Tremonti: A New John Law Bubble Has Burst; Only a New Bretton Woods Will Work
April 1, 2008 (EIRNS)In an interview with the Italian financial daily Il Sole 24 Ore, former Finance Minister Giulio Tremonti again advances a new Bretton Woods conference, as the only solution for the now-evident collapse of the world financial system. Tremonti, who will become economic czar of Italy if the PdL coalition of Silvio Berlusconi wins the April 13-14 elections, has electrified Italy over the recent weeks, with this proposal of Lyndon LaRouche to urgently reconstitute a fixed-exchange-rate monetary system by international agreement.
Tremonti says: "Only now have they begun to speak about losses, and only in the hundreds of billions of dollars. This is a double mistake: in the first place, it is not a matter of losses. To lose something you must own something: in the moment 'T,' you have an asset; in the moment 'T+1' you lose it. This is different: there has been no loss of what one had, but only of the fiction of what one did not have. To have a loss you must have had an asset, but if you did not have the asset, because you never had it, the phenomenon is different from losses. The second mistake is a quantitative one: it is not about hundreds of billions, but about trillions of dollars. In the history of finance there was once something similar, although on a smaller scale: a similar kind of finance, connected with the globalization of that time: stretching from Europe to North America, to Louisiana, in the Eighteenth Century. It was John Law's techno-finance." (A sardonic analogy to so-called techno-music.)
When the journalist asks how to emerge from under the wreckage, Tremonti answers: "I do not believe that aspirins are enough, nor do I think it sufficient to close the barn after the cows have left."
Question: A first attempt at joint monitoring was featured at the last meeting of the Financial Stability Forum...
Tremonti: "It is preliminary, useful but only preparatory. Necessary, but not sufficient. We need something much stronger, and I think it is a new Bretton Woods. A political moment of very high symbolic value."
Question: In the year 2009, Italy will chair the G8...
Tremonti: "I do not think that Gaeta [the Italian town to host the G8] can replace Bretton Woods. We could go back to Bretton Woods; something new and political, to bring order back into the global chaos, is fundamental. Just go to Google, and look for the Mount Washington Hotel, and the section dedicated to the historical gallery. It is impressive: in 1944, with half of Europe still under Hitler, there were representatives from Poland,... from China, from India, from Australia. From the free world. And then, the men: Morgenthau, Keynes and, behind them, the heads of state and government. Of acting governments, of exiled governments. The breath of politics in a world shifting from war to peace. I am firmly convinced that today we need something similar."
Tremonti also strongly advocates nuclear energy. In the immediate period, the only energy source is nuclear, he says. However, in order to overcome the oligarchical veto against building nuclear power plants in Italy, he proposes to build them in the Balkans, and supply Italy with energy through undersea cables. Apparently, it has already been agreed that "part of the GNP increase is going to remain in the originating country."