World Leaders Go for Remake of 1923
Sept. 29, 2011 (EIRNS)There was total insanity in what "world leaders" said and did at the G20 gathering in Washington on Sept. 23-24. Faced with the endgame of the global financial collapse, they have simply panicked, with U.S. Treasury Secretary Tim Geithner, British Finance Minister George Osborne, and President Obama himself terrified that the Eurozone crisis will hasten their destruction.
On the evening of Sept. 23, Geithner held a series of frantic meetings and made phone calls to try and drum up support for expansion the European Financial Stability Facility (EFSF). In his speech to the IMF conference the following day, he stated: "Sovereign and banking stresses in Europe are the most serious risk now confronting the world economy.... The threat of cascading default, bank runs, and catastrophic risk must be taken off the table, as otherwise it will undermine all other efforts, both within Europe and globally. Decisions as to how to conclusively address the region's problems cannot wait until the crisis gets more severe."
In the preceding week, President Obama himself was talking to heads of state at a mad pace, to get them to adopt quantitative easing measures now. One main target is German Chancellor Angela Merkel, reported the New York Times, whom Obama called on Sept. 19, after the EU finance ministers said no to Geithner in Poland; Obama demanded that she "throw more financial firepower" into the bailout.
And British Chancellor of the Exchequer George Osborne warned in a speech in Washington on Sept. 23: "Patience is running out in the international community. There is a sense from across the leading lights of the Eurozone that time is running out for them.... The Eurozone has six weeks to resolve this political crisis." The deadline is the next G20 meeting to be held in Cannes, France, in early November.
Obama's former top economic advisor, Austan Goolsbee, from the University of Chicago, also complained at an IMF panel on Sept. 22, that the €400 billion of the ESFS is not enough, and accused Europe of making the debt crisis a "morality play" against "financial profligacy in southern Europe."
Why are Wall Street (Geithner) and the City of London (Osborne) so hysterical about saving the euro? Hasn't Brussels always claimed that the Americans were rejoicing over the misfortune of their great financial competitor, the euro? Ah, but the euro system is, and always has been, a creature of the City of London/Inter-Alpha Group-centered financial system, the very system which is collapsing right now, and irreversibly so.
Look at the current epicenter of the crisis, the "French banks." French banks have about €8 trillion assets, which is four times the French GDP. Their stock capital has been cut in half since the beginning of the year, and their exposure to EU peripheral sovereign debt threatened with default, has cut them off from refinancing markets. Since they depend on 60% of their refinancing from those markets, and with the third quarter budget deadline coming at the end of September, a major banking insolvency caused by a liquidity crunch is just around the corner.
But the debt of the French banks is insured in New York and London. Thus, the entire world financial system is going to blow out, and there is nothing that can be done to save it, from within the system.
"I know what to do," Lyndon LaRouche stated, contrary to the world leaders at the G20. "This is a 1923-style collapse on a global scale, and the political leadership of the United States is acting like the dumb Germans from 1923. They have learned nothing from that lesson. Nearly everyone in leading positions today has flinched and backed off from the necessary measures. They are not prepared to defend civilization, because civilization itself depends on acting as I have specified."