Subscribe to EIR Online
This presentation appears in the January 25, 2008 issue of Executive Intelligence Review.


Six Months Into the
Greatest Ever Financial Crash

[PDF version of this transcript]

Lyndon LaRouche delivered the following hour-long keynote, and then fielded questions for two more hours at an international webcast from Washington, D.C., sponsored by the LaRouche Political Action Committee on Jan. 17, 2008. The webcast was moderated by LaRouche's national spokeswoman Debra Freeman. Media archive of the webcast.

Debra Freeman: Good afternoon. On behalf of the LaRouche Political Action Committee, I'd like to welcome all of you to today's international webcast. As I think many of our listeners may recall, it was approximately six months ago, during a similar webcast, on July 25, that Mr. LaRouche made clear that we were in a situation, not where we were facing an impending financial collapse, but that in fact the financial collapse was under way. Within days of that webcast, Mr. LaRouche was proven absolutely correct, by a chain of events that occurred. On July 28, Countrywide Financial, which is the nation's biggest mortgage lender, announced a 33% drop in profits, and it's been nothing but bad news ever since then. Two days after that, American Home Mortgage, another major lender, which specialized in subprime mortgages, collapsed. By July 31, the subprime mortgage crisis was on the front page of every newspaper in the United States.

Mr. LaRouche was 100% right in forecasting the collapse. He was 100% right, when he said that the collapse had occurred. And here we are, six months later, with the debris from that collapse hitting on a daily basis. As a result of a national and international mobilization, the willingness to deal with that crisis, at least the willingness to admit that that collapse is under way, has begun to permeate political circles. Hillary Clinton's Presidential campaign stands as probably the only Presidential campaign, or at least the only one that I'm aware of, that has been prepared to put this front and center. And while that is useful, they have still failed to address the causes of the crisis, or the real solutions.

I think that today's webcast is one in which Mr. LaRouche, as he has been doing repeatedly at these international webcasts, will provide a pathway, whereby people can gain greater understanding of what it is we are facing, as a nation, as a world, indeed, as a civilization. And I believe, knowing Mr. LaRouche as I do, that he'll also provide a pathway to solving it.

So ladies and gentlemen, without further ado, let me present to you, Lyndon LaRouche.

The Crisis Is Manageable

Lyndon LaRouche: Thank you.

The presentation and discussion which is going to occur now, will be for most of you, one of the most important things in your lives—the issues. Because we are at a point, not of an ordinary crisis, not of a financial crisis, not of a mere depression, but of a global breakdown crisis, centered in the trans-Atlantic community, especially the English-speaking trans-Atlantic community, which will radiate, if it's not stopped, to bring every part of the world into a general breakdown of their respective social systems. This is one of the greatest moments, in terms of importance, in history, since the 14th Century in Europe, with its new dark age, and since similar events, like the collapse of the Roman Empire, or the collapse of the Byzantine Empire: This is the kind of period we're living in. And the danger from this crisis is greater than probably any of the precedents, other than the collapse of the Roman Empire itself.

This is momentarily a collapse. Each day, now, since Jan. 3, the crisis has been expanding in magnitude, at an accelerating rate. What you think is the extent of the crisis today, if the measures I propose are not taken, will become much worse, by an order of magnitude in the next week, and the week after that, and the week after that, until the whole system grinds into a collapse, probably some time during this year. And I'm talking about a global collapse, not a collapse just of the trans-Atlantic English-speaking community. But the thing is centered obviously in the trans-Atlantic English-speaking community. That's where the source of the infection is, from which it spreads. And that's what we have to deal with.

We also have to deal with another problem, apart from an economic problem: a problem of idiocy, which permeates the highest ranks of the Senate, and other locations, among all so-called leading economists, today. There are a few exceptions here and there. But on this question, of this crisis, except for a few people in the woodwork that I know about, there is no public expression of any comprehension of what this crisis is about, or any comprehension of what the remedies are.

Now, let me say, on that point specifically, that the primary crisis before us, immediately, is twofold: On the one hand, it's an international monetary-financial crisis, in which the collapse of the entire world international monetary system could be completed within a time as early as this year, and even sometime earlier in this year, because that's the way human events are. You can not predict the day in which that collapse would occur, but the collapse is already ongoing. And none of the governments in existence today, has any efficient comprehension of adopting measures which would actually deal with this crisis.

The crisis is manageable. It's not simply solvable: You can not simply turn back the clock and get good times back again, where you had them before. But you can bring the thing under control. And the problem I wish to address today, specifically, is the measures of control which the government of the United States and other governments must take now!, if they're going to save civilization. This is doom-time. And often in human history, it was possible up to a certain point, to prevent a civilization from disintegrating into chaos. We're in such a situation now.

But if we don't take the measures, this civilization will collapse into chaos this year. If we understand these measures and are willing to take them, we can manage the crisis, through cooperation among nations, which agree on certain principles. That's always been possible. But if we do not do that, we are living on the brink of one of the great dark ages in all human existence, globally.

'This Is Big-Time'

So: What I'll do in the course of today's remarks—I've portioned things into two sections, because I can anticipate from certain leading circles in our political system and elsewhere, that there will be certain questions addressed to me, through Debbie, which will either identify themselves, or will identify themselves categorically, by their profession or by their interest. But some of them are very highly sensitive, and the questions will come to me, not with their name attached to it, but with the category that they represent involved. And what I'm addressing most immediately, are certain leading political and other circles, inside the United States and internationally, which need to know what I know, and they do not yet know, and to make that clear.

So this is big-time. This is not small-time.

