The ongoing collapse of the massive junk bond bubble marks the beginning of the crash of the entire western financial system, which is based on the largest speculative bubble in history, worthless derivative gambling debts, and trillions of dollars of "quantitative easing" funny money. The following is the editorial from Tuesday's EIR Daily Alert Service.
The Financial Crash Is On; Only a Trans-Atlantic Policy Revolution Can Avert Disaster
Dec. 14 (EIRNS)—The entire trans-Atlantic London-Wall Street financial system is on the very edge of total collapse. It could happen any hour, any day. The critical signs are already there, for anyone who is not willfully blind. Four Italian banks have gone under in the past week, with the European Union imposing bail-in looting of depositor’s funds. Puerto Rico has already announced it will likely default on a $1 billion debt payment by Jan. 1, the front end of a $72 billion debt bubble; and vulture funds are fully exposed. Already, a number of hedge funds, exposed to the Puerto Rican debt and to the shale oil and gas sector bankruptcies, have collapsed. These are merely harbingers of a total breakdown of the trans-Atlantic system that is imminent.
The crisis is compounded by the imminent danger of world war, triggered by London and Wall Street desperation over their imminent bankruptcy. NATO and the Obama Administration have done everything possible to provoke Russia, from the eastward expansion of NATO to the deployment of a unilateral ballistic missile defense system on the borders of Russia, to the modernization of tactical nuclear weapons to soon be deployed throughout Eastern Europe. Russian Armed Forces Chief of the General Staff Gen. Valeriy Gerasimov briefed foreign military attachés in Moscow this week on the added threat of NATO’s plans for asymmetric warfare aimed at regime change in Moscow. Under President Vladimir Putin’s clear leadership, Russia will not capitulate to the threats from the likes of Obama and Cameron. The danger of a thermonuclear war of extinction is greater today than at the height of the Cold War at the time of the Cuban Missile Crisis. It is driven, purely, by the bankruptcy of Wall Street and London.
EIR Founding Editor Lyndon LaRouche has made clear that the only option at this late moment is for Republicans and Democrats to abandon partisan madness and come together around preemptive actions to avert the total blowout and the chaos that will follow, if there is no action now. This requires a total break from the policies associated with President Obama, Hillary Clinton and Donald Trump. This means a genuine revival of the policies adopted by President Franklin D. Roosevelt in his first hundred days in the White House. Yes, Glass-Steagall is vital, and beyond that, a massive infusion of Federal credit, as FDR did through the Reconstruction Finance Corporation, is urgently needed, to create jobs, build infrastructure, and trigger a boost in the productive powers of labor, which have been wiped out through four decades of insane monetarist policy.
Lyndon LaRouche, many months ago, spelled out the four cardinal laws for a genuine physical economic recovery:
- Reinstate Glass-Steagall, fully separating commercial banking from the gambling activities of investment banks, hedge funds, and proprietary trading desks that gamble with depositors’ money with no concern for the collapse of the productive economy. Such vital action means the immediate wiping out of Wall Street’s debt, which is unpayable and illegitimate in the first place. Glass-Steagall wipes out the political power of the Wall Street/London bankers cartel.
- Launch a massive infusion of Federal credits, through that restored commercial banking system, into the real economy. This Hamiltonian solution is the only viable option today. By restoring Alexander Hamilton’s concept of national banking and Federal credit, a fundamental change in direction can be quickly kick-started. It may take years to fully realize the shift, but it must begin immediately.
- Concentrate on those areas of investment that most increase the energy-flux density of the economy as a whole, including infrastructure, scientific and technological R&D. This means trillions of dollars in capital investment, to build a 21st-century infrastructure grid and train a new generation of currently unskilled youth to become the highly skilled workforce to revive a modern system of physical production.
- Pursue areas of frontier scientific exploration, keying off from the work of the great 20th-century Russian scientist V.I. Vernadsky in the field of bio-chemistry and the noösphere. This must include an international crash program to achieve commercial fusion power, an essential feature of the next phase of space exploration, as well as solving the energy and water requirements of a world facing a breakdown crisis of Dark Age proportions.
In Europe, similar bold actions are required, starting with the dissolving of the European Union, which has become nothing more than a vehicle for imposing outright fascist austerity policies, which have now reached levels of genocide, on the formerly sovereign nations. In Italy, when four banks recently went under, the European Union imposed bail-in looting of depositors’ savings. There has already been one suicide, triggered by this EU-led assault. Similar genocidal conditions have already been imposed on Greece and Cyprus, and Spain, Portugal and Italy all face existential crises, under the EU tyranny.
This crisis is here and now. These urgent actions can and must be initiated in the immediate days ahead—before the trans-Atlantic crash triggers the kind of chaos and genocide that can rapidly become unstoppable. A major mobilization of leading institutions and courageous citizens on both sides of the Atlantic is required to force through the urgently needed changes in policy. Mankind has been endowed with the unique capacity to create a future, in which the common aims of mankind are pursued through cooperation among leading nations, grouped around projects like the World Land-Bridge. The question now on the table is: Will citizens and leaders demonstrate the moral fitness to survive by breaking with past trends and adopting a truly human course of action? The very survival of mankind is on the table, awaiting their decision.