The Four Powers Solution, Russia, China, India and the USA
A Four-Power Agreement Can Create a New World Credit System
In view of the brevity of time, I shall confine my remarks to a certain aspect of the problem. On the 25th of July of the year 2007, I delivered a forecast by way of an international webcast, which I conducted at that time. At that point, on that date, I said we were then on the verge of a general crisis of the financial system of the United States. I said it would break out in a matter of days, and it did: Then, what became known as the mortgage crisis—but it was more than a mortgage crisis, it was the beginning of a process which has continued up to the present day, of a general breakdown of the U.S. economy in its present form. It's a crisis which threatens the entire world. Because if the United States, with its vast debt, collapses, if the debt of the United States, for example, to China, collapses in value to nearly zero, which it can do, this would set forth a chain-reaction throughout the world system, which would be a crisis comparable to what Europe experienced during the 14th Century. This is the most serious.
However, there's an immediate solution to this problem.
In his address to the Rhodes Forum, Lyndon LaRouche outlined his proposal for an alliance among the world’s four great powers—China, Russia, India, and the U.S.A.—to end the global crisis.
In the first stage, what I proposed was legislation which was campaigned for throughout the states of the United States, for a resolution by state governments, to push through national Congressional legislation, to put the entire mortgage system of the United States into receivership under bankruptcy protection, in which the householders would remain in their homes, and we would, in due course, settle and resolve the mortgage debt.
At the same time, the other action was to put the banking system, the so-called commercial banking system of the United States under protection. We used to have a law called the Glass-Steagall Act, which provided for precisely that kind of action. But we had Larry Summers, who's not unknown to some people in Russia, known as a thief, I generally believe, who had succeeded in causing the Glass-Steagall Act to be cancelled. So the commercial banking system had been exposed, since that time, to all kinds of speculation, which allowed, earlier, only for investment banking. Which meant that the entire banking system of the United States was being corrupted, and in danger of general bankruptcy.
In the meantime, at the same time, there had been a long-term trend, since actually 1968-1971, of a decline in the U.S. economy, a physical decline in the U.S. economy, which had been ongoing, and had accelerated, especially since the 1987 period.
So now, we no longer had bankruptcy protection of our commercial banking system, and my legislation, which was supported largely through many of the states of the United States, and also through some of the governors of these states, who were leading governors, would have prevented this crisis from going out of control. It would have meant a financial reorganization of many accounts, but they would be done in an orderly fashion under law, not by chaos.
We're Still in a State of Chaos
What we've been in, is a process of chaos, because, instead of resolving this problem, instead of providing social security for people who lived in homes, instead of protecting industries and other places of essential employment, we allowed chaos to reign, under George W. Bush, and now, under Obama. We're still in a state of chaos.
We have now reached a point, because of certain developments in the meantime, that it is no longer possible to do what I proposed then, back in 2007. Now, we're in a general crisis, which can bring down, chain-reaction style, the entire planet. Because we have outstanding, a mass of debt, based on financial derivatives, and financial derivatives on financial derivatives, which, if the process of collapse occurs, it will bring down the whole planet, but for a very special reason: Formerly, when we had a system of sovereign nation-states, we would have up to 80% of the requirements of survival within the nation, produced within the nation.
Under the process of globalization, we no longer have that security.
For example, China's a victim of that. China was offered the opportunity to produce more cheaply, than the cost of producing in the United States, as an arrangement, and China assumed that this arrangement would be stable. But now, recently, with the collapse of the U.S. dollar, with the collapse of the U.S. financial economy, a chain-reaction was created, which China has good reason to wonder if it will be able to withstand this blow, without serious damage.
Therefore, we have two questions here: Not only how to deal with the problem of the economy, but, how do we deal with the world economy as well. Because we have to maintain stability among key nations. I have picked out four nations, as absolutely crucial, that they must cooperate, because with their cooperation, and with that of others who join them, it will be possible to take reorganization of the world economy, by eliminating financial derivatives—just cancel them; they're worthless paper, cancel them. Go back to the honest debt of nations, go to a commercial banking standard, and create new credit to replace the worthless old debt. By creating new credit, and launching physical production programs, in infrastructure and other terms, we could, by agreement among nation-states, prevent a general collapse, and actually launch a program of orderly recovery. And these problems that we now face could be solved.
The problem is, that the world is dominated by financier interests, which are essentially parasitical in character. Our industries, our agriculture, our infrastructure is decaying, worldwide—especially in the Americas, especially in North America, and especially in Western Europe. Western and Central Europe is a disaster area. They no longer have national security, economic security: They're dominated by the British, entirely, under the British system, which was established in the context of the breakdown of the Soviet Union and East German economy.
At that point, the British succeeded, with the support of [French President François] Mitterrand, and with the support of George H.W. Bush, the President at that time, in imposing upon Germany, and other nations of Western and Central Europe, conditions which are destructive. And the Western European economy is generally bankrupt, today, hopelessly so. It could be reorganized, through bankruptcy reorganization, but presently the whole system of Western and Central Europe is hopelessly bankrupt, as other parts of the world are.
