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

Published: Tuesday, Aug. 30, 2005

Volume 4, Issue Number 35

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This Week You Need to Know:

LaRouche Comments on Professor Hankel and Himself

by Lyndon H. LaRouche, Jr.

August 13, 2005
On July 16, Professor Wilhelm Hankel, former chief consultant of Germany's Kreditanstalt für Wiederaufbau, conducted an interview, on the subject of the current unsustainability of the "Euro" system, with EIR's Lothar Komp and Michael Liebig. It was intended that I should respond to that interview by about the end of August. I do so here and now, presenting my argument in the form of a criticism of my own and Professor Hankel's expressed views.

We today are living within a failed system of world economy, a system which, so to speak, hovers now on its virtual death-bed. Thus, were there no revolutionary changes from what have been recently considered proven standards of practice by leading institutions, this civilization would soon disintegrate into a planetary new dark age. There is no way to fix this system, without removing the characteristic, principled feature which has transformed the once-successful and promising U.S.-led world economy of 1945-1946, into this miserable rotting dump of our ruined heritages today.
......Essentially, this virtually global European system, as best exemplified by the design of the U.S. constitutional system, is a successful "model" which would have succeeded, for the benefit of the planet as a whole, had its principled features of 1945 persisted in their shaping of world development. However, influences alien to, hostile to the Franklin Roosevelt design for the post-war world, have reigned increasingly within the reach of the presently reigning international monetary-financial system. especially since the 1971-1972 change to a floating-exchange-rate monetary-financial system. This, thus-reigning element is the root cause of the presently onrushing destruction.

...more ...full version (pdf)


Latest From LaRouche


by Lyndon H. LaRouche, Jr.

August 27, 2005

Even the mere hint of today's global, financial reality from Fed Chairman Alan Greenspan, and a matching side remark by former Treasury Secretary Robert Rubin, have touched off a furore of lunatic rage among the customary annual coven of wishful dreamers assembled for this weekend's annual rain-dance at Jackson Hole.

I restate, in clear text, what Greenspan and Rubin were actually thinking about as they spoke on this occasion.

Alan Greenspan took over the Fed from Paul Volcker at the point that the New York stock market had just gone through the October 1987 equivalent of what happened to Hoover in 1929. Greenspan's reign has been distinguished by his regime's bail-out strategies, which have consisted chiefly of a resort to the massive legalization of what are actually gamblers' side-bets, but are called, euphemistically, "financial derivatives" or "hedge funds," a kind of play-money which has been used as a way of papering over the effects of a major stock-market crash. About the time the unlucky, and easily duped George W. Bush, Jr. was entering office in January 2001, the beginning of a financial-derivatives-driven general collapse of the world monetary-financial system, was already in progress. Nonetheless, despite this reality, Greenspan continued to play his part in the wilder and wilder pumping up of collapsing world financial institutions by a method most fairly and kindly described as "blowing bubbles."

During the interval since the 2000 collapse of Greenspan's earlier "IT" financial bubble, the Fed Chairman and his accomplices overseas have postponed the overripe collapse of the world's current financial system so far, by resort to dubious schemes typified most visibly by an international hyperinflationary spiral in mortgage-based financial securities markets, such as those in the U.S.A., the United Kingdom, Australia, and so forth. A blow-out of that over-ripe mortgage-securities bubble, is the leading immediate threat to the U.S. and British banking systems, a threat of an event which would spread like wildfire throughout world markets.

As a result of Greenspan's pumping policy, since about April of this year, the entire world system has been flirting with the increasing possibility of an immediate general blow-out of the hedge-fund system. Now, as until the present international system actually blows out, that system is wobbling on the edge of something far more menacing than a mere stock-market crash like that of 1929 or October 1987.

To calm the worst fears of the panicked pack at this weekend's Jackson Hole affair, I describe the actual situation of the markets in the plain language which Greenspan and Rubin avoided on this occasion.

The world markets as a whole are gripped now by what has been an accelerating global hyperinflation with certain mathematical-functional similarities to what happened in Germany during the Summer and Autumn of 1923. This threat is immediate, and worsening at an accelerating rate, but, fortunately, the challenge is manageable, on condition that certain essential emergency reforms are made quickly. As Franklin Roosevelt once said, famously, "We have nothing as much to fear as fear itself"—or, if not fear, the kind of mass-delusions exhibited by the maenads of Jackson Hole. - The Nature of the Crisis -

The immediate problem of the world's principal financial markets has the following leading characteristics.

