Fed should increase theinterest rate to 4% for normal banking business

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Helga Zepp-LaRouche keynoted a private EIR seminar in Wiesbaden, Germany on July 26. Here is an editedtranscript of her remarks. Due to audio problems, it beginsmid-sentence. Subheads have been added.
[ PDF version of this article ]
... ever since August, we have the collapse of the banking system,we have a credit crunch, interbank lending has almost ceasedcompletely, because every banking, every major investment bankknows that they're sitting on hundreds of billions of unsellablepaper; unsellable, because these are structured investmentvehicles, and mortgage-backed assets, and all kinds of otherthings, which if they would be sold, everybody would realize theymay be worth 5 cents on the dollar. And then the whole thing wouldbe devalued, and the banks would have to declare bankruptcy. So,since that time, any interbank lending has come to an end, and thecentral banks so far have only decided to pour liquidity, alreadywell over $1 trillion—actually much more—and that hasjust, from September [2007] onward, fueled the hyperinflationaryprocess. You could see it from September onward in the explosion offood prices, of energy prices, of commodity prices.
And naturally, as Lyndon LaRouche has said many times, the problemwith these bubbles, is they're like a slime-mold, as are theirowners. You know, you had the new market bubble, which exploded in2000-01, which eliminated $16 trillion in terms of assets. At thatpoint, [Fed chairman Alan] Greenspan lowered the interest rate inthe United States almost to zero, which led to the mortgage andreal estate bubble. And now that that bubble is collapsing, whichwas absolutely foreseeable, because if you give a mortgage topeople who have no capital to pay for it, or no wages to supportit, the explosion had to come.
Now, with the collapse of the real estate and mortgage bubble, thespeculative money went into food: into biofuel speculation, intoother food speculation on the Chicago Board of Trade, intocommodities, into energy, oil, and other things, and this all is abubble. And there is nothing in this universe which will make itpossible to come to a normal situation.
This view, by the way, is shared by some extremely high-rankingpeople in leading positions in the world financial system, whoprivately tell you the system is bankrupt, and the only thing whichwould save it, would be a complete nationalization of thebanks—which in part they have started to do. The Mother ofFree Trade, Great Britain, already nationalized Northern Rock andsimilar things, but this thing is completely untenable.
There is a report out, that there are 100 commercial banks in theU.S. which are bankrupt, but for national security reasons, thislist has not been published, because if such a list would bepublished, naturally, that would be the end of the U.S. system. Buttoday, two more banks collapsed: one, the Bank of Nevada, and thenanother bank. So this is the seventh bank in a row, which closedafter IndyMac. And you saw the lines of people who were in a run onthe bank!
Now, I'm not predicting that this will happen, but the thing is sooverextended, that a run could happen almost any moment around theworld. And that would be, indeed the end of the system. Because ifpeople would get the idea that their money is not safe in the bankany more, and everybody would be in line, like it happened withNorthern Rock, with Countrywide, and now with IndyMac, then thissystem would be finished right this minute. Weimar Germany Redux
Now, we do not have a cyclical crisis; we have, what was discussedin the early 20th Century by the German Social Democracy, as ageneral breakdown crisis of the system. And, any attempt to prolongthat by putting in liquidity is just going to lead tohyperinflation worldwide, like happened in Weimar, in 1923. Youremember that, after the Versailles Treaty imposed the payment ofthe war debt on Germany, plus their own debt which they hadaccumulated from the war period, was simply too much. So, theReichsbank just printed money. And this, then, at a certain point,in March 1923, started to show in prices, and by November the thinghad become absurd: You had up to 1 trillion reichsmarks for a poundof bread, and then the whole thing came to a screeching halt,because it became absurd.
Now, as [Fed chairman Ben] Bernanke, who is known as "Mr.Helicopter Money," has said, before they ever let the systemgo bankrupt, they will fly with helicopters over large cities, andjust pour banking notes out, to prevent a collapse, and that'sexactly what they're doing right now. And Bernanke has also said,the good thing is, you don't need to physically print money anymore, because you have the beautiful method of electronic creditcreation, which gives you a hundred ways to create credit thesedays.
