July 10, 2013
As the result of a careful review of two recent documents publicly released by JP Morgan Chase and the Bank for International Settlements (BIS), the following urgent call to action has been issued by Lyndon LaRouche through the LaRouche Political Action Committee (LPAC):
Over the last three weeks, you’ve had several explicit statements of intent, from a major faction of the British-European oligarchy. The first was the J.P. Morgan research paper published May 28th which laid out a perspective for the Eurozone. In this 16-page document, they said: We’re halfway there to the establishment of a bankers’ dictatorship over a single-currency European region which no longer has any degree of national sovereignty; and to complete the process, we’ve got to crush any resistance to establishing a dictatorship over all of Europe, an austerity fascist dictatorship, effectively on the model of what was done, at the initiative of the Bank of England and the Bank for International Settlements (BIS) in the 1930s with the bankrolling of Hitler and the Nazis by the likes of Montagu Norman, Prescott Bush and Averell Harriman. In this document the authors from the JP Morgan London office are very explicit, very transparent that the big problem areas within the Eurozone, are Italy and Germany, in part because of certain residual anti-fascist features of the immediate postwar Constitution in Germany, and impulses in that direction in Italy; but that, basically, this has to be crushed.
Then, two days ago, at the annual meeting of the BIS, the BIS came out, even more explicitly and transparently, and basically said, quantitative easing is to be halted immediately. No more postponing, we’re going to go for brutal austerity, a policy of bail-in, and again, just a hard, jackboot policy, for consolidation of dictatorship over Europe.
Yesterday (June 24), in the Financial Times, there was an analysis of the European debt situation by Wolfgang Münchau, in which he says, to give it the short version, that the European debt is unsustainable, it can’t be paid, and there is going to have to be a day of reckoning, and a massive default. He estimates that the bad debt on the books of the various “bad banks” that have been created in Europe, along with the hidden debt on the books of the so-called solvent banks, represents somewhere in the range of EU2.5 trillion and the ESM fund that’s been supposedly created to deal with bailing out any financial problems, has EU500 billion. So, it ain’t even close.
The fact is, Münchau’s number estimates vastly understate the magnitude of the problem. Just as one example: Last week, because of the continuing collapse of the real economies, including in Asia, at one point, the price of a barrel of crude oil, went down to $93 a barrel, and as the result of derivatives bets, certain banks lost an estimated $1 trillion just in a 48-hour period, just on that one bad derivative bet. This is not surprising, considering you’re looking at $1.4 quadrillion in over-the-counter and other unregulated derivatives.
So you’re in a situation where certain people are now saying, the debt is unpayable and we’re going to pull the plug on it. The intent of pulling the plug now is to be able to control the process of determining who are the winners and who are the losers. And the big loser is intended to be the United States. If you think about the fact that the Fed has been pouring money into Europe—right now, over half of the monthly $85 billion in transparent bailout money from the Fed under QE is going to European banks, not even to U.S. banks. The Fed has built up a balance sheet of almost $4 trillion—it’s up 300% in recent years. The same is true for a number of other central banks around the world.
So, the whole point is: A faction in the British oligarchy has announced its intention to pull the plug on the debt bubble, and to bankrupt and bring down the United States as an integral part of what they plan to do, which is a drive towards outright fascism. The BIS report makes clear that a big source of funding for this whole process is going to be massive bail-in looting of unsecured depositors’ funds in all of the banks. This means that you’re going to have to have a real, top-down dictatorial policy, to be able to pull this off.
In the Münchau article, one of the points he makes, as a subsidiary point, is that, no one should believe the balance sheets of the German banks. The German banks are in deep trouble. They’re going to go down in a major way in this whole shakeout.
Now, if you look at the Bank for International Settlements, and remember a little bit of the history, the BIS was established in 1929, by the Young Plan, which was devised by J.P. Morgan. It was Owen Young, a Morgan asset, but it was actually J.P. Morgan, Jr. and others from Morgan Guarantee who oversaw the write-down of most of the unpayable World War I German reparations, in order to prepare the way for the Nazi war mobilization, for the war that was being planned from the late ’20s onward.
So the BIS has a history. J.P. Morgan has a history. We’ve talked about the Bush family as an integral part of the apparatus, the Anglo-American apparatus that put Hitler into power, and the same networks, today, the heirs of that apparatus, have made a statement of intent, that they’re going to do the same kind of thing now. They intend to use the fact that the debt is unpayable, to control the process and bring down the United States first, so that there’s no prospect of a Franklin D. Roosevelt impulse coming from the U.S.
This is the significance of what happened in Delaware, last week, when J.P. Morgan in their own name, came out and said: Under no circumstances will Glass-Steagall be reinstated. For the London and Wall Street-centered international financier oligarchy, Glass-Steagall is synonymous with Roosevelt and the return to an American credit system.
Lyndon LaRouche today (June 26) insisted that the U.S. has to make a declaration of policy intent: This BIS/JP Morgan swindle to bankrupt the United States is going to be preemptively stopped. The United States must immediately call in all of the unpayable debt on the part of the big London and continental European banks, and put the onus of the bankruptcy on the heads of the very people who were planning this drive for fascism. You’ve got to give them something to be afraid of and something very concrete that is preemptive, before they get to make their move. And since they’ve come out openly, in the last three weeks, with their statement of intent of exactly what they’re going to do, the United States Government must preempt it.
If you just simply take the massive amount of European debt, that the Fed and Treasury are sitting on, all you have to do is make an immediate margin call on that debt, and they’re screwed, to put it in blunt language. And under those circumstances, the only recourse for the United States is immediate Glass-Steagall bank separation; seize the assets of those banks that are incapable of paying those debts back, and create something like a Resolution Trust Corporation, which was the mechanism that was used in the case of the savings & loans blowout, in which a government agency seized the assets of the bankrupt institutions and sold them off over time, to recuperate some of the loss. And then, on top of that, you have to go with Glass-Steagall and a credit system, to begin a massive program of economic recovery.
We bankrupt the British oligarchy before they get to strike the first blow and bankrupt the United States. JP Morgan and the BIS saw their ability to control the situation slipping away. They had no choice but to come out explicitly to attack Glass-Steagall, and they had to make their public declaration of intent, to go for murderous Schachtian austerity and dictatorship without a Hitler figure on the scene in Europe. The JP Morgan and BIS documents were nothing less than a declaration of war against the United States.
Lyndon LaRouche summarized the state of war and the emergency measures that must be adopted by the United States Government immediately: “We put through a motion, a declaration tonight of the intent, that the United States must adopt, with respect to the plan of the British to bankrupt and loot the United States. And that is what we can do, and must do. So, by our announcing that, by saying what the intention is to loot and destroy the United States, by the British, and that we are not going to tolerate it, we force preemptive appropriate action. And that’s the way you deal with it.”
See Also: JP Morgan: Fascist Then, Fascist Now by Leandra Bernstein.
 “The Euro Area Adjustment: About Halfway There” http://culturaliberta.files.wordpress.com/2013/06/jpm-the-euro-area-adjustment-about-halfway-there.pdf
 On June 20, 2013 a representative of JP Morgan Chase personally intervened into a Delaware State Senate Banking Committee hearing on State Senate Resolution No. 8 for the reinstatement of Glass-Steagall, to argue forcibly against the adoption of the resolution. The JP Morgan spokesman asserted: “It would be very inadvisable for Delaware, of all states, to pass this resolution at this time.” See www.larouchepac.com/node/27047 for more.