We also have a big problem of a bankruptcy of ideas and mentality among a dominant section of our culture. The more influential part of our upper 20% of family-income brackets are crazy, and corrupt. Especially the generation now between 50 and 65 years of age. That is the generation which is the most disoriented and most corrupt, especially certain influentials.

So therefore, the problem is that some of the people, including in the major press, major publications, mass media generally, and so forth, on this question, are either outrightly lying or incapable of telling the truth, because they couldn't know where to find it. And they are the most influential voices you hear, so far, from the U.S. Senate, from leaders of the House of Representatives—not all leaders, but the ones who are the most vocal and most reported—and from most Presidential candidates. They are all, by my book, idiots, and worse; because their opinions are worse than worthless. If their opinions were to prevail, the whole country will go to Hell; that I can guarantee you.

Therefore, what we're in the process of doing, which I'm particularly in the process of doing, is, being a veteran Presidential campaigner, and of some international significance: I am not running for President, but I am running to create the situation on which the coming President of the United States, if properly selected, will take the steps which are necessary on behalf of the United States, to enter into cooperation on these principles with other nations, and under those conditions, this planet can survive, civilization can survive. We can recover again. This is not as easy as Franklin Roosevelt faced with the Great Depression. This is a much tougher problem, a much more dangerous, deeper corruption than that. And so, the precedents from that period, while valuable to us today as a lesson, are not a prescription by imitation for solving this problem.

The greatest problem we have, is the incumbent President of the United States, and the number of idiots, both Democratic and Republican, in the Congress, including the Senate, who think like they do. That's our biggest problem. Because what we need at this moment, looking back at our history, we are in a moment, that we need a Franklin Roosevelt as President. And what we have as a Presidency today has no resemblance to that, whatsoever. As a matter of fact, the question of species is also in doubt.

So therefore, it requires a special effort. The effort will, however, come in the course of the campaign—a critical point. Because if one or two figures, who are Presidential candidates, or pre-candidates at this point, step forward, as Hillary Clinton has made a step in that direction—if they step forward to take charge of the leadership of the parties going into their Presidential nomination procedures, then they will become a focal point of leadership, to counter the idiot who occupies the White House today. That's our best shot. And people from abroad will observe that, because they will say, "Yes, you have interesting ideas. It would be nice if the United States would do that." But, will the United States do that, considering the idiot we have in the White House today? And with the Cheney hanging around his neck. And with a Speaker of the House, Pelosi, who seems to be owned by a notable fascist, and is doing everything to sabotage what needs to be done to save this nation? And similar problems in the Senate.

So therefore, the first thing we have to address is the fact of a general incompetence in dealing with a specific problem we must solve, and also a massive corruption, political and moral corruption, within relevant parts of the upper 20% of our family-income brackets, notably those in politics. That's our problem.

Therefore, I could say the following, just as an example: You could imagine two politicians trained in economics. They jump out of an airplane, to take a parachute to the ground—but they have forgotten their parachutes. The first one says, "I think we're in for it." The other one says, "Don't believe any of those conspiracy theories. We're going to make it. We'll bounce back." And you'll get that from a lot of them, today.

The British Empire 'Slime-Mold'

Now, let's go back in American history to a point, which should be a point of reference today—it doesn't contain the solution, but it contains the suggestion of what the solution might be: Franklin Roosevelt, as President. Franklin Roosevelt as President saved the United States, by returning the United States to its Constitution. Measures by Roosevelt were in accord with the principle of the Constitution. The Presidents who preceded him, since the assassination of McKinley, including Woodrow Wilson, Teddy Roosevelt, Hoover, Coolidge, so forth, had actually been the enemies of the best interests of the United States, operating from the top level of the United States.

The problem that Roosevelt faced, was a problem of the British Empire. Now, the British Empire is not really a monarchy. It's a slime-mold: That is, it is a collection—and this has been the case since the beginning of the British Empire in 1763, with the Peace of Paris—an international financier cartel, largely of Anglo-Dutch denomination, but essentially bankers in the Venetian tradition, a slime-mold. They kill each other by night, and they gang up together against the human race in the morning. This is the type.

In 1763, this slime-mold, this international financial gang, took over Britain, at a time that Britain had been the victor in a war it orchestrated, called the Seven Years' War. What Britain had done, which is typical Liberal practice, is to defeat all its rivals on the continent of Europe, by inducing them to make war against each other. So Britain sat back, while Russia, and France, and Prussia, and other countries, fought each other, and came down in ruins, with the Peace of Paris, in which the British came in and collected the remains. It was the British East India Company, who collected the remains. The British monarchy is not the controlling force inside the British Empire. The controlling force is a slime-mold, called the Anglo-Dutch Liberal financial establishment. They run the empire. They are not necessarily British citizens; they're often Dutch, they are French, they're Venetian, they're New York bankers. George Shultz, for example, the guy who sank the Roosevelt monetary system, is part of this. He's a fascist. So's Rohatyn. Rohatyn's a fascist. It's not a term, it's a species designation.

And what we're faced with today, and with the Bloomberg game, is the attempt to establish a Presidency of the United States, under Bloomberg and Schwarzenegger (whose father gave him fascist credentials by birth) to establish a dictatorship in the United States, modelled immediately on that which was used by the British to create Mussolini as a dictator in Italy, the same British circles which put Hitler into power in Germany. This is the problem. We are faced with a threat of tyranny beyond belief, by this crowd. And this is what the British Empire is: It's the Anglo-Dutch Liberal system, which is a system of international finance, which in respect to each other are predatory. They eat each other, and they eat each other's children. But then, they gang up against all of the rest of us, and play us for fools.

