...... ...................Larouche Online Almanac

Published: Tuesday, Mar. 15, 2005

Today is:

Volume 4, Issue Number 11

This Week You Need to Know:

Soaring Commodity Prices Show Threat to Dollar System

by Lothar Komp

More than three decades after President Nixon dismantled the Bretton Woods monetary order, global financial markets are in an untenable situation. At the heart of the issue is the U.S. dollar, still the most important reserve currency in the world. The dollar is the currency upon which the interest rates of hundreds of billions of dollars worth of loans, mortgage credits, and financial derivatives are pegged, and with which practically all raw material purchases are transacted.

The transformation of the United States from a prominent industrial nation, into a consumer society dependent on foreign manufacturers, has triggered an unprecedented flood of U.S. currency into Asian central banks. As a result of the enormous quantities of American debt holdings which accumulated in foreign countries, by virtue of export surpluses and foreign exchange market interventions abroad, merely a press release expressing market fears, by an official in Japan, South Korea, or China, is enough to make the dollar's tumble continue.

Additional turbulence results from the highly inflationary blow-up in the raw materials markets. Over the course of time, these markets have fallen almost completely under the control of private, speculative interests. As a result of central banks pumping liquidity into the financial system, and the control of raw commodity prices by futures exchanges in London and New York, the prices for a wide spectrum of raw materials—from crude oil to copper and iron ore—have been forced to stratospheric levels.



Animation Studies of the
U. S. Physical Economy

(Provided and Funded by
Lyndon LaRouche's Political Action Committee.)

The Economy

World and Nation-State

This Week in History

March 14-20, 1776

General Washington Drives the British Out of Boston

On March 17, 1776, a British occupation force of 10,000 soldiers, accompanied by 1,100 Tories, was forced by Gen. George Washington and the newly-formed Continental Army to abandon the town of Boston. The American victory was due not to overwhelming force, which the Americans never possessed, but to careful planning, bold maneuvers and the creative abilities of individual officers and men.

When Washington arrived on July 2, 1775 in Cambridge, to take command of the New England militia and Minutemen who had gathered around British-occupied Boston, the prospect of defeating Britain's well-supplied professional army did not look promising. The Americans had only a handful of cannon, and an inventory of gunpowder supplies revealed that there were fewer than nine shots available per man.

Had the British known of Washington's lack of powder and cannons, they could have sent out major expeditions to scatter the surrounding army. But Washington kept the army's actual numbers and lack of supplies to himself, while launching initiatives to increase his firepower. To just a few intimates, he admitted that, "So far from my having an army of 20,000 men, well armed, I have been here with less than one-half of that number, including sick, furloughed, and on command; and those neither armed nor clothed as they should be. In short, my situation has been such, that I have been obliged to use art, to conceal it from my own officers."

But Congress and the American public were impatient with the seeming delay in attacking the British, and heavy pressure was being put on Washington to act immediately. "To have the eyes of the whole continent," said he, "fixed with anxious expectation of hearing of some great event, and to be restrained in every military operation for want of the necessary means of carrying it on, is not very pleasing, especially as the means used to conceal my weakness from the enemy, conceal it also from our friends, and add to their wonder."

One of Washington's biggest problems was that the enlistments of the "Eight Months Army" raised by New England after the battles of Lexington and Concord would expire in December. Congress responded to Washington's request for assistance by sending Benjamin Franklin and two other Congressmen to Cambridge for a planning meeting. Delegates from several New England colonies joined the group, and several days of deliberation resulted in preparations for founding the Continental Army on Jan. 1, 1776.

Artillery officer Henry Knox was dispatched to Lake Champlain to bring back the cannon from Fort Ticonderoga, which had been captured by American militia. When Knox and his men succeeded in hauling the cannon through winter snow and ice to Massachusetts, the existence of the much-needed artillery was kept secret from the British.