Long-Term Agreements
Therefore, the task, as I defined it, is, if Russia, and the United States, and China, and India, agree, as a group of countries, to initiate and force a reorganization of the world financial and credit system, under those conditions, with long-term agreements, of the same type that Franklin Roosevelt had uttered before his death, in 1944, under key nations, the intention of Roosevelt all these years later, could have been realized, and we could do that, today.
That's our chance: Either we do that, or we go under. I can assure you, if you think that there's any possibility that the present system could continue into the coming year, as a system to work with, that there will not be a general, continuing, worsening crisis, at the present time, there will be no economic recovery in any part of the planet, under the present conditions.
We're now headed for a general chain-reaction breakdown crisis, caused by not only this particular financial crisis, but caused by globalization. Because under these conditions, every nation has become so dependent upon other nations, that any disease, of the economy, any breakdown disease of the economy, will bring down all nations of the economy, in chain-reaction form. At what speed, we can't be sure. But that's the danger.
So, the issue now is the political decision: Can we have the United States, under an improved Presidency—and it does require improvement—can we have the United States, Russia, China, and India, become a bloc of countries, which each have different characteristics, but if they recognize among themselves, that they have a common interest, they will adapt to each other, and respect each other's different characteristics. The result of this, will be the elimination of the monetary system of the world that has been dominating European civilization since the Peloponnesian War.
The imperial systems of the world, are not the United Kingdom, for example, but the British system is an imperial system. It's an imperial system because of its role in an international monetary system. We no longer have nations which control their own money: We have an international monetary system that does control their money. If you control the monetary market, the monetary system, you control the world.
The monetary system is now a disease. We have to put the power over monetary systems, back in the hands of sovereign governments. This must start, with leading governments—a coalition among leading governments, which agree that this is necessary, and will agree to set up a fixed-exchange-rate system, among reorganized, sovereign, national systems of their own currency, their own credit system. These credit systems must be organized in such a way, that, as in the case of China and some other countries, that the remedy for the problems which now exist, are no longer the remedies that we thought would exist, or many thought could exist, a few years ago. We now have to think in terms of generating long-term credit, at interest-rate charges of 1.5 and 2%, because that's what you require in order to do this kind of thing. China is going to require 50 years of long-term development, to bring itself into the condition it desires to be in. Other countries are in a similar situation. Most of North Asia is in that situation; Russia is also in the same situation.
Therefore, we have to come to a discussion, a moral discussion, of what our objectives are. If we do that, we could survive.
A Four-Power Agreement Can Create a New World Credit System
In view of the brevity of time, I shall confine my remarks to a certain aspect of the problem. On the 25th of July of the year 2007, I delivered a forecast by way of an international webcast, which I conducted at that time. At that point, on that date, I said we were then on the verge of a general crisis of the financial system of the United States. I said it would break out in a matter of days, and it did: Then, what became known as the mortgage crisis—but it was more than a mortgage crisis, it was the beginning of a process which has continued up to the present day, of a general breakdown of the U.S. economy in its present form. It's a crisis which threatens the entire world. Because if the United States, with its vast debt, collapses, if the debt of the United States, for example, to China, collapses in value to nearly zero, which it can do, this would set forth a chain-reaction throughout the world system, which would be a crisis comparable to what Europe experienced during the 14th Century. This is the most serious.
However, there's an immediate solution to this problem.
In his address to the Rhodes Forum, Lyndon LaRouche outlined his proposal for an alliance among the world’s four great powers—China, Russia, India, and the U.S.A.—to end the global crisis.
In the first stage, what I proposed was legislation which was campaigned for throughout the states of the United States, for a resolution by state governments, to push through national Congressional legislation, to put the entire mortgage system of the United States into receivership under bankruptcy protection, in which the householders would remain in their homes, and we would, in due course, settle and resolve the mortgage debt.
At the same time, the other action was to put the banking system, the so-called commercial banking system of the United States under protection. We used to have a law called the Glass-Steagall Act, which provided for precisely that kind of action. But we had Larry Summers, who's not unknown to some people in Russia, known as a thief, I generally believe, who had succeeded in causing the Glass-Steagall Act to be cancelled. So the commercial banking system had been exposed, since that time, to all kinds of speculation, which allowed, earlier, only for investment banking. Which meant that the entire banking system of the United States was being corrupted, and in danger of general bankruptcy.
In the meantime, at the same time, there had been a long-term trend, since actually 1968-1971, of a decline in the U.S. economy, a physical decline in the U.S. economy, which had been ongoing, and had accelerated, especially since the 1987 period.
So now, we no longer had bankruptcy protection of our commercial banking system, and my legislation, which was supported largely through many of the states of the United States, and also through some of the governors of these states, who were leading governors, would have prevented this crisis from going out of control. It would have meant a financial reorganization of many accounts, but they would be done in an orderly fashion under law, not by chaos.
