theDrahos

Following Thursday’s announcement by European Central Bank head Mario Draghi of a 1.1-trillion-euro hyperinflationary bailout of Europe’s bankrupt financial institutions, Lyndon LaRouche immediately denounced the program as a “total farce” that will only accelerate the final collapse the trans-Atlantic system, anchored in Wall Street and the City of London.

LaRouche reiterated that it is precisely the collapse of Wall Street and London that is driving the world towards thermonuclear Armageddon, as a desperate trans-Atlantic financial oligarchy pushes for war against Russia and China as the only means of retaining political power, as the banking system goes into its final disintegration.

[div:class-“body-quote”]”The quadrillions of dollars in gambling debts built up by Wall Street and its European partners is unpayable, and is headed for a near-term crash,” LaRouche declared. “And Draghi’s efforts to paper over that unavoidable bankruptcy of those gambling debts, through the latest hyperinflationary central bank swindle, will only accelerate the collapse of the real economy of the trans-Atlantic region—and feed the desperate drive for war.”

It is clear that the disintegration of the trans-Atlantic financial situation has reached the point that desperate actions are being taken on many fronts. Pam Martens wrote on Thursday in Wall Street on Parade that the ECB actions must be seen in the context of similar hyperinflationary moves coming out of other quarters as well, with central banks in Japan, Switzerland, Denmark, Turkey, Peru, and Canada all announcing new interest rate cuts or extended QE.

As LaRouche emphasized earlier this week:

With a wistful gesture to all the sound and fury of Federal Reserve and Bank of Japan money-printing of the past six years, Mario Draghi today announced a relative whimper of a “quantitative easing” bailout for Europe’s banks, but one which will suffice to drive down the euro and destroy the Eurozone. The desperate Wall Street and London-centered international banks did not think it nearly enough, however; Société Générale, speaking on their behalf, immediately issued a memo saying that the bailout had to be twice or three times as large as Draghi promised.

In a typically sardonic press conference, the gimlet-eyed chief of the European Central Bank (ECB) announced an 18-month program, beginning in March and continuing to September 2016, of buying EU60 billion/month of securities from the big banks — to give them cash, as he repeated several times, which they would no doubt want to invest (some of, surely) in the European economies. The great majority of the securities will be government bonds held by those megabanks. Eighty percent of the buying will actually be done by national central banks with ECB approval, and 20% by the ECB. No government should get the idea that this money-printing, virtually zero-interest-rate environment means they can spend any money, said Draghi; “structural reforms must be continued.”

And Greek bonds, he replied to a question, would not be bought until “perhaps July,” and then only if a new Greek government does nothing to displease the ECB or IMF before then, so that the ECB’s current “quality waiver” on Greek bonds could continue. Otherwise, other ECB board members have threatened, all credit to Greece and Greek banks will be cut off.

Thus ECB President Draghi thought to commute the sentences of the megabanks, while condemning the nations and their citizens.

But he and French board member Coeuré have both been saying they wanted to raise the ECB’s balance sheet to EU4 trillion, and this program won’t bring it even to EU2 trillion. So it appears Draghi announced only what German Chancellor Angela Merkel and Finance Minister Schäuble allowed him to announce.

The euro fell sharply from just under $1.16 to below $1.14, an 11-year low, and this will continue. Severe upward pressure on “surrounding” currencies continued, with the Swiss, Danish, Finnish, and even Turkish central banks now cutting their interest rates weekly to hold their currencies down. As leading German economist Hans-Werner Sinn pointed out, the bankrupt European megabanks will “be glad to have the cash,” but will invest it in Swiss, Danish, U.S., Chinese, etc. currencies, not the Eurozone.

All these results tend toward disintegration of the Eurozone and further impoverishment of its national economies.

The next act in the drama is the Greek national parliamentary election, set for Sunday Jan. 25.