For example, who started the war in Iraq, the last war in Iraq, that's now still ongoing? It was done by the Tony Blair government of England. Tony Blair orchestrated it. Remember the case of David Kelly? The key figure inside the United States was Dick Cheney, but not really Dick; it's his wife. His wife is the one who picked him out of the swamp, got him jobs, got him positions, and she's the terror who runs him. She's a British agent, a Fabian, part of the Fabian Society, the same thing that Tony Blair represents. So, you had American accomplices of the British Empire—which is not the British monarchy, it's the slime-mold of British or Anglo-Dutch finance—orchestrated a war in Iraq, in Southwest Asia, to destroy the United States by inducing it to destroy itself! Just in the same way that the Anglo-Dutch Liberals set up, in the early part of the 18th Century, a war called the Seven Years' War, in which the powers of Continental Europe chopped at each other. And the British came in and collected the remains, the Anglo-Dutch Liberals.

In our midst—if you think that Felix Rohatyn is an advisor to any leading figure, you should fire that leading figure, should be fired from office, particularly from the position of Speaker of the House. Because they represent a danger to the United States, as great as a traitor in a high position during warfare. She, under the influence, is a poor patsy, a poor, dumb patsy, controlled by Felix Rohatyn, who has done the most to destroy the United States House of Representatives, during her term of service, since she gained that position. These are the kinds of problems we face.

Roosevelt Used the Constitution To Save the U.S.A.

Now, go back to, again as I said, to Roosevelt: Roosevelt came into the Presidency at a point that we hadn't had—with the exception of Taft, in a sense, and Harding, who were questionable figures—we hadn't had an honest President since the British killed McKinley, in order to bring Teddy Roosevelt into the Presidency. Teddy Roosevelt, Woodrow Wilson, Coolidge, Hoover, so forth, were problems. We were almost destroyed by this. We were still a powerful nation at that time; we were almost destroyed.

Roosevelt came along. Now, Roosevelt was a descendant of a New York banker by the name of Isaac Roosevelt, who had been a collaborator of Alexander Hamilton, in his time. And Roosevelt did not stumble around, and did not innovate in some curious manner, did not violate the Constitution, but he used the Constitution precisely, and followed it, in order to organize an effort to save the United States from itself, and from what previous Presidents had done to the United States. He saved the United States. He did more than save the United States: At the time he came in, the British ruling class, including the British monarchy itself, had not only put Mussolini into power in Italy, but had put Hitler into power in Germany. Who created Hitler? It was not Germans, it was Brits. They organized it. They insisted upon it.

When Roosevelt became President, this underwent some degree of change. Roosevelt took emergency measures which were based on the U.S. Constitution. And today, we should follow exactly those precedents that Roosevelt used then, that are constitutional precedents. His constitutional conceptions are constitutional. What exists now, as a so-called "constitutional" interpretation of these matters, is not constitutional: It is something imported from abroad. This is not our Constitution.

Remember, our Constitution is derived, primarily, immediately, from the 1648 Treaty of Westphalia, the Peace of Westphalia. This was the foundation of a commitment among nations to the modern, sovereign nation-state by those nations, in 1648. This ended a long period of religious warfare, which had been induced by Venetian interests, from 1492, the Expulsion of the Jews from Spain, by the Grand Inquisitor, through the end of the war in Europe in 1648, the Thirty Years' War.

This agreement, prompted by a great Cardinal Mazarin, from France—actually an Italian, but he was stuck in there by the Pope—and this agreement on the Peace of Westphalia, on the "benefit of the other," that each people and each nation must devote itself primarily to the benefit of other nations, and by doing so, to create a bond among nations, in cooperation among nations, by which these kinds of problems can be cured.

We can not eliminate the nation-state; we do not need a Tower of Babel. Because the ability of a people to govern itself depends upon its culture. And without that culture, a people can not be self-governing. So therefore, you can not impose law upon nations, simply by just imposing law upon them. You must work through the culture of that nation, the culture of its people, and have their willful consent to cooperation of the type needed to fulfill the intentions specified by the 1648 Peace of Westphalia.

This is embedded in our Constitution, in the citation from Leibniz, in the Declaration of Independence: the "pursuit of Happiness," which was Leibniz's attack on the Liberal theory. Liberalism is not U.S. philosophy, not constitutional philosophy: Liberalism is rejected in U.S. constitutional philosophy. This principle of the "pursuit of Happiness" which Benjamin Franklin and others took from a book by Leibniz, was expressed as the great Preamble of our Constitution, the so-called Bill of Rights. And this principle of our Preamble is our fundamental law. And that is the law which is the interpretation imposed on every other aspect of our constitutional system. The Preamble of the Constitution is our fundamental law! Which expresses, echoes the Declaration of Independence, but is our constitutional law, as a Federal Republic. Every other part of the Constitution is subject to interpretation according to the specifications of that Preamble. That's our law. That was the law understood by Franklin Roosevelt.

The Federal Power of Bankruptcy

We also have another feature of our Constitution, which is different than anything you find in Europe, or at least in western and central Europe: We do not believe in monetary systems, constitutionally. The United States system is not constitutionally a monetary system. European systems are monetary systems, based on parliamentary government. There is no moral principle controlling. There are moral principles adopted in constitutions in Europe, but the essential thing is not there. In the U.S. Constitution, the creation of money, and the regulation of money is a function of the Federal government. The issuance of money is done by the consent of the House of Representatives, and enacted by the Treasury Department, under the direction of the President. It is unlawful to create money, or a form of money, in the United States, except by the Federal government, and except according to this principle, this constitutional principle. We are not a monetary system! Not constitutionally. We are a Federal Republic, and we have a credit system, which is based upon the constitutional principle reflected in our system of the creation of credit.

