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This discussion appears in the July 15, 2005 issue of Executive Intelligence Review.

Money Is a Question of
Physical Economy

by Lyndon H. LaRouche, Jr.

Here are LaRouche's closing remarks on June 29 to an EIR-sponsored seminar in Berlin..

The most important thing is, that we're dealing with a world in which there's a conception of money, which is the popular conception of money by governments, and by leading institutions, which, from my knowledge, is insane, by the standard of the effect of the concept, the way it's applied. That the value of money should not be determined based on some current accounting value. That accounting should be banned as a method for determining the value of money.

The value of money should be determined by a scientific principle, not an accounting principle. And the scientific principle is: What is a physically defensible determination of the will of governments and the ability of governments to perform in creating credit, over the long term, for the development of their economies and their productivities? And therefore, we among nations, should recognize this process, use this process, and set values in terms of credit, and exchange, on the basis of those determinations, which must be physical, scientific determinations. Because, the crucial thing is, what is the physical life of the investment? How is it going to be maintained? And how long is it, and what's its quality? Those are the bases on which you should issue credit: on knowledge of the determination and competence of the government to create value, to create wealth, and to have sufficient wealth, to repay the debt you are creating, in a timely fashion.

This is a physical question, not an accounting question.

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