Greenspan's methods have amounted to flooding the financial system's current accounts through a massive infusion of financial-derivatives "Monopoly play money." The crux of the problem is, that short-term apparent returns on current financial markets have been bought by an accelerating rate of growth of unpayable long-term financial obligations, which have been generated by Greenspan's and by similar methods used abroad. When that hyperinflationary debt-inflation, halts, the present world monetary-financial system blows apart. The relationship between apparent financial returns and long-term unpayable financial obligations is now clearly hyperbolic. The really bad news is, that the longer the market does not collapse, the worse the financial collapse becomes, that at an accelerating rate.

Wishful people who refuse to think clearly are deluding themselves, like people living on the proceeds of taking in one another's laundry, by asking one another, "Are we sure that the market will never really crash?" Asking "When" is their potentially fatal mistake; they should be asking, "How?" instead.

The best thing would be to have had the crash sooner, rather than later, but on the condition that the U.S. government were thinking clearly, and was prepared to act as Secretary Rubin and President Clinton had posed the need for international financial-system reform, back during September 1998.

The problem is that the crowd of virtual bankrupts represented at Jackson Hole are clinging so desperately to their delusion of riches, that they, like the dupes of 1923 Germany, would rather cling for another moment to their own doomed dreams, than face the reality of the urgently needed general reform.

Sometimes the worst kind of insanity is clinging to denials, as we see from the spectacle of the diabolical romp of the wild-eyed warlocks and witches assembled at Jackson Hole.

Even chief warlock of the Federal Reserve, Greenspan, can no longer charm them with his spells.

The question is, are they willing to accept a merciful path to survival in bankruptcy proceedings, or the permanent torment their continued folly of today would assure them now? The question is: "Since most of that crowd at Jackson Hole are probably hopelessly insane, and probably soon bankrupt, for the moment, what are you, John Q. Citizen, willing to do, to save your country, and, also, your own butt?"

The Economy

World and Nation-State
Proposed Rail Development Corridors in the Indiana-Ohio-Pennsylvania Industrial Belt
InDepth Coverage








Links to articles from
Executive Intelligence Review,
Vol. 32, No. 34
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LaRouche Comments on Professor Hankel and Himself
by Lyndon H. LaRouche, Jr.
August 13, 2005
On July 16, Professor Wilhelm Hankel, former chief consultant of Germany's Kreditanstalt für Wiederaufbau, conducted an interview, on the subject of the current unsustainability of the 'Euro' system, with EIR's Lothar Komp and Michael Liebig. It was intended that I should respond to that interview by about the end of August. I do so here and now, presenting my argument in the form of a criticism of my own and Professor Hankel's expressed views.


Why America Needs To Build Nuclear Power Plants—Fast
by Paul Gallagher

The vague vaporings of the George W. Bush Administration about 'getting back to designing some nuclear power plants by 2010' (the President on Aug. 8 in New Mexico), are worse than inadequate to the United States' immediate need to have a sizable nuclear power construction program under way— tomorrow. The same White House which has exhaustively mounted a desperate bully pulpit trying to undo 70 years of Social Security, has done nothing more to revive nuclear power, than occasionally to indicate its generally favorable views on the subject. Combined with an increasingly deregulated, 'market-driven' power industry—which is interested in monopolizing existing nuclear power plants because they produce electricity so efficiently, but little interested in expending the capital and risk to build new ones—White House policy is aimed toward building a molehill, of perhaps two or three new nuclear plants by 2015 or so.

How Electricity Dereg Causes Blackouts
by Marsha Freeman
During the Winter of 2000-01, citizens in California watched while rolling blackouts shut the lights off in their homes and workplaces. The previous Summer, the state's utilities watched while an unregulated power mafia drove electricity prices from $30 to $3,000 per megawatt-hour. Deregulation had opened the state to manipulated 'shortages' designed to drive up prices—and to power marketers like Enron, which made a financial killing trading on the volatility of the market. Deregulation eventually drove the state's largest utility, and the state itself, into bankruptcy.

Corruption in America:
Big Three Execs Get Huge Pay To Ruin Auto Sector
by Richard Freeman
Since 2000, driven by shareholder value, the Big Three global automakers—GM, Ford, and DaimlerChrysler—have fired 100,000 American workers, more than 65,000 of them skilled auto production workers. In this process, they have utterly destroyed the advanced machine-tool capacity embedded in the U.S. auto industry. This year, the process of destruction intensified, with GM and Ford walking toward the cliff of bankruptcy. Yet for their efforts, the CEOs are treated to huge compensation packages instead of more deserved long jail sentences. The chiefs of each of the Big Three—GM's Rick Wagoner, Ford's William Clay Ford, Jr., and DaimlerChrysler's recently retired Jürgen Schrempp—have each hauled in between $10 and $25 million in total annual compensation.

