August 4, 2007 (LPAC)--We don't know what date it's going to happen, but the system is coming down. As long as the present system exists, it's doomed. The date may be uncertain, but the date is getting closer all the time.

This was Lyndon LaRouche's summary comment on Thursday, August 2--the day after the Interstate 35W bridge at Minneapolis, Minnesota buckled and came crashing down into the Mississippi River. This, like the global financial meltdown LaRouche has been warning about, was a catastrophe waiting to happen--only the specific day it would occur was uncertain. The bridge had been deemed "structurally deficient" by the Minnesota Department of Transportation in 2005. In fact, 25% of all the 590,750 bridges in the United States are rated as "structurally deficient or functionally obsolete," according to the American Society of Civil Engineers.

Lyndon LaRouche focused his attention on the global economic collapse that is the actual cause of this event, and on those political forces responsible for it:

George W. is going to have a real problem with this one, Lyn said. The President will not get by with this; this is going to be all over the nation. The impact is going to be the horror: you know, people are driving across a bridge, dozens of cars go down in the river, and all these people die. An unexpected thing. People are going to be seized and gripped by this.

The point is, LaRouche insisted, Bush must change his policy: Fire Cheney now! At this point, Bush must fire Cheney, because it was Cheney's pressure on extending and broadening the war, which is a big factor in this. The other major factor is the collapse of the automobile industry, which Congress did nothing about. Because if we'd gone ahead with the conversion of the industry as I proposed, LaRouche stressed, we would have had the policy in place and we would have concentrated on engineering programs to address our general infrastructure requirements, including bridges.

We had the needed program, and under pressure, the Democrats in Congress did not push it. And that kind of mistake in judgment kills people!

Lyn noted that Bush is responding to the bridge collapse with his characteristic callousness. Bush and company are going to say: "No money, no money." You're going to get the same thing you got on Katrina. Bush is now caught again in his Katrina Syndrome, this time at the other end of the Mississippi. Katrina has moved upriver to Minneapolis-St. Paul.

This thing is going to be dumped into the lap of Congress, Lyn said. And they are about to leave, to go home on August recess. And one of the places they're going home to is the state of Minnesota!

Lyn then addressed the global financial crisis in the following terms:

What we are facing is the "book-ends" crisis that I've referred to. There's a breakdown because of the collapse of the mortgage-based securities operation. They can't generate the additional cash out of that, as capitalization. Therefore the stream going from the banks, which depend on this MBS margin, is shutting down-- the stream of financial capital flowing through the system into the hedge funds, which have commitments that they have to fulfill under contract. Because they have taken options on purchases, and they made a promise to pay--but they don't have the money to pay. Which means, as I've indicated, that at both ends--at the end of the generation of the fictitious capital, and at the point where it has to be delivered, or otherwise there will be a default--it broke down.

Right in the middle, in Germany, the whole German economy was crushed in a crusher which is actually global.

So this is not a a local question; it's not a regional question; or a question involving a number of regions. It's global.

You've got a lot of things that could go, and maybe they will go, or maybe they'll be temporarily stopped. Like the yen carry trade crisis; what's now already hitting Australia and New Zealand, which is largely tied to the yen carry trade operation; the entirety of this European complex; the China issues. These are all related. This thing is not a piecemeal problem. This is a systemic crisis.

So they have this bookends problem. You have the yen carry trade, which is the generator of this leveraged credit which is used; you have the U.S. housing market, the British housing market, and so forth, which have been used for the same thing; and other things, collateral things, used the same way. And what this means is that now you have an institution of deposit which is relevant somewhere along the line, which turns the MBS, and things like that, into a monetary asset. This thing is then channeled from the banks into Wall Street and similar types of operations, which then goes into a hedge fund, or hedge fund-like operations.

Now at the other end, the hedge funds take over something without actually having the money to pay to do the buy-out. What they do, is they give a promissory note to pay, and then they pay from what they loot from what they took over, on options. So therefore, if the money is not flowing from MBS and whatever else they are using for this, if it is not flowing into the relevant banks and similar institutions, and therefore is not flowing through the system, like various management companies and so forth, into the leveraged deals like Cerberus, then they are stuck with the fact that they have taken over something on the basis of a promise to pay. And the money for them to deliver the payment doesn't exist.

So you have it at both ends. You have it at the end of the collapse of the housing market, and similar kinds of things, which have shut off the sources of credit used to generate what becomes the means of payment. And at the other end, you've got somebody who has taken over something, and they are going to have to reneg on a contract, default on a contract, and lose their interest there.

And you are going to get a Bear Stearns-like phenomenon, where suddenly somebody gets caught in the middle, and they have zero assets. And that's the global situation.

So you have a general, systemic breakdown of the system. And people are tending to look at this from the wrong standpoint. They are looking at it from the standpoint of local this, local that, government this, national that--which doesn't mean a damned thing. Because the whole thing is one, big bubble. This is like an international John Law Bubble, which is not based on reality; it's based on speculation. And when the speculator is caught with his pants down, that is, he cannot pay to maintain his continued speculation, then-boom! The whole thing is started, just like the John Law Bubble.

This is what happened in the 14th century with the House of Bardi. They were passing loans all over the place, and some of their debtors couldn't pay--namely the King of England. And when the King of England couldn't pay, then it called the shot on all the outstanding obligations involving France and various countries, whose wars were being financed through things like the Lombard bankers. This started a chain-reaction, and the whole system came down.

What we are looking at, as I've been telling people for years, the eventuality, which you are looking at here, is a 14th century-style chain reaction collapse. That's what you're looking at.

Some people ask the question: Is it going to break down tomorrow? We don't know, because various things may be done to postpone this and create new kinds of fictitious assets, and somehow try to cover this thing up. But, what you are looking at, no matter what the remedy is, they are going to end up in the same place. It's just going to be bigger and worse when it goes.

So we don't know exactly when it's going to go under, but we know that it's going under. And there's nothing that's going to stop it from going under. It can be delayed, the collapse can be delayed, but it cannot be prevented, except by changing the monetary system, which can be done. But they are not particularly enthusiastic about that right now.

In the face of all this, George Bush and company are, in effect, saying: "Well, not now; we have other things on our mind. We've got to cut! We've got to cut!"

So that's where the dream world folds, and reality hits, LaRouche concluded.