenders effectively process this burgeoning inventory of defaulted credit?" His answer is no.

Harrington also notes, using BIS and figures, that at least
$2 trillion of high-yield debt for shale oil/gas "capital expenditures" has gone on the asset books of banks, expected to produce three times its value, now worth half its nominal value at best. "The selloff in energy bonds now underway creates general risk avoidance across the board. Ballooning loan write-offs hit the major banks and those smaller banks to whom the loans were syndicated. The manifestation of counterparty credit defaults and its cross defaults hit the banks again and many other firms that began originating swaps. The contagion through the expanding and loosely regulated derivative market is surely destined for surprises. Even with the selloff to date, one cannot gauge the magnitude of the problem and how it might play out. But we know one thing for sure: It will be ugly."

Oil prices fell toward $28 Monday, but U.S. producers are actually getting as low as $15, or even giving oil away to get it stored and keep pumping. The Dallas Federal Reserve Bank today denied the weekend's Zero Hedge story that it had told banks to keep "marking" oil at $49-59 on the banks' books, while forcing oil/gas debtors to liquidate assets, pay down debt, and keep pumping with what is left. A Texas source with long knowledge of the industry told {EIR} today that whether or not the Dallas Fed issued such instructions, that is, in fact, what the banks are doing.

Thus bank fraud is being combined with looting and liquidation of companies and employment, until the whole financial speculation blows up -- or Wall Street is shut down by orderly, Glass-Steagall bankruptcy reorganization.

170 Economists and Financial Experts Back Sanders' Policy on Glass-Steagall

Jan. 15, 2016 (EIRNS)-One hundred and seventy prominent economists and financial experts from more than 100 universities and other institutions issued a letter called, "Economists and Financial Experts in Favor of Sen. Sanders' Wall St. Reforms," in which they not only vigorously call for reinstating Glass-Steagall and other Wall Street reforms, but also explicitly criticize Hillary Clinton's stand on the banks.

The signers, including former Labor Secretary Robert Reich, University of Texas Prof. James Galbraith, Dean Baker from the Center for Economic and Policy Research in Washington, DC, former U.S. Congressman Brad Miller (D-NC), and William Black, University of Missouri-Kansas City, say in the letter:

"In our view, Sen. Bernie Sanders' plan for comprehensive financial reform is critical for avoiding another too-big-to-fail financial crisis. The Senator is correct that the biggest banks must be broken up and that a new 21st Century Glass-Steagall Act, separating investment from commercial banking, must be enacted.

"Wall Street's largest banks are now far bigger than they were before the crisis, and they still have every incentive to take excessive risks. No major Wall Street executive has been indicted for the fraudulent behavior that led up to the 2008 crash, and fines imposed on the banks have been only a fraction of the banks' potential gains....

"Secretary Hillary Clinton's more modest proposals do not go far enough.... they leave intact the titanic financial conglomerates that practice most shadow banking.... Given the size and political power of Wall Street, her proposal would only invite more dilution and finagle.

"The only way to contain Wall Street's excesses is with reforms sufficiently bold and public they can't be watered down. That's why we support Senator Sanders's plans for busting up the biggest banks and resurrecting a modernized version of Glass- Steagall."

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Lyndon LaRouche