Now, obviously, this is the problem, and it is an internationalphenomenon, because, for example if you look at China, China is, toa very large extent, depending on the U.S. import market; becauseof globalization, the outsourcing, a lot of capital, a lot ofactivity has been geared towards cheap production, in China, forthe market. This market is now falling into a depression which ishitting Chinese export values very badly, but it also devalues $1trillion foreign reserves which China has in dollar assets. And alot of these are U.S. Treasuries, but a lot of them are also bondsfrom the Freddie Mac/Fannie Mae papers; so the same goes for manyother Asian countries. There are 35 countries which are pegged tothe dollar in one way or another, so that this hyperinflationarymove by the Federal Reserve, by trying to resolve the problem tojust pour liquidity, is simply affecting the whole system.
Now, as you could see, the G8 meeting which just took place inJapan, utterly failed to address the systemic meltdown of thesystem. It was a complete failure, that did not discuss anything.And in part it was noted, especially by the Russians, that thefailure to involve the so-called BRIC countries—Brazil,Russia, India, China—plus other nations in a solution,naturally was one of the reasons.
Now the big question will be: Will it be possible, one way oranother, to get a combination of governments together, which will,in time, impose the kind of measures to remedy this situation? Assault on National Sovereignty
And that brings me to the second problem, that is Europe: Becausesome people here know that we have opposed the introduction of theeuro, we have opposed the Maastricht agreement which was imposed onGermany after the unification in '89, and it was a geostrategicpolicy by Margaret Thatcher, by François Mitterrand, and inpart, in a covert way, also by George Bush, Sr. But it reallyimposed a dictatorship of the Brussels bureaucracy and the EuropeanCentral Bank, where one can say many criticisms, but the mostimportant criticism for sure, is that it deactivated thesovereignty of the member countries, and thereby making itimpossible for them to do any kind of intervention into theeconomic process.
For example, the so-called Stability Pact simply means thatgovernments are forbidden to make state credit interventions of thekind Franklin D. Roosevelt did with the New Deal, and it simply hasmade these governments completely impotent to do anything about it.
Now, with the new effort to impose the so-called Lisbon Treaty,which fortunately, now, is, at least slowed down, because of the"No" of the Irish in the referendum, and the statementsby the Presidents of Poland and the Czech Republic. But , let me state this very clearly: We are still in a mobilization toget this treaty completely off the table, because it is a cold coupfrom above. It's a complete scandal, because the "No" ofthe people in France and Holland in 2005—we have here, acouple of people who were very helpful in bringing this resultabout in France—which basically meant the treaty was a deadletter. But then, through the completely undemocratic measure ofthe convention, in which a group of private individuals decidedthey would re-write it a little bit and give it a different name,namely, not calling it a "constitution" any more, but tocall it a "treaty," they decided on Dec. 13, at theLisbon Summit of the European Union, in a stealth way, to simplyram it through without public debate, without discussion.
And I completely agree with some of the professors from Germany,and especially Austria, who have called it a "state coup fromabove." The effort to impose an oligarchical dictatorship,where, if you look at the different elements of this treaty, oncethis treaty is signed, it could be changed by the European Counciland the European Commission, into anything they wanted thereafter. And several people, including Prof. [KarlAlbrecht] Schachtschneider, therefore have called this the new Ermächtigungsgesetz [Enabling Act], with reference to what happened in the ThirdReich. And I fully agree with that, because there would beabsolutely no more democratic control by the national parliaments,once this treaty would be signed.