Meanwhile, in October, Gen. Thomas Gage was recalled to Britain, and the much more efficient Gen. William Howe became chief commander of the British Army in America. Howe immediately strengthened his defenses and sent out British Navy cruisers to harass the coastal towns of New England, hoping to force Washington to weaken his army by sending detachments to defend the seacoast. Portland, Maine was burned in October, and other towns soon followed.

But Washington was not fooled. Since the U.S. Navy had not yet been established, he encouraged the conversion of American ships to privateers. One ship in particular was directed to maintain a position off Boston Harbor, and it captured a British supply ship which contained heavy guns, mortars, and entrenching tools—just what the Americans needed. Washington also had floating batteries constructed on the Charles River which could be used to lob shells into Boston when the American army attacked.

As winter progressed, Washington was chafing with impatience to "break up the nest" in Boston. He hoped to attack over the ice on the Charles River, but the winter was too mild. When the river finally froze over in February, his council of officers voted against the plan as being too dangerous. General Howe, meanwhile, felt secure in his beleaguered city, attending a series of plays and other amusements. He wrote to Lord Dartmouth that he had not the least apprehension of an attack from the rebels, and that he really wished that they would "attempt so rash a step, and quit their strong intrenchments." He was soon to get his wish.

When the Charles River attack was voted down, Washington determined to fortify Dorchester Heights, which overlooked Boston and its inner harbor, and which both Gage and Howe had neglected to occupy. He planned carefully, and for three nights, starting on March 2, the American cannon bombarded Boston from five locations around the outskirts of the city. Then, at 7:00, on the evening of March 4, two thousand American soldiers, with entrenching tools, silently made their way to Dorchester Heights. The 300 wagons and carts which followed them rolled on muffled wheels, while bales of hay piled along the route protected them from being seen or shot at by British sentries. Even when the troops began constructing redoubts and placing the cannon, the British sentries, diverted by the roaring cannonades, did not hear them.

General Washington came to supervise the work in person, aided by engineer Richard Gridley, who had designed the breastworks at the Battle of Bunker Hill. By dawn, the soldiers had constructed two redoubts armed with the cannon from Fort Ticonderoga. There were hundreds of barrels, filled with stones, positioned on the Heights for rolling down on potential attackers. At the base of the ridge were a line of strong abatis (pointed wooden stakes), cut from the trees in adjacent orchards.

A British officer wrote that, "This morning at daybreak we discovered two redoubts on Dorchester point, and two smaller ones on their flanks. They were all raised during the last night, with an expedition equal to that of the genii belonging to Aladdin's wonderful lamp. From these hills they command the whole town, so that we must drive them from their post, or desert the place." The amazed General Howe exclaimed that "The rebels have done more work in one night, than my whole army would have done in one month." Admiral Shuldham informed Howe that, "If they retain possession of the Heights, I cannot keep a ship in the harbor."

Washington knew there would be a British attack, and so he had prepared boats and floating batteries that would carry 4,000 American troops into Boston. Howe dispatched a picked force of 2,400 men by water to attack the Heights, but a severe storm blew some of them ashore and made it impossible for the British Navy to cover their movements. Heavy rains the next day also made an attack impossible, and Howe's council of war determined to evacuate, taking Boston's Tories and their families with them to Nova Scotia.

Howe sent a note to Washington via the Boston selectmen, threatening to burn the town if his troops were fired on while evacuating. As the Americans held their fire, however, Howe procrastinated, hoping that he would be reinforced from Britain. Washington did not rest on his accomplishments—he planted a new battery overlooking the town and was ready to attack in case the British changed their minds. When Howe still occupied Boston on March 16, Washington gave an order to seize and fortify Nook's Hill, which was the closest hill to the city, and which then put the British completely at his mercy. Howe understood the message, and began loading his troop transports at 4:00 a.m. on March 17.

