Get Out with Hamiltonian ‘New Economic Platform’

January 6, 2015

World markets were swept Monday by a shudder of an unpayable debt crash, originating in the Eurozone, the collapsing oil price, and plunging bank stocks across Europe and the United States.

If an answer was needed to the "leaked" vaunting of Chancellor Angela Merkel and her team over the weekend, that they were ready to usher Greece out of the euro, the markets gave the answer. They are not ready for another Greek (and Spanish, and Italian, etc.) debt crisis, because they are in a deep, deep no-growth crisis, with a policy of anti-Russia financial warfare imposed on Europe which is leading to both financial crash and war.

As soon as it became clear last month that Greece was going to a Jan. 25 election over renegotiating its debt, EIR Founding Editor Lyndon LaRouche warned that the new debt crisis would not start just after Jan. 25, but immediately in early January, and that the real stakes would be war with thermonuclear power Russia. Now, entering the foothills of a debt crash, some leading European figures are saying, "Enough; we have to get out of this crisis; where is the exit from war?" The warnings on Sunday from French President Hollande ("We must put an end to the sanctions now") and from German Vice-Chancellor Gabriel ("remember that Russia is a nuclear power!") were more serious than any such previously; and they were only the most notable of others coming from Italy, from Eastern Europe, and of course from Russia itself, which is offering to replace the confrontation with EU-Eurasian Economic Union cooperation.

In the United States the down-2% shudder on Wall Street, led by bank stocks falling fast, was provoked by another slide in the oil price, and the outlandish investments Wall Street banks have in tens of trillions in derivatives based on these commodities. The Energy Information Agency released a forecast that world oil consumption in the first half of 2015 would drop another 1 million barrels/day from the second half of 2014; itself a sign of the ongoing economic trans-Atlantic economic plunge centered in Europe. Yet Obama, boasting Nero-like, continues to pursue a London-created policy of "forcing Russia to its knees," with sanctions and the same oil price plunge which is threatening to blow up Wall Street.

This policy will also blow up the world in war.

The way out of this existential crisis? The "new economic platform" proposed by LaRouche since March-June 2014, in four fundamental laws of economic policy, is a return to the Hamiltonian principles on which the United States' original unity and rapid economic growth were based. That reversal will allow the United States — and Europe, should it follow — to join in the new order of mutual growth and productivity offered by the BRICS-allied nations, particularly by China's policy.

A major public event in New York City January 17, the Martin Luther King commemoration holiday, will join leading American activists in organizing that policy, and be watched by meetings internationally. Its theme is "BRICS Nations Revive Dr. Martin Luther King's Dream: Economic Justice Is an Inalienable Right." That event will be a turning point in humanity's escape from the crisis intensifying now.



Wall Street Is Writing Its Own Indictment for Derivatives Crimes

In the midst of signs of a debt collapse detonating in the Eurozone and threatening in the United States, the issue of the Wall Street crime involved in the mid-December Congressional repeal of a key derivatives regulation, cannot be allowed to drop.

Under pressure of "whipping" from both President Obama and JPMorgan Chase CEO Jamie Dimon, Congress agreed to a "poison pill" slipped into a government funding bill, which claimed to make it legal for the big banks to put their exposure to commodities derivatives and OTC credit derivatives into their commercial bank units. There, this exposure to $20-25 trillion of the riskiest derivatives exposure there is, would enjoy FDIC insurance if it implodes — ultimately a taxpayers' bailout.

What Obama and Congress claimed to make "legal" by repealing Regulation 716 of the Dodd-Frank Act, remains illegal. For one thing, placing high-risk securities on the books of a Federally insured bank unit remains illegal under Section 23A of the Federal Reserve Act (a vestige of Glass-Steagall), which Obama and the Fed have refused to enforce.

Now two extremely damning facts have been revealed.

First, Forbes reported Jan. 3 that during the last two months of 2014 Citigroup bought the entire commodities trading operations of both Deutsche Bank (in early November) and Credit Suisse (as of Dec. 31). This makes the estimate of 7% of Citi's assets being in oil debt (already a very high outlier) obsolete. This is while several other banks are shrinking commodities operations — Deutsche Bank and CS obviously, but also JPM Chase and Barclays). Citigroup's global revenue from commodities speculation went from $215 million in 2013 to $485 million in 2014 (through 9/30 for both years). But now it is losing a) as much as $1 billion in China metals speculation through Hong Kong, and b) big, in the oil debt collapse.

Secondly, the website Zero Hedge's research Jan. 5 discovered that Citigroup's derivatives exposure increased by an astonishing $9 trillion in the third quarter of 2014 alone, and it thus became the most exposed Wall Street bank to derivatives, with $70.5 trillion in exposure. All of this exposure is on its FDIC-insured commercial bank, Citibank National Association.

The question raised by Zero Hedge: Is Citibank the "AIG" of the coming crash? A further question: Is Citibank volunteering once again to lead the crash of Wall Street — and get bailed out, based on a legal fraud? Recall that Citigroup was given an FDIC guarantee for $342 billion of its securities in October 2008.

