Panicked Flight Into Corporatism As System Breaks Down
Oct. 21, 2008 (EIRNS)This release was issued today by the Lyndon LaRouche Political Action Committee (LPAC).
As the global financial system breaks apart, the bankers, their regulators and the governments are also breaking down, psychologically, and lashing out with statements and actions which have no substance, Lyndon LaRouche warned today. Unable to come to grips with reality, they are rushing headlong down the path of Weimar Germany-style hyperinflation and Mussolini-style corporatist fascism.
The dominant themes from this dysfunctional crowd of bozos are escalating bailouts and global financial dictatorship, as they push ever crazier schemes in a desperate effort to save what cannot be saved. What they will get is not success, but deadly hyperinflation, and the collapse into a dark age, a process which has already begun.
Typical of this insanity is the Fed's latest "bailout of the day" scheme announced today, to pump some $540 billion into the money-market mutual funds via a new Money Market Investor Funding Facility, or MMIFF, which will lend the funds to five private special purpose vehicles, or PSPVs, to be managed by J.P. Morgan Chase. These PSPVs, which will also raise funds by selling asset-backed commercial paper, will act as a secondary market to buy assets from money market mutual funds and other money-market players. Less than a month ago, on Sept. 29, the U.S. Treasury announced a Temporary Guarantee Program for Money Market Funds, with funds provided via the $50 billion Exchange Stabilization Fund; today's action creates a fund more than ten times larger, reflecting the speed with which the system is disintegrating. Some $500 billion has been withdrawn from money market funds since August.
"Isn't this hyperinflation?" Lyndon LaRouche asked. "This is actually Weimar Germany-style hyperinflation."
Meanwhile, most of the Fed money being pumped into the financial system is going not to additional lending, but to build up war-chests for takeovers and to cover known but as yet unreported losses. The big banks are planning to take over the smaller banks in droves, using taxpayer money to fund a dangerous concentration of the banking system into a small number of giant banks. Today's New York Times quotes an unnamed Treasury official as explicitly admitting that "Treasury doesn't want to prop up weak banks. One purpose of this plan is to drive consolidation."
Of the $125 billion to be provided to the top banks in the first round of equity injections, $5 billion is going to help fund Wells Fargo's acquisition of Wachovia and Bank of America is getting $5 billion to aid its takeover of Merrill Lynch. All of this conveniently overlooks the fact that the biggest banks are the most bankrupt of all, and yet the smaller banks will be fed to them, in a desperate attempt to save the zombie giants.
"You're talking about corporatism," LaRouche responded, "and we should call it that. This is Mussolini; this is fascism. It's what is called corporatism; this is fascism."
At the same time the controllers of the Anglo-Dutch Liberal system are pushing for a system of global banking regulation, to replace national control. There is discussion of using the IMF for this purpose, but in this case the devil is not in the details, but in the intent, which is to create a global bankers' dictatorship run by the forces which control the British Empire, with the intent of destroying the nation-state system, including the United States.
"But what happens if China, India and Russia and some others don't join?" LaRouche asked. "I can almost guarantee that would be the case," he added.
"We're seeing a breakdown of the system which is now a psychological breakdown," LaRouche summed it up." A lack of confidence, lashing out with wild meaningless desperation, with no substance addressing the actual situation.
"These idiots are in a panicked flight forward, with no idea what they're doing, no coherence, and are turning toward corporatism," LaRouche warned. "This is corporatism, Mussolini-style fascism, and the government is funding it. People should study the history of Mussolini, how his corporatist system was created and how it functioned."
"What are they going to do? Is the Mussolini government going to control Obama by doses of castor oil?" he asked.