It also would mean to turn Europe into an imperial power, withmilitary interventions in the so-called developing countries, withthe pretexts of "humanitarian concerns": Countries whichhave already been mentioned are Burma, Zimbabwe, Sudan, and others.And it is very clear that the international financial oligarchywhich has its own models of how to get out of this financialcrisis, would like to turn Europe into a fascist dictatorship, andthe United States, as well. LaRouche's Three Steps
So therefore, we have a couple of really serious problems. One isthat there are people who know that this is very bad, but they'reeither too corrupt or too stupid, or too cowardly to do anythingabout it, and therefore, in Europe, we are really in a badposition. Therefore, when Lyndon LaRouche, in his recent webcast[July 22], reiterated three measures, which absolutely have to betaken if the world is supposed to come out of this crisis, it takesthis problem of Europe into account. And let me just repeat what hesaid.
He said: There need to be three measures: first ,a legislation, which he proposed last August, when he said thatthe evictions of millions of people in the United States followingthe mortgage and real estate collapse had to be prevented; andtherefore he called for the Homeowners and Bank Protection Act,which essentially said that all people should stay in their housesand apartments, and that state institutions should take overfinding out what would be an appropriate rent; but people have tostay in their homes; and secondly, that the banks, according to theAmerican Constitution, have to be taken under state protection;because if the banking system collapses, then naturally the economycollapses as well.
Now, the Congress in the United States is also extremely corrupt,because they took a lot of money from George Soros, and therefore,Nancy Pelosi and Harry Reid blocked an efficient action by theCongress which would have been the normal thing. But we decided totake this to the grassroots, and we have now passed this resolutionin over 100 cities in the United States, where the city councilsendorsed it. We have it introduced in many state legislatures, andthis process is going on full steam.
Then, the second measure LaRouche said was necessary, is to introduce, in theUnited States, a two-tier credit system. Because the lowering bythe Federal Reserve of the interest rate, to presently 2%, when theBank of England has 5% and the European Central Bank has 4.25%,naturally means that you have a lot of capital flowing out of thedollar right now. And if the dollar collapses, people should not behappy! I mean, there's a lot of stupidity sometimes in somequarters, who say, "Oh, we hate the United States so much,it's good, let them collapse, let them crash against thewall." But I can only say that the consequences of this wouldbe a global— are already a global crisis, and it would be much worse.
So therefore, LaRouche has said that the Fed should increase theinterest rate to 4% for normal banking business, but to have alower interest of 1-2% for crucial investments in infrastructureand other productive enterprises in the United States. And alreadynow, several former members of the board of the Federal Reservehave come out and said something to this effect. Because anybodywho looks at the situation, sees that something urgently of thistype has to be done, even if this is only a stop-gap measure, andnot the final solution to the problem. But it somehow stops thebleeding of the ulcer.
Now, the third measure, and this is obviously, the most important, is that weneed to have a New Bretton Woods system: We need to have aconference on the level of heads of state, which basically declaresthis present system to be bankrupt, and establishes a new system.Now, LaRouche has said for a long time, that the only way thiscould succeed, given the power of the international financialinstitutions, the hedge funds which are sitting primarily inLondon, but also in other places like New York, Frankfurt, andelsewhere—that only if you take the four most powerfulcountries in the world, would they have enough power to oppose thisfinancial oligarchy: And that would be a changed United States,plus Russia, China, and India. And then individual nation-statesshould group themselves around these four countries, not as aEuropean Union, but as France, Austria, Germany, Italy, and othernations, because it does not function with the European Unionstructure.
Now, this is, some people may say, a far-fetched, long-shot option,but it is not impossible. Call To Double World Food Output
Let me first mention one other thing: that while all of this isgoing on, this breakdown crisis has an effect on the real world.You know, this is not something which only concerns Europe and theUnited States, but the effects on the developing countries arealready murderous. Jacques Diouf, who is the director of the FAO[Food and Agriculture Organization], in June 2007, warned thatthere were hunger catastrophes coming in many countries of thedeveloping sector. There was not even a mention of it, in theinternational media. Then, when, in October, he reiterated awarning, and said that there are hunger riots coming—which,again, was not reported, and nothing was done about it—thesehunger riots took place until late April, when the internationalmedia, for the first time, chose to report it.
