Aug. 15, 2007 (LPAC)--In an article published in Cronica Digital Aug. 14 under headline, "Hold Onto Your Pants: The International Financial System is Crashing," Chilean economist Manuel Riesco revealed that the country's private pension funds, or AFPs as they are known, have suffered huge losses just over the past few weeks. These losses have come from their speculative investments on international markets that are now crashing--exactly what LPAC's mobilization saved Social Security from, in defeating the Cheney-Bush privatization drive in 2005.

In the mid-1990s, Executive Intelligence Review exposed Chile's private pension system as a fascist looting scheme, imposed by force on the country by the brutal 1973-1990 Pinochet dictatorship. Reflecting the thinking of Pinochet's sponsors, Felix "the Fixer" Rohatyn and George P. Schultz, the AFP system was never intended to benefit Chilean workers. It was designed for the foreign banks and insurance companies--Banco Santander, BBVA and Citigroup among them--that control most of the system's assets, and threw them into the speculative international derivatives and hedge fund apparatus that is now crumbling.

George Schultz tried to get his protege George W. Bush to ram through a Chilean-style privatized Social Security system in the United States in 2005, but was prevented from doing so thanks to the LaRouche movement's mobilization.

Look at this great Chilean "success story" today. Out of the AFP's total assets of $104 billion, they lost $2.5 billion just in the period between July 25 and August 12. About half their assets, according to Riesco, are invested in the local, as well as international stock markets, and in the stock of such banks as Bear Stearns and the crisis-ridden French insurance giant AXA. As of March, 2006, the AFPs had $435 million invested in AXA. Legislation recently approved in Chile will allow the AFP's to invest 40% of their assets abroad, up from 30%.