A Nation Once Again

Now that the Troika is on a fast track to their Bail-In insanity of their desperate European  Banking Union, we should review the words and music to the post 1789 Irish Rebellion “A Nation Once Again”. Is “boyhood’s fire in your blood”?

Here is the great John McCormack http://www.youtube.com/watch?v=pCkZXk8F3Hc

 

Why More Community Banks Are Failing

Why More Community Banks Are Failing

17 May  (LPAC) The failure of at least three and likely four Arizona community banks in the past week has drawn attention to the increased rate of such failures in 2013 — though not back to the levels of 2009-10, yet. The number of community banks in the United States, frequently cited as “about 7,000,” is actually down to roughly 6,300, according to an American Banker article May 13, “More Than Regulation Is Killing Small Banks.”

“Regulation” here refers to the failed Dodd-Frank Act, introduced and passed to block restoration of FDR’s Glass-Steagall Act. The article cites two other factors: community banks drawn into concentrating on commercial real estate and commercial mortgage-backed securities (CMBS) over the past decade; and the impact of Federal Reserve zero-interest rate policy for the past five years in pushing smaller banks to shift their assets to risky securities speculations. This too is directly relevant to getting Glass-Steagall back in place to stop the loss of these banks.

“Even though regulation has increased over the past decade, it would be an oversimplification to attribute a reduced number of community banks and their lower profitability only to regulation,” reports American Banker. “The gradual erosion of the net interest income ratio in community banks and a compensatory shift toward adding risk to their balance sheet in search of additional yield, … is a major factor responsible for high chargeoffs and community bank failures.”

LaRouche’s 17 May Webcast

Here is LaRouche’s Friday Project Webcast, which began with the announcement that Senator Harkin had introduced S.985 – A Glass-Steagall restoration bill  into the U.S. Senate

Watch this historic webcast here

Michael D Higgins Warns of Real Danger In Not Supporting Creativity

Irish President Michael D. Higgins warned of the “real danger” of not supporting creativity while he was on hand at the unveiling of a special stamp meant to commemorate UNESCO’s naming of Dublin as permanent city of literature in 2010

President Higgins, while at the unveiling of the new stamp, said “When education is going badly, that wonderment is stopped and people are asked to adjust themselves to something that may not in fact be the very best.”
Read more: http://www.irishcentral.com/news/President-Higgins-warns-of-real-danger-of-not-supporting-creativity-at-UNESCO-event-207764051.html#ixzz2Tl9kjYp0

EU Prepares Grab for Bank Accounts

by Helga Zepp-LaRouche

11 May (EIR)—European Union Internal Market Commissioner Michel Barnier is prepared to offer the “Cyprus model”—the expropriation of bank deposits in case of bank failures—to the entire EU, Focus magazine reports. After the taboo-breaking and “red lines” that no one ever wanted to cross, it cannot be excluded that soon every bank account, from the first euro on, will be fair game, and the October 2008 promises of Chancellor Angela Merkel and [Social Democratic Party candidate for chancellor Peer] Steinbrück on the alleged government guarantee on deposits up to €100,000 are just wastepaper today. Rumor has it that such a Europe-wide “bail-in” was already on the agenda at the most recent meeting of EU finance ministers.

Given the “derivatives bomb” of several trillion in outstanding derivative contracts, and even more tension in the financial markets than there was before the collapse of Lehman Brothers, it is not surprising that the publicly owned bank Kreditanstalt für Wiederaufbau (KfW), has simulated the worst-case scenario of the financial system: the collapse of a “too big to fail” bank, with a subsequent global chain reaction and the collapse of the Eurozone. In this case, the printing of money to an even greater extent than is already being done by the central banks would not be sufficient, and it would be necessary to move in on the deposits of account holders and savers. This is the Cyprus model, of which the head of the Eurogroup, Jeroen Dijsselbloem, had spoken. After creeping expropriation by the inherent hyperinflationary effect of the bank-rescue packages—for some time now, the banks’ interest rates have no longer offset the depreciation of their deposits—now we are threatened by open expropriation by means of the bail-in.

The final hours of the euro are here, as shown by the fact that former advocates of the European Monetary Union from both sides of the political divide, such as the former finance ministers of Germany’s Schröder government, Oskar Lafontaine, and of Britain’s Thatcher government, Nigel Lawson, are now simultaneously abandoning the euro and the EU, along with the growing opposition to the euro in virtually every EU member state. French economist Jean-Pierre Vesperini writes in Le Monde, for example, that the presently emerging German-French tragedy could only be averted with the termination of the euro, since that tragedy has its roots in the euro’s creation.

