Obama Out To Kill Glass-Steagall,
While Pushing Weimar Hyperinflation
May 11, 2010 (EIRNS)This release was issued today by the Lyndon LaRouche Political Action Committee (LPAC).
Lyndon LaRouche today fiercely denounced the Obama White House and Treasury Department, for simultaneously conducting a vicious campaign to kill the Glass-Steagall amendment, introduced by Senators Maria Cantwell (D-Wash.) and John McCain (R-Ariz.), while pushing through a "Super-TARP" bailout of Europe, at American taxpayers expense. LaRouche warned:
If the Super-TARP bailout is allowed to go forward, there will be blood in the streets. The American people are not about to tolerate another mega-trillion dollar bailout of a hopelessly bankrupt international monetary systemparticularly when the U.S. Federal Reserve is put forward as the bailout lender of last resort for a bunch of European-based foreign banks. This is 1923 Weimar hyperinflation on the global scale.
In the past 24 hours, sources close to the Obama White House and the Democratic leadership in the U.S. Senate have confirmed that President Obama, Treasury Secretary Tim Geithner, and White House economic advisor Larry Summers are waging an all-out campaign to kill the Cantwell-McCain amendment, that would reinstate the Glass-Steagall standards, first established by President Franklin Roosevelt in 1933. According to these sources, following Saturday's defeat of incumbent Senator Robert Bennett (R-Ut.) in the Republican caucus, over his support for the 2008 TARP Wall Street bailout, Republican support for the Glass-Steagall amendment jumped, assuring that the amendment, if introduced onto the Dodd financial reform bill, would overwhelmingly pass.
In response, the White House worked through the weekend and into Monday night, with Senate Majority Leader Harry Reid (D-Nev.), Senate Banking Committee Chairman Christopher Dodd (D-Conn.), and Senators Carl Levin (D-Mich.) and Jeff Merkley (D-Ore.), to draft and boost an alternative bill, based on former Federal Reserve Chairman Paul Volcker's so-called "Volcker Rules." The Volcker Rules would place some restrictions on speculative activity by banks and bank holding companies, but would do nothing to reestablish the Glass-Steagall firewall, separating commercial banks from investment banks, hedge funds, insurance companies and private equity funds. As Lyndon LaRouche made clear on Saturday, May 8, in his international webcast, nothing short of a full restoration of Glass-Steagall and a bankruptcy reorganization of the otherwise hopelessly bankrupt global financial system, can work.
The sources all confirmed that the intent of the Levin-Merkley amendment, as worked out with the Obama White House, was to kill the Glass-Steagall effort.
In response to these reports, Lyndon LaRouche described the Volcker Rules as "less than worthless:"
Paul Volcker has apparently lost his guts to defend the U.S.A. He prefers to be acceptable to this crazy Administration. It is now time to be patriotic, to forget about things like popularity and legacy. Obviously, Volcker lacks my guts. He does not lack the brains to understand the consequences of his capitulation to pressure from the Obama White House. This is a sell-out of the United States, and he knows it. And the same is true of Senator Levin, who also knows better than to be putting his ambitions ahead of the American people.
LaRouche had even stronger words for President Obama, who he accused of "refusing to defend the United States, which, as President, is tantamount to treason." He warned that anyone who does not back the Glass-Steagall amendment, which has the overwhelming backing of the American people, will be vilified by 80% of all Americans. LaRouche warned:
By moving explicitly to block the introduction of the Cantwell-McCain amendment, the White House is going for dictatorship.
According to senior U.S. intelligence and Democratic Party sources, beginning with last Thursday's 1,000 point temporary crash of Wall Street, triggered by the looming collapse of the European Monetary Union sovereign debt bubble, Geithner and Summers, with the active backing of President Obama, played a pivotal role in ramming through a $1 trillion-plus bailout of the major European banks, a bailout that will do nothing to solve the onrushing global financial disintegration, but will subject the populations of continental Western Europe and the United States to murderous Schachtian austerity, leading to an inevitable social explosion throughout the Trans-Atlantic world.
According to official White House accounts, President Obama phoned German Chancellor Angela Merkel and French President Nicolas Sarcozy on Sunday morning, to press them to go along with a Super-TARP bailout scheme. While the public announcements of the deal focused on the role of the European Central Bank and the International Monetary Fund, sources confirmed that the key to the whole deal was the committment of the U.S. Federal Reserve to pump an unlimited supply of U.S. Dollars into the bailout.
Indeed, at 9:15 PM EDT on Sunday, May 9, the Board of Governors of the Federal Reserve Board issued a terse two paragraph press release, announcing that the swap window, that had been used in the 2007-2008 international financial meltdown, would be extended, once again, to the ECB, the Bank of England and the Swiss National Bank, through January 2011.
The decision to go for another hyperinflationary bailout of the entire international financial system, LaRouche warned, is going to trigger the kind of Hell on Earth that the British Monarchy has been advertising as its policy for years.
They want to reduce the world population to below two billion people, and this Fed bailout policy, pushed through by President Obama, is going to do exactly that, if not reversed immediately. Someone wants chaos throughout the Trans-Atlantic region.