From Volume 38, Issue 34 of EIR Online, Published September 2, 2011

Global Economic News

London Demands U.S. Fed Bailout of the Whole Bloody British Empire

Aug. 25 (EIRNS)—The U.S. Fed is already pumping worthless liquidity overtime into the bankrupt European banking system. In Aug. 24 remarks in New York, Bundesbank executive board member Dr. Andreas Dombret admitted as much, noting that the European interbank market was indeed freezing up, but, "If need be, the ECB stands ready to mitigate potential bottlenecks, based on the swap agreement in place with the Fed."

But what London wants to come next can be described as swaps on steroids. The FT Alphaville blog, which frequently speaks for highly placed City of London interests, on Aug. 23 reported favorably on the comments of Wall Street trader and hedge fund owner Bruce Krasting, who stated: "I maintain the next move by the Fed is to massively open up the dollar swap lines with the European central banks. I don't think Bernanke wants to announce this significant step at Jackson Hole [on Aug. 26]. It is an EU issue and the Fed can't take the lead on this. Opening the swap lines will prove to be very unpopular in the U.S. Politicians will jump on it as a bailout of Europe while America is struggling."

FT Alphaville added sympathetically that such unlimited swaps would be more effective than QE3, as facilities initiated by global central banks in 2008, the most helpful was in fact the introduction of unlimited foreign exchange swap lines."

British Banks Threaten Violence if Anyone Messes with Their Fix

Aug. 21 (EIRNS)—The Association of Corporate Treasurers (ACT), which represents all the biggest banks and companies in the UK, warned that if the Independent Commission on Banking opts for even the milquetoast "ring-fencing" plan (separating commercial from investment activities within the same bank), "the UK's 2.5 trillion pound bank lending market will be drastically reduced," the Daily Telegraph reports, and that "production and employment could be hit." A decision by the ICB is expected on Sept. 12.

ECB Fascist Activities Are under Attack

Aug. 22 (EIRNS)—The fascist "good governance" policies being promoted by European Central Bank President Jean-Claude Trichet are being attacked for being "undemocratic" and an danger to European countries.

Paul Murphy, Member of the European Parliament (MEP) representing the Irish Socialist Party told Britain's Guardian, that there had been a "massive shift away from democratic accountability since the start of the crisis." He added: "There needs to be a check on the enormous power of the ECB, which is unelected, and has basically held a government to ransom."

Referring to the various proposals that have been made at several EU summits for European-wide mechanisms to control each country's budget he said, "All these proposals, discussions about economic government, are about undermining democracy in order to impose a European shock doctrine," said Murphy. "EU elites need to remove points of pressure that can be mounted on governments. If the mass of people are opposed to austerity, they can mount pressure on governments to hold that in check. So the only way it can then be imposed is undemocratically."

Jan Willem Goudriaan, deputy general secretary of the European Public Sector Union, the largest trade union federation in Europe, was quoted in the Guardian as saying, "Europe cannot be governed through secret letters of bankers, officials or an unaccountable body.... It is very worrying that few address the democratic nature of the Eurozone's proposed economic government."

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