In December, last year, Diouf had said that he urgently neededEu10.9 million—really peanuts—to buy seed for the poorestfarmers of the developing countries; and in April, he said he wasnot able to raise that money, which led him to the conclusion thatthere was no intention by the rich countries to help the poor. Andby that time, it was also too late, because the time for the Springsowing had already passed, and therefore, this report came justbefore the annual meeting of the IMF and World Bank.
At that point, I issued a call: I said that the only response onecan have to this, is to double world food production. Now how doyou double the world's food production? First of all, the mostimmediate thing would be to stop biofuels, using food for biofuels;because I share the view of people like Jean Ziegler [UN SpecialRapporteur on the Right to Food, 2000-08] and others, that, to usefood for biofuels, when you have world hunger, is a crime againsthumanity, and it's genocide.
Now, it is all the more incredible that by the end of April, theWorld Bank issued a report which it kept secret, that 75% of thefood price inflation is coming from biofuels. They did not publishthis. I issued this call to double food production. And, apart frombiofuels, you would have to have a complete abolishing of freetrade, you would have to go to food security instead; you wouldhave to go through protective measures by individual countries, tohave their food production close to where it is being consumed; andnaturally, you have to really remedy what has been done by GATT andthe WTO, by lowering the food capacity in the last decades; and tomassively increase food production, especially in the developingcountries, by building infrastructure, by building ports, roads,railways, water, new fresh water, through nuclear energy, throughdesalination, irrigation, food processing, food irradiation, andsimply take a real, serious development program, which is on theagenda anyway, if mankind is supposed to survive.
So, we took this call, and we collected worldwide quite a number ofsignatures, in the hundreds, from important institutions. Forexample, the Agriculture Committee of the Argentine Parliamentendorsed it; hundreds of elected officials in the United States, inLatin America; there were many politicians and officials whoendorsed it. So it is still on the table. The idea was, with thismobilization, to change the agenda of the FAO conference at thebeginning of June.
Now, this FAO conference, also, was an utter failure, because itdid not produce any result worth mentioning. But it did one thing:It clarified the fronts, by showing that there are twofactions—one is the free-trade faction, the people who arepushing the WTO, the Doha Round, to eliminate all trade barriersand give complete freedom to the speculators; in complete contrastto those people who are talking about food security, about thecommon good of the people, about protective tariffs. So that isessentially what clashed.
The only good thing one can say about Europe, is that there arestill remnants of the Adenauer/de Gaulle tradition in the EuropeanCommon Agricultural Policy, which is a protectionist policy. It'snot perfect, but it's its remnants. And the French AgricultureMinister Michel Barnier, Italian Agriculture Minister Luca Zaia,and even the German Agriculture Minister Horst Seehofer, arebasically protecting and defending this, so that the presentnegotiations in Geneva, of the so-called Doha Round are probablybeing closed down by the beginning of the week, forever.
And this has also led to a very useful clash between FrenchPresident Nicolas Sarkozy and the EU Trade Commissioner PeterMandelson. Because Sarkozy said at a certain point, that there's noway France will accept this, and then Mandelson said, "This isan outrage; I'm representing the European Union. Sarkozy hasnothing to say, this is not a measure of national government."So, I only hope that this will enlighten the national impulse ofSarkozy and some other French people.
Therefore, you have a very critical situation. The U.S. Elections
Now let us look at what are the options, in this environment, tocome to the Four Power agreement that LaRouche has suggested.
First, the situation in the United States: Because we have inEurope, a media, which is more controlled than during the period ofGoebbels (if people have questions about that, I'm happy to giveyou many examples as a proof), therefore, most people do not havemuch knowledge about the election situation in the United States.The reality is, that the entire game plan of the U.S. election wasto build up Obama, who is a completely shallow person, who has onlyempty words, and if you look at the content of what he just said inBerlin in his speech, it is essentially the same thing as Bush issaying: "More war against terrorism; more troops toAfghanistan."