We're Still in a State of Chaos
What we've been in, is a process of chaos, because, instead of resolving this problem, instead of providing social security for people who lived in homes, instead of protecting industries and other places of essential employment, we allowed chaos to reign, under George W. Bush, and now, under Obama. We're still in a state of chaos.
We have now reached a point, because of certain developments in the meantime, that it is no longer possible to do what I proposed then, back in 2007. Now, we're in a general crisis, which can bring down, chain-reaction style, the entire planet. Because we have outstanding, a mass of debt, based on financial derivatives, and financial derivatives on financial derivatives, which, if the process of collapse occurs, it will bring down the whole planet, but for a very special reason: Formerly, when we had a system of sovereign nation-states, we would have up to 80% of the requirements of survival within the nation, produced within the nation.
Under the process of globalization, we no longer have that security.
For example, China's a victim of that. China was offered the opportunity to produce more cheaply, than the cost of producing in the United States, as an arrangement, and China assumed that this arrangement would be stable. But now, recently, with the collapse of the U.S. dollar, with the collapse of the U.S. financial economy, a chain-reaction was created, which China has good reason to wonder if it will be able to withstand this blow, without serious damage.
Therefore, we have two questions here: Not only how to deal with the problem of the economy, but, how do we deal with the world economy as well. Because we have to maintain stability among key nations. I have picked out four nations, as absolutely crucial, that they must cooperate, because with their cooperation, and with that of others who join them, it will be possible to take reorganization of the world economy, by eliminating financial derivatives—just cancel them; they're worthless paper, cancel them. Go back to the honest debt of nations, go to a commercial banking standard, and create new credit to replace the worthless old debt. By creating new credit, and launching physical production programs, in infrastructure and other terms, we could, by agreement among nation-states, prevent a general collapse, and actually launch a program of orderly recovery. And these problems that we now face could be solved.
The problem is, that the world is dominated by financier interests, which are essentially parasitical in character. Our industries, our agriculture, our infrastructure is decaying, worldwide—especially in the Americas, especially in North America, and especially in Western Europe. Western and Central Europe is a disaster area. They no longer have national security, economic security: They're dominated by the British, entirely, under the British system, which was established in the context of the breakdown of the Soviet Union and East German economy.
At that point, the British succeeded, with the support of [French President François] Mitterrand, and with the support of George H.W. Bush, the President at that time, in imposing upon Germany, and other nations of Western and Central Europe, conditions which are destructive. And the Western European economy is generally bankrupt, today, hopelessly so. It could be reorganized, through bankruptcy reorganization, but presently the whole system of Western and Central Europe is hopelessly bankrupt, as other parts of the world are.
Long-Term Agreements
Therefore, the task, as I defined it, is, if Russia, and the United States, and China, and India, agree, as a group of countries, to initiate and force a reorganization of the world financial and credit system, under those conditions, with long-term agreements, of the same type that Franklin Roosevelt had uttered before his death, in 1944, under key nations, the intention of Roosevelt all these years later, could have been realized, and we could do that, today.
That's our chance: Either we do that, or we go under. I can assure you, if you think that there's any possibility that the present system could continue into the coming year, as a system to work with, that there will not be a general, continuing, worsening crisis, at the present time, there will be no economic recovery in any part of the planet, under the present conditions.
We're now headed for a general chain-reaction breakdown crisis, caused by not only this particular financial crisis, but caused by globalization. Because under these conditions, every nation has become so dependent upon other nations, that any disease, of the economy, any breakdown disease of the economy, will bring down all nations of the economy, in chain-reaction form. At what speed, we can't be sure. But that's the danger.
So, the issue now is the political decision: Can we have the United States, under an improved Presidency—and it does require improvement—can we have the United States, Russia, China, and India, become a bloc of countries, which each have different characteristics, but if they recognize among themselves, that they have a common interest, they will adapt to each other, and respect each other's different characteristics. The result of this, will be the elimination of the monetary system of the world that has been dominating European civilization since the Peloponnesian War.
The imperial systems of the world, are not the United Kingdom, for example, but the British system is an imperial system. It's an imperial system because of its role in an international monetary system. We no longer have nations which control their own money: We have an international monetary system that does control their money. If you control the monetary market, the monetary system, you control the world.
The monetary system is now a disease. We have to put the power over monetary systems, back in the hands of sovereign governments. This must start, with leading governments—a coalition among leading governments, which agree that this is necessary, and will agree to set up a fixed-exchange-rate system, among reorganized, sovereign, national systems of their own currency, their own credit system. These credit systems must be organized in such a way, that, as in the case of China and some other countries, that the remedy for the problems which now exist, are no longer the remedies that we thought would exist, or many thought could exist, a few years ago. We now have to think in terms of generating long-term credit, at interest-rate charges of 1.5 and 2%, because that's what you require in order to do this kind of thing. China is going to require 50 years of long-term development, to bring itself into the condition it desires to be in. Other countries are in a similar situation. Most of North Asia is in that situation; Russia is also in the same situation.
Therefore, we have to come to a discussion, a moral discussion, of what our objectives are. If we do that, we could survive.
Last edited by a moderator:
