Category: Aggregated

With the euro sinking and broken glass from the Swiss “escape” action flying in all directions, the bankrupt Eurozone is now headed for the start of massive quantitative easing, and then the posing of a Greek demand for writeoff of sovereign debt throughout the European Union. Support for the Greek Syriza Party’s Europe-wide debt conference proposal is increasing, as is Syriza’s lead in the polls in Greece before this Sunday’s election.

Losses in the financial sector from the Swiss National Bank action were in the many billions, and are still mounting, according to a Bloomberg review Jan. 19. Citigroup, the world’s biggest currencies dealer, lost more than $150 million; JPM Chase, $120 million; Deutsche Bank lost $150 million and Barclays about $100 million, and so on. Hedge funds lost much more; but what will have shocked these megabanks is the fact that in every case, the forex/derivatives losses on the Swiss move were 5-6 times the maximum “value at risk” which those banks’ models told them they could lose in one day. Denmark, Finland, and other non-Euro EU members are being watched to guess who pulls the cord next.

A London Guardian article Jan. 17 reported support for Syriza’s Europe-wide debt conference proposal is increasing. The Guardian cites Hans-Werner Sinn supporting Syriza’s proposal; the UK group Jubilee Debt Campaign; Franco Caselli of the LSE; and “a growing chorus of experts.” In Ireland the Finance Minister Andrew Noonan, and the Deputy Prime Minister, John Burton, both supported Syriza’s proposal last week.

IMF Managing Director Christine Lagarde, visiting Ireland, opposed Greece in the most London imperial tones possible: “A debt is a debt and it is a contract. Defaulting, restructuring, changing the terms has consequences on the signature and the confidence in the signature,” said Madame.

The European Central Bank, desperately believed by all now to be on the verge of massive purchases of government bonds, has strictly opposed any writedown of Greek debt, and ruled out “QE” buying of Greek debt because it is of “low quality.” Spiegel on Jan. 16 reported, without giving any source, that Draghi briefed Merkel and Schaeuble Jan. 14, on his QE plan for the Jan. 22 ECB meeting; “The plan envisages a 20% to 25% percent limit on purchases of each country’s debt” — except Greece, of course. That “limit” adds up to the range of $2-2.5 trillion euros.

Sinn, head of the Institute for Economic Research, told CNBC-TV in an interview Jan. 19 that this QE will trigger exactly the “Swiss” volatility in markets, but on a larger scale. “[The banks] will happy to be able to sell the government bonds, which they consider as partly toxic, and they will have a lot of cash. What will they do — they will primarily try to take it abroad. And they have already begun doing that – what you see in Switzerland,” Sinn told CNBC. “If we want to help governments that are in trouble let’s do it — but let the parliaments decide, rather than this technocratic body, the ECB.”

Led by the non-stop activity of its New York City teams, the movement of Lyndon LaRouche and the the Schiller Institute are advancing on the goals of bringing down Wall Street and pushing the United States into a new economic alliance with the BRICS nations. “We’ve got the tiger by the tail: keep swinging!” said Helga Zepp-LaRouche, after keynoting the exceptional New York City conference of the Schiller Institute Jan. 17, which brought Martin Luther King’s life purpose together with that of economic development and peace today.

The principle to be restored in doing this is the credit principle of the United States’ first Treasury Secretary, Alexander Hamilton, a principle of real economic growth which is diametrically opposed to the way Wall Street and London have ruined the economies of the United States and Europe. With a leaflet, “Alexander Hamilton’s Credit Principle,” LaRouche’s movement will hit Wall Street and New York again this week to follow through on the Jan. 17 breakout event in New York, “BRICS Nations Revive Dr. Martin Luther King’s Dream.”

Watch the rally live at 12:30 Eastern!

But because of the bankruptcy of Wall Street and the City of London, they continue to drive for war against Russia and China: provocations against Russia in Eastern Europe, war again raging in Ukraine, sanctions and financial warfare overtly aimed at bringing down the Putin government.

EIR Founding Editor LaRouche had a firm message on this today, which must be understood.

“If the United States launches attacks on Russia,” LaRouche said, “then Russian weapons will hit the United States before it knows what has happened. If you represent Wall Street, if you participate in its policies, then you’re already dead if the United States goes to war with Russia.”

The Wall Street and London banks are reeling, showing all signs of another oncoming, well-deserved breakdown. The Wall Street megabanks are on the hook for the “shale oil bubble” now undergoing collapse, and exposed to it by $20 trillion in derivatives contracts now going bad. They’ve just reported their worst earnings since the Great Depression and laid off 50,000 employees. The European megabanks, under City of London’s dictate, are so bankrupt they are desperate to get a $1-2 trillion bailout from the European Central Bank started this week; and were just shocked by big losses when Switzerland cut its ties with the sinking euro currency. As one Wall Street Journal writer expressed it Monday,

“the Davos conference is opening with the world on the edge of a nervous breakdown.”

That is, the world of Wall Street.

It is this desperate City of London/Wall Street regime which threatens war — even global thermonuclear war — thinking to save itself by the capitulation of just those nations whose policies threaten it with a new order: China and Russia in particular; the BRICS-allied nations generally.

LaRouche’s warning is directed precisely at that insane delusion of a collapsing Wall Street order.

The Schiller Institute’s petition calling for the United States and Europe to join with the BRICS nations, is crucial in this situation.