A Monetarist Coup

There is no doubt that the financial oligarchy is planning to apply the time-tested theory of Carl Schmitt,[1] that only those who can manage the emergency actually have power. Very soon the Draghis and Dijsselbloems of this world will try a coup and issue the threat: Either the EU member states agree to immediate fiscal and banking union, as well as the pooling of sovereign debt, or the euro will break up, with terrible consequences—in combination with the expropriation of bank accounts and savings deposits, of course.

The head of the European Institute of the London School of Economics (the elite of City of London monetarism), Paul de Grauwe, argues that Europe now has no choice other than to push through a fiscal union and pooling of debt, or else to accept the (supposedly) catastrophic consequences of abandoning the euro. De Grauwe had the audacity, writing in the blog “Project Syndicate“, to compare the debt pooling demanded by the EU with the transformation of war debts from the American Revolutionary War into a credit system by Alexander Hamilton (a measure which played a crucial role in creating the United States as a full monetary, fiscal, and political union—a sovereign nation).

But nothing could be further from the truth, because Europe (which, thanks to EU policies, has become deeply disunited under the heel of the oligarchical bureaucracy in Brussels), and young, republican America are as different as night and day. A European fiscal and debt union is pure monetarism, i.e., the virtually unconditional sacrifice of the real economy and living standards, as we currently experience it with all its horrors in southern Europe. The credit system created by Alexander Hamilton, quite the contrary, was the engine of the industrial revolution and the concomitant dramatic improvement of living conditions in America and, indirectly also, in Europe, Russia, and Japan.

What is happening today in Greece, Cyprus, Italy, Spain, and Portugal is the shame of Europe, and the EU will break up in its current form—the sooner, the better. In Greece, 31% of people live below the poverty line; doctors can no longer perform surgery; 2.5 million people no longer have health insurance and cannot afford a visit to the doctor; patients must wait 18 months for cancer surgery; and children are no longer vaccinated. The unemployment rate for young people aged 15-24 years is 64.2%! That is, two out of three young people have no work and, under the current EU regime, also no future! (See article on Greece in International.)

As Jeremy Warner writes in the Daily Telegraph, from the latest monthly report of the International Monetary Fund it is apparent that Spain is already insolvent, and the supposedly successful reduction of the budget deficit came about only because the totals for the last bailout, from the previous year, were simply not counted. The government was just waiting for the introduction of the banking union! Thus German taxpayers especially are expected to pay the debts of the bankrupt Spanish gambling banks!

What a banking union and pooling of debts would mean is simply that similar conditions of poverty would then also occur in Germany, which, in a new version of the Versailles Treaty, would be the ultimate paymaster for all. But 1923 is still too fresh in the collective consciousness of Germany, for us to miss the signs of the times and the cui bono: that with hyperinflation, the population is dispossessed in the most brutal manner.

Only the Real Glass-Steagall Will Work

The German Institute for Economic Research (DIW), in a recently published study, concluded that the blueprint presented by the federal government for a so-called “two-tier banking system” does just as little of consequence as all other proposals currently being discussed by officials in Europe. The government’s plan makes it very easy for banks to re-package proprietary trading as “market making,” and as long as seemingly separate banks are still united in a holding company, the effect of such a law would be marginal at best.

Why then does the DIW not call for the only proposal that really does something to protect the deposits of savers and the accounts related to the real economy, providing the latter with real credit for productive investment? The only way that an imminent catastrophe of the global financial system can be averted, would be with the immediate adoption of the original Glass-Steagall Act, as President Franklin Roosevelt pushed it through in 1933, and as it is currently being discussed, thanks to the mobilization of the LaRouche Political Action Committee, in the U.S. Congress, in state legislatures, and in the American population. If Glass-Steagall is adopted in the United States, this will change the situation around the world, almost overnight, and in Europe, nothing more would remain to be done than to do the same.

This indispensable first step must be followed by a second, equally indispensable one: the establishment of a real credit system in the tradition of Alexander Hamilton, which is the exact opposite of monetarism. Instead of the current, mindless fixation on money, the credit system will ensure that the real economy is brought into accord with the laws of the anti-entropic, self-developing physical universe. That is to say, there will be credit for investments that lead to a permanent increase in the energy-flux density of the production process, and thus help to develop each generation on a qualitatively higher level, allowing their real identities to become those of what is thus far the only known creative species in the universe.

