This Week You Need To Know
Dialogue With LaRouche
How Do You Determine Currency's Value?
In the concluding panel of the seminar on June 29 (see InDepth for Lyndon LaRouche's keynote speech), LaRouche responded to a lengthy question from Prof. Stanislav Menshikov of Russia, asking how nations would come to a determination of the values of their currencies and relative exchange rates. The exchange here has been edited for publication.
LaRouche: I just want to focus on one particular point, which is crucial, which is one which has to bethe least likely to be understood, and the most important to be understood: On setting the rates of relative values of currencies in an emergency, new monetary agreement.
Now, the problem here, is a problem of method. It's a problem, the distinction between the Aristotelean method of astronomy, that of Claudius Ptolemy, which is fraudulent, and the method of Kepler. Now, this is a very ancient issue. It's the same issue which is raised by Leibniz. In the Ptolemaic model, it's the mind of the accountant. And the first thing you have to do, in dealing with economics, is get rid of the accountants. It's like getting rid of Claudius Ptolemy on the way to understand astronomy.
The value of a currency is not its statistical average value today, based on exchanges. The value of a currency is its power. Now the power of a currency is expressed, how? It's expressed by the rate of growth of the economy. If you invest, you're talking about investing in a currency. Now, there is such a thing as an interest rate. But the question is, what is the real earned interest rate? What is the real earned rate of gain, of a currency? And that determines its relative value.
Now, you're dealing with, today, if you take the statistics of today of any part of the world economy, and you try to negotiate on the basis of that, you are worse than Claudius Ptolemy, who committed a deliberate fraud. It wasn't just a mistake or backwardness. The guy was a hoaxster. He was a Roman. And all Romans lie. So, you don't start from there....