The news of the evacuation of Boston stunned the British Ministry. The Duke of Manchester told the House of Lords that, "The Army of Britain, equipped with every possible essential of war; a chosen army, with chosen officers, backed by the power of a mighty fleet, sent to correct revolted subjects; sent to chastise a resisting city; sent to assert Britain's authority;—has, for many tedious months, been imprisoned within that town by the Provincial army; who, their watchful guards, permitted them no inlet to the country; who braved all their efforts and defied all their skill and ability in war could ever attempt. One way, indeed, of escape was left; the fleet is yet respected; to the fleet the army has recourse; and British generals, whose name never met with a blot of dishonor, are forced to quit that town which was the first object of the war, the immediate cause of hostilities, the place of arms which has cost this nation more than a million to defend."

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Strategic Analysis:

World on the Verge Of a Dollar Crash
by Jeffrey Steinberg
Lyndon LaRouche announced on March 9, based on a breaking pattern of developments, that, in his judgment, the world is now on the verge of a collapse of the entire dollar-based post-Bretton Woods floating-exchange-rate system. This does not guarantee the immediate crash of the dollar, and the evaporation of the entire global financial superstructure. It does mean that governments around the world, particularly the United States government, must be prepared to act, to avert an otherwise inescapable crisis at some point in the very near future.


Soaring Commodity Prices Show Threat to Dollar System
by Lothar Komp
More than three decades after President Nixon dismantled the Bretton Woods monetary order, global financial markets are in an untenable situation. At the heart of the issue is the U.S. dollar, still the most important reserve currency in the world. The dollar is the currency upon which the interest rates of hundreds of billions of dollars worth of loans, mortgage credits, and financial derivatives are pegged, and with which practically all raw material purchases are transacted.

Economy and Ideas
by Lyndon H. LaRouche, Jr.
The following is the foreword to the forthcoming book The Earth's Next Fifty Years, to be issued by LaRouche PAC.
February 28, 2005
The Spring 2000 collapse of Alan Greenspan's 'IT' financial derivatives bubble of the 1990s, set the stage for the immediate onset of what has been the George W. Bush Administration's accelerating, 2001-2005, general economic breakdown-crisis of the world's monetary-financial system. This breakdown is not something which might happen, or soon will happen. It has been happening already, that at an accelerating rate, every day President George W. Bush, Jr. has remained in office. The end will come when the Bush trolley soon reaches the end of the line.

Italy Reps. Debate New Bretton Woods
The Italian Chamber of Deputies is scheduled to debate motion March 14 which calls on the Italian government to act 'to create a new financial architecture, aimed at avoiding future financial crashes and the repetition of speculative bubbles, and thus dedicated to the main objective of supporting the real economy.' The motion concludes by requesting 'the convocation of an international conference at the level of Heads of State and Government similar to that held in Bretton Woods in 1944, to create a new and more just global monetary and financial system.'

GMAC Is a Big Soft Spot In Global Debt Bubble
by Paul Gallagher
General Motors Acceptance Corporation (GMAC)—the huge $300 billion credit finance company, sitting at the valve between the overblown U.S. real estate bubble and the deflating auto sector—is facing big debt trouble in 200506. The trouble is driven by the falling dollar, rising interest rates, and falling auto sales. GMAC is far larger than all the other combined parts of its parent General Motors; its debt, at about $260 billion, is bigger than that of any other American corporation except the huge government-sponsored Federal National Mortgage Agency (Fannie Mae), whose mortgage debt it invests in. During 2005, GMAC will be caught simultaneously in a shrinking real estate bubble, in the tar pit of falling global auto sales, and possibly in the unpaid obligations of General Motors' pension plan. GMAC could play a major part in a collapse of the dollar and dollar credit markets.