At the risk of giving the monetarists a heart attack: Money as such will play no role in this system, and credit derivatives are entirely superfluous. The key to the organization of the physical economy of the future lies rather in the understanding of how life itself is organized in the universe, and which laws govern the development of life from lower to higher forms. The key lies in the understanding of human creativity as a reflection of the laws of the universe.

Cyprus at risk of even deeper recession

IMF says Cyprus at risk of even deeper recession

18 May (EIRNS) It is as if a doctor prescribes a medicine for your illness and then says a few weeks later that it will kill you. The International Monetary Fund forecast that the economy will get worse then was expected when along with the other members of the Troika of the apocalypse the European Union and the Europe Central Bank force the bail-in bailout on Cyprus.
An AP wire reports that a new IMF report forecast demanding that the government does not slacken on implementing the Troika program.. AP writes., “The IMF said there are substantial risks that the negative effects of the crisis could be even worse than what is currently anticipated.” It even said that the the banking crisis, which the Troika created by the bailin, could have a “highly uncertain” effect on the economy and created a “vicious cycle” of bankruptcies, drops in real estate prices, bank losses, and unemployment. If that happens it “could also lead to a deeper recession than anticipated,” the report said.
The IMF report projections are nonetheless optimist claiming the economic will collapse by 9 percent this year and another 4 percent in 2014 whileh unemployment forecast to peak around 17 percent in 2014.

One Billion New Jobs

17 May (LPAC) The real cost of the global crisis is not the $4.5 trillion in Quantitative Easing already handed over to the British Empire’s banks; nor the $11 trillion in QE planned by the end of 2014; nor even the $18 trillion of combined QE and “bail-in” Quantitative Stealing that is planned by 2014, as per the “Cyprus template.” The real cost is the massive destruction of the actual source of physical economic wealth: the productive powers of the world’s decimated labor force.

EIR’s estimate is that, planet-wide, there are currently about one billion working-age people who are either unemployed, underemployed, or “working” in the totally unproductive “informal” and black economies. About one-third of that total are youth, in the 15-24 age bracket. This is the underpinning of the nearly 3 billion members of our species who currently are suffering “poverty” and “extreme poverty.”

The immediate requirement is to generate one billion new, productive jobs in a generation — which is only do-able by launching global high-tech reconstruction projects, facilitated by a Hamiltonian credit system, preceded by Glass-Steagall bankruptcy reorganization to get the financial cancer out of the way.

From that standpoint, consider a few physical economic updates:

* Egypt: The Guardian reports that Egypt is “suffering the worst economic crisis since the 1930s.” Citing a former finance minister (Samir Radwan) and a leading economics professor (Galal Amin), they report that half the population is in a state of poverty: 25.2% below the poverty line, and 23.7% hovering just above it. A quarter of all families currently spend 50% of their income on food, and now food prices are skyrocketing, and “some goods have doubled in price since last autumn.” The article cites a few specific cases where families have gone from spending half their income on food, to spending up to 80% on food. One in four young Egyptians is unemployed. Egypt imports 60% of its food, and the Egyptian pound is being massively devalued. Foreign investment and tourism revenues have fallen drastically, and foreign reserves have therefore dropped by nearly 60%, since the fall of Mubarak in 2011. The IMF is demanding major structural reforms, in exchange for a pathetic $4.8 billion loan. “Without the loan,” the Guardian notes, “foreign investment — which has fallen by 56% since 2011 — is also unlikely to return.”

* Spain: “Spain is making heroic efforts to adjust,” Ambrose Evans-Pritchard reported May 15. Although they are still being killed in most areas, international auto companies have apparently decided to set up shop in Valencia and elsewhere. Why? “They are betting on Spain because Spanish workers have agreed to keep plants open seven days a week, to toil on Sundays without overtime pay, and to accept wage deals below inflation. A blast of Iberian Thatcherism. . .”

* United States:The farm bills now before the House and Senate committees call for cutting about $4 billion per year, for five years, from the government’s $80 billion food stamp program. That may sound like “only” a 5% cut, but if you consider that the number of people requiring food stamps is growing at more than 10% per year, and the fact that inflation of food prices is also soaring, you are actually looking at something like a 25-30% real cut in food stamps per capita for some 50 million Americans — the ones who desperately need the stamps in order to put food on their table. Anyone who thinks that the crisis is somehow only happening “over there” in Europe or elsewhere, needs to have their head examined.