Russian Weekly Reports: 'Lyndon LaRouche: "The Fate of The Roman Empire Awaits the USA"'
The July 19-26, 2002 issue of the Russian weekly newspaper Vek ("The Age") contains an interview with Lyndon LaRouche in which the American economist and Presidential candidate addresses the systemic nature of the current world financial crisis, and indicates the way out. The interview is posted in the electronic edition of Vek (www.wek.ru), under the headline, "Lyndon LaRouche: 'The Fate of the Roman Empire Awaits the USA.'" It is the lead article in the economics section of Vek online, appearing on page 6 of the print edition.
LaRouche replied July 10 to written questions from Vek journalists Stanislav Stremidlovsky and Galina Borzikova, all of which dealt with aspects of the global economic collapse that are of burning concern in Russia. LaRouche's concise and pithy replies (full text is below) were published in full. Only the characterization of LaRouche in the subhead, as "the American politician and would-be ideologue of anti-globalism," sounds incongruous next to the statesmanlike content of his answers.
Vek is a widely read publication, founded in 1992. It is known for its attention to economic developments.
LaRouche's Interview With Vek
Q. The American economy is being shaken by scandals around financial abuses by major corporations, like Enron, WorldCom and Xerox. What is behind these scandals? Are they a coincidence, or do they reflect a general tendency?
LaRouche: The corruption is systemic; it is intrinsic to the present U.S. economic system as it has degenerated, at an accelerating rate, over the course of 1966-2002. The change was from an economy based on the principle of a physically productive national economy, toward an imperial consumer society echoing the moral degeneration of Rome from about the time of the close of the Second Punic War. My widely circulated "Triple Curve," illustrating the divergence among U.S.A. financial, monetary, and physical-economic aggregates over the interval 1966 to the present, corresponds to the moving-average of trends to date. The 1955-2002 statistical reports purporting to show U.S. net growth, were all fraudulent. The system has now entered a terminal phase, and is ripe for a total collapse of the system in its present form. Thus, the system has entered a "boundary layer," an interval of accelerating turbulence, like a shock-front. The waves of bankruptcies merely express the bankruptcy which has been prevalent among U.S. firms and real-estate interests during the recent seven years.
Q. British analysts forecast a fall in the exchange rate of the U.S. dollar, which they believe will mean troubles for the world economy. Do you share this opinion?
LaRouche: Yes. The world system is now in the throes of an onrushing general breakdown crisis. All European, Japan, U.S.A., and most other currencies are presently falling at accelerating rates. Which one falls the most during any period is an important, but not decisive matter. Obviously, the U.S. dollar is at the brink of a fall, a collapse which is long overdue. Such a fall of the dollar would be, obviously, an earth-shaking, global political development, whatever other developments with other currencies may occur.
Q. How can an ordinary person protect his savings at the present time? In which currency should one keep accumulated fundsthe dollar, the euro, or is there another way?
LaRouche: Some persons, chiefly within the upper 1% of U.S. family-income brackets, have prospered because they wisely dumped their investments in financial markets to invest in tangible assets. The rest in the upper 10% of family-income brackets behaved almost exactly as the French fools, during the early 18th century, who invested in the John Law financial bubble. Those in lower 80% of U.S. family-income brackets, have suffered increasingly over the entirety of the 1977-2002 interval to date. The imminent collapse of the system will create a condition in which only the intervention of the state could create stability in any economic sector.
Q. Do modern nation-states have the power and the possibility to manage the economy?
LaRouche: In principle, yes. Approximately half of the total investment in a sound economy must occur in the form of state-controlled investments in basic economic infrastructure. These must occur either as direct public investments, against tax revenues, by national, regional, and local governments, or as government-regulated, but privately owned, public utilities of regions and municipalities. These are matters of the tax and expenditure matters of the state as such.
In addition, the present global breakdown-crisis in progress, will compel the abandonment of the control of finances and monetary affairs by privately owned central banks in the Lombard tradition. The national government alone must issue currency, and regulate the private banking system of the nation through a national bank as conceived by U.S. Treasury Secretary Alexander Hamilton.
The rest of the national economy, the so-called private sector, should be based chiefly on protected categories of small- to medium-sized entrepreneurs in agriculture, manufacturing and related functions. Such enterprises, on which the larger enterprises depend for partners, require protection against "free market" excesses.
A nation also needs an adopted sense of economic mission, around which economic policy should be shaped.
Q. One current opinion is that the world financial system has entered a period of hyperinflation. If this is the case, when may it be expected to come to an end?
LaRouche: We are presently in the end-phase of existence of the present G-7 system; we are presently in an accelerating hyperinflation. The exact date of collapse is uncertain, but it will be an early one.
Q. Is it possible to carry out a monetary reform in the United States? If this happens, at whose expense will it be?
LaRouche: Yes. To be successful, the Franklin Roosevelt precedent must be followed. The interest served must be nothing but the general welfare, as Roosevelt recognized this.
Q. In whose hands is the world's gold today?
LaRouche: The gold market is presently controlled by banking interests, who are orchestrating the gold-trading market to keep the price artificially very low. In a breakdown, the price will zoom to perhaps much more than double the presently prevailing price. I propose to restore the 1945-1971 fixed-exchange-rate system using gold as a reserve. The price should be a fair current price for produced gold.
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