Lyndon LaRouche, June 1st discussion with associates.
Attali: ‘Worst’ Financial Blow-Out, and Bail-in, Coming Next Year
Senior economist of the French Socialist Party (PS) Jacques Attali, in a May 26 L’Express column perhaps written before that party got buried in an earthquake, says the worst financial crisis in generations will hit next year.
Attali’s curious ground for the forecast — at least the one he offers — is that for “more than a generation a major financial and economic crisis has occurred every seven years” (he begins with the market crash of October 1987).
But the crisis that should be triggered in 2015, he says, will be worse than any of the previous ones, “particularly in Europe.” Neither governments nor the ECB will be able to carry out any significant bailouts, “even the most heterodox” ECB tools. “Thus there will be no other solutions than to foot the bill…. That includes the participation of the final holders of the debt, that is to say savers, who will watch their savings being plundered, not by inflation, but by a drain on their bank accounts, as in Cyprus (which the recent agreements on the Banking Union explicitly allow, and are known as ‘bail-ins,’ though few people know about it).”
The fact that the first of Attali’s four steps to “prepare for” the crisis is to lower the exchange rate of the euro, shows how thoroughly this is a type of financial establishment thinking which the crisis itself, and the “earthquake” against the French Socialists, have blown away. It is merely a very blunt acknowledgment: The policy is now bail-in, total austerity and depression.
Global Watchdogs Have Something to Fear: Lack of Fear in the Markets
City of London mouthpiece Ambrose Evans-Pritchard writes that the “remarkable disregard for risk in the equity, credit, and currency markets” feels like the heady days of 2007, just before the crash.
Pritchard cites the Bank of England’s Deputy Governor Charles Bean as saying this “eerily reminiscent” of the run up to the financial crisis in 2007-2008. He also cites Italy central bank Governor Ignazio Visco as having issued a similar warning on Friday: “Volatility on the financial markets in the advanced economies has subsided to well below the historic norm, reaching levels that in the past sometimes preceded rapid changes in the orientation of investors.” He also cites Dallas Fed chief Richard Fisher “warning for several weeks that the decline in the VIX index measuring volatility is an accident waiting to happen.”
Blair: Britain Should Not Leave Europe But Take It Over
Her Majesty’s favorite, former Prime Minister Tony Blair has weighed in on the future of Great Britain and the European Union, with the demand that Britain not leave the EU but take it over, with the ongoing neo-liberal free market agenda of the British Empire. Speaking at a conference of the Confederation of British Industry at the London Business School on June 2, he declared that the May 25 European elections were a “wake up call” for the Union to rethink its European policy.
The elections showed, he said, that “The people of Europe have not lost their sense that the primary politics of their country is national and not supranational,” and have “deep anxiety, distrust and alienation from the institutions and core philosophies of Europe.” Nonetheless Blair praised Winston Churchill’s infamous 1946 vision for a “United States of Europe,” in order to bring peace to Europe, but now he declared, “The rationale for Europe today is not peace; it is power” in the face of the rising power of China, Brazil, India, etc. and therefore, Britain should be “playing a leading role in the reform of Europe, not just a negotiation of Britain’s terms of membership.”
‘I am not a Candidate’
While Blair says that talk of more federalism should be dropped, he said there should be for “a big push on the single market especially in the service sector; and on trade, where the prospect of a Transatlantic Trade and Investment Partnership.” On top of this, he called for accelerating the common energy policy in order to cut dependence on “foreign energy,” i.e. Russian gas.
Spanish King Abdicates
Spain’s King Abdicates, Calling Monarchy Into Question. And What About the British Monarchy?
Britain’s favorite Spanish banker Emilio Botin, the head of Santander Bank, rallied to defend the royals yesterday, within hours after King Juan Carlos announced his abdication in favor of his son Felipe (who has yet to be the target of the corruption scandals embroiling other royal offspring). Botin expressed “our [sic] loyalty and support to our future King Felipe,” but tens of thousands of Spaniards flocked to the plazas of key cities across Spain to demand a referendum on the establishment of a republic, to thus bury the monarchy altogether. The demonstrations were throughout Spain, including 60 or so cites, no less that 20,000 demonstrated in Madrid demanding a republic. Similar demonstrations were held by Spanish “subjects” in 30 cities across Europe and South America, according to the Guardian. The Leftwing Podemos party which won five seats in the European elections, spent the day rallying for a referendum on Twitter. “We are citizens, not subjects. It’s about time we had our say.” Cayo Lara, who heads the United Left coalition, said it was the moment for “the people to decide if they want a monarchy or a republic…It’s inconceivable in the 21st century that we’re still talking about blood rights.” The king admitted that his abdication was a political decision because he wanted to turn the crown over to is yachtsman son Felipe (but not his daughter whose husband is under indictment for fraud) because he represents the younger generation. The ruling PP party and the socialist PSOE, however, are holding tight to the ancien regime, quickly joining banker Botin to express their unwavering loyalty to the crown. What comes next in Spain is an open question, given the shredding of every fiber of the institutional fabric of the country under conditions where the Trans-Atlantic system is disintegrating.
The British Are Next in Line
Instead of Fake ‘Juncker’ Issue, Get to the Real European Issues!
Over the past days, the public in Europe has been flooded with statements pro and con regarding having Jean-Claude Juncker as the next EU Commission president, and European Parliament President Martin Schulz, the Socialist candidate and main rival, has been already buried by the SPD and Greens, who are coming out for Juncker now and even urging Merkel to do the same and not listen to David Cameron and other critics, who even threatened to quit the EU should Juncker be voted in, despite the opposition.
Whereas Cameron has a point, opposing Juncker, former Eurogroup president and former Luxembourg Prime Minister, as a representative of the kind of EU that was brutally rejected by so many voters in the May 25 elections, nonetheless, Cameron does not address the real issue: the urgent need for bank separation, which will change things in the City of London financial center. Ironically, even Schulz was a bit closer to such changes, when calling for bank separation during the election campaign, although Schulz would probably not go much further than the Liikanen proposal. Juncker is definitely on the other side, that of the banks and the euro. To be against Juncker without being against the policies which he stands for, is a big hoax. The same hoax can be said about the many populist outbursts against “Brussels” that have no programmatic depth at all.