We also have, under the same term, as a Federal government, the power of bankruptcy. And this power of bankruptcy is very important at this time, because without exerting it, you're not going to save the United States. And if you can't save the United States, you're not going to save the rest of the world.

That means: That most of the outstanding debt, represented by financial interests, as claims upon the United States, its territories, and its people, will be put by the Federal government, into bankruptcy receivership. What should be paid, in the short term, will be paid. What should be supported in the short term, will be supported. But those sums we can not afford to pay, we shall not pay. We shall proceed under bankruptcy law, under our Federal law, to put the entire system, of money and related things, into receivership. If we do that, other countries will do it, too.

Now, what I've proposed, as you know, is that four powers in this planet must come together to share a policy, an initiative, which will save this planet from a general collapse. These four powers are, the United States (despite the idiot in the White House now); Russia, China, and India. Because, if these four nations agree on a relevant policy, not only will other nations join them, automatically, other nations, which are smaller nations, will join them in common interest. But we will solve the problem. We can organize a recovery of the world economic system, by reorganization of its financial system. We will return to a principle, if we agree among these nations, under which the same principle that applies to the U.S. Constitution, in terms of money, applies there: We will create a fixed-exchange-rate system, echoing what Roosevelt intended before he died—and I'll explain what that significance, "before he died" is.

We will therefore have a system under which loans outstanding can not fluctuate in the interest rates upon them, but will be kept within payable limits. Because, in general with the world economy as it is today, if the interest rate on long-term loans exceeds 2%, you're going to have a collapsed economy. Because you can not afford, in today's productivity, to have higher rates of interest in general, for long-term capital and related improvements. Therefore, you must have a fixed-exchange-rate system. That does not mean a gold-based system, but it does mean that we probably would do the same thing with gold that Roosevelt did with gold: We will consider it, not as a monetary asset, but as a means for settling accounts among sovereign national powers. And thus, to use that power, to maintain a counter-inflationary stability in long-term investments among nations.

If we don't do that, if we're unwilling to do just exactly that, there is no chance that the world civilization as we know it, in its present organized form, will continue to exist, as long as the remainder of this year. Because the rate of acceleration of decadence, of collapse, that is now built into the system, will accelerate to such a degree, that we can not determine on what date the system disintegrates, but it will be soon.

Mobilizing the Base

So the question is: Can we find in the United States, in particular, can we find a group of people, especially leading figures, who will come together to do what I have prescribed on this account?

Now what we're doing right now, we are mobilizing the base: The problem has been, that since the corruption from the top down, in the Senate and the House of Representatives, the corruption typified by that expressed by Nancy Pelosi, the stooge for the fascist Felix Rohatyn, that has prevented the Houses of Congress from functioning. They don't function. There are people in there who would like to function. There are good people in there, but they don't function. Because the system of "go along to get along" doesn't permit them to function properly under these conditions. With proper leadership in the Senate, and proper leadership in the House, yes, they would function. We've got to, first of all, change the Speaker of the House, right away. Otherwise, you don't care much about the United States. If you care about the United States, you will say that she needs to go, into some peaceful retirement, where her limited mental powers will find a proper realization.

So, thus, in this way, we had to go to a lower income-bracket section of the population. We went to the states and localities, working on the state level, to campaign for an action, which I prescribed, which if it is not implemented exactly as I have prescribed, means the doom of the nation. This is the Homeowners and Bank Protection Act. If that act is not instituted, in exactly the method I have specified, without changes, the system won't survive: We're finished.

Now, what we have now, is a growing mass support in the base of the population, on the state level, for that act. That the people in the Senate and the Congress are increasingly aware of the pressure coming from the states, in our mobilization for support of this act—to be implemented precisely as I have prescribed, without changes.

Why? Let me explain this act: The bankruptcy of homeowners, or nominal homeowners, can not be allowed. And we can not solve the problem by selective bailouts of some people. It won't work. You have to have a national freeze on foreclosures. Now, that has been picked up by some political figures, such as Bill Clinton and his wife. And so far, that's good. But that's not enough, as I think they know. You also have to protect the bankers simultaneously, and in the same act. Why? Because mortgages, if they're legitimate, and orderly mortgages, not some kind of fly-by-night thing, are related to banks: to chartered banks, to chartered Federal banks, to chartered state banks. These banks are now in danger of collapse and liquidation.

Therefore, you can not simply suspend these mortgages by themselves: You've got to put the banks under protection, in exactly the same act! If you don't put the bank under protection, your attempt to defend the mortgages will do no good. And if you allow the thing to continue, where the banks are being chewed up, now—by disreputable things that should be written off entirely—are being looted. As in the recent round of trying to buy out some of these hedge-fund operations which should not have been saved. They should be collapsed! Write them off the books! They're not worth anything.

We've got to save the homeowners. We've got to keep them in their houses. We've got to keep the communities stable. We've got to protect the local banks. Because, if the local, regular banks, the honest banks, are not able to conduct business, the whole economy of any part of the country will proceed to disintegrate! If you are not prepared to defend the homeowners, and the banks, the legitimate banks, in the same Federal act of bankruptcy, using bankruptcy law as the means of doing it, you aren't worth anything! And you should stop talking. Stop babbling. That's the only way you can save this system.

