Tag Archive for: Euro

The Greek “OXI” (NO) vote is all over the news. But, what’s next? by LaRouchePAC

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Revive the Glass-Steagall Act — It’s time for our own United States to take the next historic steps to free the world of austerity.

If you don’t know what the Glass-Steagall act is, please take a moment and review the background of the law, and what it did.

Lyndon LaRouche’s call to action, below,  is our historic responsibility not only to other nations of the world, but to ourselves, so that we might give a future to the next generations.

LaRouche: To Save the Trans-Atlantic Region, Implement FDR’s Glass Steagall Act Now

July 6, (EIRNS) — Lyndon LaRouche today responded to Sunday’s landslide rejection by Greek voters of the Troika’s genocidal austerity program, by clearly spelling out how the United States can play a decisive role in solving the otherwise irreversible collapse of the entire British-run trans-Atlantic financial system. LaRouche called for the United States to immediately adopt a return to President Franklin Delano Roosevelt’s original Glass Steagall policy.

The United States, LaRouche declared, should set the example for Europe, by immediately reinstating FDR’s Glass Steagall.

“The U.S. should solve the problem of the European mess, starting with the mess in Britain, by a Glass Steagall reorganization, clearing out the oversized and useless debt. Cancel all the debt with no intrinsic value, by going back to President Franklin Roosevelt’s successful model.  Only by such a debt cancellation can there be any prospect of a longterm recovery, in real physical economic terms.”

In his weekly live broadcast dialogue with LPAC’s Policy Committee, on July 6, LaRouche elaborated on his call for immediate Glass-Steagall:

“What has happened, as a result of the Greek operations during yesterday and today, has created a situation in which… Europe, most nations in Europe, and also the United States, are implicitly bankrupt. This is number one.

“Now what I mean on number one, on the bankruptcy, is that Wall Street in particular, and everything that coordinates with Wall Street, is now actually worthless.  That will be shown in due course, that we hope we can get this thing under control. What this means, we have to go to a Glass-Steagall action.  The only way we can do this, is a Glass-Steagall action.  That means, in the trans-Atlantic region, I’m talking about right now the trans-Atlantic region:  The situation is that the United States in particular is in a collapse.  That is, Wall Street and the things which are associated with Wall Street, are now actually worthless, which means a great amount of what is called money, among the business community, especially the financial business community, is worthless, and it is going to be very difficult for Wall Street and President Obama, both, to try to cover things over in this matter.

“Now the other side of this situation is, that it is perfectly possible for us in the United States itself, and with cooperation with certain circles in Europe and elsewhere, we’re quite capable of solving the problem.  And the solution is obviously, Glass-Steagall, Franklin Roosevelt’s own Glass-Steagall.  That is essentially the key thing.

“And the only way that the United States and the people of the United States could possibly escape from a general breakdown of the financial system of the United States, is to go back to Glass-Steagall.  That would mean we would simply cancel most of everything that’s called Wall Street, or anything like it; just cancel it.  It’s rubbish.  It has no intrinsic value.

“And therefore we have to go back to Franklin Roosevelt’s policies in order to save the United States economy.  Now, it’s going to be a tough row to hoe, because we have very poor skills available in the U.S. population.  The productive power of labor, in the United States’ population, has collapsed to a great degree…

“We see that, when people say, ‘well, some people are poor, they’re not worth keeping.’ Well, that’s not the problem, that’s not the truth of the matter. What they’re trying to do is kill off people, as in the case of California.  What’s happening in California, is actually an intentional determination, to kill off as many people in California and adjoining areas as possible. That’s what the policy is; that’s plain talk, no beating around the Bush.  And the Governor of California is one of the leaders, who is leading toward a campaign for mass-slaughter of people in California and adjoining areas.  That’s the reality!

“However, if we go to Glass-Steagall, Franklin Roosevelt’s Glass-Steagall, with means which I’m fully aware of as feasible, we can prevent that.  But the key thing now that’s driving it, is the fact that the European economy is going into a spin, downward, and this includes the British system itself, and it means other areas.”

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Greece: How Did It Get Into This Mess?

RELATED VIDEO: Farage: Isn’t the EU quite as bad as the USSR, Mr Tusk?

Greeks Prepare to Be Pillaged by Jeffrey A. Tucker

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In the world of banking, a “holiday” means you can’t get your money. It’s been a few years since we’ve seen that happen in any developed world economy, but that is exactly what the Greek government is doing, starting now, to stop a massive bank run.

Greece owes the International Monetary Fund a payment of $1.5 billion, due tomorrow, from the last time the government was bailed out. But, of course, governments can’t make wealth, and the money didn’t just magically materialize. They have to beg, borrow, and steal to get it, and Greece has finally found those limits.

Athens had hoped that it could once against tap the European Commission. But drained and fed up, other governments refused to extend yet another loan to Greece unless they agreed to reform their bloated and corrupt welfare state.

Unfortunately for Greeks, the ruling coalition in Greece swept into power in January on the platform of stopping “austerity” and rolling back budget cuts. They balked at the EU’s (and especially Germany’s) conditions for the next round of bailout money.

As a result, Athens has really and truly run out of money, and they will default on their debts starting tomorrow — and the European Central Bank has said it will cut off emergency credit to Greek banks if the government fails to pay its debts.

The news that no deal would be reached sent bank depositors into a panic, and thousands have been lined up at ATMs all over the country since Friday.

Prime Minister Alexis Tsipras announced that he was closing all banks for at least a week as a way to stem the tide. Many ATMs are empty; the rest, by government order, will only dispense €60 per person per day. The government is now imposing capital controls to stop cash from leaving the country.