German Economics Minister Gabriel: No New Sanctions, Russia Is a Nuclear Power

Tougher sanctions are opposed by the German Social Democrats, the party's national chairman Sigmar Gabriel warned in an interview Sunday with Bild am Sonntag, Germany's leading Sunday mass-tabloid.

"The goal was never to push Russia politically and economically into chaos... We want to help solve the conflict in Ukraine, not to force Russia to its knees.

"Anyone who wants that will provoke a much more dangerous situation for all of us in Europe," he said, pointing out that Russia is a nuclear power. The aim of the sanctions has always been to pull Russia back to the Ukraine negotiating table, Gabriel explained.

"Those who want to destabilize Russia economically and politically even more are pursuing completely different interests," said Gabriel, charging "some in Europe and in the United States" with wanting to force "the old arch-rival Russia to its knees.... That is not in Germany's or Europe's interest. We want to help solve the conflict in Ukraine, not to force Russia to its knees."

Since Gabriel not only is Germany's Economics Minister but also Vice Chancellor, leading his Social Democrats in the Grand Coalition with Christian Democratic Chancellor Angela Merkel, his statements are of utmost relevance for the government as a whole: Should Merkel hold onto her anti-Russian policy, she runs the risk of breaking up the coalition, because the government cannot have two policies on a strategic issue such as relations with Russia.

French President Hollande Wants To Escape the War Party's Inferno

Facing the terrible consequences of the "destroy Russia" policy of London, Obama, and NATO, French President François Hollande, like many other European leaders, is starting to call loudly for opening the exit door. Two weeks after diverting his plane for an unscheduled meeting with Russian President Putin, Hollande gave an interview Jan. 4 to Radio France Inter with a conflicted call for an immediate end to the regime of financial sanctions against Russia.

As widely publicized in European press, Hollande in the Sunday interview called for the sanctions to be removed in the course of the negotiations with Russia, in Minsk and elsewhere, over Ukraine. As reported in translation on BBC,

"Hollande said he wanted to make sure there's progress in peace talks over the situation in Ukraine, before putting an end to sanctions. He said he hopes to see signs of mutual understanding at the Jan. 15 talks in Astana, Kazakhstan. The meeting is being organized by Ukrainian President Petro Poroshenko, and Russian President Vladimir Putin and German Chancellor Angela Merkel are expected to be among the participants."

But in the same interview, Hollande also spoke more urgently:

"If Russia has a crisis, it is not necessarily good for Europe, I'm not for the policy of attaining goals by making things worse, I think that sanctions must stop now."

The French President's intention, in a situation rapidly devolving toward economic collapse and/or potentially thermonuclear war, is clear: He wants to be in Astana, and begin the end of the sanctions regime there. German Chancellor Angela Merkel, however, has not confirmed that she will attend such a meeting.

The Empire Has Its Knives Out for Brazil’s President

Having been stymied in its plan to unleash financial chaos in Argentina, and bring down the government of Cristina Fernandez de Kirchner, the Queen's vulture fund, Aurelius Capital, is now gunning for Brazil's President Dilma Rousseff, using the bribery and corruption scandal of the Petrobras oil firm, as the vehicle for removing her from office. Rousseff was chairwoman of Petrobras's board of directors from 2003 to 2010, the timeframe during which the alleged corruption occurred.

Aurelius, which is still litigating against Argentina in New York and elsewhere to demand payment of the full face value of bonds which Aurelius bought up at pennies on the dollar, is now pushing for Petrobras to be declared in default, supposedly as a "precaution," after the firm failed to report its third quarter earnings within 90 days of the end of that quarter (by Dec. 29). This is a violation of the bond terms and an infraction that could result in default if not resolved within 60 days, Bloomberg reported Monday.

A Petrobras default would unleash financial and political chaos in Brazil, and throughout the region, which is what Aurelius is seeking. It is trying to get at least 25% of the holders of a series of Petrobras bonds, issued under New York jurisdiction and valued at $54 bn., to join with it, as this is the threshold for a default notice to be valid, Bloomberg adds.

The jackals in the London and Wall Street media are already salivating over the likelihood that Rousseff will be brought down by the scandal, raising the issue of impeachment. "Failure to stop Petrobras scandal could haunt Brazil's Rousseff," the British news service Reuters trumpeted on Jan. 2, noting that while opposition leaders say "she is unlikely to face impeachment...still, she faces mounting scrutiny over whether she did enough to halt the corruption."

Three days earlier, on Dec. 30, Reuters had reported that Brazil's market regulator, CVM, is investigating whether Petrobras executives failed in their legal duties to protect the firm and its investors from losses, and is looking into "any irregularities related to the possible breach of fiduciary duties of company administrators." Reuters points out that executives with fiduciary duties include members of the board of directors, whose chairwoman was Dilma Rousseff from 2003 to 2010, "a period when much of the alleged corruption took place."

On Dec. 24, the city of Providence, Rhode Island, one of Petrobras's minority shareholders, filed a case in New York, naming Rousseff as a potential witness.