That is not all that's required. If we stabilize the United States politically, by the Homeowners and Bank Protection Act, then we open the door for the next required steps, which is to change national policy, probably in this time I would change it through leading pre-Presidential candidates. What you need, is an organizing voice, or more organizing voices, to get something moving behind this. If leading candidates defend the Homeowners and Bank Protection Act, as prescribed, we can save this nation. But that's only the first step towards saving this nation.

Europe Needs a Lender of Last Resort

The next step is to proceed on the international level. And that means, the President of the United States has to go to Russia, to China, and to India, and to other countries, and to propose a treaty agreement, a draft treaty agreement, which is equitable, which establishes a fixed-exchange-rate system. And this will probably bring nearly everybody in, if you do it.

For example, in Europe, as my wife has explained to people—she's German, and she knows about Germany, which many Germans don't; but she also has her contact with German experts and French experts and so forth—and has been conducting a discussion, an intensive discussion, on the question of the Lender of Last Resort. Now, the reason that Continental Europe is absolutely doomed today, under its present conditions, is there is no lender of last resort under the Maastricht Treaty and implementation. You have to reverse and cancel the Maastricht Treaty, to save Europe! And all it takes is a couple of countries who are key countries, to break out of the Maastricht Treaty, and it will disintegrate of its own accord.

In that case, then Germany, Italy, France, and so forth, will be forced to return to the principle of the lender of last resort, which is their own national government, their own constitutional government. Once they agree to return to this principle, then we can talk to Russia, to China, and India, in terms of long-term trade agreements, we're talking about 25-to-50-year trade agreements, for infrastructure, all these kinds of things. And we can have a program of expansion of the economy, development, which will give us a perspective of long-term recovery.

Once we decide, under treaty agreements of that sort, that we are going to survive, over the coming 50 years, then we shall survive. Because we will then make the decisions and be able to make the agreements which enable us to accomplish the common aims of mankind. And that's our function on that account.

Now, there are several things that have to be dealt with to clean up the garbage which is left over from the past. Go back to FDR. Now, there are two views of what the Bretton Woods Agreement was. One view, which is little known today, is the intention of Franklin Roosevelt, and that intention was very clearly declared, repeatedly, by Franklin Roosevelt, while he was President, especially during the war: President Roosevelt's intention for the Bretton Woods system, was a breakup of the British Empire. Roosevelt was committed—as I was at the time, I was in military service at the time—he was committed to the liberation of all territories from colonial occupation or oppression; and also the elimination of what we call semi-colonialism. That was his intention.

The British, and Winston Churchill, had a fit about that. And as soon as we had breached the wall in France, in the invasion of Continental Europe, immediately, those banking interests, in London and in the United States—like the Harriman bank, which had initially put Hitler into power in Germany, and also had put Mussolini into power in Italy—these banks, which had created Fascism, on the continent of Europe, with the participation of certain U.S. bankers, Wall Street bankers of the same type which I'm fighting today, like Shultz, and Harriman, and so forth—these guys made a right turn. And the British policy was to prevent the war from being won too quickly at that point.

Therefore, the war was sabotaged. For example, you had a General Montgomery, who was probably the worst commander in World War II, who ran an operation with the First Army, which screwed everything up, and prolonged the war for at least six to seven months. Other things were done, to try to eliminate the Roosevelt perspective for the post-war world. And the issue was largely expressed between Churchill and Roosevelt. Roosevelt would talk to Churchill, and say, "Winston! We are not going to do this! We're not going to put up with this any more! We're going into a world without colonialism, without people being oppressed by other people. We're going to the American System, of the conception of independent, sovereign nation-states. And every people has to have the right to have a development, a self-development, of a sovereign nation-state."

Oh! Churchill wanted none of that! He was out to defend the British Empire. So, as soon as Roosevelt was safely dead, Churchill's friends—take the case of Indo-China: Indo-China had won its independence in warfare, under Ho Chi Minh. Ho Chi Minh had been cooperating with the United States in that struggle. With Roosevelt now dead, the British ordered the Japanese to come out of the prison camps where they had been held in Indo-China, to be re-armed, and to occupy the country which had just been liberated from them. And the entire history of the Indo-China War since that time, was that creation.

A similar operation was run in Indonesia. There was a very effective liberation movement in Indonesia against the Dutch imperialism. The British backed that, with armed forces, a war that went on for some time, and created the mess which we suffer still today.

Similar things were done in the split-up of India, in the Pakistan-India split—and it was a horrible scene to see, the way it occurred. This was done, by the British.

Africa was given liberation, but not liberation: They were given the title to liberation, but no power to run their countries. Similar kind of thing.

Similar efforts were made in Central and South America. So that when this Bretton Woods agreement was presented, by Franklin Roosevelt, the intention had been to use the power of the U.S. military, that is the economic power, to convert the military power into economic power, for machine tools and similar kinds of development, to assist not only war-ravaged Western Europe, but also the nations which had been colonized or semi-colonized, to be liberated and developed, by converting the war-production capability of the United States to a peace-production capability, for the needs of these people. We proposed to make a world free of imperialism and its vestiges. That was Roosevelt's policy.

When Roosevelt died, immediately, Truman, who was an agent of the British in terms of his connections, moved to sabotage everything that Roosevelt had represented, in terms of this post-war policy of decolonization. The post-war policy of the Truman Administration was re-colonization. A British policy of recolonization.

FDR's Bretton Woods System Was Anti-British

Now, despite these changes, the United States continued on its internal economic policy, in the same direction, until the assassination of President Kennedy. And it was not just the assassination of President Kennedy that was key, it was the fact that his successor, Johnson, was terrified. And because Johnson was terrified, Johnson supported the Gulf of Tonkin Resolution, which got us into the Indo-China War.