LaRouche PAC Memorandum
Fascist Chile Model of Pension Privatization
LaRouche PAC on Feb. 7 issued this fact sheet, which is circulating on Capitol Hill and elsewhere.
President George Bush has repeatedly cited Chile as his model for Social Security privatization. While in Chile last November, he called it a 'great example.' And in an April 2001 visit to the country, Bush said: 'I think some members of Congress could take some lessons from Chile, particularly when it comes to how to run our pension plans.' The architect of Chile's 1981 privatization was Harvard-trained Jose´ Piñera, who was Chile's Labor and Social Security Minister from 1978-80, under the Pinochet military dictatorship (1973-90). Piñera today is co-chairman of the Cato Institute's Project on Social Security Choice, one of the ideological centers of the Bush assault.

Change the Assumptions to Growth, And Social Security Is in Fine Shape
by Richard Freeman
In testimony before the House Ways and Means Committee on Feb. 8, U.S. Treasury Secretary John Snow engaged in a heated, sometimes acrimonious exchange with Rep. James McDermott (D-Wa.), a leading member of that committee: The meat of the exchange went as follows....

Can You See José?
by Dennis Small
Not lately. José Piñera, the hatchetman for Chilean dictator Gen. Augusto Pinochet's 1981 pension privatization, and the guru of the Bush Administration's plan to do the same, was supposed to be on a non-stop speaking tour across the United States beginning mid-February, to help ram the idea down the throat of the United States. As co-chair of the Cato Institute's misnamed 'Project on Social Security Choice,' over recent years Piñera has been an ever-present face in Washington and capitals around the world, promoting his plans (and himself) at every opportunity.

India Puts Energy Security on Fast Track
by Ramtanu Maitra
On March 5, Venezuela's President Hugo Chávez, who was on a four-day (March 4-7) visit to India, signed six agreements whereby India's state-owned Oil and Natural Gas Corporation (ONGC) Videsh Ltd will now hold a 49% stake in Venezuela's San Cristóbal oilfield, which can potentially produce 100,000 barrels a day. The Indian firm will partner with the Venezuelan state oil company Petróleos de Venezuela SA (PDVSA). The India-Venezuela oil deal is part of a series of oil and gas deals India has concluded in recent months to ensure the steady supply of oil and gas necessary to maintain a constant rate of economic growth in the future.


U.S. Administration's Lebanon Ploy Is Blowing Up In Its Face
by Nancy Spannaus
On March 8, at the very moment that President Bush was delivering a speech at the National Defense University in Washington, D.C., praising the Lebanese opposition as yetanother 'democratic force on the march,' between 500,000 and 1 million Lebanese were turning out in Beirut for an antiAmerican, pro-Syrian rally, called by the head of Hezbollah. That rally dwarfed, by orders of magnitude, any rally of the so-called anti-Syrian opposition, which suddenly surfaced on the streets of Beirut, following the assassination of former Lebanese Prime Minister Rafik Hariri last month.

U.S. Killing of Intelligence Official Shakes Italian-U.S. Relationship
by Claudio Celani

The killing of an Italian intelligence official in Baghdad by U.S. military forces on March 4 is shaking relations between Italy and the United States in a way potentially more serious than the 1985 Achille Lauro crisis, or the 1998 Cermis tragedy, when a U.S. military aircraft caused the crash of a funicular, killing 20 civilians in northern Italy. The incident is revealing how U.S. military forces have lost control of the situation on the ground in Iraq, as U.S. troops are shooting at officials of allied military forces—in the best case, accidentally—as a result of an occupation policy which includes radical rules of engagement. It also includes Defense Secretary Donald Rumsfeld's 'reforms,' resulting in a de facto destruction of intelligence and communications capabilities among the various U.S. agencies.

  • Interview: Luigi Ramponi
    Italy Paid No Ransom To Kidnappers
    Regardless of the Italian version of the Calipari incident, on March 10 some neo-con and right-wing U.S. media published nasty attacks on the Italians, indicating that Rumsfeld's friends intend to run a coverup of what happened on March 4, to make the case that there is no reason to change any aspect of U.S. military occupation policies in Iraq. Leading the charge was the Wall Street Journal, which suggested that the Italians had paid a ransom for Sgrena's realease, a 'policy of deliberately aiding terrorists.' The Journal also repeated the lie that the car was speeding up to the checkpoint.

