Mr. President: What Must Be Done Before Another Bank Crash
A statue on a spire of the Duomo Cathedral in
Milan, Italy overlooks the city's downtown and financial district. Photo (Stefano
Stabile / Wikimedia Commons / CC BY-SA 3.0)
The warning of another devastating Europe-U.S.
banking crash before the end of this year, raised by EIR in
May and by a meeting of European Parliamentarians in early July, is becoming an
emergency danger. It requires a mobilization of actions to stop it.
The Italian banking
system, which has just suffered three major bank bailouts combined with "bail-ins"
of unlucky savers, is trying to raise capital it cannot raise to prevent a
potential collapse which could take Germany's banks down with it. U.S.-based
banks have $2 trillion of exposure to that looming collapse of bad debt and
worse derivatives, centered in London.
Those Wall Street banks,
unpunished and bailed out since 2008, have rapidly built up bubbles of
corporate debt and commercial real estate derivatives larger than the
mortgage-debt bubbles which blew out back then, and default rates and
bankruptcy rates are now rising sharply in those bubbles. A scared Federal
Reserve has not raised interest rates enough, yet, to trigger the crash that
the IMF, for example, is warning of but by post poning the crash trigger, it is
only making it more economically devastating when it comes.
President Trump's policy
of cooperation with Russia and China for peace and mutual benefit is right,
and must be defended against all the attacks on him for it. But it will not
survive the chaos of another trans-Atlantic financial crash, and he does not
have the American economic revival plans he said he had to head such a crash
off.
Action must be mobilized
rapidly, ultimately by the American people and their organizations.
First, the
Glass-Steagall separation of commercial from investment banking must be
reinstated, with beginning effect immediately to break up Wall Street's
gigantic speculative casinos.
Since the Glass-Steagall
Act began to be torn down 50 years ago, Wall Street's banks and funds with
their most dangerous operations always in London! have been a succubus on
the economy which can't grow without financial crashes, and since the 2008
crash can't grow at all. The Glass-Steagall breakup must start now to prevent
the threatening new bank crash.
Then, credit must be issued from a national
credit institution (see Editor Lyndon LaRouche's "The Lost Art of the
Capital Budget" republished in EIR for July 21) credit soon in the trillions for 20-25-year periods at low interest rates.
The purpose is high-technology investments in
new, more productive 'infrastructure' to replace the
crumbling sinews of the U.S. economy, raise productivity and create productive
employment again. It cannot and will not be done by private investment.
President Trump must learn this, and the Wall Streeters around him, like the
Treasury Secretary, have to go.
A great expansion of the
United States space exploration program will drive this revival, as the
President had stated in a television message to the American people in March.
But facing this
threatening financial crash and meeting this emergency with action now
depends primarily on the American people effectively demanding these actions,
as if it were the last weeks of a Presidential political campaign.
Then, the President's
intent to cooperate with China and Russia will become a tremendous benefit,
especially from the great "win-win" building project a Beijing's
New Silk Road across Eurasia and Africa. Let such high-speed rail corridors,
for example, be built across North America. The United States is potentially a
full partner in the Belt and Road Initiative.
First Wall Street, in
both the Congress and the Administration, must be beaten and broken up to prevent it from permanently destroying what remains of American industrial
economy and scientific capability.
https://larouchepac.com/20170725/what-must-be-done-another-bank-crash-hits