The Indo-China War, a long war, like the Peloponnesian War, destroyed the United States, or destroyed the United States' economy, and so undermined it, that in 1971, the Bretton Woods system disintegrated under Nixon.

Now, the other view of the Bretton Woods system was that of Keynes. Keynes was at the 1944 conference of the Bretton Woods convention, and did submit a proposal. Now, people who don't know their history, will say that the Bretton Woods system was designed by Keynes. Not so. The Bretton Woods system was an anti-British, anti-colonialist position. What happened with the death of Roosevelt, was that Truman and Co., were able with their fascist friends in New York, like the Harrimans and so forth—the same people who had put Hitler into power earlier—to turn it into the "Keynesian" alternative. So therefore, Roosevelt's Bretton Woods system is made clear by his own testimony: This was an anti-colonialist system. The Keynesian system was a colonialist copy.

But nonetheless, despite the fact that this was merely a colonialist copy, in the United States, we maintained, internally, an economic system which was very much like the intention of Roosevelt. We maintained that up until the death of Kennedy, when things began to go bad at the time, after Kennedy had been killed. So therefore, today, when people say the "Keynesian system," that's a way of covering up the fact of this.

So, we maintained a protectionist economy, up through Kennedy, up through Kennedy's Presidency, and lost it rapidly after that point, especially after 1968.

Then, in 1971, we lost our honor; we lost everything. The British took over, through George Shultz, the same George Shultz who, in the same period of time, put a fascist dictator, Pinochet, into power in South America, in Chile. The same George Shultz who owns Schwarzenegger today (whose father was a real Nazi), who ran a Nazi-aided operation in the Southern Cone of Americas during the first half of the 1970s. And has not improved his morals since that time—or Schwarzenegger's either.

So this is what the issue is. We had a system, which is the Roosevelt Constitutional system, for decolonization of the world. Now if we look at things today, look at Asia and Africa, and the struggles in South America and Central America, you see a similar situation. The mission, the long-term mission for humanity now, if we get out of this crisis, is to fix this problem: We have large populations in Asia, most of whom are extremely poor. By their own unaided means, they could not solve the problems as they must be solved. However, with international cooperation, long-term cooperation, long-term agreements, the development of infrastructure, the development of other things needed. For example: The need for the thorium cycle of fission power, in India. India's a very poor country. It has some people in it, who are not so poor. But 70% are desperately poor, and their condition of life is worsening. Without thorium-cycle nuclear power, India can not in practice recover from this mess.

China has a similar problem. It has certain technological progress, certain achievements, but it also has vast needs of development. This requires nuclear power; it requires cooperation in infrastructure. It requires long-term agreements. The same thing is true of all of these countries, of the world. We need these long-term agreements, which must be treaty agreements, based on a fixed-exchange-rate system, like that of Franklin Roosevelt's design for the Bretton Woods system. That's what's required. And therefore, what we do is move from an act like the Homeowners and Bank Protection Act, to stabilize the U.S. economy sufficiently, to begin to move on the other things, to give us the room to move on the other things we must move to—including immediate long-term agreements, starting no later than January of the coming year, with the nations I indicated: the United States, Russia, China, and India. We must have a long-term agreement, or series of treaty agreements, with those and with other nations, which govern the way we are going to develop this planet economically, for the future of humanity! For a thousand or two thousand years to come.

Defending the principle of sovereignty of a people, because a people has embedded in its culture, its language, or the use of its language, it has the deeper aspects of mentation. A people that's denied that, and is supposed to speak an argot, moving from one country to another, and speaking some kind of a pidgin—they lack that cultural continuity of development, and the people are turned into virtual slaves, or approximations of that. So, we know that we must maintain national sovereignty, national cultural sovereignty among nations. And therefore, national sovereignty must be expressed in terms of cooperation among sovereigns, to develop long-term agreements on common objectives, for up to a thousand years or so to come. That's what we require.

And that is what should be laid on the table of the next President of the United States, properly selected.

LaRouche's 'Triple Curve'

Now, let's go to the first of these Triple Curves, to explain where I come in on this thing [Figure 1]. This was something which I first produced, actually in the end of 1995, and published for the first time in January of 1996. It was published as a feature of my pre-Presidential election campaign that year. And what it describes is the actuality at that time, of the U.S. financial-economic situation. The three values are simply: You have the issue of money, Monetary Aggregate, issued by governments or by other means, other agencies. You have also then, the generation of Financial Assets, as distinct from just simply money assets, which are related to monetary assets. You also then must compare this with the per-capita, per-square-kilometer productive powers of labor, in physical terms, including infrastructure, as well as other aspects of productivity.

Now, what has been happening, especially at an accelerating rate, since 1971 in particular, and at an accelerated since 1987, since October of 1987, has been an increasing decrease of the physical output per capita of the population of the United States, per capita and per square kilometer. What has been happening at the same time, is this has been sustained, as especially under Greenspan, by an accelerating rate of monetary emission. The U.S. government, in various forms, has been extending the emission.

Now the emission has been used by a multiplier factor, which is insane, to increase the rate of financial aggregates outstanding. So now, you see an accelerating rate of financial aggregates' growth, relative to an accelerating rate of decline of physical production. For example: infrastructure. The New York streets, for example, under Bloomberg. The New York streets are collapsing under Bloomberg. Maybe it's an expression of their dislike for the man!