Dirty-Money Scandal Points to Sharon, Mega
by Dean Andromidas
On the morning of March 6, Israeli police raided Branch 535 of Bank Hapoalim, Israel's largest bank, and arrested 22 bank employees and top managers, in what Israeli police are calling the largest money-laundering case in the nation's history. Meanwhile, on the other side of town on March 6, police raided the offices of exiled Russian oligarch Vladimir Guzinsky, in search of incriminating evidence of money laundering. In addition, it was announced that the Israeli Ambassador to London, Zvi Hefetz, Guzinsky's former business partner, will be questioned about his possible role in the affair.

Behind the Kelly/Wilson/Duggan Affair: Anatomy of a Defamation Campaign
by Jeffrey Steinberg
For the past 18 months, a trans-Atlantic network of 'friends of Dick Cheney and Tony Blair' has been waging a defamation campaign against leading Democratic Party figure Lyndon LaRouche. Since the first Bush-Cheney Inauguration in January 2001, LaRouche, one of the world's most reknowned political economists of the American System school, and a 2004 candidate for the Democratic Party Presidential nomination, has been leading the effort to expose the follies of the Bush-Cheney Administration, which promotes perpetual imperial wars abroad, and the 'Hooverization' of the American economy at home.

Discontinuity in Current World Affairs
by Maj. Gen. Vinod Saighal (ret.)
India's General Saighal delivered an abridged version of this presentation to EIR's seminar in Berlin on Jan. 12, which was published in our Feb. 11 issue. Here, he expands on his views on the 'discontinuity' in world strategic affairs—a point which Lyndon LaRouche took up in the seminar dialogue. LaRouche underlined the factor of mass insanity in producing discontinuities and revolutions. 'The government of the United States today, the present government, is a case of mass insanity. That's where the discontinuity lies,' LaRouche said. But the discontinuities themselves create the opportunity for revolutionary change of a positive nature. That is most urgently true, in the case of the United States today.

Schröder Visits Arabian Peninsula
by Rainer Apel
In a Feb. 27-March 5 tour, German Chancellor Gerhard Schröder visited Saudi Arabia and six other states on the Arabian Peninsula, five of these— Kuwait, Qatar, Bahrain, Oman, and Yemen—for the first time. And although not explicitly proclaimed by the Chancellor and his entourage of 170 German business leaders, this tour not only served German economic interests, but also pursued policies of intensified cooperation, in stark contrast to the anti-Islamic, confrontation policy of the Bush Administration.


John Bolton Will Push Preventive War at the UN
by Michele Steinberg
John Bolton deserves 'any job he wants.'
—Vice President Dick Cheney, quoted in the Los Angeles Times, March 8, 2004
For those people who were still clinging to the delusion that the second George W. Bush Administration would be a 'kinder, gentler' entity, the appointment of John Bolton to be the new U.S. ambassador to the United Nations should be a shock of reality. Coming at the time that the Bush Administration is in a full court press for regime change in Damascus, the appointment of the Administration's leadingWMDdisinformation specialist, and the architect of the passage of the Syrian Accountability Act, is a particularly provocative gesture.

Washington Post Hits Dems on Social Security
The March 8 Washington Post ran a front-page featured lie— one of a number it has uttered in a sly, weeks-long promotion of Social Security privatization under a 'Democratic' cover—against the Democracy Corps group of James Carville and pollster Stanley Greenberg. The Post claimed that a report issued by Democracy Corps chided the Democrats for not putting forward their own compromise 'solution' for Social Security, and warned them they would lose the battle unless they did. Post writer Don Balz quoted Democratic consultant Harold Ickes, somewhat incoherently, to the same claimed effect—the policy the Post wants to recommend to Congressional Democrats.

