This editorial appears in the July 15, 2016 issue of
Executive Intelligence Review.
EDITORIAL
Deutsche Bank Must Be Saved,
For the Sake of World Peace!
Statement issued by Helga Zepp-LaRouche,
Chairwoman of the German Civil Rights Movement Solidarity (BüSo), on July 12,
2016.
The imminent threat of the bankruptcy of
Deutsche Bank is certainly not the only potential trigger for a new systemic
crisis of the trans-Atlantic banking system, which would be orders of magnitude
more deadly than the 2008 crisis, but it does offer a unique lever to prevent a
collapse into chaos.
Behind the SOS launched by the chief economist of Deutsche
Bank, David Folkerts-Landau, for an EU program of €150 billion to recapitalize
the banks, lurks the danger openly discussed in international financial media,
that the entire European banking system is de facto insolvent, and is sitting on
a mountain of at least €2 trillion of non-performing loans. Deutsche Bank is the
international bank which, with a total of €55 trillions of outstanding
derivative contracts and a leverage factor of 40:1, even outdoes Lehman Brothers
at the time of its collapse, and therefore represents the most dangerous
Achilles heel of the system. Half of Deutsche Bank’s balance sheet, which has
plummeted 48% in the past 12 months and is down to only 8% of its peak value, is
made up of level-3 derivatives, i.e., derivatives amounting to circa €800
billion without a market valuation.
It probably came as a surprise to many that Lyndon LaRouche called
today for Deutsche Bank to be saved through a one-time increase in its capital
base, because of the systemic implications of its threatened bankruptcy. Neither
the German government with its GDP of €4 trillion, nor the EU with a GDP of €18
trillion, would be able to control the domino effect of a disorderly
bankruptcy.
The one-time capital injection, LaRouche explained, is only an
emergency measure which needs to be followed by an immediate reorientation of
the bank, back to its tradition which prevailed until 1989 under the leadership
of Alfred Herrhausen. To actually oversee such an operation, a management
committee must be set up to verify the legitimacy and the implications of the
obligations, and finalize its work within a given timeframe. That committee
should also draw up a new business plan, based on Herrhausen’s banking
philosophy and exclusively oriented to the interests of the real economy of
Germany.
Alfred Herrhausen was the last actually creative, moral industrial
banker of Germany. He defended, among other things, the cancellation of the
unpayable debt of developing countries, as well as the long-term credit
financing of well-defined development projects. In December 1989, he planned to
present in New York a plan for the industrialization of Poland, which was
consistent with the criteria used by the Kreditanstalt für Wiederaufbau
(KfW) for the post-1945 reconstruction of Germany, and would have offered a
completely different perspective than the so-called “reform policy,” or shock
therapy, of Jeffrey Sachs.
Herrhausen was assassinated on November 30, 1989 by the
“Third Generation of the Red Army Fraction,” whose existence has yet to be
proven to this day. It happened only two days after Chancellor Helmut Kohl, who
counted Herrhausen among his closest advisors, had presented his ten-point
program for gradually overcoming the division of Germany [between East and
West]. The cui bono of the terrorist attack remains one of
the most fateful issues in the modern history of Germany, and one which urgently
needs to be clarified.
The fact is that Herrhausen’s successors introduced a fundamental
paradigm change in the bank’s philosophy, which brought Deutsche Bank into the
wild world of profit maximization at all costs, and also into countless
unpunishable and punishable legal entanglements, which those responsible have
avoided until now, mainly because of the “too big to fail” premises.
The transformation of Deutsche Bank into a global investment bank
with the highest derivatives exposure, combined with the simultaneous credit
crunch for German small and medium-sized enterprises, is symptomatic of the
folly which has led to the current catastrophe.
We must now act with resolution, but not in the way
Folkerts-Landau proposes, that is, not with more of the same medicine, which
would certainly kill the patient. Although it has mainly operated over the past
years out of London and New York, Deutsche Bank is too important for the German
economy, and therefore for Germany, and ultimately for the fate of all of
Europe. Its reorganization in the spirit of Alfred Herrhausen is not only the
key to overcoming the banking crisis, but also for averting the acute danger of
war.
Herrhausen’s assassination has gone unpunished. However, there
exists “the dreaded might, that judges what is hid from sight,” which is the
subject of Friedrich Schiller’s poem “Die Kraniche des Ibykus.” The Erinyes have
begun their dreadful dance.
It is now incumbent upon all those who, in addition to the family,
have suffered from the assassination of Herrhausen, upon the representatives of
the Mittelstand, of the German economy, and the institutional representatives of
the German population, to honor his legacy and to seize the tremendous
opportunity which is now offered to save Germany.
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