Now then, we come to a second one, a second case, which I published in 2000 [Figure 2]. There was a change that occurred that time, in which the United States entered into a long-term, deep, depression. This happened before George Bush was able to pollute the White House, that is, George Bush, Jr. But what had happened was, you had the rate of monetary aggregates, that you had to generate to sustain the financial explosion, and financial aggregates expanded. So, as a result of that, with a continued collapse of the physical output, per capita and per square kilometer, you had entered into a collapse phase of the U.S. economy, a terminal collapse phase. So, by the time Bush came in, as President, in January of 2001, the United States economy was already doomed under its existing policy. It was doomed to collapse at an accelerating rate, over the period of the decade. And it did.

That's the problem we have to fix. We have a bankrupt system, which is inherently bankrupt, in which the amount of monetary aggregate being generated to bail out, as you see the bailouts occurring today, to bail out an inflated, explosive mass of financial aggregate, has reached the point that it is now going to accelerate at such a rate, that the question is, whether the U.S. economy, under its present policies, will outlive this current year. People who think they have money, are going to find they don't have any. People who thought they had vast savings, will find out they don't have any. That's the kind of world we're living in.

And idiots out there, are saying, we're going to induce a palliative to some homeowners, we're going to "stimulate the economy." "Stimulate?" What's that mean? More monetary aggregate! That's like putting more fuel in the fire, in the forest fire! The worst thing you can do. You have to go back to the Roosevelt idea, the Roosevelt conception. Put the system under bankruptcy, put it under control, and some things will have to go into negotiation, and some things will be paid; and that decision will be made on the nature of national interest and human interest, and human rights. That's our only chance.

Now, most people have a problem with this, including people who may be asking questions not too distant from now. "I don't understand it," they will say. "I don't understand what you see." "Won't it be sufficient...?"

Now, the problem we have: We have two kinds of people who are ignorant of economics: those who are honestly ignorant, and those who are inherently dishonest. And the latter outnumber the former. In other words, "How can I cheat?" This is Economics 101 today: "How Can I Cheat?" Not "How Can I Earn?" Well, we abolished earning: We shut down our factories, we stopped building our infrastructure, we shut down our farmers. We allowed Al Gore, who was reputed to have been eaten by a polar bear—which likes fat. Polar bears like fat. They see a guy walking up there, with fat, "This guy, what a fat head! He must be fat all over. We'll eat him!"

But, these kinds of ideas of sophistry, the same kind of sophistry in an extreme form, which sank ancient Greece under Pericles, the same kind that we're repeating today. This is our problem. And as a result of the popularity of sophistry: "All my friends tell me...."

The Human Mind Is Not Digital

Well, let me take one more little side issue, because it's so crucial to understand this problem, which most people don't. Let's take computer games. Killer computer games. What's the difference between a man and a monkey? And how does this apply to understanding computer games? Because computer games are designed on the basis of two things: First of all, they were designed to kill; they were designed to train a mass of the population, and retrain soldiers, as killers, who would shoot more often and at more people. And it worked! In order to train soldiers to kill more profusely, they invented games; they went to the computer industry to produce games, which are point-and-shoot training games. Then, late in the 1990s, when the subsidies to the computer industry were collapsing, under the previous arrangement, then, the computer industry, which otherwise would have gotten suddenly poor, went into mass production of the computer killer-game industry.

They produced this killer wave: We are on the verge of having suicide-prone mass-killers, just like you talk about in the Middle East, inside the United States. These mass-killers will be from our own youth, and they will be from youth who have been indoctrinated in playing computer games. And those who produce these games, are fully aware of this. And our study of case-histories shows that the secret of these games is, the children don't play the games. The games play the children.

One of my experiences earlier in life—oh, a quarter-century ago, or more; back in the 1960s, actually—was, I had been an old chess player. And I got away from it, because I got bored with the game, couldn't stand it any more. I went to all the games. I didn't win tournaments, but I was a blindfold chess player, simultaneous blindfold chess, all these kinds of tricks which I was good at, when I was younger and quicker. But then I said, "I gotta change." So, I looked at the game of "Go." And after a little too much playing the game of Go, I realized what it does to your mind—and I said, "never again!"

Now, the game of Go does not have a bad intention as such. It has a negative effect on the mind. But it does not have a bad intention. Killer games have a bad intention. And the intention which is built into the design of the games, is that you think that the person is playing the game on the Internet? Uh-uh! The game is playing him! And the firm that runs the game, and monitors it, is playing him! Or her.

So the point is, first of all, it has all the defects of Go, with all the necessary moral failures added. Kill! Kill! Game ends! Game ends! Game ends! Die!

When does game end? When the law enforcement agency or other official comes on the scene—and you stop killing the people, and kill yourself. That's exactly what happened in Virginia, exactly that.

And all the time this is happening, the companies that run the games on the Internet, are monitoring the games. They're coaching the games. Controlling and manipulating the minds of the players!

You have also a similar effect on MySpace, another mass-brainwashing operation produced by the digital industry. Facebook, another one, and so on and so forth. We're seeing the development of mass terrorism potential, inside the United States, based on these games! And the effect in the United States will be comparable to what we have in Southwest Asia, as so-called terrorism. But coming from inside the United States, generated, and monitored, and controlled by computer companies that manage these games, while the poor suckers who are playing them are being managed.

We allow it.

The other aspect of this thing, which is what I refer to in this case, is that the human mind is not digital. There is no digital mathematics that can represent the processes of the human mind, as distinct from those of a monkey. The human mind is creative by virtue of functions we associate only with analog devices. Creativity, as expressed by a human mind, corresponds generally to an analog function. We've done some work on that.

In the case of economics—coming back to that: in economy today, what is taught as economics, is Cartesian kinematics, a projection, a statistical projection. There are virtually no competent economists engaged in long-term forecasting—none! But many incompetent ones! And every one is wrong. Because it does not correspond to human behavior.