War Crimes Was the Policy
by Edward Spannaus

Yet another report, in a series of investigations commissioned by Defense Secretary Donald Rumsfeld, has concluded that there was no systemic policy for abuse and torture, and no culpability on the part of top Administration officials, for what took place at Abu Ghraib and at other detention facilities in Afghanistan and Iraq.

Arnie's Lies Can't Hide Shultz's Fascism
by Harley Schlanger
When George Shultz threw his not inconsiderable weight behind Arnold Schwarzenegger's candidacy for Governor of California, it was said that he did so because he agreed with former Gov. Pete Wilson, that Arnie 'has the stomach' to impose the harsh medicine that Wall Street has prescribed for the state's economy.

Supreme Court Majority Bars Death Penalty for Minors
by Nancy Spannaus
The March 1 decision by the U.S. Supreme Court majority, declaring that the execution of minors under the age of 18 is unconstitutional, represents another step toward bringing the United States back into the moral community of nations. Whereas most countries in the world have celebrated their liberation from oppression by banning the death penalty, the United States has remained a notorious example of retributive justice. At least 72 death row prisoners, who committed their crimes when they were under 18, are expected to be reprieved by this ruling—many of them in President Bush's home state of Texas.

DeLay Is Nervous; Pals' Legal Troubles Mount
by Harley Schlanger
House Majority LeaderTom DeLay (R-Texas) is getting even more worried, as the legal noose tightens around the necks of the flunkies who are alleged to have laundered money on his behalf. A civil case was heard in Austin the first week in March against Bill Ceverha, the treasurer of Texans for a Republican Majority (TRMPAC), who is being sued by five Democrats who lost races in the 2002 elections for the Texas House of Representatives to Republicans who received money from TRMPAC.

Civil Rights:

LaRouche Youth Join Amelia Boynton Robinson
by Bonnie James and Katherine Notley
On the 40th anniversary of the historic crossing of Edmund Pettus Bridge in the Selma-to-Montgomery march for voting rights, one of the movement's great heroines, Amelia Boynton Robinson, invited four representatives of the LaRouche Youth Movement to join her in Selma, Alabama to participate. The annual 'Bridge Crossing Jubilee' to commemorate 'Bloody Sunday' on March 7, 1965, when state troopers attacked the demonstrators attempting to march from Selma to the state capital in Montgomery, giving the date its infamous name, was hosted on March 3-6 by the National Voting Rights Museum in Selma, and culminated on Sunday, March 6, with a re-enactment of the bridge crossing.

  • Interview: Amelia Boynton Robinson
    'A Vote-Less People Is a Hopeless People'
    Mrs. Robinson, a fighter for civil rights for nearly a century, is vice chairwoman of the Schiller Institute in the United States. Katherine Notley interviewed her on Feb. 15, shortly before Mrs. Robinson returned to Selma, Alabama to celebrate the 40th anniversary of a keystone battle for the right to vote— the 1965 Selma to Montgomery march, which had its baptism by fire on Bloody Sunday, March 7, 1965. She and her late husband S.W. Boynton had been fighting for voting rights for 30 years in Dallas County, Alabama, before the Selma march. Mrs. Robinson's autobiography is titled Bridge Across Jordan.


LaRouche: `The Immortality of Martin Luther King'

Lyndon H. LaRouche, Jr.

speaks to the Martin Luther King Day Prayer Breakfast in Talladega County, Alabama on Jan. 19, 2004


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Coverup Exposed!

The Israeli Attack On the USS Liberty

``The Loss of Liberty,"
a video by filmmaker Tito Howard, proves beyond any doubt that the June 8, 1967 Israeli attack against the USS Liberty, in which 34 American servicemen were killed and 171 wounded, was deliberate. The video includes testimony from Liberty survivors, many Congressional Medal of Honor winners, and from such high-ranking Americans as:

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