But, thankfully, Obama, before he left the United States, let alittle cat out of the bag, by saying he wants to reduce the taxburden of Americans for supporting U.S. troops in Afghanistan,therefore he would demand that the Europeans send more troops! Buthe wants to have a strengthening of the European Union, so theEuropean Union can "reach out," and he mentioned Darfurand other such problems.
But the point is, Obama is not what he appears to be. He's not thisHawaii-born, young, attractive man who has a Waschbrettbauchen ["six-pack abs"]—he goes to the Adlon fitnesscenter to prove it, and have pictures taken! No, the problem is,the only purpose of the Obama campaign was to ruin the election ofHillary Clinton. Now, people have views about Bill and HillaryClinton, but I can assure you, that we know, from being veryclosely involved in the situation, that Hillary Clinton emerged inthe election campaign, especially since the primary in NewHampshire, as somebody who is really taking on an FDR profile. Shehas made many speeches, saying that she would take the interest ofthe "forgotten men and women," the "invisible"Americans"—the people who have three jobs and stillcannot afford an education for their children. And she definitelyis the only one who has any knowledge about economics.
She had the most popular votes, she had more votes than any otherPresidential primary candidate, ever, in the United States—18million—and she has more delegates; nevertheless, the media,after each primary victory would say, "Oh, she almostlost!" Even when she had landslide victories in some cases,they still painted it as "She's a complete loser."
The pressure became, at the beginning of June, somassive—because also the head of the Democratic Party, HowardDean and Nancy Pelosi—they were completely against her; andGeorge Soros, who is famous for many "humanitariancauses" around the world, poured money in, with hisorganization MoveOn, to buy delegates. Unfortunately, manyAfrican-Americans need money for their social programs, and usingsomething like the faith-based initiative, money was given to thesepeople to come out for Obama.
Hillary, under these conditions, suspended her campaign, but shedid not end it—and she did not release her delegates.
In the meantime, a sobering-up has occurred among the base ofObama, because, contrary to his big words of"change"—and "change," which, in English,means also the little coins you get back when you pay, so he'sreally the "candidate of change"—are disappointed,because he kicked out many African-Americans from leading positionsof the party, and replaced them with party hacks, with party apparatchiki . Now, there is a real move away from Obama. And many people whovoted for Hillary, said they will absolutely not vote for Obama.
And therefore, you have now, 53 organizations which have sprung upin the United States, to demand there should be an open convention,that there should be a roll call vote, and an open nomination, andspeeches for the nomination of Hillary; and then there should be acontest between the two candidates.
One organization is called PUMA, which stands for "PartyUnity, My Ass!" because now the DNC [Democratic NationalCommittee] says, there should be "party unity" behindObama. These people are committed to fight for the nomination ofHillary; many others there now, are putting advertisements in theleading American newspapers, demanding an open convention. Andgiven the fact that it is our expectation that the financial crisiswill worsen, and it's about five weeks until the convention [beginsAug. 25], that it is absolutely, eminently possible. Because itwill become clear that Obama, who has really not said anythingconcerning the economy so far, that the circumstances could verywell arise that this leads to the open convention and thenomination of Hillary. And even if that would not happen, bySeptember, this system is going to blow! And therefore, we are in acompletely open situation. A 'New Deal' for Russia, China, India
Now, if you look at the other countries, Russia, China, and India:How do they do in terms of the potential to put such a coalitiontogether?