Human behavior is creative. Look at yourself. Now stand next to a picture of a gorilla or a chimpanzee. Or a baboon if you prefer. And say, "what's the difference between me, and a baboon, and a gorilla, or a chimpanzee? What do I do? I can think."

"Well, prove that."

Well, what is the population-density of baboons, chimpanzees, and gorillas. How many millions per square kilometer can you have, of chimpanzees, baboons, and gorillas? Now, what is the rate of growth of world population, per capita and per square kilometer of the human species? What's the difference? The difference is discoveries, which take two forms: of scientific principle, physical scientific principles, and Classical artistic principles. And these things enable human beings to increase the potential of the human species, as no other living creature can do.

This power comes as a result of what we call creativity, which does not exist in any digital system. But the only way you can represent it, mathematically, is by analog systems. That does not cause it, but it's capable of reflecting that.

So the point today, is people are living in a digital society, whose deleterious effects are enhanced, increased, by the role of these games, and similar kinds of entertainment. Look at the attention span of a young kid, 16-to-25 years of age! What is the typical attention span? What is it, 30 seconds? 15 seconds? Strictly as a result of MySpace. Take a MySpace addict, a typical MySpace addict: What is the length of their concentration span, measurable? What is the length of concentration span of a game player, on a killer game? These guys are babblers! They have no concentration span, whatsoever.

So we're destroying a section of a population, by destroying their minds, destroying their mental capacities, and turning them potentially into mass killers. And this is what our policy is.

It Is Time for a Global Peace of Westphalia

And this is the way we teach economics. Gore is typical of this. Gore is an exemplification of evil. Why? Because he denies the existence of creativity. For example, the case of India. He says he's for reducing carbon emissions—it doesn't mean a damned thing. He doesn't know what he's talking about! But! What does he mean? He's against the development of the fission process, for thorium-fission cycle. The thorium-fission cycle, using a material called thorium, which is rather abundant in India, used in proper devices, can be placed locally to provide power in locations, to improve water management and do a lot of other things. So the people of India require a very large increase of this process, set into motion. And to do this, you have to have a nuclear reaction which charges the thorium—which is not military problem at all—which thus gives the local village and so forth the ability to have a nuclear plant which provides what it can't get otherwise: freshwater.

Take for example, the Deccan in southern India: In southern India, the supplies of water have depended for long time, on drawing down fossil water! Now fossil water in southern India, in the Deccan region, means water which was put down there before the beginning of the Ice Age, 2 million years ago, the first ice age we know of. So, fossil water, which has been buried there for 2 million years, is now the recommended resource, for providing water for a village in southern India. It's crazy. With a nuclear plant, on the coast—and India has a very small area, relative to the coastline—near the coast, you can produce from seawater, you can produce freshwater in quantities, and economically, for these people. And improve the conditions of life.

So the United States government, in its infinite lack of wisdom, has tried to ban the thorium cycle from use in India, along with the British. So, the point is that humanity progresses through technological progress, and so forth.

What we represent as the American System is this: Europe has a very special kind of quality. Remember that about 19-20,000 years ago, we had great ice ages, all over the northern hemisphere, not every part of it, but a lot of it. Ice was thick, habitation was poor. The most advanced cultures were maritime cultures, people sailing in flotillas of boats, using astronavigation, to go large distances, up to 1,000 miles or so, or 2,000 miles, across oceans, or down oceans, from one place of residence to another place of residence, as the seasons change. And we know of these things, because through the study of astronomy, we recognize that some of these astronomical cycles which are built into the calendars are of that character: that only a society which was based on astronavigation, a maritime culture, could possibly have generated these features of those calendars: 25,000 years, 50,000 years, 200,000 years. Long-range calendars for cycles.

So in this process, the Mediterranean area and its adjoining areas became developed, as a maritime culture. This happened over thousands of years, but what we know of most of it, started about 700 B.C. with the emergence of an alliance among Egypt—that is, the case of Egypt, the Etruscans, and the Ionians, against Tyre. And this process led to the development of European civilization, which had a promising start, but kept being destroyed by empires, or the development of European empires, such as those of the Romans, or the Byzantine Empire, or the empire of the Venetians of the medieval period; and the attempted modern empire.

The issue has always been, in European civilization, in particular, that the tendency has been by oligarchs, to degrade the lower 80% or more of the family-income brackets of a population to virtual animals, by denying them access to the process of developing creativity and new discoveries. This was the issue posed by Aeschylus in his great Prometheus Trilogy and other writings. We take the distinction of mankind from the animal, which is the creative powers of the human mind, which don't exist in any animal, which the strength of humanity lies in there, and we suppress that in large parts of populations, with various kinds of oppression—colonial and other oppression.

So we take a society which had the most advanced power in the planet, which was European society as it developed in recovery from the dark age of the middle of the 14th Century; we corrupt it by things like the Grand Inquisitor, and the emergence of Liberalism, and the creation of empires based on Liberalism. And we subject the entire planet to this cruelty. And we call that, "the way things are." We call that, "common sense."

The time has come when the requirements of maintaining humanity, the technological requirements and scientific requirements are such, that humanity can no longer exist under what has been the practice of much of European civilization over the period to date. We must take what we resolved in Europe in 1648, the Peace of Westphalia, and commit ourselves to the entirety of the human race, to all of it: It has the rights which are granted to Europeans among themselves by the Peace of Westphalia.

So, that, to bring things to this close, as I presume the questions'll be pouring in shortly, is what I have to say today.

Back to top