June 10 (LPAC)--Lyndon LaRouche emphasized today that there is a fight going on now within the U.S. Federal Reserve on interest rate policy.

As LaRouche has repeatedly stressed, rather than simply lowering or raising interest rates, what the Federal Reserve needs to do immediately is implement a two-tier credt system caried out under Federal control. The Fed must impose low interest rates for productive investments, while allowing the rates to rise to a prohibitive level for speculative investments. This is the only way to stabilize financial markets. You cannot carry the volumes of bad debt which exist. The two-tier policy would immediately sink the spot markets, would hit Amsterdam and London hard, also speculators like Soros. At the same time, you would have to impose a firewall to protect the banks, as specified in LaRouche's Homeowners and Bank Protection Act (HBPA).

This would gain immediate support from governments in Russia, China and India, as well as from certain important institutional forces in Europe. It would also gain the support of all those in the lower 80% income brackets, who are suffering from the effects of hyperinflation.