Now, the good thing about Russia, is that both [Russian PrimeMinister Vladimir] Putin and [President Dmitri] Medvedev havealready talked about the systemic crisis; they are not totallyclear on what that means, but that can be remedied. Putin hasspoken many times that Russia needs a "New Deal," thatthe foreign policy between Russia and the United States must be onthe basis of the tradition of Franklin Delano Rooseelt, and theRussian government has started to go in the direction of a programwhich we are pushing since the beginning of the '90s, namely theEurasian Land-Bridge. And maybe, the most spectacular of theseinfrastructure projects, is the commitment of the Russiangovernment to build across the Bering Strait, a 6,000 km railwaybetween Siberia and Alaska, with a 100 km tunnel underneath theBering Strait, which is a promising thing.
The shortcoming of Russia, presently, is that from our bestknowledge—and if people have better insights, they're welcometo contribute those—that the big flaw, is that the Russians upto the present time, do not understand the systemic nature of thiscrisis. Because some of the leading economists in the recentperiod, have stated that it's good that the Federal Reserve isfinally doing something serious by opening the discount window, andthis means the government is now finally taking care, and that bySpring, one can expect that the whole situation will be back undercontrol, and that new rules can be negotiated. But, that'scompletely off the wall, and means that they have not reallyunderstood the problem. But on the other side, I think it's not aproblem which cannot be overcome.
Concerning China, I already mentioned that they are really in trouble, because of the collapse of the U.S. economy, andbecause of the collapse of the dollar.
And I can say in a positive sense, that Lyndon LaRouche is acceptedand famous in all three countries: In Russia, even though, thereare naturally always elements who do not agree with him, but thereare important elements of Russian society which know that he wasthe author of the SDI; that his prediction that if the Andropovgovernment would keep its policy of rejecting the SDI in 1983, thatthe Soviet Union would collapse in five years. And this, at thattime, was a big scandal, and a lot of slanders and attacks occurredagainst LaRouche in the Russian media. But we have subsequentlytalked with many Academicians, scientists, people from themilitary-industrial complex in Russia, and they have grudginglyadmitted that LaRouche was right: The Soviet Union diddisintegrate; and they have in the meantime, also studied veryseriously LaRouche's economics. Therefore, there is a generalawareness of his ideas.
The same goes for China. There were many publications in China,picking up on LaRouche's ideas; and for example, last year inNovember, he gave a speech in Los Angeles, which was sponsored bythe organizations which are campaigning for the unification ofTaiwan and the mainland, and at that conference, LaRouche presentedhis Four Power agreement, and said there is no solution possible,if the United States and China do not work together. And thatspeech was published in all the major Chinese papers, China Daily , People's Daily , all the economic science papers. So I think there is apossibility existing.
As concerns India, I should say, that we worked, at the end of the1970s, with Prime Minister Indira Gandhi on a 40-year developmentprogram for India, and we continued that work with Rajiv Gandhi,and therefore, Lyndon LaRouche is regarded in the relevant circlesin India as a legendary figure, and as the only American they cantrust. Bring Back a Green Revolution
Now, after the failure of the FAO conference, there was animportant meeting at the 62nd session of the UN General Assembly,where the Secretary General of the United Nations Ban Ki-moonpresented a paper called, CFA: Comprehensive Framework for Action,which was produced by a high-level task force, which was supposedto present some new ideas on how to solve the food problem. And theIndian ambassador to the United Nations, Nirupam Sen, on July 18,made a reply to that. He said: It's unfortunate that there wasabsolutely no input allowed from the member states. And he thencriticized a formulation of this paper that the crisis ofstarvation is also a chance to change things. He said: "It'svery unfortunate to present the desperation of millions ofvulnerable people in their struggle to feed themselves, as anopportunity." Which is really an attack on the cynicism ofthis paper.
He also said that it was absolutely to be remedied that theagricultural productive capacity has been systemically underminedby the so-called "Bretton Woods institutions"—and bythat, he means the IMF and the World Bank—and then he blastedthe fact that the WTO and the IMF and the World Bank had forced thedeveloping countries to produce, not food crops for their ownpopulation, but cash crops for export to pay their debts! And thaton the other side, the OECD countries, in the same period, hadspent $385 billion for subsidies.
