Aug. 23, 2007 (LPAC)--Russian economist Sergei Glazyev, member of the State Duma and head of the National Institute for Development, gave a press conference in Moscow today to lay out the dimensions of the current global financial crisis. According to reports from the Rosbalt and Novy Region agencies, he identified as the foremost symptoms of "the self-destruction phase of the dollar and yen financial bubbles," the same two developments in international finance, which Lyndon LaRouche has called the "bookends" of the current crisis. Those are: the mortgage crisis in the United States; and the devastation of international investment institutions by their involvement in the yen carry trade.
"The situation in world markets can be called a permanent economic crisis, so nobody should be surprised by the ongoing devaluation of the dollar, or the absence of industrial growth in Japan," said Glazyev.
More fundamentally, Glazyev explained, this is the end-phase of a nearly forty-year process. "Starting in 1971," he said, "the U.S. Federal Reserve System and the Bank of Japan have been pumping their currencies into the world economy. ... The National Bank of Japan has printed as much money as Japan itself, and neighboring countries, could swallow." Glazyev's mention of 1971 is a reference to the end of the post-World War II Bretton Woods system, when George Shultz, as President Richard Nixon's treasury secretary, oversaw the end of fixed exchange rates. Since then, said Glazyev, "the U.S. Fed has been issuing as much as $2 billion per day, and in August 2007, the figure has been ten times that. ... But, every financial pyramid comes to an end, sooner or later."
Glazyev warned that Russian financial officials were insufficiently attuned to the oncoming crisis, saying that "they are taking no measures" to deal with it. Even in the short term, he said, Russia has lost $30 billion through the dollar's fall, while the investment of a good portion (45%) of the country's $120 billion so-called Stabilization Fund in dollars threatens to bring much greater losses. As short-term measures, Glazyev called for holding more of Russia's Central Bank reserves in gold, and denominating Russian oil exports in rubles. The ruble, he added, "could be turned into a reserve currency for the CIS countries, Europe, and China." The possible use of the ruble in this way was also mentioned by President Vladimir Putin during the June 2007 St. Petersburg International Economic Forum.
Glazyev, who has been courted by various political blocs for their slates in the December 2007 State Duma elections, said he will decide within the next two weeks, whether or not to run. The founder and former head of the Rodina (Homeland) Party, he said earlier this year that he would not primarily play politics, but would try to provide ideas and leadership for Russia through the Academy of Sciences, of which he is an associate member. Glazyev said today that he is in a dialogue with several parties.
In June 2001, Glazyev hosted State Duma hearings on protecting the national economy under conditions of global financial crisis, under the auspices of the Duma Economic Committee, which he chaired. Lyndon LaRouche gave the keynote testimony, at Glazyev's invitation. EIR News Service published the English language version of Glazyev's book, Genocide: Russia and the New World Order, in 1999.