One thing needs to be said about this frantic authoritarian approach: It never works. Bank closings add to the atmosphere of panic. They are often followed by an announcement that the government is going to devalue or outright steal people’s money. Whatever trust remains in the system is drained away along with the value of the currency.

But there’s another factor in play, for the first time. People are looking at Bitcoin as a way to store and move money.

There is now a Bitcoin ATM in Athens that is reportedly doing a brisk business. Redditors are sharing tips. And, of course, the exchange rate of Bitcoin is on the move again.

This past week, I was out of touch of the news entirely because I was at the New Hampshire liberty retreat, Porcfest. There you can buy almost anything with Bitcoin, so I was checking the price often. I noticed the upward price pressure, and I had an intuition that something serious was happening.

Sure enough, this morning I was awakened by a call from Russia Today. They wanted me on a two-hour segment today to talk about the meltdown in Greece. I turned them down because I haven’t followed it closely enough (though that doesn’t usually stop most commentators!).

But when I looked into it, I suddenly understood: Sure enough, Bitcoin is on the move for a reason.

Many price watchers are predicting another spike in the exchange rate if Greece actually defaults and leaves the euro. Maybe, maybe not. It actually doesn’t matter. The exchange rate can be anything; it doesn’t affect the utility of having access to a global currency and payment system that is outside regional banking systems — one that can’t be closed, controlled, confiscated, or devalued at the whim of desperate regimes.

Cryptocurrency is here to stay. It is the world’s new safe haven, displacing the role that gold once played. The reasons are rather obvious: Bitcoin is more liquid than gold. It takes up no space, weighs nothing, and is more secure. Once you are an owner, nothing can take away what you own — and you don’t have to rely on a third party such as a gold warehouse or a bank (or a government) to take care of your money.

Given all of this, there is supreme irony in the announcement made by the Greek central bank last year that consumers should be wary of Bitcoin. Bitcoin is vastly more safe and reliable than any national currency, including the euro and the dollar.

There is no government anywhere that would decline to shut the banks if their ruling class feared financial meltdown. That’s what’s happening in Greece. That could happen in any European country, and it could happen (and has happened) in the United States, too.

In the end, government regards itself as the ultimate owner of all a nation’s currency and the wealth it carries.

It’s wise to have another option, and people have long known that. The question is: What is that option? Today, not for the first time, and not for the last, Bitcoin is here to save the day.


Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.

Grexit? A flesh wound compared to Frexit (exit of France from EU)

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The Telegraph reports this morning that Greek economic minister Varoufakis now threatens to sue in a higher court if the EU attempts to force Greece to leave the EU (our thanks to G. in the UK for this tip).

The article quotes French President François Hollande as follows:

“What is at stake is whether or not Greeks want to stay in the eurozone or want to take the risk of leaving,” said French president Francois Hollande.

Now you would think from this bold statement that Hollande heads up a country that pays its bills to the EU on time, wouldn’t you? After all, financial pundits are all saying that if Greece leaves the EU, Spain, Portugal and perhaps even Italy could be next. No one mentions France.

However, there’s a colossal French debt that no one wants to talk about, except some brave journalists like Francis Journot at the site Agora, who shows that France is actually the elephant in the EU room.

My translation of the opening paragraph of this extraordinary article follows:

The French State’s public debt has reached 6 trillion euros, equivalent to 5 years of tax receipts and nearly 300% of GDP. The process of extravagant financial operations [tentative rendition of cavalerie financière, see below] on the public debt that are available to the government since the banking law of Jan 3, 1973 exposes France more than ever to the volatility of the financial markets and to a default. More-confidential commitments, off the balance sheet and allowed by the State, for payment of retirement pensions of government employees and the like, could also prove impossible to meet in the long run. An exit from the EU could eventually be the only way out of a fraudulent system that is threatening to blow up. [my highlighting] [original text below]

This debt has been constantly fed by new loans to ensure reimbursement of the elderly and their interests, as well as new deficits. The amounts kicked down the road in this way are far greater than those payable by the Greeks. But the off-the-books debt is no less than the debt shown on the books. The author makes it clear, citing authorities, that this debt could never be paid without major growth through new investment in industry. Some of the debt is owed to the IMF and hence, represents US exposure.

One rendition of the term I rendered as “extravagant financial operations” is “Ponzi scheme” and that is just a more direct way of saying the same thing.

Now, if a Grexit is a threat to the integrity of the EU, a Frexit would spell certain doom to the already-shaky entity, and the entire globe is exposed.

Original text:

La dette publique de l’État français atteint 6 000 milliards d’euros, équivaut à plus de vingt années de recettes fiscales et près de 300% du PIB. Le processus de cavalerie financière de la dette publique auquel les gouvernements ont recours depuis la loi bancaire du 3 janvier 1973, expose plus que jamais la France à la volatilité des marchés financiers et au défaut de paiement. Des engagements plus confidentiels, hors-bilan et portés par l’État, pour le paiement des pensions de retraites des fonctionnaires ou assimilés, pourraient également s’avérer, à terme, impossibles à honorer. Une sortie de l’UE pourrait s’imposer comme l’unique voie de sortie d’un système de cavalerie qui menace d’exploser.   

End quote

Cavalerie financière is a fraudulent financial practice based on the discrepancies between the amounts and periods for recording income and outflows to mask a failure between resources and debt owed. Other possible renditions include “can kicking” and “Ponzi scheme.”

RELATED ARTICLE: The euro is a straitjacket for Greece