Now, that is obviously a tricky point, because you need protectivepolicies for everybody, and not just for the so-called "richcountries."
He then demanded a number of other useful things, like stopping theuse of food for biofuels, bringing back a Green Revolution to allthe countries, by eliminating private control overseeds—because seeds are now controlled 90% by Monsanto, whichhas manipulated the seeds such that they cannot be re-used the nextyear—and so forth.
After the G8 meeting, which had, afterwards a meeting with China,Russia, India, and Brazil, which did not produce anything, becausethey were not really incorporated; afterwards, the IndianParliament made a motion to have a vote of no-confidence againstthe prime minister, because they felt that they had sold out toBush. This failed just barely; but the Indians are freaked out,because they say they are being attacked by hedge funds, byprivatization schemes, in the same way as occurred against Russiain the 1990s. And naturally, if you have 70% of the populationwhich is poor , and is already not fed enough, and you then have a price increaseof 20, 30, 40% for basic foods, you know, you have food riots! Andyou have total desperation. So therefore, the Indians are reallybetween a rock and a hard place, between the economic crisis andtremendous pressure from the United States, trying to get them awayfrom the strategic partnership with Russia and China. But I thinkthere is a potential openness there, as well. Finally, a New, Just World Economic Order
Now, I could speak about many things which have to be fixed. Weneed a global renaissance for nuclear energy, because without thatthere is no way we can come to energy security; we need a number ofother measures. But I want to say one thing: The time hasabsolutely passed, where side solutions would remedy the problem.
A philosopher whom I appreciate a lot, Nicolaus of Cusa, of the15th Century, who is the founder of modern science, the founder ofthe sovereign nation-state, he already, at that time, said, that ifyou have an existential crisis, you cannot have side solutions, butyou have to have a solution on the highest level. And therefore,the time for little steps, in my view, is over, and we need to havea package, in full, on the agenda.
What that means is, we have to have a new world financial system, aNew Bretton Woods system; we need a new world economic order, andwe suggest the Eurasian Land-Bridge, which we have proposed since1990-91: to connect the Eurasian continent through infrastructurecorridors, to be extended through the Bering Strait all the waydown to Chile, and through Sicily to Tunisia, and through Gibraltarinto Africa. Because, only if you have a real reconstructionprogram for the world economy, can you prevent a world catastrophe.
And this has to be accomplished between now, and the end ofSeptember. I'm saying this, because you have the Democratic PartyConvention at the end of August; then you have the beginning of theUN General Assembly, which starts on the 26th of September; and bythat time, we have to have a couple of leaders from differentcountries, who pose this question of a new, just world economicorder on the agenda of the General Assembly.
Now, if people think that this is too big, and it cannot be done, Ican tell you that we came already once very close to that. Let megive you very quickly a review:
In 1975, Lyndon LaRouche travelled to Iraq to the celebration ofthe Ba'ath Party, and he talked to many leaders from Africa, andfrom the Arab world. And he came back, and he made the firstcomprehensive proposal to replace the already then bankrupt IMF,with a new financial system, which he called at that time, theInternational Development Bank. This was the proposal to reorganizethe debt of the developing countries, to turn debt with highinterest and short term, into long-term credit with low interest,and use this reorganized debt with credit lines for well-definedinfrastructure projects: like roads, railways, infrastructure, inall the things you can see in terms of infrastructure in Europe,for example, to have that approach for Africa, Latin America, andAsia.
At that time, we, as an organization, as the international LaRoucheorganization, for one full year, organized for this idea: We talkedto every embassy in the world; we talked to many politicalinstitutions in the respective countries, and after one year, themeeting of the Non-Aligned Movement in Sri Lanka adopted thisproposal, almost word for word, in their final resolution, theso-called Colombo Resolution. And we even talked to many bankersand others in Europe, and they said, "Yes, we made feasibilitystudies; this would work." Because the proposal had the ideato have, per year, $400 billion credit, and a technology transferinto the developing countries for capital goods for theseinfrastructure projects. So these bankers in Europe said,"Yes, it would work—but we don't like it."
