February 13, 2010 (LPAC)– The fast-unravelling EU crisis is not a crisis of government budgets. It’s the bank exposure, not government budgets; the budgets are only the excuse to impose fascism. “Absolutely,” replied Lyndon LaRouche. “The banks are bankrupt. Exactly!— because they own assets which are worthless.”
European banks’ exposure to public and private debts of Portugal, Ireland, Greece and Spain is estimated at $2.1 trillion, with Spanish debt by far the largest part. But the bigger problem is their derivatives exposure, at least an order of magnitude larger.
EU conditions on Greece will include imposing a law under the Lisbon Treaty, that Greece must provide reliable economic statistics. “Who’s going to make sure they’re reliable?”, LaRouche asked. “Because if they reported reliable statistics, it’ll sink the whole system.” Other conditionalities include Greece’s establishing a contingency fund for “budget emergencies,” amounting to 10% of current public-sector expenditures. LaRouche’s diagnosis: “Let’s just call this masturbation. It’s pure masturbation. There’s no reality to it whatsoever; it’s a compulsion to lie. Everybody is now put under a compulsion to lie. The system is finished! It’s over!”
As British forces have tried to put forward the so-called BRIC alliance of Brazil, Russia, India and China as an alternative to LaRouche’s Four-Power Initiative, no less an authority than Banco Santander’s chief economist for Brazil, assured the public that the Eurozone crisis would not affect Brazil. LaRouche laughed uproariously at this. This expert went on that Greek debt is probably owned by investment and pension funds, so banks won’t be affected. “Banks won’t be affected?”, laughed LaRouche. “These guys are really idiots, nuts! Brazil is not affected, and there will be no contagion,— they’ll keep the bank breakdown inside Brazil!”
In a related development, the Brazilian government is receiving all international flights by offering free condoms to the passengers, to “prevent contagion” during the Carnival.
“It’s hilarious,” LaRouche summed up. “It’s obvious that mass insanity has taken over the financial markets. That’s what the truth is. Like this thing from Brazil: nothing bad can happen to us, because we’re too big to collapse. We’re Brazil! You’re wrong, buddy: you’re going to have a bigger collapse, because you’re big.
“This is the end-game” he said. “The world is in an end-game.
“I know the truth,” he added. “Others don’t wish to know the truth. It’s like they’re putting their hands in front of their eyes.
“The whole thing is coming down,” LaRouche said. “There’s no way. And the only way you can deal with it, is a general wipe-out, off the books, by a Glass-Steagall type of standard. Without that measure, there’s no chance of civilization surviving this crisis. So, therefore, there has to be a global Glass-Steagall type wipeout of these fictitious assets. What is called the claims, is largely fictitious assets, and what you must do, is wipe it out, as Roosevelt did with the Glass-Steagall Act. It has to be a global one, and it means a lot of speculative banks will go under. So what! We’re going to save the economy; we can’t save all these banks. We can only save the ones that can pass the Glass-Steagall standard. All others are subject to re-assessment, shall we say.
“There is no solution,” LaRouche continued. “It’s a general breakdown crisis of the entire international system, and there’s no way that this is going to be miraculously cured, nor is anybody going to be able to save a lot of these worthless assets. What’s needed is a global Glass-Steagall cleanout of the entire international financial system. Then we can start all over again, and we’ll have all these happy, bankrupt ex-bankers, who now finally are able to take a lo-o-ong rest, from the strain of their careers. That’s simply the reality. The reality is, that there has to be a global Glass-Steagalll, which means that there’ll be nothing left of places like Wall Street. And people have to get used to that: We don’t need Wall Street. It’s going to have to go, because there’s no way you can carry out a Glass-Stegall type of reform at this time, which is the only way the economies of the world can survive, without wiping out financial centers such as Wall Street. The effect will have to be that. That, regrettably for some people, is the price we have to pay for a recovery. And that’s the point to make. Watch’em suffer! Let’em squirm! Squirm, worm!
“It’s a breakdown crisis,” he concluded, “and they’re all lying their heads off. And they’re silly, on top of everything else!”