Housing Bubble Means Workers Can't Afford A Home Where They Work
by Mary Jane Freeman and Richard Freeman

Most working Americans cannot afford to buy a home where they work and many cannot afford to rent there, as Federal Reserve Chairman Alan Greenspan's policies have driven up the price of homes and the rental market in the United States. A just-released national survey, 'Paycheck to Paycheck: the Cost of Housing in America,' by the Center for Housing Policy (CHP), found that 'the median price of a home rose 20% [from $186,000 to $225,000] in just a year and a half' ending the first quarter of 2005. Yet, 'at the same time, wages for key community workers . . . in the majority of cities nationwide remained flat.'


Will Senator Warner Move To Block BRAC Atrocity?
by Carl Osgood
When the Defense Base Closure and Realignment Commission (BRAC) released its initial recommendations several months ago, this news agency denounced BRAC as a blatant 'real estate scam,' which had to be fought tooth and nail. Indeed, the BRAC plan contained so many outrageous proposals—from the proposed shutting of the technological heart of U.S. submarine capability, at Portsmouth Naval Shipyard and New London, to the shutting of the premier military hospital in the United States, Walter Reed—that it provoked an unprecedented bipartisan uproar against BRAC. Thousands swarmed to town meetings around the country, to protest the proposed shutdowns, and lawsuits were filed in Illinois, Pennsylvania, and Tennessee, to prevent the closing of vital Air National Guard locations.


BüSo Rallies Berliners To Stop Cheney's War Drive
by Muriel Mirak-Weissbach
What can you do to prevent a war against Iran?
This was the question at the center of a heated debate in Germany's capital on Aug. 22, at an election campaign event of the Civil Rights Movement Solidarity party (BüSo), titled, 'Requirements for German Foreign Policy.' As BüSo candidate for Chancellor Helga Zepp-LaRouche defined it, this question must be addressed politically, and in full cognizance of the military diemnsions, as laid out at the meeting in dramatic detail by Col. Jügen Hübschen (ret.), a former military attache´ at the German Embassy in Baghdad.

c/o LaRouchePAC Of Moonies and 'Spoonies':
Dick Cheney and His 'Spoon-Benders' Rampage in South America
by Dennis Small
Aug. 25 (EIRNS) Religious hoaxster Pat Robertson used his Christian Broadcast Network telecast this Aug. 22, to issue an in-your-face call for the political assassination of Venezuelan President Hugo Chavez. "If he [Chavez—ed.] thinks we're trying to assassinate him, I think that we really ought to go ahead and do it. It's a whole lot cheaper than starting a war."

Interview: Anton Giulio de'Robertis
FDR Wanted UN To Ensure Rule of Law

Anton Giulio de'Robertis is Professor of History of Treaties and International Relations at the University of Bari, in the southern Italian region of Apulia, and senior analyst at the National Research Center (CNR) in Rome. He has been a consultant and Italian representative in various international institutions for security and foreign relations, such as the Atlantic Council. De'Robertis is the author of several books on the role played by President Franklin Delano Roosevelt in shaping an international agreement for peaceful coexistence and cooperation. This discussion with EIR correspondent Paolo Raimondi took place in late July in Rome. It has been translated from Italian.

Russia Warns of Lower Nuclear Threshold
by Rachel Douglas
Russian President Vladimir Putin took the opportunity of his participation in Russian strategic force maneuvers Aug. 17, to state bluntly his opposition to the increasing readiness to use nuclear weapons. Interfax reported Putin's remarks from onboard the Navy cruiser Peter the Great: 'I think that lowering the threshold for the use of nuclear arms is a dangerous trend, because somebody may feel tempted to use nuclear weapons. If that happens, the next step can be taken—more powerful nuclear arms can be used, which may lead to a nuclear conflict. This extremely dangerous trend is in the back of the mind of some politicians and military officials.'

Brazil Has Cards of Its Own To Play, Too
by Gretchen Small
Like the energizer bunny, the corruption scandal against President Lula da Silva's government and allied parties just keeps going, and going, and going. What started in June as a Congressional bribery scandal, had expanded to charges of illegal financing of President Lula's 2002 election by Aug. 11, only to engulf Wall Street's once-beloved Finance Minister Antonio Palocci himself, the next week. Allegations that Palocci took kickbacks from a garbage disposal company while he was a mayor in the 1990s, grew to charges that he still works for 'the trash mafia.'

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


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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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