So, it was rejected. But the Colombo conference had adopted it.And, at that time, I called the news editor of the DPA, the GermanNews Agency—I said, "Oh, this is wonderful.Three-quarters of mankind has just adopted a new world economicorder. When are you going to publish it?" This guy said,"Oh, that's not newsworthy, we'll not publish it at all."So much for the freedom of the press here.
But then, at the UN General Assembly in 1976, Fred Wills, who wasthe Foreign Minister of Guyana at that time, introduced this intothe United Nations. And, at that time, it was absolutely supportedby [Indian Prime Minister] Indira Gandhi, by [Sri Lanka PrimeMinister] Mrs. [Sirimavo] Bandaranaike, by [Pakistan Prime MinisterZulfikar Ali] Bhutto, by many other Third World leaders. Butbecause there was, at that point, no support from the so-calledadvanced countries, a real backlash happened. You had theassassination of Bhutto; you had the destabilization of Mrs.Gandhi—unfortunately, she had made some domestic mistakeswhich made it relatively easy to get rid of her for the time being;you had the destabilization of Mrs. Bandaranaike, and some otherleaders, so the whole effort did not succeed.
But, then in 1982, José López Portillo, who was thePresident of Mexico, called LaRouche to come to Mexico City, and heasked him to write a program to defend the Mexican peso, which wasat that point attacked with capital flight. So, LaRouche wrote aprogram which was called "Operation Juárez," whichwas essentially the idea for Latin American integration andinfrastructure development program, and López Portillostarted to implement that program on Sept. 1, 1982, which causedshivers in Wall Street, because they thought that the Third Worldhad formed a debt cartel, and that would be the end of the banks onWall Street. López Portillo, then, at the next [UN] GeneralAssembly meeting, in September 1982, introduced, in a beautifulspeech, this same idea. And López Portillo is now talkedabout a lot in Mexico again, because people now demand hispolicies. The Last Chance for Civilizat i on
So therefore, the situation today, 32 years after this ColomboResolution—and many lives and the happiness of many peoplehave been lost, because of the failure to introduce it at the time:But now, 32 years later, I think that this is the absolute lastchance for civilization to prevent a collapse into chaos. And Ithink that, therefore, we have, in Europe, to do our best to breakthe Maastricht control: We have to cancel all treaties fromMaastricht to Nice. And we have to prevent by all means, the LisbonTreaty, because it would really turn Europe into a dictatorship,and it would completely disable Europe to do anything meaningful inrespect to this crisis which I just painted.
And I can only say, I think it can work, what we have worked out. Ithink the danger is absolutely enormous, we are living in extremelydangerous times. The danger that this whole thing disintegratesinto worldwide chaos, with governments being wiped away, like thegovernment of Haiti, which has already been wiped away, because thepeople who were starving, said: "We don't fear the bullets ofthe police, because we are starving anyway, so what does itmatter?" And that is, I think, a glimpse of the future, if wedon't remedy the situation.
We will do this anyway—and hope that some of the people inthis room will help to do it—that we mobilize as never before,to get the new world economic order on the agenda of the UnitedNations in September. And that if we mobilize in many countries,and all with the idea that we need a just, new world economicorder, and that the present system has failed, I think that thereis something in human nature, which gives me hope that it can bedone: Because I agree with Leibniz, that a great danger alwaysprovokes a greater good. And you know, given that anotherprediction of Leibniz, who at the end of the 17th Century, saidthat if it would ever come to the point that the whole world wouldbe dominated by utilitarianism, it would come to a worldrevolution. And I think if you look at the present internationalfinancial institutions, which are all based on utilitarianprinciples, I think the words of Leibniz could actually be reallytrue. But we don't want a Jacobin revolution, we want the principleof the American Revolution, and the sovereignty of all countries tobe the guidance of this matter.